Registration No. 811-3105
File No. 2-69719
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |
☒ |
Pre-Effective Amendment No. |
□ |
Post-Effective Amendment No. 71 |
☒ |
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |
☒ |
Oppenheimer Capital Appreciation Fund
(Exact Name of Registrant as Specified in Charter)
6803 South Tucson Way, Centennial, Colorado
80112-3924
(Address of Principal Executive Offices) (Zip Code)
(303) 768-3200
(Registrant’s Telephone Number, including Area Code)
Cynthia Lo Bessette, Esq.
OFI Global Asset Management, Inc.
225 Liberty Street, New York, New York 10281-1008
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box):
□ immediately upon filing pursuant to paragraph (b)
☒ on October 27, 2017 pursuant to paragraph (b)
□ 60 days after filing pursuant to paragraph (a)(1)
□ on
pursuant to paragraph (a)(1)
□ 75 days after filing pursuant to paragraph (a)(2)
□ on
pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
□ This post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
Oppenheimer
Capital Appreciation Fund
Prospectus dated
October 27, 2017
Oppenheimer Capital Appreciation
Fund is a mutual fund that seeks capital appreciation. It invests primarily in common stocks of “growth” companies.
This prospectus contains important
information about the Fund’s objective, investment policies, strategies and risks. It also contains important information about how to buy and sell shares of the Fund and other account features. Please read this
prospectus carefully before you invest and keep it for future reference about your account.
NYSE Ticker Symbols
Class A
| OPTFX
|
Class B
| OTGBX
|
Class C
| OTFCX
|
Class R
| OTCNX
|
Class Y
| OTCYX
|
Class I
| OPTIX
|
As with all mutual
funds, the Securities and Exchange Commission has not approved or disapproved the Fund’s securities nor has it determined that this prospectus is accurate or complete. It is a criminal offense to represent
otherwise.
Investment Objective. The Fund seeks capital appreciation.
Fees and
Expenses of the Fund. This table describes the fees and expenses that you may pay if you buy and hold or redeem shares of the Fund. You may qualify for sales
charge discounts if you (or you and your spouse) invest, or agree to invest in the future, at least $25,000 in certain funds in the Oppenheimer family of funds. More information about these and other discounts and
sales charge waivers is available from your financial professional and in the section “About Your Account” beginning on page 11 of the prospectus, in the appendix to the prospectus titled “Special Sales Charge Arrangements and Waivers” and in the section “How to Buy
Shares” beginning on page 48 in the Fund’s Statement of Additional Information.
(fees paid directly from your
investment)
| Class A
| Class B
| Class C
| Class R
| Class Y
| Class I
|
|
Maximum Sales Charge (Load) imposed on purchases (as % of offering price)
| 5.75%
| None
| None
| None
| None
| None
|
|
|
Maximum Deferred Sales Charge (Load) (as % of the lower of original offering price or redemption proceeds)
| None
| 5%
| 1%
| None
| None
| None
|
|
Annual
Fund Operating Expenses*
(expenses that you pay each year as a
percentage of the value of your investment)
| Class A
| Class B
| Class C
| Class R
| Class Y
| Class I
|
|
Management Fees
| 0.59%
| 0.59%
| 0.59%
| 0.59%
| 0.59%
| 0.59%
|
|
|
Distribution and/or Service (12b-1) Fees
| 0.25%
| 1.00%
| 1.00%
| 0.50%
| None
| None
|
|
|
Other Expenses
| 0.23%
| 0.24%
| 0.23%
| 0.23%
| 0.23%
| 0.04%
|
|
|
Total Annual Fund Operating Expenses
| 1.07%
| 1.83%
| 1.82%
| 1.32%
| 0.82%
| 0.63%
|
|
*
| Expenses have been restated to reflect current fees.
|
Example. The following Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in a class of shares of the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your investment
has a 5% return each year and that the Fund’s operating expenses remain the same. Any applicable fee waivers and/or expense reimbursements would be reflected in the below examples for the first year only.
Although your actual costs may be higher or lower, based on these assumptions your expenses would be as follows:
| If shares are redeemed
| If shares are not redeemed
|
|
| 1 Year
| 3 Years
| 5 Years
| 10 Years
| 1 Year
| 3 Years
| 5 Years
| 10 Years
|
|
Class A
| $678
| $897
| $1,134
| $1,812
| $678
| $897
| $1,134
| $1,812
|
|
|
Class B
| $688
| $881
| $1,199
| $1,780
| $188
| $581
| $999
| $1,780
|
|
|
Class C
| $287
| $578
| $994
| $2,156
| $187
| $578
| $994
| $2,156
|
|
|
Class R
| $135
| $421
| $728
| $1,601
| $135
| $421
| $728
| $1,601
|
|
|
Class Y
| $84
| $263
| $457
| $1,018
| $84
| $263
| $457
| $1,018
|
|
|
Class I
| $65
| $202
| $352
| $789
| $65
| $202
| $352
| $789
|
|
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A
higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the annual fund operating
expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 63% of the average value of its portfolio.
Principal Investment
Strategies. The Fund mainly invests in common stocks of “growth companies.” Growth companies are companies whose earnings and stock prices
are expected to increase at a faster rate than the overall market. These may be newer companies or established companies of any capitalization range that the portfolio manager believes may appreciate in value over the
long term. Currently, the Fund primarily focuses on established companies that are similar in size to companies in the S&P 500 Index or the Russell 1000 Growth Index. The Fund primarily invests in securities of
U.S. issuers but may also invest in foreign securities. The portfolio manager looks for growth companies with stock prices that he believes are reasonable in relation to overall stock market valuations. In seeking
broad diversification of the Fund’s portfolio among industries and market sectors, the portfolio manager focuses on a number of factors that may vary in particular cases and over time. Currently, the portfolio
manager looks for:
■
| companies in business areas that have above-average growth potential
|
Oppenheimer Capital Appreciation Fund
| 1
|
■
| companies with growth rates that the portfolio manager believes are sustainable over time
|
■
| stocks with reasonable valuations relative to their growth potential.
|
The Fund may sell the stocks of
companies that the portfolio manager believes no longer meet the above criteria, but is not required to do so.
Principal Risks. The price of the Fund’s shares can go up and down substantially. The value of the Fund’s investments may change because of
broad changes in the markets in which the Fund invests or because of poor investment selection, which could cause the Fund to underperform other funds with similar investment objectives. There is no assurance that the
Fund will achieve its investment objective. When you redeem your shares, they may be worth less than what you paid for them. These risks mean that you can lose money by investing in the Fund.
Risks of Investing in
Stocks. The value of the Fund’s portfolio may be affected by changes in the stock markets. Stock markets may experience significant short-term volatility and may fall sharply at times.
Adverse events in any part of the equity or fixed-income markets may have unexpected negative effects on other market segments. Different stock markets may behave differently from each other and U.S. stock markets may
move in the opposite direction from one or more foreign stock markets.
The prices of
individual stocks generally do not all move in the same direction at the same time. A variety of factors can affect the price of a particular company’s stock. These factors may include, but are not limited to:
poor earnings reports, a loss of customers, litigation against the company, general unfavorable performance of the company’s sector or industry, or changes in government regulations affecting the company or its
industry. To the extent that securities of a particular type are emphasized (for example foreign stocks, stocks of small- or mid-cap companies, growth or value stocks, or stocks of companies in a particular industry),
fund share values may fluctuate more in response to events affecting the market for those types of securities.
Industry and Sector Focus. At times the Fund may increase the relative emphasis of its investments in a particular industry or sector. The prices of stocks of issuers in a particular industry or sector may go up and
down in response to changes in economic conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry or sector more than others. To the extent that the
Fund increases the relative emphasis of its investments in a particular industry or sector, its share values may fluctuate in response to events affecting that industry or sector. To some extent that risk may be
limited by the Fund’s policy of not concentrating its investments in any one industry.
Risks of Growth Investing. If a growth company’s earnings or stock price fails to increase as anticipated, or if its business plans do not produce the expected results, its securities may decline sharply.
Growth companies may be newer or smaller companies that may experience greater stock price fluctuations and risks of loss than larger, more established companies. Newer growth companies tend to retain a large part of
their earnings for research, development or investments in capital assets. Therefore, they may not pay any dividends for some time. Growth investing has gone in and out of favor during past market cycles and is likely
to continue to do so. During periods when growth investing is out of favor or when markets are unstable, it may be more difficult to sell growth company securities at an acceptable price. Growth stocks may also be
more volatile than other securities because of investor speculation.
Who Is the Fund
Designed For? The Fund is designed primarily for investors seeking capital appreciation over the long term. Those investors should be willing to assume
the risks of short-term share price fluctuations that are typical for a fund focusing on stocks. Because of its focus on long-term growth, the Fund may be more appropriate for investors with longer term investment
goals. The Fund is not designed for investors needing current income. The Fund is not a complete investment program. You should carefully consider your own investment goals and risk tolerance before investing in the
Fund.
An investment in the Fund is not a deposit of any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
The
Fund’s Past Performance. The bar chart and table below provide some indication of the risks of investing in the Fund by showing changes in the Fund’s
performance (for Class A Shares) from calendar year to calendar year and by showing how the Fund’s average annual returns for the periods of time shown in the table compare with those of a broad measure of
market performance. The Fund’s past investment performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Sales charges and taxes are not reflected in the
bar chart and if those charges were included, returns would be less than those shown. More recent performance information is available by calling the toll-free number on the back of this prospectus and on the
Fund’s website: https://www.oppenheimerfunds.com/fund/CapitalAppreciationFund
2
| Oppenheimer Capital Appreciation Fund
|
Sales charges and taxes are not included and the returns would be lower if they were. During the period shown, the highest return for a calendar quarter was 18.94% (2nd Qtr 09) and the lowest return for a calendar
quarter was -28.10% (4th Qtr 08). For the period from January 1, 2017 to September 30, 2017 the return before sales charges and taxes was 19.52%.
The following table shows the
average annual total returns for each class of the Fund’s shares. After-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state or local
taxes. Your actual after-tax returns, depending on your individual tax situation, may differ from those shown and after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred
arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown for only one class and after-tax returns for other classes will vary.
Average
Annual Total Returns for the periods ended December 31, 2016
| 1 Year
| 5 Years
| 10 Years
(or life of class, if less)
|
|
Class A Shares (inception 01/22/81)
|
|
|
|
|
Return Before Taxes
| (7.96)%
| 9.94%
| 4.31%
|
|
Return After Taxes on Distributions
| (8.87)%
| 7.99%
| 3.34%
|
|
Return After Taxes on Distributions and Sale of Fund Shares
| (3.77)%
| 7.74%
| 3.36%
|
|
|
Class B Shares (inception 11/01/95)
| (7.70)%
| 10.10%
| 4.42%
|
|
|
Class C Shares (inception 12/01/93)
| (4.00)%
| 10.40%
| 4.13%
|
|
|
Class R Shares (inception 03/01/01)
| (2.61)%
| 10.96%
| 4.65%
|
|
|
Class Y Shares (inception 11/03/97)
| (2.12)%
| 11.57%
| 5.29%
|
|
|
Class I Shares (inception 12/29/11)
| (1.93)%
| 11.74%
| 11.66%
|
|
|
S&P 500 Index
| 11.96%
| 14.66%
| 6.95%
|
|
(reflects no deduction for fees, expenses, or taxes)
|
|
| 14.54%*
|
|
|
Russell 1000 Growth Index
| 7.08%
| 14.50%
| 8.33%
|
|
(reflects no deduction for fees, expenses, or taxes)
|
|
| 14.40%*
|
|
Investment Adviser. OFI Global Asset Management, Inc. (the “Manager”) is the Fund’s investment adviser. OppenheimerFunds, Inc. (the
“Sub-Adviser”) is its sub-adviser.
Portfolio
Manager. Paul Larson has been portfolio manager and Vice President of the Fund since October 2016.
Purchase and Sale of Fund
Shares. You can buy most classes of Fund shares with a minimum initial investment of $1,000. Traditional and Roth IRA, Asset Builder Plan,
Automatic Exchange Plan and government allotment plan accounts may be opened with a minimum initial investment of $500. For wrap fee-based programs, salary reduction plans and other retirement plans and accounts,
there is no minimum initial investment. Once your account is open, subsequent purchases may be made in any amount. For Class I shares, the minimum initial investment is $1 million per account. The Class I share
minimum initial investment is waived for retirement plan and health savings account service provider platforms (jointly, “service provider platforms”).
Shares may be purchased and
redeemed on days the New York Stock Exchange is open for trading. Shareholders may purchase or redeem shares by mail at the address on the back cover, through the website at www.oppenheimerfunds.com or by calling
1.800.225.5677 on any regular business day.
Share transactions may be paid
by check, by Federal Funds wire or directly from or into your bank account.
Class B shares
are no longer offered for new purchases.
Taxes. Fund distributions are subject to Federal income tax as ordinary income or as capital gains and they may also be subject to state or local
taxes, unless your shares are held in a tax-deferred account (in which case you may be taxed later, upon withdrawal of your investment from such account).
Payments to Broker-Dealers and
Other Financial Intermediaries. If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank), the Fund, the Sub-Adviser, or their
related companies may
Oppenheimer Capital Appreciation Fund
| 3
|
pay the intermediary for the sale of Fund
shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
4
| Oppenheimer Capital Appreciation Fund
|
About the Fund’s
Investments
The allocation of the
Fund’s portfolio among different types of investments will vary over time and the Fund’s portfolio might not always include all of the different types of investments described below. The Statement of
Additional Information contains additional information about the Fund’s investment policies and risks.
The Fund’s Principal
Investment Strategies and Risks. The following strategies and types of investments are the ones that the Fund considers to be the most important in seeking to achieve its
investment objective and the following risks are those the Fund expects its portfolio to be subject to as a whole.
Common Stock. Common stock represents an ownership interest in a company. It ranks below preferred stock and debt securities in claims for dividends and in claims for assets of the issuer in a
liquidation or bankruptcy. Common stocks may be exchange-traded or over-the-counter securities. Over-the-counter securities may be less liquid than exchange-traded securities.
The value of the Fund’s
portfolio may be affected by changes in the stock markets. Stocks and other equity securities fluctuate in price in response to changes to equity markets in general. Stock markets may experience significant short-term
volatility and may fall sharply at times. Adverse events in any part of the equity or fixed-income markets may have unexpected negative effects on other market segments. Different stock markets may behave differently
from each other and U.S. stock markets may move in the opposite direction from one or more foreign stock markets.
The prices of
individual stocks generally do not all move in the same direction at the same time. A variety of factors can affect the price of a particular company’s stock. These factors may include, but are not limited to:
poor earnings reports, a loss of customers, litigation against the company, general unfavorable performance of the company’s sector or industry, or changes in government regulations affecting the company or its
industry. To the extent that securities of a particular type are emphasized, (for example foreign stocks, stocks of small- or mid-sized companies, growth or value stocks, or stocks of companies in a particular
industry), their share values may fluctuate more in response to events affecting the market for those types of securities.
Growth Investing. Growth companies are companies whose earnings and stock prices are expected to grow at a faster rate than the overall market. Growth companies can be new companies or established companies
that may be entering a growth cycle in their business. Their anticipated growth may come from developing new products or services or from expanding into new or growing markets. Growth companies may be applying new
technologies, new or improved distribution methods or new business models that could enable them to capture an important or dominant market position. They may have a special area of expertise or the ability to take
advantage of changes in demographic or other factors in a more profitable way. Although newer growth companies may not pay any dividends for some time, their stocks may be valued because of their potential for price
increases.
Risks of Growth
Investing. If a growth company’s earnings or stock price fails to increase as anticipated, or if its business plans do not produce the expected results, its securities may
decline sharply. Growth companies may be newer or smaller companies that may experience greater stock price fluctuations and risks of loss than larger, more established companies. Newer growth companies tend to retain
a large part of their earnings for research, development or investments in capital assets. Therefore, they may not pay any dividends for some time. Growth investing has gone in and out of favor during past market
cycles and is likely to continue to do so. During periods when growth investing is out of favor or when markets are unstable, it may be more difficult to sell growth company securities at an acceptable price. Growth
stocks may also be more volatile than other securities because of investor speculation.
Other Investment Strategies and
Risks. The Fund can also use the investment techniques and strategies described below. The Fund might not use all of these techniques or
strategies or might only use them from time to time.
Investing in Small- and Mid-Sized
Companies. The Fund currently focuses on securities of issuers with large capitalizations. They may pay higher dividends than small-and mid-cap companies and their stock prices have tended to be less
volatile than securities of smaller issuers. However, the Fund can buy stocks of issuers in all capitalization ranges. At times the Sub-Adviser might increase the relative emphasis of securities of issuers in a
particular capitalization range if the Sub-Adviser believes they offer greater opportunities for total return.
Other Equity Securities. In addition to common stocks, the Fund can invest in other equity or “equity equivalents” securities such as preferred stocks, convertible securities, rights or
warrants.
■
| Preferred stock has a set dividend rate and ranks ahead of common stocks and behind debt securities in claims for dividends and for assets of the issuer in a liquidation or bankruptcy. The dividends on preferred
stock may be cumulative (they remain a liability of the company until paid) or non-cumulative. The fixed dividend rate of preferred stocks may cause their prices to behave more like those of debt securities. If
prevailing interest rates rise, the fixed dividend on preferred stock may be less attractive, which may cause the price of preferred stock to decline.
|
■
| Warrants are options to purchase equity securities at specific prices that are valid for a specific period of time. Their prices do not necessarily move parallel to the prices of the underlying securities, and can
be more volatile than the price
|
Oppenheimer Capital Appreciation Fund
| 5
|
| of the underlying securities. If the market price of the underlying security does not exceed the exercise price during the life of the warrant, the warrant will expire worthless and any amount paid for the warrant
will be lost. The market for warrants may be very limited and it may be difficult to sell a warrant promptly at an acceptable price. Rights are similar to warrants, but normally have a short duration and are
distributed directly by the issuer to its shareholders. Rights and warrants have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer.
|
■
| A convertible security can be converted into or exchanged for a set amount of common stock of an issuer within a particular period of time at a specified price or according to a price formula. Convertible debt
securities pay interest and convertible preferred stocks pay dividends until they mature or are converted, exchanged or redeemed. Some convertible debt securities may be considered “equity equivalents”
because of the feature that makes them convertible into common stock. Convertible securities may offer the Fund the ability to participate in stock market movements while also seeking some current income. Convertible
securities may provide more income than common stock but they generally provide less income than comparable non-convertible debt securities. Convertible securities are subject to credit and interest rate risk, however
credit ratings of convertible securities generally have less impact on the value of the securities than they do for non-convertible debt securities.
|
Risks of Foreign
Investing. Securities traded in foreign markets often involve special risks not present in U.S. investments that can increase the chances the Fund will lose money. Additional
information regarding certain of the risks associated with foreign investing is provided below.
■
| Foreign Market Risk. If there are fewer investors in a particular foreign market, securities traded in that market may be less liquid and more volatile than U.S. securities and more difficult to price. Foreign
markets may also be subject to delays in the settlement of transactions and difficulties in pricing securities. If the Fund is delayed in settling a purchase or sale transaction, it may not receive any return on the
invested assets or it may lose money if the value of the security declines. It may also be more expensive for the Fund to buy or sell securities in certain foreign markets than in the United States, which may increase
the Fund’s expense ratio.
|
■
| Foreign Economy Risk. Foreign economies may be more vulnerable to political or economic changes than the U.S. economy. They may be more concentrated in particular industries or may rely on particular resources
or trading partners to a greater extent. Certain foreign economies may be adversely affected by shortages of investment capital or by high rates of inflation. Changes in economic or monetary policy in the U.S. or
abroad may also have a greater impact on the economies of certain foreign countries.
|
■
| Foreign Governmental and Regulatory Risks. Foreign companies may not be subject to the same accounting and disclosure requirements as U.S. companies. As a result there may be less accurate information available regarding a foreign
company’s operations and financial condition. Foreign companies may be subject to capital controls, nationalization, or confiscatory taxes. There may be less government regulation of foreign issuers, exchanges
and brokers than in the United States. Some countries also have restrictions that limit foreign ownership and may impose penalties for increases in the value of the Fund’s investment. The value of the
Fund’s foreign investments may be affected if it experiences difficulties in enforcing legal judgments in foreign courts.
|
■
| Foreign Currency Risk. A change in the value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of securities denominated in that foreign currency. If the U.S. dollar
rises in value against a foreign currency, a security denominated in that currency will be worth less in U.S. dollars and if the U.S. dollar decreases in value against a foreign currency, a security denominated in
that currency will be worth more in U.S. dollars. The dollar value of foreign investments may also be affected by exchange controls. Foreign currency exchange transactions may impose additional costs on the Fund. The
Fund can also invest in derivative instruments linked to foreign currencies. The change in value of a foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of derivatives linked to
that foreign currency. The investment adviser’s selection of foreign currency denominated investments may not perform as expected. Currency derivative investments may be particularly volatile and subject to
greater risks than other types of foreign-currency denominated investments.
|
■
| Foreign Custody Risk. There may be very limited regulatory oversight of certain foreign banks or securities depositories that hold foreign securities and foreign currency and the laws of certain countries may
limit the ability to recover such assets if a foreign bank or depository or their agents goes bankrupt. There may also be an increased risk of loss of portfolio securities.
|
■
| Time Zone Arbitrage. If the Fund invests a significant amount of its assets in foreign securities, it may be exposed to “time-zone arbitrage” attempts by investors seeking to take advantage of
differences in the values of foreign securities that might result from events that occur after the close of the foreign securities market on which a security is traded and before the close of the New York Stock
Exchange that day, when the Fund’s net asset value is calculated. If such time zone arbitrage were successful, it might dilute the interests of other shareholders. However, the Fund’s use of “fair
value pricing” under certain circumstances, to adjust the closing market prices of foreign securities to reflect what the investment adviser and the Board believe to be their fair value, may help deter those
activities.
|
■
| Globalization Risks. The growing inter-relationship of global economies and financial markets has increased the effect of conditions in one country or region on issuers of securities in a different country or
region. In particular, the adoption or prolongation of protectionist trade policies by one or more countries, changes in economic or monetary policy in the United States or abroad, or a slowdown in the U.S. economy,
could lead to a decrease in demand for products and reduced flows of capital and income to companies in other countries.
|
6
| Oppenheimer Capital Appreciation Fund
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| Regional Focus. At times, the Fund might increase the relative emphasis of its investments in a particular region of the world. Securities of issuers in a region might be affected by changes in economic
conditions or by changes in government regulations, availability of basic resources or supplies, or other events that affect that region more than others. If the Fund has a greater emphasis on investments in a
particular region, it may be subject to greater risks from adverse events that occur in that region than a fund that invests in a different region or that is more geographically diversified. Political, social or
economic disruptions in the region may adversely affect the values of the Fund’s holdings.
|
Master Limited
Partnerships. The Fund may invest in publicly traded limited partnerships known as “master limited partnerships” or MLPs. MLPs issue units that are registered with the Securities and
Exchange Commission and are freely tradable on a securities exchange or in the over-the-counter market. An MLP consists of one or more general partners, who conduct the business, and one or more limited partners, who
contribute capital. The Fund, as a limited partner, normally would not be liable for the debts of the MLP beyond the amounts the Fund has contributed, but would not be shielded to the same extent that a shareholder of
a corporation would be. In certain circumstances creditors of an MLP would have the right to seek return of capital distributed to a limited partner. This right of an MLP’s creditors would continue after the
Fund sold its investment in the MLP.
Derivative Investments. The Fund can invest in “derivative” instruments. A derivative is an instrument whose value depends on (or is derived from) the value of an underlying security, asset, interest
rate, index or currency. Derivatives may allow the Fund to increase or decrease its exposure to certain markets or risks.
The Fund may use derivatives to
seek to increase its investment return or for hedging purposes. The Fund is not required to use derivatives in seeking its investment objective or for hedging and might not do so.
Options, futures, options on futures, and forward contracts are some of the types of derivatives that the Fund may use. The Fund may also use other types of derivatives that are consistent with its investment
strategies or for hedging purposes.
Hedging. Hedging transactions are intended to reduce the risks of securities in the Fund’s portfolio. If the Fund uses a hedging instrument at the wrong time or judges market conditions
incorrectly, however, the hedge might be unsuccessful or could reduce the Fund’s return or create a loss.
Risks of
Derivative Investments. Derivatives may be volatile and may involve significant risks. The underlying security, obligor or other instrument on which a derivative is based, or the derivative
itself, may not perform as expected. For some derivatives, it is possible to lose more than the amount invested in the derivative investment. In addition, some derivatives have the potential for unlimited loss,
regardless of the size of the Fund’s initial investment. Certain derivative investments held by the Fund may be illiquid, making it difficult to close out an unfavorable position. Derivative transactions may
require the payment of premiums and may increase portfolio turnover. Derivatives are subject to credit risk, since the Fund may lose money on a derivative investment if the issuer or counterparty fails to pay the
amount due. As a result of these risks, the Fund could realize little or no income or lose money from the investment, or the use of a derivative for hedging might be unsuccessful.
In addition, under financial
reform legislation currently being implemented, certain over-the-counter derivatives, including certain interest rate swaps and certain credit default swaps, are (or soon will be) required to be executed on a
regulated market and/or cleared through a clearinghouse, which may result in increased margin requirements and costs for the Fund. It is unclear how these regulatory changes will affect counterparty risk, and entering
into a derivative transaction that is cleared may entail further risks and costs, including the counterparty risk of the clearinghouse and the futures commission merchant through which the Fund accesses the
clearinghouse.
Illiquid and Restricted
Securities. Investments that do not have an active trading market, or that have legal or contractual limitations on their resale, are generally referred to as “illiquid” securities.
Illiquid securities may be difficult to value or to sell promptly at an acceptable price or may require registration under applicable securities laws before they can be sold publicly. Securities that have limitations
on their resale are referred to as “restricted securities.” Certain restricted securities that are eligible for resale to qualified institutional purchasers may not be regarded as illiquid.
The Fund will not invest more
than 15% of its net assets in illiquid securities. The Fund’s holdings of illiquid securities are monitored on an ongoing basis to determine whether to sell any of those securities to maintain adequate
liquidity.
Conflicts of
Interest. The investment activities of the Manager, the Sub-Adviser and their affiliates with respect to other funds and accounts they manage may present potential conflicts of interest that
could, under certain circumstances, disadvantage or adversely affect the Fund and its shareholders. The Manager, the Sub-Adviser or their affiliates advise other funds and accounts that have
investment objectives and strategies that differ from, and may be contrary to, those of the Fund. That may result in another fund or account holding investment positions that are adverse to the Fund’s investment
strategies or activities. Other funds or accounts advised by the Manager, the Sub-Adviser or their affiliates may also have conflicting interests arising from investment objectives and strategies that are similar to
those of the Fund. For example, those funds and accounts may engage in, and compete for, the same types of investment opportunities as the Fund or invest in securities of the same issuers that have
different features and interests as compared to securities held by the Fund. These features (such as seniority, guarantees and differential voting rights) may, under certain circumstances, come into conflict with or disadvantage securities held by the Fund. Because the Manager, the Sub-Adviser and their affiliates may carry out the investment activities of those other funds
or accounts without regard to the investment objectives or performance of the Fund, it is possible that the value of investments held by the Fund or the Fund’s investment strategies may be adversely affected.
Oppenheimer Capital Appreciation Fund
| 7
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The
Fund’s investment performance will usually differ from the performance of other funds or accounts that are also advised by the Fund’s Manager, the Sub-Adviser or their affiliates even in cases where the
investment objectives and strategies of the relevant funds or accounts are similar. When managing multiple funds or accounts, the Fund’s Manager, the Sub-Adviser and their affiliates may make decisions with
respect to investment positions held by certain funds or accounts that may cause the Fund to experience losses during periods in which other funds or accounts achieve gains. This may include causing another fund or
account to take actions with respect to an issuer’s liquidation, restructuring, default or corporate actions that may conflict with the interests of the Fund. Similar conflicts may also arise when the Fund and
other funds or accounts invest in different parts of an issuer’s capital structure, such as when the Fund holds equity or debt obligations of an issuer, and another fund or account holds more senior (or junior)
debt obligations of the same issuer, or when the Fund and other funds or accounts hold securities of different issuers that have competing claims to the same assets or sources of payment. In such circumstances,
decisions regarding whether to trigger an event of default, the terms of any potential workout or restructuring of a distressed issuer, liquidating or selling an investment, corporate actions, litigation or other
investment decisions may, and often do, result in conflicts of interest. The Fund may receive lower returns on its investment in an issuer as a result of actions taken with respect to the same or related issuers by
other investors, including other funds or accounts managed by the Manager, the Sub-Adviser or their affiliates.
The Fund’s Manager, the
Sub-Adviser or their affiliates may manage funds or accounts with different fee rates and/or fee structures, including funds or accounts that pay advisory fees based on account performance (“performance fee
accounts”). Such differences in fee arrangements may raise potential conflicts of interest by creating an incentive to favor higher-fee accounts. For example, the Manager, the Sub-Adviser or their affiliates
could potentially allocate the most attractive investments to higher-fee accounts or performance fee accounts, or the trading of higher-fee accounts could potentially be favored as to timing and/or execution price.
The Manager and the Sub-Adviser
have adopted policies and procedures designed to mitigate where possible potential conflicts of interest identified by the Manager and the Sub-Adviser. However, such policies and procedures may also limit the
Fund’s investment activities and affect its performance. For example, the investment activities of such funds or accounts may result in the Manager’s, the Sub-Adviser’s or their affiliates’
receipt of material non-public information concerning certain securities, which could lead to restrictions in the trading of such securities or other investment activities of the Fund or other funds or accounts
managed by the Manager, the Sub-Adviser or their affiliates. In certain cases, the Fund’s Manager, the Sub-Adviser or their affiliates may avoid certain investment opportunities or actions that would potentially
give rise to conflicts with other funds or accounts, which could also have the effect of limiting the Fund’s investment opportunities and performance. In other cases, the Fund’s Manager, the Sub-Adviser or
their affiliates may choose not to or fail to avoid investment opportunities or action that would potentially give rise to conflicts with other funds or accounts, which could under certain circumstances disadvantage
the Fund while advantaging other funds or accounts or vice versa.
The Manager, the Sub-Adviser and
their affiliates may also face other potential conflicts of interest in managing the Fund, and the information above is not a complete description of every conflict that could be deemed to exist when simultaneously
managing the Fund and other funds and accounts.
Diversification and
Concentration. The Fund is a diversified fund. It attempts to reduce its exposure to the risks of individual securities by diversifying its investments across a broad number of different issuers. The
Fund will not concentrate its investments in issuers in any one industry. At times, however, the Fund may emphasize investments in some industries or sectors more than others. The prices of securities of issuers in a
particular industry or sector may go up and down in response to changes in economic conditions, government regulations, availability of basic resources or supplies, or other events that affect that industry or sector
more than others. To the extent that the Fund increases the relative emphasis of its investments in a particular industry or sector, its share values may fluctuate in response to events affecting that industry or
sector. The Securities and Exchange Commission has taken the position that investment of more than 25% of a fund’s total assets in issuers in the same industry constitutes concentration in that industry. That
limit does not apply to securities issued or guaranteed by the U.S. government or its agencies and instrumentalities; however, securities issued by any one foreign government are considered to be part of a single
“industry.” For purposes of compliance with its concentration policy, the Fund will consider portfolio investments held by underlying investment companies in which the Fund invests, to the extent that the
Fund has sufficient information about such portfolio investments. The Fund will make reasonable efforts to obtain such information.
Investments by “Funds of
Funds.” Class I and Class Y shares of the Fund are offered as an investment to certain other Oppenheimer funds that act as “funds of funds,” which may invest significant portions of
their assets in shares of the Fund. From time to time, those investments may also represent a significant portion of the Fund’s outstanding shares, or of its outstanding Class I and/or Y shares. The Oppenheimer
funds of funds typically use asset allocation strategies that may increase or reduce the amount of their investment in the Fund frequently, possibly on a daily basis during volatile market conditions. If the size of
those purchases or redemptions were significant relative to the size of the Fund’s assets, the Fund might be required to purchase or sell portfolio securities, which could increase its transaction costs and
reduce the performance of all of its share classes. A decline in the Fund’s assets due to large redemptions could also cause the Fund’s operating expenses to increase. Further discussion of the possible
effects of frequent trading in the Fund’s shares is included elsewhere in this prospectus.
Investments in Money Market
Instruments. The Fund can invest its free cash balances in money market instruments to provide liquidity or for defensive purposes. Money market instruments are short-term, U.S. dollar-denominated debt
instruments issued or guaranteed by domestic and foreign corporations and financial institutions, the U.S. government, its
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| Oppenheimer Capital Appreciation Fund
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agencies and
instrumentalities and other entities. Money market instruments include certificates of deposit, commercial paper, repurchase agreements, treasury bills, certain asset-backed securities and other short term debt
obligations that have a final maturity, as defined under rules under the Investment Company Act of 1940, of 397 days or less. They may have fixed, variable or floating interest rates. Money market instruments are
subject to certain risks, including the risk that an issuer of an obligation that the Fund holds might have its credit rating downgraded or might default on its obligations, or that interest rates might rise sharply,
causing the value of the Fund’s investments to fall.
The Fund may invest in money
market instruments by investing in Class E shares of Oppenheimer Institutional Government Money Market Fund. It may also invest in money market instruments directly, or in other affiliated or unaffiliated money market
funds. The Fund may invest in such other money market funds, such as Oppenheimer Institutional Government Money Market Fund, rather than purchasing individual short-term investments. Oppenheimer Institutional
Government Money Market Fund is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, and is part of the Oppenheimer family of funds. At the
time of an investment, the Fund cannot always predict what will be the yield of the Oppenheimer Institutional Government Money Market Fund, or any other money market fund it may hold, because of the wide variety of
instruments that such fund may hold in its portfolio. The return on those investments may, in some cases, be lower than the return that would have been derived from other types of investments that would provide
liquidity. As a shareholder, the Fund will be subject to its proportional share of the expenses of any other money market fund it may hold, including its advisory fee. However, the Manager will waive a portion of the
Fund’s advisory fee to the extent of the Fund’s share of the advisory fee paid to the Manager by Oppenheimer Institutional Government Money Market Fund, or to any other similar affiliated money market fund
of which the Fund is a shareholder. If the Fund invests in an unaffiliated money market fund, the Manager will not waive a portion of the Fund’s advisory fee representing the Fund’s share of the advisory
fee paid by such unaffiliated fund to any unaffiliated manager.
Temporary Defensive and Interim
Investments. For temporary defensive purposes in times of adverse or unstable market, economic or political conditions, the Fund can invest up to 100% of its total assets in investments that may be
inconsistent with the Fund’s principal investment strategies. Generally, the Fund would invest in shares of Oppenheimer Institutional Government Money Market Fund or in the types of money market instruments in
which Oppenheimer Institutional Government Money Market Fund invests or in other short-term U.S. government securities. The Fund might also hold these types of securities as interim investments pending the investment
of proceeds from the sale of Fund shares or the sale of Fund portfolio securities or to meet anticipated redemptions of Fund shares. To the extent the Fund invests in these securities, it might not achieve its
investment objective.
Portfolio
Turnover. A change in the securities held by the Fund is known as “portfolio turnover.” The Fund may engage in active and frequent trading to try to achieve its investment objective and
may have a portfolio turnover rate of over 100% annually. Increased portfolio turnover may result in higher brokerage fees, dealer mark-ups and other transaction costs, which can adversely affect performance. If the Fund realizes capital gains when it sells investments, it generally must pay those gains to
shareholders, increasing its taxable distributions.The Financial Highlights tables at the end of this prospectus show the Fund’s portfolio turnover rates during past fiscal years.
Changes To The Fund’s
Investment Policies. The Fund’s fundamental investment policies cannot be changed without the approval of a majority of the Fund’s outstanding
voting shares, however, the Fund’s Board can change non-fundamental policies without a shareholder vote. Significant policy changes will be described in supplements to this prospectus. The Fund’s
investment objective is not a fundamental policy and may be changed without shareholder approval. Investment restrictions that are fundamental policies are listed in the Fund’s Statement of Additional
Information. An investment policy is not fundamental unless this prospectus or the Statement of Additional Information states that it is.
Portfolio
Holdings. The Fund’s portfolio holdings are included in its semi-annual and annual reports that are distributed to its shareholders within 60
days after the close of the applicable reporting period. The Fund also discloses its portfolio holdings in its Schedule of Investments on Form N-Q, which is a public filing that is required to be made with the
Securities and Exchange Commission within 60 days after the end of the Fund’s first and third fiscal quarters. Therefore, the Fund’s portfolio holdings are made publicly available no later than 60 days
after the end of each of its fiscal quarters. In addition, the Fund’s portfolio holdings information, as of the end of each calendar month, may be posted and available on the Fund’s website no sooner than
30 days after the end of each calendar month.
A description of the
Fund’s policies and procedures with respect to the disclosure of its portfolio holdings is available in the Fund’s Statement of Additional Information.
How the Fund is Managed
THE MANAGER AND THE
SUB-ADVISER. OFI Global Asset Management, Inc., the Manager, is a wholly-owned subsidiary of OppenheimerFunds, Inc. The Manager oversees the
Fund’s investments and its business operations. OppenheimerFunds, Inc., the Sub-Adviser, chooses the Fund’s investments and provides related advisory services. The Manager carries out its duties, subject
to the policies established by the Fund’s Board, under an investment advisory agreement with the Fund that states the Manager’s responsibilities. The agreement sets the fees the Fund pays to the Manager
and describes the expenses that the Fund is responsible to pay to conduct its business. The Sub-Adviser has a sub-advisory agreement with the Manager and is paid by the Manager.
The Manager has been an
investment adviser since 2012. The Sub-Adviser has been an investment adviser since 1960. The Manager and the Sub-Adviser are located at 225 Liberty Street, New York, New York 10281-1008.
Oppenheimer Capital Appreciation Fund
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Advisory
Fees. Under the investment advisory agreement, the Fund pays the Manager an advisory fee at an annual rate that declines on additional assets as the Fund grows: 0.75% of the
first $200 million of average annual net assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $700 million, 0.58% of the next $1 billion, 0.56% of
the next $2 billion, 0.54% of the next $2 billion, 0.52% of the next $2 billion, 0.50% of the next $2.5 billion, and 0.48% over $11 billion, calculated on the daily net assets of the Fund. Under the sub-advisory
agreement, the Manager pays the Sub-Adviser a percentage of the net investment advisory fee (after all applicable waivers) that it receives from the Fund as compensation for the provision of the investment advisory
services. The Fund’s advisory fee for the fiscal year ended August 31, 2017 was 0.59% of average annual net assets, before any applicable waivers.
The Manager has agreed to waive
fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investments in funds managed by the Manager or its affiliates. During the fiscal year ended
August 31, 2017, those indirect expenses were less than 0.01% of average daily net assets and are therefore not shown in the Annual Fund Operating Expenses table earlier in this prospectus.
The Fund’s annual
operating expenses may vary in future years.
A discussion
regarding the basis for the Board’s approval of the Fund’s investment advisory arrangements is available in the Fund’s Semi-Annual Report to shareholders for the period ended February 28, 2017.
Portfolio Manager. The Fund’s portfolio is managed by Paul Larson, who is primarily responsible for the day-to-day management of the Fund’s investments. Mr. Larson has been a portfolio manager
and Vice President of the Fund since October 2016.
Mr. Larson has been a Vice
President of the Sub-Adviser and portfolio manager of the Main Street Team since January 2013. Prior to joining the Sub-Adviser, he was a portfolio manager and Chief Equity Strategist at Morningstar. He was previously
an analyst at Morningstar covering the energy sector and oversaw the firm’s natural resources analysts. Prior to joining Morningstar in 2002, Mr. Larson was an analyst with The Motley Fool. Mr. Larson is a
portfolio manager and officer of other portfolios in the OppenheimerFunds complex.
The Statement
of Additional Information provides additional information about portfolio manager compensation, other accounts managed and ownership of Fund shares.
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| Oppenheimer Capital Appreciation Fund
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About Your Account
Where Can You
Buy Fund Shares? Oppenheimer funds may be purchased either directly or through a variety of “financial intermediaries” that offer Fund shares to their clients. Financial intermediaries include
securities dealers, financial advisors, brokers, banks, trust companies, insurance companies and the sponsors of fund “supermarkets,” fee-based advisory or wrap fee-based programs or college and retirement
savings programs. Financial intermediaries through which you purchase fund shares may impose policies and limitations that are different from those described in this prospectus or the Statement of Additional
Information. As a result, the availability of certain share classes and/or shareholder privileges or services described in this prospectus or the Statement of Additional Information will depend on the policies,
procedures and trading platforms of the financial intermediary. To be eligible for the share classes and/or shareholder privileges or services described in this prospectus or the Statement of Additional Information,
you may need to open an account directly with the Fund. You should consult a representative of your financial intermediary for further information. In addition, the availability of the sales charge reductions and waivers discussed below will depend upon whether or not you purchase your shares through a financial intermediary.
Intermediaries may have different policies and procedures regarding the availability of these reductions or waivers. Information on intermediaries’ variations from the reductions and waivers discussed below are
disclosed in the appendix to this prospectus titled “Special Sales Charge Arrangements and Waivers.” Your financial intermediary may also charge you fees or commissions in addition to those disclosed in this prospectus.
What Classes of Shares Does The Fund Offer? The Fund offers investors five different classes of shares. Class B shares are no longer offered for new purchases. The different classes of shares represent investments in the same portfolio of securities, but the classes are subject to different expenses and will usually have different share prices.
When you buy shares, be sure to specify the class of shares you wish to purchase. If you do not choose a class or identify your financial advisor, your investment will be
made in Class A shares, unless you are an eligible employee (defined below) in which case your investment will be made in Class Y shares.
Class A
Shares. If you buy Class A shares, you will pay an initial sales charge on investments up to $1 million for regular accounts unless you qualify for certain fee waivers. The amount of the sales
charge will vary depending on the amount you invest. The sales charge rates for different investment amounts are listed in “About Class A Shares” below.
Class B
Shares. If you purchased Class B shares, you did not pay a sales charge at the time of purchase, but you pay an annual asset-based sales charge (distribution fee) over a period of approximately
six years. If you sell your shares within six years after buying them, you will normally pay a contingent deferred sales charge. The amount of the contingent deferred sales charge varies depending on how long you own
your shares.
Class B
shares are no longer offered for new purchases. Any investments for existing Class B share accounts will be made in Class A Shares of Oppenheimer Government Money Market Fund. See “About Class B Shares”
below.
Class C
Shares. If you buy Class C shares, you will pay no sales charge at the time of purchase, but you will pay an ongoing asset-based sales charge. If you sell your shares within 12 months after buying
them, you will normally pay a contingent deferred sales charge of 1.00%, as described in “About Class C Shares” below.
Class R Shares. Class R shares are offered only to retirement plans and accounts at net asset value per share without an initial sales charge. If you buy Class R shares you will pay an ongoing asset-based
sales charge. See “About Class R Shares” below.
Class Y
Shares. Class Y shares are offered only to institutional investors, wrap fee-based programs, commissionable brokerage platforms that charge a transaction-based sales commission and eligible employees. See “About Class Y Shares” below.
Class I
Shares. Class I shares are only offered to eligible institutional investors that make a minimum initial investment of $1 million or more and to retirement plan service providers’ platforms.
See “About Class I Shares” below.
Certain sales
charge waivers may apply to purchases or redemptions of Class A, Class B or Class C shares. More information about those waivers is available below in “Sales Charge Waivers” and in the appendix to this
prospectus titled “Special Sales Charge Arrangements and Waivers”, or by visiting the OppenheimerFunds website at: www.oppenheimerfunds.com.
What is the Minimum
Investment? You can buy most Fund share classes with a minimum initial investment of $1,000. For Class I shares the minimum initial investment is $1
million per account. The Class I share minimum initial investment is waived for service provider platforms. Reduced initial minimums are available for other share classes in certain circumstances,
including, but not limited to, the following:
■
| Traditional and Roth IRA accounts as well as Asset Builder Plan, Automatic Exchange Plan and government allotment plan accounts may be opened with a minimum initial investment of $500.
|
■
| For wrap fee-based programs, salary reduction plans and other retirement plans and accounts, there is no minimum initial investment.
|
Oppenheimer Capital Appreciation Fund
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The Fund, at
its discretion, reserves the right to otherwise waive the minimum initial investment. There are no subsequent purchase minimums.
Minimum Account Balance. The minimum account balance on Fund accounts is $500, except for Class I shares. Small accounts may be redeemed by the Fund with 30 days’ notice if the value has fallen below
$500.
The minimum account balance for
Class I shares is $250,000. If a Class I account balance falls below $250,000, the account may be redeemed or converted into a Class Y share account. This minimum balance policy does not apply to Class I share
accounts for which the minimum initial investment is waived.
Choosing a Share Class. Once you decide that the Fund is an appropriate investment for you, deciding which class of shares is best suited to your needs depends on
a number of factors that you should discuss with your financial advisor. The Fund’s operating costs that apply to a share class and the effect of the different types of sales charges on your investment will
affect your investment results over time. For example, expenses such as the distribution or service fees will reduce the net asset value and the dividends on share classes that are subject to those expenses.
Two of the factors to consider
are how much you plan to invest and, while future financial needs cannot be predicted with certainty, how long you plan to hold your investment. For example, with larger purchases that qualify for a reduced initial
sales charge on Class A shares, the effect of paying an initial sales charge on purchases of Class A shares may be less over time than the effect of the distribution fees on other share classes. If your goals and
objectives change over time and you plan to purchase additional shares, you should re-evaluate each of the factors to see if you should consider a different class of shares.
The discussion below is not
intended to be investment advice or a recommendation, because each investor’s financial considerations are different. The discussion below assumes that you will purchase only one class of shares and not a
combination of shares of different classes. These examples are based on approximations of the effects of current sales charges and expenses projected over time, and do not detail all of the considerations in selecting
a class of shares. You should analyze your options carefully with your financial advisor before making that choice.
■
| Investing for the Shorter Term. While the Fund is meant to be a long-term investment, if you have a relatively short-term investment horizon, you should consider investing in Class C shares in most cases. That is because
the effect of the initial sales charge on most Class A shares may be greater than the effect of the ongoing asset-based sales charge on Class C shares over the short-term. The Class C contingent deferred sales charge
does not apply to redemptions of shares held for more than one year.
|
■
| Investing for the Longer Term. If you have a longer-term investment horizon, Class A shares may be more appropriate in most cases. That is because the effect of the ongoing asset-based sales charge on Class C shares
might be greater than the effect of the initial sales charge on Class A shares, regardless of the amount of your investment.
|
■
| Amount of Your Investment. Your choice will also depend on how much you plan to invest. As your investment horizon increases and/or your eligibility for a reduced front-end sales charge applies, Class C shares might not be as advantageous as Class A shares with a sales charge. That is because the effect of the ongoing asset-based sales
charge on Class C shares may be greater than the effect of the reduced front-end sales charge on Class A share purchases. For an investor who is eligible to purchase Class I shares, that share class will be the most
advantageous. For other investors who invest $1 million or more or in other arrangements that qualify for a sales charge waiver, Class A shares will be more advantageous than Class C shares in most cases, no matter
how long you intend to hold your shares.
|
Purchase
orders from a single investor for more than $1 million of Class C shares will not normally be accepted. Financial intermediaries are responsible for determining the suitability of a particular share class for an
investor.
Are There Differences in Account
Features That Matter to You? Some account features may not be available for all share classes. Other features may not be advisable because of the effect of the contingent deferred sales charge. Therefore, you should
carefully review how you plan to use your investment account before deciding which class of shares to buy.
How Do Share Classes Affect
Payments to Your Financial Intermediary? The Class B and Class C contingent deferred sales charges and asset-based sales charges have the same purpose as the front-end sales charge or contingent deferred sales charge on Class A
shares: to compensate the Distributor for concessions and expenses it pays to brokers, dealers and other financial intermediaries for selling Fund shares. Those financial intermediaries may receive different
compensation for selling different classes of shares. The Sub-Adviser or Distributor may also pay dealers or other financial intermediaries additional amounts from their own resources based on the value of Fund shares
held by the intermediary for its own account or held for its customers’ accounts. For more information about those payments, see “Payments to Financial Intermediaries and Service Providers”
below.
The Price of
Fund Shares. Shares may be purchased at their offering price which is the net asset value per share plus any initial sales charge that applies. Shares
are redeemed at their net asset value per share less any contingent deferred sales charge that applies. The net asset value that applies to a purchase or redemption order is the next one calculated after the
Distributor receives the order, in proper form as described in this prospectus, or after any agent appointed by the Distributor receives the order in proper form as described in this prospectus. Your financial
intermediary can provide you with more information regarding the time you must submit your purchase order and whether the intermediary is an authorized agent for the receipt of purchase and redemption
orders.
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| Oppenheimer Capital Appreciation Fund
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Net Asset
Value. The Fund calculates the net asset value of each class of shares based on the value of the Fund’s portfolio determined as of 4:00 p.m., Eastern time, on each day the New York Stock
Exchange (the “NYSE”) is open for trading (referred to in this prospectus as a “regular business day”) except, if there is a NYSE scheduled early closing, the Fund will calculate its net asset
value for each share class based on the value of the Fund’s portfolio determined as of the NYSE scheduled early closing time (the “Valuation Time”). The net asset value per share for each share class
is determined by dividing the net assets of the class by the number of outstanding shares of that class.
The Fund’s securities
generally trade on an exchange and are valued based on the official closing price of each security’s principal exchange, or if not available, at the last sale price or fair value, as described below.
Fair Value
Pricing. If the Manager determines that a value for any of the Fund’s assets is not readily available or the value normally obtained for it, such as from a pricing service,
is not reliable when the Fund’s NAV is to be calculated, the Manager will determine a fair value for the asset in good faith, pursuant to valuation procedures for the Fund adopted by the Board, and will
incorporate that fair value in its NAV calculation. These fair value determinations are intended to reflect values for the Fund’s assets that the Manager and the Board believe to be more reliable. However, the
Fund’s fair value determinations involve subjective judgments and there can be no assurance that the Fund will receive the fair value assigned to a security if it were to sell the security. Fair value
determinations are subject to review and approval or ratification by the Board at or prior to its next scheduled meeting after the fair valuations are determined.
The Board has
delegated the day-to-day responsibility for fair value determinations to the Manager. The Manager has established a valuation committee to oversee those responsibilities. In determining whether a value is not readily
available or reliable, the Manager (and Sub-Adviser) monitors the information it receives in the ordinary course of its investment management responsibilities to identify significant events that the Manager believes,
in good faith, will affect the value of the investment. Those may include, but are not limited to, information or events affecting or related to specific issuers, securities, or markets; consideration of recent
transactions in comparable securities; price movements in futures contracts, appropriate market indices, ADRs or exchange-traded funds; the bid/ask quotes of brokers; or other market trading trends or information.
About Class A Shares. Class A shares are sold at their offering price, which is the net asset value of the shares (described below) plus, in most cases, an
initial sales charge. The Fund receives the amount of your investment, minus the sales charge, to invest for your account. In some cases, Class A purchases may qualify for a reduced sales charge or a sales charge
waiver, as described below and in the appendix to this prospectus titled “Special Sales Charge Arrangements and Waivers.”
The Class A sales charge rate
varies depending on the amount of your purchase. A portion or all of the sales charge may be retained by the Distributor or paid to your broker, dealer or other financial intermediary as a concession. The current
sales charge rates and concessions paid are shown in the table below. There is no initial sales charge on Class A purchases of $1 million or more, but a contingent deferred sales charge (described below) may apply.
Amount of Purchase
| Front-End Sales Charge
As a Percentage of
Offering Price
| Front-End Sales Charge
As a Percentage of Net
Amount Invested
| Concession As a
Percentage of Offering
Price
|
|
Less than $25,000
| 5.75%
| 6.10%
| 4.75%
|
|
|
$25,000 or more but less than $50,000
| 5.50%
| 5.82%
| 4.75%
|
|
|
$50,000 or more but less than $100,000
| 4.75%
| 4.99%
| 4.00%
|
|
|
$100,000 or more but less than $250,000
| 3.75%
| 3.90%
| 3.00%
|
|
|
$250,000 or more but less than $500,000
| 2.50%
| 2.56%
| 2.00%
|
|
|
$500,000 or more but less than $1 million
| 2.00%
| 2.04%
| 1.60%
|
|
Due to rounding, the actual
sales charge for a particular transaction may be higher or lower than the rates listed above.
Reduced Class A Sales
Charges. Under a “Right of Accumulation” or a “Letter of Intent” you may be eligible to buy Class A shares of the Fund at
the reduced sales charge rate that would apply to a larger purchase. Purchases of “qualified shares” of the Fund and certain other Oppenheimer funds may be added to your Class A share purchases for
calculating the applicable sales charge.
Except as
noted below, Class A, Class B and Class C shares of the Oppenheimer funds listed in the Fund’s Statement of Additional Information under the heading “The Oppenheimer Funds” (including shares of the
Fund), and Class A, Class B, and Class C units owned in adviser sold college savings programs, for which an affiliate of the Manager or the Distributor serves as the “Program Manager” or “Program
Distributor” are “qualified shares” for satisfying the terms of a Right of Accumulation or a Letter of Intent. Purchases made by reinvestment of dividend or capital gain distributions are
“qualified shares” for satisfying the terms of a Right of Accumulation, but are not “qualified shares” for satisfying the terms of a Letter of Intent. Purchases of Class R, Class Y or Class I
shares of Oppenheimer funds, purchases under the “reinvestment privilege” described below, and purchases of Class A shares of Oppenheimer Government Money Market Fund or
Oppenheimer Capital Appreciation Fund
| 13
|
Oppenheimer Government Cash Reserves on which a
sales charge has not been paid do not count as “qualified shares” for Right of Accumulation or Letter of Intent purposes. The Fund reserves the right to modify or to cease offering these programs at any
time.
■
| Right of Accumulation. To qualify for the reduced Class A sales charge that would apply to a larger purchase than you are currently making, you can add the value of qualified shares that you and your spouse
currently own, and other qualified share purchases that you are currently making, to the value of your Class A share purchase of the Fund. The value of the qualified shares you currently own is based on the greater of
their current offering price or the amount you paid for the shares. For purposes of calculating that value, only the value of shares owned as of December 31, 2007 and any shares purchased subsequently will be taken
into consideration. The value of any shares that you have redeemed will not be counted. In totaling your holdings, you may count shares held in:
|
■
| your individual accounts (including IRAs, 403(b) plans and eligible college savings programs),
|
■
| your joint accounts with your spouse,
|
■
| accounts you or your spouse hold as trustees or custodians on behalf of children who are minors.
|
A fiduciary can apply a right of
accumulation to all shares purchased for a trust, estate or other fiduciary account that has multiple accounts (including employee benefit plans for the same employer and Single K plans for the benefit of a sole
proprietor).
If you are
buying shares without using a financial intermediary, you must provide information about your eligibility and holdings at the time of your purchase in order to qualify for the Right of Accumulation. If you are buying
shares through a financial intermediary you must notify the intermediary of your eligibility for the Right of Accumulation at the time of your purchase.
To count shares held in accounts
at other firms, you may be requested to provide a copy of account statements showing your current qualified share holdings. The values of the qualified share holdings you provided will be retained and the Right of
Accumulation applied to future purchases, until any subsequent changes in those qualified share holdings are reported. Shares purchased under a Letter of Intent may also qualify as eligible holdings under a Right of
Accumulation.
■
| Letter of Intent. You may also qualify for reduced Class A sales charges by submitting a Letter of Intent to the Fund. A Letter of Intent is a written statement of your intention to purchase a specified
value of qualified shares over a 13-month period. The total amount of your intended purchases in the same types of accounts identified above under “Right of Accumulation” will determine the reduced sales
charge rate that will apply to your Class A share purchases during that period. You must notify the Fund, if you are purchasing shares without using a financial intermediary, or your financial intermediary of any qualifying college savings program purchases or purchases through other financial
intermediaries.
|
Submitting a Letter of Intent
does not obligate you to purchase the specified amount of shares. If you do not complete the anticipated purchases, you will be charged the difference between the sales charge that you paid and the sales charge that
would apply to the actual value of shares you purchased. Shares equal in value to 2% of the intended purchase amount will be held in escrow for this purpose. Please refer to “How to Buy Shares – Letter of
Intent” in the Statement of Additional Information for more complete information. You may also be able to apply the Right of Accumulation to purchases you make under a Letter of Intent.
Class A Contingent Deferred Sales
Charge. Although there is no initial sales charge on Class A purchases of shares of one or more of the Oppenheimer funds totaling $1 million or more, those Class A shares may be subject to a 1.00%
contingent deferred sales charge if they are redeemed within an 18-month “holding period” measured from the date of purchase (except as described in “Sales Charge Waivers” below and in the
appendix to this prospectus titled “Special Sales Charge Arrangements and Waivers”). That sales charge will be calculated on the lesser of the original net asset value of the redeemed shares at the time of
purchase or the aggregate net asset value of the redeemed shares at the time of redemption. The Class A contingent deferred sales charge does not apply to shares purchased by the reinvestment of dividends or capital
gain distributions.
The Distributor pays concessions
from its own resources equal to 0.75% of Class A purchases of $1 million or more (other than purchases by certain group omnibus retirement plans) plus advances the service fee for those purchases. The concession will
not be paid on shares purchased by exchange or shares that were previously subject to a front-end sales charge and concession.
About Class B Shares. Class B shares were sold at net asset value per share without an initial sales charge. However, if Class B shares are redeemed within a six
year “holding period” from the beginning of the calendar month in which they were purchased, a contingent deferred sales charge will be deducted from the redemption proceeds. The “holding
period” for shares purchased after February 5, 2012 will begin on the date of purchase. Class B shares are also subject to an asset-based sales charge that is calculated daily based on an annual rate of 0.75%.
The Class B contingent deferred sales charge and asset-based sales charge are paid to compensate the Distributor for providing distribution-related services to the Fund in connection with the sale of Class B
shares.
Class B shares
are no longer offered for new purchases. Dividend and/or capital gains distributions will continue to be made in Class B shares, and exchanges of Class B shares into and from other Oppenheimer funds and certain
account transfers will be permitted.
Any investments
for existing Class B share accounts will be made in Class A shares of Oppenheimer Government Money Market Fund.
14
| Oppenheimer Capital Appreciation Fund
|
The amount of the Class B
contingent deferred sales charge will depend on the number of years since you invested, according to the following schedule:
Years Since Purchase Order was Accepted
| Contingent Deferred Sales Charge on Redemptions in That Year
(As % of Amount Subject to Charge)
|
|
0-1
| 5.0%
|
|
|
1-2
| 4.0%
|
|
|
2-3
| 3.0%
|
|
|
3-4
| 3.0%
|
|
|
4-5
| 2.0%
|
|
|
5-6
| 1.0%
|
|
|
More than 6
| None
|
|
In the table, a
“year” is a 12-month period.
Automatic Conversion of Class B
Shares. Class B shares automatically convert to Class A shares six years (72 months) after you purchase them. This conversion eliminates the Class B asset-based sales charge, however, the shares
will be subject to the ongoing Class A fees and expenses. The conversion is based on the relative net asset value of the two classes, and no sales load or other charge is imposed. When any Class B shares that you hold
convert to Class A shares, all other Class B shares that were acquired by reinvesting dividends and distributions on the converted shares will also convert.
Existing Class
B shares will continue to mature and convert to Class A shares according to their established conversion schedule. For further information on the conversion feature and its tax implications, see “Class B Conversion” in the Statement of Additional Information.
About Class C Shares. Class C shares are sold at net asset value per share without an initial sales charge. However, if Class C shares are redeemed within a 12
month “holding period” measured from the date of purchase, a contingent deferred sales charge of 1.00% may be deducted from the redemption proceeds. Class C shares are also subject to an asset-based sales
charge that is calculated daily based on an annual rate of 0.75%. The Class C contingent deferred sales charge and asset-based sales charge are paid to compensate the Distributor for providing distribution-related
services to the Fund in connection with the sale of Class C shares.
About Class R Shares. Class R shares are offered only to retirement plans and accounts. Class R shares are sold at net asset value per share without an initial
sales charge. Class R shares are subject to an asset-based sales charge that is calculated daily based on an annual rate of 0.25%. See “Distribution and Service (12b-1) Plans” in this prospectus for more
information. See “Class R Share Availability” in the Statement of Additional Information for eligibility requirements.
About Class Y Shares. Class Y shares are not available directly to individual investors, except for eligible employees (defined below). Class Y shares are sold
at net asset value per share without an initial sales charge, and are available only to:
■
| Wrap fee-based programs and fee-based clients of a broker, dealer, registered investment advisor or other financial intermediary;
|
■
| Commissionable brokerage platforms where the financial intermediary, acting as broker on behalf of its customer, charges the customer a transaction-based commission outside of the Fund;
|
■
| “Institutional investors” which may include corporations; trust companies; endowments and foundations; defined contribution, defined benefit, and other employer sponsored retirement and deferred
compensation plans; retirement plan platforms; insurance companies; registered investment advisor firms; registered investment companies; bank trusts; college savings programs; and family offices; and
|
■
| Eligible employees, which are present or former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager and its affiliates, its parent company and the subsidiaries of
its parent company, and retirement plans established for the benefit of such individuals.
|
An institutional investor or
financial intermediary that buys Class Y shares for its customers’ accounts may impose charges on those accounts that are not described in this prospectus or the Statement of Additional Information. The
procedures for buying, selling, exchanging and transferring the Fund’s other classes of shares (other than the time those orders must be received by the Distributor or Transfer Agent at their Colorado office)
and some of the special account features available to investors buying other classes of shares do not apply to Class Y shares. Instructions for buying, selling, exchanging or transferring Class Y shares must be
submitted by the institutional investor, not by its customers for whose benefit the shares are held.
Individual shareholders who hold
Class Y shares through retirement plans or financial intermediaries will not be eligible to hold Class Y shares outside of their respective retirement plan or financial intermediary platform.
Oppenheimer Capital Appreciation Fund
| 15
|
About Class I Shares. Class I shares are sold at net asset value per share without a sales charge and are only available to eligible institutional investors. To
be eligible to purchase Class I shares, an investor must:
■
| be an “institutional investor” which may include corporations; trust companies; endowments and foundations; defined contribution, defined benefit, and other employer sponsored retirement plans and
deferred compensation plans; service provider platforms; insurance companies; registered investment advisor firms; registered investment companies; bank trusts; college savings programs; and family offices;
|
■
| make a minimum initial investment of $1 million or more per account (waived for service provider platforms); and
|
■
| trade through an omnibus, trust, trust networked or similar pooled account.
|
Class I shares are not available
directly to individual investors. Individual shareholders who purchase Class I shares through a financial intermediary or service provider platform will not be eligible to hold Class I shares outside of their
respective financial intermediary or service provider platform.
An institutional investor that
buys Class I shares for its customers’ accounts may impose charges on those accounts that that are not described in this prospectus or the Statement of Additional Information. When buying, selling, exchanging
and transferring the Fund’s other classes of shares, most of the special account features available to investors buying other classes of shares do not apply to Class I shares.
The Fund, at its discretion,
reserves the right to waive the minimum initial investment and minimum balance requirements for investment companies advised or sub-advised by the Manager or an affiliate of the Manager, and for certain investors
otherwise eligible that provide investment products that reference Class I shares of the Fund as the underlying security.
No operational and
recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finder’s fees” will be paid with respect to Class I shares.
Contingent Deferred Sales
Charge. If you redeem shares during their applicable contingent deferred sales charge holding period, the contingent deferred sales charge generally will be deducted from the redemption proceeds.
In some circumstances you may be eligible for one of the waivers described in “Sales Charge Waivers” below and in the “Special Sales Charge Arrangements and Waivers” appendix to this
prospectus. You must advise the Transfer Agent or your financial intermediary of your eligibility for a waiver when you place your redemption request.
A contingent deferred sales
charge will be based on the net asset value of the redeemed shares at the time of redemption or the original net asset value, whichever is lower. A contingent deferred sales charge is not imposed on:
■
| any increase in net asset value over the initial purchase price,
|
■
| shares purchased by the reinvestment of dividends or capital gains distributions, or
|
■
| shares eligible for a sales charge waiver (see “Sales Charge Waivers” below).
|
The Fund redeems shares in the
following order:
■
| shares acquired by the reinvestment of dividends or capital gains distributions,
|
■
| other shares that are not subject to the contingent deferred sales charge, and
|
■
| shares held the longest during the holding period.
|
You are not charged a contingent
deferred sales charge when you exchange shares of the Fund for shares of other Oppenheimer funds. However, if you exchange your shares within the applicable holding period, your original holding period will carry over
to the shares you acquire, even if the new fund has a different holding period. The contingent deferred sales charge applicable to the share class of the Oppenheimer fund you exchange into will apply to the acquired
shares.
Sales Charge
Waivers. The Fund and the Distributor offer the following opportunities to purchase shares without front-end or contingent deferred sales charges.
The Fund reserves the right to amend or discontinue these programs at any time without prior notice. Not all Oppenheimer funds offer all of the share classes described and not all waivers apply to all Oppenheimer
funds. You must advise the Distributor, the Transfer Agent or your financial intermediary that you qualify for the waiver at the time you submit your purchase order or redemption request.
Class A Sales Charge Waivers
Class A shares purchased in
certain circumstances described below are not subject to Class A sales charges (and no concessions are paid by the Distributor on such purchases):
■
| Dividend Reinvestment. Dividends or capital gains distributions may be reinvested in shares of the Fund, or any of the other Oppenheimer funds into which shares of the Fund may be exchanged, without a sales charge.
|
■
| Exchanges of Shares. There is no sales charge on exchanges of shares except for Class A shares of Oppenheimer Government Money Market Fund or Oppenheimer Government Cash Reserves on which you have not paid a sales
charge.
|
■
| Reinvestment Privilege. There is no sales charge on reinvesting the proceeds from redemptions of Class A shares or Class B shares that occurred within the previous three months if you paid an initial or contingent
deferred sales charge on the redeemed shares. This reinvestment privilege does not apply to reinvestment purchases made through automatic investment options.
|
16
| Oppenheimer Capital Appreciation Fund
|
■
| Shares issued in plans of reorganization, such as mergers, asset acquisitions and exchange offers, to which the Fund is a party.
|
■
| Purchases made with the reinvestment of loan repayments by a participant in a retirement plan if the participant previously paid a sales charge on those shares.
|
■
| Purchases made in amounts of less than $5 for accounts held directly with the Transfer Agent.
|
■
| Purchases by the Manager or its affiliates.
|
■
| Purchases by present or former officers, directors, trustees and employees (and their “immediate families”) of the Fund, the Manager and its affiliates, and retirement plans established by the Manager or
its affiliate for their employees. The term “immediate family” refers to one’s spouse, children, grandchildren, grandparents, parents, parents in law, brothers and sisters, sons and daughters in law,
a sibling’s spouse, a spouse’s siblings, aunts, uncles, nieces and nephews; relatives by virtue of a remarriage (step-children, step-parents, etc.) are included.
|
■
| Purchases by current employees and registered representatives (and their spouses) of any financial intermediaries if permitted by the intermediary’s policies. The purchaser must certify to the Distributor at
the time of purchase that the purchase is for the purchaser’s own account (or for the benefit of such employee’s spouse or minor children).
|
■
| Purchases made through an advisory fee or wrap fee-based platform.
|
■
| Purchases by group omnibus retirement plans under section 401(a), 401(k), 403(b) and 457 of the Internal Revenue Code.
|
■
| Purchases by taxable accounts held directly with the Transfer Agent that are established with the proceeds of Required Minimum Distributions from retirement plans and accounts.
|
■
| Rollover purchases in an OppenheimerFunds-sponsored IRA held directly with the Transfer Agent made with the proceeds of a retirement plan distribution that was previously invested in an Oppenheimer fund.
|
■
| Purchases by former shareholders of Atlas Strategic Income Fund for any Oppenheimer fund into which shareholders of Oppenheimer Global Strategic Income Fund may exchange if permitted by the intermediary’s
policies.
|
■
| Purchases by former shareholders of Oppenheimer Total Return Fund Periodic Investment Plan for any Oppenheimer fund into which shareholders of Oppenheimer Main Street Fund may exchange if permitted by the
intermediary’s policies.
|
■
| Purchases within retirement plans that were converted to Class A shares from Class B shares on July 1, 2011, if permitted by the intermediary’s policies.
|
■
| Effective December 4, 2017, purchases made where there is no broker-dealer of record.
|
Waivers of the Class A Contingent
Deferred Sales Charge for Certain Redemptions
The Class A CDSC is also waived
if shares that would otherwise be subject to the CDSC are redeemed in the following cases:
■
| Involuntary redemptions of small accounts (please refer to “Minimum Account Balance,” in the applicable fund prospectus).
|
■
| For distributions from retirement plans and accounts, deferred compensation plans or other employee benefit plans for any of the following reasons, as applicable:
|
1.
| Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant’s account was established in an
Oppenheimer fund.
|
2.
| To return excess contributions.
|
3.
| To return contributions made due to a mistake of fact.
|
4.
| To make hardship withdrawals, except from IRAs, as defined in the plan.
|
5.
| To make distributions required under a qualified domestic relations order described in Section 414(p) of the Internal Revenue Code or, in the case of an IRA, a divorce or separation agreement described in Section
71(b) of the Internal Revenue Code.
|
6.
| To meet the minimum distribution requirements of the Internal Revenue Code.
|
7.
| To make “substantially equal periodic payments” as described in Section 72(t) of the Internal Revenue Code.
|
8.
| For loans to participants or beneficiaries except for loans from OppenheimerFunds-sponsored 403(b)(7) custodial plans or from Oppenheimer Single K plans.
|
9.
| On account of the participant’s separation from service. This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after separation from service in or after the year age 55 is
attained.
|
10.
| Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager).
|
11.
| Distributions made on account of a plan termination or “in-service” distributions, if the redemption proceeds are rolled
|
Oppenheimer Capital Appreciation Fund
| 17
|
| over directly to an OppenheimerFunds-sponsored IRA held directly with the Transfer Agent, if requested prior to plan termination or the elimination of the Oppenheimer funds as an investment option under the plan.
|
12.
| Distributions from a participant’s account under an Automatic Withdrawal Plan after the participant reaches age 59 1⁄2, as long as the aggregate value of the distributions does not exceed 12% of the account’s value annually.
|
■
| Redemptions of shares under an Automatic Withdrawal Plan for an account (other than a retirement plan) if the aggregate value of the redeemed shares does not exceed 12% of the account’s value annually.
|
Waivers of Class B and Class C
Contingent Deferred Sales Charges
The Class B and Class C CDSCs
will be waived for redemptions of shares in the following cases.
■
| Involuntary redemptions of small accounts (please refer to “Minimum Account Balance,” in the applicable fund prospectus).
|
■
| Redemptions from accounts other than retirement plans following the death or disability of the last surviving shareholder or sole beneficiary of a trust. The death or disability must have occurred after the account
was established, and for disability you must provide evidence of a determination of disability by the Internal Revenue Code.
|
■
| Redemptions of Class C shares of an Oppenheimer fund, requested in writing by a retirement plan sponsor and submitted more than 12 months after the retirement plan’s first purchase of Class C shares, if the
redemption proceeds are invested to purchase Class R shares of one or more Oppenheimer funds.
|
■
| Distributions from retirement plans and accounts, deferred compensation plans or other employee benefit plans for any of the following reasons, as applicable:
|
1.
| Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant’s account was established in an
Oppenheimer fund.
|
2.
| To return excess contributions.
|
3.
| To return contributions made due to a mistake of fact.
|
4.
| To make hardship withdrawals, except from IRAs, as defined in the plan.
|
5.
| To make distributions required under a qualified domestic relations order described in Section 414(p) of the Internal Revenue Code or, in the case of an IRA, a divorce or separation agreement described in Section
71(b) of the Internal Revenue Code.
|
6.
| To meet the minimum distribution requirements of the Internal Revenue Code.
|
7.
| To make “substantially equal periodic payments” as described in Section 72(t) of the Internal Revenue Code.
|
8.
| For loans to participants or beneficiaries except for loans from OppenheimerFunds-sponsored 403(b)(7) custodial plans or from OppenheimerFunds Single K plans.
|
9.
| On account of the participant’s separation from service. This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after separation from service in or after the year age 55 is
attained.
|
10.
| Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager).
|
11.
| Distributions made on account of a plan termination or “in-service” distributions, if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA held directly with the Transfer
Agent, if requested prior to plan termination or the elimination of the Oppenheimer funds as an investment option under the plan.
|
12.
| For distributions from a participant’s account under an Automatic Withdrawal Plan after the participant reaches age 59 1⁄2, as long as the aggregate value of the distributions does not exceed 10% of the account’s value annually.
|
■
| Redemptions of Class B shares or Class C shares under an Automatic Withdrawal Plan from an account other than a retirement plan if the aggregate value of the redeemed shares does not exceed 10% of the
account’s value annually.
|
■
| Redemptions of shares sold to the Manager or its affiliates.
|
■
| Redemptions of shares issued in plans of reorganization to which the Fund is a party.
|
■
| Effective December 4, 2017, conversions to Class A share accounts requested by current investors who no longer have a broker-dealer of record for an existing Class C share account.
|
In addition, the appendix to
this prospectus titled “Special Sales Charge Arrangements and Waivers” provides detailed information about certain other initial sales charge and contingent deferred sales charge waivers and arrangements.
A description of those sales charge waivers and arrangements is available for viewing on the OppenheimerFunds website at www.oppenheimerfunds.com and may also be ordered by calling 1.800.225.5677. You must advise the Distributor, the Transfer Agent or your financial intermediary that you qualify
for one of those waivers at the time you submit your purchase order or redemption request.
18
| Oppenheimer Capital Appreciation Fund
|
DISTRIBUTION
AND SERVICE (12b-1) PLANS
Service Plan for Class A
Shares. The Fund has adopted a service plan for Class A shares that reimburses the Distributor for a portion of the costs of maintaining accounts and providing services to Class A shareholders.
Reimbursement is made periodically at an annual rate of up to 0.25% of the Class A shares daily net assets. The Distributor currently uses all of those fees to pay brokers, dealers, banks and other financial intermediaries for providing personal service and maintaining the accounts of their customers that hold Class A shares. For Class A purchases with no front-end
sales charge imposed due to the qualifying breakpoint, the Distributor normally pays intermediaries the service fee in advance for the first year after shares are purchased and then pays that fee periodically. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Because the service fee is paid out of the Fund’s assets on an ongoing
basis, over time it will increase the cost of your investment.
Distribution and Service Plans for
Class B, Class C and Class R Shares. The Fund has adopted Distribution and Service Plans for Class B, Class C and Class R shares to pay the Distributor for distributing those share classes, maintaining accounts and providing
shareholder services. Under the plans, the Fund pays the Distributor an asset-based sales charge for Class B and Class C shares calculated at an annual rate of 0.75% of the daily net assets of those classes and for
Class R shares calculated at 0.25% of the daily net assets of that class. The Fund also pays a service fee under the plans at an annual rate of 0.25% of the daily net assets of Class B, Class C and Class R shares.
Altogether, these fees increase the Class B and Class C shares annual expenses by 1.00% and increase the Class R shares annual expenses by 0.50%, calculated on the daily net assets of the applicable class. Because
these fees are paid out of the Fund’s assets on an ongoing basis, over time they will increase the cost of your investment and may cost you more than other types of sales charges.
Use of Plan
Fees: The Distributor uses the service fees to compensate brokers, dealers, banks and other financial intermediaries for maintaining accounts and providing personal services to Class B, Class C
or Class R shareholders in the applicable share class. The Distributor normally pays intermediaries the 0.25% service fee in advance for the first year after shares are purchased and then pays that fee
periodically.
Class C
Shares: At the time of a Class C share purchase, the Distributor generally pays financial intermediaries a sales concession of 0.75% of the purchase price from its own resources. Therefore, the
total amount, including the advance of the service fee that the Distributor pays the intermediary at the time of a Class C share purchase is 1.00% of the purchase price. The Distributor normally retains the
asset-based sales charge on Class C share purchases during the first year and then pays that fee to the intermediary as an ongoing concession. For Class C share purchases in certain omnibus group retirement plans, the
Distributor pays the intermediary the asset-based sales charge during the first year instead of paying a sales concession at the time of purchase. The Distributor pays the service fees it receives on those shares to
the intermediary for providing shareholder services to those accounts. See the Statement of Additional Information for exceptions to these arrangements.
Class R
Shares: For all new purchases of Class R shares, the Distributor pays intermediaries a 0.25% service fee and a 0.25% asset based sales charge on an ongoing basis.
For certain
Class R shares of Oppenheimer funds purchased prior to July 1, 2014, the Distributor paid financial intermediaries 1.00% of the purchase price at the time of sale. For those shares, the Distributor retained the
service fee for the first year, paying intermediates the service fee thereafter, and retains the asset-based sales charge on Class R shares on an ongoing basis.
Payments to Financial
Intermediaries and Service Providers. The Sub-Adviser and/or the Distributor, Transfer Agent and/or Sub-Transfer Agent, at their discretion, may also make payments to
broker-dealers, other financial intermediaries or to service providers for some or all of the following services: distribution, promotional and marketing support, operational and recordkeeping, sub-accounting,
networking and administrative services.
The types of financial
intermediaries that may receive compensation for providing such services include, but are not limited to, broker-dealers, financial advisors, registered investment advisers, sponsors of fund
“supermarkets,” sponsors of fee-based advisory or wrap fee-based programs, sponsors of college and retirement savings programs, banks, trust companies, retirement plan or qualified tuition program
administrators, third party administrators, financial intermediaries that offer products that hold Fund shares, and insurance companies that offer variable annuity or variable life insurance products.
Payments for distribution or
promotional and marketing support are made out of the Sub-Adviser’s and/or the Distributor’s own resources and/or assets, including from the revenues or profits derived from the advisory fees the
Sub-Adviser receives from the Manager for sub-advisory services on behalf of the Fund. Such payments, which may be substantial, are paid to financial intermediaries who perform services for the Sub-Adviser, and/or the
Distributor, and are in addition to payments made pursuant to an applicable 12b-1 plan. Such payments are separate from any commissions the Distributor pays to financial intermediaries out of the sales charges paid by
investors.
Payments for
distribution-related expenses and asset retention items, paid by the Sub-Adviser or the Distributor, such as marketing or promotional expenses, are often referred to as “revenue sharing.” Revenue sharing
payments may be made on the basis of the sales of shares attributable to that financial intermediary, the average net assets of the Fund and other Oppenheimer funds attributable to the accounts of that financial
intermediary and its clients, negotiated lump sum payments for distribution services provided, or similar fees. In some circumstances, revenue sharing payments may create an incentive for a financial intermediary or
its representatives to recommend or offer shares of the Fund or other
Oppenheimer Capital Appreciation Fund
| 19
|
Oppenheimer funds to its customers. These
payments also may give a financial intermediary an incentive to cooperate with the Distributor’s marketing efforts. A revenue sharing payment may, for example, qualify the Fund for preferred status with the
financial intermediary receiving the payment or provide representatives of the Distributor with access to representatives of the financial intermediary’s sales force, in some cases on a preferential basis over
funds of competitors. Additionally, as firm support, the Sub-Adviser or Distributor may reimburse expenses, including, but not limited to, educational seminars and “due diligence” or training meetings (to
the extent permitted by applicable laws or the rules of the Financial Industry Regulatory Authority (“FINRA”)) designed to increase sales representatives’ awareness about Oppenheimer funds, including
travel and lodging expenditures. However, the Sub-Adviser or Distributor does not consider a financial intermediary’s sale of shares of the Fund or other Oppenheimer funds when selecting brokers or dealers to
effect portfolio transactions for the funds.
Various factors are used to
determine whether to make revenue sharing payments. Possible considerations include, without limitation, the types of services provided by the financial intermediary, sales of Fund shares, the redemption rates on
accounts of clients of the financial intermediary or overall asset levels of Oppenheimer funds held for or by clients of the financial intermediary, the willingness of the financial intermediary to allow the
Distributor to provide educational and training support for the financial intermediary’s sales personnel relating to the Oppenheimer funds, the availability of the Oppenheimer funds on the financial
intermediary’s sales system, as well as the overall quality of the services provided by the financial intermediary. The Sub- Adviser and Distributor have adopted guidelines for assessing and implementing each
prospective revenue sharing arrangement. To the extent that financial intermediaries receiving distribution-related payments from the Sub-Adviser or Distributor sell more shares of the Oppenheimer funds or retain more
shares of the funds in their client accounts, the Sub-Adviser and Distributor benefit from the incremental management and other fees they receive with respect to those assets.
Payments may be made by the
Transfer Agent or Sub-Transfer Agent to financial intermediaries to compensate or reimburse them for services provided, such as sub-transfer agency services for shareholders or retirement plan participants, omnibus
accounting or sub-accounting, participation in networking arrangements, operational and recordkeeping and other administrative services. These payments are made out of the Transfer Agent’s or Sub-Transfer
Agent’s own resources and/or assets, including from the revenues or profits derived from the transfer agency fees the Transfer Agent receives from the Fund. Financial intermediaries that may receive these fees
for providing services may include, but are not limited to, retirement plan administrators, qualified tuition program sponsors, banks and trust companies, broker-dealers, and insurance companies that offer variable
annuity or variable life insurance products, and other financial intermediaries. These fees may be used by the financial intermediary to offset or reduce fees that would otherwise be paid directly to them by certain
account holders, such as retirement plans.
Payments made by the
Sub-Adviser, and/or the Distributor, the Transfer Agent and Sub-Transfer Agent are not reflected in the tables in the “Fees and Expenses of the Fund” section of this prospectus because they are not paid by
the Fund.
Financial intermediaries will
not receive any operational and recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finder’s fees” for Class I
shares.
The Statement of Additional
Information contains more information about revenue sharing payments made by the Sub-Adviser and/or Distributor and operational and recordkeeping, networking and sub-accounting payments made by the Transfer Agent
and/or Sub-Transfer Agent. Your broker-dealer or other financial intermediary may charge you fees or commissions in addition to those disclosed in this prospectus. You should ask your financial intermediary for details about any such payments it receives from the Sub-Adviser, Distributor, Transfer Agent or Sub-Transfer Agent, or any
other fees or expenses it charges.
How to Buy, Sell and Exchange
Shares
Buying Shares. You can buy shares in several ways as described below. Your order must be received in proper form before the Valuation Time for you to receive that day’s offering
price. If your order is received on a day other than a regular business day or after the Valuation Time, the order will receive the next offering price that is determined. To be in proper form, your purchase order
must comply with the procedures described below. If you submit a purchase request without designating which Oppenheimer fund you wish to invest in or if the selected Oppenheimer fund or share class is no longer
offered, your investments will be made into Class A shares of Oppenheimer Government Money Market Fund. This does not apply to purchases by or for certain retirement plans or accounts. A purchase order for the Fund’s shares may be rejected for any reason.
Buying Shares Through a Financial
Intermediary. You can buy shares through any financial intermediary that has a selling agreement in place with the Distributor. Your financial intermediary will place your order on your
behalf and may charge a fee for that service. Your account information will be shared with the financial intermediary designated as the dealer of record for your account. When buying shares
through a financial intermediary, you may not be eligible to purchase certain share classes offered by the Fund or benefit from certain policies and procedures described herein as your eligibility may be dependent
upon the policies and procedures of such financial intermediary. In addition, financial intermediaries may have different policies and procedures regarding the availability of the sales charge reductions and waivers
described herein and disclosed in the Appendix titled “Special Sales Charge Arrangements and Waivers.”
Buying Shares Without Using a
Financial Intermediary. We recommend that you discuss your investment with a financial advisor before you make a purchase to be sure that the Fund is appropriate for you. If you want to purchase shares without
using a financial intermediary (without designating a broker-dealer as described below), complete an
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| Oppenheimer Capital Appreciation Fund
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OppenheimerFunds new account application and
mail it with a check payable in U.S. dollars to Oppenheimer funds at the address shown on the back cover of this prospectus. No share class other than Class A may be purchased by a new (non-institutional) investor
without designating a broker-dealer.
If you do not designate a
broker-dealer on your application or a current investor no longer has a broker-dealer of record for an existing account, the account will be held on behalf of the Fund(s) and, effective December 4, 2017, you will only
be eligible to purchase Class A shares without a sales charge (and, for eligible institutional investors, Class Y or Class I shares). In the event a broker-dealer is thereafter designated by an investor, the Class A
sales charge waiver privilege will be revoked for future purchases. For more information regarding undesignated investments, please call the number on the back cover of this prospectus.
■
| Involuntary Redemptions. In some circumstances, involuntary redemptions may be made to repay any losses from the cancellation of share purchase orders.
|
Identification Requirements. Federal regulations may require the Fund to obtain your name, your date of birth (for a natural person), your residential street address or principal place of business, and your Social
Security Number, Employer Identification Number or other government-issued identification when you open an account. Additional information may be required to open a corporate account or in certain other circumstances.
The Fund or the Transfer Agent may use this information to verify your identity. The Fund may not be able to establish an account if the necessary information is not received. The Fund may also place limits on account
transactions while it is in the process of verifying your identity. Additionally, if the Fund is unable to verify your identity after your account is established, the Fund may be required to redeem your shares and
close your account.
Suspension of Share
Offering. The offering of Fund shares may be suspended during any period in which the determination of net asset value is suspended, and may be suspended by the Board at any time the Board believes
it is in the Fund’s best interest to do so.
Selling Shares. You can generally redeem (sell) some or all of your shares on any regular business day. You may redeem your shares by writing a letter, by
wire, by telephone or on the Internet. You can also set up an Automatic Withdrawal Plan to redeem shares on a regular basis. The redemption of Fund shares may be suspended under certain circumstances described in
“Payment Delays” below. If you have questions about any of these procedures, and especially if you are redeeming shares in a special situation,
such as due to the death of the owner or from a retirement plan account, please call your financial intermediary or the Transfer Agent for assistance.
Redemption Price. Your shares will be redeemed at net asset value less any applicable sales charge or other fees. The net asset value used will be the next one calculated after your order is received, in
proper form, by the Transfer Agent or your authorized financial intermediary. To be in proper form, your redemption order must comply with the procedures described below. The redemption price for shares will change
from day-to-day because the value of the securities in the Fund’s portfolio and the Fund’s expenses fluctuate. The redemption price will normally differ for each class of shares. The redemption price of
your shares may be more or less than their original cost.
Redemptions
“In-Kind.” Shares may be “redeemed in-kind” under certain circumstances (such as a lack of liquidity in the Fund’s portfolio to meet redemptions). That means that the redemption
proceeds will be paid in securities from the Fund’s portfolio on a pro-rata basis, possibly including illiquid securities. If the Fund redeems your shares in-kind, you may bear transaction costs or the risk of
not being able to sell illiquid securities, and will bear market risks until such securities are converted into cash. You may incur taxable capital gain when converting securities to cash.
Redemption or transfer requests
will not be honored until the Transfer Agent receives all required documents in proper form. From time to time, the Transfer Agent, in its discretion, may waive certain of the requirements for redemptions stated in
this prospectus.
Options for Receiving Redemption
Proceeds
■
| By Check. The Fund will normally send redemption proceeds by check to the address on your account statement.
|
■
| By AccountLink. If you have linked your Fund account to your bank account with AccountLink (described below), you may have redemption proceeds transferred directly into your account. Normally the transfer
to your bank is initiated on the bank business day after the redemption. You will not receive dividends on the proceeds of redeemed shares while they are waiting to be transferred.
|
■
| By Wire. You can arrange to have redemption proceeds sent by Federal Funds wire to an account at a bank that is a member of the Federal Reserve wire system. The redemption proceeds will normally be
transmitted on the next bank business day after the shares are redeemed. You will not receive dividends on the proceeds of redeemed shares while they are waiting to be transmitted.
|
Payment
Delays. Payment for redeemed shares is typically made within one business day after the Transfer Agent receives redemption instructions in proper form regardless of the payment method requested,
but may be delayed for up to seven days as described below. For accounts registered in the name of a broker-dealer, payment will normally be forwarded to the broker-dealer within two business days. The Transfer Agent
may delay processing redemption payments for recently purchased shares until the purchase payment has cleared. That delay may be as much as five business days from the date the shares were purchased. That delay may be
avoided if you purchase shares by Federal Funds wire or
Oppenheimer Capital Appreciation Fund
| 21
|
certified check. Under the Investment Company
Act of 1940, the Fund may suspend the right of redemption or postpone the date of payment for more than seven days in the following unusual circumstances:
■
| during any period in which the NYSE is closed other than customary weekend and holiday closings or during any period in which trading on the NYSE is deemed to be restricted;
|
■
| during any period in which an emergency exists, as a result of which (i) it is not reasonably practicable for the Fund to dispose of securities owned by it or (ii) it is not reasonably practicable for the Fund to
fairly determine the value of its net assets; or
|
■
| during such other periods as the Securities and Exchange Commission may by order permit to protect Fund shareholders.
|
The Securities and Exchange
Commission will determine the conditions under which trading shall be deemed to be restricted and the conditions under which an emergency shall be deemed to exist.
The Fund
typically expects to use cash on hand to meet redemption requests under normal market conditions. However, to meet redemption requests during stressed market conditions, the Fund may be required to sell portfolio
securities to raise cash or redeem shares “in-kind” if there is a lack of liquidity in the Fund’s portfolio. Additionally, the Fund participates in a revolving credit facility intended to provide
short-term financing, if necessary, subject to certain restrictions, in connection with atypical redemption activity.
The Oppenheimer Exchange
Privilege. You can exchange all or part of your Fund shares for shares of the same class of other Oppenheimer funds that offer the exchange privilege,
generally without the imposition of any sales charges. For example, you can exchange Class A shares of the Fund only for Class A shares of another fund. You can obtain a list of the Oppenheimer funds that are
currently available for exchanges by calling a service representative at the telephone number on the back of this prospectus. The funds available for exchange can change from time to time. The Fund may amend, suspend
or terminate the exchange privilege at any time. You will receive 60 days’ notice of any material change in the exchange privilege unless applicable law allows otherwise.
Requirements for Exchanges of
Shares. To exchange shares of the Fund, you must meet several conditions. The Fund may amend the following requirements at any time:
■
| Shares of the fund selected for exchange must be available for sale in your state of residence.
|
■
| The selected fund and share class must offer the exchange privilege.
|
■
| You must meet the minimum purchase requirements for the relevant class of the selected fund.
|
■
| Generally, exchanges may be made only between identically registered accounts, unless all account owners send written exchange instructions with a signature guarantee.
|
■
| Before exchanging into a fund, you should obtain its prospectus and should read it carefully.
|
Timing of Exchange
Transactions. Exchanged shares are normally redeemed from one fund and the proceeds are reinvested in the fund selected for exchange on the same regular business day on which the Transfer Agent or its
agent (such as a financial intermediary holding the investor’s shares in an “omnibus” or “street name” account) receives an exchange request that conforms to these policies. The request
must be received before the Valuation Time on that day in order to receive that day’s net asset value on the exchanged shares. For requests received after the Valuation Time the shares being exchanged will be
valued at the next net asset value calculated after the request is received. The Transfer Agent may delay transmitting the proceeds from an exchange for up to five business days, if it determines, in its discretion,
that an earlier transmittal of the redemption proceeds would be detrimental to either the fund from which shares are being exchanged or the fund into which the exchange is being made. The exchange proceeds will be
invested in the new fund at the next net asset value calculated after the proceeds are received. In the event that a delay in the reinvestment of proceeds occurs, the Transfer Agent will notify you or your financial
intermediary.
Taxes on Exchanges. For tax purposes, an exchange of shares of the Fund is considered a sale of those shares and a purchase of the shares of the fund into which you are exchanging. Therefore, an exchange may
result in a capital gain or loss for tax purposes.
Frequent Purchase and Exchange
Limitations
The Board has adopted a policy
to discourage and seek to limit or eliminate frequent purchases or exchanges of shares of the Fund by shareholders or authorized broker-dealer representatives of shareholders, in order to prevent the negative impacts,
if any, that this activity may impose on other shareholders of the Fund. Negative impacts may include, without limitation, interference with portfolio management, increased taxes on portfolio securities, diminishment
of Fund performance due to the need to sell portfolio securities at less favorable prices, increases in portfolio and administrative transaction costs resulting from large volumes of frequent purchase or exchange
activity, and the possible dilution of Fund yields as a result of such activity. In addition, a Fund that invests in non-U.S. securities is subject to the risk that an investor may seek to take advantage of a delay
between the change in value of the Fund’s portfolio securities and the determination of the Fund’s net asset value as a result of different closing times of U.S. and non-U.S. markets by buying or selling
Fund shares at a price that does not reflect their true value. A similar risk exists for Funds that invest in securities of small capitalization companies, securities of issuers located in emerging markets or high
yield securities (junk bonds) that are thinly traded and therefore may have actual values that differ from their market prices. This short-term arbitrage activity can
22
| Oppenheimer Capital Appreciation Fund
|
reduce the
return received by long-term shareholders. The Fund will seek to eliminate these opportunities by using fair value pricing, as described in “Fair Value Pricing” in this prospectus.
There is no guarantee that this
policy will be sufficient to identify and prevent all frequent purchases or exchanges that may have negative impacts to a Fund. In addition, the implementation of the Funds’ policy involves judgments that are
inherently subjective and involve some selectivity in their application. The Fund, however, seeks to make judgments that are consistent with the interests of the Fund’s shareholders. No matter how the Fund
defines frequent purchases or exchanges, other purchases and sales of Fund shares may have adverse effects on the management of a Fund’s portfolio and its performance. Additionally, due to the complexity and
subjectivity involved in identifying certain frequent trading and the volume of Fund shareholder transactions, there can be no guarantee that the Fund will be able to identify violations of the policy or to reduce or
eliminate all detrimental effects of frequent purchases or exchanges.
The Fund may from time to time
use other methods that it believes are appropriate to deter market timing or other trading activity that may be detrimental to a fund or long-term shareholders.
Right to Refuse Any Purchase
and/or Exchange Orders. The Fund may refuse, or cancel as permitted by law, any purchase or exchange order in its discretion for any reason at any time, and is not obligated to provide notice before rejecting or
canceling an order. If a shareholder has engaged in purchases and redemptions of shares that would have been prohibited had the activity been attempted as an exchange, that shareholder may be prohibited from
purchasing new Fund shares unless the Fund determines that such activity is not frequent trading activity.
Right to Terminate or Suspend
Account Privileges. The Fund may, in its discretion, limit or terminate trading activity by any person, group or account that it believes would be disruptive, even if the activity has not exceeded the policy
described in this prospectus. As part of the Fund’s policy to detect and deter frequent purchases and exchanges, the Fund may review and consider the history of frequent trading activity in all accounts in the
Oppenheimer funds known to be under common ownership or control. The Fund may send a written warning to a shareholder that it believes may be engaging in disruptive or excessive trading activity; however, the Fund
reserves the right to suspend or terminate the ability to purchase or exchange shares, with or without warning, for any account that the Fund determines, in the exercise of its discretion, has engaged in such trading
activity.
Omnibus Accounts. Underlying shareholder or account data, including individual transactions, in “omnibus” or “street name” accounts (“omnibus accounts”) in the name of a
broker-dealer or other financial intermediaries are often not disclosed to a Fund, which may make it difficult for a Fund to monitor for frequent trading activity. Financial intermediaries holding omnibus accounts
where underlying shareholder or account data is not disclosed to a Fund will, generally, enter into written agreements which require the financial intermediaries to provide such data at the Fund’s request.
Overall purchase and redemption activity in omnibus accounts will be monitored to identify patterns which may suggest frequent trading by the underlying owners. Financial intermediaries will be required to apply the
Fund’s policy in addition to their own frequent trading controls. For financial intermediaries, the Fund will request individual account or transaction information, and based on the information and data it
receives, will apply its policy to review transactions that may constitute frequent purchase or exchange activity. The Fund may prohibit, in its sole discretion, purchases or exchanges of Fund shares by a financial
intermediary or by some or all of its clients.
30-Day Exchange Limit. In addition to the discretionary ability to limit or reject any order to purchase or exchange shares of a Fund at any time, if a shareholder exchanges shares of another Oppenheimer fund
account for shares of the Fund, his or her Fund account will be “blocked” from exchanges into any other fund for a period of 30 calendar days from the date of the exchange, subject to certain exceptions
described below. Likewise, if a Fund shareholder exchanges Fund shares for shares of another eligible Oppenheimer fund, that fund account will be “blocked” from further exchanges for 30 calendar days,
subject to the exception described below. The block will apply to the full account balance and not just to the amount exchanged into the account. For example, if a shareholder exchanged $2,000 from one fund into
another fund in which the shareholder already owned shares worth $10,000, then, following the exchange and assuming no exception applied, the full account balance ($12,000 in this example) would be blocked from
exchanges into another fund for a period of 30 calendar days.
Exceptions to 30-Day Exchange
Limit
■
| Exchanges Into Money Market Funds. A shareholder will be permitted to exchange shares of the Fund for shares of an eligible money market fund any time, even if the shareholder has exchanged shares into the Fund during the
prior 30 days. Exchanges from that money market fund into another fund will be monitored for excessive activity and the Fund may limit or refuse any exchange order from a money market fund in its discretion pursuant
to this policy.
|
■
| Dividend Reinvestments and Share Conversions. The reinvestment of dividends or distributions from one fund to purchase shares of another fund and the conversion of shares from one share class to another class within the same fund will
not be considered exchanges for purposes of imposing the 30-day limit.
|
■
| Asset Allocation Programs. Investment programs by Oppenheimer “funds of funds” that entail rebalancing investments in underlying Oppenheimer funds will not be subject to these limits. However,
third-party asset allocation and rebalancing programs will be subject to the 30-day limit described above. Asset allocation firms that want to exchange shares held in accounts on behalf of their customers must
identify themselves and execute an acknowledgement and agreement to abide by these policies with respect to their customers’ accounts. “On-demand” exchanges outside the parameters of portfolio
rebalancing programs will also be subject to the 30-day limit.
|
Oppenheimer Capital Appreciation Fund
| 23
|
■
| Automatic Exchange Plans. Accounts that receive exchange proceeds through automatic or systematic exchange plans that are established through the Transfer Agent will not be subject to the 30-day exchange limit as a
result of those automatic or systematic exchanges but may be blocked from exchanges, under the 30-day limit, if they receive proceeds from other exchanges.
|
■
| Redemptions of Shares. These exchange policy limits do not apply to redemptions of shares. Shareholders are permitted to redeem their shares on any regular business day, subject to the terms of this
prospectus.
|
Other Limitations on
Exchanges. There are a number of other special conditions and limitations that apply to certain types of exchanges. Those conditions and circumstances are described in the section “How to
Exchange Shares” in the Statement of Additional Information. For information about sales charges that may apply to exchanges of shares see the sections “Contingent Deferred Sales Charge” and
“Sales Charge Waivers” in this prospectus.
Submitting Share Transaction
Requests. Share transactions may be requested by telephone or internet, in writing, through your financial intermediary, or by establishing one of
the Investor Services plans described below. Certain transactions may also be submitted by fax. If an account has more than one owner, the Fund and the Transfer Agent may rely on instructions from any one owner or
from the financial intermediary’s representative of record for the account, unless that authority has been revoked. Class Y and Class I share transactions may only be submitted in writing, by fax, by phone
through a service representative, or through an investor’s designated financial intermediary.
Internet and Telephone Transaction
Requests. Purchase, redemption and exchange requests may be submitted on the OppenheimerFunds website, www.oppenheimerfunds.com. Those requests may also be made by calling the telephone number on
the back cover and either speaking to a service representative or accessing PhoneLink, the OppenheimerFunds automated telephone system that enables shareholders to perform certain account transactions automatically
using a touch-tone phone.
You will need to obtain a user
I.D. and password to execute transactions through PhoneLink or on the internet. Some internet and telephone transactions require the Oppenheimer AccountLink feature, described below, that links your Fund account with
an account at a U.S. bank or other financial institution. The Transfer Agent will record any telephone calls to verify data concerning transactions.
The following policies apply to
internet and telephone transactions:
■
| Purchases through AccountLink that are submitted through PhoneLink or on the internet are limited to $100,000.
|
■
| Purchases through AccountLink that are submitted by calling a service representative are limited to $250,000.
|
■
| Redemptions that are submitted by telephone or on the internet and request the proceeds to be paid by check, are limited to $100,000, must be made payable to all owners of record of
the shares and must be sent to the address on the account statement. This service is not available within 15 days of changing the address on an account.
|
■
| Redemptions by telephone or on the internet that are sent to your bank account through AccountLink are limited to $100,000.
|
■
| Exchanges submitted by telephone or on the internet may be made only between accounts that are registered with the same name(s) and address.
|
■
| Shares for which share certificates have been issued may not be redeemed or exchanged by telephone or on the internet.
|
■
| Shares held in an OppenheimerFunds-sponsored qualified retirement plan account may not be redeemed or exchanged by telephone or on the internet.
|
The Transfer Agent has adopted
procedures to confirm that telephone and internet instructions are genuine. Callers are required to provide service representatives with tax identification numbers and other account data and PhoneLink and internet
users are required to use PIN numbers. The Transfer Agent will also send you written confirmations of share transactions. The Transfer Agent and the Fund will not be liable for losses or expenses that occur from
telephone or internet instructions reasonably believed to be genuine.
The Transfer Agent maintains
physical, electronic and procedural safeguards that are reasonably designed to protect your personal account information. It is important that you 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, do not allow it to be used by anyone else. Also, take special precautions when accessing your account on a computer used by others. We
advise you not to send personal or account information to us in non-secure emails. Instead, you are encouraged to take advantage of the secure features of our website to encrypt your email correspondence. The Transfer
Agent, its affiliates, and the Fund are not responsible for any account losses incurred as a result of fraud if they have reason to believe that the person transacting business on an account is authorized to do so. By
completing the terms of online registration to access an account through the OppenheimerFunds website, you waive any right to reclaim any losses from the Transfer Agent, its affiliates, or the Fund incurred through
fraudulent activity.
Telephone or internet
transaction privileges may be modified, suspended or terminated by the Fund at any time. The Fund will provide you notice of such changes whenever it is required to do so by applicable law.
Purchases and
Redemptions by Federal Funds Wire. Shares may be paid for by Federal Funds wire. Redemption proceeds may also be transmitted by wire and are limited to $100,000. The minimum wire purchase or redemption is $2,500. There is a
$10 fee for each wire redemption request. Before sending a wire purchase, please call the number on
24
| Oppenheimer Capital Appreciation Fund
|
the back cover
of this prospectus to provide notification of the incoming wire and to receive further instructions. To set up wire redemptions on your account or to arrange for a wire redemption, please call the number on the back
cover of this prospectus.
Written Transaction
Requests. You can send purchase, exchange or redemption requests to the Transfer Agent at the address on the back cover. Your request must include:
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| For existing accounts, the Fund account number (from your account statement);
|
■
| For new accounts, a completed account application;
|
■
| For purchases, a check payable to the Fund or to OppenheimerFunds, Inc.;
|
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| For redemptions, any special payment instructions;
|
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| For redemptions or exchanges, the dollar amount or number of shares to be redeemed or exchanged;
|
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| For redemptions or exchanges, any share certificates that have been issued (exchanges or redemptions of shares for which certificates have been issued cannot be processed until the Transfer Agent receives the
certificates);
|
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| For individuals, the names and signatures of all registered owners exactly as they appear in the account registration;
|
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| For corporations, partnerships or other businesses or as a fiduciary, the name of the entity as it appears in the account registration and the names and titles of any individuals signing on its behalf; and
|
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| Other documents requested by the Transfer Agent to assure that the person purchasing, redeeming or exchanging shares is properly identified and has proper authorization to carry out the transaction.
|
Certain Requests Require a
Signature Guarantee. To protect you and the Fund from fraud, certain redemption requests must be in writing and must include a signature guarantee. A notary public seal will not be accepted for these requests
(other situations might also require a signature guarantee):
■
| You wish to redeem more than $100,000;
|
■
| The redemption check is not payable to all shareholders listed on the account statement;
|
■
| The redemption check is not sent to the address of record on your account statement;
|
■
| Shares are being transferred to a Fund account with a different owner or name; or
|
■
| Shares are being redeemed by someone (such as an Executor) other than the owners.
|
Where Can You Have Your Signature
Guaranteed? The Transfer Agent will accept a signature guarantee from a number of financial institutions, including:
■
| a U.S. bank, trust company, credit union or savings association,
|
■
| a foreign bank that has a U.S. correspondent bank,
|
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| a U.S. registered dealer or broker in securities, municipal securities or government securities, or
|
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| a U.S. national securities exchange, a registered securities association or a clearing agency.
|
Fax Requests. You may send requests for certain types of account transactions to the Transfer Agent by fax. Please call the number on the back of this prospectus for information about which transactions
may be handled this way. Transaction requests submitted by fax are subject to the same rules and restrictions as the written, telephone and internet requests described in this prospectus. However, requests that
require a signature guarantee may not be submitted by fax.
Submitting Transaction Requests
Through Your Financial Intermediary. You can submit purchase, redemption or exchange requests through any broker, dealer or other financial intermediary that has an agreement with the Distributor. The broker, dealer or other
intermediary will place the order with the Distributor on your behalf. A broker or dealer may charge a processing fee for that service. If your shares are held in the name of your financial intermediary, you must
redeem them through that intermediary.
Intermediaries that perform
account transactions for their clients by participating in “Networking” through the National Securities Clearing Corporation are responsible for obtaining their clients’ permission to perform those
transactions, and are responsible to their clients who are shareholders of the Fund if the intermediary performs any transaction erroneously or improperly.
Client Account Exchanges by
Financial Intermediaries. The Fund and the Transfer Agent permit brokers, dealers and other financial intermediaries to submit exchange requests on behalf of their customers, unless that authority has been revoked.
The Fund or the Transfer Agent may limit or refuse exchange requests submitted by such financial intermediaries if, in the Transfer Agent’s judgment, exercised in its discretion, the exchanges would be
disruptive to any of the funds involved in the transaction.
Oppenheimer Capital Appreciation Fund
| 25
|
Investment Plans and Services
AccountLink. You can use our AccountLink feature to link your Fund account with an account at a U.S. bank or other financial institution that is an Automated Clearing House (ACH) member. AccountLink
lets you:
■
| transmit funds electronically to purchase shares by internet, by telephone or automatically through an Asset Builder Plan. The purchase payment will be debited from your bank account.
|
■
| have the Transfer Agent send redemption proceeds or dividends and distributions directly to your bank account.
|
AccountLink privileges should be
requested on your account application or on your broker-dealer’s settlement instructions if you buy your shares through a broker-dealer. For an established account, you can request AccountLink privileges by
sending signature-guaranteed instructions and proper documentation to the Transfer Agent. AccountLink privileges will apply to each shareholder listed in the registration on the account as well as to the financial
intermediary’s representative of record unless and until the Transfer Agent terminates or receives written instructions terminating or changing those privileges. After you establish AccountLink for your account,
any change you make to your bank account information must be made by signature-guaranteed instructions to the Transfer Agent signed by all shareholders on the account. Please call the Transfer Agent for more
information.
Asset Builder Plans. Under an Asset Builder Plan, you may purchase shares of the Fund automatically. An Asset Builder Plan is available only if you have established AccountLink with a bank or other financial
institution. Payments to purchase Fund shares will be debited from your linked account.
To establish an Asset Builder
Plan at the time you initially purchase Fund shares, complete the “Asset Builder Plan” information on the account application. To add an Asset Builder Plan to an existing account, use the Asset Builder
Enrollment Form. You may change the amount of your Asset Builder payment or you can terminate your automatic investments at any time by writing to the Transfer Agent.
The Transfer Agent may require a
reasonable period after receipt of your instructions to implement any requested changes. For more details, see the account application, the Asset Builder Enrollment Form and the Statement of Additional Information. Those documents are available by contacting the Distributor or
may be downloaded from our website at www.oppenheimerfunds.com. The Fund reserves the right to amend, suspend or discontinue offering Asset Builder Plans at any time without prior notice.
Automatic Redemption and Exchange
Plans. The Fund has several plans that enable you to redeem shares automatically or exchange them for shares of another Oppenheimer fund on a regular basis. Please call the Transfer Agent or
consult the Statement of Additional Information for details.
Retirement Plans. The Distributor offers a number of different retirement plans that individuals and employers can use. The procedures for buying, selling, exchanging and transferring shares, and the
account features applicable to share classes offered to individual retirement plans and other account types, generally do not apply to shares offered through a group omnibus retirement plan. Purchase, redemption,
exchange and transfer requests for a group omnibus retirement plan must generally be submitted by the plan administrator, not by plan participants. However, the time that transaction requests must be received in order
to purchase, redeem or exchange shares at the net asset value calculated on any business day is the same for all share classes and plan types. The types of retirement plans that the Distributor offers
include:
■
| Individual Retirement Accounts (IRAs). These include traditional IRAs, Roth IRAs and rollover IRAs.
|
■
| SIMPLE IRAs. These are Savings Incentive Match Plan for Employees IRAs for small business owners or self-employed individuals.
|
■
| SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business owners or self-employed individuals.
|
■
| 403(b)(7) Custodial Plans. These are tax-deferred plans for employees of eligible tax-exempt organizations, such as schools, hospitals and charitable organizations.
|
■
| “Single K” Plans. These are 401(k) plans for self-employed individuals.
|
■
| Qualified Plans. These plans are designed for businesses and self-employed individuals.
|
Class B shares are no longer
offered for any new purchases. Any investments for existing Class B share retirement accounts received will be made in Class A shares of Oppenheimer Government Money Market Fund.
Class I shares are only
available to plans that make an initial investment of $1 million or more (per account) or to retirement plan service provider platforms.
Less Paper, Less Waste. To avoid sending duplicate copies of Fund materials to households, the Fund will mail only one copy of each prospectus, annual and semi-annual report and annual notice of the Fund’s
privacy policy to shareholders having the same last name and address on the Fund’s records. The consolidation of these mailings, called “householding,” benefits the Fund through lower printing costs
and reduced mailing expense.
If you prefer to receive
multiple copies of these materials, you may call the Transfer Agent at the number on the back of this prospectus or you may notify the Transfer Agent in writing. Multiple copies of prospectuses, reports and privacy
notices will be sent to you commencing within 30 days after the Transfer Agent receives your request to stop householding.
26
| Oppenheimer Capital Appreciation Fund
|
You may also choose to receive
your account documents electronically via eDocs Direct. In order to sign up for eDocs Direct, you need to register for online access to your account(s) through the website at www.oppenheimerfunds.com, or call
1.888.470.0862 for information and instructions. Once registered, you can select your preferences for electronic document delivery of account documents.
Dividends, Capital Gains and
Taxes
Dividends and
Distributions. The Fund intends to declare and pay dividends annually from its net investment income. The Fund may also realize capital gains on the sale
of portfolio securities, in which case it may make distributions out of any net short-term or long-term capital gains annually. The Fund may also make supplemental distributions of dividends and capital gains
following the end of its fiscal year. The Fund has no fixed dividend rate and cannot guarantee that it will pay any dividends or capital gains distributions in a particular year.
Dividends and
distributions are paid separately for each share class. The dividend distributions paid on Class A, Class Y and Class I shares will generally be higher than those on Class B, Class C and Class R shares, since the
latter classes normally have higher expenses than Class A, Class Y and Class I.
Options for Receiving Dividends
and Distributions. When you open your Fund account, you can specify on your application how you want to receive distributions of dividends and capital gains. To change that option, you must notify the
Transfer Agent. There are four payment options available:
■
| Reinvest All Distributions in the Fund. You can elect to reinvest all dividends and capital gains distributions in additional shares of the Fund.
|
■
| Reinvest Only Dividends or Capital Gains. You can elect to reinvest some types of distributions in the Fund while receiving the other types of distributions by check or having them sent to your bank account through AccountLink.
Different treatment is available for distributions of dividends, short-term capital gains and long-term capital gains.
|
■
| Receive All Distributions in Cash. You can elect to receive all dividends and capital gains distributions by check or have them sent to your bank through AccountLink.
|
■
| Reinvest Your Distributions in Another Oppenheimer Fund. You can reinvest all of your dividends and capital gains distributions in another Oppenheimer fund that is available for exchanges. You must have an existing account in the same share
class in the selected fund.
|
Taxes. If your shares are not held in a tax-deferred retirement account, you should be aware of the following tax consequences of investing in the Fund. Fund distributions, whether taken in cash
or reinvested in additional shares of the Fund or another Oppenheimer fund, are subject to Federal income tax and may be subject to state or local taxes. Distributions paid from short-term capital gains and net
investment income are taxable as ordinary income (except as discussed below) and distributions from net long-term capital gains are taxable as long-term capital gains no matter how long you have held your shares. The
maximum rate for individuals and certain other non-corporate taxpayers, applicable to long-term capital gains, is either 15% or 20%, depending on whether the taxpayer’s income exceeds certain threshold
amounts.
In the case of individuals and
other non-corporate taxpayers, certain dividends (including certain dividends from foreign corporations) may be taxable at the lower rate applicable to long-term capital gains. In the case of certain corporations,
some dividends may be eligible for the dividends-received deduction. To the extent the Fund’s distributions are paid from these types of dividends, and provided certain other Fund and shareholder level holding
period requirements are satisfied, the Fund’s individual and non-corporate shareholders may be eligible to claim the reduced tax rate for the distributions and the Fund’s corporate shareholders may be
eligible to claim the dividends-received deduction.
A 3.8%
Medicare contribution tax is imposed on the “net investment income” of individuals, estates and trusts to the extent their income exceeds certain threshold amounts. Net investment income generally includes
for this purpose dividends paid by the Fund, including any capital gain dividends, and net capital gains recognized on the sale, redemption or exchange of shares of the Fund.
The Fund may be subject to
foreign income taxes on income or gains from foreign securities. If at the end of the Fund’s fiscal year more than 50% of the Fund’s assets are invested in foreign securities, the Fund may make an election
that would generally allow shareholders to take a credit or deduction for such foreign taxes on their Federal income tax returns, subject to applicable limitations. If the Fund makes this election, shareholders must
include in their income their share of the foreign taxes paid by the Fund.
After the end of each calendar
year the Fund will send you and the Internal Revenue Service (“IRS”) statements showing the amount of any taxable distributions you received in the previous year and will separately identify any portion of
these distributions that qualify for taxation as long-term capital gains or for any other special tax treatment.
The Fund intends to qualify each
year to be taxed as a regulated investment company under the Internal Revenue Code by satisfying certain income, asset diversification and income distribution requirements, but reserves the right not to so qualify. In
each year that it qualifies as a regulated investment company, the Fund will not be subject to Federal income taxes on its income that it distributes to shareholders.
If you are neither a resident
nor a citizen of the United States, or if you are a foreign entity, the ordinary income dividends paid to you (which include distributions of net short-term capital gains) generally will be subject to a 30% U.S.
withholding
Oppenheimer Capital Appreciation Fund
| 27
|
tax, unless a lower rate applies under an
income tax treaty. Certain distributions that are reported by the Fund as interest-related dividends or short-term capital gain dividends and paid to a foreign shareholder may be eligible for an exemption from U.S.
withholding tax. To the extent the Fund’s distributions are derived from ordinary dividends, they will not be eligible for this exemption. In addition, under legislation known as “FATCA” (the Foreign
Account Tax Compliance Act), the Fund will be required to withhold 30% of the ordinary dividends it pays and, after December 31, 2018, the gross proceeds of share redemptions and certain capital gains it pays to
certain foreign shareholders that fail to meet prescribed information reporting or certification requirements.
Backup Withholding. Unless an exception applies, the Fund may be required to withhold U.S. Federal income tax on distributions and redemption proceeds payable to you if you fail to provide the Fund with your
correct social security number or taxpayer identification number or fail to make required certifications, or if you have been notified by the IRS that you are subject to backup withholding. Any amounts withheld may be
credited against your U.S. Federal income tax liability.
Avoid “Buying a
Distribution.” If you buy shares of the Fund before it makes a distribution, the distribution will generally be taxable to you even though it may actually be a return of a portion of your investment. You
should consider whether you should purchase shares on or just before the ex-dividend date.
Remember, There May be Taxes on
Transactions. Because the prices of the Fund’s shares fluctuate, you may have a capital gain or capital loss when you sell the shares or exchange them for shares of a different fund. The amount of
such gain or loss is generally an amount equal to the difference between the price you paid for the shares and the amount received. Your ability to utilize capital losses may be subject to applicable
limitations.
Returns of Capital Can
Occur. In certain cases, distributions made by the Fund may be considered a return of capital to shareholders, which is generally non-taxable. The Fund will notify you if this occurs. In such a
case, you would need to reduce the cost basis of your shares for tax purposes, which could result in a higher taxable capital gain (or lower capital loss) on a subsequent sale or exchange of the shares. Any such
distribution in excess of your cost basis in your shares will be treated as capital gain.
Cost Basis Reporting. The Fund is required to report to the IRS, and furnish to Fund shareholders, detailed “cost basis” and “holding period” information for Fund shares acquired on or
after January 1, 2012 (“covered shares”) that are redeemed on or after that date. These requirements do not apply to investments through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement plan. If you redeem covered shares during any year, the Fund will report the following information to the IRS and to you on Form 1099-B: (i) the cost basis of such shares, (ii) the gross proceeds you
received on the redemption and (iii) the holding period for the redeemed shares.
The default method for
calculating the cost basis of covered shares is based on the average cost of all Fund shares you purchased on or after January 1, 2012 and prior to a particular redemption. If you and your financial or tax advisor
determine another calculation method may be more beneficial for your individual tax situation, you may be able to elect another IRS-accepted method via the OppenheimerFunds website, www.oppenheimerfunds.com, or by
notifying the Fund’s Transfer Agent in writing.
You should contact your
financial or tax advisor about the application of the cost basis reporting rules to you, particularly whether you should elect a cost basis calculation method or use the default average cost basis.
This
information is only a summary of certain U.S. Federal income tax information about your investment. You are encouraged to consult your tax advisor about the effect of an investment in the Fund on your particular tax situation and about any changes to the applicable law that may occur from
time to time. Additional information about the tax effects of investing in the Fund is contained in the Statement of Additional Information.
Financial Highlights
The Financial Highlights Table
is presented to help you understand the Fund’s financial performance for the past five fiscal years. Certain information reflects financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions). This information has been audited by KPMG LLP, the Fund’s
independent registered public accounting firm. KPMG LLP’s report, along with the Fund’s financial statements, are included in the annual report, which is available upon request.
28
| Oppenheimer Capital Appreciation Fund
|
Class A
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $52.99
| $58.99
| $66.40
| $54.14
| $48.38
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment income (loss)2
| 0.04
| 0.07
| (0.06)
| (0.03)
| 0.27
|
|
Net realized and unrealized gain
| 9.01
| 1.36
| 2.21
| 14.86
| 5.79
|
|
Total from investment operations
| 9.05
| 1.43
| 2.15
| 14.83
| 6.06
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| (0.04)
| 0.00
| 0.00
| (0.02)
| (0.30)
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.17)
| (7.43)
| (9.56)
| (2.57)
| (0.30)
|
|
Net asset value, end of period
| $59.87
| $52.99
| $58.99
| $66.40
| $54.14
|
|
|
Total Return, at Net Asset Value3
| 17.90%
| 2.02%
| 3.16%
| 28.09%
| 12.61%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $3,266,760
| $3,112,543
| $3,368,384
| $3,397,665
| $2,886,673
|
|
Average net assets (in thousands)
| $3,120,844
| $3,198,528
| $3,497,054
| $3,171,028
| $2,929,516
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment income (loss)
| 0.08%
| 0.14%
| (0.10)%
| (0.05)%
| 0.53%
|
|
Expenses excluding specific expenses listed below
| 1.05%
| 1.05%
| 1.04%
| 1.05%
| 1.11%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 1.05%
| 1.05%
| 1.04%
| 1.05%
| 1.11%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 1.04%
| 1.05%7
| 1.04%7
| 1.05%7
| 1.11%7
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
| Less than 0.005%.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 1.05%
|
Year Ended August 31, 2016
| 1.05%
|
Year Ended August 31, 2015
| 1.04%
|
Year Ended August 29, 2014
| 1.05%
|
Year Ended August 30, 2013
| 1.11%
|
7.
| Waiver was less than 0.005%.
|
Oppenheimer Capital Appreciation Fund
| 29
|
Class B
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $42.36
| $48.90
| $57.00
| $47.12
| $42.20
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment loss2
| (0.31)
| (0.26)
| (0.45)
| (0.42)
| (0.13)
|
|
Net realized and unrealized gain
| 7.09
| 1.15
| 1.91
| 12.85
| 5.05
|
|
Total from investment operations
| 6.78
| 0.89
| 1.46
| 12.43
| 4.92
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| 0.00
| 0.00
| 0.00
| 0.00
| 0.00
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Net asset value, end of period
| $47.01
| $42.36
| $48.90
| $57.00
| $47.12
|
|
|
Total Return, at Net Asset Value3
| 16.98%
| 1.25%
| 2.38%
| 27.13%
| 11.66%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $19,129
| $43,566
| $80,124
| $127,565
| $143,066
|
|
Average net assets (in thousands)
| $29,533
| $59,243
| $103,954
| $137,376
| $161,182
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment loss
| (0.72)%
| (0.60)%
| (0.86)%
| (0.81)%
| (0.29)%
|
|
Expenses excluding specific expenses listed below
| 1.82%
| 1.82%
| 1.81%
| 1.81%
| 2.09%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 1.82%
| 1.82%
| 1.81%
| 1.81%
| 2.09%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 1.81%
| 1.82%7
| 1.81%7
| 1.81%7
| 1.95%
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 1.82%
|
Year Ended August 31, 2016
| 1.82%
|
Year Ended August 31, 2015
| 1.81%
|
Year Ended August 29, 2014
| 1.81%
|
Year Ended August 30, 2013
| 2.09%
|
7.
| Waiver was less than 0.005%.
|
30
| Oppenheimer Capital Appreciation Fund
|
Class C
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $42.02
| $48.56
| $56.67
| $46.87
| $41.95
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment loss2
| (0.30)
| (0.27)
| (0.45)
| (0.42)
| (0.11)
|
|
Net realized and unrealized gain
| 7.02
| 1.16
| 1.90
| 12.77
| 5.03
|
|
Total from investment operations
| 6.72
| 0.89
| 1.45
| 12.35
| 4.92
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| 0.00
| 0.00
| 0.00
| 0.00
| 0.00
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Net asset value, end of period
| $46.61
| $42.02
| $48.56
| $56.67
| $46.87
|
|
|
Total Return, at Net Asset Value3
| 16.98%
| 1.26%
| 2.37%
| 27.11%
| 11.73%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $376,618
| $390,891
| $430,473
| $425,871
| $362,314
|
|
Average net assets (in thousands)
| $375,968
| $408,311
| $445,480
| $398,019
| $364,712
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment loss
| (0.69)%
| (0.62)%
| (0.86)%
| (0.81)%
| (0.25)%
|
|
Expenses excluding specific expenses listed below
| 1.82%
| 1.82%
| 1.80%
| 1.81%
| 1.89%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 1.82%
| 1.82%
| 1.80%
| 1.81%
| 1.89%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 1.81%
| 1.82%7
| 1.80%7
| 1.81%7
| 1.89%7
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 1.82%
|
Year Ended August 31, 2016
| 1.82%
|
Year Ended August 31, 2015
| 1.80%
|
Year Ended August 29, 2014
| 1.81%
|
Year Ended August 30, 2013
| 1.89%
|
7.
| Waiver was less than 0.005%.
|
Oppenheimer Capital Appreciation Fund
| 31
|
Class I
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $57.04
| $62.72
| $69.75
| $56.75
| $50.71
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment income2
| 0.29
| 0.32
| 0.22
| 0.24
| 0.28
|
|
Net realized and unrealized gain
| 9.71
| 1.43
| 2.31
| 15.60
| 6.31
|
|
Total from investment operations
| 10.00
| 1.75
| 2.53
| 15.84
| 6.59
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| (0.27)
| 0.00
| 0.00
| (0.29)
| (0.55)
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.40)
| (7.43)
| (9.56)
| (2.84)
| (0.55)
|
|
Net asset value, end of period
| $64.64
| $57.04
| $62.72
| $69.75
| $56.75
|
|
|
Total Return, at Net Asset Value3
| 18.40%
| 2.45%
| 3.60%
| 28.63%
| 13.14%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $1,131,656
| $988,213
| $1,009,353
| $1,026,931
| $835,858
|
|
Average net assets (in thousands)
| $1,046,626
| $987,503
| $1,050,463
| $944,683
| $167,432
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment income
| 0.49%
| 0.56%
| 0.33%
| 0.38%
| 0.51%
|
|
Expenses excluding specific expenses listed below
| 0.63%
| 0.63%
| 0.62%
| 0.63%
| 0.65%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 0.63%
| 0.63%
| 0.62%
| 0.63%
| 0.65%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 0.63%7
| 0.63%7
| 0.62%7
| 0.63%7
| 0.65%7
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 0.63%
|
Year Ended August 31, 2016
| 0.63%
|
Year Ended August 31, 2015
| 0.62%
|
Year Ended August 29, 2014
| 0.63%
|
Year Ended August 30, 2013
| 0.65%
|
7.
| Waiver was less than 0.005%.
|
32
| Oppenheimer Capital Appreciation Fund
|
Class R
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $50.49
| $56.68
| $64.31
| $52.61
| $47.01
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment income (loss)2
| (0.10)
| (0.06)
| (0.21)
| (0.18)
| 0.14
|
|
Net realized and unrealized gain
| 8.56
| 1.30
| 2.14
| 14.43
| 5.63
|
|
Total from investment operations
| 8.46
| 1.24
| 1.93
| 14.25
| 5.77
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| 0.00
| 0.00
| 0.00
| 0.00
| (0.17)
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| (0.17)
|
|
Net asset value, end of period
| $56.82
| $50.49
| $56.68
| $64.31
| $52.61
|
|
|
Total Return, at Net Asset Value3
| 17.60%
| 1.74%
| 2.89%
| 27.78%
| 12.31%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $92,888
| $83,248
| $89,442
| $95,477
| $92,488
|
|
Average net assets (in thousands)
| $86,076
| $85,690
| $94,706
| $94,728
| $98,344
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment income (loss)
| (0.18)%
| (0.12)%
| (0.35)%
| (0.30)%
| 0.28%
|
|
Expenses excluding specific expenses listed below
| 1.31%
| 1.31%
| 1.30%
| 1.31%
| 1.37%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 1.31%
| 1.31%
| 1.30%
| 1.31%
| 1.37%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 1.30%
| 1.31%7
| 1.30%7
| 1.31%7
| 1.37%7
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 1.31%
|
Year Ended August 31, 2016
| 1.31%
|
Year Ended August 31, 2015
| 1.30%
|
Year Ended August 29, 2014
| 1.31%
|
Year Ended August 30, 2013
| 1.37%
|
7.
| Waiver was less than 0.005%.
|
Oppenheimer Capital Appreciation Fund
| 33
|
Class Y
| Year Ended
August 31,
2017
| Year Ended
August 31,
2016
| Year Ended
August 31,
2015
| Year Ended
August 29,
20141
| Year Ended
August 30,
20131
|
|
Per Share Operating Data
|
|
|
|
|
|
|
Net asset value, beginning of period
| $56.79
| $62.57
| $69.73
| $56.72
| $50.67
|
|
Income (loss) from investment operations:
|
|
|
|
|
|
|
Net investment income2
| 0.16
| 0.22
| 0.09
| 0.14
| 0.54
|
|
Net realized and unrealized gain
| 9.69
| 1.43
| 2.31
| 15.57
| 6.01
|
|
Total from investment operations
| 9.85
| 1.65
| 2.40
| 15.71
| 6.55
|
|
Dividends and/or distributions to shareholders:
|
|
|
|
|
|
|
Dividends from net investment income
| (0.15)
| 0.00
| 0.00
| (0.15)
| (0.50)
|
|
Distributions from net realized gain
| (2.13)
| (7.43)
| (9.56)
| (2.55)
| 0.00
|
|
Total dividends and/or distributions to shareholders
| (2.28)
| (7.43)
| (9.56)
| (2.70)
| (0.50)
|
|
Net asset value, end of period
| $64.36
| $56.79
| $62.57
| $69.73
| $56.72
|
|
|
Total Return, at Net Asset Value3
| 18.16%
| 2.28%
| 3.38%
| 28.40%
| 13.06%
|
|
|
Ratios/Supplemental Data
|
|
|
|
|
|
|
Net assets, end of period (in thousands)
| $149,511
| $119,008
| $146,485
| $185,284
| $358,162
|
|
Average net assets (in thousands)
| $129,570
| $136,687
| $148,398
| $237,983
| $996,554
|
|
Ratios to average net assets:4
|
|
|
|
|
|
|
Net investment income
| 0.27%
| 0.38%
| 0.13%
| 0.22%
| 1.00%
|
|
Expenses excluding specific expenses listed below
| 0.82%
| 0.82%
| 0.81%
| 0.81%
| 0.71%
|
|
Interest and fees from borrowings
| 0.00%5
| 0.00%5
| 0.00%5
| 0.00%
| 0.00%
|
|
Total expenses6
| 0.82%
| 0.82%
| 0.81%
| 0.81%
| 0.71%
|
|
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses
| 0.81%
| 0.82%7
| 0.81%7
| 0.81%7
| 0.71%7
|
|
Portfolio turnover rate
| 63%
| 79%
| 66%
| 67%
| 61%
|
|
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.
|
6.
| Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:
|
Year Ended August 31, 2017
| 0.82%
|
Year Ended August 31, 2016
| 0.82%
|
Year Ended August 31, 2015
| 0.81%
|
Year Ended August 29, 2014
| 0.81%
|
Year Ended August 30, 2013
| 0.71%
|
7.
| Waiver was less than 0.005%.
|
34
| Oppenheimer Capital Appreciation Fund
|
Appendix: Special Sales
Charge Arrangements and Waivers
Special Sales Charge Arrangements
and Waivers
In certain cases, the initial
sales charge that applies to purchases of Class A shares of the Oppenheimer funds or the contingent deferred sales charge (“CDSC”) that may apply to Class A, Class B or Class C shares of the Oppenheimer
funds may be waived. The availability of the sales charge reductions and waivers discussed in the prospectus will depend upon whether or not you purchase your shares through a financial intermediary. Certain
intermediaries have different policies and procedures regarding the availability of sales charge reductions or waivers, which are set forth below. In all instances, it is the shareholder’s responsibility to notify the Fund or the shareholder’s financial intermediary at the time of purchase or redemption of any relationship
or other facts qualifying the shareholder for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, shareholders will have to purchase Fund shares either without
using a financial intermediary or through another intermediary to receive these waivers or discounts. Please contact your financial intermediary for questions regarding your eligibility and to receive the most current
information with respect to your financial intermediary’s policies on sales charge variations, waivers and discounts.
Not all Oppenheimer funds offer
all of the share classes described and not all waivers apply to all Oppenheimer funds. These waivers and special arrangements may be amended or terminated at any time by a particular fund, the Distributor, OFI Global
Asset Management, Inc., and/or OppenheimerFunds, Inc. (referred to in this Appendix as the “Manager”).
Clients of financial
intermediaries with self-directed brokerage accounts must check with their financial intermediary to determine if they are eligible for a particular waiver or discount.
Financial intermediary-specific
sales charge waivers and/or discounts are implemented and administered by each financial intermediary. Please contact your financial intermediary to ensure that you have the most current information regarding the
sales charge waivers and discounts available to you and that you understand the steps you must take to qualify for available waivers and discounts.
Sales Charge Reductions and
Waivers Available Through Merrill Lynch
Class A Sales Charge Waivers
(Concessions paid by Distributor*)
•
| Purchases of Class A shares by retirement plans that have any of the following record-keeping arrangements:
|
1.
| The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. (“Merrill Lynch”) on a daily valuation basis for the retirement plan. On the date the plan sponsor signs the
record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets invested in (a) mutual funds, other than those advised or managed by certain Merrill Lynch investment advisers,
as specified by Merrill Lynch (a “Specified Merrill Lynch Investment Adviser”), that are made available under a Service Agreement between Merrill Lynch and the mutual fund’s principal underwriter or
distributor, and (b) funds advised or managed by a Specified Merrill Lynch Investment Adviser (the funds described in (a) and (b) are referred to as “Applicable Investments”).
|
2.
| The record keeping for the retirement plan is performed on a daily valuation basis by a record keeper whose services are provided under a contract or arrangement between the Retirement Plan and Merrill Lynch. On the
date the plan sponsor signs the record keeping service agreement with Merrill Lynch, the plan must have $5 million or more of its assets (excluding assets invested in money market funds) invested in Applicable
Investments.
|
3.
| The record keeping for a retirement plan is handled under a service agreement with Merrill Lynch and on the date of the plan sponsor signs that agreement, the plan has 500 or more
eligible employees (as determined by the Merrill Lynch plan conversion manager).
|
* However, that concession will
not be paid on purchases of shares in amounts of $1 million or more (including any right of accumulation) by a retirement plan that pays for the purchase with the redemption proceeds of Class C shares of one or more
Oppenheimer funds held by the Plan for more than one year.
Waivers of Class B and Class C
Sales Charges
Redemptions of Class B shares
held by retirement plans whose records are maintained on a daily valuation basis by Merrill Lynch or an independent record keeper under a contract with Merrill Lynch.
Shareholders purchasing Fund
shares through a Merrill Lynch platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may
differ from those disclosed elsewhere in this Fund’s prospectus or SAI.
Front-end Sales Load Waivers on
Class A Shares available at Merrill Lynch
•
| Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based
brokerage account and shares are held for the benefit of the plan
|
•
| Shares purchased by or through a 529 Plan
|
•
| Shares purchased through a Merrill Lynch affiliated investment advisory program
|
•
| Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch’s platform
|
•
| Shares of funds purchased through the Merrill Edge Self-Directed platform (if applicable)
|
•
| Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family)
|
•
| Shares exchanged from Class C (i.e. level-load) shares of the same fund in the month of or following the 10-year anniversary of the purchase date
|
•
| Employees and registered representatives of Merrill Lynch or its affiliates and their family members
|
•
| Directors or Trustees of the Fund, and employees of the Fund’s investment adviser or any of its affiliates, as described in this prospectus
|
•
| Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and
purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement)
|
CDSC Waivers on A, B and C Shares
available at Merrill Lynch
•
| Death or disability of the shareholder
|
•
| Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus
|
•
| Return of excess contributions from an IRA Account
|
•
| Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70 1⁄2
|
•
| Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch
|
•
| Shares acquired through a right of reinstatement
|
•
| Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A and C shares
only)
|
Front-end load Discounts Available
at Merrill Lynch: Breakpoints, Rights of Accumulation & Letters of Intent
•
| Breakpoints as described in this prospectus.
|
•
| Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s
household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets
|
•
| Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time (if applicable)
|
Class A Sales Charge Waivers
Available Through Mass Mutual Retirement Services (concessions are not paid by the Distributor)
•
| Purchases in an OppenheimerFunds-sponsored Rollover IRA held directly with the Transfer Agent by clients of Mass Mutual Retirement Services.
|
Class A Sales Charge Waivers
Applicable to Share Purchases through LPL Financial (“LPL”) (concessions are not paid by the Distributor)
•
| Shares purchased by clients of LPL who are accessing the Oppenheimer funds through LPL’s Mutual Fund Only Platform.
|
THIS PAGE INTENTIONALLY LEFT
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Statement of
Additional Information and Annual and Semi-Annual Reports. The Fund’s Statement of Additional Information and Annual and Semi-Annual Reports to shareholders provide additional information
about the Fund’s investments. The Annual Report includes a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year. The
Fund’s Statement of Additional Information and audited financial statements included in its most recent Annual Report dated August 31, 2017, including the notes thereto and report of the independent registered
public accounting firm thereon, are incorporated by reference into (are legally considered part of) this prospectus.
How to Request More Information
You can request the above
documents, the notice explaining the Fund’s privacy policy, and other information about the Fund, without charge, by:
Telephone:
| Call OppenheimerFunds Services toll-free:
1.800.CALL OPP (1.800.225.5677)
|
Mail:
| Use the following address for regular mail:
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217-5270
|
| Use the following address for courier or express mail:
OppenheimerFunds Services
12100 East Iliff Avenue
Suite 300
Aurora, Colorado 80014
|
Internet:
| You may request documents, and read or download certain documents at www.oppenheimerfunds.com
|
Information about the Fund
including the Statement of Additional Information can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by
calling the SEC at 1.202.551.8090. Reports and other information about the Fund are available on the EDGAR database on the SEC’s website at www.sec.gov. Copies may be obtained after payment of a duplicating fee
by electronic request at the SEC’s e-mail address: publicinfo@sec.gov or by writing to the SEC’s Public Reference Section, Washington, D.C. 20549-1520.
No one has been authorized to provide
any information about the Fund or to make any representations about the Fund other than what is contained in this prospectus. This prospectus is not an offer to sell shares of the Fund, nor a solicitation of an offer
to buy shares of the Fund, to any person in any state or other jurisdiction where it is unlawful to make such an offer.
The Fund’s SEC File No.: 811-07857
SP0320.001.1017
Oppenheimer Capital Appreciation
Fund
October 27,
2017
Statement of Additional
Information
This document
contains additional information about Oppenheimer Capital Appreciation Fund (the “Fund”) and supplements information in the Fund’s prospectus dated October 27, 2017 (the “Prospectus”).
This Statement of Additional
Information (“SAI”) is not a prospectus. It should be read together with the Prospectus. The Fund’s financial statements are incorporated by reference into this SAI from its most recent Annual
Report. The Fund’s Prospectus and most recent Annual Report may be obtained without charge, upon request, by writing to OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling
OppenheimerFunds Services at the toll-free number shown below, or by downloading it from the OppenheimerFunds website at www.oppenheimerfunds.com.
NYSE Ticker Symbols
|
Class A OPTFX
| Class R OTCNX
|
Class B OTGBX
| Class Y OTCYX
|
Class C OTFCX
| Class I OPTIX
|
Oppenheimer Capital Appreciation Fund6803 South Tucson Way, Centennial, Colorado 80112-39241.800.CALL OPP (255.5677)
Additional Information About the
Fund’s Investment Policies and Risks
OFI Global
Asset Management, Inc. (“OFI Global”), the Fund’s investment adviser, has retained OppenheimerFunds, Inc. (the “Sub-Adviser”) to choose the Fund’s investments and provide related
advisory services to the Fund. The portfolio manager(s), who is responsible for the day-to-day management of the Fund’s portfolio, is employed by the Sub-Adviser unless indicated otherwise. In this Statement of
Additional Information (“SAI”), references to the “Manager” mean OFI Global and the Sub-Adviser unless the context indicates otherwise or unless otherwise specified. Any references in this SAI
to the “Investment Company Act” refer to the “Investment Company Act of 1940, as amended.” Prior to January 1, 2013, all references in this SAI to the “Sub-Adviser” refer to
OppenheimerFunds, Inc. in its capacity as the Manager.
The investment objective, the
principal investment policies and the principal risks of the Fund are described in the Prospectus. This SAI contains supplemental information about those policies and risks and the types of securities that the
Fund’s Sub-Adviser can select for the Fund. Additional information is also provided about the strategies that the Fund may use to try to achieve its investment objective.
The composition of the
Fund’s portfolio and the techniques and strategies that the Fund uses in selecting portfolio securities may vary over time. The Fund is not required to use all of the investment techniques and strategies
described below in seeking to achieve its investment objective. It may use some of the investment techniques and strategies only at some times or it may not use them at all.
The Fund’s Main Investment
Policies
Common
Stock. Common stock represents an equity ownership interest in a company. It ranks below preferred stock and debt securities in claims for dividends and in claims for assets of the issuer in a
liquidation or bankruptcy. Common stocks may be exchange-traded or over-the-counter securities. Over-the-counter securities may be less liquid than exchange-traded securities.
Risks of
Investing in Stocks. Stocks fluctuate in price, and their short-term volatility at times may be great. To the extent that the Fund invests in equity securities, the value of the Fund’s
portfolio will be affected by changes in the stock markets. Market risk can affect the Fund’s net asset value per share, which will fluctuate as the values of the Fund’s portfolio securities change. The
prices of individual stocks do not all move in the same direction uniformly or at the same time. Different stock markets may behave differently from each other.
Other factors can affect a
particular stock’s price, such as poor earnings reports by the issuer, loss of major customers, major litigation against the issuer, or changes in government regulations affecting the issuer or its industry. The
Fund can invest in securities of large companies and mid-cap companies, but may also buy stocks of small companies, which may have more volatile stock prices than large companies.
Growth Companies. Growth companies are those companies whose earnings and stock prices are expected to increase at a faster rate than the overall market. They may be established companies as well as newer
companies in the development stage. Growth companies may have a variety of factors that characterize them as “growth” issuers. They might:
•
| be generating or applying new technologies, new or improved distribution techniques or new services,
|
•
| own or develop natural resources,
|
•
| be companies that can benefit from changing consumer demands or lifestyles, or
|
•
| be companies that have projected earnings in excess of the average for their sector or industry.
|
Securities of newer growth
companies might offer greater opportunities for capital appreciation than securities of larger, more established companies. However, these securities also involve greater risks than securities of more established
companies.
Rights and Warrants. Rights and warrants may be purchased directly or may be acquired as part of other securities. Warrants are options to purchase equity securities at a specific price during a specific
period of time. The price of a warrant does not necessarily move parallel to the price of the underlying security and is generally more volatile than the price of the underlying security. Rights are similar to
warrants, but normally have a shorter duration and are distributed directly by the issuer to its shareholders. The market for rights or warrants may be very limited and it may be difficult to sell them promptly at an
acceptable price. Rights and warrants have no voting rights, receive no dividends and have no rights with respect to the assets of the issuer.
The Fund can invest up to 5% of
its total assets in rights and warrants, not including rights and warrants the Fund acquires as part of securities units or that are attached to other securities the Fund buys.
Risks of Small- and Mid-Cap Companies. Small- and mid-cap companies may be either established or newer companies, including “unseasoned” companies that have typically been in operation for less
than three years. While smaller companies might offer greater opportunities for gain than larger companies, they also may involve greater risk of loss. They may be more sensitive to changes in a company’s
earnings expectations and may experience more abrupt and
erratic price movements. Smaller
companies’ securities often trade in lower volumes and in many instances, are traded over-the-counter or on a regional securities exchange, where the frequency and volume of trading is substantially less than is
typical for securities of larger companies traded on national securities exchanges. Therefore, the securities of smaller companies may be subject to wider price fluctuations and it might be harder for the Fund to
dispose of its holdings at an acceptable price when it wants to sell them. Small- and mid-cap companies may not have established markets for their products or services and may have fewer customers and product lines.
They may have more limited access to financial resources and may not have the financial strength to sustain them through business downturns or adverse market conditions. Since small- and mid-cap companies typically
reinvest a high proportion of their earnings in their business, they may not pay dividends for some time, particularly if they are newer companies. Smaller companies may have unseasoned management or less depth in
management skill than larger, more established companies. They may be more reliant on the efforts of particular members of their management team and management changes may pose a greater risk to the success of the
business. Securities of small, unseasoned companies may be particularly volatile, especially in the short term, and may have very limited liquidity. It may take a substantial period of time to realize a gain on an
investment in a small- or mid-cap company, if any gain is realized at all.
The Fund may not invest more
than 5% of its net assets in those securities.
Investing in Cyclical
Opportunities. Although the Fund focuses on long-term growth, it might seek to take advantage of short-term market movements or events affecting particular issuers or industries by investing in companies
that are sensitive to changes in the business cycle. For example, when the economy is expanding, companies in consumer durables and the technology sector might benefit. There is the risk that those securities might
lose value if the business cycle becomes unfavorable to that issuer or industry or if the Sub-Adviser’s expectations for favorable cyclical movement is not realized.
Other Investments and Investment
Strategies
Preferred Stock. Preferred stock are equity securities that have a dividend rate payable from the company’s earnings. Their stated dividend rate causes preferred stock to have some characteristics of
debt securities. If interest rates rise, the fixed dividend on preferred stock may be less attractive and the price of those securities will likely decline. If interest rates fall, their price will likely
increase.
Preferred stock dividends may be
cumulative or non-cumulative, participating, or auction rate. “Cumulative” dividend provisions require that all, or a portion of, any unpaid dividends must be paid before the issuer can pay dividends on
its common stock. “Participating” preferred stock may be entitled to a larger dividend than the stated dividend in certain cases. “Auction rate” preferred stock has a dividend rate that is set
by a Dutch auction process.
Preferred stock may have
mandatory sinking fund provisions, as well as provisions for their call or redemption prior to maturity which can have a negative effect on their prices when interest rates fall.
Preferred stock do not
constitute a liability of the issuer and therefore do not offer the same degree of capital protection or assured income as debt securities. Preferred stock generally rank ahead of common stock and behind debt
securities in claims for dividends and for assets of the issuer in a liquidation or bankruptcy.
Convertible Securities. Convertible securities are debt securities or preferred stocks that are convertible into the issuer’s common stock or other equity securities. While many convertible securities are
considered to be mainly debt securities, certain convertible securities are regarded more as “equity equivalents” because of their conversion feature. The market value of a convertible security reflects
both its “investment value,” which is its expected income potential, and its “conversion value,” which is its anticipated market value if it were converted. If its investment value exceeds its
conversion value, the security will generally behave more like a debt security, and the security’s price will likely increase when interest rates fall and decrease when interest rates rise. If its conversion
value exceeds its investment value, the security will generally behave more like an equity security. In that case, its price will tend to fluctuate with the price of the underlying common stock or other
security.
Convertible debt securities,
like other debt securities, are subject to credit risk and interest rate risk. Interest rate risk is the risk that when interest rates rise, the values of already-issued convertible debt securities generally fall.
When interest rates fall, however, the values of already-issued convertible debt securities generally rise. Credit risk is the risk that the issuer of a security might not make principal or interest payments on the
security when they are due. If the issuer fails to pay interest, the Fund’s income might be reduced, and if the issuer fails to pay interest or repay principal, the value of the security might fall. The credit
ratings of convertible securities generally have less impact on their price than the credit ratings of other debt securities. Convertible securities rank senior to common stock in a corporation’s capital
structure and therefore are subject to less risk than common stock in case of an issuer’s bankruptcy or liquidation.
For convertible securities that
are considered to be “equity equivalents,” their credit quality generally has less impact on the security’s value than in the case of non-convertible debt securities. To determine whether convertible
securities should be regarded as “equity equivalents,” a number of factors may be considered, including:
•
| whether the convertible security can be exchanged for a fixed number of shares of common stock of the issuer or is subject to a “cap” or a conversion formula or other type of limit;
|
•
| whether the convertible security can be exchanged at a time determined by the investor rather than by the issuer;
|
•
| whether the issuer of the convertible securities has restated its earnings per share on a fully diluted basis (that is, as if all of the issuer’s convertible securities were converted into common stock); and
|
•
| the extent to which the convertible security may participate in any appreciation in the price of the issuer’s common stock.
|
Convertible securities generally
sell at a premium over the value of the common stock into which they could be converted. If the Fund buys a convertible security at a premium, and the underlying common stock does not appreciate as expected, the Fund
might not realize a gain on the security or may experience a loss.
The conversion feature of
convertible securities generally causes the market value of convertible securities to increase when the value of the underlying common stock increases, and to fall when the stock price falls. However, convertible
securities generally do not have the same potential for capital appreciation as the underlying stock and may not experience the same decline when the price of the underlying common stock declines. Convertible
securities usually only decline to a level called their “investment value,” which is approximately the value of a similar non-convertible debt security.
Foreign Securities. Foreign securities include equity and debt securities of issuers organized under the laws of countries other than the United States and debt securities issued or guaranteed by foreign
governmental or by supra-national entities, such as the World Bank, or by their agencies or instrumentalities. They may also include securities of issuers (including those that are located in the U.S. or organized
under U.S. law) that derive a significant portion of their revenue or profits from foreign businesses, investments or sales, or that have a significant portion of their assets abroad. Securities denominated in foreign
currencies issued by U.S. companies may also be considered to be “foreign securities.” Foreign securities may be traded on foreign securities exchanges or in foreign over-the-counter markets.
Investing in foreign securities
offers potential benefits that are not available from investing only in the securities of U.S. issuers. Those benefits include the opportunity to invest in a wider range of issuers, in countries with economic policies
or business cycles that differ from those in the United States and in markets that often do not move parallel to U.S. markets. Because of these features, foreign investments may reduce portfolio volatility.
The percentage of assets
allocated to foreign securities may vary over time depending on a number of factors, including the relative yields of foreign and U.S. securities, the economies of foreign countries, the condition of foreign financial
markets, the interest rate climate in particular foreign countries, and the relationship of foreign currencies to the U.S. dollar. The investment adviser may analyze fundamental economic criteria, including for
example: relative inflation levels and trends, growth rate forecasts, natural resources, reliance on particular industries, balance of payments status, interest rates, market conditions, currency values, international
trading patterns, trade barriers, diplomatic developments, social and political factors, and economic policies.
Securities of foreign issuers
that are represented by American Depository Receipts, or similar depository arrangements, or that are listed on a U.S. securities exchange or traded in the U.S. over-the-counter markets are not considered
“foreign securities” for purposes of the Fund’s investment allocations, because they are not subject to many of the special considerations and risks that apply to foreign securities held
and traded abroad.
The Fund currently does not
expect to have more than 35% of its total assets invested in foreign securities, although it has the ability to invest in them without limit.
Risks of Foreign Investing. Investments in foreign securities present risks and considerations not usually associated with investments in U.S. securities. Those may include:
•
| a lack of public information about foreign issuers;
|
•
| lower trading volume and less liquidity in foreign securities markets than in U.S. markets;
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•
| greater price volatility in foreign markets than in U.S. markets;
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•
| less government regulation of foreign issuers, exchanges and brokers than in the U.S.;
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•
| a lack of uniform accounting, auditing and financial reporting standards in foreign countries compared to those applicable to U.S. issuers;
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•
| fluctuations in the value of foreign investments due to changes in currency rates;
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•
| the expense of currency exchange transactions;
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•
| greater difficulties in pricing securities in foreign markets;
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•
| foreign government restrictions on investments by U.S. and other non-local entities;
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•
| higher brokerage commission rates than in the U.S.;
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•
| increased risks of delays in clearance and settlement of portfolio transactions;
|
•
| unfavorable differences between the U.S. economy and some foreign economies;
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•
| greater difficulty in commencing and pursuing lawsuits or other legal remedies;
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•
| less regulation of foreign banks and securities depositories;
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•
| increased risks of loss of certificates for portfolio securities;
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•
| government restrictions on the repatriation of profits or capital or other currency control regulations;
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•
| the possibility in some countries of expropriation, confiscatory taxation, political, financial or social instability or adverse diplomatic developments;
|
•
| the reduction of income by foreign taxes; and
|
•
| potential for time-zone arbitrage.
|
Foreign investments are often
denominated in currencies other than the U.S. dollar, which means that changes in the currency exchange rate will affect the value of those investments. Generally, when the U.S. dollar increases in value against a
foreign currency, an investment denominated in that currency is worth less in U.S. dollars and when the U.S. dollar decreases in value against a foreign currency, an investment denominated in that currency
is worth more in U.S. dollars. The Fund must compute its net asset value and its income in U.S. dollars and a change in the dollar value of a foreign currency will generally result in a change in the Fund’s net
asset value or its investment income that is available for distribution to shareholders. Because a portion of the Fund’s investment income may be received in foreign currencies, the Fund will be required to
compute its income in U.S. dollars for distribution to shareholders, and therefore the Fund will absorb the cost of currency fluctuations. Foreign currency losses that occur after the Fund has distributed income may
result in the Fund having made a distribution that was larger than its investment income during a particular fiscal period. In that case, the additional amount distributed would be classified as a return of capital to
shareholders.
In the past, government policies
have discouraged investments in certain foreign countries through economic sanctions, trade restrictions, taxation or other government actions. It is possible that such policies could be implemented in the future.
Risks of Developing and Emerging
Markets. Emerging and developing markets may offer special opportunities for investing but, in addition to being subject to all the risks of foreign investing, also have greater risks than more
mature foreign markets. Emerging and developing market countries may be subject to greater political, social and economic instability; have high inflation rates; experience unfavorable diplomatic developments; have
less liquid securities markets with greater price volatility; have additional delays in the settlement of securities transactions; impose exchange controls; be subject to trade barriers; impose differential taxes on
foreign investors; have a higher possibility of confiscatory taxes or the expropriation of assets; impose restrictions on direct investments or investments in issuers in particular industries; and lack developed legal
or regulatory systems. Investments in securities of issuers in developing or emerging market countries may be considered speculative. Additional information about certain risks associated with emerging and developing
markets is provided below.
•
| Less Developed Securities Markets. Developing or emerging market countries may have less well-developed securities markets and exchanges. Consequently, they have lower trading volume than the securities markets of more
developed countries. These markets may be unable to respond effectively to increases in trading volume. Therefore, prompt liquidation of substantial portfolio holdings may be difficult at times. As a result, these
markets may be substantially less liquid than those of more developed countries, and the securities of issuers located in these markets may have limited marketability.
|
•
| Transaction Settlement. Settlement procedures in developing or emerging markets may differ from those of more established securities markets. Settlements may also be delayed by operational problems. Securities
issued by developing countries and by issuers located in those countries may be subject to extended settlement periods. Delays in settlement could result in temporary periods during which some assets are uninvested
and no return is earned on those assets. The inability to make intended purchases of securities due to settlement problems could cause missed investment opportunities. Losses could also be caused by an inability to
dispose of portfolio securities due to settlement problems. As a result there could be subsequent declines in the value of the portfolio security, a decrease in the level of liquidity of the portfolio or, if there is
a contract to sell the security, a possible liability to the purchaser.
|
•
| Price Volatility. Securities prices in developing or emerging markets may be significantly more volatile than is the case in more developed nations of the world, which may lead to greater difficulties in
pricing securities.
|
•
| Less Developed Governments and Economies. Developing or emerging market countries may have less developed legal and accounting systems, and their governments may also be more unstable than the governments of more developed
countries. For example, governments of some developing or emerging market countries have defaulted on their bonds and there is the risk of this happening in the future. These countries may also have less protection of
property rights than more developed countries. Developing or emerging market countries also may be subject to social, political or economic instability, and have greater potential for pervasiveness of corruption and
crime, armed conflict, the adverse economic impact of civil war and religious or ethnic unrest. In addition, the economies of developing or emerging market countries may be more dependent on relatively few industries
or investors that may be
|
| highly vulnerable to local and global changes. Further, the value of the currency of a developing or emerging market country may fluctuate more than the currencies of countries with more mature markets. Investments
in developing or emerging market countries may also be subject to greater potential difficulties in enforcing contractual obligations.
|
•
| Government Restrictions. In certain developing or emerging market countries, government approval may be required for the repatriation of investment income, capital or the proceeds of sales of securities by foreign
investors. Also, a government might impose temporary restrictions on remitting capital abroad if the country’s balance of payments deteriorates, or it might do so for other reasons. If government approval were
delayed or refused, income or capital gains may not be able to be transmitted to the United States. Other government restrictions may include confiscatory taxation, expropriation or nationalization of company assets,
restrictions on foreign ownership of local companies, managed adjustments in relative currency values and other protectionist measures, and practices such as share blocking. Share blocking is the practice in certain
foreign markets where voting rights related to an issuer’s securities are predicated on those securities being blocked from trading at the custodian or sub-custodian level for a period of time around a
shareholder meeting. Such restrictions have the effect of prohibiting the purchase and sale of certain voting securities within a specified number of days before, and in certain instances, after a shareholder meeting.
The share blocking period can last up to several weeks, typically terminating on a date established at the discretion of the issuer. Share blocking may prevent the Fund from buying or selling securities for a period
of time. When shares are blocked, trades in such securities will not settle. Having a blocking restriction lifted can be difficult and onerous, with the particular requirements varying widely by country. In some
countries, the block cannot be removed for the duration of time it is effective. Additionally, the imposition of restrictions on investments by foreign entities might result in less attractive investment opportunities
or require the sale of existing investments. Investments in developing or emerging market countries may also be subject to greater risks relating to the withdrawal or non-renewal of any license enabling the Fund to
trade in securities of a particular country.
|
•
| Privatization Programs. The governments in some developing or emerging market countries have been engaged in programs to sell all or part of their interests in government-owned or controlled enterprises.
Privatization programs may offer opportunities for significant capital appreciation, in the appropriate circumstances. However, in certain developing countries, the ability of foreign entities to participate in
privatization programs may be limited by local law. Additionally, the terms on which a foreign entity might be permitted to participate may be less advantageous than those afforded local investors. There can be no
assurance that privatization programs will be successful.
|
Repurchase Agreements. The Fund may acquire securities subject to repurchase agreements. Repurchase agreements may be acquired for temporary defensive purposes, to maintain liquidity to meet anticipated share
redemptions, pending the investment of the proceeds from sales of shares, or pending the settlement of portfolio securities transactions. In a repurchase transaction, the purchaser buys a security from, and
simultaneously resells it to, an approved institution for delivery on an agreed-upon future date. The resale price exceeds the purchase price by an amount that reflects an agreed-upon interest rate effective for the
period during which the repurchase agreement is in effect. Approved institutions include U.S. commercial banks, U.S. branches of foreign banks, or broker-dealers that have been designated as primary dealers in
government securities. Institutions must meet credit requirements set by the investment adviser from time to time.
The majority of repurchase
transactions run from day to day and delivery pursuant to the resale typically occurs within one to five days of the purchase. Repurchase agreements that have a maturity beyond seven days are subject to limits on
illiquid investments. There is no limit on the amount of assets that may be subject to repurchase agreements having maturities of seven days or less.
Repurchase agreements are
considered “loans” under the Investment Company Act and are collateralized by the underlying security. Repurchase agreements require that at all times while the repurchase agreement is in effect, the value
of the collateral must equal or exceed the repurchase price to fully collateralize the repayment obligation. However, if the institution fails to pay the repurchase price on the delivery date, there may be costs
incurred in disposing of the collateral and losses if there is a delay in the ability to do so. The investment adviser will monitor the institution’s creditworthiness to confirm that it is financially sound and
will continuously monitor the collateral’s value.
Pursuant to an Exemptive Order
issued by the Securities and Exchange Commission (the “SEC”), the Fund, along with the affiliated entities managed by the investment adviser or its affiliates, may transfer uninvested cash balances into
one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements secured by U.S. government securities. Securities that are pledged as collateral for repurchase
agreements are held by a custodian bank until the agreements mature. Each joint repurchase arrangement requires that the market value of the collateral be sufficient to cover payments of interest and principal;
however, in the event of default by the other party to the agreement, retention or sale of the collateral may be subject to legal proceedings.
The Fund will not enter into a
repurchase agreement that causes more than 10% of its net assets to be subject to repurchase agreements having a maturity beyond seven days.
Illiquid and Restricted
Securities. Generally, an illiquid asset is an asset that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the price at which it has been valued.
Under the policies and procedures established by the Board, the investment adviser determines the liquidity of portfolio investments. The holdings of illiquid and restricted securities are monitored on an ongoing
basis to determine whether to sell any holdings
to maintain adequate liquidity. Among the types
of illiquid securities are repurchase agreements maturing in more than seven days. Liquidity may dissipate at any time and there can be no assurance that the investment adviser’s liquidity determinations will be
correct or that a reduction in liquidity will not occur between the time such determination is made and an event prompting the Fund to sell a security.
Restricted securities acquired
through private placements have contractual restrictions on their public resale that might limit the ability to value or to dispose of the securities and might lower the price that could be realized on a sale. To sell
a restricted security that is not registered under applicable securities laws, the security might need to be registered. The expense of registering restricted securities may be negotiated with the issuer at the time
of purchase. If the securities must be registered in order to be sold, a significant period may elapse between the time the decision is made to sell the security and the time the security is registered. There is a
risk of downward price fluctuation during that period.
Limitations that apply to
purchases of restricted securities do not limit purchases of restricted securities that are eligible for sale to qualified institutional buyers under Rule 144A of the Securities Act of 1933, if those securities have
been determined to be liquid by the investment adviser under its policies and procedures. Those policies and procedures take into account the trading activity for the securities and the availability of reliable
pricing information, among other factors. If there is a lack of trading interest in a particular Rule 144A security, holdings of that security may be considered to be illiquid.
Borrowing and Leverage. The Fund can borrow from banks, as permitted by the Investment Company Act. The Fund also can borrow from banks and other lenders to meet redemption obligations or for temporary and
emergency purposes. When the Fund borrows money for investment in other assets, it is using a speculative investment technique known as “leverage,” and changes in the value of the Fund’s investments
will have a larger effect on its share price if the investments were acquired using leverage than if the Fund acquired assets without the use of leverage.
Under the Fund’s
investment policies, the Fund may not borrow money, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder or any exemption from that Act that applies to the Fund.
Currently, under the Investment Company Act, a mutual fund may borrow only from banks (other than for emergency purposes) and the maximum amount it may borrow is up to one-third of its total assets (including the
amount borrowed), less all liabilities and indebtedness other than borrowings, meaning that the value of those assets must be at least equal to 300% of the amount borrowed. If the value of the Fund’s assets
fails to meet this 300% asset coverage requirement, the Fund will reduce the amount of its borrowings within three days to meet the requirement. To do so, the Fund might have to sell a portion of its investments at a
disadvantageous time and for a disadvantageous price.
The Fund may also borrow up to
5% of its total assets for temporary or emergency purposes from any lender, including a non-bank. Under the Investment Company Act, there is a rebuttable presumption that a loan is temporary if it is repaid within 60
days and not extended or renewed.
The Fund will pay interest and
may pay other fees in connection with loans. Interest expense and the amount of any other fees incurred by the Fund in connection with loans will raise the overall expenses of the Fund and may reduce its returns. If
the Fund does borrow, its expenses will usually be greater than comparable funds that do not borrow. Additionally, if the Fund does borrow the use of leverage will make the Fund’s share prices more sensitive to
changes in the value of its assets and thus might cause the Fund’s net asset value per share to fluctuate more than that of funds that do not borrow. Finally, on the maturity date for any loan, the Fund must
have sufficient cash available to pay back the lenders the amount borrowed.
The Fund participates in a
multi-borrower, unsecured, revolving line of credit along with certain other Oppenheimer funds (the “Line of Credit”) and with a syndicate of banks as lenders. The Line of Credit permits combined
borrowings by the Fund and these other Oppenheimer funds of up to a maximum aggregate amount, as negotiated from time to time. Borrowings by a Fund under the Line of Credit may only be used for temporary or emergency
purposes, including without limitation, funding of shareholder redemptions, and may not be used for leverage. The Fund’s Board has determined that the Fund’s participation in the Line of Credit is
consistent with the Fund’s investment objective and policies and is in the best interests of the Fund and its shareholders.
Under the Line of Credit,
interest is charged to the Fund, based on its borrowings, at a floating benchmark rate of interest plus a margin. Additionally, the Fund will pay quarterly its pro rata portion of a loan commitment fee for the Line of
Credit, and pays an additional fee at each renewal of the facility (which is expected to be annually) to the administrative agent for management and administration of the facility. The Fund can prepay loans and
terminate its participation in the Line of Credit at any time upon prior notice to the lenders, however each borrowing under the Line of Credit will have a scheduled maturity of 30 days. As a borrower under the Line
of Credit, the Fund has certain rights and remedies under state and federal law comparable to those it would have with respect to a loan from a bank.
Debt Securities. Although the Fund invests mainly in equity securities, it can also invest in bonds, debentures and other debt securities. It is not anticipated that a significant amount of the
Fund’s assets will be invested in debt securities. In general, debt securities are subject to the following risks:
•
| Interest Rate Risk. Interest rate risk refers to the fluctuations in value of a debt security resulting from the relationship between price and yield. An increase in general interest rates
will tend to reduce the market value of already-issued
|
| debt securities and a decline in general interest rates will tend to increase their value. Debt securities with longer maturities are usually subject to greater fluctuations in value from interest rate changes than
obligations having shorter maturities. Variable rate debt securities pay interest based on an interest rate benchmark. When the benchmark rate changes, the interest payments on those securities may be reset at a
higher or lower rate. Except for investments in variable rate debt securities, fluctuations in general interest rates do not affect the amount of interest income received. Fluctuations in the market valuations of debt
securities may, however, affect the value of Fund assets. “Zero-coupon” or “stripped” securities may be particularly sensitive to interest rate changes. Risks associated with rising interest
rates are heightened given that interest rates in the U.S. are near historic lows.
|
•
| Duration Risk. Duration is a measure of the price sensitivity of a debt security or portfolio to interest rate changes. Duration risk is the risk that longer-duration debt securities
are more volatile and thus more likely to decline in price, and to a greater extent, than shorter-duration debt securities, in a rising interest-rate environment. “Effective duration” attempts to measure the expected percentage change in the value of a bond or portfolio resulting from a change in prevailing interest
rates. The change in the value of a bond or portfolio can be approximated by multiplying its duration by a change in interest rates. For example, if a bond has an effective duration of three years, a 1% increase in
general interest rates would be expected to cause the bond’s value to decline about 3% while a 1% decrease in general interest rates would be expected to cause the bond’s value to increase 3%. The duration
of a debt security may be equal to or shorter than the full maturity of a debt security.
|
•
| Credit Risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. In general, below-investment-grade, higher-yield bonds
are subject to credit risk to a greater extent than lower-yield, investment-grade bonds. In making investments in debt securities, the investment adviser may rely to some extent on the ratings of national statistical
rating organizations or it may use its own research to evaluate a security’s credit-worthiness. If securities purchased are unrated, they may be assigned a rating by the investment adviser in categories similar
to those of a national statistical rating organization. There are no investment policies establishing specific maturity ranges for investments, and they may be within any maturity range (short, medium or long)
depending on the investment adviser’s evaluation of investment opportunities available within the debt securities markets.
|
•
| Credit Spread Risk. Credit spread risk is the risk that credit spreads (i.e., the difference in yield between securities that is due to differences in their credit quality) may increase when
the market expects below-investment-grade bonds to default more frequently. Widening credit spreads may quickly reduce the market values of below-investment-grade and unrated securities. Some unrated securities may
not have an active trading market or may trade less actively than rated securities, which means that it might be difficult to sell them promptly at an acceptable price.
|
•
| Extension Risk. Extension risk is the risk that, if interest rates rise rapidly, repayments of principal on certain debt securities may occur at a slower rate than expected, and the
expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally have a greater potential for loss when prevailing interest rates rise, which could cause their
values to fall sharply. Extension risk is particularly prevalent for a callable security where an increase in interest rates could result in the issuer of that security choosing not to redeem the security as
anticipated on the security’s call date. Such a decision by the issuer could have the effect of lengthening the debt security’s expected maturity, making it more vulnerable to interest rate risk and
reducing its market value.
|
•
| Reinvestment Risk. Reinvestment risk is the risk that when interest rates fall, it may be necessary to reinvest the proceeds from a security’s sale or redemption at a lower interest
rate. Callable bonds are generally subject to greater reinvestment risk than non-callable bonds.
|
•
| Prepayment Risk. Certain fixed-income securities (in particular mortgage-related securities) are subject to the risk of unanticipated prepayment. Prepayment risk is the risk that, when
interest rates fall, the issuer will redeem the security prior to the security’s expected maturity, or that borrowers will repay the loans that underlie these fixed-income securities more quickly than expected,
thereby causing the issuer of the security to repay the principal prior to expected maturity. It may be necessary to reinvest the proceeds at a lower interest rate, reducing income. Securities subject to prepayment
risk generally offer less potential for gains when prevailing interest rates fall. If these securities are purchased at a premium, accelerated prepayments on those securities could cause losses on a portion of the
principal investment. The impact of prepayments on the price of a security may be difficult to predict and may increase the security’s price volatility. Interest-only and principal-only securities are especially
sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and repayment assumptions about those investments.
|
•
| Event Risk. If an issuer of debt securities is the subject of a buyout, debt restructuring, merger or recapitalization that increases its debt load, it could interfere with its
ability to make timely payments of interest and principal and cause the value of its debt securities to fall.
|
Fixed-Income
Market Risks. The fixed-income securities market can be susceptible to unusual volatility and illiquidity. Volatility and illiquidity may be more pronounced in the case of lower-rated and unrated
securities. Liquidity can decline unpredictably in response to overall economic conditions or credit tightening. Increases in volatility and decreases in liquidity may be caused by a rise in interest rates (or the
expectation of a rise in interest rates), which are near historic lows in the U.S. and in other countries. During times of reduced market liquidity, the Fund may not be able to readily sell bonds at the prices at
which they are carried on the Fund’s books. If the Fund needed to sell large blocks of bonds to
meet
shareholder redemption requests or to raise cash, those sales could further reduce the bonds’ prices. An unexpected increase in Fund redemption requests (including requests from shareholders who may own a
significant percentage of the Fund’s shares) which may be triggered by market turmoil or an increase in interest rates, as well as other adverse market and economic developments, could cause the Fund to sell its
holdings at a loss or at undesirable prices and adversely affect the Fund’s share price and increase the Fund’s liquidity risk, Fund expenses and/or taxable distributions. Similarly, the prices of the
Fund’s holdings could be adversely affected if an investment account managed similarly to the Fund was to experience significant redemptions and that account were required to sell its holdings at an inopportune
time. The liquidity of an issuer’s securities may decrease as a result of a decline in an issuer’s credit rating, the occurrence of an event that causes counterparties to avoid transacting with the issuer,
or an increase in the issuer’s cash outflows. A lack of liquidity or other adverse credit market conditions may hamper the Fund’s ability to sell the debt securities in which it invests or to find and
purchase suitable debt instruments.
Economic and other market
developments can adversely affect fixed-income securities markets in the United States, Europe and elsewhere. At times, participants in debt securities markets may develop concerns about the ability of certain issuers
of debt securities to make timely principal and interest payments, or they may develop concerns about the ability of financial institutions that make markets in certain debt securities to facilitate an orderly market.
Those concerns may impact the market price or value of those debt securities and may cause increased volatility in those debt securities or debt securities markets. Under some circumstances, as was the case during the
latter half of 2008 and early 2009, those concerns may cause reduced liquidity in certain debt securities markets, reducing the willingness of some lenders to extend credit, and making it more difficult for borrowers
to obtain financing on attractive terms (or at all).
Following the
financial crisis, the Federal Reserve sought to stabilize the economy by keeping the federal funds rate near zero percent. The Federal Reserve has also purchased large quantities of securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities, pursuant to its monetary stimulus program known as “quantitative easing.” As the Federal Reserve has completed the tapering of its securities
purchases pursuant to quantitative easing, has recently raised interest rates on multiple occasions, and continues to consider future raises to the federal funds rate, there is a risk that interest rates may rise and
cause fixed-income investors to move out of fixed-income securities, which may also increase redemptions in fixed-income mutual funds.
In addition, although the
fixed-income securities markets have grown significantly in the last few decades, regulations and business practices have led some financial intermediaries to curtail their capacity to engage in trading (i.e.,
“market making”) activities for certain debt securities. As a result, dealer inventories of fixed-income securities, which provide an indication of the ability of financial intermediaries to make markets
in fixed-income securities, are near historic lows relative to market size. Because market makers help stabilize the market through their financial intermediary services, further reductions in dealer inventories could
have the potential to decrease liquidity and increase volatility in the fixed-income securities markets.
Sovereign Debt. Sovereign debt securities include fixed income securities issued or guaranteed by governments, their agencies and instrumentalities, and securities issued by supranational entities such as
the World Bank or the European Union. Investment in sovereign debt can involve a high degree of risk, including the risk that the governmental entity that controls the repayment of sovereign debt may not be able or
willing to repay the principal and/or interest when due in accordance with the terms of such debt. A governmental entity’s willingness or ability to repay principal and interest due in a timely manner may be
affected by, among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden
to the economy as a whole, the governmental entity’s policy towards international lenders or agencies and the political constraints to which a governmental entity may be subject. Although some sovereign debt,
such as Brady Bonds, is collateralized by U.S. government securities, repayment of principal and interest is not guaranteed by the U.S. government. Governmental entities may also be dependent on expected disbursements
from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such
disbursements may be conditioned on the implementation of economic reforms and/or economic performance and the timely service of such debtor’s obligations. Failure to implement such reforms, achieve specified
levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties’ commitments to lend funds to the governmental entity, which may further impair such
debtor’s ability or willingness to timely service its debts. Consequently, governmental entities may default on their sovereign debt.
Holders of sovereign debt may be
requested to participate in the rescheduling or restructuring of such debt and to extend further loans to governmental entities. Restructuring arrangements have included, among other things, reducing and rescheduling
interest and principal payments by negotiation, new or amended credit agreements or converting outstanding principal and unpaid interest to Brady Bonds, and obtaining new credit for finance interest payments. There
can be no assurance that foreign sovereign debt securities will not be subject to similar restructuring arrangements or to requests for new credit which may have adverse consequences for holders of such debt.
Furthermore, certain participants in the secondary market for such debt may be directly involved in negotiating the terms of these arrangements and may therefore have access to information not available to other
market participants. In the event of a default by a governmental entity, there may be limited or no effective legal remedies for collecting on such debt. A restructuring or default of sovereign debt may also cause
additional impacts to the financial markets, such as
downgrades to credit ratings, a flight to
quality debt instruments, disruptions in common trading markets or unions, reduced liquidity, increased volatility, and heightened financial sector, foreign securities and currency risk, among others.
Debt securities issued by
certain “supra-national” entities include entities designated or supported by governments to promote economic reconstruction or development, international banking organizations and related government
agencies. Examples are the International Bank for Reconstruction and Development (commonly called the “World Bank”), the Asian Development Bank and the Inter-American Development Bank. A supra-national
entity’s lending activities may be limited to a percentage of its total capital, reserves and net income. The governmental members of those supra-national entities are “stockholders” that typically
make capital contributions and may be committed to make additional capital contributions if the entity is unable to repay its borrowings. There can be no assurance that the constituent governments will continue to be
able or willing to honor their capitalization commitments.
The Fund can invest in U.S.
dollar-denominated “Brady Bonds.” These foreign debt obligations may be fixed-rate par bonds or floating-rate discount bonds. They are generally collateralized in full as to repayment of principal at
maturity by U.S. Treasury zero-coupon obligations that have the same maturity as the Brady Bonds. Brady Bonds can be viewed as having three or four valuation components: (i) the collateralized repayment of principal
at final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity. Those uncollateralized amounts constitute
what is called the “residual risk.”
If there is a default on
collateralized Brady Bonds resulting in acceleration of the payment obligations of the issuer, the zero-coupon U.S. Treasury securities held as collateral for the payment of principal will not be distributed to
investors, nor will those obligations be sold to distribute the proceeds. The collateral will be held by the collateral agent to the scheduled maturity of the defaulted Brady Bonds. The defaulted bonds will continue
to remain outstanding, and the face amount of the collateral will equal the principal payments which would have then been due on the Brady Bonds in the normal course. Because of the residual risk of Brady Bonds and
the history of defaults with respect to commercial bank loans by public and private entities of countries issuing Brady Bonds, Brady Bonds are considered speculative investments.
The Fund will invest in
securities of U.S. government agencies and instrumentalities only when the investment adviser is satisfied that the credit risk with respect to the agency or instrumentality is minimal.
Credit Ratings of Debt
Securities. Ratings by ratings organizations such as Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”), and Fitch, Inc.
(“Fitch”) represent the respective rating agency’s opinions of the credit quality of the debt securities they undertake to rate. However, their ratings are general opinions and are not guarantees of
quality or indicative of market value risk. Debt securities that have the same maturity, coupon and rating may have different yields, while other debt securities that have the same maturity and coupon but different
ratings may have the same yield. Ratings and market value may change from time to time, positively or negatively, to reflect new developments regarding the issuer.
“Investment-grade”
securities are those rated within the four highest rating categories of S&P’s, Moody’s, Fitch or another nationally recognized statistical rating organization (or, in the case of unrated securities,
determined by the investment adviser to be comparable to securities rated investment-grade). While securities rated within the fourth highest category by S&P’s (meaning BBB+, BBB or BBB-) or by Moody’s
(meaning Baa1, Baa2 or Baa3) are considered “investment-grade,” they have some speculative characteristics. If two or more nationally recognized statistical rating organizations have assigned different
ratings to a security, the investment adviser uses the highest rating assigned.
Below-investment-grade
securities (also referred to as “junk bonds”) are those rated below investment grade by the S&P, Moody’s, Fitch or other nationally recognized statistical rating organization or unrated
securities the investment adviser believes are of comparable quality.
After a Fund buys a debt
security, the security may cease to be rated or its rating may be reduced. Neither event requires a Fund to sell the security, but the investment adviser will consider such events in determining whether a Fund should
continue to hold the security. To the extent that ratings given by Moody’s, S&P, Fitch or another nationally recognized statistical rating organization change as a result of changes in those rating
organizations or their rating systems, a Fund will attempt to use similar ratings as standards for investments in accordance with the Fund’s investment policies. The investment adviser continuously monitors the
issuers of below-investment-grade securities held by a Fund for their ability to make required principal and interest payments, as well as in an effort to control the liquidity of a Fund so that it can meet redemption
requests.
A list of the rating categories
of Moody’s, S&P, Fitch and other nationally recognized statistical rating organizations for debt securities is contained in an Appendix to this SAI.
Unrated
Securities. Because a Fund may purchase securities that are not rated by any nationally recognized statistical rating organization, the investment adviser may internally assign
ratings to those securities, after assessing their credit quality and other factors, in categories similar to those of nationally recognized statistical rating organizations. Unrated securities are considered
“investment-grade” or “below-investment-grade” if judged by the investment adviser to be comparable to rated investment-grade or below-investment-grade securities. There can be no assurance,
nor is it intended, that the investment adviser’s credit analysis process is consistent or comparable with the credit analysis process used by a nationally recognized statistical rating organization. The
investment adviser’s rating does not constitute
a guarantee of the credit quality. In addition,
some unrated securities may not have an active trading market, which means that a Fund might have difficulty selling them promptly at an acceptable price. In evaluating the credit quality of a particular security,
whether rated or unrated, the investment adviser will normally take into consideration a number of factors including, but not limited to, the financial resources of the issuer, the underlying source of funds for debt
service on a security, the issuer’s sensitivity to economic conditions and trends, any operating history of the facility financed by the obligation, the degree of community support for the financed facility, the
capabilities of the issuer’s management, and regulatory factors affecting the issuer or the particular facility.
Risks of Below-Investment-Grade
Securities. Below-investment-grade securities (also referred to as “junk bonds”) are those rated below investment grade by S&P, Moody’s, Fitch or other nationally recognized
statistical rating organization or unrated securities the investment adviser believes are of comparable quality. The investment adviser continuously monitors the issuers of below-investment-grade securities held by
the Fund for their ability to make required principal and interest payments, as well as in an effort to control the liquidity of the Fund so that it can meet redemption requests. While below-investment-grade
securities generally may have a higher yield than securities rated in the investment-grade categories, they are subject to increased risks. Below-investment-grade securities are considered to be speculative with
respect to the ability of the issuer to timely repay principal and pay interest or dividends in accordance with the terms of the obligation and may have more credit risk than investment-grade securities, especially
during times of weakening economic conditions or rising interest rates. The risks of below-investment-grade securities include:
•
| Prices of below-investment-grade securities are subject to extreme price fluctuations, even under normal market conditions. Negative economic developments may have a greater impact on the prices of
below-investment-grade securities than on those of investment-grade securities. In addition, the market values of below-investment-grade securities tend to reflect individual issuer developments to a greater extent
than do the market values of investment-grade securities, which react primarily to fluctuations in the general level of interest rates.
|
•
| Below-investment-grade securities may be issued by less creditworthy issuers and may be more likely to default than investment-grade securities. The issuers of below-investment-grade securities may have more
outstanding debt relative to their assets than issuers of higher-grade securities. Below-investment-grade securities are vulnerable to adverse changes in the issuer’s industry and to general economic conditions.
If the issuer experiences financial stress, it may not be able to pay interest and principal payments in a timely manner. The issuer’s ability to pay its debt obligations also may be lessened by specific issuer
developments or the unavailability of additional financing. In the event of a default of an issuer of a below-investment-grade security, the Fund may incur expenses to the extent necessary to seek recovery or to
negotiate new terms.
|
•
| Below-investment-grade securities are frequently ranked junior to claims by other creditors. If the issuer cannot meet its obligations, the senior obligations are generally paid off
before the junior obligations, which could limit the Fund’s ability to fully recover principal or to receive interest payments when senior securities are in default. As a result, investors in
below-investment-grade securities have a lower degree of protection with respect to principal and interest payments than do investors in investment-grade securities.
|
•
| There may be less of a market for below-investment-grade securities and as a result they may be harder to sell at an acceptable price. Not all dealers maintain markets in all below-investment-grade securities. As a
result, there is no established retail secondary market for many of these securities. The Fund anticipates that such securities could be sold only to a limited number of dealers or institutional investors. To the
extent a secondary trading market does exist, it is generally not as liquid as the secondary market for investment-grade securities. The lack of a liquid secondary market may have an adverse impact on the market price
of the security. The lack of a liquid secondary market for certain securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing its securities. Market quotations
are generally available on many below-investment-grade securities only from a limited number of dealers and may not necessarily represent firm bids of such dealers or prices for actual sales. In addition, the trading
volume for below-investment-grade securities is generally lower than that for investment-grade securities and the secondary markets could contract under adverse market or economic conditions independent of any
specific adverse changes in the condition of a particular issuer. Under certain economic and/or market conditions, the Fund may have difficulty disposing of certain below-investment-grade securities due to the limited
number of investors in that sector of the market. When the secondary market for below-investment-grade securities becomes more illiquid, or in the absence of readily available market quotations for such securities,
the relative lack of reliable objective data makes it more difficult to value the Fund’s securities and judgment plays a more important role in determining such valuations.
|
•
| Below-investment-grade securities frequently have redemption features that permit an issuer to repurchase the security from the Fund before it matures. During times of falling interest rates, issuers of these
securities are likely to redeem or prepay the securities and finance them with securities with a lower interest rate. To the extent an issuer is able to refinance the securities, or otherwise redeem them; the Fund may
have to replace the securities with lower yielding securities, which could result in a lower return for the Fund.
|
•
| Below-investment-grade securities markets may also react strongly to adverse news about an issuer or the economy, or to the perception or expectation of adverse news, whether or not
it is based on fundamental analysis. An increase in interest rates could severely disrupt the market for below-investment-grade securities. Additionally, below-investment-grade securities may be affected by
legislative and regulatory developments. These developments could adversely
|
| affect the Fund’s net asset value and investment practices, the secondary market for below-investment-grade securities, the financial condition of issuers of these securities and the value and liquidity of
outstanding below-investment-grade securities, especially in a thinly traded market.
|
These additional risks mean that
the Fund may not receive the anticipated level of income from these securities, and the Fund’s net asset value may be affected by declines in the value of below-investment-grade securities. Credit rating
downgrades of a single issuer or related similar issuers whose securities the Fund holds in significant amounts could substantially and unexpectedly increase the Fund’s exposure to below-investment-grade
securities and the risks associated with them, especially liquidity and default risk.
While securities rated
“Baa” by Moody’s, “BBB” by S&P or Fitch, or the similar category by the investment adviser if an unrated security, are investment grade, they may be subject to special risks and have
some speculative characteristics.
U.S. Treasury Obligations. These securities are directly issued by the U.S. Treasury. They include Treasury bills (which have maturities of one year or less when issued), Treasury notes (which have maturities of more
than one year and up to ten years when issued), Treasury bonds (which have maturities of more than ten years when issued), and Treasury Inflation-Protection Securities (“TIPS”). Other U.S. Treasury
obligations include U.S. Treasury securities that have been “stripped” by a Federal Reserve Bank and zero-coupon U.S. Treasury securities. Treasury securities are backed by the full faith and credit of the
United States as to timely payments of interest and repayments of principal. While U.S. Treasury securities have relatively little credit risk, they are subject to price fluctuations from changes in interest
rates.
Obligations Issued or Guaranteed
by U.S. Government Agencies or Instrumentalities. These include direct obligations and mortgage-related securities that have different levels of credit support from the government. Some are supported by the full faith
and credit of the U.S. government, such as Government National Mortgage Association pass-through mortgage certificates. Some are supported by the right of the issuer to borrow from the U.S. Treasury under certain
circumstances, such as Federal National Mortgage Association bonds and Federal Home Loan Mortgage Corporation obligations.
Zero-Coupon and Stripped
Securities. The Fund may buy zero-coupon, delayed-interest and “stripped” securities. Stripped securities are debt securities whose interest coupons are separated from the security and
sold separately. The Fund can buy the following types of zero-coupon or stripped securities, among others: U.S. Treasury notes or bonds that have been stripped of their interest coupons, U.S. Treasury bills issued
without interest coupons, and certificates representing an interest in stripped securities.
Zero-coupon securities do not
make periodic interest payments and are sold at a discount from their face value. The buyer recognizes return from the gradual appreciation of the security, which is redeemed at face value on a specified maturity
date. The amount of the discount depends on the time remaining until maturity, as well as prevailing interest rates, the liquidity of the security and the credit quality of the issuer. Unless there is an adverse
change in the issuer’s credit quality, the discount typically decreases as the maturity date approaches. Some zero-coupon securities convert to a security with a specified coupon rate at a predetermined date.
Because zero-coupon securities
make no periodic interest payments, their effective interest rate is fixed at the time they are issued and their prices are generally more volatile than the prices of other debt securities. The value of zero-coupon
and stripped securities may fall more sharply than the value of interest-paying securities when prevailing interest rates rise. When interest rates fall, zero-coupon and stripped securities tend to increase in value
more rapidly because they have a fixed rate of return.
The Fund’s investments in
zero-coupon and stripped securities may require the Fund to recognize income and make distributions to shareholders before it receives any cash payments on the zero-coupon investment. To satisfy those distribution
requirements, the Fund may need to sell portfolio securities that it would otherwise continue to hold.
Investments in
Other Investment Companies. The Fund may invest in the securities of other investment companies. Investments in the securities of other investment companies can include open-end funds, closed-end funds, business
development companies and unit investment trusts. Exchange-traded funds (“ETFs”), which are typically open-end funds or unit investment trusts, are listed on a stock exchange. These investments may provide
a way to gain exposure to segments of the equity or fixed-income markets represented by the exchange-traded fund’s portfolio at times when it is not possible to buy those portfolio securities directly, or may be
used in order to equitize cash positions.
Investing in another investment
company may involve paying a substantial premium above the value of that investment company’s portfolio securities. The Fund does not intend to invest in other investment companies unless the investment adviser
believes that the potential benefits of an investment justify the expenses. As a shareholder of an investment company, the Fund would be subject to its ratable share of that company’s expenses, including its
advisory and administration expenses. Investments in other investment companies are subject to limits set forth in the Investment Company Act.
Subject to the limits under the
Investment Company Act, the Fund may also invest in foreign mutual funds which are also deemed “passive foreign investment companies” (PFICs) (since nearly all of the income of a mutual fund is generally
passive income). Investing in these types of foreign investment companies may allow exposure to various countries
because some foreign countries limit, or
prohibit, all direct foreign investment in the securities of companies domiciled therein. In addition to bearing their proportionate share of the Fund’s expenses (management fees and operating expenses),
shareholders will also indirectly bear similar expenses of such entities. Additional risks of investing in these types of foreign investment companies are described herein under “Passive Foreign Investment
Companies.”
Money Market Instruments. Money market securities are high-quality, short-term debt instruments that are issued by the U.S. government, corporations, banks or other entities. They may have fixed, variable or
floating interest rates. The investments of a fund that is classified as a “money market fund” must comply with the credit rating and other provisions of Rule 2a-7 under the Investment Company Act. To
qualify as an “Eligible Security” under the Rule 2a-7 credit rating requirements, a security must: (a) have received a rating in one of the two highest short-term rating categories by any two
“nationally recognized statistical rating organizations” as defined in Rule 2a-7 (“NRSRO”), or, if only one NRSRO has rated that security, have received a rating in one of the two highest
short-term rating categories by that NRSRO; or (b) be guaranteed, and either that guarantee or the party providing that guarantee meets the requirements in (a); or (c) be an unrated security that is either issued by
an issuer having another similar security that meets the above requirements, or is judged by the investment adviser to be of comparable quality to investments that meet those requirements.
Publicly Traded
Partnerships; Master Limited Partnerships. The Fund may invest in publicly traded limited partnerships such as master limited partnerships (“MLPs”). MLPs issue units that are registered with the Securities and Exchange
Commission (the “SEC”) and are freely tradable on a securities exchange or in the over-the-counter market. An MLP may have one or more general partners, who conduct the business, and one or more limited
partners, who contribute capital. The general partner or partners are jointly and severally responsible for the liabilities of the MLP. The Fund invests as a limited partner, and normally would not be liable for the
debts of an MLP beyond the amounts the Fund has contributed but it would not be shielded to the same extent that a shareholder of a corporation would be. In certain circumstances, creditors of an MLP would have the
right to seek a return of capital that had been distributed to a limited partner. This right of an MLP’s creditors would continue even after the Fund had sold its investment in the partnership. MLPs typically
invest in real estate, oil and gas and equipment leasing assets, but they also finance entertainment, research and development, and other projects.
The Fund currently may invest in
MLPs that are generally taxed as corporations for United States federal tax purposes and that make distributions in additional shares rather than cash. Because these distributions of additional shares will be made
proportionately to all owners of shares, the receipt of these additional shares will not be included in the gross income of an owner of shares for United States federal income tax purposes. When the Fund as an owner
of the shares of such an MLP receives additional shares, it will be required to allocate its tax basis in its shares of the MLP equally between shares that the Fund already owns and the new additional shares received.
Gain or loss recognized by the Fund as an owner of shares, on the sale or other disposition of a share will generally be taxable as capital gain or loss.
The Fund may invest in MLPs that
are classified as partnerships and qualify as “qualified publicly traded partnerships” for federal tax purposes. As a RIC, the Fund is required to derive at least 90% of its gross income for each taxable
year from qualifying income. Net income and gains from an investment in a qualified publicly traded partnership are qualifying income for purposes of the 90% income test. In order to meet the asset diversification
test applicable to RICs, the Fund is limited to investing no more than 25% of the value of its total assets in one or more qualified publicly traded partnerships. The Fund also may invest in MLPs that are taxed as
corporations for United States federal tax purposes. Income and gains from MLPs taxed as corporations also generate qualifying income and gains for purposes of the 90% income test and a RIC may invest up to 25% of the
value of its total assets in one such corporation.
The Fund may invest in MLPs that
are classified as partnerships but are not qualified publicly traded partnerships. Such partnerships may pass through gross income that would not be qualifying income for purposes of the 90% test described above. The
Fund may also have non-qualifying assets for purposes of the RIC diversification requirements, resulting from the partnership investment.
Derivatives and Hedging. The Fund can invest in a variety of derivative instruments for liquidity, to seek income or investment return or for hedging purposes. Some of the derivative instruments and hedging
strategies that the Fund may use are:
•
| futures
|
•
| put and call options
|
•
| currency futures and options
|
•
| options on futures
|
•
| forward contracts
|
The Fund can use derivatives to
attempt to hedge against declines in the market value of securities in the Fund’s portfolio, to preserve unrealized gains in the value of portfolio securities that have appreciated, or to facilitate selling
securities for investment reasons. The Fund can also use derivatives to establish a position in the securities market as a temporary substitute for purchasing particular securities or to seek to benefit from an
anticipated rise in their market value. In that case, the Fund would normally purchase the securities and then terminate the derivative position.
The Fund is not obligated to use
hedging, even though it is permitted to do so, as described below. The Fund’s hedging strategies are intended to reduce losses but they may also cause losses or limit gains if the hedging instrument or strategy
does not perform in the way that the Fund anticipates.
The Fund may use derivatives and
hedging to the extent consistent with its investment objective, internal risk management guidelines adopted by the Manager (as they may be amended from time to time), and as otherwise set forth in the Fund’s
Prospectus or this SAI. The Fund can employ other derivatives or hedging instruments and strategies, including new ones that are developed, if those investments or strategies are consistent with the Fund’s
investment objective and are permissible under applicable regulations governing the Fund.
The Fund does not currently
anticipate using derivatives or hedging to a significant degree.
Futures. The Fund can buy and sell futures contracts that relate to (1) broadly-based stock indices (“stock index futures”), (2) an individual stock (“single stock
futures”), (3) debt securities (these are referred to as “interest rate futures”), (4) other broadly-based securities indices (these are referred to as “financial futures”), (5) foreign
currencies (these are referred to as “forward contracts”), or (6) commodities (these are referred to as “commodity futures”).
Stock Index Futures. A broadly-based stock index is used as the basis for trading stock index futures. In some cases an index may be based on stocks of issuers in a particular industry or
group of industries. The buyer or seller of a stock index future is obligated to pay cash to settle the transaction, based on the fluctuation of the index’s value in response to the changes in the relative
values of the underlying stocks that are included in the index over the term of the contract. A stock index cannot be purchased or sold directly.
Single Stock Futures. A single stock future obligates the seller to deliver (and the purchaser to take) cash or a specified equity security of an issuer to settle the futures transaction.
Either party may also enter into an offsetting contract to close out the position. Single stock futures trade on a very limited number of exchanges, and contracts are typically not transferable between the
exchanges.
Interest Rate Futures. An interest rate future obligates the seller to deliver (and the purchaser to take) cash or a specified type of debt security to settle the futures transaction. Either
party could also enter into an offsetting contract to close out the position.
Financial Futures. Financial futures are based on the value of the basket of securities that comprise an index. These contracts obligate the buyer or seller to pay cash to settle the
futures transaction, based on the fluctuation of the index’s value in response to the change in the relative values of the underlying securities that are included in the index over the term of the contract. No
delivery of the underlying securities is made to settle the futures contract. Either party may also settle the transaction by entering into an offsetting contract.
Forward Contracts. Forward contracts are foreign currency exchange contracts that are used to buy or sell foreign currency for future delivery at a fixed price. They are discussed below in
the section “Buying and Selling Options on Foreign Currencies.”
Commodity Futures. Commodity futures may be based upon commodities within five main commodity groups: (1) energy, which includes crude oil, natural gas, gasoline and heating oil; (2)
livestock, which includes cattle and hogs; (3) agriculture, which includes wheat, corn, soybeans, cotton, coffee, sugar and cocoa; (4) industrial metals, which includes aluminum, copper, lead, nickel, tin and zinc;
and (5) precious metals, which includes gold, platinum and silver. The Fund can purchase and sell commodity futures contracts, options on futures contracts and options and futures on commodity indices with respect to
these five main commodity groups and the individual commodities within each group, as well as other types of commodities.
These futures transactions are
effected through a clearinghouse associated with the exchange on which the contracts are traded. No money is paid or received on the purchase or sale of a future. Upon entering into a futures transaction, the
purchaser is required to deposit an initial margin payment for the futures commission merchant (the “futures broker”). The initial margin payment will be deposited with the custodian bank in an account,
registered in the futures broker’s name, that the futures broker can gain access to only under specified conditions. As the future is marked-to-market (that is, its value on the books is changed to reflect
changes in its market value), subsequent margin payments, called variation margin, will be paid to or from the futures broker daily.
At any time prior to expiration
of the future, the purchaser may elect to close out its position, at which time a final determination of variation margin is made and any cash in the margin account must be paid or released. The purchaser then
realizes any loss or gain on the futures transaction for tax purposes.
The Fund may use futures for
hedging and non-hedging purposes to the extent consistent with its investment objective, internal risk management guidelines adopted by the Manager (as they may be amended from time to time), and as otherwise set
forth in the Fund’s Prospectus or this SAI.
Selling Covered Call
Options. If the Fund sells (“writes”) a call option, it must be “covered.” That means that while the call option is outstanding, the Fund must either own
the security subject to the call, or, for certain types of call options, identify liquid assets on its books that would enable it to fulfill its obligations if the option were exercised.
A call option on a security is an agreement by
the seller to sell an underlying security to the call purchaser at a fixed price (the “exercise price”) regardless of changes in the market price of that security during a call period. Call options are
sold for a cash payment (a premium). The exercise price is usually higher than the price of the security at the time the call is sold. The seller bears the risk that the price of the underlying security may increase
during the call period, requiring it to sell the security for less than the market value at the time. That risk may be offset to some extent by the premium the seller receives. If the market value of the security does
not rise above the exercise price during the call period, the call generally will not be exercised. In that case the seller realizes a profit from the cash premium it received. Any such profits earned by the Fund are
considered short-term capital gains for federal income tax purposes and are taxable as ordinary income when distributed to shareholders.
A call on a securities index is
also sold for a cash premium. If the buyer exercises an index call option, the seller is required to pay an amount equal to the difference between the market value of the index and the exercise price, multiplied by a
specified factor. If the value of the underlying index does not rise above the call price, it is unlikely that the call will be exercised. In that case the seller would keep the cash premium without being obligated to
make any payments to the purchaser of the call.
The Fund’s custodian bank,
or a securities depository acting for the custodian bank, may act through the Options Clearing Corporation as the escrow agent for securities that are subject to a call option the Fund has sold. The Options Clearing
Corporation will only release those securities when the call option expires or when the Fund enters into a closing transaction. No margin is required for those transactions.
When the Fund sells an
over-the-counter (“OTC”) call option, it will typically enter into an arrangement with a securities dealer which will establish a formula price at which the Fund will have the absolute right to repurchase
that OTC option. The formula price will generally be based on a multiple of the premium received for the option, plus the amount by which the option is exercisable below the market price of the underlying security
(that is, the amount that the option is “in the money”). When the Fund writes an OTC option, it will treat as illiquid (for purposes of its restriction on holding illiquid securities) the mark-to-market
value of any OTC option it holds, unless the option is subject to a buy-back agreement by the executing broker.
To terminate its obligation on
an OTC call it has written, the Fund can purchase a corresponding call in a “closing purchase transaction.” If the Fund cannot effect a closing purchase transaction due to the lack of a market, it will
have to hold the callable securities until the call expires or is exercised. The Fund will realize a profit or loss, depending upon whether the premium received on the call is more or less than the amount of the
option transaction costs and the price of the call the Fund purchases to close out the transaction. The Fund may realize a profit if the call expires unexercised, because the Fund will retain both the underlying
security and the premium it received when it wrote the call. Any such profits are considered short-term capital gains for federal income tax purposes and are taxable as ordinary income when distributed by the Fund.
A call on a futures contract may
be sold without owning the futures contract or securities deliverable under the contract. To do so, at the time the call must be covered by identifying an equivalent dollar amount of liquid assets. If the value of the
segregated assets drops below 100% of the current value of the future, additional liquid assets must be identified. Because of this requirement, in no circumstances would an exercise notice as to that future require
delivery on a futures contract. It would simply create a short futures position, which is permitted by applicable hedging policies.
Selling Put Options. A put option on a security or a securities index gives the purchaser the right, during the option period, to sell the underlying investment to the seller at the exercise
price. When selling (writing) a put option on a security, the option must be covered by the Fund by identifying liquid assets with a value equal to or greater than the exercise price of the put option, to secure the
obligation. In this case the Fund forgoes the opportunity to invest, sell or write calls against the identified assets.
The seller of a put is obligated
to buy the underlying investment at the exercise price even if the market value of the investment falls below that price. If the price of the underlying investment remains higher than the exercise price, it is
unlikely that a put option would be exercised. If a put option is not exercised, the seller would realize a gain of the amount of the premium received less the transaction costs incurred. If the put is exercised, the
exercise price will usually exceed the market value of the underlying investment at that time. In that case, the seller could incur a loss. If the underlying investment is resold at that time, the loss would be equal
to the exercise price and any transaction costs minus the amount of the premium received and the amount the seller received from the resale of the underlying investment. Settlement of a put on an index is in cash
rather than by delivery of the underlying investment. Any profits earned by the Fund from writing put options are considered short-term capital gains for federal income tax purposes, and are taxable as ordinary income
when distributed to shareholders.
Purchasing Call Options. A call option may be purchased by the Fund to seek to benefit from an anticipated rise in a particular security or in a securities index. The purchaser pays a premium for
a call option. The purchaser then has the right to buy the underlying investment during the call period at a fixed exercise price. The purchaser benefits only if, during the call period, the market price of the
underlying investment rises above the exercise price plus the transaction costs and the premium paid for the call or if the call option is resold at a profit. If the purchaser does not exercise the call
option or resell it (whether or not at a
profit), the option becomes worthless on its expiration date. In that case the purchaser will have lost the amount it paid as a premium and not realized any gain on the transaction.
Settlement of a call on an index
is in cash rather than by delivery of the underlying investment. Gain or loss on the transaction would depend on changes to the prices of the securities that make up the index.
Purchasing Put Options. A put on a security or securities index may be purchased by the Fund to attempt to protect against a decline (below the exercise price) in the value of the underlying
investment. The purchaser pays a premium for the right to sell the underlying investment at a fixed exercise price during the put period. If the market price of the underlying investment remains above or equal to the
exercise price, the put will generally not be exercised or resold and will become worthless on the expiration date. In that case the purchaser will have lost the amount it paid as a premium and not realize any benefit
from the right to sell the underlying investment. If the purchaser resells a put prior to its expiration date, it may or may not realize a profit on that sale.
A put may also be purchased on
an investment the buyer does not own. That would permit the purchaser to resell the put or to buy the underlying investment and sell it at the exercise price. If the market price of the underlying investment remains
above or equal to the exercise price, the put would generally not be exercised and would become worthless on its expiration date.
Settlement of a put on a
securities index is in cash rather than by delivery of the underlying investment. Gain or loss on the transaction would depend on the changes to the prices of the securities that make up the index.
Up to 25% of the Fund’s
total assets can be subject to call options the Fund sells. The Fund will not sell put options if more than 25% of the Fund’s total assets would be required to be segregated to cover such options. The Fund can
buy a put or call option only if, after the purchase, the value of all call and put options held by the Fund will not exceed 5% of the Fund’s total assets.
Buying and Selling Options on
Foreign Currencies. Put and call options on foreign currencies include puts and calls that trade on a securities or commodities exchange or in the over-the-counter markets or that are quoted
by major recognized dealers in such options. The Fund can buy and sell exchange-traded and over-the-counter put options and call options on foreign currencies. The Fund could use these calls and puts to try to protect
against declines in the dollar value of foreign securities and increases in the dollar cost of foreign securities the Fund wants to acquire.
If the investment adviser
anticipates a rise in the dollar value of a foreign currency in which securities to be acquired are denominated, the increased cost of those securities may be partially offset by purchasing calls or writing puts on
that foreign currency. If the investment adviser anticipates a decline in the dollar value of a foreign currency, the decline in the dollar value of portfolio securities denominated in that currency might be partially
offset by writing calls or purchasing puts on that foreign currency. However, the currency rates could fluctuate in a direction adverse to the Fund’s position. The Fund will then have incurred option premium
payments and transaction costs without a corresponding benefit.
A call the Fund writes on a
foreign currency is “covered” if the Fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration held in a segregated account by its custodian bank) upon conversion or exchange of other foreign currency held in its portfolio.
The Fund could write a call on a
foreign currency to provide a hedge against a decline in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. That decline
might be one that occurs due to an expected adverse change in the exchange rate. This is known as a “cross-hedging” strategy. In those circumstances, the Fund covers the option by maintaining cash, U.S.
government securities or other liquid, high grade debt securities in an amount equal to the exercise price of the option, in a segregated account with the Fund’s custodian bank.
Foreign Currency Forward
Contracts. Foreign currency forward contracts are used to buy or sell foreign currency for future delivery at a fixed price. They are used to “lock in” the U.S. dollar price of a security
denominated in a foreign currency that the Fund has bought or sold, or to protect against possible losses from changes in the relative value of the U.S. dollar against a foreign currency. Although forward contracts
may reduce the risk of loss from a decline in the value of the hedged currency, at the same time they limit any potential gain if the value of the hedged currency increases. Forward contracts are traded in the
inter-bank market conducted directly among currency traders (usually large commercial banks) and their customers.
Risks of Hedging with Options and
Futures. The use of hedging instruments requires special skills and knowledge of investment techniques that are different than what is required for normal portfolio management. If the Fund uses a
hedging instrument at the wrong time or if market conditions are judged incorrectly, hedging strategies may reduce the Fund’s return. The Fund could also experience losses if the prices of its futures and
options positions were not correlated with its other investments. The Fund’s option activities may affect its costs.
The Fund’s option
activities could affect its portfolio turnover rate and brokerage commissions. The exercise of calls written by the Fund might cause the Fund to sell related portfolio securities, thus increasing its turnover rate.
The exercise by the Fund of puts on securities will cause the sale of underlying investments, increasing portfolio turnover. Although the
decision whether to exercise a put it holds is
within the Fund’s control, holding a put might cause the Fund to sell the related investments for reasons that would not exist in the absence of the put.
The Fund could pay a brokerage
commission each time it buys a call or put, sells a call or put, or buys or sells an underlying investment in connection with the exercise of a call or put. Those commissions could be higher on a relative basis than
the commissions for direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to the market value of the underlying investments. Consequently, put and call options offer
large amounts of leverage. The leverage offered by trading in options could result in the Fund’s net asset value being more sensitive to changes in the value of the underlying investment.
If a covered
call written by the Fund is exercised on an investment that has increased in value above the call price, the Fund will be required to sell the investment at the call price. Consequently, the Fund will not realize any
additional appreciation on the investment once its value increases above the call price.
An exchange traded option
position may be closed out only on a market that provides secondary trading for options of the same series, and there is no assurance that a liquid secondary market will exist for any particular option. The Fund might
experience losses if it could not close out a position because of an illiquid market for the future or option.
There is a risk in using short
hedging by selling futures or purchasing puts on broadly-based indices or futures to attempt to protect against declines in the value of the Fund’s portfolio securities. The risk is that the prices of the
futures or the applicable index will correlate imperfectly with the behavior of the cash prices of the Fund’s securities. For example, it is possible that while the Fund has used hedging instruments in a short
hedge, the market may advance and the value of the securities held in the Fund’s portfolio might decline. If that occurred, the Fund would lose money on the hedging instruments and also experience a decline in
the value of its portfolio securities. However, while this could occur for a very brief period or to a very small degree, over time the value of a diversified portfolio of securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.
The risk of imperfect
correlation increases as the composition of the Fund’s portfolio diverges from the securities included in the applicable index. To compensate for the imperfect correlation of movements in the price of the
portfolio securities being hedged and movements in the price of the hedging instruments, the Fund might use hedging instruments in a greater dollar amount than the dollar amount of portfolio securities being hedged.
It might do so if the historical volatility of the prices of the portfolio securities being hedged is more than the historical volatility of the applicable index.
The ordinary spreads between
prices in the cash and futures markets are subject to distortions, due to differences in the nature of those markets. First, all participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the cash and futures
markets. Second, the liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery,
liquidity in the futures market could be reduced, thus producing distortion. Third, from the point of view of speculators, the deposit requirements in the futures market are less onerous than margin requirements in
the securities markets. Therefore, increased participation by speculators in the futures market may cause temporary price distortions.
The Fund can use hedging
instruments to establish a position in the securities markets as a temporary substitute for the purchase of individual securities (long hedging) by buying futures and/or calls on such futures, broadly-based indices or
on securities. It is possible that when the Fund does so the market might decline. If the Fund then concludes not to invest in securities because of concerns that the market might decline further or for other reasons,
the Fund will realize a loss on the hedging instruments that is not offset by a reduction in the price of the securities purchased.
Regulatory
Aspects of Derivatives and Hedging Instruments. As a result of amendments to rules under the Commodity Exchange Act (“CEA”) by the Commodity Futures Trading Commission (“CFTC”), the Manager must either operate
within certain guidelines and restrictions with respect to the Fund’s use of futures, options on such futures, commodity options and certain swaps, or be subject to registration with the CFTC as a
“commodity pool operator” (“CPO”) with respect to the Fund, and, upon the finalization of additional CFTC rules, be required to operate the Fund in compliance with certain disclosure,
reporting, and recordkeeping requirements.
Previously, the CFTC permitted
unlimited futures transactions and options thereon, so long as a fund had claimed an exclusion from registration as a CPO, and swap contracts were not formerly regulated by the CFTC. Under the amended rules, the
investment adviser of a registered investment company may claim an exemption from registration as a CPO only if the registered investment company that it advises uses futures contracts, options on such futures,
commodity options and certain swaps solely for “bona fide hedging purposes,” or limits its use of such instruments for non-bona fide hedging purposes to certain de minimis amounts.
While the
Manager is registered as a CPO under the CEA, the Manager currently intends to limit and monitor, consistent with internal compliance procedures, the Fund’s use of futures, options on such futures, commodity
options and certain swaps in order to permit the Fund to continue to claim an exemption under the CFTC rules. As such, with respect to the management of the Fund, the Manager will not be subject to the disclosure,
reporting and recordkeeping requirements under the CFTC rules.
Financial
reform legislation that is currently being implemented imposes execution and clearing requirements on certain types of over-the-counter derivatives, among other things. In a cleared derivatives transaction, the
Fund’s ultimate counterparty is a central derivatives clearing organization, or clearing house, rather than a bank or broker. The Fund will enter into cleared derivatives transactions with an executing broker.
Such transactions then will be submitted for clearing and, if cleared, will be held in accounts at regulated futures commission merchants that are members of central clearing house counterparties. In contrast to
bilateral derivatives transactions, cleared derivatives transactions are submitted for clearing to central clearing house counterparties immediately following execution of the agreement. Central clearing house
counterparties and the members of such clearing houses generally can require termination of existing cleared derivatives transactions at any time, and can also require increases in margin above the margin that was
required at the beginning of a transaction.
The Fund is also subject to the
risk that, after entering into a cleared derivatives transaction, no futures commission merchant or clearing house counterparty is willing or able to clear the transaction on the Fund’s behalf. In such an event,
the Fund is likely to have to pay a termination amount to the executing broker. Further, the assets of the Fund might not be fully protected in the event of the bankruptcy of the Fund’s futures commission
merchant or the clearing house counterparty, because the Fund might be limited to recovering only a pro rata share of all available funds and margin segregated on behalf of the futures commission merchant’s
customers. Also, the Fund is subject to the risk that the futures commission merchant will use the Fund’s assets, which are held in an omnibus account with assets belonging to the futures commission
merchant’s other customers, to satisfy payment obligations of a defaulting customer of the futures commission merchant to the clearing house counterparty. In addition, futures commission merchants generally
provide to the clearing house counterparty the net amount of variation margin required for cleared derivatives for all customers in the aggregate, rather than the gross amount for each customer. The Fund is therefore
subject to the risk that a clearing house counterparty will not make variation margin payments owed to the Fund if another customer of the futures commission merchant has suffered a loss and is in default. In cleared
derivatives transactions, the Fund is also required to post initial as well as variation margin, thus increasing the cost of transacting in this type of instrument.
The ultimate
impact of the financial reform legislation and related regulations remains unclear. New regulations could, among other things, restrict the Fund’s ability to engage in, or increase the cost to the Fund of,
derivatives transactions.
Asset Coverage for Certain
Investments and Trading Practices. A Fund will segregate with its custodian or otherwise designate on its books and records liquid assets in an amount the Fund believes to be adequate to ensure that it has sufficient liquid
assets to meet its obligations under its derivatives contracts, or the Fund may enter into an offsetting position to “cover” its obligations with respect to such transactions. Depending upon the
contractual terms of the derivatives instrument, the customary settlement practice associated with the derivative instrument and the instrument’s liquidity, among other things, the amounts that are segregated or
designated may be based on the notional (or contract) amount of the derivative or on the daily mark-to-market obligation under the derivatives contract. These amounts may be reduced by amounts on deposit with the
applicable broker or counterparty to the derivatives transaction. With respect to less liquid derivative instruments (or in other situations in which the Sub-Adviser believes it necessary), a Fund may segregate
amounts in addition to the amounts described above. By segregating or designating liquid assets equal to only the mark-to-market obligation under a derivatives contract, a Fund will have the ability to utilize these
instruments to a greater extent than if the Fund segregated or designated liquid assets equal to the full market value of the underlying asset or the notional (or contract) amount of the instrument.
In certain circumstances, a Fund
may enter into an offsetting position rather than segregating or designating liquid assets (e.g., the Fund may “cover” a written put option with a purchased put option with the same or higher exercise
price). Although the Sub-Adviser will attempt to ensure that a Fund has sufficient liquid assets to meet its obligations under its derivative contracts, it is possible that the Fund’s liquid assets may be
insufficient to support such obligations under its derivatives positions.
Segregating or designating a
large percentage of the Fund’s liquid assets could impede the Sub-Adviser’s ability to manage the Fund’s portfolio. A Fund may modify its asset segregation policies from time to time.
Passive Foreign Investment
Companies. Under U.S. tax laws, passive foreign investment companies (“PFICs”) are those foreign corporations which generate primarily “passive” income. Passive income is
defined as any income that is considered foreign personal holding company income under the Internal Revenue Code. For federal tax purposes, a foreign corporation is deemed to be a PFIC if 75% or more of its gross
income during a taxable year is passive income or if 50% or more of its assets during a taxable year are assets that produce, or are held to produce, passive income.
Foreign mutual funds are
generally deemed to be PFICs, since nearly all of the income of a mutual fund is passive income. Foreign mutual funds investments may be used to gain exposure to the securities of companies in countries that limit or
prohibit direct foreign investment; however investments in foreign mutual funds by the Fund are subject to limits under the Investment Company Act.
Other types of foreign
corporations may also be considered PFICs if their percentage of passive income or passive assets exceeds the limits described above. Unless the Fund makes an election with respect to its investment in a PFIC, which
election may not always be possible, income from the disposition of a PFIC investment and from certain PFIC distributions may be subject to adverse tax treatment. The application of the PFIC rules may affect, among
other things,
the character of gains, the amount of gain or
loss and the timing of the recognition of income with respect to PFIC shares, and may subject the Fund itself to tax on certain income from PFIC shares. Federal tax laws impose severe tax penalties for failure to
properly report investment income from PFICs. Although every effort is made to ensure compliance with federal tax reporting requirements for these investments, foreign corporations that are PFICs for federal tax
purposes may not always be recognized as such or may not provide the Fund with all information required to report, or make an election with respect to, such investment.
Additional risks of investing in
other investment companies are described under “Investments in Other Investment Companies.”
Tax Aspects of Certain Derivatives
and Hedging Instruments. Futures contracts, non-equity options (as defined in the Internal Revenue Code) and certain foreign currency exchange contracts are treated as “Section 1256 contracts” under
the Internal Revenue Code. In general, gains or losses from Section 1256 contracts are characterized as 60% long-term and 40% short-term capital gains or losses under the Internal Revenue Code. However, foreign
currency gains or losses arising from Section 1256 contracts that are forward contracts generally are treated as ordinary income or loss. In addition, Section 1256 contracts held by the Fund at the end of each taxable
year are marked-to-market, and unrealized gains or losses are treated as though they were realized. These contracts also are marked-to-market for purposes of determining the excise tax potentially applicable to the
Fund and for other purposes under rules prescribed pursuant to the Internal Revenue Code.
Certain forward contracts and
other derivatives may result in “straddles” for federal income tax purposes. The straddle rules may affect the character and timing of gains (or losses) recognized on those positions. Generally, a loss
sustained on the disposition of a position making up a straddle is allowed only to the extent that the loss exceeds any unrecognized gain in the offsetting positions. Disallowed loss is generally allowed at the point
where there is no unrecognized gain in the offsetting positions making up the straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code,
the following gains or losses are treated as ordinary income or loss:
1.
| gains or losses attributable to fluctuations in exchange rates that occur between the time interest or other receivables denominated in a foreign currency are accrued or expenses or other liabilities denominated in
a foreign currency are accrued and the time the Fund actually collects such receivables or pays such liabilities, and
|
2.
| gains or losses attributable to fluctuations in the value of a foreign currency between the date of acquisition of a debt security denominated in a foreign currency or foreign
currency forward contracts and the date of disposition.
|
Currency gains and losses are
offset against market gains and losses on each trade before determining a net “Section 988” gain or loss under the Internal Revenue Code for that trade, which may increase or decrease the amount of
investment income available for distribution to shareholders.
Temporary Defensive and Interim
Investments. In times of unstable or adverse market, economic or political conditions, or if the Sub-Adviser believes it is otherwise appropriate to reduce holdings in the Fund’s principal
investments, the Fund can invest in other types of securities for defensive purposes. It can also purchase these types of securities for liquidity purposes to meet cash needs due to the redemption of shares, or to
hold while waiting to reinvest cash received from the sale of other portfolio securities. The Fund can buy:
•
| high-quality (rated in the top rating categories of nationally recognized statistical rating organizations (“NRSROs”) or deemed by the Sub-Adviser to be of comparable quality), short-term money market
instruments, including those issued by the U.S. Treasury or other government agencies,
|
•
| commercial paper (short-term, unsecured, promissory notes of domestic or foreign companies) rated in the top rating category of a NSRO,
|
•
| debt obligations of corporate issuers, rated investment grade (rated at least Baa by Moody’s Investors Service, Inc. or at least BBB by Standard & Poor’s Corporation, or a comparable rating by
another rating organization), or unrated securities judged by the Sub-Adviser to be of a quality comparable to rated securities in those categories,
|
•
| preferred stocks,
|
•
| certificates of deposit and bankers’ acceptances of domestic and foreign banks and savings and loan associations, and
|
•
| repurchase agreements.
|
Short-term debt securities would
normally be selected for defensive or cash management purposes because they can normally be disposed of quickly, are not generally subject to significant fluctuations in principal value and their value will be less
subject to interest rate risk than longer-term debt securities.
Portfolio Turnover. “Portfolio turnover” describes the rate at which the Fund traded its portfolio securities during its last fiscal year. For example, if the Fund sold all of its securities
during the year to purchase securities, its portfolio turnover rate would have been 100%. The portfolio turnover rate will fluctuate from year to year.
Increased portfolio turnover
creates higher brokerage and transaction costs for the Fund, which could reduce its overall performance. Additionally, the realization of capital gains from selling portfolio securities may result in distributions
of
taxable capital gains to shareholders, since
the Fund will normally distribute all of its capital gains realized each year, to avoid Fund-level income and excise taxes under the Internal Revenue Code.
Cyber Security Risk. With the increased use of technologies such as the Internet and the dependence on computer systems to perform necessary business functions, the Fund may be prone to operational and
informational security risks resulting from breaches in cyber security (“cyber-attacks”). A cyber-attack refers to both intentional and unintentional events that may cause a Fund to lose proprietary
information, suffer data corruption, or lose operational capacity. Cyber-attacks include, but are not limited to, infection by computer viruses or other malicious software code, gaining unauthorized access to systems,
networks, or devices that are used to service the Fund’s operations through “hacking” or other means for the purpose of misappropriating assets or sensitive information, corrupting data, or causing
operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on the Fund’s websites (i.e., efforts to
make network services unavailable to intended users). In addition, authorized persons could inadvertently or intentionally release confidential or proprietary information stored on the Fund’s systems.
Cyber security
failures or breaches by the Fund’s affiliates or service providers, may cause disruptions and impact the business operations, potentially resulting in financial losses to both the Fund and shareholder, the
inability of fund shareholders to transact business and the mutual funds to process transactions, inability to calculate the Fund’s net asset value, impediments to trading, violations of applicable privacy and
other laws (including the release of private shareholder information), regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs. In addition,
substantial costs may be incurred in attempting to prevent any cyber incidents in the future. While the investment adviser has policies and procedures (and risk management systems) designed to prevent or reduce the
impact of such cyber-attacks, there are inherent limitations in such controls, systems and protocols, including the possibility that certain risks have not been identified, as well as the rapid development of new
threats. These cyber security risks are also present for issuers of securities in which the Fund invests, which could result in material adverse consequences for such issuers, and may cause the Fund’s investment
in such securities to lose value and may result in financial loss for Fund shareholders.
Investment Restrictions
Diversification. The Fund is classified as a “diversified” fund under the Investment Company Act. Currently, under the Investment Company Act a “diversified” fund is one with at
least 75% of the value of its total assets represented by: (i) cash and cash items (including receivables), (ii) securities issued by the U.S. government or any of its agencies or instrumentalities, (iii) securities
of other investment companies, and (iv) other securities that, for any one issuer, are limited in respect to an amount not greater than 5% of the value of the fund’s total assets and not more than 10% of the
outstanding voting securities of such issuer. A change to a non-diversified status would require shareholder approval.
Fundamental Policies. The Fund has adopted policies and restrictions to govern its investments. Under the Investment Company Act, fundamental policies are those policies that can be changed only by the vote of
a “majority” of the Fund’s outstanding voting securities, which is defined as the vote of the holders of the lesser of:
•
| 67% or more of the shares present or represented by proxy at a shareholder meeting, if the holders of more than 50% of the outstanding shares are present or represented by proxy; or
|
•
| more than 50% of the outstanding shares.
|
The Fund’s investment
objective is not a fundamental policy. Other policies described in the Prospectus or this SAI are “fundamental” only if they are identified as such. The Fund’s Board of Trustees can change
non-fundamental policies without shareholder approval. However, significant changes to investment policies will be described in supplements or updates to the Prospectus or this SAI, as appropriate. The Fund’s
most significant investment policies are described in the Prospectus.
Other Fundamental Investment
Restrictions. The following investment restrictions are fundamental policies of the Fund.
•
| The Fund may not borrow money, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund, as such statute, rules,
regulations or exemptions may be amended or interpreted from time to time by the Securities and Exchange Commission, its staff, or other authority with appropriate jurisdiction.
|
•
| The Fund may not make any investment if, as a result, the Fund’s investments will be concentrated in any one industry, except to the extent permitted under the Investment Company Act, the rules or regulations
thereunder or any exemption therefrom that is applicable to the Fund, as such statute, rules, regulations or exemption may be amended or interpreted from time to time by the Securities and Exchange Commission, its
staff, or other authority with appropriate jurisdiction. For purposes of this concentration limitation, the Fund’s investment adviser may analyze the characteristics of a particular issuer and instrument and may
assign an industry or sector classification consistent with those characteristics in the event that any third party classification provider that may be used by the investment adviser does not assign a classification.
|
•
| The Fund cannot make loans, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund, as such statute, rules,
regulations or exemption may be amended or interpreted from time to time by the Securities and Exchange Commission, its staff, or other authority with appropriate jurisdiction.
|
•
| The Fund cannot invest in real estate or commodities, except to the extent permitted under the Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund,
as such statute, rules, regulations or exemption may be amended or interpreted from time to time by the Securities and Exchange Commission, its staff, or other authority with appropriate jurisdiction.
|
•
| The Fund cannot issue “senior securities,” except to the extent permitted under the Investment Company Act, the rules or regulations thereunder or any exemption therefrom that is applicable to the Fund,
as such statute, rules, regulations or exemption may be amended or interpreted from time to time by the Securities and Exchange Commission, its staff, or other authority with appropriate jurisdiction.
|
•
| The Fund cannot underwrite securities of other issuers, except to the extent permitted under the Investment Company Act or the Securities Act of 1933, the rules or regulations
thereunder or any exemption therefrom that is applicable to the Fund, as such statutes, rules, regulations or exemption may be amended or interpreted from time to time by the Securities and Exchange Commission, its
staff, or other authority with appropriate jurisdiction.
|
The following is only a brief
summary of certain current limitations imposed on investment companies by the Investment Company Act and certain rules and interpretations thereunder, and is not a complete description of such limits. The discussion
below is based on current law, regulations and administrative interpretations. Those laws, regulations and administrative interpretations may be changed by legislative, judicial, or administrative action, sometimes
with retroactive effect.
The Investment Company Act
prohibits a fund from issuing “senior securities,” which are generally defined as fund obligations that have a priority over the fund’s shares with respect to the payment of dividends or the
distribution of fund assets, except that the fund may borrow money as described above.
Currently, under the Investment
Company Act, and an OppenheimerFunds exemptive order, a fund may borrow only from banks and/or affiliated investment companies in an amount up to one-third of its total assets (including the amount borrowed less all
liabilities and indebtedness other than borrowing), except that a fund may borrow up to 5% of its total assets from any person for temporary purposes. Under the Investment Company Act, there is a rebuttable
presumption that a loan is temporary if it is repaid within 60 days and not extended or renewed.
Under the Investment Company
Act, a fund currently cannot make any commitment as an underwriter, if immediately thereafter the amount of its outstanding underwriting commitments, plus the value of its investments in securities of issuers (other
than investment companies) of which it owns more than ten percent of the outstanding voting securities, exceeds twenty-five percent of the value of the fund’s total assets, except to the extent that a fund may
be considered an underwriter within the meaning of the Securities Act when reselling securities held in its own portfolio.
The Investment Company Act does
not prohibit a fund from owning real estate, commodities or contracts related to commodities. The extent to which the Fund can invest in real estate and/or commodities or contracts related to commodities is set out in
the investment strategies described in the Prospectus and this SAI.
Current SEC staff
interpretations under the Investment Company Act prohibit a fund from lending more than one-third of its total assets, except through the purchase of debt obligations or the use of repurchase agreements.
The Investment
Company Act does not define what constitutes “concentration” in an industry. However, the SEC has taken the position that investment of more than 25% of a fund’s total assets in issuers in the same
industry constitutes concentration in that industry. That limit does not apply to securities issued or guaranteed by the U.S. government or its agencies and instrumentalities; however, securities issued by any one
foreign government are considered to be part of a single “industry.” For the purposes of compliance with its concentration policy, the Fund will consider portfolio investments held by underlying investment
companies in which the Fund invests, to the extent that the Fund has sufficient information about such portfolio investments. The Fund will make reasonable efforts to obtain such information.
Non-Fundamental
Restrictions. The Fund has the following additional operating policy that is not “fundamental” and can be changed by the Board without shareholder approval.
•
| The Fund cannot invest in the securities of other registered investment companies or registered unit investment trusts in reliance on sub-paragraph (F) or (G) of Section 12(d)(1) of the Investment Company Act.
|
Unless the
Prospectus or this SAI states that a percentage restriction applies on an ongoing basis, it applies only at the time the Fund makes an investment. That means the Fund is not required to sell securities to meet the
percentage limits if the value of the investment increases in proportion to the size of the Fund. Percentage limits on borrowing apply on an ongoing basis.
For purposes of the Fund’s
policy with respect to concentration, described above, the Fund has adopted an industry classification that is not a fundamental policy.
Disclosure of Portfolio Holdings
While recognizing the importance
of providing Fund shareholders with information about their Fund’s investments and providing portfolio information to a variety of third parties to assist with the management, distribution and administrative
processes, the need for transparency must be balanced against the risk that third parties who gain access to the Fund’s portfolio holdings information could attempt to use that information to trade ahead of or
against the Fund, which could negatively affect the prices the Fund is able to obtain in portfolio transactions or the availability of the securities that a portfolio manager is trading on the Fund’s behalf.
The Fund, the
Manager/Sub-Adviser, the Distributor and the Transfer Agent have therefore adopted policies and procedures regarding the dissemination of information about the Fund’s portfolio holdings by employees, officers
and directors or trustees of the Fund, the Manager, the Distributor and the Transfer Agent. These policies are designed to assure that non-public information about the Fund’s portfolio securities holdings is
distributed only for a legitimate business purpose, and is done in a manner that (a) conforms to applicable laws and regulations and (b) is designed to prevent that information from being used in a way that could
negatively affect the Fund’s investment program or enable third parties to use that information in a manner that is harmful to the Fund. It is a violation of the Code of Ethics for any covered person to release
holdings in contravention of the portfolio holdings disclosure policies and procedures adopted by the Fund.
Portfolio Holdings Disclosure
Policies. The Fund, the Manager/Sub-Adviser, the Distributor and the Transfer Agent and their affiliates and subsidiaries, employees, officers, and directors or trustees, shall neither solicit nor
accept any compensation or other consideration (including any agreement to maintain assets in the Fund or in other investment companies or accounts managed by the Manager or any affiliated person of the Manager) in
connection with the disclosure of the Fund’s non-public portfolio holdings. The receipt of investment advisory fees or other fees and compensation paid to the Manager/Sub-Adviser and its subsidiaries pursuant to
agreements approved by the Fund’s Board shall not be deemed to be “compensation” or “consideration” for these purposes. Until publicly disclosed, the Fund’s portfolio holdings are
proprietary, confidential business information. After they are publicly disclosed, the Fund’s
portfolio holdings may be released in
accordance with the Fund’s, the Manager’s/Sub-Adviser’s, the Distributor’s and the Transfer Agent’s policies and procedures regarding dissemination of information about the Fund’s
portfolio holdings.
•
| Public Disclosure. The Fund’s portfolio holdings are made publicly available no later than 60 days after the close of each of the Fund’s fiscal quarters in its annual and semi-annual reports to
shareholders and in its Schedule of Investments on Form N-Q. Those documents are publicly available at the SEC. In addition, the Fund’s portfolio holdings information, as of the end of each calendar month, may
be posted and available on the Fund’s website (at www.oppenheimerfunds.com) no sooner than 30 calendar days after the end of the calendar month to which the information relates. Partial holdings, listed by
security or by issuer, may be posted on the Fund’s website no sooner than 5 business days following the month to which the information relates. The Fund may delay posting its holdings or may not post any
holdings, if the Manager/Sub-Adviser believes that would be in the best interests of the Fund and its shareholders. Other general information about the Fund’s portfolio investments, such as portfolio composition
by asset class, industry, country, currency, credit rating or maturity, may also be publicly disclosed 5 business days after the end of the calendar month to which the information relates.
|
The Fund’s portfolio
holdings (which may include the Fund’s entire portfolio or individual securities therein) may be released to the following categories of individuals or entities pursuant to ongoing arrangements, provided that
such individual or entity either (1) has signed an agreement to keep such information confidential and will not use such information in any way that is detrimental to the Fund or (2) as a member of any service
provider to the Fund or of the Fund’s legal counsel, is subject to fiduciary obligations (a) not to disclose such information except in compliance with the Fund’s policies and procedures and (b) not to
trade for his or her personal account on the basis of such information. For the categories of individuals and entities described below that have ongoing arrangements to receive portfolio holdings information, such
information may be furnished as often as appropriate for the purpose for which it is being provided, which may be as frequently as daily and often with no time lag between the date of the information and the date it
is furnished.
•
| Employees of the Fund’s service providers who need to have access to such information;
|
•
| The Fund’s independent registered public accounting firm;
|
•
| Members of the Fund’s Board and the independent legal counsel to the Board’s independent trustees;
|
•
| The Fund’s custodian bank;
|
•
| The Fund’s financial printers;
|
•
| A proxy voting service designated by the Fund and its Board;
|
•
| Rating/ranking organizations (such as Lipper and Morningstar);
|
•
| Portfolio pricing services retained by the Manager/Sub-Adviser to provide portfolio security prices;
|
•
| Brokers and dealers for purposes of providing portfolio analytic services, in connection with portfolio transactions (purchases and sales), and to obtain bids or bid and asked prices (if securities
held by the Fund are not priced by the Fund’s regular pricing services, or to obtain prices for inter-fund trades or similar transactions); and
|
•
| Other service providers to the Fund, the Manager, the Sub-Adviser, the Distributor, and the Transfer Agent, including providers of index services and personal trading compliance
services.
|
Month-end lists of the
Fund’s complete portfolio holdings may be disclosed for legitimate business reasons, no sooner than 5 business days after the relevant month end, pursuant to special requests and under limited circumstances
discussed below, provided that:
•
| The third-party recipient must first submit a request for release of Fund portfolio holdings, explaining the business reason for the request;
|
•
| Senior officers in the Manager’s/Sub-Adviser’s Investment Operations and Legal departments must approve the completed request for release of Fund portfolio holdings; and
|
•
| Before receiving the data, the third-party recipient must sign a portfolio holdings non-disclosure agreement, agreeing to keep confidential the information that is not publicly
available regarding the Fund’s holdings and agreeing not to use such information in any way that is detrimental to the Fund.
|
Portfolio holdings may be
disclosed for legitimate business purposes to brokers and dealers for purposes of providing portfolio analytic services, in connection with portfolio transactions (purchases and sales), and to obtain bids or bid and
asked prices (if securities held by the Fund are not priced by the Fund’s regular pricing services). Portfolio holdings also may be disclosed for legitimate business purposes to consultants for pension plans
that invest in Oppenheimer funds and sponsors of 401(k) plans that include Oppenheimer funds.
Portfolio holdings (which may
include the Fund’s entire portfolio or individual securities therein) may be provided by the Manager/Sub-Adviser or its attorneys to other third parties subject to non-disclosure agreements or available
confidentiality rights, including in the following circumstances:
•
| Response to legal process in litigation matters, such as responses to subpoenas or in class action matters where the Fund may be part of the plaintiff class (and seeks recovery for losses on a security) or a
defendant; and
|
•
| Response to regulatory requests for information (from the SEC, the Financial Industry Regulatory Authority (“FINRA”), state securities regulators, and/or foreign securities authorities, including without
limitation requests for information in inspections or for position reporting purposes).
|
Portfolio
managers and analysts may, subject to the Manager’s/Sub-Adviser’s policies on communications with the press and other media, discuss portfolio information in interviews with members of the media, or in due
diligence or similar meetings with clients or prospective purchasers of Fund shares or their financial representatives.The Fund’s shareholders may, under unusual circumstances (such as a lack of liquidity in the
Fund’s portfolio to meet redemptions), receive redemption proceeds of their Fund shares paid as pro rata shares of securities held in the Fund’s portfolio. In such circumstances, disclosure of the
Fund’s portfolio holdings may be made to such shareholders up to 5 business days prior to making the redemption request, provided that such shareholders have entered into a non-disclosure agreement not to
disclose or trade on the basis of such portfolio holdings.Any permitted release of otherwise non-public portfolio holdings information must be in accordance with the then-current policy on approved methods for
communicating confidential information.The Fund’s policy regarding disclosure of portfolio holdings and all material amendments have been reviewed and approved by the Fund’s Board. The investment adviser
and the Chief Compliance Officer of the Fund both conduct periodic reviews of compliance with the policy and provide periodic reports relating to such reviews to the Board. The Fund’s Board reserves the right to
amend the Fund’s policy regarding the disclosure of portfolio holdings from time to time without prior notice and in its sole discretion.
How the Fund is Managed
Organization and History. The Fund is an open-end, diversified management investment company with an unlimited number of authorized shares of beneficial interest. The Fund was organized as a Maryland corporation in
1980 but was reorganized as a Massachusetts business trust in February 1987. The Fund was reorganized as a Delaware statutory trust in October 2013.
Classes of Shares. The Fund’s Board of Trustees (the “Board”) is authorized, without shareholder approval, to:
•
| create new series and classes of shares;
|
•
| reclassify unissued shares into additional series and classes; and
|
•
| divide or combine the shares of a class into a greater or lesser number of shares without changing the proportionate beneficial interest of a shareholder in the Fund.
|
The Fund currently has six
classes of shares: Class A, Class B, Class C, Class R, Class Y and Class I. All classes invest in the same investment portfolio. Each class of shares:
•
| has its own dividends and distributions;
|
•
| pays certain expenses which may be different for the different classes;
|
•
| will generally have a different net asset value;
|
•
| will generally have separate voting rights on matters in which interests of one class are different from interests of another class; and
|
•
| votes as a class on matters that affect that class alone.
|
Each share of each class:
•
| represents an interest in the Fund proportionately equal to the interest of each other share of the same class;
|
•
| is freely transferable;
|
•
| has one vote at shareholder meetings, with fractional shares voting proportionally;
|
•
| may be voted in person or by proxy at shareholder meetings; and
|
•
| does not have cumulative voting rights, preemptive rights or subscription rights.
|
Class B Share Availability.
Class B shares are no longer
offered for new purchases. See the Prospectus section “More About Your Account” for details.
Class R Share
Availability.
Class R shares may be purchased
by retirement plans and accounts, such as traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans, Single K plans, Profit-Sharing Plans, Money Purchase Pension Plans; plans under Section 401(a), 401(k), 403(b)
and 457 of the Internal Revenue Code; and qualified or non-qualified retirement plans or accounts or deferred compensation plans for employees or other organized groups of persons.
Class Y Share Availability.
Class Y shares are not available
directly to individual investors, except for eligible employees (defined below). Class Y shares are sold at net asset value per share without an initial sales charge, and are available only to:
•
| Wrap fee-based programs and fee-based clients of a broker, dealer, registered investment adviser or other financial intermediary;
|
•
| Commissionable brokerage platforms where the financial intermediary, acting as broker on behalf of its customer, charges the customer a transaction-based commission outside of the Fund;
|
•
| “Institutional investors” which may include corporations; trust companies; endowments and foundations; defined contribution, defined benefit, and other employer sponsored retirement and deferred
compensation plans; retirement plan platforms; insurance companies; registered investment adviser firms; registered investment companies; bank trusts; college savings programs; and family offices; and
|
•
| Eligible employees, which are present or former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager and its affiliates, its parent
company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals.
|
Individual shareholders who hold
Class Y shares through retirement plans or financial intermediaries will not be eligible to hold Class Y shares outside of their respective retirement plan or financial intermediary platform.
Voluntary Conversion to Class Y
Shares. For shareholders who currently hold other classes of Fund shares, but are authorized to purchase Class Y shares, those shareholders can convert their eligible existing shares to Class Y
shares of the Fund either through their financial intermediary or by submitting written instructions to the Transfer Agent. Shares that are subject to a contingent deferred sales charge (“CDSC”) are not
eligible to convert to Class Y shares until the applicable CDSC period has expired. Under current interpretations of applicable federal income tax law by the Internal Revenue Service (the “IRS”), this
voluntary conversion to Class Y shares is not treated as a taxable event. If those laws or the IRS interpretation of those laws should change, this voluntary conversion feature may be suspended.
Class I Share Availability.
Class I shares are not available
directly to individual investors. They are only available to eligible institutional investors. To be eligible to purchase Class I shares, an investor must:
•
| be an “institutional investor” which may include corporations; trust companies; endowments and foundations; defined contribution, defined benefit, and other employer sponsored retirement plans and
deferred compensation plans; retirement plan or health savings account service provider platforms (jointly, “service provider platforms”); insurance companies; registered investment advisor firms;
registered investment companies; bank trusts; college savings programs; and family offices;
|
•
| make a minimum initial investment of $1 million or more per account (waived for retirement and health savings account plan service provider platforms (collectively, “service provider platforms”)); and
|
•
| trade through an omnibus, trust, trust networked or similar pooled account.
|
No operational and
recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finder’s fees” will be paid with respect to Class I shares. The
Fund, at its discretion, reserves the right to waive the minimum initial investment and minimum balance requirements for investment companies advised or sub-advised by the Manager or an affiliate of the Manager.
Voluntary Conversion to Class I
Shares. Shareholders who currently hold other classes of Fund shares but are eligible to purchase Class I shares can convert their eligible existing shares to Class I shares of the Fund either
through their financial intermediary or by submitting an application to the Transfer Agent. Shares that are subject to a contingent deferred sales charge (“CDSC”) are not eligible to convert to Class I
shares until the applicable CDSC period has expired. Upon conversion, payment of specific fees that may relate to the previous share class such as operational and recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finders fees,” are subject to Class I share restrictions. Under current
interpretations of applicable federal income tax law by the Internal Revenue Service, this voluntary conversion to Class I shares is not treated as a taxable event. If those laws or the IRS interpretation of those
laws should change, this voluntary conversion feature may be suspended.
Involuntary Conversion of Class
I Shares. If a Class I share account balance falls below $250,000, the investor will be notified that the account is below the required minimum balance. If the account remains below $250,000 for
more than six consecutive months after such notification, the account may be involuntarily redeemed or converted into a Class Y share account. This policy does not apply to accounts for which the minimum initial
investment is waived.
Individual
shareholders who purchase Class I shares through financial intermediaries or service provider platforms will not be eligible to hold Class I shares outside of their respective financial intermediary or service
provider platform.
Shareholder and Trustee Liability;
Shareholder Meetings. Under Delaware law and the Fund’s Declaration of Trust, Fund shareholders are entitled to the same limitation of personal liability extended to shareholders of corporations
organized under Delaware law. Under Delaware
law and the Fund’s Declaration of Trust, Trustees are not personally liable to any person for any obligations of the Fund. Therefore a shareholder or Trustee of the Fund generally will not be subject to personal
liability for Fund obligations. The risk that a Fund shareholder or Trustee will incur personal liability for Fund obligations is limited to the circumstances in which a state court may not apply Delaware law or the
terms of the Fund’s Declaration of Trust.
As a Delaware statutory trust,
the Fund is not required to hold regular annual meetings of shareholders and does not plan to do so. The Fund may hold shareholder meetings from time to time.
Board of Trustees and Oversight
Committees
The Fund is
governed by a Board of Trustees, which is responsible for protecting the interests of shareholders under Delaware and Federal law. The Board is led by Brian F. Wruble, an independent trustee, who is not an
“interested person” of the Fund, as that term is defined in the Investment Company Act. The Board meets periodically throughout the year to oversee the Fund’s activities, review its performance,
oversee the potential conflicts that could affect the Fund, and review the actions of the Manager and Sub-Adviser. With respect to its oversight of risk, the Board, through its committees, relies on reports and
information received from various parties, including the Manager, Sub-Adviser, and any Sub-Sub Advisers, internal auditors, the Fund’s Chief Compliance Officer, the Fund’s outside auditors and Fund
counsel. It is important to note that, despite the efforts of the Board and of the various parties that play a role in the oversight of risk, it is likely that not all risks will be identified or mitigated.
The Board has an Audit
Committee, a Regulatory & Oversight Committee and a Governance Committee. Each Committee is comprised solely of Trustees who are not “interested persons” under the Investment Company Act (the
“Independent Trustees”). The Board has determined that its leadership structure is appropriate in light of the characteristics and circumstances of the Fund because it allocates areas of responsibility
among the committees in a manner that enhances the Board’s oversight.
Prior to June 2013, Joanne Pace
and Edmund P. Giambastiani, Jr. served as members of an Advisory Board that assisted the Board in its oversight. For purposes of the following disclosure, Ms. Pace and Admiral Giambastiani are identified as
Trustees.
During the
Fund’s fiscal year ended August 31, 2017, the Audit Committee held 8 meetings, the Regulatory & Oversight Committee held 5 meetings and the Governance Committee held 4 meetings.
The members of the Audit
Committee are Joanne Pace (Chair), Elizabeth Krentzman, Mary F. Miller, Daniel S. Vandivort and Brian F. Wruble. The Audit Committee selects an independent registered public accounting firm (also referred to as the
“Independent Auditors”). Other main functions of the Audit Committee outlined in the Audit Committee Charter, include, but are not limited to: (i) reviewing the scope and results of financial statement
audits and the audit fees charged; (ii) reviewing reports from the Fund’s Independent Auditors regarding the Fund’s internal accounting procedures and controls; (iii) reviewing reports from the
Manager’s Internal Audit Department; (iv) maintaining a separate line of communication between the Fund’s Independent Auditors and the Independent Trustees/Directors; (v) reviewing the independence of the
Fund’s Independent Auditors; and (vi) approving in advance the provision of any audit or non-audit services by the Fund’s Independent Auditors, including tax services, that are not prohibited by the
Sarbanes-Oxley Act, to the Fund, the Manager and certain affiliates of the Manager. The Audit Committee also reviews reports concerning the valuation of certain investments.
The members of the Regulatory
& Oversight Committee are Elizabeth Krentzman (Chair), Beth Ann Brown, Edmund P. Giambastiani, Jr., Joel W. Motley, Joanne Pace and Brian F. Wruble. The Regulatory & Oversight Committee evaluates and reports
to the Board on the Fund’s contractual arrangements, including the Investment Advisory, Sub-Advisory and any Sub-Sub-Advisory Agreements (if applicable, including any with a wholly-owned subsidiary),
Distribution Agreements, Transfer Agency and Shareholder Service Agreements and custodian agreements as well as the policies and procedures adopted by the Fund to comply with the Investment Company Act and other
applicable law. The Regulatory & Oversight Committee also reviews reports from the Manager’s Risk Management Department and Chief Compliance Officer among other duties as set forth in the Regulatory &
Oversight Committee’s Charter. These reports, and others concerning investment, operational and other risks to the Funds are shared with, and discussed by, the full Board.
The members of the Governance
Committee are Joel W. Motley (Chair), Beth Ann Brown, Edmund P. Giambastiani, Jr., Mary F. Miller and Daniel S. Vandivort. The Governance Committee reviews the Fund’s governance guidelines, the adequacy of the
Fund’s Codes of Ethics, and develops qualification criteria for Board members consistent with the Fund’s governance guidelines, provides the Board with recommendations for voting portfolio securities held
by the Fund, monitors the Fund’s proxy voting, and coordinates with organizations representing the independent directors of mutual funds among other duties set forth in the Governance Committee’s
Charter.
The Governance Committee’s
functions also include the nomination of Trustees/Directors, including Independent Trustees/Directors, for election to the Board. The full Board elects new Trustees/Directors except for those instances when a
shareholder vote is required.
The Governance Committee will consider nominees
recommended by Independent Trustees/Directors or recommended by any other Board members including Board members affiliated with the Fund’s Manager. The Governance Committee may consider the advice and
recommendation of the Manager and its affiliates in selecting nominees, but need not do so. Upon Board approval, the Governance Committee may retain an executive search firm to assist in screening potential candidates
and may also use the services of legal, financial, or other external counsel that it deems necessary or desirable in the screening process. To date, the Governance Committee has been able to identify from its own
resources an ample number of qualified candidates. However, under the current policy of the Board, if the Board determines that a vacancy exists or is likely to exist, the Governance Committee will include candidates
recommended by the Fund’s shareholders in its consideration of nominees.
Shareholders wishing to submit a
nominee for election to the Board may do so by mailing their submission to the offices of OppenheimerFunds, Inc., 225 Liberty Street, New York, New York 10281-1008, to the attention of the Board of Trustees/Directors
of the applicable Fund, c/o the Secretary of the Fund. Submissions should, at a minimum, be accompanied by the following: (1) the name, address, and business, educational, and/or other pertinent background of the
person being recommended; (2) a statement concerning whether the person is an “interested person” as defined in the Investment Company Act; (3) any other information that the Fund would be required to
include in a proxy statement concerning the person if he or she was nominated; and (4) the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that
person held Fund shares. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Sub-Adviser) would be deemed an “interested
person” under the Investment Company Act. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds’
outside legal counsel may cause a person to be deemed an “interested person.”
The Governance Committee has not
established specific qualifications that it believes must be met by a nominee. In evaluating nominees, the Governance Committee considers, among other things, an individual’s background, skills, and experience;
whether the individual is an “interested person” as defined in the Investment Company Act; and whether the individual would be deemed an “audit committee financial expert” within the meaning of
applicable SEC rules. The Governance Committee also considers whether the individual’s background, skills, and experience will complement, and add to the diversity of, the background, skills, and experience of
other Trustees/Directors, and will contribute to the Board’s deliberations. There is no difference in the manner in which the Governance Committee evaluates a nominee based on whether the nominee is recommended
by a shareholder. Candidates are expected to provide a mix of attributes, experience, perspective and skills necessary to effectively advance the interests of shareholders.
Below is a brief discussion of
the specific experience, qualifications, attributes or skills of each Board member that led the Board to conclude that he or she should serve as a Trustee/Director of the Fund.
Each Independent
Trustee/Director has served on the Board for the number of years listed below, during the course of which he or 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. Each Trustee’s/Director’s outside professional experience is outlined in the table of Biographical Information,
below.
Trustees and Officers of the Fund
Except for Mr. Steinmetz, each
of the Trustees is an Independent Trustee. All of the Trustees are also Trustees of the following Oppenheimer funds (referred to as “New York Board Funds”):
Oppenheimer Capital Appreciation Fund
|
Oppenheimer Developing Markets Fund
|
Oppenheimer Discovery Fund
|
Oppenheimer Discovery Mid Cap Growth Fund
|
Oppenheimer Dividend Opportunity Fund
|
Oppenheimer Emerging Markets Innovators Fund
|
Oppenheimer Equity Income Fund
|
Oppenheimer Global Fund
|
Oppenheimer Global Multi-Alternatives Fund
|
Oppenheimer Global Multi-Asset Growth Fund
|
Oppenheimer Global Multi-Asset Income Fund
|
Oppenheimer Global Multi Strategies Fund
|
Oppenheimer Global Opportunities Fund
|
Oppenheimer Global Real Estate Fund
|
Oppenheimer Global Value Fund
|
Oppenheimer Gold & Special Minerals Fund
|
Oppenheimer International Diversified Fund
|
Oppenheimer International Equity Fund
|
Oppenheimer International Growth and Income Fund
|
Oppenheimer International Growth Fund
|
Oppenheimer International Small-Mid Company Fund
|
Oppenheimer Limited-Term Bond Fund
|
Oppenheimer Macquarie Global Infrastructure Fund
|
Money Market Funds:
|
Oppenheimer Government Money Market Fund
|
Oppenheimer Institutional Government Money Market Fund
|
Oppenheimer Multi-State Municipal Trust:
|
Oppenheimer Rochester High Yield Municipal Fund
|
Oppenheimer Rochester New Jersey Municipal Fund
|
Oppenheimer Rochester Pennsylvania Municipal Fund
|
Oppenheimer Municipal Fund:
|
Oppenheimer Rochester Short Duration High Yield Municipal Fund
|
Oppenheimer Portfolio Series Funds:
|
Active Allocation Fund
|
Conservative Investor Fund
|
Equity Investor Fund
|
Moderate Investor Fund
|
Oppenheimer Quest for Value Funds:
|
Oppenheimer Fundamental Alternatives Fund
|
Oppenheimer Global Allocation Fund
|
Oppenheimer Mid Cap Value Fund
|
Oppenheimer Real Estate Fund
|
Oppenheimer Rising Dividends Fund
|
Oppenheimer Rochester AMT-Free Municipal Fund
|
Oppenheimer Rochester AMT-Free New York Municipal Fund
|
Oppenheimer Rochester Arizona Municipal Fund
|
Oppenheimer Rochester California Municipal Fund
|
Oppenheimer Rochester Fund Municipals
|
Oppenheimer Rochester Intermediate Term Municipal Fund
|
Oppenheimer Rochester Limited Term California Municipal Fund
|
Oppenheimer Rochester Maryland Municipal Fund
|
Oppenheimer Rochester Massachusetts Municipal Fund
|
Oppenheimer Rochester Michigan Municipal Fund
|
Oppenheimer Rochester Minnesota Municipal Fund
|
Oppenheimer Rochester North Carolina Municipal Fund
|
Oppenheimer Rochester Ohio Municipal Fund
|
Oppenheimer Rochester Short Term Municipal Fund
|
Oppenheimer Rochester Virginia Municipal Fund
|
Oppenheimer Series Fund:
|
Oppenheimer Value Fund
|
Oppenheimer Small Cap Value Fund
|
Rochester Portfolio Series:
|
Oppenheimer Rochester Limited Term New York Municipal Fund
|
Messrs. Edwards,
Kennedy, Larson, Legg, Petersen, Steinmetz, Sternhell and Yoder and Mss. Bullington, Burley, Foxson, LaFond, Lo Bessette, Miller and Picciotto who are officers of the Fund, hold the same offices with one or more of
the other New York Board Funds.
Present or former
officers, directors, trustees and employees (and their immediate family members) of the Fund, the Manager and its affiliates, and retirement plans established by them for their employees are permitted to purchase
Class A shares of the Fund and the other Oppenheimer funds at net asset value without sales charge. The sales charge on Class A shares is waived for that group because of the reduced sales efforts realized by the
Distributor. Present or former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager and its affiliates, its parent company and the subsidiaries of its parent
company, and retirement plans established for the benefit of such individuals, are also permitted to purchase Class Y shares of the Fund and other Oppenheimer funds that offer Class Y shares.
As
of October 4, 2017, the Trustees/Directors and officers of the Fund, as a group, owned less than 1% of any class of shares of the Fund beneficially or of record.
The foregoing
statement does not reflect ownership of shares held of record by an employee benefit plan for employees of the Manager, Sub-Adviser and its subsidiaries, other than the shares beneficially owned under that plan by the
officers of the Fund. In addition, none of the Independent Trustees/Directors (nor any of their immediate family members) owns securities of either the Manager, Sub-Adviser or the Distributor or of any entity directly
or indirectly controlling, controlled by or under common control with the Manager or the Distributor.
Biographical
Information. The Trustees and officers, their positions with the Fund, length of service in such position(s) and principal occupations and business affiliations during at least the past five years are
listed in the charts below. The address of each Independent 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.
Each Trustee has served
the Fund in the following capacities from the following dates:
Independent Trustees
| Position(s)
| Length of Service
|
Brian F. Wruble
| Board Chairman; Trustee
| Since 2007; 2005
|
Beth Ann Brown
| Trustee
| Since 2016
|
Edmund P. Giambastiani, Jr.
| Trustee
| Since 2013
|
Elizabeth Krentzman
| Trustee
| Since 2014
|
Mary F. Miller
| Trustee
| Since 2004
|
Joel W. Motley
| Trustee
| Since 2002
|
Joanne Pace
| Trustee
| Since 2012
|
Daniel S. Vandivort
| Trustee
| Since 2014
|
Interested Trustee
|
|
|
Independent Trustees
| Position(s)
| Length of Service
|
Arthur P. Steinmetz
| Trustee
| Since 2015
|
Independent Trustees
|
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held
| Portfolios Overseen
in Fund Complex
|
Brian F. Wruble (1943)
Chairman of the Board, Trustee
| Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (registered business
development company) (since November 2015); Chairman Emeritus of the Board of Trustees (since August 2011), Chairman of the Board of Trustees (August 2007-August 2011), Trustee of the Board of Trustees (since August
1991) 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 (since May
1992) of the Institute for Advanced Study (non-profit educational institute); 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). 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 Board’s deliberations.
| 57
|
Beth Ann Brown (1968)
Trustee
| 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). 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 Board’s deliberations.
| 57
|
Independent Trustees
|
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held
| Portfolios Overseen
in Fund Complex
|
Edmund P. Giambastiani, Jr. (1948)
Trustee
| 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) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE
Corporation (federally-funded research development) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc.
(career services) (March 2015-November 2016), Director of Monster Worldwide, Inc. (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, 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. 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 Board’s deliberations.
| 57
|
Elizabeth Krentzman (1959)
Trustee
| Member of the University of Florida National Board Foundation (since September 2017); Member of the Cartica Funds Board of
Directors (private investment funds) (since January 2017); Member of the University of Florida College of Law Association Board of Trustees and Audit Committee Member (since April 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).
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 Board’s deliberations.
| 57
|
Independent Trustees
|
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held
| Portfolios Overseen
in Fund Complex
|
Mary F. Miller (1942)
Trustee
| 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). 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 Board’s
deliberations.
| 57
|
Joel W. Motley (1952)
Trustee
| 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). 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 Board’s deliberations.
| 57
|
Joanne Pace (1958)
Trustee
| Advisory Board Director of Massey Quick Simon & Co. (wealth management), LLC (since October 2014); Board Director of
Horizon Blue Cross Blue Shield of New Jersey (healthcare) (since November 2012); Advisory Board Director of The Alberleen Group LLC(investment banking) (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 (investment banking): 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). Ms. Pace has served on the Boards of certain Oppenheimer
funds since November 2012, 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.
| 57
|
Independent Trustees
|
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held
| Portfolios Overseen
in Fund Complex
|
Daniel S. Vandivort (1954)
Trustee
| 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) and Treasurer, Chairman of the Audit and Finance Committee (since January 2016); 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). 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 Board’s deliberations.
| 57
|
Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman and director 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.
Interested Trustee and Officer
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held
| Portfolios Overseen
in Fund Complex
|
Arthur P. Steinmetz (1958)
Trustee, President and Principal Executive Officer
| 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).
| 101
|
The addresses of the officers in
the charts below are as follows: for Messrs. Edwards, Larson, Steinmetz and Sternhell and Mss. Foxson, Lo Bessette and Picciotto 225 Liberty Street, New York, New York 10281, for Messrs. Kennedy, Legg, Petersen and
Yoder and Mss. Bullington, Burley, LaFond and Miller, 6803 S. Tucson Way, Centennial, Colorado 80112. Each officer serves for an indefinite term or until his or her resignation, retirement, death or removal.
Each of the Officers has served
the Fund in the following capacities from the following dates:
| Position(s)
| Length of Service
|
Paul Larson
| Vice President
| Since 2016
|
Arthur P. Steinmetz
| President and Principal Executive Officer
| Since 2014
|
Mary Ann Picciotto
| Chief Compliance Officer and Chief AML Officer
| Since 2014
|
Jennifer Foxson
| Vice President and Chief Business Officer
| Since 2014
|
| Position(s)
| Length of Service
|
Brian S. Petersen
| Treasurer and Principal Financial &
Accounting Officer
| Since 2016
|
Stephanie Bullington
| Assistant Treasurer
| Since 2016
|
Julie Burley
| Assistant Treasurer
| Since 2013
|
James A. Kennedy
| Assistant Treasurer
| Since 2011
|
Jan Miller
| Assistant Treasurer
| Since 2013
|
Cynthia Lo Bessette
| Secretary and Chief Legal Officer
| Since 2016
|
Taylor V. Edwards
| Assistant Secretary
| Since 2008
|
Randy G. Legg
| Assistant Secretary
| Since 2008
|
Michael Sternhell
| Assistant Secretary
| Since 2016
|
John Yoder
| Assistant Secretary
| Since 2016
|
Gloria J. LaFond
| Blue Sky Officer
| Since 2011
|
Other Officers of the Fund
|
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Last 5 Years
| Portfolios Overseen
in Fund Complex
|
Paul Larson (1971)
Vice President
| Vice President of the Sub-Adviser and portfolio manager of the Main Street Team since January 2013. Prior to joining the
Sub-Adviser, Mr. Larson was a portfolio manager and Chief Equity Strategies at Morningstar.
| 5
|
Other Information about the Officers of the Fund
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years
| Portfolios Overseen
in Fund Complex
|
Mary Ann Picciotto (1973)
Chief Compliance Officer and
Chief Anti-Money Laundering Officer
| 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).
| 101
|
Jennifer Foxson (1969)
Vice President and Chief Business Officer
| 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).
| 101
|
Brian S. Petersen (1970)
Treasurer and Principal Financial and Accounting Officer
| Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of the
Sub-Adviser (February 2007-December 2012); Assistant Vice President of the Sub-Adviser (August 2002-2007).
| 101
|
Stephanie Bullington (1977)
Assistant Treasurer
| Vice President of the Manager (since February 2014); Vice President of the Manager (January 2013-September 2013); Vice President of the
Sub-Adviser (January 2010-December 2012); Assistant Vice President of the Sub-Adviser (October 2005-January 2010).
| 101
|
Julie Burley (1981)
Assistant Treasurer
| Vice President of the Manager (since October 2013). Previously held the following positions at Deloitte & Touche: Senior Manager
(September 2010-October 2013), Manager (September 2008-August 2010), and Audit Senior (September 2005-August 2008).
| 101
|
James A. Kennedy (1958)
Assistant Treasurer
| Senior Vice President of the Manager (since January 2013); Senior Vice President of the Sub-Adviser (September 2006-December
2012).
| 101
|
Other Information about the Officers of the Fund
|
|
Name, Year of Birth, Position(s)
| Principal Occupation(s) During the Past 5 Years
| Portfolios Overseen
in Fund Complex
|
Jan Miller (1963)
Assistant Treasurer
| Vice President of the Manager (since January 2014); Assistant Vice President of the Manager (January 2013-January 2014); Assistant Vice
President of the Sub-Adviser (2005-December 2012); Assistant Vice President in the Sub-Adviser’s Fund Accounting department (November 2004 to March 2006).
| 101
|
Cynthia Lo Bessette (1969)
Secretary and Chief Legal Officer
| Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Senior Vice President and Deputy General Counsel
of the Manager (March 2015-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);
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.
| 101
|
Taylor V. Edwards (1967)
Assistant Secretary
| Senior Vice President and Managing Counsel of the Manager (since January 2017); Vice President and Senior Counsel of the Manager (January
2013-January 2017); Vice President (February 2007-December 2012) and Senior Counsel (February 2012-December 2012) of the Sub-Adviser; Associate Counsel (May 2009-January 2012); Assistant Vice President (January
2006-January 2007) and Assistant Counsel (January 2006-April 2009) of the Sub-Adviser.
| 101
|
Randy Legg (1965)
Assistant Secretary
| Vice President and Senior Associate General Counsel of the Manager (since January 2013); Vice President (June 2005-December 2012) and Senior
Counsel (March 2011-December 2012) of the Sub-Adviser; Associate Counsel (January 2007-March 2011) of the Sub-Adviser.
| 101
|
Michael J. Sternhell (1975)
Assistant Secretary
| Senior Vice President and Managing Counsel of the Manager (since February 2015); Vice President and Associate Counsel of the Manager (January
2013-January 2015); Vice President and Associate Counsel (June 2011-December 2012) of the Sub-Adviser.
| 101
|
John Yoder (1975)
Assistant Secretary
| Vice President and Associate General Counsel of the Manager (since January 2013); Vice President and Assistant Counsel (July 2011-December
2012) of the Sub-Adviser.
| 101
|
Gloria J. LaFond (1945)
Blue Sky Officer
| Assistant Vice President of the Manager (since January 2013); Assistant Vice President (January 2006-December 2012) of the
Sub-Adviser.
| 101
|
Trustees’ Share
Ownership. The chart below shows information about each Trustee’s beneficial share ownership in the Fund and in all of the registered investment companies that the Trustee oversees in the
Oppenheimer family of funds (“Supervised Funds”).
As of December 31, 2016
|
|
| Dollar Range of Shares
Beneficially Owned in the Fund
| Aggregate Dollar Range of Shares
Beneficially Owned in Supervised Funds
|
Independent Trustees
|
|
|
Brian Wruble
| None
| Over $100,000
|
Beth Ann Brown
| None
| $10,001-$50,000
|
Edmund P. Giambastiani, Jr.
| None
| Over $100,000
|
Elizabeth Krentzman
| None
| Over $100,000
|
Mary F. Miller
| None
| Over $100,000
|
Joel W. Motley
| None
| Over $100,000
|
As of December 31, 2016
|
|
| Dollar Range of Shares
Beneficially Owned in the Fund
| Aggregate Dollar Range of Shares
Beneficially Owned in Supervised Funds
|
Joanne Pace
| None
| Over $100,000
|
Daniel S. Vandivort
| $50,001-$100,000
| Over $100,000
|
Interested Trustee
|
|
|
Arthur P. Steinmetz
| None
| Over $100,000
|
Remuneration of the Officers and
Trustees. The officers and the Interested Trustee of the Fund, who are associated with the Manager, receive no salary or fee from the Fund. The Independent Trustees’ total compensation from
the Fund and fund complex represents compensation for serving as a Trustee and member of a committee (if applicable) of the Boards of the Fund and other funds in the OppenheimerFunds complex during the calendar year
ended December 31, 2016.
| Aggregate Compensation
From the Fund1
| Total Compensation From the
Fund and Fund Complex
|
Name and Other Fund Position(s) (as applicable)
| Fiscal Year Ended August 31, 2017
| Year Ended
December 31,2016
|
Brian F. Wruble
Chairman of the Board, Audit Committee Member and Regulatory & Oversight Committee Member
| $10,5412
| $313,750
|
Beth Ann Brown
Regulatory & Oversight Committee Member and Governance Committee Member
| $8,070
| $183,750
|
Edmund P. Giambastiani, Jr.
Regulatory & Oversight Committee Member and Governance Committee Member
| $8,070
| $241,250
|
Elizabeth Krentzman
Regulatory & Oversight Committee Chair and Audit Committee Member
| $9,058
| $263,173
|
Mary F. Miller
Audit Committee Member and Governance Committee Member
| $8,0703
| $241,250
|
Joel W. Motley
Governance Committee Chair and Regulatory & Oversight Committee Member
| $9,0584
| $270,000
|
Joanne Pace
Audit Committee Chair and Regulatory & Oversight Committee Member
| $9,058
| $270,000
|
Daniel Vandivort
Audit Committee Member and Governance Committee Member
| $8,070
| $241,250
|
1.
| “Aggregate Compensation from the Fund” includes fees and amounts deferred under the “Compensation Deferral Plan” (described below), if any.
|
2.
| Includes $10,540 deferred by Mr. Wruble under the Compensation Deferral Plan.
|
3.
| Includes $1,883 deferred by Ms. Miller under the Compensation Deferral Plan.
|
4.
| Includes $755 deferred by Mr. Motley under the Compensation Deferral Plan.
|
Compensation Deferral Plan. The Board of Trustees has adopted a Compensation Deferral Plan for Independent Trustees that enables them to elect to defer receipt of all or a portion of the annual fees they are entitled
to receive from certain Funds. Under the plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds selected by
the Trustee. The amount paid to the Trustee under the plan will be determined based on the amount of compensation deferred and the performance of the selected funds.
Deferral of the Trustees’
fees under the plan will not materially affect a Fund’s assets, liabilities or net income per share. The plan will not obligate a fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the SEC, a fund may invest in the funds selected by the Trustee under the plan without shareholder approval for the limited purpose of determining the value
of the Trustee’s deferred compensation account.
Major
Shareholders. As of October 4, 2017, the only persons or entities who owned of record, or who were known by the Fund to own beneficially, 5% or more of any class of the Fund’s outstanding shares were:
Name
| Address
| % Owned
| Share Class
|
Capital Appreciation Fund
|
|
|
|
OPPENHEIMER PORTFOLIO SERIES
ACTIVE ALLOCATION
| ATTN FUND TREASURY
6803 S TUCSON WAY
CENTENNIAL CO 80112-3924
| 48.46%
| I
|
OPPENHEIMER PORTFOLIO SERIES
MODERATE INVESTOR
| ATTN FUND TREASURY
6803 S TUCSON WAY
CENTENNIAL CO 80112-3924
| 27.31%
| I
|
OPPENHEIMER PORTFOLIO SERIES
EQUITY INVESTOR FUND
| ATTN FUND TREASURY
6803 S TUCSON WAY
CENTENNIAL CO 80112-3924
| 15.80%
| I
|
OPPENHEIMER PORTFOLIO SERIES
CONSERVATIVE INVESTOR
| ATTN FUND TREASURY
6803 S TUCSON WAY
CENTENNIAL CO 80112-3924
| 5.72%
| I
|
STATE FARM COLLEGE SAVINGS PLAN
| ATTN: OFIPI
PO BOX 173865
DENVER CO 80217-3865
| 42.03%
| Y
|
MLPF&S FOR THE SOLE BENEFIT
OF ITS CUSTOMERS
| ATTN FUND ADMN
4800 DEER LAKE DR E FL 3
JACKSONVILLE FL 32246-6484
| 8.48%
| Y
|
AMERICAN ENTERPRISE
INVESTMENT SVC
| 707 2ND AVE SOUTH
MINNEAPOLIS MN 55402-2405
| 7.31%
| Y
|
The Manager and the Sub-Adviser
The Manager is a wholly-owned
subsidiary of OppenheimerFunds, Inc., the Sub-Adviser. The Sub-Adviser is wholly-owned by Oppenheimer Acquisition Corp., a holding company primarily owned by Massachusetts Mutual Life Insurance Company, a global,
diversified insurance and financial services company.
Code of Ethics. The Fund, the Manager, the Sub-Adviser and the Distributor have a Code of Ethics. It is designed to detect and prevent improper personal trading by portfolio managers and certain other
employees (“covered persons”) that could compete with or take advantage of the Fund’s portfolio transactions. Covered persons include persons with knowledge of the investments and investment
intentions of the Fund and/or other funds advised by the Manager. The Code of Ethics does permit personnel subject to the Code to invest in securities, including securities that may be purchased or held by the Fund,
subject to a number of restrictions and controls. Compliance with the Code of Ethics is carefully monitored and enforced by the Manager, the Sub-Adviser and the Distributor.
The Code of Ethics is an exhibit
to the Fund’s registration statement filed with the SEC. It can be viewed as part of the Fund’s registration statement on the SEC’s EDGAR database at the SEC’s website at www.sec.gov and can be
reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.
Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which include Proxy Voting Guidelines, under which the Fund votes proxies relating to securities held by the Fund
(“portfolio proxies”). The Manager generally undertakes to vote portfolio proxies with a view to enhancing the value of the company’s stock held by the Fund. The Fund has retained an independent,
third party proxy voting agent to vote portfolio proxies in accordance with the Fund’s Proxy Voting Guidelines and to maintain records of such portfolio proxy voting. The Manager’s internal Proxy Voting
Committee is responsible for monitoring the third party proxy voting agent.
The Portfolio Proxy Voting
Policies and Procedures include provisions to address conflicts of interest that may arise between the Fund and the Manager or the Manager’s affiliates or business relationships. Such a conflict of interest may
arise, for example, where the Manager or an affiliate of the Manager manages or administers the assets of a pension plan or other investment account of the portfolio company soliciting the proxy or seeks to serve in
that capacity. The Manager and its affiliates generally seek to avoid such material conflicts of interest by maintaining separate investment decision making processes to prevent the sharing of business objectives with
respect to proposed or actual actions regarding portfolio proxy voting decisions. Additionally, the Manager employs the following procedures, as long as OFI determines that the course of action is consistent with the
best interests of the Fund and its shareholders:
If the proposal that gives rise to the conflict
is specifically addressed in the Proxy Voting Guidelines, the Manager will vote the portfolio proxy in accordance with the Proxy Voting Guidelines.
•
| If such proposal is not specifically addressed in the Proxy Voting Guidelines, or if the Proxy Voting Guidelines provide discretion to the Manager on how to vote (i.e., on a case-by-case basis), the Manager will
vote in accordance with the third-party proxy voting agent’s general recommended guidelines on the proposal provided that the Manager has reasonably determined that there is no conflict of interest on the part
of the proxy voting agent.
|
•
| With respect to such proposal where a portfolio manager has requested that the Manager vote (i) in a manner inconsistent with the Proxy Voting Guidelines, or (ii) if such proposal is
not specifically addressed in the Proxy Voting Guidelines, in a manner inconsistent with the third-party proxy voting agent’s general recommended guidelines, the Proxy Voting Committee may determine that such a
request is in the best interests of the Fund (and, if applicable, its shareholders) and does not pose an actual material conflict of interest. In making its determination, the Proxy Voting Committee may consider,
among other things, whether the portfolio manager is aware of the business relationship with the company, and/or is sufficiently independent from the business relationship, and to the Proxy Voting Committee’s
knowledge, whether the Manager has been contacted or influenced by the company in connection with the proposal.
|
If none of the previous
procedures provides an appropriate voting recommendation, the Proxy Voting Committee may: (i) determine how to vote on the proposal; (ii) recommend that the Manager retain an independent fiduciary to advise the
Manager on how to vote the proposal; or (iii) determine that voting on the particular proposal is impracticable and/or is outweighed by the cost of voting and direct the Manager to abstain from voting.
The Proxy Voting
Guidelines’ provisions with respect to certain routine and non-routine proxy proposals are summarized below:
•
| The Fund evaluates director nominees on a case-by-case basis, examining the following factors, among others: composition of the board and key board committees, experience and qualifications, attendance at board
meetings, corporate governance provisions and takeover activity, long-term company performance, the nominee’s investment in the company, and whether the company or nominee is targeted in connection with public
“vote no” campaigns.
|
•
| The Fund generally supports proposals requiring the position of chairman to be filled by an independent director unless there are compelling reasons to recommend against the proposal such as a counterbalancing
governance structure.
|
•
| The Fund generally supports proposals asking that a majority of directors be independent. The Fund generally supports proposals asking that a board audit, compensation, and/or nominating committee be composed
exclusively of independent directors.
|
•
| The Fund generally votes against shareholder proposals to require a company to nominate more candidates than the number of open board seats.
|
•
| The Fund generally supports shareholder proposals to reduce a super-majority vote requirement, and opposes management proposals to add a super-majority vote requirement.
|
•
| The Fund generally supports proposals to allow shareholders the ability to call special meetings.
|
•
| The Fund generally votes for proposals that remove restrictions on or provide the right of shareholders to act by written consent independently of management taking into account the company’s specific
governance provisions including right to call special meetings, poison pills, vote standards, etc. on a case-by-case basis.
|
•
| The Fund generally votes against proposals to create a new class of stock with superior voting rights.
|
•
| The Fund generally votes against proposals to classify a board.
|
•
| The Fund generally supports proposals to eliminate cumulative voting.
|
•
| The Fund generally votes against proposals to establish a new board committee.
|
•
| The Fund generally votes on management proposals seeking approval to exchange/reprice options on a case-by-case basis.
|
•
| The Fund votes on qualified employee stock purchase plans on a case-by-case basis. The Fund generally supports non-qualified employee stock purchase plans that feature broad-based participation, limits on employee
contribution, company matching up to 25%, and no discount on the stock price on the date of purchase.
|
•
| The Fund generally supports transfer stock option (“TSO”) programs, if executive officers and non-employee directors are excluded from participating, if stock options are purchased from third-party
financial institutions at a discount to their fair value using option pricing models, and if there is a two-year minimum holding period for sale proceeds. The Fund generally votes against equity plan proposals if the
details of ongoing TSO programs are not provided to shareholders.
|
•
| The Fund generally supports proposals to require majority voting for the election of directors.
|
•
| The Fund generally supports proposals seeking additional disclosure of executive and director pay information.
|
•
| The Fund generally supports proposals seeking disclosure regarding the company’s, board’s or committee’s use of compensation consultants.
|
•
| The Fund generally supports “pay-for-performance” and “pay-for-superior-performance standard” proposals that align a significant portion of total compensation of senior executives to company
performance, and generally supports an annual frequency for advisory votes on executive compensation.
|
•
| The Fund generally supports having shareholder votes on poison pills.
|
•
| The Fund generally supports proposals calling for companies to adopt a policy of not providing tax gross-up payments.
|
•
| The Fund votes case-by-case on bonus banking/bonus banking “plus” proposals.
|
•
| The Fund generally supports proposals calling for companies to adopt a policy of obtaining shareholder approval for golden coffins/executive death benefits. This would not apply to any benefit programs or equity
plan proposals for which the broad-based employee population is eligible.
|
•
| The Fund generally supports proposals to eliminate accelerated vesting of unvested equity awards to senior executives in the event of change in control (except for pro rata vesting considering the time elapsed and
attainment of any related performance goals between the award date and the change in control).
|
•
| In the case of social, political and environmental responsibility issues, the Fund will generally abstain where there could be a detrimental impact on share value or where the perceived value if the proposal was
adopted is unclear or unsubstantiated.
|
•
| The Fund generally supports proposals that would clearly have a discernible positive impact on short- or long-term share value, or that would have a presently indiscernible impact on
short- or long-term share value but promotes general long-term interests of the company and its shareholders.
|
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 Form N-PX filing is available (i) without charge, upon request, by calling
the Fund toll-free at 1.800.525.7048 and (ii) on the SEC’s website at www.sec.gov.
The Investment Advisory
Agreement. The Manager provides investment advisory and management services to the Fund under an investment advisory agreement between the Manager and the Fund. The Manager has retained the
Sub-Adviser pursuant to a separate sub-advisory agreement, described below, under which the Sub-Adviser chooses the Fund’s investments and provides related advisory services to the Fund. Prior to January 1,
2013, OppenheimerFunds, Inc. was the Manager of the Fund.
The advisory agreement requires
the Manager, at its expense, to provide the Fund with adequate office space, facilities and equipment. It also requires the Manager to provide and supervise the activities of all administrative and clerical personnel
required to provide effective administration for the Fund. Those responsibilities include the compilation and maintenance of records with respect to its operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for continuous public sale of shares of the Fund.
The Fund pays expenses not
expressly assumed by the Manager under the investment advisory agreement. The investment advisory agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes, brokerage
commissions, fees to certain Board members, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and registration costs and non-recurring expenses, including
litigation costs. The management fees paid by the Fund to the Manager are calculated at the rates described in the Prospectus, which are applied to the assets of the Fund as a whole. The fees are allocated to each
class of shares based upon the relative proportion of the Fund’s net assets represented by that class. The management fees paid by the Fund to the Manager during its last three fiscal years were:
Fiscal Year Ended 08/31
| Management Fees Paid to the Manager
|
2015
| $31,294,242
|
2016
| $28,892,050
|
2017
| $28,394,625
|
The investment advisory
agreement states that in the absence of willful misfeasance, bad faith, gross negligence in the performance of its duties or reckless disregard of its obligations and duties under the investment advisory agreement,
the Manager is not liable for any loss the Fund sustains in connection with matters to which the agreement relates.
The agreement permits the
Manager to act as an investment adviser for any other person, firm or corporation and to use the name “Oppenheimer” in connection with other investment companies for which it may act as investment adviser
or general distributor. If the Manager shall no longer act as investment adviser to the Fund, the Manager may withdraw the right of the Fund to use the name “Oppenheimer” as part of its name.
The Sub-Advisory Agreement. Under the sub-advisory agreement between the Manager and the Sub-Adviser, the Sub-Adviser shall regularly provide investment advice with respect to the Fund and invest and reinvest cash,
securities, commodity interests and the property comprising the assets of the Fund. The Sub-Adviser selects securities and/or commodity interests for the Fund’s portfolio and provides related advisory services.
The portfolio manager(s) of the Fund
is employed by the Sub-Adviser and is
principally responsible for the provision of advisory services to the Fund’s portfolio. Other members of the Sub-Adviser’s investment teams provide the portfolio manager(s) with counsel and support in
managing the Fund’s portfolio.
Under the sub-advisory
agreement, the Manager pays the Sub-Adviser a percentage of the net investment advisory fee (after all applicable waivers) that it receives from the Fund as compensation for the provision of investment advisory
services. The fee paid to the Sub-Adviser under the sub-advisory agreement is paid by the Manager, not by the Fund.
The sub-advisory agreement
states that in the absence of willful misfeasance, bad faith, negligence or reckless disregard of its duties or obligations, the Sub-Adviser shall not be liable to the Manager for any act or omission in the course of
or connected with rendering services under the Sub-Advisory Agreement or for any losses that may be sustained in the purchase, holding or sale of any security.
Pending
Litigation. In 2009, several putative class action lawsuits were filed and later consolidated before the U.S. District Court for the District of Colorado in connection with the investment performance
of Oppenheimer Rochester California Municipal Fund (the “California Fund”), a fund advised by OppenheimerFunds, Inc. (“OFI”) and distributed by OppenheimerFunds Distributor, Inc. (“OFDI”). The plaintiffs asserted claims against OFI, OFDI and certain present and former trustees and officers of the
California Fund under the federal securities laws, alleging, among other things, that the disclosure documents of the California Fund contained misrepresentations and omissions and the investment policies of the
California Fund were not followed. In October 2015, following a successful appeal by defendants and a subsequent hearing, the court granted plaintiffs’ motion for class certification and appointed class representatives and class counsel. In April 2017, the parties executed a memorandum of understanding setting forth the terms of a proposed settlement. The proposed
settlement is subject to the negotiation and execution of final settlement documentation and approval by the court.
OFI believes that neither the
suit nor the proposed settlement should impair the ability of OFI or OFDI to perform their respective duties to the Fund and that the outcome of the suit should not have any material effect on the operations of any of
the Oppenheimer funds.
Portfolio Manager. The Fund is managed by Paul Larson (the “Portfolio Manager”), who is responsible for the day-to-day management of the Fund’s investments.
•
| Other Accounts Managed. In addition to managing the Fund’s investment portfolio, Mr. Larson also manages other investment portfolios and other accounts on behalf of the Sub-Adviser or its affiliates. No
portfolio or account has an advisory fee based on performance. The following table provides information regarding those other portfolios and accounts as of August 31, 2017.
|
Portfolio Manager
| Registered
Investment
Companies
Managed
| Total Assets
in Registered
Investment
Companies
Managed1
| Other Pooled
Investment
Vehicles
Managed
| Total Assets
in Other
Pooled
Investment
Vehicles
Managed
| Other
Accounts
Managed
| Total Assets in
Other Accounts
Managed2,3
|
Paul Larson
| 9
| $16.02
| 0
| $0
| 0
| $0
|
1.
| In
billions.
|
2.
| In
millions.
|
3.
| Does not include personal accounts of the portfolio managers and their families which are subject to the Code of Ethics.
|
As indicated above, a portfolio
manager may also manage other funds and accounts. At different times, a portfolio manager may manage other funds or accounts with investment objectives and strategies similar to, or different from, those of the Fund.
At times, those responsibilities could potentially conflict with the interests of the Fund. That may occur whether the investment objectives and strategies of the other funds and accounts are the same as, or different
from, the Fund’s investment objectives and strategies. For example, a portfolio manager may need to allocate investment opportunities between the Fund and another fund or account having similar objectives or
strategies, or may need to execute transactions for another fund or account that could have a negative impact on the value of securities held by the Fund. Not all funds and accounts advised by the Sub-Adviser have the
same management fee. If the management fee structure of another fund or account is more advantageous to the Sub-Adviser than the fee structure of the Fund, the Sub-Adviser could have an incentive to favor the other
fund or account. However, the Sub-Adviser’s compliance procedures and Code of Ethics recognize the Sub-Adviser’s obligation to treat all of its clients, including the Fund, fairly and equitably, and are
designed to preclude a portfolio manager from favoring one client over another. It is possible, of course, that those compliance procedures and the Code of Ethics may not always be adequate to do so.
Compensation of Portfolio
Managers. Portfolio managers are employed and compensated by the Sub-Adviser or an affiliate, not by the Fund. Under the compensation program for portfolio managers and portfolio analysts,
compensation is based primarily on the relative investment performance results of the funds or accounts they manage, rather than on the financial success of the Sub-Adviser. This is intended to align the interests of
the portfolio managers and analysts with the success of the funds and accounts of their shareholders. The compensation structure is designed to attract and retain highly qualified investment management professionals
and to reward individual and team contributions toward creating
shareholder value. A portfolio manager’s
compensation is not directly based on the total value of assets they manage; however, higher total compensation potential is likely to align with greater assets under management. The compensation structure is intended
to be internally and externally equitable and serve to reduce potential conflicts of interest arising from a portfolio manager’s responsibilities managing different funds or accounts.
Portfolio manager compensation
generally consists of three components: a base salary, an annual bonus, and eligibility to participate in long-term awards. In general, the average proportion of total compensation among these three components is as
follows: base salary is 15%, annual bonus is 65%, and long-term awards are 20%.
The base pay component for each
portfolio manager is reviewed regularly to ensure that it reflects the performance of the individual, is commensurate with the requirements of the particular portfolio, reflects any specific competence or specialty of
the individual manager, and is competitive with other comparable positions.
The annual bonus is calculated
based on two factors: a formulaic performance portion and a discretionary portion. In general, the formulaic performance portion is a much larger part of the annual bonus than the discretionary portion. The formulaic
performance portion of the annual bonus is measured against the one, three and five year performance, or performance since inception, as applicable, of the fund(s) relative to an appropriate Morningstar peer group
category selected by senior management. Performance is measured on a pre-tax basis. The compensation structure is weighted towards long-term performance of the funds, with one year performance weighted at 20%, three
year performance rated at 30%, and five year performance weighted at 50%. This formula has the effect of rewarding consistently above median performance, which best aligns the interests of the portfolio manager and
the shareholder. Below median performance in all three periods results in an extremely low, and in some cases no, formulaic performance based bonus.
The discretionary portion of the
annual bonus is determined by senior management of the Sub-Adviser and is based on a number of factors, including, management quality (such as style consistency, risk management, sector coverage, team leadership and
coaching), contributions to marketing efforts and organizational development.
Finally, the long-term award
component consists of grants in the form of appreciation rights in regard to the common stock of the Sub-Adviser’s holding company parent, restricted shares of such common stock, as well as deferred cash
investments in the fund(s) managed by a portfolio manager. Portfolio managers must elect to receive between 20% and 50% of their annual long-term award component in the form of a deferred cash award indexed to the
portfolio(s) and fund(s) managed. These awards settle in cash at the end of a three-year vesting period. Through this long-term award component, the interests of the portfolio managers are further aligned with those
of fund shareholders.
The compensation structure of
other funds and/or accounts managed by a portfolio manager, if any, is generally the same as the compensation structure described above. A portfolio manager’s compensation with regard to other portfolios may be
based on the performance of those portfolios compared to a peer group category that may be different from that described below.
The peer group category for the
portolio manager(s) with respect to the Fund is Morningstar - Large Growth.
•
| Ownership of Fund Shares. As of August 31, 2017, the Portfolio Manager(s) beneficially owned shares of the Fund as follows:
|
Portfolio Manager
| Range of Shares Beneficially Owned in the Fund
|
Paul Larson
| $100,001 - $500,000
|
Brokerage Policies of the Fund
Brokerage Provisions of the
Investment Advisory Agreement and the Sub-Advisory Agreement. One of the duties of the Sub-Adviser under the sub-advisory agreement is to arrange the portfolio transactions for the Fund. The sub-advisory agreement contains provisions relating to the
employment of broker-dealers for that purpose. The sub-advisory agreement authorizes the Sub-Adviser to employ broker-dealers, including “affiliated brokers,” as that term is defined in the Investment
Company Act, that the Sub-Adviser thinks, in its best judgment based on all relevant factors, will implement the policy of the Fund to obtain the “best execution” of the Fund’s portfolio
transactions. “Best execution” means executing trades in a manner such that the total costs or proceeds are the most favorable under the circumstances. Some of the circumstances that may influence this
decision are: cost (brokerage commission or dealer spread), size of order, difficulty of order, and the firm’s ability to provide prompt and reliable execution.
The Sub-Adviser need not seek
competitive commission bidding. However, the Sub-Adviser is expected to be aware of the current rates of eligible brokers and to minimize the commissions paid to the extent consistent with the interests and policies
of the Fund as established by its Board. The Fund is not required to pay the lowest available commission. Under the investment advisory and sub-advisory agreements, in choosing brokers to execute portfolio
transactions for the Fund, the Manager and the Sub-Adviser may select brokers (other than affiliates) that provide both brokerage and research services to the Fund. The commissions paid to those brokers may be higher
than another qualified broker would charge, if the Manager or the Sub-Adviser makes a good faith determination that the commission is fair and reasonable in relation to the services provided.
Brokerage Practices Followed by the
Sub-Adviser. The Sub-Adviser allocates brokerage for the Fund subject to the provisions of the sub-advisory agreement and other applicable rules and procedures described below.
The Sub-Adviser’s
portfolio traders allocate brokerage based upon recommendations from the Sub-Adviser’s portfolio managers, together with the portfolio traders’ judgment as to the execution capability of the broker or
dealer. In certain instances, portfolio managers may directly place trades and allocate brokerage. In either case, the Sub-Adviser’s executive officers supervise the allocation of brokerage.
Transactions in securities other
than those for which an exchange is the primary market are generally done with principals or market makers. In transactions on foreign exchanges, the Fund may be required to pay fixed brokerage commissions and
therefore would not have the benefit of negotiated commissions that are available in U.S. markets. Brokerage commissions are paid primarily for transactions in listed securities or for certain fixed-income agency
transactions executed in the secondary market. Otherwise, brokerage commissions are paid only if it appears likely that a better price or execution can be obtained by doing so. In an option transaction, the Fund
ordinarily uses the same broker for the purchase or sale of the option and any transaction in the securities to which the option relates.
Other accounts
advised by the Sub-Adviser have investment policies similar to those of the Fund. Those other accounts may purchase or sell the same securities as the Fund at the same time as the Fund, which could affect the supply
and price of the securities. When possible, the Sub-Adviser tries to combine concurrent orders to purchase or sell the same security by more than one of the accounts managed by the Sub-Adviser or its affiliates. If
two or more accounts advised by the Sub-Adviser purchase the same security on the same day from the same dealer, each participating account in that aggregated order would receive the average share price for all
transactions to the extent that order is filled through a series of transactions on that day.
Rule 12b-1 under the Investment
Company Act prohibits any fund from compensating a broker or dealer for promoting or selling the fund’s shares by (1) directing to that broker or dealer any of the fund’s portfolio transactions, or (2)
directing any other remuneration to that broker or dealer, such as commissions, mark-ups, mark downs or other fees from the fund’s portfolio transactions, that were effected by another broker or dealer (these
latter arrangements are considered to be a type of “step-out” transaction). In other words, a fund and its investment adviser cannot use the fund’s brokerage for the purpose of rewarding
broker-dealers for selling a fund’s shares.
However, the Rule permits funds
to effect brokerage transactions through firms that also sell fund shares, provided that certain procedures are adopted to prevent a quid pro quo with respect to portfolio brokerage allocations. As permitted by the
Rule, the Manager and the Sub-Adviser have adopted procedures (and the Fund’s Board has approved those procedures) that permit the Fund to execute portfolio securities transactions through brokers or dealers
that also promote or sell shares of the Fund, subject to the “best execution” considerations discussed above. Those procedures are designed to prevent: (1) the Sub-Adviser’s personnel who effect the
Fund’s portfolio transactions from taking into account a broker’s or dealer’s promotion or sales of the Fund shares when allocating the Fund’s portfolio transactions, and (2) the Fund, the
Manager, the Sub-Adviser and the Distributor from entering into agreements or understandings under which the Sub-Adviser directs or is expected to direct the Fund’s brokerage directly, or through a
“step-out” arrangement, to any broker or dealer in consideration of that broker’s or dealer’s promotion or sale of the Fund’s shares or the shares of any of the other Oppenheimer
funds.
The investment advisory and
sub-advisory agreements permit the Manager and the Sub-Adviser to allocate brokerage for research services. The research services provided by a particular broker may be useful both to the Fund and to one or more of
the other accounts advised by the Manager or its affiliates. Investment research may be supplied to the Manager or Sub-Adviser by a broker through which trades are placed or by a third party at the instance of the
broker.
Investment research services
include information and analysis on particular companies and industries as well as market or economic trends and portfolio strategy, market quotations for portfolio evaluations, analytical software and similar
products and services. If a research service also assists the Manager or Sub-Adviser in a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component that
provides assistance to the Manager or Sub-Adviser in the investment decision making process may be paid in commission dollars.
Although the Manager and
Sub-Adviser currently do not do so, the Board may permit the Manager and Sub-Adviser to use stated commissions on secondary fixed-income agency trades to obtain research if the broker represents to the Manager or
Sub-Adviser that: (i) the trade is not from or for the broker’s own inventory, (ii) the trade was executed by the broker on an agency basis at the stated commission, and (iii) the trade is not a riskless
principal transaction. The Board may also permit the Manager and Sub-Adviser to use commissions on fixed-price offerings to obtain research in the same manner as is permitted for agency transactions.
The research services provided
by brokers broaden the scope and supplement the research activities of the Manager and Sub-Adviser. That research provides additional views and comparisons for consideration, and helps the Manager and Sub-Adviser to
obtain market information for the valuation of securities that are either held in the Fund’s portfolio or are being considered for purchase. The Manager and Sub-Adviser provide information to the Board about the
commissions paid to brokers furnishing such services, together with the Manager’s and Sub-Adviser’s representation that the amount of such commissions was reasonably related to the value or benefit of such
services.
During the
fiscal years ended August 31, 2015, 2016 and 2017, the Fund paid the total brokerage commissions indicated in the chart below. During the fiscal year ended August 31, 2017, the Fund paid $1,782,385 in commissions to
firms that provide brokerage and research services to the Fund with respect to $5,380,672,036 of aggregate portfolio transactions. All such transactions were on a “best execution” basis, as described
above. The provision of research services was not necessarily a factor in the placement of all such transactions.
Fiscal Year Ended 08/31
| Total Brokerage Commissions Paid by the Fund*
|
2015
| $2,440,954
|
2016
| $2,817,608
|
2017
| $1,897,959
|
*
| Amounts do not include spreads or commissions on principal transactions on a net trade basis.
|
Regular
Broker-Dealers. If the Fund has acquired during its most recent fiscal year, securities of its regular brokers or dealers as defined in Rule 10b-1 under the Investment Company Act or of their parents, the
following table identifies those regular brokers or dealers or their parents that derived more than 15% of their gross revenues from the business of a broker, a dealer, an underwriter, or an investment adviser as of
the fiscal year ended August 31, 2017:
Name of Regular Broker or Dealer or
Parent of Regular Broker or Dealer
| Aggregate Holdings of the Securities of the Issuer
as of the Fiscal Year Ended August 31, 2017
|
N/A
| N/A
|
Distribution and Service
Arrangements
The Distributor. Under its General Distributor’s Agreement with the Fund, the Distributor acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s shares.
The Distributor bears the expenses normally attributable to sales, including advertising and the cost of printing and mailing prospectuses, other than those furnished to existing shareholders. The Distributor is not
obligated to sell a specific number of shares.
The sales charges and
concessions paid to, or retained by, the Distributor from the sale of shares and the contingent deferred sales charges (“CDSCs”) retained by the Distributor on the redemption of shares during the
Fund’s three most recent fiscal years are shown in the tables below.
Class A Front-End Sales Charges
|
Fiscal Year Ended 08/31:
| Aggregate Front-End Sales Charges
on Class A Shares
| Class A Front-End Sales Charges
Retained by Distributor*
|
2015
| $2,930,720
| $927,677
|
2016
| $2,405,683
| $767,095
|
2017
| $2,066,319
| $676,405
|
*
| Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.
|
|
|
Concessions Advanced by Distributor
|
Fiscal Year
Ended 08/31:
| Concessions on Class A
Shares Advanced by
Distributor*
| Concessions on Class B
Shares Advanced by
Distributor*
| Concessions on Class C
Shares Advanced by
Distributor*
| Concessions on Class R
Shares Advanced by
Distributor*
|
2015
| $83,708
| $0
| $233,064
| $0
|
2016
| $33,969
| $0
| $189,055
| $0
|
2017
| $22,929
| $0
| $146,934
| $0
|
*
| The
Distributor advances concession payments to financial intermediaries for certain sales of Class A shares and for sales of Class B, Class C and Class R shares from its own resources at the time of sale.
|
|
|
Contingent Deferred Sales Charges
|
Fiscal Year
Ended 08/31:
| 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
|
2015
| $11,396
| $63,766
| $23,947
| $1,988
|
2016
| $4,956
| $42,603
| $21,027
| $0
|
2017
| $4,113
| $21,126
| $23,565
| $0
|
Distribution and Service (12b-1) Plans. The Fund has adopted a Service Plan for Class A shares and Distribution and Service Plans for Class B, Class C and Class R shares under Rule 12b-1 of the Investment Company Act. Under
those plans the Fund pays the Distributor for all or a portion of its costs incurred in connection with the distribution and/or servicing of the shares of the particular class. Each plan has been approved by a vote of
the Board, including a majority of the Independent Trustees/Directors, cast in person at a meeting called for the purpose of voting on that plan. The Independent Trustees/Directors are not “interested
persons” of the Fund and do not have any direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan, in accordance with Rule 12b-1 of the Investment Company
Act.
Under the plans, the Sub-Adviser
and the Distributor may make payments to affiliates. In their sole discretion, they may also from time to time make substantial payments from their own resources, which include the profits the Sub-Adviser derives from
the advisory fees it receives from the Fund, to compensate brokers, dealers, financial institutions and other intermediaries for providing distribution assistance and/or administrative services or that otherwise
promote sales of the Fund’s shares. These payments, some of which may be referred to as “revenue sharing,” may relate to the Fund’s inclusion on a financial intermediary’s preferred list
of funds offered to its clients.
A plan continues in effect from
year to year only if the Fund’s Board and its Independent Trustees/Directors vote annually to approve its continuance at an in person meeting called for that purpose. A plan may be terminated at any time by the
vote of a majority of the Independent Trustees/Directors or by the vote of the holders of a “majority” (as defined in the Investment Company Act) of the outstanding shares of the Class of shares to which
it applies.
The Board and the Independent
Trustees/Directors must approve all material amendments to a plan. An amendment to materially increase the amount of payments to be made under a plan must also be approved by shareholders of any affected class.
Because Class B shares of the Fund automatically convert into Class A shares 72 months after purchase, the shareholders of both Class A and Class B, voting separately by class, must approve a proposed amendment to the
Class A plan that would materially increase payments under that plan.
At least quarterly while the
plans are in effect, the Treasurer of the Fund will provide the Board with separate written reports on the plans for its review. The reports will detail the amount of all payments made under a plan and the purpose for
which the payments were made.
While each plan is in effect,
the Independent Trustees/Directors of the Fund will select and nominate any other Independent Trustees/Directors. This does not prevent the involvement of others in the selection and nomination process as long as the
final decision is made by a majority of the Independent Trustees/Directors.
No payment will be made to any
recipient for any share class unless, during the applicable period, the aggregate net asset value of Fund shares of the class held by the recipient (for itself and its customers) exceeds a minimum amount that may be
set by a majority of the Independent Trustees/Directors from time to time.
Class A Service Plan. Under the Class A service plan, the Distributor currently uses the fees it receives from the Fund to pay brokers, dealers and other financial institutions (referred to as
“recipients”) for personal and account maintenance services they provide for their customers who hold Class A shares. Those services may include answering customer inquiries about the Fund, assisting in
establishing and maintaining Fund accounts, making the Fund’s investment plans available and providing other services at the request of the Fund or the Distributor. The Class A service plan permits the Fund to
reimburse the Distributor at an annual rate of up to 0.25% of the Class A average net assets. For Class A purchases with no front-end sales charge imposed due to the qualifying breakpoint, the Distributor normally
makes payments to recipients in advance for the first year after shares are purchased and then makes payments periodically at an annual rate of not more than 0.25% of the Class A average net assets held in the
accounts of the recipient or its customers.
The
Distributor does not receive or retain the service fee for Class A share accounts when the investor does not have a broker of record. While the plan permits the Board to authorize payments to the Distributor to
reimburse itself for those services, the Board has not yet done so.
For the fiscal year ended August
31, 2017, payments under the Class A service plan totaled $7,124,092, of which $12,162 was retained by the Distributor under the arrangement described above, regarding grandfathered retirement accounts,
including $486,055 paid to an affiliate of the Distributor’s parent company. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years. The Distributor may not use payments received under the Class A plan to pay any of its interest expenses, carrying charges, or other financial costs, or allocation of overhead.
Class B, Class C and Class R
Distribution and Service Plans. Under the Class B, Class C and Class R Distribution and Service Plans (each a “Plan” and together the “Plans”), the Fund pays the asset-based sales charge (the
“distribution fee”) to the Distributor for its services in distributing Class B, Class C and Class R shares. The distribution fee allows investors to buy Class B, Class C and Class R shares without a
front-end sales charge, while allowing the Distributor to compensate dealers that sell those shares. The Distributor may use the service fees it receives under the Plans to pay recipients for providing services
similar to the services provided under the Class A service plan, described above.
Payments under the Plans are
made in recognition that the Distributor:
•
| pays sales concessions to authorized brokers and dealers at the time of sale or as an ongoing concession,
|
•
| pays the service fees in advance or periodically, as described below,
|
•
| may finance payment of sales concessions or the advance of the service fee payments to recipients under the Plans, or may provide such financing from its own resources or from the resources of an affiliate,
|
•
| employs personnel to support distribution of Class B, Class C and Class R shares,
|
•
| bears the costs of sales literature, advertising and prospectuses (other than those furnished to current shareholders) and certain other distribution expenses,
|
•
| may not be able to adequately compensate dealers that sell Class B, Class C and Class R shares without receiving payment under the Plans and therefore may not be able to offer such Classes for sale absent the Plans,
|
•
| receives payments under the Plans consistent with the service and distribution fees paid by other non-proprietary funds that charge 12b-1 fees,
|
•
| may use the payments under the Plan to include the Fund in various third-party distribution programs that might increase sales of Fund shares,
|
•
| may experience increased difficulty selling the Fund’s shares if Plan payments were discontinued, because most competitor funds have plans that pay dealers as much or more for distribution services than the
amounts currently being paid by the Fund, and
|
•
| may not be able to continue providing the same quality of distribution efforts and services, or to obtain such services from brokers and dealers, if Plan payments were discontinued.
|
Distribution fees on Class B
shares are generally retained by the Distributor. If a dealer has an agreement with the Distributor, the Distributor may pay the Class B distribution fees to recipients periodically in lieu of paying the sales
concession in advance at the time of purchase. The Distributor retains the distribution fee on Class C shares during the first year and then pays it as an ongoing concession to recipients. Distribution fees on Class R
shares are paid to recipients periodically.
Service fees for the first year
after Class B and Class C shares are purchased are generally paid to recipients in advance. After the first year, the Distributor pays the service fees to recipients periodically. Under the Plans, the Distributor is
permitted to retain the service fees or to pay recipients the service fee on a periodic basis, without payment in advance. If a recipient has an agreement with the Distributor, the Distributor may pay the Class B or
Class C or service fees to recipients periodically in lieu of paying the first year fee in advance. If Class B or Class C shares are redeemed during the first year after their purchase, a recipient of service fees on
those shares will be obligated to repay a pro rata portion of the advance payment to the Distributor. Shares purchased by exchange do not qualify for the advance service fee payment. Class R service fees are paid to
recipients periodically.
Class C or
Class R shares may not be purchased by a new investor without the investor designating a registered broker-dealer. Where a current investor no longer has a broker-dealer of record for an existing account, the account
will be held on behalf of the Fund(s). In those cases, the Distributor will then retain the distribution fees paid on Class C and Class R shares, but will not retain any service fees.
Each Plan provides for the
Distributor to be compensated at a flat rate, whether the Distributor’s distribution expenses for a period are more or less than the amounts paid by the Fund under the relevant Plan. During a calendar year, the
Distributor’s actual expenses in selling Class B, Class C and Class R shares may be more than the distribution fees paid to the Distributor under the Plans and the CDSC’s collected on redeemed shares.
Those excess expenses are carried over on the Distributor’s books and may be recouped from distribution fees paid by the Fund in future years. However, the Distributor has voluntarily agreed to cap the amount
that may be carried over from year to year and recouped for certain categories of expenses at 0.70% of annual gross sales of shares of the Fund. The capped expenses under the Plans are (i) expenses the Distributor has
incurred that represent compensation and expenses of its sales personnel and (ii) other direct distribution costs it has incurred, such as sales literature, state registration fees, advertising and prospectuses used
to offer Fund shares. If those categories of expenses exceed the capped amount, the Distributor would bear the excess costs. If a Plan were to be terminated by the Fund, the Fund’s Board may allow the Fund to
continue payments of the distribution fees to the Distributor for its services in distributing shares before the Plan was terminated.
The distribution and service
fees under each Plan are computed on the average of the net asset value of shares in the respective class, determined as of the close of each regular business day. The distribution and service fees increase the annual
Class B and Class C expenses by 1.00% and increase the annual Class R expenses by 0.50% of net assets.
Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 08/31/17
|
Class
| Total Payments
Under Plan
| Amount
Retained by
Distributor
| Amount Paid to
Affiliate
| Distributor’s
Aggregate
Unreimbursed
Expenses Under
Plan
| Distributor’s
Unreimbursed
Expenses as % of
Net Assets of
Class
|
Class B Plan
| $294,073
| $222,961
| $6,500
| $33,400,768
| 174.60%
|
Class C Plan
| $3,736,129
| $287,930
| $123,041
| $27,384,523
| 7.27%
|
Class R Plan
| $419,319
| $76,252
| $30,695
| $7,399,764
| 7.97%
|
All payments under the Plans are
subject to the limitations imposed by the Conduct Rules of FINRA on payments of distribution and service fees.
Payments to Financial
Intermediaries
Financial intermediaries may
receive various forms of compensation or reimbursement in the form of 12b-1 distribution and service plan payments as described in the preceding section. They may also receive payments or concessions from the
Distributor, derived from sales charges paid by the financial intermediary’s clients, also described in this SAI. In addition, the Sub-Adviser, the Transfer Agent, Sub-Transfer Agent and the Distributor may make
payments to broker-dealers, other financial intermediaries or to service providers for some or all of the following services: distribution, promotional and marketing support, operational and recordkeeping,
sub-accounting, networking and administrative services.
The types of financial
intermediaries that may receive compensation for providing such services include, but are not limited to, broker-dealers, financial advisors, registered investment advisers, sponsors of fund
“supermarkets,” sponsors of fee-based advisory or wrap fee-based programs, sponsors of college and retirement savings programs, banks, trust companies, retirement plan or qualified tuition program
administrators, third party administrators, financial intermediaries that offer products that hold Fund shares, and insurance companies that offer variable annuity or variable life insurance products.
Types of payments to financial
intermediaries may include, without limitation, all or portions of the following:
1.
| Payments made by the Fund, or by an investor buying or selling shares of the Fund, including:
|
•
| an initial front-end sales charge, all or a portion of which is payable by the Distributor to financial intermediaries (see the “More About Your Account” section in the Prospectus); and
|
•
| ongoing asset-based distribution and/or service fees (described in the section “Distribution and Service Arrangements - Distribution and Service (12b-1) Plans” above).
|
2.
| Payments made by the Transfer Agent or Sub-Transfer Agent to financial intermediaries, to compensate or reimburse them for services provided, such as sub-transfer agency services for shareholders or retirement plan
participants, omnibus accounting or sub-accounting, participation in networking arrangements, operational and recordkeeping and other administrative services. These payments are made out of the Transfer Agent’s
or Sub-Transfer Agent’s own resources and/or assets, including from the revenues or profits derived from the transfer agency fees the Transfer Agent receives from the Fund.
|
Financial intermediaries will not receive any operational and recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finder’s
fees” for Class I shares.
3.
| In addition, the Sub-Adviser or Distributor may, at their discretion, make the following types of payments from their own resources and/or assets, including from the revenues or profits derived from the advisory
fees the Sub-Adviser receives from the Manager for sub-advisory services on behalf of the Fund. Payments are made based on the guidelines established by the Sub-Adviser and Distributor, subject to applicable law.
These payments are often referred to as “revenue sharing” payments, and may include, but are not limited to:
|
•
| compensation for marketing or promotional support, support provided in offering shares in the Fund or other Oppenheimer funds through certain trading platforms and programs, and other promotional or marketing
services; and
|
•
| other compensation, to the extent the payment is not prohibited by law or by any self-regulatory agency, such as FINRA.
|
4.
| The Distributor may also provide, accept and/or cover the cost of certain non-cash compensation items, subject to internal policies and applicable FINRA regulations.
|
Although an intermediary that
sells Fund shares may also act as a broker or dealer in connection with the purchase or sale of portfolio securities by the Fund or other Oppenheimer funds, neither the Manager, the Sub-Adviser nor any advisory
affiliate considers a financial intermediary’s sales of shares of the Fund or other Oppenheimer funds when choosing brokers or dealers to effect portfolio transactions for the Fund or other Oppenheimer funds.
Revenue sharing payments can pay
for distribution-related or asset retention items including, without limitation:
•
| charges for setting up access for the Fund or other Oppenheimer funds on particular trading systems;
|
•
| marketing, promotional support and program support, such as expenses related to including the Oppenheimer funds in retirement plans, college savings plans, fee-based advisory or wrap fee-based programs, fund
“supermarkets,” bank or trust company products or insurance companies’ variable annuity or variable life insurance products;
|
•
| placement on the dealer’s list of offered funds;
|
•
| providing representatives of the Distributor with access to a financial intermediary’s sales meetings, sales representatives and management representatives; or
|
•
| firm support, which may include, but is not limited to, business planning assistance, “due diligence” or training meetings, advertising, or educating a financial
intermediary’s sales personnel about the Oppenheimer funds.
|
These payments may provide an
incentive to financial intermediaries to actively market or promote the sale of shares of the Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the Distributor in offering shares
of the Fund or other Oppenheimer funds. In addition, some types of payments may provide a financial intermediary with an incentive to recommend the Fund or a particular share class. Financial intermediaries may earn
profits on these payments, since the amount of the payments may exceed the cost of providing the services. Certain of these payments are subject to limitations under applicable law. Financial intermediaries may
categorize and disclose these arrangements to their clients and to members of the public in a manner different from the disclosures in the Fund’s Prospectus and this SAI. You should ask your financial
intermediary for information about any payments it receives from the Fund, the Transfer Agent, Sub-Transfer Agent, Sub-Adviser or the Distributor and any services it provides, as well as the fees and commissions it
charges.
For the year
ended December 31, 2016, the following financial intermediaries and/or their affiliates (which in some cases are broker-dealers) offered shares of the Oppenheimer funds and received revenue sharing or similar
distribution-related payments (of at least $5,000) from the Sub-Adviser or the Distributor for marketing or program support:
1st Global Capital Corp
|
AIG Life Insurance Company
|
Allianz Life Insurance Company
|
Allstate Life Insurance Company
|
American General Annuity Insurance Company
|
American Portfolios Financial Services, Inc.
|
Ameriprise Financial Services, Inc.
|
Ameritas Life Insurance Company
|
AXA Advisors, LLC
|
Bank of America Merrill Lynch
|
Cadaret Grant & Co.
|
Cambridge Investment Research
|
CCO Investment Services Corporation
|
Cetera Financial Group, Inc.
|
Citigroup Global Markets Inc.
|
Commonwealth Financial Network
|
CUNA Brokerage Services, Inc.
|
CUSO Financial Services, LP
|
Edward Jones and Company
|
Genworth Financial, Inc.
|
GWFS Equities, Inc.
|
H. Beck, Inc.
|
H.D. Vest Investment Services, Inc.
|
Hartford Life Insurance Company
|
Janney Montgomery Scott LLC
|
J.P. Morgan Securities LLC
|
Kemper Investors Life Insurance Company
|
Kestra Financial, Inc.
|
Ladenburg Thalmann & Co. Inc.
|
Lincoln Financial Advisors Corporation
|
Lincoln Financial Securities Corporation
|
Lincoln Investment Planning, LLC
|
Lincoln National Life Insurance Company
|
LPL Financial Corporation
|
Massachusetts Mutual Life Insurance Company
|
MetLife Investors Insurance Company
|
Midland National Life Insurance Company
|
Morgan Stanley Smith Barney LLC
|
MSI Financial Services, Inc.
|
National Planning Holdings, Inc.
|
Nationwide Financial Services, Inc.
|
Northwestern Mutual Investment Services, LLC
|
Oppenheimer & Co. Inc.
|
Pacific Life Insurance Company
|
Park Avenue Securities LLC
|
PNC Investments LLC
|
Protective Life and Annuity Insurance Company
|
Prudential Investment Management Services LLC
|
Raymond James Financial Services, Inc.
|
RBC Capital Markets, LLC
|
Robert W. Baird & Co.
|
Security Benefit Life Insurance Company
|
Signator Investors, Inc.
|
State Farm VP Management Corp.
|
Stifel Nicolaus & Company Incorporated
|
Sun Life Financial
|
Sun Trust Investment Services, Inc.
|
The Guardian Insurance & Annuity Company, Inc.
|
Thrivent Investment Management
|
Transamerica Life Insurance Co.
|
UBS Financial Services, Inc.
|
Union Central Life Insurance Company
|
U.S. Bancorp Investments, Inc.
|
Voya Financial
|
Wells Fargo Clearing Services, LLC
|
For the year ended December 31,
2016, the following financial intermediaries and/or their affiliates (which in some cases are broker-dealers) received payments from the Transfer Agent or Sub-Transfer Agent (of at least $2,500) for operational and
recordkeeping, networking, sub-accounting or administrative services provided:
1st Global Capital Corp
|
ADP Broker-Dealer, Inc.
|
Alerus Retirement Solutions
|
Alliance Benefit Group
|
Allianz Life Insurance Company
|
Allstate Life Insurance Company
|
American General Annuity Insurance Company
|
American United Life Insurance Co.
|
Ameriprise Financial Services, Inc.
|
Ameritas Life Insurance Company
|
Annuity Investors Life Insurance Company
|
Ascensus, Inc.
|
AXA Equitable Life Insurance Company
|
Bank of America Merrill Lynch
|
Benefit Consultants Group
|
Benefit Plans Administrative Services, Inc.
|
Benefit Trust Company
|
Benetech, Inc.
|
BMO Harris Bank, N.A.
|
Charles Schwab & Co. Inc.
|
CUNA Mutual Group
|
Davenport & Co. LLC
|
David Lerner Associates, Inc.
|
Digital Retirement Solutions
|
Edward Jones and Company
|
Fidelity Brokerage Services LLC
|
Genworth Financial, Inc.
|
Great-West Life & Annuity Insurance Company
|
GWFS Equities, Inc.
|
H.D. Vest Investment Services, Inc.
|
Hartford Life Insurance Company
|
Hewitt Associates LLC
|
Jefferson National Life Insurance
|
John Hancock Life Insurance Company
|
J.P. Morgan Broker-Dealer Holdings, Inc.
|
J.P. Morgan Securities LLC
|
Kemper Investors Life Insurance Company
|
Lincoln Financial Advisors Corporation
|
Lincoln Investment Planning LLC
|
Lincoln National Life Insurance Company
|
LPL Financial Corporation
|
Massachusetts Mutual Life Insurance Company
|
Matrix Settlement & Clearance Services
|
Mercer HR Services
|
MetLife Investors Insurance Company
|
Mid Atlantic Capital Corporation
|
Midland National Life Insurance Company
|
Milliman, Inc.
|
Minnesota Life Insurance Company
|
Mony Life Insurance Company of America
|
Morgan Stanley Smith Barney, LLC
|
Nationwide Financial Services, Inc.
|
New York Life Insurance and Annuity Corporation
|
Newport Retirement Services
|
Northwest Plan Services Inc.
|
Oppenheimer & Co. Inc.
|
Pacific Life Insurance Company
|
PenServ Plan Services, Inc.
|
Pershing LLC
|
Phoenix Life Insurance Company
|
Plan Administrators Inc.
|
PlanMemeber Securities Corporation
|
PNC Bank N.A.
|
Principal Life Insurance Company
|
Protective Life and Annuity Insurance Company
|
Prudential Investment Management Services LLC
|
Raymond James Financial Services, Inc.
|
RBC Capital Markets, LLC
|
Reliance Trust Co.
|
Robert W. Baird & Co.
|
Sammons Financial Network, LLC
|
Security Benefit Life Insurance Company
|
Security Financial Resources, Inc.
|
SEI Private Trust Company
|
Standard Insurance Company
|
Stifel Nicolaus & Company Incorporated
|
Sun Life Financial
|
T. Rowe Price
|
TD Ameritrade Clearing, Inc.
|
The Guardian Insurance & Annuity Company, Inc.
|
Tiaa-Cref Individual & Institutional Services, LLC
|
Transamerica Life Insurance Co.
|
Transamerica Retirement Services
|
Trust Company of America
|
UBS Financial Services, Inc.
|
Ultimus Fund Solutions, LLC
|
Union Central Life Insurance Company
|
U.S. Bank N.A.
|
VALIC Financial Advisors, Inc.
|
Vanguard Group
|
Voya Financial
|
Wells Fargo Clearing Services, LLC
|
Wilmington Trust Company
|
About Your Account
The
Fund’s prospectus describes how to buy, sell and exchange shares of the Fund and certain other Oppenheimer funds. The information below provides further details about the Fund’s policies regarding those
share transactions. It should be read in conjunction with the information in the Prospectus. The appendix to the Fund’s prospectus titled “Special Sales Charge Arrangements and Waivers” provides more
information about the special sales charge arrangements offered by the Fund, and the circumstances in which sales charges may be reduced or waived for certain investors and certain types of purchases or
redemptions.
Determination of Net Asset Value
Per Share. The net asset value, or “NAV,” of the Fund is determined by subtracting the expenses and liabilities attributable to the Fund as a whole from the value of the Fund’s
assets. The net assets attributable to each class is determined by pro rating the net assets of the Fund according to the relative number of shares of each class. The net asset value per share for each class of shares
of the Fund is determined by subtracting from the value of the Fund’s net assets attributable to the class, those expenses and liabilities that are attributable to the class, and dividing the result by the
number of shares of that class that are outstanding.
The NAV is determined as of 4:00
p.m., Eastern time, on each day that the New York Stock Exchange (the “NYSE”) is open, except if there is an NYSE scheduled early closing the Fund will calculate the net asset value for each share class as
of the NYSE scheduled early closing time (the “Valuation Time”). The NYSE’s most recent annual announcement (which is subject to change) states that it will close on New Year’s Day, Martin
Luther King, Jr. Day, Washington’s Birthday (Presidents Day), Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.
Trading in certain securities
may occur when the NYSE is closed (including weekends and holidays) or after 4:00 p.m. on a regular business day. Because the Fund’s NAVs will not be calculated on those days, the value of the Fund’s
assets, and in turn, the Fund’s NAVs may be significantly affected when shareholders may not purchase or redeem shares.
Securities Valuation. The Fund’s Board has adopted valuation procedures for the valuation of the Fund’s assets and has delegated the day-to-day responsibility for valuation, including fair value
determinations, under those procedures to the Manager. The Manager has established a valuation committee which oversees those responsibilities. Fair value determinations are subject to review and approval or ratification by the Board at or prior to its next scheduled meeting after the fair valuations are determined.
Depending on the type of asset
held by the Fund, assets are generally valued as follows:
•
| Equity securities (both U.S. and foreign) traded on a securities exchange are valued based on the official closing price on the principal exchange on which the security is traded, prior to when the Fund’s
assets are valued. If the official closing price is unavailable, the security is valued at the last sale price on the principal exchange on which it is traded. If neither the official closing price nor the last sales
price is available, the security is valued based on prices derived from bid and/or asked quotes from the exchange or broker-dealers or at fair value.
|
•
| Fixed Income securities (both U.S. and foreign and including corporate, government and municipal or tax-exempt securities), event-linked bonds, loans, mortgage-backed securities,
collateralized mortgage obligations, and asset-backed securities are valued at the mean between the “bid” and “asked” prices as determined by a pricing service or by utilizing evaluated prices
provided by third party pricing services who may use matrix pricing methods to determine the evaluated prices. Standard inputs generally considered by third-party pricing vendors include, but are not limited to,
reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, the credit quality, yield, maturity, as well as other factors. Pricing services generally price fixed
income securities assuming orderly transactions of an institutional “round lot” size, but some Fund trades may occur in smaller, “odd lot” sizes, sometimes at lower prices than institutional
round lot trades. If a security cannot be valued in the manner stated above, the security is valued based on information derived from bid and/or asked prices for round lots from broker-dealers. If a fixed income
security with a remaining maturity of 60 days or less cannot be valued in the manner stated above, the security is valued at cost adjusted by the amortization of discount or premium to maturity.
|
•
| Exchange-traded derivatives (other than futures and futures options) are valued at the last sale price on their principal exchange. If the exchange-traded derivative cannot be valued at the last sale price, it is
valued at the mean between the closing bid and asked prices on the exchange. Futures and futures options traded on an exchange are generally valued at the official settlement price on their principal exchange.
Over-the-counter (OTC) derivatives (other than a forward currency exchange contract) are valued by a pricing service or if a value from the pricing service is not available, by one or more prices from dealers, which
may be or include the counterparty to the derivative transaction.
|
•
| Shares of an investment company or a fund’s wholly-owned subsidiary (if applicable) that are not traded on an exchange and shares of OFI Global China Fund LLC are valued at
their NAV per share.
|
Fair Value Pricing. Securities for which market quotations are not readily available or of an issuer or market to which a significant event has occurred that would materially affect the value of the security,
are 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 attempts to consider all relevant facts that are reasonably available, through either public
information or other reasonably available
information, when determining the fair value of a security. Those standardized fair valuation methodologies include, but are not limited to, valuing securities at the last sale price or initially at cost and
subsequently adjusting the value based on: changes in company specific fundamentals, changes in an appropriate securities index, or changes in the value of similar securities which may be further adjusted for any
discounts related to security-specific resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted quoted prices of similar securities, observable interest rates, currency
rates and yield curves. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that the Fund can obtain the
fair value assigned to a security if it were to sell the security.
Allocation of Expenses. The Fund pays expenses related to its daily operations, such as custodian fees, Board fees, transfer agency fees, legal fees and auditing costs. Those expenses are paid out of the
Fund’s assets, not directly by shareholders. However, those expenses reduce the net asset value of Fund shares, and therefore are borne indirectly by shareholders.
For calculating the Fund’s
net asset value, dividends and distributions, the Fund differentiates between two types of expenses. General expenses that do not pertain specifically to any one class are allocated pro rata to the shares of all
classes. Those expenses are first allocated based on the percentage of the Fund’s total assets that is represented by the assets of each share class. Such general expenses include management fees, legal,
bookkeeping and audit fees, Board compensation, custodian expenses, share issuance costs, interest, taxes, brokerage commissions, and non-recurring expenses, such as litigation costs. Then the expenses allocated to a
share class are allocated equally to each outstanding share within a given class.
Other expenses that are directly
attributable to a particular class are allocated equally to each outstanding share within that class. Examples of such expenses include distribution and service plan (12b-1) fees, transfer and shareholder servicing
agent fees and expenses, and shareholder meeting expenses to the extent that such expenses pertain only to a specific class.
How to Buy Shares
The Oppenheimer Funds. The “Oppenheimer funds” are those mutual funds for which the Distributor acts as distributor and currently include the following:
Oppenheimer Capital Appreciation Fund
|
Oppenheimer Capital Income Fund
|
Oppenheimer Corporate Bond Fund
|
Oppenheimer Developing Markets Fund
|
Oppenheimer Discovery Fund
|
Oppenheimer Discovery Mid Cap Growth Fund
|
Oppenheimer Dividend Opportunity Fund
|
Oppenheimer Emerging Markets Innovators Fund
|
Oppenheimer Emerging Markets Local Debt Fund
|
Oppenheimer Equity Income Fund
|
Oppenheimer Global Fund
|
Oppenheimer Global High Yield Fund
|
Oppenheimer Global Multi-Alternatives Fund
|
Oppenheimer Global Multi-Asset Growth Fund
|
Oppenheimer Global Multi-Asset Income Fund
|
Oppenheimer Global Multi Strategies Fund
|
Oppenheimer Global Opportunities Fund
|
Oppenheimer Global Real Estate Fund
|
Oppenheimer Global Strategic Income Fund
|
Oppenheimer Global Value Fund
|
Oppenheimer Gold & Special Minerals Fund
|
Oppenheimer Integrity Funds:
|
Oppenheimer Total Return Bond Fund
|
Oppenheimer International Bond Fund
|
Oppenheimer International Diversified Fund
|
Oppenheimer International Equity Fund
|
Oppenheimer International Growth and Income Fund
|
Oppenheimer International Growth Fund
|
Oppenheimer International Small-Mid Company Fund
|
Oppenheimer Limited-Term Bond Fund
|
Oppenheimer Limited-Term Government Fund
|
Oppenheimer Macquarie Global Infrastructure Fund
|
Oppenheimer Main Street Funds:
|
Oppenheimer Main Street Fund
|
Oppenheimer Main Street All Cap Fund
|
Oppenheimer Main Street Mid Cap Fund
|
Oppenheimer Main Street Small Cap Fund
|
Money Market Funds:
|
Oppenheimer Government Cash Reserves
|
Oppenheimer Government Money Market Fund
|
Oppenheimer Institutional Government Money Market Fund
|
Oppenheimer Multi-State Municipal Trust:
|
Oppenheimer Rochester High Yield Municipal Fund
|
Oppenheimer Rochester New Jersey Municipal Fund
|
Oppenheimer Rochester Pennsylvania Municipal Fund
|
Oppenheimer Municipal Fund:
|
Oppenheimer Rochester Short Duration High Yield Municipal Fund
|
Oppenheimer Portfolio Series Funds:
|
Active Allocation Fund
|
Conservative Investor Fund
|
Equity Investor Fund
|
Moderate Investor Fund
|
Oppenheimer Quest for Value Funds:
|
Oppenheimer Fundamental Alternatives Fund
|
Oppenheimer Global Allocation Fund
|
Oppenheimer Mid Cap Value Fund
|
Oppenheimer Real Estate Fund
|
Oppenheimer Rising Dividends Fund
|
Oppenheimer Rochester AMT-Free Municipal Fund
|
Oppenheimer Rochester AMT-Free New York Municipal Fund
|
Oppenheimer Rochester Arizona Municipal Fund
|
Oppenheimer Rochester California Municipal Fund
|
Oppenheimer Rochester Fund Municipals
|
Oppenheimer Rochester Intermediate Term Municipal Fund
|
Oppenheimer Rochester Limited Term California Municipal Fund
|
Oppenheimer Rochester Maryland Municipal Fund
|
Oppenheimer Rochester Massachusetts Municipal Fund
|
Oppenheimer Rochester Michigan Municipal Fund
|
Oppenheimer Rochester Minnesota Municipal Fund
|
Oppenheimer Rochester North Carolina Municipal Fund
|
Oppenheimer Rochester Ohio Municipal Fund
|
Oppenheimer Rochester Short Term Municipal Fund
|
Oppenheimer Rochester Virginia Municipal Fund
|
Oppenheimer Senior Floating Rate Fund
|
Oppenheimer Senior Floating Rate Plus Fund
|
Oppenheimer Series Fund:
|
Oppenheimer Value Fund
|
Oppenheimer Small Cap Value Fund
|
Oppenheimer SteelPath MLP Funds Trust:
|
Oppenheimer SteelPath MLP Alpha Fund
|
Oppenheimer SteelPath MLP Alpha Plus Fund
|
Oppenheimer SteelPath MLP Income Fund
|
Oppenheimer SteelPath MLP Select 40 Fund
|
Oppenheimer SteelPath Panoramic Fund
|
Oppenheimer Ultra-Short Duration Fund
|
Rochester Portfolio Series:
|
Oppenheimer Rochester Limited Term New York Municipal Fund
|
Classes of
Shares. Each class of shares of the Fund represents an interest in the same portfolio of investments of the Fund. However, each class has different shareholder privileges and features. The net
income attributable to each class of shares and the dividends payable on each class of shares will be reduced by incremental expenses borne solely by that class. Those expenses include the asset-based sales charges to
which some share classes are subject.
The availability of
different classes of shares permits an investor to choose the method of purchasing shares that is more appropriate for the investor. That may depend on the amount of the purchase, the length of time the investor
expects to hold shares, and other relevant circumstances. Class A shares of the Oppenheimer funds normally are sold subject to an initial sales charge (except Oppenheimer Government Cash Reserves, Oppenheimer
Institutional Government Money Market Fund, Oppenheimer Government Money Market Fund and Oppenheimer Ultra-Short Duration Fund). The purpose of the deferred sales charge and asset-based sales charge that are
applicable to some other share classes is the same as that of the initial sales charge on Class A shares of many of the Oppenheimer funds—to compensate the Distributor and brokers, dealers and financial
institutions that sell shares of those funds. A salesperson who is entitled to receive compensation from his or her firm for selling shares of the Oppenheimer funds may receive different levels of compensation for
selling one class of shares rather than another.
Class B shares are no
longer offered for new purchases. See the Prospectus section “More About Your Account” for details.
Class
A Sales Charges Reductions and Waivers. There is an initial sales charge on the purchase of Class A shares of each of the Oppenheimer funds except for the money market funds (under certain circumstances described in this SAI,
redemption proceeds of certain money market fund shares may be subject to a CDSC). As discussed in the Prospectus, a reduced initial sales charge rate may be obtained for certain share purchases because of the reduced
sales efforts and reduction in expenses realized by the Distributor, dealers or brokers in making such sales. Sales charge waivers may apply in certain other circumstances because the Distributor or dealer or broker
incurs little or no selling expenses, or when a financial intermediary has entered into an agreement with the Distributor and has been approved by the Distributor to offer shares to self-directed brokerage accounts
that may or may not charge transaction fees to customers. The appendix to the prospectus titled “Special Sales Charge Arrangements and Waivers” includes additional information regarding certain of these sales charge reductions and
waivers.
A reduced sales
charge rate may be obtained for Class A shares under a Right of Accumulation or Letter of Intent because of the reduction in sales effort and expenses to the Distributor, dealers or brokers for those sales.
Letter of Intent. Under a Letter of Intent (a “Letter”), you may be able to reduce the initial sales charge rate that applies to your Class A share purchases of the Fund if you purchase Class A,
Class B or Class C shares of most Oppenheimer funds (including the Fund) or Class A, Class B, Class C, Class G and Class H units of advisor sold college savings programs, for which an affiliate of the Manager or the
Distributor serves as the Program Manager or Program Distributor.
A Letter is an
investor’s statement in writing to the Distributor of his or her intention to purchase a specified value of those shares or units during a 13 month period (the “Letter period”), which begins on the
date of the investor’s first share purchase following the establishment of the Letter. The sales charge on each purchase of Class A shares during the Letter period will be at the rate that would apply to a
single lump-sum purchase of shares in the amount intended to be purchased. In submitting a Letter, the investor makes no commitment to purchase shares. However, if the investor does not fulfill the terms of the Letter
within the Letter period, he or she agrees to pay the additional sales charges that would have been applicable to any purchases that are made. The investor agrees that shares equal in value to 2% of the intended
purchase amount will be held in escrow by the Transfer Agent for that purpose, as described in “Terms of
Escrow That Apply to Letters of Intent”
below. It is the responsibility of the dealer of record and/or the investor to advise the Distributor about the Letter when placing purchase orders during the Letter period. The investor must also notify the
Distributor or his or her financial intermediary of any qualifying college savings program holdings.
To determine whether an investor
has fulfilled the terms of a Letter, the Transfer Agent will count purchases of “qualified” Class A, Class B and Class C shares and Class A, Class B, Class C, Class G and Class H units during the Letter
period. Purchases of Class R, Class Y or Class I shares, purchases made by reinvestment of dividends or capital gains distributions from the Fund or other Oppenheimer funds, purchases of Class A shares with redemption
proceeds under the Reinvestment Privilege, and purchases of Class A shares of Oppenheimer Government Money Market Fund or Oppenheimer Government Cash Reserves on which a sales charge has not been paid do not count as
“qualified” shares for satisfying the terms of a Letter. An investor will also be considered to have fulfilled the Letter if the value of the investor’s total holdings of qualified shares on the last
day of the Letter period equals or exceeds the intended purchase amount.
If the terms of the Letter are
not fulfilled within the Letter period, the concessions previously paid to the dealer of record for the account and the amount of sales charge retained by the Distributor will be adjusted on the first business day
following the expiration of the Letter period to reflect the sales charge rates that are applicable to the actual total purchases.
If subsequent eligible purchases
during the Letter period cause the amount of total eligible purchases to exceed the intended purchase amount and also exceed the amount needed to qualify for the next sales charge rate reduction (stated in the
Prospectus), the sales charges paid on those subsequent purchases will be charged at the lower rate as permitted under the Fund’s Right of Accumulation policy.
By establishing a Letter, the
investor agrees to be bound by the terms of the Prospectus, this SAI and the application used for a Letter, and if those terms are amended to be bound by the amended terms and that any amendments by the Fund will
apply automatically to existing Letters. Group retirement plans qualified under section 401(a) of the Internal Revenue Code may not establish a Letter, however defined benefit plans and Single K sole proprietor plans
may do so.
Terms of Escrow That Apply to
Letters of Intent.
1. Out of the
initial purchase, or out of subsequent purchases if necessary, the Transfer Agent will hold in escrow Fund shares equal to 2% of the intended purchase amount specified in the Letter. For example, if the intended
purchase amount is $50,000, the escrow amount would be shares valued at $1,000 (computed at the offering price for a $50,000 share purchase). Any dividends and capital gains distributions on the escrowed shares will
be credited to the investor’s account.
2. If the
Letter applies to more than one fund account, the investor can designate the fund from which shares will be escrowed. If no fund is selected, the Transfer Agent will escrow shares in the fund account that has the
highest dollar balance on the date of the first purchase under the Letter. If there are not sufficient shares to cover the escrow amount, the Transfer Agent will escrow shares in the fund account(s) with the next
highest balance(s). If there are not sufficient shares in the accounts to which the Letter applies, the Transfer Agent may escrow shares in other accounts that are linked for Right of Accumulation purposes.
Additionally, if there are not sufficient shares available for escrow at the time of the first purchase under the Letter, the Transfer Agent will escrow future purchases until the escrow amount is met.
3. If, during
the Letter period, an investor exchanges shares of the Fund for shares of another fund (as described in the Prospectus section titled “The Oppenheimer Exchange Privilege”), the Fund shares held in escrow
will automatically be exchanged for shares of the other fund and the escrow obligations will also be transferred to that fund.
4. If the
total purchases under the Letter are less than the intended purchases specified, on the first business day after the end of the Letter period, the Distributor will redeem escrowed shares equal in value to the
difference between the dollar amount of the sales charges actually paid and the amount of the sales charges that would have been paid if the total purchases had been made at a single time. Any shares remaining after
such redemption will be released from escrow.
5. If the
terms of the Letter are fulfilled, the escrowed shares will be promptly released to the investor at the end of the Letter period.
6. By signing
the Letter, the investor irrevocably constitutes and appoints the Transfer Agent as attorney-in-fact to surrender for redemption any or all escrowed shares.
Class B Conversion. Under current interpretations of applicable federal income tax law by the Internal Revenue Service (the “IRS”), the conversion of Class B shares to Class A shares is not
treated as a taxable event for the shareholder. If those laws or the IRS’ interpretation of those laws should change, the automatic conversion feature may be suspended. In that event, no further conversions of
Class B shares would occur while that suspension remained in effect. Although Class B shares could then be exchanged for Class A shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable event for the shareholder, and absent such exchange, Class B shares might continue to be subject to the asset-based sales charge for longer
than six years.
Share Certificates. When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a book entry on the records of the Fund. The Fund will not issue or re-register
physical share certificates.
Cancellation of Purchase
Orders. Cancellation of purchase orders for the Fund’s shares (for example, when a purchase check is returned to the Fund unpaid) causes a loss to be incurred when the net asset values of
the Fund’s shares on the cancellation date is less than on the purchase date. That loss is equal to the amount of the decline in the net asset value per share multiplied by the number of shares in the purchase
order. The investor is responsible for that loss. If the investor fails to compensate the Fund for the loss, the Distributor will do so. The Fund may reimburse the Distributor for that amount by redeeming shares from
any account registered in that investor’s name, or the Fund or the Distributor may seek other redress.
AccountLink. Shares purchased through AccountLink will be purchased at the net asset value calculated on the same regular business day if the Distributor is instructed to initiate the Automated
Clearing House (“ACH”) transfer to buy the shares before the Valuation Time. If the Distributor is instructed to initiate the ACH transfer after the Valuation Time, the shares will be purchased on the next
regular business day.
Dividends will begin to accrue
on the shares purchased through the ACH system on the next regular business day after the purchase date. If the proceeds of an ACH transfer are not received on a timely basis, the Distributor reserves the right to
cancel the purchase order. The Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays in ACH transmissions.
Asset Builder Plans. As indicated in the Prospectus, you normally must establish your Fund account with $1,000 or more. However, you can open a Fund account for as little as $500 if you establish an Asset
Builder Plan at the time of your initial share purchase to automatically purchase additional shares directly from a bank account.
An Asset Builder Plan is
available only if your bank is an ACH member and you establish AccountLink. Under an Asset Builder Plan, payments to purchase shares of the Fund will be debited from your bank account automatically. Normally the debit
will be made two business days prior to the investment dates you select on your application. Neither the Distributor, the Transfer Agent nor the Fund will be responsible for any delays in purchasing shares that result
from delays in ACH transmissions.
To establish an Asset Builder
Plan at the time you initially purchase Fund shares, complete the “Asset Builder Plan” information on the Account Application. To establish an Asset Builder Plan for an existing account, use the Asset
Builder Enrollment Form. The Account Application and the Asset Builder Enrollment Form are available by contacting the Distributor or may be downloaded from our website at www.oppenheimerfunds.com. Before you
establish a new Fund account under the Asset Builder Plan, you should obtain a prospectus of the selected Fund and read it carefully.
You may change the amount of
your Asset Builder payment or you can terminate your automatic investments at any time by writing to the Transfer Agent. The Transfer Agent requires a reasonable period (approximately 10 days) after receipt of your
instructions to implement them. An Asset Builder Plan may not be used to buy shares for OppenheimerFunds employer-sponsored qualified retirement accounts. The Fund reserves the right to amend, suspend or discontinue
offering Asset Builder Plans at any time without prior notice.
Retirement
Plans. Certain types of retirement plans are entitled to purchase shares of the Fund without sales charges or at reduced sales charge rates, as described in the appendix to the Prospectus titled “Special Sales Charge Arrangements and Waivers.”
Certain special sales charge
arrangements described in the appendix to the Prospectus titled “Special Sales Charge Arrangements and Waivers” apply to retirement plans whose records are maintained on a daily valuation basis by Bank of
America Merrill Lynch (“Merrill Lynch”) or an independent record keeper that has a contract or special arrangement with Merrill Lynch. The amount of assets the plan had in applicable investments on the
date the plan sponsor signed the Merrill Lynch record keeping service agreement determines which share classes are available for purchase. If the plan had less than $1 million in such assets, then it may purchase only
Class C shares.If the plan had $1 million or more but less than $5 million in such assets it may purchase only Class R shares. If the plan had $5 million or more in such assets it may purchase only Class A shares.
The Transfer Agent or
Sub-Transfer Agent has entered into agreements with certain financial intermediaries whereby such intermediaries receive compensation for operational, record keeping, networking and sub-accounting services performed
on behalf of the participant accounts in a retirement plan. While such compensation may act to reduce the record keeping fees charged by the retirement plan’s record keeper, that compensation arrangement may be
terminated at any time, potentially affecting the record keeping fees charged by the retirement plan’s record keeper.
Financial
intermediaries will not receive any operational and recordkeeping, networking, sub-accounting, administrative or similar types of fees, 12b-1 fees, commission payments, or so called “finder’s fees”
for Class I shares.
Electronic Document
Delivery. To access your account documents electronically via eDocs Direct, please register for online access to your account(s) through the website at www.oppenheimerfunds.com, or call
1.888.470.0862 for information and instructions. Once registered, you can select your preferences for electronic document delivery of account documents.
How to Sell Shares
Receiving Redemption Proceeds by
Federal Funds Wire. The Fund would normally authorize a Federal Funds wire of redemption proceeds to be made on its next regular business day following the redemption. A Federal Funds wire may be delayed if
the Fund’s custodian bank is not open for business on that day. In that case, the wire will not be transmitted until the next business day on which the bank and the Fund are both open for business. No dividends
will be paid on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.
Redeeming Shares Through Brokers
or Dealers. The Distributor is the Fund’s agent to repurchase its shares from authorized brokers or dealers on behalf of their customers. Shareholders should contact their broker or dealer to
arrange this type of redemption. The repurchase price per share will be the next net asset value computed after the Distributor or the broker or dealer receives the order. A repurchase will be processed at that
day’s net asset value if the order was received by the broker or dealer from its customer prior to the Valuation Time.
For accounts
redeemed through a broker-dealer, payment will ordinarily be made within two business days after the shares are redeemed. However, the Distributor must receive the required redemption documents in proper form, with
the signature(s) of the registered shareholder(s) guaranteed as described in the Prospectus.
Payments “In
Kind.” As stated in the Prospectus, payment for redeemed shares is ordinarily made in cash. Under certain circumstances, however, the Board may determine that it would be detrimental to the best
interests of the remaining shareholders for the Fund to pay for the redeemed shares in cash. In that case, the Fund may pay the redemption proceeds, in whole or in part, by a distribution “in kind” of
liquid securities from the Fund’s portfolio. The Fund will value securities used to pay a redemption in kind using the same method described above under “Determination of Net Asset Value Per Share.”
That valuation will be made as of the time the redemption price is determined. If shares are redeemed in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities for cash. A
redemption in kind may result in a taxable gain or loss to a shareholder, based on the difference between the value of the securities received and the shareholder’s tax basis in its Fund shares, to the same
extent as a redemption for cash. Additional taxable gain or loss may be realized upon a later sale or disposition of such securities.
The Fund has elected to be
governed by Rule 18f-1 under the Investment Company Act. Under that rule, redemptions by a shareholder, of up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period, must be redeemed
solely in cash.
Distributions From Retirement
Plans. Participants in OppenheimerFunds-sponsored pension or profit-sharing plans (other than self-employed plan sponsors), whose shares of the Fund are held in the name of the plan or its
fiduciary, may not request redemption of their accounts directly. The plan administrator or fiduciary must submit the request.
Requests for distributions from
OppenheimerFunds-sponsored IRA’s, SEP-IRA’s, SIMPLE IRA’s, 403(b)(7) custodial plans, 401(k) plans or pension or profit-sharing plans should be addressed to “Trustee, OppenheimerFunds
Retirement Plans,” c/o the Transfer Agent at its address listed on the back cover of this SAI. The request must:
1.
| state the reason for the distribution;
|
2.
| if the distribution is premature, state the owner’s awareness of tax penalties; and
|
3.
| conform to the requirements of the plan and the Fund’s other redemption requirements.
|
Distributions from pension and
profit sharing plans are subject to special requirements under the Internal Revenue Code and certain documents (available from the Transfer Agent) must be completed and submitted to the Transfer Agent before the
distribution may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code, and IRS Form W-4P (available from the Transfer Agent) must be submitted to the
Transfer Agent with the distribution request, or the distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification number, the Internal Revenue Code requires
that tax be withheld from any distribution even if the shareholder elects not to have tax withheld. The Fund, the Manager, the Distributor, and the Transfer Agent assume no responsibility for determining whether a
distribution satisfies the conditions of applicable tax laws and they will not be responsible for any tax penalties assessed in connection with a distribution.
Automatic Withdrawal Plans. Under an Automatic Withdrawal Plan, investors who own Fund shares can authorize the Transfer Agent to redeem shares automatically on a monthly, quarterly, semi-annual or annual basis. The
minimum periodic redemption amount under an Automatic Withdrawal Plan is $50. Shareholders having AccountLink privileges may have Automatic Withdrawal Plan payments deposited to their designated bank account. Payments
may also be made by check, payable to all shareholders of record and sent to the address of record for the account. Automatic withdrawals may be requested by telephone for amounts up to $1,500 per month if the
payments are to be made by checks sent to the address of record for the account. Telephone requests are not available if the address on the account has been changed within the prior 15 days.
Fund shares will be redeemed as
necessary to meet the requested withdrawal payments. Shares will be redeemed at the net asset value per share determined on the redemption date, which is normally three business days prior to the payment receipt date
requested by the shareholder. The Fund cannot guarantee receipt of a payment on the date requested, however. Shares acquired without a sales charge will be redeemed first. Shares acquired with reinvested dividends
and
capital gains distributions will be redeemed
next, followed by shares acquired with a sales charge, to the extent necessary to make withdrawal payments. Depending on the amount withdrawn, the investor’s principal may be depleted. Payments made under these
plans should not be considered as a yield or income on your investment. The redemption of shares necessary to make a requested withdrawal payment may result in a taxable gain or loss.
Because of the sales charge
assessed on Class A share purchases, shareholders should usually not make additional Class A share purchases while participating in an Automatic Withdrawal Plan. A shareholder whose account is subject to a CDSC should
usually not establish an automatic withdrawal plan because of the imposition of the CDSC on the withdrawals. If a CDSC does apply to a redemption, the amount of the check or payment will be reduced accordingly.
Distributions of capital gains from accounts subject to an Automatic Withdrawal Plan must be reinvested in Fund shares. Dividends on shares held in the account may be paid in cash or reinvested. Required minimum
distributions from OppenheimerFunds-sponsored retirement plans may not be arranged on this basis.
The shareholder may change the
amount, the payment interval, the address to which checks are to be mailed, the designated bank account for AccountLink payments or may terminate a plan at any time by writing to the Transfer Agent. A signature
guarantee may be required for certain changes. The requested change will usually be put into effect approximately two weeks after such notification is received. The shareholder may redeem all or any part of the shares
in the account by written notice to the Transfer Agent. That notice must be in proper form in accordance with the requirements in the then-current Fund Prospectus.
The Transfer Agent will
administer the Automatic Withdrawal Plan as agent for the shareholder(s) who executed the plan authorization and application submitted to the Transfer Agent. Neither the Fund nor the Transfer Agent shall incur any
liability for any action taken or not taken by the Transfer Agent in good faith to administer the plan. Any share certificates must be surrendered unendorsed to the Transfer Agent with the plan application to be
eligible for automatic withdrawal payments. If the Transfer Agent ceases to act as transfer agent for the Fund, the shareholder will be deemed to have appointed any successor transfer agent to act as agent in
administering the plan.
The Transfer Agent will
terminate a plan upon its receipt of evidence, satisfactory to it, that the shareholder has died or is legally incapacitated. The Fund may also give directions to the Transfer Agent to terminate a plan. Shares that
have not been redeemed at the time a plan is terminated will be held in an account in the name of the shareholder. Share certificates will not be issued for any such shares and all dividends will be reinvested in the
account unless and until different instructions are received, in proper form, from the shareholder, his or her executor or guardian, or another authorized person.
The Fund reserves the right to
amend, suspend or discontinue offering these plans at any time without prior notice. By requesting an Automatic Withdrawal Plan, the shareholder agrees to the terms and conditions that apply to such plans. These
provisions may be amended from time to time by the Fund and/or the Distributor. When adopted, any amendments will automatically apply to existing Plans.
Transfers of Shares. A shareholder will not be required to pay a CDSC when Fund shares are transferred to registration in the name of another person or entity. The transfer may occur by absolute assignment,
gift or bequest, as long as it does not involve, directly or indirectly, a public sale of the shares. When shares subject to a CDSC are transferred, the CDSC will continue to apply to the transferred shares and will
be calculated as if the transferee had acquired the shares in the same manner and at the same time as the transferring shareholder.
If less than all of the shares
held in an account are transferred, and some but not all shares in the account would be subject to a CDSC if redeemed at that time, the priorities for the imposition of the CDSC described in the Prospectus will be
followed in determining the order in which the shares are transferred.
Minimum Account Balance. Except for Class I shares, the minimum account balance is $500. The minimum account balance for Class I shares is $250,000, excluding accounts for which the minimum initial investment was
waived.
Involuntary Redemptions. The Fund has the right to redeem shares held in any account, except for Class I share accounts, with a value of less than $500. If the Fund exercises this right, a minimum of 30 days
notice will be provided. Alternatively, the Transfer Agent may set requirements for shareholders so that the shares would not be involuntarily redeemed.
If a Class I account falls below
the $250,000 minimum balance, the account may be redeemed or converted into a Class Y share account. This policy does not apply to Class I share accounts for which the minimum initial investment is waived.
Unclaimed accounts may be
subject to state escheatment laws, and the Fund and the Transfer Agent will not be liable to shareholders or their representatives for good faith compliance with those laws.
The Fund reserves the authority to
modify the minimum balance policies in its discretion.
Reinvestment Privilege. Within three months after redeeming Class A or Class B shares, a shareholder may reinvest all or part of the redemption proceeds in Class A shares without a sales charge if:
•
| An initial sales charge was paid on the redeemed Class A shares or a Class A CDSC was paid when the shares were redeemed; or
|
•
| The Class B CDSC was paid on the redeemed Class B shares.
|
The reinvestment may only be
made in Class A shares of the Fund or other Oppenheimer funds into which shares of the Fund are exchangeable, as described in “How to Exchange Shares” below. This privilege does not apply to any other
share class or to purchases made through automatic investment options. The Fund may amend, suspend or cease offering this reinvestment privilege at any time for shares redeemed after the date of the amendment,
suspension or cessation. The shareholder must request the reinvestment privilege from the Transfer Agent or his or her financial intermediary at the time of purchase.
Reinvestment
will be at the next net asset value computed after the Transfer Agent receives the reinvestment order. Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not alter any
capital gains tax payable on that gain. If there was a capital loss on the redemption, some or all of the loss may not be tax deductible, depending on the timing and amount of the reinvestment. Under the Internal
Revenue Code, if shares on which a sales charge was paid are redeemed before the 91st day after such shares were acquired and if the redemption proceeds are reinvested in shares of the Fund or another of the
Oppenheimer funds on or before January 31 of the calendar year following the calendar year in which the shares were redeemed, the shareholder’s basis in the shares of the Fund that were redeemed may not include
the amount of the sales charge paid for the purposes of determining the amount of gain or loss on the redemption. That would reduce the loss or increase the gain recognized from the redemption, however, the sales
charge would be added to the basis of the shares acquired with the redemption proceeds.
How to Exchange Shares
Shares of the Fund (including
shares acquired by reinvestment of dividends or distributions from other Oppenheimer funds) may be exchanged for shares of certain other Oppenheimer funds at net asset value without the imposition of a sales charge,
however a CDSC may apply to the acquired shares as described below. Shares of certain money market funds purchased without a sales charge may be exchanged for shares of other Oppenheimer funds offered with a sales
charge upon payment of the sales charge. Exchanges into another Oppenheimer fund must meet any applicable minimum investment requirements of that fund.
As stated in the Prospectus,
shares of a particular class of Oppenheimer funds having more than one class of shares may be exchanged only for shares of the same class of other Oppenheimer funds. The prospectus of each of the Oppenheimer funds
indicates which share class or classes that fund offers and provides information about limitations on the purchase of particular share classes, as applicable for the particular fund. Shareholders that own more than one class of shares of the Fund must specify which class of shares they wish to exchange.
You can obtain a current list of
the share classes offered by the funds by calling the toll-free phone number on the first page of this SAI.
The different Oppenheimer funds
that are available for exchange have different investment objectives, policies and risks. A shareholder should determine whether the fund selected is appropriate for his or her investment goals and should be aware of
the tax consequences of an exchange. For federal income tax purposes, an exchange transaction is treated as a redemption of shares of one fund and a purchase of shares of another. Some of the tax consequences of
reinvesting redemption proceeds are discussed in “Reinvestment Privilege,” above. The Fund, the Distributor, and the Transfer Agent are unable to provide investment, tax or legal advice to a shareholder in
connection with an exchange request or any other investment transaction.
The Fund may amend, suspend or
terminate the exchange privilege at any time. Although the Fund may impose these changes at any time, it will provide notice of those changes whenever it is required to do so by applicable law. It may be required to
provide 60 days’ notice prior to materially amending or terminating the exchange privilege, however that notice is not required in extraordinary circumstances.
How Exchanges Affect Contingent
Deferred Sales Charges. If shares acquired by exchange are later redeemed within the CDSC holding period applicable to those acquired shares, the CDSC applicable to the share class of the Oppenheimer fund you are
exchanging into will apply to the acquired shares. This includes the redemption of shares of Oppenheimer Government Cash Reserves and Oppenheimer Government Money Market Fund that were acquired by exchange.
When shares that are subject to
a CDSC are exchanged, the priorities for the imposition of the CDSC described in “About Your Account” in the Prospectus will be followed in determining the order in which the shares are exchanged. Before
exchanging shares, shareholders should consider how the exchange may affect any CDSC that might be imposed on the subsequent redemption of any remaining shares.
For
circumstances in which a CDSC on shares acquired by exchange may be waived, see the appendix to the prospectus titled “Special Sales Charge Arrangements and Waivers.”
Telephone Exchange Requests. When exchanging shares by telephone, a shareholder must have an existing account in the fund to which the exchange is to be made. Otherwise, the investors must obtain a prospectus of that
fund before the exchange request may be submitted. If all telephone lines are busy (which might occur, for example, during periods of substantial market fluctuations), shareholders might not be able to request
exchanges by telephone and would have to submit written exchange requests.
Automatic Exchange Plans. Under an Automatic Exchange Plan, shareholders can authorize the Transfer Agent to exchange shares of the Fund for shares of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis. The minimum amount that may be exchanged to each other fund account is $50. Instructions regarding the exchange amount, the selected fund(s) and the exchange interval should be provided on
the OppenheimerFunds account application or by signature-guaranteed instructions. Any requested changes will usually be put into effect approximately two weeks after notification of a change is received. Exchanges
made under these plans are subject to the restrictions that apply to exchanges as set forth in this SAI and in “The Oppenheimer Exchange Privilege” section in the Prospectus.
The Transfer Agent will
administer the Automatic Exchange Plan as agent for the shareholder(s). Neither the Fund nor the Transfer Agent shall incur any liability for any action taken or not taken by the Transfer Agent in good faith to
administer the plan. Any share certificates must be surrendered unendorsed to the Transfer Agent with the plan application to be eligible for automatic exchanges. If the Transfer Agent ceases to act as transfer agent
for the Fund, the shareholder will be deemed to have appointed any successor transfer agent to act as agent in administering the plan.
The Fund reserves the right to
amend, suspend or discontinue offering automatic exchanges at any time without prior notice. By requesting an Automatic Exchange Plan, the shareholder agrees to the terms and conditions that apply to such plans. These
provisions may be amended from time to time and any amendments will automatically apply to existing Plans.
Processing Exchange
Requests. Shares to be exchanged are redeemed at the net asset value calculated on the regular business day the Transfer Agent receives an exchange request in proper form before the Valuation Time
(the “Redemption Date”). Normally, shares of the fund to be acquired are purchased on the Redemption Date, but such purchases may be delayed by up to five business days if it is determined that either fund
would be disadvantaged by an immediate transfer of the redemption proceeds. The Fund reserves the right, in its discretion, to refuse any exchange request that may disadvantage it. For example, if the receipt of
multiple exchange requests from a dealer might require the disposition of portfolio securities at a time or at a price that might be disadvantageous to the Fund, the Fund may refuse the request.
When you exchange some or all of
your shares, any special features of your account that are available in the new fund (such as an Asset Builder Plan or Automatic Withdrawal Plan) will be applied to the new fund account unless you tell the Transfer
Agent not to do so.
Shares that are subject to a
restriction cited in the Prospectus or this SAI and shares covered by a share certificate that is not tendered will not be exchanged. If an exchange request includes such shares, only the shares available without
restrictions will be exchanged.
Distributions and Taxes
Dividends and Other
Distributions. The Fund does not have a fixed rate for dividends or other distributions (“distributions”) and cannot assure the payment of any distributions. The distributions made by the
Fund will vary depending on market conditions, the composition of the Fund’s portfolio and Fund expenses. The Fund intends to distribute substantially all of its net investment income and net realized capital
gains at least annually, and may sometimes pay a special distribution near the end of the calendar year in order to comply with federal tax requirements.
Distributions are calculated in
the same manner, at the same time, and on the same day for each class of shares but will normally differ in amount. Distributions on Class B, Class C and Class R shares shares are expected to be lower than
distributions on Class A, Class Y and Class I shares shares because of the effect of the asset-based sales charge on Class B, Class C and Class R shares shares. Distributions are taxable to shareholders, as discussed
below, regardless of whether the distributions are paid in cash or reinvested in additional shares of the Fund (or of another Oppenheimer fund). Shareholders receiving a distribution in the form of additional shares
will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date.
Returned checks for the proceeds
of redemptions are invested in shares of Oppenheimer Government Money Market Fund. If a dividend check or a check representing an automatic withdrawal payment is returned to the Transfer Agent by the Postal Service as
undeliverable, it will be reinvested in shares of the Fund. Reinvestments will be made as promptly as
possible after the return of such checks to the
Transfer Agent. Unclaimed accounts may be subject to state escheatment laws, and the Fund and the Transfer Agent will not be liable to shareholders or their representatives for compliance with those laws in good
faith.
Taxes. The federal tax treatment of the Fund and distributions to shareholders is briefly highlighted in the Prospectus. The following is only a summary of certain additional tax considerations
generally affecting the Fund and its shareholders. The tax discussion in the Prospectus and this SAI is based on tax laws in effect on the date of the Prospectus and SAI. Those laws and regulations may be changed by
legislative, judicial, or administrative action, sometimes with retroactive effect. State, local and non-U.S. tax treatment may differ from the treatment under the Internal Revenue Code as described below.
Before purchasing Fund shares,
investors are urged to consult their tax advisers with reference to their own particular tax circumstances as well as the consequences of federal, state, local and any other jurisdiction’s tax rules affecting an
investment in the Fund.
Qualification and Taxation as a
Regulated Investment Company. The Fund intends to qualify each year to be taxed as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code. As long as the Fund qualifies as a
RIC, the Fund may deduct the amount of investment company taxable income and net capital gains that it distributes to its shareholders, thereby eliminating Fund-level corporate income tax that would otherwise be
imposed on such income. Qualification as a RIC also allows the Fund, under certain conditions, to characterize the distributions made to its shareholders as composed of specific types of tax-favored income such as
corporate dividends and capital gains.
Even though the Fund expects to
qualify as a RIC, to the extent that it distributes less than all of its income, the Fund may still be subject to a corporate income tax and an excise tax. In addition, any investment income or proceeds received from
a foreign source may be subject to foreign withholding or other taxes, although the rate of any such withholding or other tax may be reduced under an income tax treaty if the Fund qualifies for the benefits of the
treaty. If possible, the Fund will operate so as to qualify for such reduced rates. Any foreign withholding or other taxes will reduce the Fund’s income and capital gain. The Fund may also be subject to
corporate income tax and interest charges on distributions or gains if the Fund invests in “passive foreign investment companies” (described below) even if those amounts are distributed to the Fund’s
shareholders.
Qualifying as a RIC. To qualify as a RIC, the Fund must be a domestic corporation that is either registered under the Investment Company Act as a management company or unit investment trust
or is otherwise described in the Internal Revenue Code as having a specific status under the Investment Company Act. The Fund must also satisfy certain tests with respect to (i) the composition of its gross income,
(ii) the composition of its assets and (iii) the amount of its dividend distributions.
Gross Income
Test. To qualify as a RIC, the Fund must derive at least 90% of its gross income from dividends, interest, certain payments with respect to loans of securities, gains from the sale or other
disposition of securities or foreign currencies, and certain other income derived with respect to its business of investing in such securities or currencies (including, but not limited to, gains from options, futures
or forward contracts), and net income derived from interests in “qualified publicly traded partnerships.”
Asset
Test. In addition, at the close of each quarter of its taxable year, the Fund must satisfy two asset tests. First, at least 50% of the value of the Fund’s assets must consist of U.S.
government securities, securities of other RICs, securities of other issuers (“Other Issuers”) and cash or cash items (including receivables). The securities of an Other Issuer are not counted towards
satisfying the 50% test if the Fund either invests more than 5% of the value of the Fund’s assets in the securities of that Other Issuer or holds more than 10% of the outstanding voting securities of that Other
Issuer. Second, no more than 25% of the value of the Fund’s total assets may be invested, including through corporations in which the Fund owns a 20% or greater voting stock interest, in (1) the securities of
any one issuer (other than U.S. government securities and the securities of other RICs), (2) the securities of two or more issuers (other than the securities of other RICs) that the Fund controls and that are engaged
in the same or similar trades or businesses, or (3) the securities of one or more qualified publicly traded partnerships. For purposes of these tests, obligations issued or guaranteed by certain agencies or
instrumentalities of the U.S. government are treated as U.S. government securities.
Dividend
Distributions Test. During the taxable year or, under specified circumstances, within 12 months after the close of the taxable year, the Fund must distribute at least the sum of 90% of its investment company
taxable income for the taxable year, which is generally its net investment income and the excess of its net short-term capital gain over its net long-term capital loss, and 90% of its net tax-exempt income for the
taxable year.
Failure to Qualify. If the Fund failed to qualify as a RIC, it would (unless certain cure provisions apply) then be unable to deduct from its taxable income the dividend distributions made
to its shareholders and therefore those amounts would be subject to a Fund-level corporate income tax. In addition, the Fund would not be able to characterize the distributions made to its shareholders as anything
other than ordinary corporate distributions. To the extent the Fund had “earnings and profits” (as determined for tax purposes), distributions to its shareholders would be taxable as ordinary dividend
income. In the case of individuals, those distributions might qualify for the maximum 15% or 20% tax rate on qualified dividend income and, in the case of corporations, they might qualify for the dividends-received
deduction.
As discussed
above, the Fund needs to satisfy certain requirements relating to the source of its income, diversification of assets, and distribution of income, in order to qualify for favorable U.S. federal tax treatment as a RIC.
If the Fund enters into derivative financial instruments or similar transactions, it will consider the requirements for qualification as a RIC, the expected tax treatment of such transactions, as well as the
applicable regulatory rules and authorities. However, there may be no direct authority specifically addressing the application of the rules applicable to RICs to certain potential derivative financial instrument
activities, including for instance securities lending activities, that may be entered into by the Fund. As a result, in certain cases, the tax treatment of a transaction entered into by the Fund may be uncertain and
there can be no assurance that the tax authorities in question or a court of law, will agree with the Fund’s characterization of a transaction in applying the qualification requirements for tax treatment as a
RIC, or with respect to the recognition of income, deductions, gain, or loss, or any liability for taxes arising from such transaction.
Portfolio Investments Subject to
Special Tax Rules. The Fund may engage in transactions and investments that are subject to special tax rules under the Internal Revenue Code. These special tax rules may, among other things, affect the
Fund’s holding period in its investments, change the character of, or accelerate, the Fund’s income, defer or disallow the Fund’s deductions and losses, and compel the Fund to include in taxable
income otherwise unrealized appreciation in its assets. For example, the Fund may invest in foreign currencies or securities denominated in foreign currencies. Under certain circumstances losses from foreign
securities could be capital losses but gains from foreign currencies are ordinary income. Because capital losses cannot be deducted against ordinary income, this mismatch in character may negatively affect the
character and amount of the Fund’s distributions. In addition, part of an “interest” payment from a high yield debt obligation may be characterized for tax purposes as a dividend and, therefore,
eligible for the dividends-received deduction available to corporations.
Certain positions in the
Fund’s portfolio may have to be marked to market (that is, treated as if they were sold and repurchased on the last day of the Fund’s taxable year). Such “deemed sales” under the mark-to-market
rules may alter the character, amount and timing of distributions to shareholders by requiring the Fund to make distributions in order to satisfy the RIC dividend distributions test even though the deemed sales
generate no cash. The Fund will monitor its transactions, and seek to make appropriate tax elections and appropriate entries in its books and records in order to reduce the effect of the mark-to-market rules. In
addition, the Fund’s investments in zero coupon securities, deferred interest securities, capital appreciation bonds or other securities bearing original issue discount or, if the Fund elects to include market
discount in income currently, market discount, will generally cause it to realize income or gain prior to the receipt of cash payments with respect to these securities. In order to obtain cash to enable it to
distribute this income or gain, maintain its qualification as a RIC and avoid federal income or excise taxes, the Fund may be required to liquidate portfolio securities earlier than it might otherwise have done.
Passive Foreign Investment
Companies. If the Fund invests in a “passive foreign investment company” (“PFIC”), then the Fund may be subject to special rules meant to discourage U.S. taxpayers from
investing in foreign companies as a way of deferring taxable income. Under those rules, any income from certain PFIC distributions or the sale of PFIC shares is allocated ratably to the current taxable year and to
prior taxable years. Income allocated to the current year is treated as part of the year’s ordinary income. Income allocated to a prior taxable year is taxed at the highest corporate rate for that year
(regardless of the Fund’s actual income or tax rate for that prior year). For each prior taxable year, the Fund must pay both the amount of tax so computed and interest that is calculated as if the amount of tax
was due but unpaid for the prior taxable year. Liability for such taxes and interest would reduce the investment return of the Fund.
If a PFIC is willing to provide
the Fund with certain necessary reporting information annually (which PFICs frequently do not provide), the Fund may elect to treat a PFIC as a “qualified electing fund” (“QEF”) and, in lieu of
the tax consequences described above, the Fund would be required to include in each year’s income its share of the ordinary earnings and net capital gains of the PFIC, even if they are not distributed to the
Fund.
Alternatively, if the Fund
invests in marketable stock of a PFIC, it may make a mark-to-market election that will result in the Fund being treated as if it had sold and repurchased such PFIC stock at the end of each year. In that case, the Fund
would report any gains as ordinary income and would deduct any losses as ordinary losses to the extent of previously recognized gains. The election must be made separately for each PFIC owned by the Fund and, once
made, would be effective for all subsequent taxable years, unless revoked with the consent of the U.S. Internal Revenue Service (the “IRS”). By making either election, the Fund might be able to mitigate
the adverse tax consequences with respect to its ownership of shares in a PFIC, but in any particular year it could be required to recognize income in excess of the distributions it received from the PFIC and the
proceeds from dispositions of the PFIC’s stock. The amounts so included would be treated as taxable income for purposes of the 90% dividends distributions test (discussed above) and for excise tax purposes.
Excise Tax on Regulated Investment
Companies. Under the Internal Revenue Code, the Fund must pay an annual, non-deductible excise tax unless, by December 31st each year, it distributes (1) 98% of its taxable investment income earned
from January 1 through December 31, (2) 98.2% of its capital gain net income realized in the period from November 1 of the prior year through October 31 of the current year and (3) undistributed amounts from prior
years. It is presently anticipated that the Fund will meet these distribution requirements, although to do so the Fund might be required to liquidate portfolio investments in certain circumstances. In some years, the
Board and the Manager and/or
OFI may determine that it would be in the
shareholders’ best interests for the Fund to pay the excise tax on undistributed amounts rather than making the required level of distributions. In that event, the tax may reduce shareholder total returns from
the Fund.
Taxation of Fund
Distributions. The Fund anticipates distributing substantially all of its investment company taxable income and net capital gain for each taxable year. The Fund’s distributions will be treated as
dividends to the extent paid from the Fund’s earnings and profits (as determined under the Internal Revenue Code). Distributions in excess of the Fund’s earnings and profits will be treated as a return of
capital to the extent of each shareholder’s basis in his or her shares, and any remaining amount in excess of such basis will be treated as gain from the sale of those shares, as discussed below. Shareholders
will be notified if at the end of the fiscal year, any part of an earlier distribution is re-characterized as a non-taxable return of capital. A reduction in the basis of shares could result in a higher taxable
capital gain (or lower capital loss) on a subsequent sale or exchange of the shares.
Special Characteristics of Certain
Distributions. Different types of Fund earnings may have different federal income tax characteristics, including different types of capital gains and different types of ordinary income. For example, if
the Fund invests in stock, a portion of the Fund’s ordinary income may be composed of dividends eligible for the dividends-received deduction or that qualify for the special maximum tax rate on “qualified
dividend income” as described below. The Fund may also generate foreign tax credits. The Fund will allocate the tax characteristics of its earnings among its distributions as prescribed by the IRS. The
percentage of each distribution that corresponds to a particular type of income will generally be based on how much of that income the Fund earns for the taxable year in accordance with the IRS rules, rather than how
much of that income the Fund has earned at time of the distribution. Those percentages normally will be determined after the close of the Fund’s taxable year. The Fund will provide a statement to shareholders
shortly after the end of each year indicating the amount and character of distributions made during the preceding calendar year.
Distributions
Derived from Dividends. If the Fund earns dividend income from U.S. corporations, for the Fund’s corporate shareholders to claim the dividends-received deduction against the Fund’s distributions, both
the Fund and its corporate shareholders must satisfy special provisions of the Internal Revenue Code. If a dividend the Fund receives on a stock held in its portfolio otherwise qualifies for the dividends-received
deduction, the Fund still (1) must hold the stock for a minimum number of days during a specified period that includes the stock’s ex-dividend date, (2) cannot enter into certain positions that reduce the risk
of holding the stock and (3) cannot debt-finance the stock. Similarly, distributions of otherwise qualifying dividends will not be eligible for the dividends-received deduction in the hands of a corporate shareholder
of the Fund unless the corporate shareholder (1) holds the Fund’s shares for at least 46 days during a specified period that includes the portfolio stock’s ex-dividend date and (2) does not debt-finance
its investment in the Fund’s shares. To the extent the Fund’s distributions are derived from items such as option premiums, interest income, gains from the sale of securities, or dividends from foreign
corporations, those distributions will not qualify for the dividends-received deduction.
If the Fund earns qualified
dividend income, as discussed below, special rules may also apply to regular dividends paid to a non-corporate shareholder of the Fund. Provided that the shareholder receiving the dividend satisfies certain holding
period and other requirements, those dividends may be subject to tax at the reduced rates generally applicable to long-term capital gains for individuals. Dividends subject to these special rules are not actually
treated as capital gains, however. They are not included in the computation of the shareholder’s net capital gain and generally cannot be offset by capital losses. For a taxable year of the Fund, (i) if 95% or
more of the Fund’s gross income is attributable to qualified dividend income (defined below), then the special maximum rate will apply to 100% of the regular dividends paid to the shareholder during such year
and (ii) if less than 95% of the Fund’s gross income is attributable to qualified dividend income, then the special maximum rate will only apply to the portion of the regular dividends reported by the Fund as
qualified dividend income, which generally cannot exceed the ratio that the Fund’s qualified dividend income bears to its gross income. Gross income, for these purposes, does not include gains attributable to
the sale or other disposition of stocks and securities, except to the extent the net short-term capital gain from such sales and dispositions exceeds the net long-term capital loss from such sales and dispositions.
“Qualified dividend
income” generally means dividends received by the Fund with respect to the stock of a U.S. corporation or qualified foreign corporation. In each case, however, the Fund must hold the stock for a minimum number
of days during a specified period that includes the stock’s ex-dividend date and cannot enter into certain positions that reduce the risk of holding the stock. Qualified dividend income does not include
“payments in lieu of dividends” received in securities lending transactions or dividends received from a real estate investment trust (“REIT”) or another RIC, except to the extent such
dividends were paid from qualified dividend income received and reported by such REIT or RIC. Dividends received from a foreign corporation that, for the taxable year of the corporation in which the dividend was paid,
or the preceding taxable year, is a PFIC will not be qualified dividends. If a shareholder elects to treat Fund dividends as investment income for purposes of the limitation on the deductibility of investment
interest, such dividends will not be treated as qualified dividend income.
Ordinary
Income Dividends. Distributions from income earned by the Fund from one or more of the following sources generally will be treated as ordinary income to the shareholder:
•
| income from certain taxable investments (such as certificates of deposit, repurchase agreements, commercial paper and obligations of the U.S. government, or its agencies and instrumentalities) or from bonds or other
debt obligations;
|
•
| income from loans of portfolio securities;
|
•
| income or gains from certain options or futures;
|
•
| any net short-term capital gain;
|
•
| any market discount accrual on tax-exempt bonds; and
|
•
| certain foreign currency gains.
|
Capital Gain
Distributions. The Fund may either retain or distribute to shareholders its net capital gain (the excess of net long-term capital gain over net short-term capital loss). Currently, the Fund intends to
distribute these gains. Distributed net capital gain that is properly reported will be taxable to the Fund’s shareholders as long-term capital gain. The amount of distributions reported as net capital gain will
be reported to shareholders shortly after the end of each year. Such treatment will apply no matter how long the shareholder has held Fund shares and even if the gain was recognized by the Fund before the shareholder
acquired Fund shares.
If the Fund elects to retain all
or a portion of its net capital gain for a taxable year, the Fund will be subject to tax on such gain at the highest corporate tax rate. If the Fund so elects, each shareholder of record on the last day of such
taxable year will be informed of his or her portion of both the gain and the tax paid, will be required to report that portion of the gain as long-term capital gain, will be able to claim that portion of the tax paid
as a refundable credit, and will increase the basis of his or her shares by the amount of the capital gain reported minus the tax credit.
3.8% Medicare
Tax. An additional 3.8% tax applies to certain net investment income (including ordinary dividends and capital gain distributions received from the Fund and net gains from redemptions or other
taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross
income” (in the case of an estate or trust) exceeds a threshold amount.
Foreign Source
Income. Investment income and proceeds that the Fund may receive from sources within foreign countries may be subject to foreign taxes withheld at the source or other foreign taxes. If more than
50% of the value of the Fund’s total assets at the close of any taxable year consists of securities of foreign corporations, the Fund may elect to treat any foreign income and withholding taxes it pays as having
been paid by its shareholders for U.S. federal income tax purposes, as long as the Fund continues to qualify as a RIC. If the Fund makes that election, the amount of foreign income taxes paid by the Fund will be
included in the income of its shareholders and each shareholder will be entitled (subject to certain limitations) to either credit the amount against the shareholder’s U.S. federal income tax due, or deduct the
amount from his or her U.S. taxable income. If the Fund has investments in foreign securities, the Fund may qualify for and make this election in some, but not necessarily all, of its taxable years.
Shortly after
the end of any year for which it makes such an election, the Fund will report to its shareholders the amount of such foreign tax that must be included in each shareholder’s gross income and the amount that will
be available for deduction or credit. In general, a shareholder may elect each year whether to claim deductions or credits for foreign taxes. However, no deductions for foreign taxes may be claimed by a non-corporate
shareholder who does not itemize deductions. If a shareholder elects to credit foreign taxes, the amount of credit that may be claimed in any year cannot exceed the same proportion of the U.S. tax against which such
credit is taken as the shareholder’s taxable income from foreign sources bears to his or her entire taxable income, unless the shareholder is an individual all of whose gross income from non-U.S. sources is
qualified passive income and whose creditable foreign taxes for the taxable year do not exceed $300 ($600 for a joint return).
As a general rule, if the Fund
has made the appropriate election, a shareholder may treat as foreign source income the portion of any dividend paid by the Fund which represents income derived from sources within foreign countries, as well as the
shareholder’s proportionate share of the taxes paid to those countries. Capital gains realized by the Fund on the sale of foreign securities and other foreign currency gains of the Fund are considered to be
U.S.-source income and, therefore, any portion of the tax credit passed through to shareholders that is attributable to such gains or distributions might not be usable by a shareholder who does not have other foreign
source income.
Tax Consequences of Share
Redemptions. If all or a portion of a shareholder’s investment in the Fund is redeemed, the shareholder will generally recognize a gain or loss on the redeemed shares equal to the difference
between the proceeds of the redeemed shares and the shareholder’s adjusted tax basis in the shares. In general, any gain or loss from the redemption of shares of the Fund will be considered capital gain or loss
if the shares were held as a capital asset and will be long-term capital gain or loss if the shares were held for more than one year. Any capital loss arising from the redemption of shares held for six months or less,
however, will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on those shares. Special holding period rules under the Internal Revenue Code apply in this case to
determine the holding period of shares. There are limits on the deductibility of capital losses in any year.
All or a portion of any loss on redeemed shares
may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the redemption (including purchases through the reinvestment of dividends). In that case, the basis of the
acquired shares will be adjusted to reflect the disallowed loss. If a shareholder exercises the exchange or reinvestment privilege within 90 days after acquiring Fund shares, and no later than January 31 of the
following calendar year, in certain circumstances, any loss that the shareholder recognizes on the redemption or exchange will be reduced, or any gain will be increased, to the extent that any sales charge paid on the
redeemed or exchanged shares reduces any charges the shareholder would have incurred on the purchase of the new shares in the absence of the exchange or reinvestment privilege. Such sales charge will be treated as an
amount paid for the new shares.
Backup Withholding. The Fund will be required in certain cases to withhold 28% of ordinary income dividends, capital gain distributions and the proceeds of the redemption of shares, paid to any shareholder
(1) who has failed to provide a correct taxpayer identification number or to properly certify that number when required, (2) who is subject to backup withholding for failure to report properly the receipt of interest
or dividend income, or (3) who has failed to certify to the Fund that the shareholder is not subject to backup withholding or is an “exempt recipient” (such as a corporation). Any tax withheld by the Fund
is remitted by the Fund to the U.S. Treasury and is identified in reports mailed to shareholders after the end of each calendar year with a copy sent to the IRS. Backup withholding is not an additional tax. Any amount
withheld generally may be allowed as a refund or a credit against a shareholder’s federal income tax liability, provided the required information is timely provided to the IRS.
Taxation of U.S. Tax-Exempt
Shareholders. A tax-exempt shareholder could recognize unrelated business taxable income (“UBTI”) by virtue of its investment in the Fund if shares in the Fund constitute debt-financed
property in the hands of the tax-exempt shareholder or if the Fund recognizes “excess inclusion income” and the amount of such income exceeds the Fund’s investment company taxable income (after
taking into account deductions for dividends paid by the Fund). The Fund could recognize excess inclusion income with respect to its indirect investments in REITs that hold residual interests in real estate mortgage
conduits or which are, or have certain wholly-owned subsidiaries that are, taxable mortgage pools. Tax-exempt shareholders, including in particular charitable remainder trusts, are urged to consult their tax advisers
with respect to the particular consequences of an investment in the Fund.
Taxation of Foreign
Shareholders. Under the Internal Revenue Code, taxation of a foreign shareholder depends primarily on whether the foreign shareholder’s income from the Fund is effectively connected with the
conduct of a U.S. trade or business. A “foreign shareholder” includes, but is not limited to, a nonresident alien individual, a foreign trust, a foreign estate, a foreign corporation, or a foreign
partnership.
If a foreign shareholder fails
to provide a properly completed and signed Certificate of Foreign Status (using the applicable IRS Form W-8), the Fund will be required to withhold U.S. tax on ordinary income dividends, capital gains distributions
and the proceeds of the redemption of shares. Provided the Fund obtains a proper certification of foreign status, ordinary income dividends that are paid by the Fund to foreign shareholders and that are not
“effectively connected income,” will be subject to a U.S. withholding tax. The tax rate may be reduced if the foreign shareholder’s country of residence has an income tax treaty with the United
States allowing for a reduced tax rate on ordinary income dividends paid by the Fund. If the ordinary income dividends from the Fund are effectively connected with the conduct of a U.S. trade or business, then the
foreign shareholder may claim an exemption from the U.S. withholding tax described above provided the Fund obtains a properly completed and signed Certificate of Foreign Status. Any tax withheld by the Fund is
remitted to the U.S. Treasury and all income and any tax withheld is identified in reports mailed to shareholders in the early part of each year with a copy sent to the IRS. Capital gain dividends are not subject to
U.S. withholding tax unless the recipient is a nonresident alien who is present in the United States for 183 days or more during the taxable year in which the dividends are received. A foreign individual who is
present in the United States for 183 days or more generally loses his or her status as a nonresident alien.
Properly reported dividends will
generally be exempt from U.S. federal withholding tax on foreign persons provided such dividends (i) are derived from the Fund’s “qualified net interest income” (generally, the Fund’s U.S.
source interest income, other than certain contingent interest and interest from obligations of a corporation or partnership in which the Fund is a 10% or greater shareholder, reduced by expenses that are allocable to
such income) or (ii) are derived from the Fund’s “qualified short-term capital gains” (generally, the excess of the Fund’s net short-term capital gain over the Fund’s net long-term
capital loss for such taxable year). In order to qualify for this exemption from withholding, a shareholder that is a foreign person must comply with applicable certification requirements relating to its non-U.S.
status. However, depending on its circumstances, the Fund may report some, all, or none of its potentially eligible dividends as interest-related dividends or as short-term capital gain dividends, and/or treat such
dividends, in whole or in part, as ineligible for this exemption from withholding on foreign persons. In the case of shares held through a financial intermediary, the intermediary may withhold even if the Fund reports
the payment as qualified net interest income or qualified short-term capital gain. Shareholders that are foreign persons should contact their intermediaries with respect to the application of these rules to their
accounts.
The tax consequences to foreign
persons entitled to claim the benefits of an applicable income tax treaty may be different from those described in this SAI. Foreign shareholders are urged to consult their tax advisers with respect to the particular
tax consequences of an investment in the Fund, including the applicability of the U.S. withholding taxes described above and the possible applicability of U.S. estate tax.
Under legislation known as
“FATCA” (the Foreign Account Tax Compliance Act), ordinary dividends the Fund pays and, after December 31, 2018, the gross proceeds of share redemptions and certain capital gains dividends it pays to
“foreign financial institutions” and certain other foreign entities will be subject to U.S. withholding tax at a rate of 30% unless various certification, information reporting, due diligence and other
applicable requirements (different from, and in addition to, those described above) are satisfied. In general, no such withholding will occur with respect to a U.S. person or non-U.S. individual that timely provides
the Fund with a valid IRS Form W-9 or IRS Form W-8BEN, respectively. No such withholding will occur with respect to a non-U.S. entity that timely provides the Fund with a valid IRS Form W-8BEN-E (or other applicable
Form W-8) indicating the entity’s compliance with, or exemption from, FATCA. Payments that are taken into account as effectively connected income are not subject to these withholding rules. Foreign shareholders
should consult their own tax advisors as to the applicability and consequences of this legislation to them.
Tax Shelter and Other Reporting
Requirements. If a shareholder realizes a loss on the disposition of Fund shares of at least $2 million in any single taxable year or $4 million in any combination of taxable years (for an individual
shareholder); or at least $10 million in any single taxable year or $20 million in any combination of taxable years (for a corporate shareholder), the shareholder must file with the IRS a disclosure statement on Form
8886. Shareholders should consult their tax advisers to determine the applicability of this requirement in light of their individual circumstances. Some states may similarly require such transactions to be reported
separately with the appropriate state taxing authorities.
Additional Information About the
Fund
The Distributor. The Fund’s shares are sold through dealers, brokers and other financial institutions that have a sales agreement with OppenheimerFunds Distributor, Inc., a subsidiary of the
Sub-Adviser that acts as the Fund’s Distributor. The Distributor also distributes shares of the other Oppenheimer funds.
The Transfer Agent. OFI Global Asset Management, Inc. is the Fund’s Transfer Agent. It serves as the Transfer Agent for a fee based on annual net assets. Shareholder Services, Inc., an affiliate of the
Transfer Agent, doing business as OppenheimerFunds Services, is the Fund’s Sub-Transfer Agent. OppenheimerFunds Services is responsible for maintaining the Fund’s shareholder registry and shareholder
accounting records, and for paying dividends and distributions to shareholders. It also handles shareholder servicing and administrative functions. It also acts as shareholder servicing agent for the other Oppenheimer
funds. Shareholders should direct inquiries about their accounts to OppenheimerFunds Services at the address and toll-free numbers shown on the back cover.
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.
The
Custodian. JPMorgan Chase Bank is the custodian of the Fund’s cash balances and portfolio securities, except affiliated mutual fund shares. The custodian’s responsibilities include
safeguarding and controlling the Fund’s portfolio securities and handling the delivery of such securities to and from the Fund. It is the practice of the Fund to deal with the custodian in a manner uninfluenced
by any banking relationship the custodian may have with the Manager and its affiliates. The Fund’s cash balances with the custodian in excess of $250,000 are not protected by the Federal Deposit Insurance
Corporation (“FDIC”). Those uninsured balances may at times be substantial. The Sub-Transfer Agent records the Fund’s positions in affiliated mutual fund shares that may be held by the
Fund.
Independent Registered Public
Accounting Firm. KPMG LLP serves as the independent registered public accounting firm for the Fund. KPMG LLP audits the Fund’s financial statements and performs other related audit and tax services.
KPMG LLP also acts as the independent registered public accounting firm for the Manager, the Sub-Adviser and certain other funds advised by the Manager and its affiliates. Audit and non-audit services provided by KPMG
LLP to the Fund must be pre-approved by the Audit Committee.
Appendix: Ratings
Definitions
Ratings Definitions
Below are summaries of the
rating definitions used by the nationally recognized statistical rating organizations (“NRSROs”) listed below. Those ratings represent the opinion of the NRSRO as to the credit quality of issues that they
rate. The summaries below are based upon publicly available information provided by the NRSROs.
Moody’s Investors Service,
Inc. (“Moody’s”)
GLOBAL RATING SCALES
Ratings assigned on
Moody’s global long-term and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial institutions, structured
finance vehicles, project finance vehicles, and public sector entities. Long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a
default on contractually promised payments and the expected financial loss suffered in the event of default.1 Short-term ratings are assigned to obligations with an original maturity of thirteen months or less and reflect both on the
likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.2
Global Long-Term Rating Scale
Aaa: Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A: Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa: Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba: Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B: Obligations rated B are considered speculative and are subject to high credit risk.
Caa: Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C: Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Note: Moody’s appends
numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by
banks, insurers, finance companies, and securities firms.*
* By their terms, hybrid
securities allow for the omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may also be subject to contractually
allowable write-downs of principal that could result in impairment. Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk
associated with that security.
Global Short-Term Rating Scale
Short-term ratings are assigned
to obligations with an original maturity of thirteen months or less and reflect the likelihood of a default on contractually promised payments.
P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.
P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.
NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
U.S. MUNICIPAL SHORT-TERM DEBT AND
DEMAND OBLIGATION RATINGS
Short-Term Obligation Ratings
While the global short-term
‘prime’ rating scale is applied to US municipal tax-exempt commercial paper, these programs are typically backed by external letters of credit or liquidity facilities and their short-term prime ratings
usually map to the long-term rating of the enhancing bank or financial institution and not to the municipality’s rating. Other short-term
municipal obligations, which generally have
different funding sources for repayment, are rated using two additional short-term rating scales (i.e., the MIG and VMIG scales discussed below). The Municipal Investment Grade (MIG) scale is used to rate US municipal
bond anticipation notes of up to three years maturity. Municipal notes rated on the MIG scale may be secured by either pledged revenues or proceeds of a take-out financing received prior to note maturity. MIG ratings
expire at the maturity of the obligation, and the issuer’s long-term rating is only one consideration in assigning the MIG rating. MIG ratings are divided into three levels—MIG 1 through MIG 3—while
speculative grade short-term obligations are designated SG.
MIG 1: This designation denotes superior credit quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access to the
market for refinancing.
MIG 2: This designation denotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.
MIG 3: This designation denotes acceptable credit quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.
SG: This designation denotes speculative-grade credit quality. Debt instruments in this category may lack sufficient margins of protection.
Demand Obligation Ratings
In the case of variable rate
demand obligations (VRDOs), a two-component rating is assigned: a long or short-term debt rating and a demand obligation rating. The first element represents Moody’s evaluation of risk associated with scheduled
principal and interest payments. The second element represents Moody’s evaluation of risk associated with the ability to receive purchase price upon demand (“demand feature”). The second element uses
a rating from a variation of the MIG scale called the Variable Municipal Investment Grade (VMIG) scale.
VMIG 1: This designation denotes superior credit quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal protections
that ensure the timely payment of purchase price upon demand.
VMIG 2: This designation denotes strong credit quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections that
ensure the timely payment of purchase price upon demand.
VMIG 3: This designation denotes acceptable credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural and legal
protections that ensure the timely payment of purchase price upon demand.
SG: This designation denotes speculative-grade credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have an investment grade short-term
rating or may lack the structural and/or legal protections necessary to ensure the timely payment of purchase price upon demand.
S&P Global Ratings
(“S&P”), a part of McGraw-Hill Financial
ISSUE CREDIT RATINGS
A S&P issue credit rating is
a forward-looking opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on
medium-term note programs and commercial paper programs). It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the
currency in which the obligation is denominated. The opinion reflects S&P view of the obligor’s capacity and willingness to meet its financial commitments as they come due, and may assess terms, such as
collateral security and subordination, which could affect ultimate payment in the event of default.
Issue credit ratings can be
either long-term or short-term. Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity
of no more than 365 days—including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. Medium-term notes are
assigned long-term ratings.
Issue credit ratings are based,
in varying degrees, on S&P analysis of the following considerations:
•
| Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation;
|
•
| Nature of and provisions of the obligation and the promise we impute;
|
•
| Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting
creditors’ rights.
|
Issue ratings are an assessment of default
risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)
LONG-TERM ISSUE CREDIT RATINGS
AAA: An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely
strong.
AA: An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is
very strong.
A: An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories.
However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.
BBB: An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity
of the obligor to meet its financial commitment on the obligation.
BB; B; CCC; CC; and C: Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative characteristics.
‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.
BB: An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.
B: An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.
CCC: An obligation rated ‘CCC’ is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its
financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is used when a default has not yet occurred, but S&P expects default to
be a virtual certainty, regardless of the anticipated time to default.
C: An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared to
obligations that are rated higher.
D: An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments on an
obligation are not made on the date due, unless S&P believes that such payments will be made within five business days in the absence of a stated grace period or within the earlier of the stated grace period or 30
calendar days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to
automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer.
NR: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of
policy.
Note: The ratings from
‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
SHORT-TERM ISSUE CREDIT RATINGS
A-1: A short-term obligation rated ‘A-1’ is rated in the highest category by S&P. The obligor’s capacity to meet its financial commitment on the obligation is strong.
Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the obligation.
B: A short-term obligation rated ‘B’ is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial
commitments; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitments.
C: A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its
financial commitment on the obligation.
D: A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when
payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be
treated as five business days. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for
example due to automatic stay provisions. An obligation’s rating is lowered to ‘D’ if it is subject to a distressed exchange offer.
MUNICIPAL SHORT-TERM NOTE
RATINGS
An S&P U.S. municipal note
rating reflects S&P opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive a note rating. Notes with an original maturity of more than
three years will most likely receive a long-term debt rating. In determining which type of rating, if any, to assign, S&P analysis will review the following considerations:
•
| Amortization schedule-the larger the final maturity relative to other maturities, the more likely it will be treated as a note; and
|
•
| Source of payment-the more dependent the issue is on the market for its refinancing, the more likely it will be treated as a note.
|
SP-1: Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.
SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.
SP-3: Speculative capacity to pay principal and interest.
ISSUER CREDIT RATINGS
An S&P issuer credit rating
is a forward-looking opinion about an obligor’s overall creditworthiness. This opinion focuses on the obligor’s capacity and willingness to meet its financial commitments as they come due. It does not
apply to any specific financial obligation, as it does not take into account the nature of and provisions of the obligation, its standing in bankruptcy or liquidation, statutory preferences, or the legality and
enforceability of the obligation. Counterparty credit ratings, corporate credit ratings and sovereign credit ratings are all forms of issuer credit ratings. Issuer credit ratings can be either long-term or
short-term.
LONG-TERM ISSUER CREDIT RATINGS
AAA: An obligor rated ‘AAA’ has extremely strong capacity to meet its financial commitments. ‘AAA’ is the highest issuer credit rating assigned by S&P.
AA: An obligor rated ‘AA’ has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.
A: An obligor rated ‘A’ has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligors in higher-rated categories.
BBB: An obligor rated ‘BBB’ has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitments.
BB; B; CCC; and CC: Obligors rated ‘BB’, ‘B’, ‘CCC’, and ‘CC’ are regarded as having significant speculative characteristics. ‘BB’ indicates the
least degree of speculation and ‘CC’ the highest. While such obligors will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to
adverse conditions.
BB: An obligor rated ‘BB’ is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties and exposure to adverse business,
financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitments.
B: An obligor rated ‘B’ is more vulnerable than the obligors rated ‘BB’, but the obligor currently has the capacity to meet its financial commitments. Adverse
business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitments.
CCC: An obligor rated ‘CCC’ is currently vulnerable, and is dependent upon favorable business, financial, and economic conditions to meet its financial commitments.
CC: An obligor rated ‘CC’ is currently highly vulnerable. The ‘CC’ rating is used when a default has not yet occurred, but S&P expects default to be a virtual
certainty, regardless of the anticipated time to default.
R: An obligor rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision the regulators may have the power to
favor one class of obligations over others or pay some obligations and not others.
SD and D: An obligor rated ‘SD’ (selective default) or ‘D’ is in default on one or more of its financial obligations including rated and unrated financial obligations but
excluding hybrid instruments classified as regulatory capital or in non-payment according to terms. An obligor is considered in default unless S&P believes that such payments will be made within five business days
of the due date in the absence of a stated grace period, or within the earlier of the stated grace period or 30 calendar days. A ‘D’ rating is assigned when S&P believes that the default will be a
general default and that the obligor will fail to pay all or substantially all of its obligations as they come due. An ‘SD’ rating is assigned when S&P believes that the obligor has selectively
defaulted on a specific issue or class of obligations but it will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. An obligor’s rating is lowered to
‘D’ or ‘SD’ if it is conducting a distressed exchange offer.
NR: An issuer designated ‘NR’ is not rated.
Note: The ratings from ‘AA’ to ‘CCC’ may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating
categories.
SHORT-TERM ISSUER CREDIT
RATINGS
A-1: An obligor rated ‘A-1’ has strong capacity to meet its financial commitments. It is rated in the highest category by S&P. Within this category, certain obligors are
designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitments is extremely strong.
A-2: An obligor rated ‘A-2’ has satisfactory capacity to meet its financial commitments. However, it is somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than obligors in the highest rating category.
A-3: An obligor rated ‘A-3’ has adequate capacity to meet its financial obligations. However, adverse economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitments.
B: An obligor rated ‘B’ is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments;
however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitments.
C: An obligor rated ‘C’ is currently vulnerable to nonpayment that would result in a ‘SD’ or ‘D’ issuer rating, and is dependent upon favorable business,
financial, and economic conditions for it to meet its financial commitments.
R: An obligor rated ‘R’ is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision the regulators may have the power to
favor one class of obligations over others or pay some obligations and not others. Please see S&P issue credit ratings for a more detailed description of the effects of regulatory supervision on specific issues or
classes of obligations.
SD and D: An obligor rated ‘SD’ (selective default) or ‘D’ has failed to pay one or more of its financial obligations (rated or unrated), excluding hybrid instruments
classified as regulatory capital or in nonpayment according to terms, when it came due. An obligor is considered in default unless S&P believes that such payments will be made within any stated grace period.
However, any stated grace period longer than five business days will be treated as five business days. A ‘D’ rating is assigned when S&P believes that the default will be a general default and that the
obligor will fail to pay all or substantially all of its obligations as they come due. An ‘SD’ rating is assigned when S&P believes that the obligor has selectively defaulted on a specific issue or
class of obligations, excluding hybrid instruments classified as regulatory capital, but it will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. An
obligor’s rating is lowered to ‘D’ or ‘SD’ if it is conducting a distressed exchange offer.
NR: An issuer designated ‘NR’ is not rated.
Fitch Ratings, Inc.
Fitch Ratings’ credit
ratings provide an opinion on the relative ability of an entity to meet financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims or counterparty obligations. Credit
ratings are used by investors as indications of the likelihood of receiving the money owed to them in accordance with the terms on which they invested. The agency’s credit ratings cover the global spectrum of
corporate, sovereign (including
supranational and sub-national), financial,
bank, insurance, municipal and other public finance entities and the securities or other obligations they issue, as well as structured finance securities backed by receivables or other financial assets.
The terms “investment
grade” and “speculative grade” have established themselves over time as shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to
‘D’ (speculative grade). The terms “investment grade” and “speculative grade” are market conventions, and do not imply any recommendation or endorsement of a specific security for
investment purposes. “Investment grade” categories indicate relatively low to moderate credit risk, while ratings in the “speculative” categories either signal a higher level of credit risk or
that a default has already occurred.
A designation of “Not
Rated” or “NR” is used to denote securities not rated by Fitch where Fitch has rated some, but not all, securities comprising an issuance capital structure.
Credit ratings express risk in
relative rank order, which is to say they are ordinal measures of credit risk and are not predictive of a specific frequency of default or loss. For information about the historical performance of ratings please refer
to Fitch’s Ratings Transition and Default studies which detail the historical default rates and their meaning. The European Securities and Markets Authority also maintains a central repository of rating default
rates.
Fitch Ratings’ credit
ratings do not directly address any risk other than credit risk. In particular, ratings do not deal with the risk of a market value loss on a rated security due to changes in interest rates, liquidity and other market
considerations. However, in terms of payment obligation on the rated liability, market risk may be considered to the extent that it influences the ability of an issuer to pay upon a commitment. Ratings nonetheless do
not reflect market risk to the extent that they influence the size or other conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked bonds).
In the default components of
ratings assigned to individual obligations or instruments, the agency typically rates to the likelihood of non-payment or default in accordance with the terms of that instrument’s documentation. In limited
cases, Fitch Ratings may include additional considerations (i.e. rate to a higher or lower standard than that implied in the obligation’s documentation). In such cases, the agency will make clear the assumptions
underlying the agency’s opinion in the accompanying rating commentary.
INTERNATIONAL ISSUER AND CREDIT
RATING SCALES
International credit ratings
relate to either foreign currency or local currency commitments and, in both cases, assess the capacity to meet these commitments using a globally applicable scale. As such, both foreign currency and local currency
international ratings are internationally comparable assessments.
The local currency international
rating measures the likelihood of repayment in the currency of the jurisdiction in which the issuer is domiciled and hence does not take account of the possibility that it will not be possible to convert local
currency into foreign currency, or make transfers between sovereign jurisdictions (transfer and convertibility (T&C) risk).
Foreign currency ratings
additionally consider the profile of the issuer or note after taking into account transfer and convertibility risk. This risk is usually communicated for different countries by the Country Ceiling, which
“caps” the foreign currency ratings of most, though not all, issuers within a given country.
Where the rating is not
explicitly described in the relevant rating action commentary as local or foreign currency, the reader should assume that the rating is a “foreign currency” rating (i.e. the rating is applicable for all
convertible currencies of obligation).
INTERNATIONAL LONG-TERM ISSUER
RATINGS
Rated entities in a number of
sectors, including financial and non-financial corporations, sovereigns and insurance companies, are generally assigned Issuer Default Ratings (IDRs). IDRs opine on an entity’s relative vulnerability to default
on financial obligations. The “threshold” default risk addressed by the IDR is generally that of the financial obligations whose non-payment would best reflect the uncured failure of that entity. As such,
IDRs also address relative vulnerability to bankruptcy, administrative receivership or similar concepts, although the agency recognizes that issuers may also make pre-emptive and therefore voluntary use of such
mechanisms.
In aggregate, IDRs provide an
ordinal ranking of issuers based on the agency’s view of their relative vulnerability to default, rather than a prediction of a specific percentage likelihood of default.
AAA: Highest credit quality. ‘AAA’ ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial
commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA: Very high credit quality. ‘AA’ ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is
not significantly vulnerable to foreseeable events.
A: High credit quality. ‘A’ ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may,
nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
BBB: Good credit quality. ‘BBB’ ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but
adverse business or economic conditions are more likely to impair this capacity.
BB: Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time;
however, business or financial flexibility exists which supports the servicing of financial commitments.
B: Highly speculative. ‘B’ ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however,
capacity for continued payment is vulnerable to deterioration in the business and economic environment.
CCC: Substantial credit risk. Default is a real possibility.
CC: Very high levels of credit risk. Default of some kind appears probable.
C: Exceptionally high levels of credit risk. Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a ‘C’ category rating for an
issuer include:
a. the issuer has entered into a
grace or cure period following non-payment of a material financial obligation;
b. the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or
c. Fitch Ratings otherwise believes a condition of ‘RD’ or ‘D’ to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.
RD: Restricted default. ‘RD’ ratings indicate an issuer that in Fitch Ratings’ opinion has experienced an uncured payment default on a bond, loan or other material financial
obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include:
a. the selective payment default
on a specific class or currency of debt;
b. the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation;
c. the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or
d. execution of a distressed debt exchange on one or more material financial obligations.
D: Default. ‘D’ ratings indicate an issuer that in Fitch Ratings’ opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal
winding-up procedure, or which has otherwise ceased business. Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral
feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a
distressed debt exchange. “Imminent” default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer
has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but
the date of the exchange still lies several days or weeks in the immediate future. In all cases, the assignment of a default rating reflects the agency’s opinion as to the most appropriate rating category
consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer’s financial obligations or local commercial practice.
Note: The modifiers “+” or “–” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the
‘AAA’ Long-Term category, or to Long-Term categories below ‘B’.
INTERNATIONAL SHORT-TERM ISSUER
AND ISSUE CREDIT RATINGS
A short-term issuer or
obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation
governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short term” based on market convention. Typically, this means up to 13 months for
corporate, sovereign, and structured obligations, and up to 36 months for obligations in U.S. public finance markets.
F1: Highest short-term credit quality. Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally
strong credit feature.
F2: Good short-term credit quality. Good intrinsic capacity for timely payment of financial commitments.
F3: Fair short-term credit quality. The intrinsic capacity for timely payment of financial commitments is adequate.
B: Speculative short-term credit quality. Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic
conditions.
C: High short-term default risk. Default is a real possibility.
RD: Restricted default. Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity
ratings only.
D: Default Indicates a broad-based default event for an entity, or the default of a short-term obligation.
DBRS
LONG-TERM OBLIGATIONS
The DBRS® long-term rating scale provides an opinion on the risk of default. That is, the risk that an issuer will fail to
satisfy its financial obligations in accordance with the terms under which an obligations has been issued. Ratings are based on quantitative and qualitative considerations relevant to the issuer, and the relative
ranking of claims. All rating categories other than AAA and D also contain subcategories “(high)” and “(low).” The absence of either a “(high)” or “(low)” designation
indicates the rating is in the middle of the category.
AAA: Highest credit quality. The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events.
AA: Superior credit quality. The capacity for the payment of financial obligations is considered high. Credit quality differs from AAA only to a small degree. Unlikely to be significantly
vulnerable to future events.
A: Good credit quality. The capacity for the payment of financial obligations is substantial, but of lesser credit quality than AA. May be vulnerable to future events, but qualifying negative
factors are considered manageable.
BBB: Adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. May be vulnerable to future events.
BB: Speculative, non investment-grade credit quality. The capacity for the payment of financial obligations is uncertain. Vulnerable to future events.
B: Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet financial obligations.
CCC/CC/C: Very highly speculative credit quality. In danger of defaulting on financial obligations. There is little difference between these three categories, although CC and C ratings are normally
applied to obligations that are seen as highly likely to default, or subordinated to obligations rated in the CCC to B range. Obligations in respect of which default has not technically taken place but is considered
inevitable may be rated in the C category.
D: When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a
downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as the case of a “distressed exchange.”
COMMERCIAL PAPER AND SHORT-TERM
DEBT
The DBRS® short-term debt rating scale provides an opinion on the risk that an issuer will not meet its short-term financial
obligations in a timely manner. Ratings are based on quantitative and qualitative considerations relevant to the issuer and the relative ranking of claims. The R-1 and R-2 rating categories are further denoted by the
subcategories “(high),” “(middle),” and “(low).”
R-1 (high): Highest credit quality. The capacity for the payment of short-term financial obligations as they fall due is exceptionally high. Unlikely to be adversely affected by future
events.
R-1 (middle): Superior credit quality. The capacity for the payment of short-term financial obligations as they fall due is very high. Differs from R-1 (high) by a relatively modest degree. Unlikely to
be significantly vulnerable to future events.
R-1 (low): Good credit quality. The capacity for the payment of short-term financial obligations as they fall due is substantial. Overall strength is not as favorable as higher rating categories. May
be vulnerable to future events, but qualifying negative factors are considered manageable.
R-2 (high): Upper end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events.
R-2 (middle): Adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events or may be exposed to other
factors that could reduce credit quality.
R-2 (low): Lower end of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable. May be vulnerable to future events. A number of
challenges are present that could affect the issuer’s ability to meet such obligations.
R-3: Lowest end of adequate credit quality. There is a capacity for the payment of short-term financial obligations as they fall due. May be vulnerable to future events and the certainty of
meeting such obligations could be impacted by a variety of developments.
R-4: Speculative credit quality. The capacity for the payment of short-term financial obligations as they fall due is uncertain.
R-5: Highly speculative credit quality. There is a high level of uncertainty as to the capacity to meet short-term financial obligations as they fall due.
D: When the issuer has filed under any applicable bankruptcy, insolvency or winding up statute or there is a failure to satisfy an obligation after the exhaustion of grace periods, a
downgrade to D may occur. DBRS may also use SD (Selective Default) in cases where only some securities are impacted, such as the case of a “distressed exchange.”
Kroll Bond Rating Agency
(“KBRA”)
LONG-TERM CREDIT RATINGS
Kroll Bond Rating Agency (KBRA)
assigns credit ratings to issuers and their obligations using the same rating scale. In either case, KBRA’s credit ratings are intended to reflect both the probability of default and severity of loss in the
event of default, with greater emphasis on probability of default at higher rating categories. For obligations, the determination of expected loss severity is, among other things, a function of the seniority of the
claim. Generally speaking, issuer-level ratings assume a loss severity consistent with a senior unsecured claim. KBRA appends an (sf) indicator to ratings assigned to structured finance obligations.
AAA: Determined to have almost no risk of loss due to credit-related events. Assigned only to the very highest quality obligors and obligations able to survive extremely challenging economic
events.
AA: Determined to have minimal risk of loss due to credit-related events. Such obligors and obligations are deemed very high quality.
A: Determined to be of high quality with a small risk of loss due to credit-related events. Issuers and obligations in this category are expected to weather difficult times with low credit
losses.
BBB: Determined to be of medium quality with some risk of loss due to credit-related events. Such issuers and obligations may experience credit losses during stress environments.
BB: Determined to be of low quality with moderate risk of loss due to credit-related events. Such issuers and obligations have fundamental weaknesses that create moderate credit
risk.
B: Determined to be of very low quality with high risk of loss due to credit-related events. These issuers and obligations contain many fundamental shortcomings that create significant credit
risk.
CCC: Determined to be at substantial risk of loss due to credit-related events, or currently in default with high recovery expectations.
CC: Determined to be near default or in default with average recovery expectations.
C: Determined to be near default or in default with low recovery expectations.
D: KBRA defines default as occurring if:
1. There is a missed interest or principal payment on a rated obligation which is unlikely to be recovered.
2. The rated entity files for protection from creditors, is placed into receivership or is closed by regulators such that a missed payment is likely to result.
3. The rated entity seeks and completes a distressed exchange, where existing rated obligations are replaced by new obligations with a diminished economic value.
KBRA may append – or +
modifiers to ratings in categories AA through CCC to indicate, respectively, upper and lower risk levels within the broader category.
SHORT-TERM CREDIT RATINGS
Kroll Bond Rating Agency’s
short-term ratings indicate an ability to meet obligations that typically have maturities of thirteen months or less when issued by corporate entities, financial institutions, and in connection with structured finance
transactions. When applied to municipal obligations, KBRA’s short-term ratings typically indicate an ability to meet obligations of three years or less. Short-term ratings may be assigned to both issuers and to
specific obligations. As compared to long-term ratings, greater emphasis is placed on an obligor’s liquidity profile and access to funding. KBRA appends an (sf) indicator to ratings assigned to structured
finance obligations.
K1: Very strong ability to meet short-term obligations.
K2: Strong ability to meet short-term obligations.
K3: Adequate ability to meet short-term obligations.
B: Questionable ability to meet short-term obligations.
C: Little ability to meet short-term obligations.
D: KBRA defines default as occurring if:
1. There is a missed interest or principal payment on a rated obligation which is unlikely to be recovered.
2. The rated entity files for protection from creditors, is placed into receivership or is closed by regulators such that a missed payment is likely to result.
3. The rated entity seeks and completes a distressed exchange, where existing rated obligations are replaced by new obligations with a diminished economic value.
KBRA may append a + modifier to
ratings in the K1 category to indicate exceptional ability to meet short-term obligations.
Footnotes to
Appendix:
1.
| For
certain structured finance, preferred stock and hybrid securities in which payment default events are either not defined or do not match investors’ expectations for timely payment, the ratings reflect the
likelihood of impairment and the expected financial loss in the event of impairment.
|
2.
| For certain structured finance, preferred stock and hybrid securities in which payment default events are either not defined or do not match investors’ expectations for timely payment, the ratings
reflect the likelihood of impairment.
|
Financial Statements
The
Fund’s audited Financial Statements, included in the Fund’s Annual Report dated August 31, 2017, including the notes thereto and the report of KPMG LLP thereon, are incorporated by reference into this
Statement of Additional Information.
THIS PAGE INTENTIONALLY LEFT
BLANK
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Oppenheimer Capital Appreciation
Fund
Website
www.oppenheimerfunds.com
Investment Adviser and
Sub-Adviser
OFI Global Asset Management, Inc. and OppenheimerFunds, Inc.
225 Liberty Street
New York, New York 10281-1008
Distributor
OppenheimerFunds Distributor, Inc.
225 Liberty Street
New York, New York 10281-1008
Transfer Agent and Sub-Transfer
Agent
OFI Global Asset Management, Inc. and
Shareholder Services Inc. doing business as OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.CALL OPP (225.5677)
Custodian Bank
JPMorgan Chase Bank
4 Chase Metro Tech Center
Brooklyn, New York 11245
Independent Registered Public
Accounting Firm
KPMG LLP
1225 17th Street, Suite 800
Denver, Colorado 80202
Legal Counsel
Kramer Levin Naftalis & Frankel LLP
1177 Avenue of the Americas
New York, New York 10036
OPPENHEIMER CAPITAL APPRECIATION FUND
FORM N-1A
PART C
OTHER INFORMATION
Item 28. Exhibits
(a) |
Agreement and Declaration of Trust dated 08/15/13: Previously filed with Registrant's Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
(b) |
By-Laws dated 08/15/13: Previously filed with Registrant’s Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
(c) |
(i) |
Article V of the Agreement and Declaration of Trust dated 08/15/13: Previously filed with Registrant's Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
|
(ii) |
Article II of the By-Laws dated 08/15/13: Previously filed with Registrant’s Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
(d) |
(i) |
Restated Investment Advisory Agreement dated 09/09/13: Previously filed with Registrant’s Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
|
(ii) |
Restated Investment SubAdvisory Agreement dated 09/09/13: Previously filed with Registrant’s Post-Effective Amendment No. 62, (10/10/13), and incorporated herein by reference. |
(e) |
(i) |
General Distributor's Agreement dated 12/10/92: Previously filed with Registrant's Post-Effective Amendment No. 27, (3/2/94), and incorporated herein by reference. |
|
(ii) |
Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds (Reg. No. 33-17850), (10/23/06), and incorporated herein by reference. |
|
(iii) |
Form of Broker Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds (Reg. No. 33-17850), (10/23/06), and incorporated herein by reference. |
|
(iv) |
Form of Agency Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds (Reg. No. 33-17850), (10/23/06), and incorporated herein by reference. |
|
(v) |
Form of Trust Company Fund/SERV Purchase Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 45 to the Registration Statement of Oppenheimer High Yield Fund (Reg. No. 2-62076), (10/26/01), and incorporated herein by reference. |
|
(vi) |
Form of Trust Company Agency Agreement of OppenheimerFunds Distributor, Inc.: Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Main Street Funds (Reg. No. 33-17850), (10/23/06), and incorporated herein by reference. |
(f) |
Amended & Restated Compensation Deferral Plan for Eligible Trustees, effective 1/1/08: Previously filed with Post-Effective Amendment No. 4 to the Registration Statement of Oppenheimer Portfolio Series (Reg. No. 333-121449), (5/29/09), and incorporated herein by reference. |
(g) |
(i) |
Global Custody Agreement dated 8/16/02, as amended: Previously filed with Post-Effective Amendment No. 51 to the Registration Statement of Oppenheimer Capital Appreciation Fund (Reg. No. 2-69719), (10/23/06), and incorporated herein by reference. |
|
(ii) |
Amendment dated 8/11/17 to the Global Custody Agreement: Previously filed with Post-Effective Amendment No. 64 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590), (8/25/17), and incorporated herein by reference. |
(h) |
Not Applicable. |
(i) |
Opinion and Consent of Counsel: Previously filed with Registrant’s Post-Effective Amendment No. 62, (10/10/13); and incorporated herein by reference. |
(j) |
Independent Registered Public Accounting Firm’s Consent: Filed herewith. |
(k) |
Not applicable. |
(l) |
Investment Letter from OppenheimerFunds, Inc. to Registrant dated 1/3/83: Previously filed with Registrant’s Post-Effective Amendment No. 39, (10/29/98), and incorporated herein by reference. |
(m) |
(i) |
Amended and Restated Service Plan and Agreement for Class A shares dated 6/30/11: Previously filed with Registrant’s Post-Effective Amendment No. 58, (12/23/11), and incorporated herein by reference. |
|
(ii) |
Amended and Restated Distribution and Service Plan and Agreement for Class B shares dated 6/30/11: Previously filed with Registrant’s Post-Effective Amendment No. 58, (12/23/11), and incorporated herein by reference. |
|
(iii) |
Amended and Restated Distribution and Service Plan and Agreement for Class C shares dated 6/30/11: Previously filed with Registrant’s Post-Effective Amendment No. 58, (12/23/11), and incorporated herein by reference. |
|
(iv) |
Amended and Restated Distribution and Service Plan and Agreement for Class N shares dated 6/30/11: Previously filed with Registrant’s Post-Effective Amendment No. 58, (12/23/11), and incorporated herein by reference. |
(n) |
Oppenheimer Funds Multiple Class Plan Pursuant to Rule 18f-3: Previously filed with Post-Effective Amendment No. 1 to the Registration Statement of Oppenheimer Global High Yield Fund (Reg. No. 333-176889), (9/25/14), and incorporated herein by reference. |
(o) |
Power of Attorney dated 9/12/16 for all Trustees and Officers: Previously filed with Post-Effective Amendment No. 15 to the Registration Statement of Oppenheimer Rochester Short Term Municipal Fund Fund (Reg. 333-147062), (9/26/16), and incorporated herein by reference. |
(p) |
Code of Ethics of the Oppenheimer Funds, Oppenheimer ETF Trust, OFI Global Asset Management, Inc., OFI SteelPath, Inc., OFI Advisors, LLC, OppenheimerFunds, Inc. (including certain other affiliates and subsidiaries) and OppenheimerFunds Distributor, Inc., effective as of 5/26/16, under Rule 17j-1 of the Investment Company Act of 1940: Previously filed with Post-Effective Amendment No. 18 to the Registration Statement of Oppenheimer Portfolio Series (Reg. No. 333-121449), (5/25/16), and incorporated herein by reference. |
Item 29. – Persons Controlled by or Under Common
Control with the Fund
None.
Item 30. – Indemnification
Reference is made to the provisions of
Article VII of Registrant’s Agreement and Declaration of Trust filed as Exhibit 28(a) to the Registration Statement and incorporated
herein by reference.
Insofar as indemnification for certain
liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of Registrant
pursuant to the foregoing provisions or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by Registrant of expenses incurred
or paid by a trustee, officer or controlling person of Registrant in the successful defense of any action, suit or proceeding)
is asserted by such trustee, officer or controlling person, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Item 31. – Business and Other Connections of the
Investment Advisers
(a) |
OFI Global Asset Management, Inc. (the “Manager”) is the manager of the Registrant. The information required by this Item 31 about officers and directors of the Manager, together with information as to any other business, |
profession, vocation or employment
of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Form
ADV, filed by the Manager pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-76771).
(b) |
OppenheimerFunds, Inc. (the “Sub-Adviser”) provides advisory services to the Registrant. The information required by this Item 31 about officers and directors of the Sub-Adviser, together with information as to any other business, profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Form ADV, filed by the Sub-Adviser pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-8253). |
Item 32. – Principal Underwriter
(a) |
OppenheimerFunds Distributor, Inc. is the Distributor of the Registrant’s shares. It is also the Distributor of each of the registered open-end investment companies listed below and for MassMutual Institutional Funds. |
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Income Fund
Oppenheimer Corporate Bond Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Discovery Mid Cap Growth Fund
Oppenheimer Dividend Opportunity Fund
Oppenheimer Emerging Markets Innovators Fund
Oppenheimer Emerging Markets Local Debt Fund
Oppenheimer Equity Income Fund
Oppenheimer Global Fund
Oppenheimer Global High Yield Fund
Oppenheimer Global Multi-Alternatives Fund
Oppenheimer Global Multi-Asset Growth Fund
Oppenheimer Global Multi-Asset Income Fund
Oppenheimer Global Multi Strategies Fund
Oppenheimer Global Opportunities Fund
Oppenheimer Global Real Estate Fund
Oppenheimer Global Strategic Income Fund
Oppenheimer Global Value Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Government Cash Reserves
Oppenheimer Government Money Market Fund
Oppenheimer Institutional Government Money Market Fund
Oppenheimer International Bond Fund
Oppenheimer International Diversified Fund
Oppenheimer International Equity Fund
Oppenheimer International Growth and Income Fund
Oppenheimer International Growth Fund
Oppenheimer International Small-Mid Company Fund
Oppenheimer Limited-Term Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Macquarie Global Infrastructure Fund
Oppenheimer Main Street All Cap Fund
Oppenheimer Main Street Fund (a series of Oppenheimer Main Street
Funds)
Oppenheimer Main Street Mid Cap Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Master Event-Linked Bond Fund, LLC
Oppenheimer Master Inflation Protected Securities Fund, LLC
Oppenheimer Master Loan Fund, LLC
Oppenheimer Multi-State Municipal Trust (3 series):
Oppenheimer Rochester High Yield Municipal Fund
Oppenheimer Rochester New Jersey Municipal Fund
Oppenheimer Rochester Pennsylvania Municipal Fund
Oppenheimer Portfolio Series (4 series):
Active Allocation Fund
Conservative Investor Fund
Equity Investor Fund
Moderate Investor Fund
Oppenheimer Quest For Value Funds (3 series):
Oppenheimer Fundamental Alternatives Fund
Oppenheimer Global Allocation Fund
Oppenheimer Mid Cap Value Fund
Oppenheimer Real Estate Fund
Oppenheimer ETF Trust (10 series):
Oppenheimer Emerging Markets Revenue ETF
Oppenheimer ESG Revenue ETF
Oppenheimer Financials Sector Revenue ETF
Oppenheimer Global ESG Revenue ETF
Oppenheimer Global Revenue ETF
Oppenheimer International Revenue ETF
Oppenheimer Large Cap Revenue ETF
Oppenheimer Mid Cap Revenue ETF
Oppenheimer Small Cap Revenue ETF
Oppenheimer Ultra Dividend Revenue ETF
Oppenheimer Rising Dividends Fund
Oppenheimer Rochester AMT-Free Municipal Fund
Oppenheimer Rochester AMT-Free New York Municipal Fund
Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Rochester California Municipal Fund
Oppenheimer Rochester Fund Municipals
Oppenheimer Rochester Intermediate Term Municipal Fund
Oppenheimer Rochester Limited Term California Municipal Fund
Oppenheimer Rochester Limited Term New York Municipal Fund (a
series of Rochester Portfolio Series)
Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer Rochester Short Duration High Yield Municipal Fund
(a series of Oppenheimer Municipal Fund)
Oppenheimer Rochester Short Term Municipal Fund
Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer Senior Floating Rate Fund
Oppenheimer Senior Floating Rate Plus Fund
Oppenheimer Small Cap Value Fund
Oppenheimer SteelPath MLP Funds Trust (4 series):
Oppenheimer SteelPath MLP Select 40 Fund
Oppenheimer SteelPath MLP Alpha Fund
Oppenheimer SteelPath MLP Income Fund
Oppenheimer SteelPath MLP Alpha Plus Fund
Oppenheimer SteelPath Panoramic Fund
Oppenheimer Total Return Bond Fund (a series of Oppenheimer
Integrity Funds)
Oppenheimer Ultra-Short Duration Fund
Oppenheimer Value Fund (a series of Oppenheimer Series Fund)
Oppenheimer Variable Account Funds (11 series):
Oppenheimer Capital Appreciation Fund/VA
Oppenheimer Conservative Balanced Fund/VA
Oppenheimer Discovery Mid Cap Growth Fund/VA
Oppenheimer Global Fund/VA
Oppenheimer Global Multi-Alternatives Fund/VA
Oppenheimer Global Strategic Income Fund/VA
Oppenheimer Government Money Fund/VA
Oppenheimer International Growth Fund/VA
Oppenheimer Main Street Fund/VA
Oppenheimer Main Street Small Cap Fund/VA
Oppenheimer Total Return Bond Fund/VA
(b) |
The directors and officers of the Registrant’s principal underwriter are: |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Rina M. Aligaen(2) |
Assistant Vice President |
None |
Anthony P. Allocco(2) |
Assistant Vice President |
None |
Joseph M. Allyn(1) |
Vice President |
None |
Nicole Andersen(2) |
Assistant Vice President |
None |
Charles F. Anderson(1) |
Vice President |
None |
Matthew J. Auer(2) |
Vice President |
None |
Kevin K. Babikian(2) |
Assistant Secretary |
None |
Anthony E. Bamonte(2) |
Vice President |
None |
James P. Barker(2) |
Vice President |
None |
Todd M. Barney(1) |
Vice President |
None |
Marina O. Barskaya(2) |
Assistant Vice President |
None |
Blake M. Bass(1) |
Vice President |
None |
Leslie A. Bednar(2) |
Assistant Vice President |
None |
Kathleen M. Beichert(1) |
Senior Vice President |
None |
Kimberly A. Belsole(2) |
Vice President |
None |
Rocco Benedetto(2) |
Senior Vice President |
None |
Emanuele S. Bergagnini(2) |
Vice President |
None |
Christopher E. Bergeron(2) |
Vice President |
None |
Rhea M. Berglund(1) |
Vice President |
None |
Rick D. Bettridge(2) |
Vice President |
None |
Kamal Bhatia(2) |
Senior Vice President |
None |
Adam L. Bilmes(2) |
Vice President |
None |
Paul G. Blease(2) |
Senior Vice President |
None |
Carolyn Boccaccio(2) |
Vice President |
None |
Maria T. Boingeanu(2) |
Assistant Vice President |
None |
Nancy S. Bong(2) |
Vice President |
None |
Christina G. Boris(2) |
Vice President |
None |
David A. Borrelli(2) |
Senior Vice President |
None |
Jeffrey R. Botwinick(2) |
Vice President |
None |
Sarah M. Bourgraf(1) |
Vice President |
None |
Matthew Brady(2) |
Assistant Vice President |
None |
Reginald J. Breaux(1) |
Vice President |
None |
Joshua H. Broad(2) |
Vice President |
None |
Kenneth S. Brodsky(2) |
Senior Vice President |
None |
Garrett Brookes(1) |
Assistant Vice President |
None |
Gregory L. Brown(2) |
Vice President |
None |
Matthew G. Brown(1) |
Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Paul T. Brunswick(2) |
Vice President |
None |
Ryan M. Buckley(2) |
Vice President |
None |
Megan R. Byrne(2) |
Assistant Vice President |
None |
Jason A. Campisi(2) |
Vice President |
None |
Tara Carbonneau(1) |
Vice President |
None |
Sean T. Carey(2) |
Vice President |
None |
Robert M. Caruso(2) |
Vice President |
None |
Rick A. Casagrande(2) |
Assistant Vice President |
None |
Thomas M. Caulfield(1) |
Vice President |
None |
Stephane C. Chevrier(2) |
Vice President |
None |
Michael G. Chewning(1) |
Vice President |
None |
Donelle L. Chisolm(2) |
Vice President |
None |
Andrew S. Chonofsky(2) |
Senior Vice President |
None |
Angelanto L. Ciaglia(2) |
Vice President |
None |
Steven F. Cinquino(2) |
Assistant Vice President |
None |
Nicholas A. Cirbo(1) |
Vice President |
None |
John S. Clark(2) |
Senior Vice President |
None |
Adam M. Cohen(2) |
Assistant Vice President |
None |
Ryan J. Coleman(1) |
Vice President |
None |
Ellen L. Comisar(2) |
Vice President |
None |
Serina Copanas(2) |
Vice President |
None |
John H. Corcoran(2) |
Vice President |
None |
Cameron T. Cowden(2) |
Vice President |
None |
Neev Crane(2) |
Vice President |
None |
Michael Daley(2) |
Vice President |
None |
Amanda J. Dampier(2) |
Assistant Vice President |
None |
Edward Dane(2) |
Senior Vice President |
None |
Jeffrey N. Davis(3) |
Vice President |
None |
Stephen D. Degnan(2) |
Vice President |
None |
Ivan A. DelRio(2) |
Vice President |
None |
Richard E. DeMarco(2) |
Assistant Vice President |
None |
Michael R. Dennehy(2) |
Vice President |
None |
Michelle D. DeWitt(2) |
Assistant Vice President |
None |
Robert U. Duffey(2) |
Vice President |
None |
Cameron F. Dunford(1) |
Vice President |
None |
Robert B. Dunphy(2) |
Vice President |
None |
Peter G. Egginton(2) |
Vice President |
None |
Wendy Hetson Ehrlich(2) |
Vice President |
None |
Paul F. Eisenhardt(2) |
Senior Vice President |
None |
Kyle C. Elliott(2) |
Vice President |
None |
Rickey C. Ernzen(3) |
Vice President |
None |
Michael J. Eustic(2) |
Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Thomas E. Evans(2) |
Vice President |
None |
Gregg A. Everett(2) |
Vice President |
None |
George R. Fahey(1) |
Senior Vice President |
None |
Jason E. Farrell(2) |
Vice President |
None |
Kristie M. Feinberg(2) |
Assistant Treasurer |
None |
Jessica M. Fernandez(2) |
Vice President |
None |
Josean Y. Fernandez(2) |
Vice President |
None |
Michael A. Ferrer(2) |
Vice President |
None |
Jonathan Ferris(4) |
Assistant Vice President |
None |
Nicole Filingeri(2) |
Vice President |
None |
Tristan A. Fischer(2) |
Vice President |
None |
John Fortuna(2) |
Senior Vice President |
None |
Mark D. Foster(1) |
Vice President |
None |
Valeri L. Fox(2) |
Vice President |
None |
Jennifer L. Foxson(2) |
Senior Vice President and
Secretary |
Vice President and Chief Business Officer |
George P. Fraser(1) |
Vice President |
None |
Victoria K. Frey(1) |
Assistant Vice President |
None |
Alice K. Fricke(2) |
Vice President |
None |
William L. Friebel(2) |
Vice President |
None |
Joseph T. Friedman(1) |
Vice President |
None |
Kellen G. Frye(2) |
Vice President |
None |
Dominique Z. Gabriel(2) |
Assistant Vice President |
None |
Kathryn T. Gallo(2) |
Vice President |
None |
Charlotte A. Gardner(1) |
Vice President |
None |
Christopher R. Gaudio(2) |
Vice President |
None |
Jay Gentry(1) |
Senior Vice President |
None |
Dina Ghanbarzadeh(2) |
Assistant Vice President |
None |
Nancy J. Girondo(2) |
Vice President |
None |
Jill E. Glazerman(2) |
Senior Vice President |
None |
Emily R. Glotzer(2) |
Assistant Vice President |
None |
Jack E. Goldin(2) |
Vice President |
None |
Justin A. Goldstein(2) |
Vice President |
None |
Michael H. Gottesman(2) |
Senior Vice President |
None |
Raquel Granahan(2) |
Senior Vice President |
None |
Justin P. Grant(2) |
Assistant Vice President |
None |
Anthony Greco(2) |
Assistant Vice President |
None |
Samuel J. Groban(2) |
Vice President |
None |
Vincent E. Grogan(2) |
Senior Vice President |
None |
Eric M. Grossjung(2) |
Vice President |
None |
Seth E. Guenther(1) |
Assistant Vice President |
None |
Michael D. Guman(2) |
Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Joseph B. Gunderson(2) |
Assistant Vice President |
None |
Mahrukh Hameed(2) |
Assistant Vice President |
None |
LeaAnna M. Hartman(1) |
Vice President |
None |
Stacia E. Hatfield(2) |
Vice President |
None |
Alexander D. Hayes(2) |
Vice President |
None |
Petter A. Hellstrom-Bialek(1) |
Vice President |
None |
Richard N. Henn(2) |
Senior Vice President |
None |
Nicholas M. Henry(2) |
Vice President |
None |
Nicole M. Pretzel Holahan(2) |
Vice President |
None |
Heather L. Holliday-Smith(1) |
Assistant Vice President |
None |
Eric D. Holquist(2) |
Vice President |
None |
Timothy B. Horsburgh(2) |
Assistant Vice President |
None |
Brian F. Husch(2) |
Vice President |
None |
Keith P. Hylind(2) |
Vice President |
None |
Vincent R. Iacono(2) |
Vice President |
None |
Omar Z. Idilby(2) |
Assistant Vice President |
None |
Jason F. Israel(2) |
Assistant Vice President |
None |
Christopher Ivezic(2) |
Vice President |
None |
Michael C. Jamison(1) |
Vice President |
None |
Nickie J. Jacobs(1) |
Assistant Vice President |
None |
Shonda R. Jaquez(2) |
Vice President |
None |
Allyson M. Jarecky-Freitag(2) |
Vice President |
None |
Daniel C. Jarema(1) |
Vice President |
None |
Robert T. Jason(1) |
Assistant Vice President |
None |
Ryan O. Johann(2) |
Assistant Vice President |
None |
Eric K. Johnson(1) |
Senior Vice President |
None |
Sarah J. Joyce(2) |
Assistant Vice President |
None |
Wylie D. Kain(2) |
Vice President |
None |
Sachin Kambli(2) |
Assistant Vice President |
None |
Annie V. Kang(2) |
Vice President |
None |
Assaf Kedem (2) |
Assistant Vice President |
None |
Geoffrey M. Keller(1) |
Vice President |
None |
Scott R. Kelley(1) |
Vice President |
None |
Gregory Kelly(2) |
Vice President |
None |
Brian P. Kiley(2) |
Senior Vice President |
None |
Susan Kim(2) |
Assistant Vice President |
None |
Elena Kirova(2) |
Assistant Vice President |
None |
Matthew J. Kissane(4) |
Assistant Vice President |
None |
Melissa M. Kretschmer(2) |
Assistant Vice President |
None |
Eric J. Kristenson(2) |
Vice President |
None |
Lamar V. Kunes(2) |
Senior Vice President |
None |
Stanford L. Kutler(2) |
Senior Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
David T. Kuzia(1) |
Vice President |
None |
Michael S. La Tona(2) |
Vice President |
None |
Lisa Lamentino(2) |
Vice President |
None |
Thomas M. Landhauser(2) |
Vice President |
None |
Brian Landy(2) |
Assistant Vice President |
None |
Laura L. Lawson(2) |
Vice President |
None |
Daniel J. Lee(2) |
Vice President |
None |
Eric Lee(2) |
Assistant Vice President |
None |
Talley D. Leger(2) |
Vice President |
None |
John P. Leonard(2) |
Vice President |
None |
Brian S. Levitt(2) |
Senior Vice President |
None |
Jesse E. Levitt(2) |
Vice President |
None |
Craig M. Lieb(2) |
Vice President |
None |
Lorna A. Lindquist(2) |
Vice President |
None |
Malissa B. Lischin(2) |
Vice President |
None |
Susan List(2) |
Assistant Vice President |
None |
Terrie P. Liu(1) |
Assistant Vice President |
None |
Cynthia Lo Bessette(2) |
Chief Legal Officer |
Secretary and Chief Legal Officer |
Gordon C. Loetz(2) |
Vice President |
None |
Christina J. Loftus(2) |
Senior Vice President |
None |
David P. Lolli(2) |
Assistant Vice President |
None |
Thomas Loncar(2) |
Vice President |
None |
Inna London-Ikhilov(2) |
Assistant Vice President |
None |
David A. Long(1) |
Assistant Vice President |
None |
John Luiz(2) |
Vice President |
None |
Brian Lynch(2) |
Assistant Vice President |
None |
Joseph M. Macaluso(2) |
Assistant Vice President |
None |
John W. Mackey(2) |
Vice President |
None |
Peter K. Maddox(2) |
Vice President |
None |
Salvatore Maia(2) |
Assistant Vice President |
None |
Michael J. Malik(2) |
Vice President |
None |
Joseph C. Marich(2) |
Vice President |
None |
Natalie Marin(2) |
Vice President |
None |
Michael A. Marino(4) |
Assistant Vice President |
None |
Todd A. Marion(2) |
Vice President |
None |
Sheila M. Masley(1) |
Assistant Vice President |
None |
Katarina Maxianova(2) |
Vice President |
None |
Clare C. Mazur(2) |
Vice President |
None |
Peter J. McCarthy(1) |
Vice President |
None |
Robert D. McClure(2) |
Vice President |
None |
Ryan T. McCormack(2) |
Assistant Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
John C. McDonough(2) |
Chairman, Chief Executive
Officer, President & Director |
None |
Matthew S. McGee(1) |
Vice President |
None |
Kent C. McGowan(2) |
Vice President |
None |
Simon A. McKay(2) |
Vice President |
None |
Philip J. McKeon(4) |
Assistant Vice President |
None |
William J. McNamara(2) |
Vice President |
None |
Christopher S. Mechem(2) |
Vice President |
None |
Brian F. Medina(1) |
Vice President |
None |
Gregory E. Mehok(2) |
Vice President |
None |
Daniel P. Melehan(2) |
Vice President |
None |
Izaak Mendelson(2) |
Assistant Vice President |
None |
Ariella Menegon(2) |
Assistant Vice President |
None |
Debbie S. Michaelson(1) |
Vice President |
None |
David B. Miller(2) |
Assistant Vice President |
None |
Toller C. Miller(1) |
Vice President |
None |
Peter L. Mintzberg(2) |
Executive Vice President |
None |
Clint T. Modler(1) |
Senior Vice President |
None |
Thomas J. Montefinise(2) |
Assistant Vice President |
None |
Brandon D. Moore(1) |
Vice President |
None |
Rian Morrissey(1) |
Vice President |
None |
James F. Mugno(2) |
Vice President |
None |
Matthew D. Mulcahy(2) |
Vice President |
None |
Wendy J. Murray(2) |
Vice President |
None |
Keith D. Myers(1) |
Assistant Vice President |
None |
Kyle Najarian(1) |
Vice President |
None |
Christina M. Nasta(2) |
Senior Vice President |
None |
Kevin R. Neznek(2) |
Senior Vice President |
None |
Nichola L. Noriega(2) |
Vice President |
None |
Peter J. Novak(2) |
Senior Vice President |
None |
Ryan P. O’Carroll(2) |
Vice President |
None |
James B. O’Connell(2) |
Vice President |
None |
Timothy J. O’Connell(2) |
Vice President |
None |
Patricia O’Connor(2) |
Vice President |
None |
Tony D. Oh(1) |
Treasurer |
None |
Ronald M. Ongaro(2) |
Assistant Vice President |
None |
Leonard J. Oremland(2) |
Senior Vice President |
None |
Leonar G. Palao(2) |
Assistant Vice President |
None |
Bruce Palm(2) |
Vice President |
None |
Alan I. Panzer(2) |
Vice President |
None |
Andrew Y. Park(1) |
Vice President |
None |
Maria Paster(2) |
Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Ashley B. Patten(1) |
Vice President |
None |
Lori L. Penna (2) |
Vice President |
None |
Daniel J. Petter(2) |
Vice President |
None |
Charles K. Pettit(2) |
Vice President |
None |
David M. Pfeffer(2) |
Director & Chief Financial Officer |
None |
Patrick A. Phalon(2) |
Vice President |
None |
Andrew W. Phillips(1) |
Vice President |
None |
Piers A. Platt(2) |
Vice President |
None |
Scott A. Porter(2) |
Assistant Vice President |
None |
Yunchang Qiu(2) |
Senior Vice President |
None |
Michael E. Quinn(2) |
Vice President |
None |
Michael A. Radon(2) |
Assistant Vice President |
None |
Richard E. Rath(2) |
Vice President |
None |
William J. Raynor(2) |
Vice President |
None |
Brenna D. Rhone(2) |
Assistant Vice President |
None |
James T. Robinson(1) |
Vice President |
None |
Ian M. Roche(2) |
Vice President |
None |
Jason D. Roche(2) |
Vice President |
None |
Adam T. Rochlin(2) |
Senior Vice President |
None |
Michael A. Rock(2) |
Vice President |
None |
Rachel S. Rodgers(2) |
Assistant Vice President |
None |
Philip Rolleri(2) |
Assistant Vice President |
None |
Michael J. Roman(2) |
Assistant Vice President |
None |
Megan P. Rosenblum(2) |
Vice President |
None |
Francis W. Ross(1) |
Vice President |
None |
Jonathan J. Ross(2) |
Vice President |
None |
Kristen M. Ross(2) |
Assistant Vice President |
None |
Adrienne M. Ruffle(2) |
Vice President |
None |
Thomas F. Sabow(2) |
Vice President |
None |
Gary Salerno(2) |
Assistant Vice President |
None |
Gary J. Sanchez(1) |
Vice President |
None |
John C. Saunders(2) |
Senior Vice President |
None |
Kurt R. Savallo(2) |
Assistant Vice President |
None |
Alex C. Schardt(2) |
Vice President |
None |
Thomas J. Schmitt(2) |
Vice President |
None |
Erik M. Schneberger (2) |
Senior Vice President |
None |
William A. Schories(2) |
Vice President |
None |
Patrick L. Scorzelli(2) |
Vice President |
None |
Uri C. Shanske(2) |
Vice President |
None |
Jeffrey D. Sharon(2) |
Vice President |
None |
Rahul N. Shah(2) |
Assistant Vice President |
None |
James B. Shields(1) |
Assistant Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Faiza Sikander(2) |
Assistant Vice President |
None |
Bryant B. Smith(2) |
Vice President |
None |
Timothy F. Smith(2) |
Assistant Vice President |
None |
Mark C. Sokoloff(2) |
Assistant Vice President |
None |
Haley M. Sorenson(1) |
Vice President |
None |
John A. Spensley(2) |
Vice President |
None |
Timothy J. Spitz(2) |
Vice President |
None |
Alfred O. St. John(2) |
Vice President |
None |
Jesse T. Stackland-Winterer(2) |
Vice President |
None |
Michael N. Staples(2) |
Vice President |
None |
Keith S. Stecker(2) |
Assistant Vice President |
None |
Bryan D. Stein(2) |
Vice President |
None |
Joseph D. Stellato(2) |
Vice President |
None |
Benjamin A. Stewart(2) |
Senior Vice President |
None |
Wayne C. Strauss(2) |
Vice President |
None |
Matthew C. Straut(2) |
Senior Vice President |
None |
Ryan P. Sullivan(2) |
Assistant Vice President |
None |
Brian C. Summe(2) |
Vice President |
None |
Michael E. Sussman(2) |
Vice President |
None |
George T. Sweeney(2) |
Senior Vice President |
None |
Adam L. Tabor(2) |
Vice President |
None |
Leo P. Tallon(2) |
Vice President |
None |
Laura B. Taylor (1) |
Senior Vice President |
None |
Paul E. Temple(2) |
Senior Vice President |
None |
Jay S. Therrien(2) |
Vice President |
None |
Anil K. Thomas(2) |
Vice President |
None |
David G. Thomas(2) |
Vice President |
None |
John B. Thorpe(1) |
Vice President |
None |
Luz V. Touma(2) |
Vice President |
None |
Matthew R. Trimble(2) |
Assistant Vice President |
None |
Catherine L. Tulley(1) |
Assistant Vice President |
None |
David C. Van Hellemont(2) |
Vice President |
None |
Wesley R. Vance(2) |
Vice President |
None |
Daniel T. Veith(2) |
Assistant Vice President |
None |
Vincent C. Vermette(2) |
Vice President |
None |
Alyse S. Vishnick(2) |
Vice President |
None |
Rohit Vohra(2) |
Vice President |
None |
Richard Walsh(2) |
Vice President |
None |
Teresa M. Ward(2) |
Vice President |
None |
Keith R. Watts(1) |
Vice President |
None |
Taylor Watts(1) |
Vice President |
None |
Michael J. Weigner(2) |
Vice President |
None |
Name & Principal
Business Address |
Position & Office
with Underwriter |
Position and Office
with Registrant |
Kimberly W. Weinrick(2) |
Vice President |
None |
Christopher G. Werner(2) |
Vice President |
None |
Donna M. White (2) |
Chief Compliance Officer |
None |
Ryan C. Wilde(1) |
Vice President |
None |
Timothy A. Wilkinson(1) |
Vice President |
None |
Thomas Winnick(2) |
Vice President |
None |
Patrick J. Wisneski(1) |
Vice President |
None |
Kevin P. Woodson(1) |
Assistant Vice President |
None |
Ryan J. Woolhiser(1) |
Vice President |
None |
Cary P. Wozniak(2) |
Vice President |
None |
Theodore J. Young(1) |
Assistant Vice President |
None |
David T. Zicchinella(2) |
Vice President |
None |
Steven L. Zito(1) |
Vice President |
None |
Zhanyi Zhu(2) |
Assistant Vice President |
None |
(1)6803
South Tucson Way, Centennial, CO 80112-3924
(2)225
Liberty Street, New York, NY 10281-1008
(3)2100
McKinney Avenue, Suite 1401, Dallas, TX 75201
(4)2005
Market Street, Suite 2020, Philadelphia, PA 19103
Item 33. – Location of Accounts and Records
The accounts, books and other documents
required to be maintained by Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and rules promulgated thereunder
are in the possession of OFI Global Asset Management, Inc., OppenheimerFunds, Inc. and Shareholder Services, Inc., as applicable,
at each entity’s offices at 6803 South Tucson Way, Centennial, Colorado 80112-3924.
Item 34. – Management Services
Not applicable.
Item 35. – Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness
of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and State of New York on the
26th day of October, 2017.
|
OPPENHEIMER CAPITAL APPRECIATION FUND |
By: |
Arthur P. Steinmetz*
|
|
Arthur P. Steinmetz
Trustee, President and Principal Executive Officer |
Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed below by the following persons in the capacities on the dates indicated:
Signatures |
Title |
Date |
Brian F. Wruble*
Brian F. Wruble |
Chairman of the Board of Trustees |
October 26, 2017 |
|
|
|
Arthur P. Steinmetz*
Arthur P. Steinmetz |
Trustee, President and Principal Executive Officer |
October 26, 2017 |
|
|
|
Brian S. Petersen*
Brian S. Petersen |
Treasurer, Principal Financial & Accounting Officer |
October 26, 2017 |
|
|
|
Beth Ann Brown*
Beth Ann Brown |
Trustee |
October 26, 2017 |
|
|
|
Edmund P. Giambastiani, Jr.*
Edmund P. Giambastiani, Jr. |
Trustee |
October 26, 2017 |
|
|
|
Elizabeth Krentzman*
Elizabeth Krentzman |
Trustee |
October 26, 2017 |
|
|
|
Mary F. Miller*
Mary F. Miller |
Trustee |
October 26, 2017 |
|
|
|
Joel W. Motley*
Joel W. Motley |
Trustee |
October 26, 2017 |
|
|
|
Signatures |
Title |
Date |
Joanne Pace*
Joanne Pace |
Trustee |
October 26, 2017 |
|
|
|
Daniel S. Vandivort*
Daniel S. Vandivort |
Trustee |
October 26, 2017 |
|
|
|
*By: /s/ Taylor V. Edwards
Taylor V. Edwards, Attorney-in-Fact |
|
|
OPPENHEIMER CAPITAL APPRECIATION FUND
Post-Effective Amendment No. 71
Registration Statement No. 2-69719
EXHIBIT INDEX
Exhibit No. |
Description |
28(j) |
Consent of Independent Registered Public Accounting Firm |