-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BptFx8xgX5OyrwkBWwk4GAnO4i0o2KdTrTseT8Z7zGOhkoayFyZGbfX94mDfhdLr ajjf8QG60XOo2avYK3k97g== 0000950146-96-000383.txt : 19960306 0000950146-96-000383.hdr.sgml : 19960306 ACCESSION NUMBER: 0000950146-96-000383 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960305 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER TARGET FUND CENTRAL INDEX KEY: 0000319767 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133054122 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03105 FILM NUMBER: 96531223 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CTR SUITE 3400 CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 2 WORLD TRADE CENTER 34TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10048 FORMER COMPANY: FORMER CONFORMED NAME: OPPENHEIMER TARGET FUND INC DATE OF NAME CHANGE: 19870616 N-30D 1 OPPENHEIMER TARGET FUND Oppenheimer Target Fund Annual Report December 31, 1995 [COVER PHOTO] "We have some important financial goals, so we want our investment to increase in value over time." [LOGO-OPENHEIMER FUNDS(R)] This Fund is for people who want the potential for solid investment growth over the long term. News Outperformed Average Total Return for the 1-Year Period Ended 12/31/95: Oppenheimer Target Fund Class A (at net asset value)(1) 34.85% Lipper Capital Appreciation Funds Average(3) 30.31% How Your Fund Is Managed Oppenheimer Target Fund seeks long-term growth by investing in the stocks of medium-sized companies that the Fund's managers believe have excellent growth potential and are undervalued relative to their future growth prospects. In today's stock market, the Fund's managers are targeting consumer and industrial companies with strong earnings momentum, as well as companies that have excellent growth prospects, especially in the technology sector, such as computer software and net-working. The Fund also invests in U.S.-based companies that are believed to have superior growth potential because their products or services are in high demand abroad. Performance Total return at net asset value for the 12 months ended 12/31/95 was 34.85% for Class A shares and 33.56% for Class C shares.(1) Your Fund's average annual total returns at maximum offering price for Class A shares for the 1-, 5-, and 10-year periods ended 12/31/95 were 27.10%, 15.64% and 10.91%, respectively. For Class C shares, average annual total returns for the 1-year period ended 12/31/95 and since inception of the Class on 12/1/93 were 32.56% and 15.26%, respectively.(2) Outlook "We believe the current environment should continue to be good for reasonably valued companies with above average growth rates. In a slow growth economy, with low inflation and declining short-term interest rates, com-panies that are able to grow their earnings better than the market, should continue to command investors' attention." Jane Putnam, Portfolio Manager December 31, 1995 Total returns include change in share price and reinvestment of dividends and capital gains distributions. Past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For more complete information, please review the prospectus carefully before you invest. 1. Based on the change in net asset value per share for the period shown, without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns show results of hypothetical investments on 12/31/94, 12/31/90 and 12/31/85, after deducting the current maximum initial sales charge of 5.75%. Class A shares were first publicly offered on 1/22/81. The Fund's maximum sales charge for Class A shares was higher during a portion of some of the periods shown, and actual investment results will be different as a result of the change. Class C returns show results of hypothetical investments on 12/31/94 and 12/1/93 (inception of class), with the 1% contingent deferred sales charge deducted for the 1-year result. Class B performance is not shown above because shares were first publicly offered on 11/1/95. An explanation of the different performance calculations is in the Fund's prospectus. 3. Source: Lipper Analytical Services. The Lipper total return average for the 1-year period was for 157 capital appreciation funds. The average is shown for comparative purposes only. Oppenheimer Target Fund is characterized by Lipper as a capital appreciation fund. Lipper performance does not take sales charges into consideration. 2 Oppenheimer Target Fund Dear OppenheimerFunds Shareholder, [PHOTO-BRIDGET A. MACASKILL] Bridget A. Macaskill President Oppenheimer Target Fund The U.S. stock market put on quite a show in 1995 with the Dow Jones Industrial Average breaking the 5000 barrier. During 1995, conditions were ideal for rising stock prices. The economy grew fast enough to generate strong corporate profits--but not so fast as to rekindle inflation. And intermediate- and long-term interest rates fell sharply, as investors anticipated that the Federal Reserve Board had shifted from its restrictive monetary policy of the prior year. Leading the rally on Wall Street for much of the year were technology stocks. Even after a bumpy Fall, many stocks in semiconductors, computers, software and telecommunications doubled during the year. The global demand for these products--developed and manufactured by American companies--continued unabated. The reduction in the rate of growth of health care expenditures is just one reason why inflation remains moderate. Another reason is the plentiful supply of inexpensive energy. In addition, the emergence of capitalism throughout the world has created a global economy of new markets and new competitors, dampening prices and labor costs. And after many years of promise, technology has finally created efficiencies in the business environment. But the primary fuel to stock prices came from corporate profits, which have been surging in the past few years, due in large part to a rise in U.S. corporate productivity. The determination of Corporate America to be successful in today's highly competitive markets has led to a strategy of tight cost control with an emphasis on efficiency. With a global boom in technology and a weak dollar in the first half of the year--which made U.S. goods more attractive overseas--corporate earnings and profitability have remained very strong, growing about 20% between 1994 and 1995. With the Dow less than 1000 just 15 years ago and only 2500 five years ago, it's clear that the stock market's advance has been tremendous. So the question remains, "Is the case for stocks still strong?" Certainly, market volatility would be expected at this point in a five year bull market, especially since there hasn't been a "normal correction" of 10% or more since 1990. And the slowdown in the economy is likely to translate into soft profit growth this year. But the underlying economic conditions that have driven stocks thus far--moderate growth with low inflation, falling interest rates, and a Corporate America that's committed to increased efficiency--remain in place. Additionally, there is increasing demand for U.S. exports in light of expanding international economies, as well as the increasing belief that U.S. technologies lead the world. As a result, we believe that the stock market continues to offer a good value for investors. But, realistically, we don't expect another year like 1995 any time soon. Your portfolio manager discusses the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds, and we look forward to helping you reach your investment goals in the future. /s/ BRIDGET A. MACASKILL Bridget A. Macaskill January 22, 1996 3 Oppenheimer Target Fund Q + A [PHOTO-JANE PUTNAM] [PHOTO-MICHAEL LEVINE] Q What benefited the Fund? An interview with your Fund's managers. How did the Fund perform over the past year? While the stock market as a whole has done better than most people expected, the Fund has performed well over the period, turning in results better than the average of funds in its class. Over the past six months, the market--with the excep-tion of July and August--has dramatically favored larger companies' stocks over smaller companies'. Although Target Fund has good exposure across market caps, the majority of our investments is in relatively large firms, so we benefited from this trend. Undoubtedly, though, the most important reason behind our performance this half was our spe-cific investment decisions. [PHOTO-PAUL LAROCCO] What investments made positive contributions to performance? The three industry sectors we invested in most heavily over the past six months were the three best performers in the market--technology, financial services, and health care. Our substantial weighting in these sectors helped us make the most of an already strong market. We benefited further from having made good stock selections within those sectors.1 Over the period, we also added to our holdings in multi-national corporations--large U.S.-based firms doing a good deal of business abroad. These companies, hurt in July as investors worried about the effects a strengthening dollar might have on their overseas sales, appeared to offer significant opportunity. We took the market's uncertainty as a signal to buy, and we've been very pleased with the results--consistent growth for a reasonable price. Were there any investments that didn't perform as well as expected? By and large, we've been 1. The Fund's portfolio is subject to change. 4 Oppenheimer Target Fund Facing page Top left: Jane Putnam, Portfolio Manager Top right: Michael Levine, Member of Equity Investments Team Bottom left: Paul LaRocco, Member of Equity Investments Team This page Top: John Doney, Member of Equity Investments Team Bottom: Robert Doll, Executive VP, Director of Equity Investments A Good stock selections within strong market sectors. pleased with the performance of our investments over the period. However, because the market had already made huge strides by the second half of the year, we'd become somewhat defensive and allowed our cash position to rise. What areas are you currently focusing on? As bottom-up managers, we look more closely at individual companies than at how the economy might affect the industries they're in. Over the year, we've used the market's expansion to strengthen our overall portfolio. Near universal price appreciation allowed us to sell companies we didn't have as much confidence in, and to focus on higher quality firms. Beyond that, one of the things we're working on now is taking profits in the areas where we've seen our strongest performance over the year. [PHOTO-ROBERT DOLL] With technology stocks having become more volatile toward the end of the year, we've begun "recycling" our holdings there. This means that we're taking profits in the companies that have risen to the price we've targeted for them and moving the proceeds into strong firms with stock prices that we feel are low. At the same time, we've been working to eliminate positions in the more commodity- oriented technology companies. In anticipation of a more selective market, we're scaling back our investments in areas such as semiconductors and disk drives in favor of companies that offer a more value-added product. [PHOTO-JOHN DONEY] We're currently buying selected brokerage and money management firms, where we can find them at good prices--we believe they're well-positioned to profit as the next year unfolds. And we've also added some energy companies. Companies in this sector have been somewhat out of favor, and we feel they may be poised for a rebound. What is your outlook for the Fund? We believe the current envi-ronment should continue to be good for reasonably valued companies with above average growth rates. In a slow growth economy, with low inflation and declining short-term interest rates, companies that are able to grow their earnings better than the market, should continue to command investors' attention.[Solid Box] 5 Oppenheimer Target Fund Financials Contents Statement of Investments 7 Statement of Assets & Liabilities 13 Statement of Operations 14 Statements of Changes in Net Assets 15 Financial Highlights 16 Notes to Financial Statements 18 Independent Auditors' Report 21 Federal Income Tax Information 22 6 Oppenheimer Target Fund Statement of Investments December 31, 1995
Face Market Value Amount See Note 1 =================================================================================================================================== Convertible Corporate Bonds and Notes--0.7% - ----------------------------------------------------------------------------------------------------------------------------------- Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 $1,700,000 $ 2,384,250 --------------------------------------------------------------------------------------------------------------- First Financial Management Corp., 5% Cv. Debs., 12/15/99 2,000,000 3,122,500 ------------ Total Convertible Corporate Bonds and Notes (Cost $3,723,750) 5,506,750 Shares =================================================================================================================================== Common Stocks--80.8% - ----------------------------------------------------------------------------------------------------------------------------------- Basic Materials--5.2% - ----------------------------------------------------------------------------------------------------------------------------------- Chemicals--2.7% Georgia Gulf Corp. 163,000 5,012,250 --------------------------------------------------------------------------------------------------------------- IMC Global, Inc. 90,000 3,678,750 --------------------------------------------------------------------------------------------------------------- Morton International, Inc. 80,000 2,870,000 --------------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc.(1) 462,500 3,757,812 --------------------------------------------------------------------------------------------------------------- Terra Industries, Inc. 270,100 3,815,162 --------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 40,000 1,500,000 ------------ 20,633,974 - ----------------------------------------------------------------------------------------------------------------------------------- Metals--0.8% Asarco, Inc. 87,500 2,800,000 --------------------------------------------------------------------------------------------------------------- Cyprus Amax Minerals Co. 30,000 783,750 --------------------------------------------------------------------------------------------------------------- Reynolds Metals Co. 45,000 2,548,125 ------------ 6,131,875 - ----------------------------------------------------------------------------------------------------------------------------------- Paper--1.7% Boise Cascade Corp. 82,000 2,839,250 --------------------------------------------------------------------------------------------------------------- Bowater, Inc. 105,000 3,727,500 --------------------------------------------------------------------------------------------------------------- Chesapeake Corp. 35,000 1,036,875 --------------------------------------------------------------------------------------------------------------- Federal Paper Board Co. 35,000 1,815,625 --------------------------------------------------------------------------------------------------------------- Willamette Industries, Inc. 62,000 3,487,500 ------------ 12,906,750 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Cyclicals--13.2% - ----------------------------------------------------------------------------------------------------------------------------------- Autos & Housing--1.2% Pulte Corp. 110,000 3,698,750 --------------------------------------------------------------------------------------------------------------- Toll Brothers, Inc.(1) 225,000 5,175,000 ------------ 8,873,750 - ----------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--2.5% Circus Circus Enterprises, Inc.(1) 120,000 3,345,000 --------------------------------------------------------------------------------------------------------------- Department 56, Inc.(1) 77,600 2,977,900 --------------------------------------------------------------------------------------------------------------- Mattel, Inc. 37,500 1,153,125 --------------------------------------------------------------------------------------------------------------- Walt Disney Co. 125,000 7,375,000 --------------------------------------------------------------------------------------------------------------- Wendy's International, Inc. 217,800 4,628,250 ------------ 19,479,275 - ----------------------------------------------------------------------------------------------------------------------------------- Media--0.5% Viacom, Inc., Cl. B(1) 75,768 3,589,509
7 Oppenheimer Target Fund Statement of Investments (Continued)
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: General--3.5% Jones Apparel Group, Inc.(1) 88,600 $ 3,488,625 --------------------------------------------------------------------------------------------------------------- Nautica Enterprises, Inc. 50,800 2,222,500 --------------------------------------------------------------------------------------------------------------- Revco D.S., Inc.(1) 100,000 2,825,000 --------------------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp.(1) 245,000 10,381,875 --------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 200,000 4,475,000 --------------------------------------------------------------------------------------------------------------- Warnaco Group, Inc. (The), Cl. A 142,000 3,550,000 ------------ 26,943,000 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: Specialty--5.5% Bed Bath & Beyond, Inc.(1) 120,000 4,657,500 --------------------------------------------------------------------------------------------------------------- CUC International, Inc.(1) 80,000 2,730,000 --------------------------------------------------------------------------------------------------------------- General Nutrition Cos., Inc.(1) 412,400 9,485,200 --------------------------------------------------------------------------------------------------------------- Home Depot, Inc. 70,000 3,351,250 --------------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 140,000 9,747,500 --------------------------------------------------------------------------------------------------------------- Office Depot, Inc.(1) 90,000 1,777,500 --------------------------------------------------------------------------------------------------------------- OfficeMax, Inc. 96,500 2,159,187 --------------------------------------------------------------------------------------------------------------- Staples, Inc. 117,000 2,851,875 --------------------------------------------------------------------------------------------------------------- Viking Office Products, Inc.(1) 120,000 5,580,000 ------------ 42,340,012 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Non-Cyclicals--14.9% - ----------------------------------------------------------------------------------------------------------------------------------- Beverages--1.2% Coca-Cola Co. (The) 55,000 4,083,750 --------------------------------------------------------------------------------------------------------------- PepsiCo, Inc. 80,000 4,470,000 --------------------------------------------------------------------------------------------------------------- Whitman Corp. 35,000 813,750 ------------ 9,367,500 - ----------------------------------------------------------------------------------------------------------------------------------- Food--2.9% H.J. Heinz Co. 127,000 4,206,875 --------------------------------------------------------------------------------------------------------------- IBP, Inc. 180,000 9,090,000 --------------------------------------------------------------------------------------------------------------- Kroger Co.(1) 46,000 1,725,000 --------------------------------------------------------------------------------------------------------------- Safeway, Inc.(1) 120,000 6,180,000 --------------------------------------------------------------------------------------------------------------- Smithfield Foods, Inc.(1) 40,000 1,270,000 ------------ 22,471,875 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--5.2% Abbott Laboratories 190,000 7,932,500 --------------------------------------------------------------------------------------------------------------- Amgen, Inc.(1) 50,000 2,968,750 --------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 60,000 5,152,500 --------------------------------------------------------------------------------------------------------------- Elan Corp. PLC, ADR(1) 85,000 4,133,125 --------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 185,000 11,655,000 --------------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 150,000 8,212,500 ------------ 40,054,375
8 Oppenheimer Target Fund
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--3.1% Cordis Corp.(1) 33,000 $ 3,316,500 --------------------------------------------------------------------------------------------------------------- HealthCare COMPARE Corp.(1) 110,000 4,785,000 --------------------------------------------------------------------------------------------------------------- Horizon/CMS Healthcare Corp.(1) 30,000 757,500 --------------------------------------------------------------------------------------------------------------- Integrated Health Services, Inc. 25,000 625,000 --------------------------------------------------------------------------------------------------------------- Lincare Holdings, Inc.(1) 189,000 4,725,000 --------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 120,000 6,705,000 --------------------------------------------------------------------------------------------------------------- Quorum Health Group, Inc.(1) 120,000 2,640,000 ------------ 23,554,000 - ----------------------------------------------------------------------------------------------------------------------------------- Household Goods--0.6% Procter & Gamble Co. 50,000 4,150,000 - ----------------------------------------------------------------------------------------------------------------------------------- Tobacco--1.9% Philip Morris Cos., Inc. 91,000 8,235,500 --------------------------------------------------------------------------------------------------------------- UST, Inc. 195,000 6,508,125 ------------ 14,743,625 - ----------------------------------------------------------------------------------------------------------------------------------- Energy--1.4% - ----------------------------------------------------------------------------------------------------------------------------------- Energy Services & Producers--0.1% Tidewater, Inc. 36,000 1,134,000 - ----------------------------------------------------------------------------------------------------------------------------------- Oil-Integrated--1.3% Mobil Corp. 60,000 6,720,000 --------------------------------------------------------------------------------------------------------------- USX-Marathon Group 130,000 2,535,000 --------------------------------------------------------------------------------------------------------------- YPF Sociedad Anonima, Sponsored ADR 30,000 648,750 ------------ 9,903,750 - ----------------------------------------------------------------------------------------------------------------------------------- Financial--14.5% - ----------------------------------------------------------------------------------------------------------------------------------- Banks--4.1% Bank of Boston Corp. 125,000 5,781,250 --------------------------------------------------------------------------------------------------------------- Chemical Banking Corp. 50,000 2,937,500 --------------------------------------------------------------------------------------------------------------- First Interstate Bancorp 25,000 3,412,500 --------------------------------------------------------------------------------------------------------------- Fleet Financial Group, Inc. 62,454 2,545,000 --------------------------------------------------------------------------------------------------------------- Midlantic Corp. 55,000 3,609,375 --------------------------------------------------------------------------------------------------------------- NationsBank Corp. 90,000 6,266,250 --------------------------------------------------------------------------------------------------------------- Northern Trust Corp. 10,000 560,000 --------------------------------------------------------------------------------------------------------------- SouthTrust Corp. 90,000 2,306,250 --------------------------------------------------------------------------------------------------------------- State Street Boston Corp. 87,400 3,933,000 ------------ 31,351,125 - ----------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--7.9% Advanta Corp., Cl. A 175,000 6,693,750 --------------------------------------------------------------------------------------------------------------- Advanta Corp., Cl. B 32,000 1,164,000 --------------------------------------------------------------------------------------------------------------- Donaldson, Lufkin & Jenrette, Inc.(1) 49,100 1,534,375 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 60,000 5,010,000 --------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. 25,000 3,103,125 --------------------------------------------------------------------------------------------------------------- First USA, Inc. 190,000 8,431,250 --------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp. 450,000 11,868,750 --------------------------------------------------------------------------------------------------------------- Money Store, Inc. (The) 95,750 1,496,094 --------------------------------------------------------------------------------------------------------------- Morgan Stanley Group, Inc. 40,000 3,225,000 --------------------------------------------------------------------------------------------------------------- Price (T. Rowe) Associates 82,300 4,053,275 --------------------------------------------------------------------------------------------------------------- Schwab (Charles) Corp. (The) 185,000 3,723,125 --------------------------------------------------------------------------------------------------------------- Travelers Group, Inc. 160,000 10,060,000 ------------ 60,362,744
9 Oppenheimer Target Fund Statement of Investments (Continued)
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Insurance--2.5% AFLAC, Inc. 115,000 $ 4,988,125 --------------------------------------------------------------------------------------------------------------- MGIC Investment Corp. 87,900 4,768,575 --------------------------------------------------------------------------------------------------------------- Reliastar Financial Corp. 41,700 1,850,437 --------------------------------------------------------------------------------------------------------------- SunAmerica, Inc. 165,000 7,837,500 ------------ 19,444,637 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial--7.9% - ----------------------------------------------------------------------------------------------------------------------------------- Electrical Equipment--2.6% Emerson Electric Co. 110,000 8,992,500 --------------------------------------------------------------------------------------------------------------- General Electric Co. 70,000 5,040,000 --------------------------------------------------------------------------------------------------------------- Kemet Corp. 20,000 477,500 --------------------------------------------------------------------------------------------------------------- Molex, Inc., Cl. A 185,937 5,694,321 ------------ 20,204,321 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial Materials--1.0% Ball Corp. 48,000 1,320,000 --------------------------------------------------------------------------------------------------------------- Centex Corp. 95,700 3,325,575 --------------------------------------------------------------------------------------------------------------- Rayonier, Inc. 103,700 3,460,988 ------------ 8,106,563 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial Services--2.4% Cintas Corp. 90,000 4,005,000 --------------------------------------------------------------------------------------------------------------- Danka Business System PLC, Sponsored ADR 145,000 5,365,000 --------------------------------------------------------------------------------------------------------------- Loewen Group, Inc. 70,000 1,771,875 --------------------------------------------------------------------------------------------------------------- Manpower, Inc. 125,000 3,515,625 --------------------------------------------------------------------------------------------------------------- Reynolds & Reynolds Co., Cl. A 90,000 3,498,750 ------------ 18,156,250 - ----------------------------------------------------------------------------------------------------------------------------------- Manufacturing--0.3% Kulicke & Soffa Industries, Inc. 90,000 2,092,500 --------------------------------------------------------------------------------------------------------------- O.T.F. Equities, Inc.(1) 400,000 -- ------------ 2,092,500 - ----------------------------------------------------------------------------------------------------------------------------------- Transportation--1.6% Burlington Northern Santa Fe Corp. 42,000 3,276,000 --------------------------------------------------------------------------------------------------------------- Canadian Pacific Ltd. 305,000 5,528,125 --------------------------------------------------------------------------------------------------------------- Illinois Central Corp. 88,100 3,380,838 ------------ 12,184,963
10 Oppenheimer Target Fund
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Technology--23.0% - ----------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.5% Goodrich (B.F.) Co. 57,000 $ 3,883,125 - ----------------------------------------------------------------------------------------------------------------------------------- Computer Hardware--6.3% 3Com Corp.(1) 130,000 6,061,250 --------------------------------------------------------------------------------------------------------------- Adaptec, Inc.(1) 130,000 5,330,000 --------------------------------------------------------------------------------------------------------------- Andrew Corp.(1) 100,000 3,825,000 --------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc.(1) 110,000 8,910,000 --------------------------------------------------------------------------------------------------------------- Cisco Systems, Inc.(1) 65,000 4,850,625 --------------------------------------------------------------------------------------------------------------- Compaq Computer Corp.(1) 125,000 6,000,000 --------------------------------------------------------------------------------------------------------------- EMC Corp.(1) 360,000 5,535,000 --------------------------------------------------------------------------------------------------------------- Gateway 2000, Inc.(1) 133,000 3,258,500 --------------------------------------------------------------------------------------------------------------- Lexmark International Group, Inc., Cl. A(1) 51,100 932,575 --------------------------------------------------------------------------------------------------------------- Sun Microsystems, Inc.(1) 61,000 2,783,125 --------------------------------------------------------------------------------------------------------------- Western Digital Corp.(1) 75,000 1,340,625 ------------ 48,826,700 - ----------------------------------------------------------------------------------------------------------------------------------- Computer Software--10.0% Adobe Systems, Inc. 10,000 620,000 --------------------------------------------------------------------------------------------------------------- Automatic Data Processing, Inc. 60,000 4,455,000 --------------------------------------------------------------------------------------------------------------- BMC Software, Inc.(1) 200,000 8,550,000 --------------------------------------------------------------------------------------------------------------- Cheyenne Software, Inc.(1) 195,900 5,117,888 --------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 50,000 2,843,750 --------------------------------------------------------------------------------------------------------------- First Data Corp. 217,577 14,550,462 --------------------------------------------------------------------------------------------------------------- Informix Corp.(1) 385,000 11,550,000 --------------------------------------------------------------------------------------------------------------- Microsoft Corp.(1) 202,000 17,725,500 --------------------------------------------------------------------------------------------------------------- Oracle Corp.(1) 275,900 11,691,263 ------------ 77,103,863 - ----------------------------------------------------------------------------------------------------------------------------------- Electronics--3.8% Arrow Electronics, Inc.(1) 70,000 3,018,750 --------------------------------------------------------------------------------------------------------------- Cypress Semiconductor Corp.(1) 140,000 1,785,000 --------------------------------------------------------------------------------------------------------------- General Instrument Corp.(1) 70,000 1,636,250 --------------------------------------------------------------------------------------------------------------- Intel Corp. 150,000 8,512,500 --------------------------------------------------------------------------------------------------------------- Motorola, Inc. 100,000 5,700,000 --------------------------------------------------------------------------------------------------------------- Novellus Systems, Inc.(1) 20,000 1,080,000 --------------------------------------------------------------------------------------------------------------- Phillips Electronics NV, ADR 100,000 3,587,500 --------------------------------------------------------------------------------------------------------------- Teradyne, Inc. 140,000 3,500,000 ------------ 28,820,000 - ----------------------------------------------------------------------------------------------------------------------------------- Telecommunications- Technology--2.4% AT&T Corp. 50,000 3,237,500 --------------------------------------------------------------------------------------------------------------- DSC Communications Corp.(1) 55,000 2,028,125 --------------------------------------------------------------------------------------------------------------- Hong Kong Telecommunications Ltd., Sponsored ADR 25,000 443,750 --------------------------------------------------------------------------------------------------------------- L.M. Ericsson Telephone Co., Cl. B, ADR 190,000 3,705,000 --------------------------------------------------------------------------------------------------------------- Telecom Corp. of New Zealand Ltd., Sponsored ADR 30,000 2,081,250 --------------------------------------------------------------------------------------------------------------- Tellabs, Inc. 180,000 6,660,000 ------------ 18,155,625
11 Oppenheimer Target Fund Statement of Investments (Continued)
Market Value Shares See Note 1 =================================================================================================================================== Utilities--0.7% - ----------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--0.3% Empresa Nacional de Electricidad SA, Sponsored ADR 45,000 $ 2,576,250 - ----------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--0.4% Cincinnati Bell, Inc. 90,000 3,127,500 ------------ Total Common Stocks (Cost $445,812,097) 620,673,436 Units =================================================================================================================================== Rights, Warrants and Certificates--0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Windmere Corp. Wts., Exp. 1/98 7,094 -- ------------ Total Rights, Warrants and Certificates (Cost $0) -- Face Amount =================================================================================================================================== Repurchase Agreements--18.9% Repurchase agreement with First Chicago Capital Markets, 5.90%, dated 12/29/95, to be repurchased at $125,182,010 on 1/2/96, collateralized by U.S. Treasury Nts., 5.125%--8.75%, 12/31/96--11/5/04, with a value of $67,905,186, U.S. Treasury Bonds, 6.25%--11.25%, 8/15/03--8/15/23, with a value of $41,152,176, and U.S. Treasury Bills maturing 11/14/96, with a value of $18,661,921 $125,100,000 125,100,000 --------------------------------------------------------------------------------------------------------------- Repurchase agreement with PaineWebber, Inc., 5.90%, dated 12/29/95, to be repurchased at $19,933,059 on 1/2/96, collateralized by U.S. Treasury Nts., 6.875%, 8/31/99, with a value of $7,118,080, and U.S. Treasury Bonds, 7.125%--7.625%, 11/15/22--2/15/23, with a value of $13,411,820 19,920,000 19,920,000 ------------ Total Repurchase Agreements (Cost $145,020,000) 145,020,000 - ----------------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $594,555,847) 100.4% 771,200,186 - ----------------------------------------------------------------------------------------------------------------------------------- Liabilities in Excess of Other Assets (0.4) (2,773,388) ------------ ------------ Net Assets 100.0% $768,426,798 ============ ============
1. Non-income producing security. See accompanying Notes to Financial Statements. 12 Oppenheimer Target Fund Statement of Assets and Liabilities December 31, 1995
=================================================================================================================================== Assets Investments, at value (including repurchase agreements of $145,020,000) (cost $594,555,847)--see accompanying statement $771,200,186 --------------------------------------------------------------------------------------------------------------- Cash 65,607 --------------------------------------------------------------------------------------------------------------- Receivables: Investments sold 3,206,531 Shares of beneficial interest sold 1,271,341 Interest and dividends 757,223 --------------------------------------------------------------------------------------------------------------- Other 210,652 ------------ Total assets 776,711,540 =================================================================================================================================== Liabilities Payables and other liabilities: Investments purchased 5,355,873 Shares of beneficial interest redeemed 1,383,530 Distribution and service plan fees--Note 4 295,184 Deferred trustees' fees--Note 1 221,911 Shareholder reports 75,397 Other 952,847 ------------ Total liabilities 8,284,742 =================================================================================================================================== Net Assets $768,426,798 ============ =================================================================================================================================== Composition of Net Assets Paid-in capital $587,467,438 --------------------------------------------------------------------------------------------------------------- Overdistributed net investment income (168,578) --------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 4,483,599 --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 176,644,339 ------------ Net assets $768,426,798 ============ =================================================================================================================================== Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $758,439,152 and 27,639,405 shares of beneficial interest outstanding) $27.44 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $29.11 --------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $2,751,009 and 100,518 shares of beneficial interest outstanding) $27.37 --------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $7,236,637 and 266,928 shares of beneficial interest outstanding) $27.11
See accompanying Notes to Financial Statements. 13 Oppenheimer Target Fund Statement of Operations For the Year Ended December 31, 1995
=================================================================================================================================== Investment Income Interest $ 6,740,731 --------------------------------------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $22,014) 4,679,929 ------------ Total income 11,420,660 =================================================================================================================================== Expenses Management fees--Note 4 3,882,505 --------------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 839,340 Class B 1,030 Class C 37,800 --------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 568,898 --------------------------------------------------------------------------------------------------------------- Shareholder reports 132,075 --------------------------------------------------------------------------------------------------------------- Legal and auditing fees 67,500 --------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 41,449 --------------------------------------------------------------------------------------------------------------- Insurance expenses 23,612 --------------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 318 Class B 931 Class C 1,864 --------------------------------------------------------------------------------------------------------------- Trustees' fees and expenses 202 --------------------------------------------------------------------------------------------------------------- Other 19,830 ------------ Total expenses 5,617,354 =================================================================================================================================== Net Investment Income 5,803,306 =================================================================================================================================== Realized and Unrealized Gain Net realized gain on investments 71,199,990 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 58,150,018 ------------ Net realized and unrealized gain 129,350,008 =================================================================================================================================== Net Increase in Net Assets Resulting From Operations $135,153,314 ============
See accompanying Notes to Financial Statements. 14 Oppenheimer Target Fund Statements of Changes in Net Assets
Year Ended December 31, 1995 1994 =================================================================================================================================== Operations Net investment income $ 5,803,306 $ 2,339,881 --------------------------------------------------------------------------------------------------------------- Net realized gain 71,199,990 38,815,275 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 58,150,018 (40,560,449) ------------ ------------ Net increase in net assets resulting from operations 135,153,314 594,707 =================================================================================================================================== Dividends and Distributions to Shareholders Dividends from net investment income: Class A (5,896,377) (2,361,728) Class B (8,658) -- Class C (24,850) (2,907) --------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (69,237,207) (35,048,552) Class B (100,605) -- Class C (663,926) (102,047) =================================================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions--Note 2: Class A 397,611,091 (30,283,681) Class B 2,840,388 -- Class C 5,989,404 1,154,378 =================================================================================================================================== Net Assets Total increase (decrease) 465,662,574 (66,049,830) --------------------------------------------------------------------------------------------------------------- Beginning of period 302,764,224 368,814,054 ------------ ------------ End of period (including overdistributed net investment income of $168,578 and $69,749, respectively) $768,426,798 $302,764,224 ============ ============
See accompanying Notes to Financial Statements. 15 Oppenheimer Target Fund Financial Highlights
Class A ------------------------------------------------------------------------- Year Ended December 31, 1995 1994 1993 1992 1991(2) =============================================================================================================== Per Share Operating Data: Net asset value, beginning of period $22.63 $25.72 $25.25 $23.76 $17.47 - --------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .24 .20 .13 .16 .27 Net realized and unrealized gain (loss) 7.61 (.11) .86 2.28 6.87 -------- -------- -------- -------- -------- Total income (loss) from investment operations 7.85 .09 .99 2.44 7.14 - --------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.24) (.20) (.12) (.17) (.18) Distributions from net realized gain (2.80) (2.98) (.40) (.78) (.67) -------- -------- -------- -------- -------- Total dividends and distributions to shareholders (3.04) (3.18) (.52) (.95) (.85) - --------------------------------------------------------------------------------------------------------------- Net asset value, end of period $27.44 $22.63 $25.72 $25.25 $23.76 ======== ======== ======== ======== ======== =============================================================================================================== Total Return, at Net Asset Value(5) 34.85% .46% 3.93% 10.27% 41.33% =============================================================================================================== Ratios/Supplemental Data: Net assets, end of period (in thousands) $758,439 $301,698 $368,806 $401,256 $369,351 - --------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $538,210 $325,003 $383,875 $362,295 $209,596 - --------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (loss) 1.08% .72% .47% .69% 1.25% Expenses 1.03% 1.16% 1.07% 1.09% 1.17% - --------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(7) 71.9% 34.7% 22.9% 42.3% 65.6% - --------------------------------------------------------------------------------------------------------------- Average brokerage commission rate(8) $0.07 -- -- -- --
1. For the period from December 1, 1993 (inception of offering) to December 31, 1993. 2. Per share amounts calculated based on the weighted average number of shares outstanding during the period. 3. For the period from November 1, 1995 (inception of offering) to December 31, 1995. 4. During 1986, the Fund had average monthly debt outstanding of $688,172; the average monthly number of shares outstanding for the year ended December 31, 1986 was 5,799,198, and the average monthly debt per share was $0.12. 5. Assumes a hypothetical 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 of less than one full year. 16 Oppenheimer Target Fund
Class B Class C - ---------------------------------------------------------------- ------------ ----------------------------------- Period Ended December 31, Year Ended December 31, 1990 1989 1988 1987 1986(4) 1995(3)(9) 1995 1994(2) 1993(1) ============================================================================================================================= $18.26 $16.04 $12.38 $20.49 $19.30 $29.77 $22.50 $25.72 $25.92 - ----------------------------------------------------------------------------------------------------------------------------- .39 .59 .27 .17 .11 (.14) .09 -- (.01) (.78) 2.34 3.74 (3.68) 1.46 .78 7.43 (.15) .31 - ------- ------- ------- -------- -------- ------ ------ ------ ------ (.39) 2.93 4.01 (3.51) 1.57 .64 7.52 (.15) .30 - ----------------------------------------------------------------------------------------------------------------------------- (.40) (.62) (.26) (.31) (.38) (.24) (.11) (.09) (.10) -- (.09) (.09) (4.29) -- (2.80) (2.80) (2.98) (.40) - ------- ------- ------- -------- -------- ------ ------ ------ ------ (.40) (.71) (.35) (4.60) (.38) (3.04) (2.91) (3.07) (.50) - ----------------------------------------------------------------------------------------------------------------------------- $17.47 $18.26 $16.04 $12.38 $20.49 $27.37 $27.11 $22.50 $25.72 ======= ======= ======= ======== ======== ====== ====== ====== ====== ============================================================================================================================= (2.13)% 18.31% 32.39% (17.95)% 8.28% 1.67% 33.56% (.50)% 2.11% ============================================================================================================================= $52,526 $66,050 $68,031 $60,888 $111,417 $2,751 $7,237 $1,066 $8 - ----------------------------------------------------------------------------------------------------------------------------- $56,208 $70,874 $68,068 $107,475 $128,757 $661 $3,792 $467 $6 - ----------------------------------------------------------------------------------------------------------------------------- 2.08% 2.93% 1.64% .60% .36% (.54)%(6) .19% (.02)% (.07)%(6) 1.33% 1.27% 1.29% 1.16% 1.16% 2.62%(6) 1.90% 2.18% 2.18%(6) - ----------------------------------------------------------------------------------------------------------------------------- 51.2% 68.3% 108.4% 95.1% 69.9% 71.9% 71.9% 34.7% 22.9% - ----------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- $0.07 $0.07 -- --
6. Annualized. 7. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended December 31, 1995 were $311,600,277 and $293,869,853, respectively. 8. Total brokerage commissions paid on purchases and sales of portfolio securities for the period divided by the total number of related shares purchased and sold. 9. Based on average shares outstanding for the period. See accompanying Notes to Financial Statements. 17 Oppenheimer Target Fund Notes to Financial Statements ================================================================================ 1. Significant Accounting Policies Oppenheimer Target Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Fund's investment objective is to seek capital appreciation. The Fund's investment advisor is OppenheimerFunds,Inc. (the Manager). The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All three classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Investment Valuation. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. - -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. - -------------------------------------------------------------------------------- Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the year ended December 31, 1995, a provision of $14,864 was made for the Fund's projected benefit obligations, and a payment of $2,026 was made to a retired trustee, resulting in an accumulated liability of $221,911 at December 31, 1995. - -------------------------------------------------------------------------------- Distributions to Shareholders. Dividends and distributions to shareholders are recorded on the ex-dividend date. 18 Oppenheimer Target Fund ================================================================================ 1. Significant Accounting Policies (continued) Classification of Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. During the year ended December 31, 1995, the Fund changed the classification of distributions determined in accordance with income tax regulations. Accordingly, during the year ended December 31, 1995, amounts have been reclassified to reflect a decrease in paid-in capital and overdistributed net investment income of $27,750. - -------------------------------------------------------------------------------- Other. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. ================================================================================ 2. Shares of Beneficial Interest The Fund has authorized an unlimited number of no par value shares of beneficial interest. Transactions in shares of beneficial interest were as follows:
Year Ended December 31, 1995(1) Year Ended December 31, 1994 ------------------------------- ----------------------------- Shares Amount Shares Amount - --------------------------------------------------------------------------------------------------------------- Class A: Sold 3,305,271 $ 90,988,885 1,091,689 $ 27,823,899 Dividends and distributions reinvested 2,635,092 71,461,980 1,592,900 35,776,790 Issued in connection with the acquisition of Oppenheimer Time Fund--Note 5 11,277,345 315,314,574 -- -- Redeemed (2,909,180) (80,154,348) (3,693,115) (93,884,370) ---------- ------------ ---------- ------------ Net increase (decrease) 14,308,528 $397,611,091 (1,008,526) $(30,283,681) ========== ============ ========== ============ - --------------------------------------------------------------------------------------------------------------- Class B: Sold 107,562 $ 3,071,314 -- $ -- Dividends and distributions reinvested 3,988 107,888 -- -- Redeemed (11,032) (338,814) -- -- ---------- ------------ ---------- ------------ Net increase 100,518 $ 2,840,388 -- $ -- ========== ============ ========== ============ - --------------------------------------------------------------------------------------------------------------- Class C: Sold 257,084 $ 7,022,376 65,435 $ 1,619,304 Dividends and distributions reinvested 22,545 604,205 4,518 100,882 Redeemed (60,076) (1,637,177) (22,893) (565,808) ---------- ------------ ---------- ------------ Net increase 219,553 $ 5,989,404 47,060 $ 1,154,378 ========== ============ ========== ============
1. For the year ended December 31, 1995 for Class A and Class C shares and for the period from November 1, 1995 (inception of offering) to December 31, 1995 for Class B shares. ================================================================================ 3. Unrealized Gains and Losses on Investments At December 31, 1995, net unrealized appreciation on investments of $176,644,339 was composed of gross appreciation of $188,523,516, and gross depreciation of $11,879,177. 19 Oppenheimer Target Fund Notes to Financial Statements (Continued) ================================================================================ 4. Management Fees And Other Transactions With Affiliates Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of .75% on the first $200 million of average annual net assets, .72% on the next $200 million, .69% on the next $200 million, .66% on the next $200 million and .60% on net assets in excess of $800 million. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent state regulatory limit on Fund expenses. For the year ended December 31, 1995, commissions (sales charges paid by investors) on sales of Class A shares totaled $594,161, of which $190,816 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and Class C shares totaled $14,218 and $32,832, of which $934 and $1,056, respectively, was paid to an affiliated broker/dealer. During the year ended December 31, 1995, OFDI received contingent deferred sales charges of $50 and $2,953, respectively, upon redemption of Class B and Class C shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OFS's total costs of providing such services are allocated ratably to these companies. Under separate approved plans, each class may expend up to .25% of its net assets annually to compensate OFDI for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers, banks and other institutions. In addition, Class B and Class C shares are subject to an asset-based sales charge of .75% of net assets annually, to compensate OFDI for sales commissions paid from its own resources at the time of sale and associated financing costs. In the event of termination or discontinuance of the Class B or Class C plan, the Board of Trustees may allow the Fund to continue payment of the asset-based sales charge to OFDI for distribution expenses incurred on Class B or Class C shares sold prior to termination or discontinuance of the plan. At December 31, 1995, OFDI had incurred unreimbursed expenses of $29,515 for Class B and $90,387 for Class C. During the year ended December 31, 1995, OFDI paid $45,762, and $699, respectively, to an affiliated broker/dealer as compensation for Class A and Class C personal service and maintenance expenses, and retained $870 and $28,402, respectively, as compensation for Class B and Class C sales commissions and service fee advances, as well as financing costs. ================================================================================ 5. Acquisition of Oppenheimer Time Fund On June 23, 1995, the Fund acquired all of the net assets of Oppenheimer Time Fund, pursuant to an Agreement and Plan of Reorganization approved by the Oppenheimer Time Fund shareholders on June 20, 1995. The Fund issued 11,277,345 shares of beneficial interest (Class A), valued at $315,314,574 in exchange for the net assets, resulting in combined Class A net assets of $686,360,280 on June 23, 1995. The net assets acquired included net unrealized appreciation of $67,068,398. The exchange qualifies as a tax-free reorganization for federal income tax purposes. 20 Oppenheimer Target Fund Independent Auditors' Report ================================================================================ The Board of Trustees and Shareholders of Oppenheimer Target Fund: We have audited the accompanying statements of investments and assets and liabilities of Oppenheimer Target Fund as of December 31, 1995, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended and the financial highlights for each of the years in the ten-year period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian and brokers; and where confirmations were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Target Fund as of December 31, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the ten-year period then ended, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Denver, Colorado January 22, 1996 21 Oppenheimer Target Fund Federal Income Tax Information (Unaudited) ================================================================================ In early 1996, shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1995. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Distributions of $3.0410, $3.0439, and $2.9076 per share were paid to Class A, Class B and Class C shareholders, respectively, on December 22, 1995, of which, for each class of shares, $2.3611 was designated as a "capital gain distribution" for federal income tax purposes. Whether received in stock or cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets held for more than one year (long-term capital gains). Dividends paid by the Fund during the fiscal year ended December 31, 1995 which are not designated as capital gain distributions should be multiplied by 26.02% to arrive at the net amount eligible for the corporate dividend- received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 22 Oppenheimer Target Fund Oppenheimer Target Fund ================================================================================ Officers and Trustees Leon Levy, Chairman of the Board of Trustees Robert G. Galli, Trustee Benjamin Lipstein, Trustee Bridget A. Macaskill, Trustee and President Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee Sidney M. Robbins, Trustee Donald W. Spiro, Trustee Pauline Trigere, Trustee Clayton K. Yeutter, Trustee Robert C. Doll, Jr., Vice President George C. Bowen, Treasurer Robert J. Bishop, Assistant Treasurer Scott Farrar, Assistant Treasurer Andrew J. Donohue, Secretary Robert G. Zack, Assistant Secretary ================================================================================ Investment Advisor OppenheimerFunds, Inc. ================================================================================ Distributor OppenheimerFunds Distributor, Inc. ================================================================================ Transfer and Shareholder Servicing Agent OppenheimerFunds Services ================================================================================ Custodian of Portfolio Securities The Bank of New York ================================================================================ Independent Auditors KPMG Peat Marwick LLP ================================================================================ Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein This is a copy of a report to shareholders of Oppenheimer Target Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Target Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 23 Oppenheimer Target Fund Information General Information Monday-Friday 8:30 a.m.-8 p.m. ET Saturday 10 a.m.-2 p.m. ET 1-800-525-7048 Telephone Transactions Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-852-8457 PhoneLink 24 hours a day, automated information and transactions 1-800-533-3310 Telecommunications Device for the Deaf (TDD) Monday-Friday 8:30 a.m.-8 p.m. ET 1-800-843-4461 OppenheimerFunds Information Hotline 24 hours a day, timely and insightful messages on the economy and issues that affect your investments 1-800-835-3104 RA0320.001.1295 February 28, 1996 [Picture of Jennifer Leonard] [Caption] Jennifer Leonard, Customer Service Representative OppenheimerFunds Service "How may I help you?" As an Oppenheimer funds shareholder, you have some special privileges. Whether it's automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that "links" your Oppenheimer funds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get automated information with OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you access to a variety of fund, account, and market information. Of course, you can always speak with a Customer Service Representative during the General Information hours shown at the left. You can count on us whenever you need assistance. That's why the International Customer Service Association, an independent, nonprofit organization made up of over 3,200 customer service management professionals from around the country, honored the Oppenheimer funds' transfer agent, OppenheimerFunds Services, with their Award of Excellence in 1993. So call us today--we're here to help. - ------------------------------------------------------------------------------- [Oppenheimer Logo] OppenheimerFunds Distributor, Inc. P.O. Box 5270 Denver, CO 80217-5270 - -------------- Bulk Rate U.S. Postage PAID Permit No. 469 Denver, CO - -------------- -----END PRIVACY-ENHANCED MESSAGE-----