-----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, UZkJEwffBIsmIPU50J83or3dfYW7mW4jlI6XOuGvSbK9ATNtmJcfyD0gTACdTHn+ RcpMmT9nKkoK1nczVXKZ1g== 0000950146-96-001591.txt : 19960906 0000950146-96-001591.hdr.sgml : 19960906 ACCESSION NUMBER: 0000950146-96-001591 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960905 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: 96626048 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 SEMIANNUAL REPORT [FRONT COVER] Oppenheimer Target Fund Semiannual Report June 30, 1996 [Picture of family at Petting Zoo] "We have some important financial goals, so we want our investment to increase in value over time." [LOGO-OPPENHEIMERFUNDS (R)] News Beat the Average Total Return for the 3-Year Period Ended 6/30/96: Oppenheimer Target Fund Class A (at net asset value)(1) 59.78% Lipper Capital Appreciation Funds Average(3) 53.80% This Fund is for people who want the potential for solid investment growth over the long term. How Your Fund Is Managed Oppenheimer Target Fund seeks long-term growth by investing in the stocks of "growth-type" companies, and cyclical industries that the Fund's investments managers believe have opportunities for capital growth. 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 networking. 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 six months ended 6/30/96 was 12.68% for Class A shares, 12.24% for Class B, and 12.21% 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 6/30/96 were 17.56%, 14.19% and 9.45%, respectively. For Class B shares, cumulative total return since inception on 11/1/95 was 9.11%. For Class C shares, average annual total returns for the 1-year period and since inception of the Class on 12/1/93 were 22.70% and 17.27%, respectively.(2) Outlook "Our outlook is very favorable, though we have become somewhat contrarian in our approach to the market. We are holding enough cash to be slightly defensive, so that we can take quick advantage of any opportunities created when various companies or market sectors fall out of favor. However, we remain aggressive in our high growth potential stock and sector holdings." Jane Putnam, Portfolio Manager June 30, 1996 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 6/30/95, 6/30/91 and 6/30/86, 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, so that actual investment results would have been lesser. Class B returns show results of hypothetical investments on 11/1/95 after the deduction of the applicable 5% contingent deferred sales charge. Class C returns show results of hypothetical investments on 6/30/95 and 12/1/93 (inception of class), with the 1% contingent deferred sales charge deducted for the 1-year result. 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 3-year period was for 81 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 Bridget A. Macaskill President Oppenheimer Target Fund [Photo Bridget Macaskill] Dear Shareholder, Against all odds, the stock market showed remarkable strength during the first five months of 1996. However, in the few months that followed, the market experienced significant volatility that resulted in a decline in the Dow of about 7 percent. Many experts said the stock market, having advanced to record heights in 1995 and void of any real market correction since 1990, was due for a downturn. This was, after all, the longest bull market of the post-World War II era. Thanks to the 10% rise in blue chip stocks during the first half of 1996 and the early success of small stocks, the decline that occurred recently was somewhat cushioned. While it's impossible to tell what will happen next, we are optimistic that this turn was a correction within a bull market rather than the onset of a bear market. What made the market perform so well during the first part of the year? It was another surprise: corporate profits. Between 1992 and 1995, corporate profits of U.S. companies advanced at a double-digit rate. Investors widely expected this year's profit tallies to be flat compared to 1995. After all, the economy had been sluggish--growing at an annual rate of just 2.3% in the first quarter of 1996. But corporate America continued to perform. The reason corporate profits were so strong is that many U.S. companies continued to successfully reduce costs. Often when a company achieves a small increase in sales, the benefit goes straight to the bottom line. Indeed, the U.S. Commerce Department reports indicated that corporate profits rose 15% for the four quarters ended March 1996, while the economy grew only marginally. Still, profits are not what they were in the early 1990s. That's why investors are seeking out companies that can grow earnings regardless of the fortunes of the economy. Which is just what many small companies in such fields as technology, healthcare and specialty retailing have been doing, growing earnings at double-digit--and even triple-digit rates. So it's not surprising that the stocks of many of these small fast-growing companies have been such strong performers. The early strength of the stock market is all the more remarkable when you consider that during the same period, interest rates moved up sharply. The yield on the benchmark 30-year U.S. Treasury bond rose from about 6% in January to over 7% today. Interest rates have been rising partly because investors are concerned that the economy is growing fast enough to generate higher inflation. However, we are watching this very closely, and would become very cautious regarding the stock market's performance if inflation were to flare up. As always, remember stock investments are generally meant for long-term growth objectives, and often involve short-term volatility. So, it's critical for investors to keep their focus on long-term goals and to put near-term setbacks in proper prospective. Your portfolio managers discuss the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. We look forward to helping you reach your investment goals in the future. /s/ Bridget A. Macaskill Bridget A. Macaskill July 22, 1996 3 Oppenheimer Target Fund Q + A (Photo-Jane Putnam] [Photo-Michael Levine] Q How did the Fund perform? An interview with your Fund's managers. How did the Fund perform over the past six months? The Fund performed very well, finishing the period significantly ahead of major indices, such as the Dow Jones Industrial Average and the S&P 500.(1) We also did well compared to our peers. Out of 169 competitors, we finished in the top half of the Lipper Analytical Services Aggressive Growth category. [Photo-Jay Tracey] What investments made positive contributions to performance? Over the past six months, we were heavily weighted in cyclical stocks compared to our peers. Because these companies do best when the economy is strong, investor demand drove their stock prices up when data on the economy indicated stronger growth. Thus, our concentration in cyclicals was a benefit. Within the cyclical sector, we continue to search for companies we feel can provide faster-than-average earnings growth, and where stock prices suggest value and room for appreciation. Did any investments negatively impact the portfolio? We were overweighted versus our peers in financial services companies. Over the long term, however, this is an area we believe offers great prospects. In addition, because of the rise in interest rates in the first half of this year, financial stocks have under-performed. This has made their stock prices attractive, giving us even greater confidence in their merits as an investment. As a result, we've added stocks of some asset management and brokerage firms. What areas are you currently targeting? Recently, we've been taking advantage of selected opportunities created by the fluc- 1. This comparison does not take sales charges into consideration. 4 Oppenheimer Target Fund Facing page Top left: Jane Putnam, Portfolio Manager Top right: Michael Levine, Member of Equity Investments Team Bottom Left: Jay Tracey, Member of Equity Investments Team This Page Top: John Doney, Member of Equity Investments Team Bottom: Robert Doll, Executive VP, Director of Equity Investments and Richard Rubinstein, Member of Equity Investments Team A We finished the period well ahead of many stock indices. tuating prices of technology stocks. We've now added some disk drive and semiconductor stocks, while we've sold the stocks of some software companies that have been terrific performers, but now look expensive. Though we saw appreciation in many of our healthcare stocks, we increased our holdings in some smaller medical technology firms not only because of their strong managements and a good track record, but also because they were available at reasonable prices. However, we've currently been reducing our weighting in cyclical stocks. Although they performed very well over the past six months, we believe these companies have appreciated enough to become more than fully-valued and we expect somewhat slower economic growth in the second half of the year. In particular, we took profits in some chemical and basic materials stocks, as well as in some of our retail holdings, and by doing so hope to capture our gains.(2) What is your outlook for the Fund? Our outlook is very favorable, though we have become somewhat contrarian in our approach to the market. Currently, we are holding enough cash to be slightly defensive, so that we can take quick advantage of any opportunities created when various companies or market sectors fall out of favor. However, we remain aggressive in our high growth potential stock holdings. Having said that, both first and second quarter earnings estimates and GDP growth rates came in above expectations. We think that suggests the potential for better-than-forecasted profit growth well into 1997.[solid box] 2. The Fund's portfolio is subject to change. 5 Oppenheimer Target Fund Statement of Investments June 30, 1996 (Unaudited)
Face Market Value Amount See Note 1 ==================================================================================================================================== Convertible Corporate Bonds and Notes--0.2% - ------------------------------------------------------------------------------------------------------------------------------------ Danka Business Systems PLC, 6.75% Cv. Sub. Nts., 4/1/02 (Cost $1,723,750) $1,700,000 $2,018,750 - ------------------------------------------------------------------------------------------------------------------------------------ Shares ==================================================================================================================================== Common Stocks--85.5% - ------------------------------------------------------------------------------------------------------------------------------------ Basic Materials--4.4% - ------------------------------------------------------------------------------------------------------------------------------------ Chemicals--3.1% FMC Corp.(1) 23,600 1,539,900 ----------------------------------------------------------------------------------------------------------------- IMC Global, Inc. 115,000 4,326,875 ----------------------------------------------------------------------------------------------------------------- Morton International, Inc. 80,000 2,980,000 ----------------------------------------------------------------------------------------------------------------- Praxair, Inc. 180,400 7,621,900 ----------------------------------------------------------------------------------------------------------------- Sterling Chemicals, Inc.(1) 187,500 2,179,687 ----------------------------------------------------------------------------------------------------------------- Terra Industries, Inc. 270,100 3,342,487 ----------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 95,000 3,776,250 ----------- 25,767,099 - ------------------------------------------------------------------------------------------------------------------------------------ Metals--0.3% Freeport-McMoRan Copper & Gold, Inc., Cl. B 70,000 2,231,250 - ------------------------------------------------------------------------------------------------------------------------------------ Paper--1.0% Boise Cascade Corp. 70,000 2,563,750 ----------------------------------------------------------------------------------------------------------------- Bowater, Inc. 110,000 4,138,750 ----------------------------------------------------------------------------------------------------------------- Willamette Industries, Inc. 25,000 1,487,500 -------------- 8,190,000 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Cyclicals--13.2% - ------------------------------------------------------------------------------------------------------------------------------------ Autos & Housing--1.4% AutoZone, Inc.(1) 100,000 3,475,000 ----------------------------------------------------------------------------------------------------------------- Pulte Corp. 150,000 4,012,500 ----------------------------------------------------------------------------------------------------------------- Toll Brothers, Inc.(1) 240,000 3,930,000 ----------- 11,417,500 - ------------------------------------------------------------------------------------------------------------------------------------ Leisure & Entertainment--3.0% Alaska Air Group, Inc.(1) 112,000 3,066,000 ----------------------------------------------------------------------------------------------------------------- AMR Corp. 30,000 2,730,000 ----------------------------------------------------------------------------------------------------------------- Delta Air Lines, Inc. 30,000 2,490,000 ----------------------------------------------------------------------------------------------------------------- Disney (Walt) Co. 125,000 7,859,375 ----------------------------------------------------------------------------------------------------------------- Mattel, Inc. 46,875 1,341,797 ----------------------------------------------------------------------------------------------------------------- Outback Steakhouse, Inc.(1) 75,000 2,586,328 ----------------------------------------------------------------------------------------------------------------- Wendy's International, Inc. 252,800 4,708,400 ----------- 24,781,900 - ------------------------------------------------------------------------------------------------------------------------------------ Media--0.7% Evergreen Media Corp., Cl. A(1) 70,000 2,992,500 ----------------------------------------------------------------------------------------------------------------- Viacom, Inc., Cl. B(1) 75,768 2,945,481 ----------- 5,937,981 - ------------------------------------------------------------------------------------------------------------------------------------ Retail: General--4.8% Donna Karan International, Inc. 234,600 6,568,800 ----------------------------------------------------------------------------------------------------------------- Eckerd Corp.(1) 245,000 5,543,125 ----------------------------------------------------------------------------------------------------------------- Jones Apparel Group, Inc.(1) 100,600 4,941,975 ----------------------------------------------------------------------------------------------------------------- Liz Claiborne, Inc. 65,000 2,250,625 ----------------------------------------------------------------------------------------------------------------- Nautica Enterprises, Inc.(1) 100,000 2,875,000 ----------------------------------------------------------------------------------------------------------------- Tommy Hilfiger Corp.(1) 200,000 10,725,000 ----------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc. 265,000 6,724,375 ----------- 39,628,900 6 Oppenheimer Target Fund Market Value Shares See Note 1 ==================================================================================================================================== Retail: Specialty--3.3% Bed Bath & Beyond, Inc. 200,000 $ 5,350,000 ----------------------------------------------------------------------------------------------------------------- CUC International, Inc.(1) 75,000 2,662,500 ----------------------------------------------------------------------------------------------------------------- General Nutrition Cos., Inc.(1) 180,100 3,151,750 ----------------------------------------------------------------------------------------------------------------- Home Depot, Inc. 65,000 3,510,000 ----------------------------------------------------------------------------------------------------------------- Lands' End, Inc.(1) 72,000 1,782,000 ----------------------------------------------------------------------------------------------------------------- Nike, Inc., Cl. B 105,000 10,788,750 ----------- 27,245,000 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Non-Cyclicals--17.2% - ------------------------------------------------------------------------------------------------------------------------------------ Beverages--1.7% Coca-Cola Co. (The) 140,000 6,842,500 ----------------------------------------------------------------------------------------------------------------- Cott Corp. 160,000 1,500,000 ----------------------------------------------------------------------------------------------------------------- PepsiCo, Inc. 160,000 5,660,000 ----------- 14,002,500 - ------------------------------------------------------------------------------------------------------------------------------------ Food--2.7% H.J. Heinz Co. 127,000 3,857,625 ----------------------------------------------------------------------------------------------------------------- JP Foodservice, Inc.(1) 94,900 2,372,500 ----------------------------------------------------------------------------------------------------------------- Kroger Co.(1) 125,000 4,937,500 ----------------------------------------------------------------------------------------------------------------- Richfood Holdings, Inc. 95,000 3,087,500 ----------------------------------------------------------------------------------------------------------------- Safeway, Inc.(1) 240,000 7,920,000 ----------- 22,175,125 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Drugs--5.2% Abbott Laboratories 80,000 3,480,000 ----------------------------------------------------------------------------------------------------------------- Amgen, Inc.(1) 50,000 2,700,000 ----------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 60,000 5,400,000 ----------------------------------------------------------------------------------------------------------------- CardioThoracic Systems, Inc.(1) 10,000 132,500 ----------------------------------------------------------------------------------------------------------------- Elan Corp. PLC, ADR(1) 85,000 4,855,625 ----------------------------------------------------------------------------------------------------------------- Johnson & Johnson 74,526 3,689,037 ----------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 185,000 13,204,375 ----------------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 150,000 9,412,500 ----------- 42,874,037 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Supplies & Services--5.0% Boston Scientific Corp.(1) 120,000 5,400,000 ----------------------------------------------------------------------------------------------------------------- HealthCare COMPARE Corp.(1) 110,000 5,362,500 ----------------------------------------------------------------------------------------------------------------- HEALTHSOUTH Corp.(1) 60,000 2,160,000 ----------------------------------------------------------------------------------------------------------------- Henry Schein, Inc. 99,500 3,805,875 ----------------------------------------------------------------------------------------------------------------- Lincare Holdings, Inc.(1) 110,000 4,317,500 ----------------------------------------------------------------------------------------------------------------- Medtronic, Inc. 100,000 5,600,000 ----------------------------------------------------------------------------------------------------------------- Nellcor Puritan Bennett, Inc.(1) 90,000 4,365,000 ----------------------------------------------------------------------------------------------------------------- Oxford Health Plans, Inc.(1) 85,000 3,495,625 ----------------------------------------------------------------------------------------------------------------- Sofamor Danek Group, Inc.(1) 70,000 1,942,500 ----------------------------------------------------------------------------------------------------------------- Ventritex, Inc.(1) 130,000 2,226,250 ----------------------------------------------------------------------------------------------------------------- VISX, Inc.(1) 90,200 3,078,075 ----------- 41,753,325 7 Oppenheimer Target Fund Statement of Investments (Unaudited) (Continued) Market Value Shares See Note 1 ==================================================================================================================================== Household Goods--0.5% Procter & Gamble Co. 50,000 $ 4,531,250 - ------------------------------------------------------------------------------------------------------------------------------------ Tobacco--2.1% Philip Morris Cos., Inc. 100,000 10,400,000 ----------------------------------------------------------------------------------------------------------------- UST, Inc. 195,000 6,678,750 ----------- 17,078,750 - ------------------------------------------------------------------------------------------------------------------------------------ Energy--1.7% - ------------------------------------------------------------------------------------------------------------------------------------ Energy Services & Producers--0.9% Global Marine, Inc.(1) 110,000 1,526,250 ----------------------------------------------------------------------------------------------------------------- Sonat Offshore Drilling, Inc. 90,000 4,545,000 ----------------------------------------------------------------------------------------------------------------- Tidewater, Inc. 36,000 1,579,500 ----------- 7,650,750 - ------------------------------------------------------------------------------------------------------------------------------------ Oil-Integrated--0.8% Mobil Corp. 60,000 6,727,500 - ------------------------------------------------------------------------------------------------------------------------------------ Financial--16.2% - ------------------------------------------------------------------------------------------------------------------------------------ Banks--4.0% Bank of Boston Corp. 125,000 6,187,500 ----------------------------------------------------------------------------------------------------------------- BankAmerica Corp. 42,000 3,181,500 ----------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 50,000 3,531,250 ----------------------------------------------------------------------------------------------------------------- NationsBank Corp. 90,000 7,436,250 ----------------------------------------------------------------------------------------------------------------- PNC Bank Corp. 97,750 2,908,063 ----------------------------------------------------------------------------------------------------------------- SouthTrust Corp. 80,000 2,250,000 ----------------------------------------------------------------------------------------------------------------- State Street Boston Corp. 87,400 4,457,400 ----------------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 12,333 2,946,045 ----------- 32,898,008 - ------------------------------------------------------------------------------------------------------------------------------------ Diversified Financial--9.6% Advanta Corp., Cl. A 175,000 8,925,000 ----------------------------------------------------------------------------------------------------------------- Associates First Capital Corp., Cl. A(1) 89,000 3,348,625 ----------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp. 60,000 5,130,000 ----------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn. 100,000 3,350,000 ----------------------------------------------------------------------------------------------------------------- First USA, Inc. 190,000 10,450,000 ----------------------------------------------------------------------------------------------------------------- Franklin Resources, Inc. 120,000 7,320,000 ----------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp. 450,000 14,062,500 ----------------------------------------------------------------------------------------------------------------- Price (T. Rowe) Associates 226,200 6,955,650 ----------------------------------------------------------------------------------------------------------------- Salomon, Inc. 100,000 4,400,000 ----------------------------------------------------------------------------------------------------------------- Schwab (Charles) Corp. (New) 150,000 3,675,000 ----------------------------------------------------------------------------------------------------------------- Travelers Group, Inc. 262,500 11,976,563 ----------- 79,593,338 - ------------------------------------------------------------------------------------------------------------------------------------ Insurance--2.6% Allstate Corp. 120,000 5,475,000 ----------------------------------------------------------------------------------------------------------------- Amerin Corp.(1) 85,000 2,273,750 ----------------------------------------------------------------------------------------------------------------- MGIC Investment Corp. 87,900 4,933,388 ----------------------------------------------------------------------------------------------------------------- SunAmerica, Inc. 165,000 9,322,500 ----------- 22,004,638 8 Oppenheimer Target Fund Market Value Shares See Note 1 ==================================================================================================================================== Industrial--6.4% - ------------------------------------------------------------------------------------------------------------------------------------ Electrical Equipment--1.7% Emerson Electric Co. 105,000 $ 9,489,375 ----------------------------------------------------------------------------------------------------------------- General Electric Co. 40,000 3,460,000 ----------------------------------------------------------------------------------------------------------------- Kemet Corp.(1) 75,000 1,500,000 ----------- 14,449,375 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Materials--1.1% Centex Corp. 141,000 4,388,625 ----------------------------------------------------------------------------------------------------------------- Rayonier, Inc. 132,700 5,042,600 ----------- 9,431,225 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Services--1.2% Danka Business Systems PLC, Sponsored ADR 75,000 2,193,750 ----------------------------------------------------------------------------------------------------------------- DecisionOne Holdings Corp.(1) 131,200 3,116,000 ----------------------------------------------------------------------------------------------------------------- Manpower, Inc. 125,000 4,906,250 ----------- 10,216,000 - ------------------------------------------------------------------------------------------------------------------------------------ Manufacturing--0.6% AGCO Corp. 108,300 3,005,325 ----------------------------------------------------------------------------------------------------------------- Kulicke & Soffa Industries, Inc.(1) 120,000 1,755,000 ----------------------------------------------------------------------------------------------------------------- O.T.F. Equities, Inc.(1) 400,000 -- ----------- 4,760,325 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation--1.8% Burlington Northern Santa Fe Corp. 42,000 3,396,750 ----------------------------------------------------------------------------------------------------------------- Canadian Pacific Ltd. 345,000 7,590,000 ----------------------------------------------------------------------------------------------------------------- Illinois Central Corp. 132,150 3,749,756 ----------- 14,736,506 - ------------------------------------------------------------------------------------------------------------------------------------ Technology--25.3% - ------------------------------------------------------------------------------------------------------------------------------------ Aerospace/Defense--0.5% Goodrich (B.F.) Co. 114,000 4,260,750 - ------------------------------------------------------------------------------------------------------------------------------------ Computer Hardware--3.6% Adaptec, Inc. 85,000 4,026,875 ----------------------------------------------------------------------------------------------------------------- Cabletron Systems, Inc.(1) 85,000 5,833,125 ----------------------------------------------------------------------------------------------------------------- Compaq Computer Corp.(1) 50,000 2,462,500 ----------------------------------------------------------------------------------------------------------------- EMC Corp.(1) 345,000 6,425,625 ----------------------------------------------------------------------------------------------------------------- Gateway 2000, Inc.(1) 170,800 5,807,200 ----------------------------------------------------------------------------------------------------------------- Seagate Technology, Inc.(1) 125,000 5,625,000 ----------- 30,180,325 - ------------------------------------------------------------------------------------------------------------------------------------ Computer Software--11.1% Automatic Data Processing, Inc. 60,000 2,317,500 ----------------------------------------------------------------------------------------------------------------- BMC Software, Inc.(1) 145,000 8,663,750 ----------------------------------------------------------------------------------------------------------------- Computer Associates International, Inc. 50,000 3,562,500 ----------------------------------------------------------------------------------------------------------------- First Data Corp. 217,577 17,324,569 ----------------------------------------------------------------------------------------------------------------- Informix Corp.(1) 350,000 7,875,000 ----------------------------------------------------------------------------------------------------------------- Microsoft Corp.(1) 230,000 27,628,750 ----------------------------------------------------------------------------------------------------------------- Oracle Corp.(1) 378,850 14,940,897 ----------------------------------------------------------------------------------------------------------------- PLATINUM Technology, Inc.(1) 180,000 2,722,500 ----------------------------------------------------------------------------------------------------------------- Shiva Corp.(1) 45,000 3,600,000 ----------------------------------------------------------------------------------------------------------------- Structural Dynamics Research Corp.(1) 70,000 1,540,000 ----------------------------------------------------------------------------------------------------------------- System Software Associates, Inc. 133,500 2,269,500 ----------- 92,444,966 9 Oppenheimer Target Fund Statement of Investments (Unaudited) (Continued) Market Value Shares See Note 1 ==================================================================================================================================== Electronics--4.1% Applied Materials, Inc.(1) 160,000 $ 4,880,000 ----------------------------------------------------------------------------------------------------------------- Arrow Electronics, Inc.(1) 50,000 2,156,250 ----------------------------------------------------------------------------------------------------------------- Cypress Semiconductor Corp.(1) 180,000 2,160,000 ----------------------------------------------------------------------------------------------------------------- Intel Corp. 150,000 11,015,625 ----------------------------------------------------------------------------------------------------------------- LSI Logic Corp.(1) 130,000 3,380,000 ----------------------------------------------------------------------------------------------------------------- Motorola, Inc. 85,000 5,344,375 ----------------------------------------------------------------------------------------------------------------- Novellus Systems, Inc.(1) 57,800 2,080,800 ----------------------------------------------------------------------------------------------------------------- Philips Electronics NV, ADR 43,000 1,402,875 ----------------------------------------------------------------------------------------------------------------- Teradyne, Inc.(1) 120,000 2,070,000 ----------- 34,489,925 - ------------------------------------------------------------------------------------------------------------------------------------ Telecommunications- Technology--6.0% 3Com Corp.(1) 65,000 2,973,750 ----------------------------------------------------------------------------------------------------------------- Andrew Corp.(1) 100,000 5,375,000 ----------------------------------------------------------------------------------------------------------------- Cisco Systems, Inc.(1) 180,000 10,192,500 ----------------------------------------------------------------------------------------------------------------- DSC Communications Corp.(1) 50,000 1,506,250 ----------------------------------------------------------------------------------------------------------------- Hong Kong Telecommunications Ltd., Sponsored ADR 110,000 1,980,000 ----------------------------------------------------------------------------------------------------------------- L.M. Ericsson Telephone Co., Cl. B, ADR 250,000 5,375,000 ----------------------------------------------------------------------------------------------------------------- Lucent Technologies, Inc. 30,000 1,136,250 ----------------------------------------------------------------------------------------------------------------- Mobile Telecommunication Technologies Corp.(1) 135,000 1,974,375 ----------------------------------------------------------------------------------------------------------------- Newbridge Networks Corp.(1) 120,000 7,860,000 ----------------------------------------------------------------------------------------------------------------- Telecom Corp. of New Zealand Ltd., Sponsored ADR 30,000 2,002,500 ----------------------------------------------------------------------------------------------------------------- Tellabs, Inc.(1) 140,000 9,362,500 ----------- 49,738,125 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities--1.1% - ------------------------------------------------------------------------------------------------------------------------------------ Electric Utilities--0.3% Empresa Nacional de Electricidad SA, Sponsored ADR 45,000 2,818,125 - ------------------------------------------------------------------------------------------------------------------------------------ Telephone Utilities--0.8% Cincinnati Bell, Inc. 70,000 3,648,750 ----------------------------------------------------------------------------------------------------------------- Telecomunicacoes Brasileiras SA, ADR 40,000 2,785,000 ----------- 6,433,750 ----------- Total Common Stocks (Cost $498,198,517) 710,448,248 Units ==================================================================================================================================== Rights, Warrants and Certificates--0.0% - ------------------------------------------------------------------------------------------------------------------------------------ Windmere Corp. Wts., Exp. 1/98 (Cost $0) 7,094 -- Face Amount ==================================================================================================================================== Repurchase Agreement--15.5% - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreement with First Chicago Capital Markets, 5.45%, dated 6/28/96, to be repurchased at $128,458,315 on 7/1/96, collateralized by U.S. Treasury Bonds, 6.25%--11.25%, 2/15/07--8/15/23, with a value of $86,078,593, and U.S. Treasury Nts., 4.75%--7.875%, 9/30/97--2/15/05 with a value of $44,920,725 (Cost $128,400,000) $128,400,000 128,400,000 - ------------------------------------------------------------------------------------------------------------------------------------ Total Investments, at Value (Cost $628,322,267) 101.2% 840,866,998 - ------------------------------------------------------------------------------------------------------------------------------------ Liabilities in Excess of Other Assets (1.2) (9,584,080) - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets 100.0% $831,282,918 ===== ============ 1. Non-income producing security. See accompanying Notes to Financial Statements. 10 Oppenheimer Target Fund Statement of Assets and Liabilities June 30, 1996 (Unaudited) ==================================================================================================================================== Assets Investments, at value (including repurchase agreement of $128,400,000) (cost $628,322,267)--see accompanying statement $840,866,998 ----------------------------------------------------------------------------------------------------------------- Cash 122,298 ----------------------------------------------------------------------------------------------------------------- Receivables: Investments sold 3,973,777 Interest and dividends 713,105 Shares of beneficial interest sold 574,923 ----------------------------------------------------------------------------------------------------------------- Other 112,579 ----------- Total assets 846,363,680 ==================================================================================================================================== Liabilities Payables and other liabilities: Investments purchased 12,660,766 Shares of beneficial interest redeemed 1,617,727 Distribution and service plan fees 335,352 Trustees' fees 244,070 Transfer and shareholder servicing agent fees 52,817 Other 170,030 ----------- Total liabilities 15,080,762 - ------------------------------------------------------------------------------------------------------------------------------------ Net Assets $831,282,918 ============ - ------------------------------------------------------------------------------------------------------------------------------------ Composition of Net Assets Paid-in capital $555,506,661 ----------------------------------------------------------------------------------------------------------------- Undistributed net investment income 2,300,178 ----------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 60,931,348 ----------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 212,544,731 ----------- Net assets $831,282,918 ============ - ------------------------------------------------------------------------------------------------------------------------------------ Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $815,509,033 and 26,372,500 shares of beneficial interest outstanding) $30.92 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $32.81 ----------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $5,299,452 and 172,533 shares of beneficial interest outstanding) $30.72 ----------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $10,474,433 and 344,279 shares of beneficial interest outstanding) $30.42 See accompanying Notes to Financial Statements. 11 Oppenheimer Target Fund Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited) ==================================================================================================================================== Investment Income Interest $ 3,446,039 ----------------------------------------------------------------------------------------------------------------- Dividends 3,481,355 ----------- Total income 6,927,394 ==================================================================================================================================== Expenses Management fees--Note 4 2,820,183 ----------------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 645,226 Class B 20,472 Class C 43,161 ----------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 510,442 ----------------------------------------------------------------------------------------------------------------- Shareholder reports 143,467 ----------------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 93,561 Class B 820 Class C 979 ----------------------------------------------------------------------------------------------------------------- Trustees' fees and expenses--Note 1 69,358 ----------------------------------------------------------------------------------------------------------------- Legal and auditing fees 62,037 ----------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 11,674 ----------------------------------------------------------------------------------------------------------------- Other 37,258 ----------- Total expenses 4,458,638 ==================================================================================================================================== Net Investment Income 2,468,756 ==================================================================================================================================== Realized and Unrealized Gain Net realized gain on investments 56,447,749 ----------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 35,900,392 ----------- Net realized and unrealized gain 92,348,141 ==================================================================================================================================== Net Increase in Net Assets Resulting From Operations $94,816,897 =========== See accompanying Notes to Financial Statements. 12 Oppenheimer Target Fund Statements of Changes in Net Assets
Six Months Ended Year Ended June 30, 1996 December 31, (Unaudited) 1995 ==================================================================================================================================== Operations Net investment income $ 2,468,756 $ 5,803,306 ----------------------------------------------------------------------------------------------------------------- Net realized gain 56,447,749 71,199,990 ----------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 35,900,392 58,150,018 ---------- ---------- Net increase in net assets resulting from operations 94,816,897 135,153,314 ==================================================================================================================================== Dividends and Distributions to Shareholders Dividends from net investment income: Class A -- (5,896,377) Class B -- (8,658) Class C -- (24,850) ----------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (69,237,207) Class B -- (100,605) Class C -- (663,926) ==================================================================================================================================== Beneficial Interest Transactions Net increase (decrease) in net assets resulting from beneficial interest transactions--Note 2: Class A (36,452,771) 397,611,091 Class B 2,198,390 2,840,388 Class C 2,293,604 5,989,404 ==================================================================================================================================== Net Assets Total increase 62,856,120 465,662,574 ----------------------------------------------------------------------------------------------------------------- Beginning of period 768,426,798 302,764,224 ----------- ----------- End of period [including undistributed (overdistributed) net investment income of $2,300,178 and $(168,578), respectively] $831,282,918 $768,426,798 ============ ============
See accompanying Notes to Financial Statements. 13 Oppenheimer Target Fund
Financial Highlights Class A --------------------------------------------------------------------- Six Months Ended June 30, 1996 Year Ended December 31, (Unaudited) 1995 1994 1993 ==================================================================================================================================== Per Share Operating Data: Net asset value, beginning of period $27.44 $22.63 $25.72 $25.25 - ------------------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income (loss) . .09 .24 .20 .13 Net realized and unrealized gain (loss) 3.39 7.61 (.11) .86 ---- ---- ---- --- Total income (loss) from investment operations 3.48 7.85 .09 .99 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income -- (.24) (.20) (.12) Distributions from net realized gain -- (2.80) (2.98) (.40) ----- ----- ----- ---- Total dividends and distributions to shareholders -- (3.04) (3.18) (.52) - ------------------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $30.92 $27.44 $22.63 $25.72 ====== ====== ====== ====== ==================================================================================================================================== Total Return, at Net Asset Value(5) 12.68% 34.85% 0.46% 3.93% ==================================================================================================================================== Ratios/Supplemental Data: Net assets, end of period (in thousands) $815,509 $758,439 $301,698 $368,806 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $793,775 $538,210 $325,003 $383,875 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 0.63%(6) 1.08% 0.72% 0.47% Expenses 1.10%(6) 1.03% 1.16% 1.07% - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(7) 32.1% 71.9% 34.7% 22.9% - ------------------------------------------------------------------------------------------------------------------------------------ Average brokerage commission rate(8) $0.0586 $0.0578 -- --
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. Based on average shares outstanding for the period. 5. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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. 14 Oppenheimer Target Fund
Class B CLass C - ---------------------- --------------------------------- ------------------------------------------------------------ Six Months Ended Period Ended Six Months Ended June 30, 1996 December 31, June 30, 1996 Year Ended December 31, 1992 1991(2) (Unaudited) 1995(3)(4) (Unauditied) 1995 1994 1993(1)(2) ============================================================================================================================= $23.76 $17.47 $27.37 $29.77 $27.11 $22.50 $25.72 $25.92 .16 .27 (.07) (.14) (.01) .09 -- (.01) 2.28 6.87 3.42 .78 3.32 7.43 (.15) .31 ---- ---- ---- --- ---- ---- ---- --- 2.44 7.14 3.35 .64 3.31 7.52 (.15) .30 - ------------------------------------------------------------------------------------------------------------------------------ (.17) (.18) -- (.24) -- (.11) (.09) (.10) (.78) (.67) -- (2.80) -- (2.80) (2.98) (.40) ---- ---- ----- ----- ----- ---- - ------------------------------------------------------------------------------------------------------------------------------- (.95) (.85) -- (3.04) -- (2.91) (3.07) (.50) - ------------------------------------------------------------------------------------------------------------------------------- $25.25 $23.76 $30.72 $27.37 $30.42 $27.11 $22.50 $25.72 ====== ====== ====== ====== ====== ====== ====== ====== ============================================================================================================================= 10.27% 41.33% 12.24% 1.67% 12.21% 33.56% (0.50)% 2.11% ============================================================================================================================= $401,256 $369,351 $5,299 $2,751 $10,474 $7,237 $1,066 $8 - ----------------------------------------------------------------------------------------------------------------------------- $362,295 $209,596 $4,122 $661 $8,692 $3,792 $467 $6 0.69% 1.25% (0.14)%(6) (0.54)%(6) (0.20)%(6) 0.19% (0.02)% (0.07)%(6) 1.09% 1.17% 1.95%(6) 2.62%(6) 1.94%(6) 1.90% 2.18% 2.18%(6) - ------------------------------------------------------------------------------------------------------------------------------ 42.3% 65.6% 32.1% 71.9% 32.1% 71.9% 34.7% 22.9% -- -- $0.0586 $0.0578 $0.0586 $0.0578 -- --
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 June 30, 1996 were $219,010,833 and $224,146,995, respectively. 8. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 15 Oppenheimer Target Fund Notes to Financial Statements (Unaudited) ================================================================================ 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. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- 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 six months ended June 30, 1996, a provision of $20,969 was made for the Fund's projected benefit obligations, and payments of $9,705 were made to retired trustees, resulting in an accumulated liability of $233,175 at June 30, 1996. - -------------------------------------------------------------------------------- Distributions to Shareholders. Dividends and distributions to shareholders are recorded on the ex-dividend date. 16 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. - -------------------------------------------------------------------------------- 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:
Six Months Ended June 30, 1996 Year Ended December 31, 1995(1) ------------------------------ -------------------------------- Shares Amount Shares Amount - ------------------------------------------------------------------------------------------------------------------------------------ Class A: Sold 2,143,495 $ 63,533,137 3,305,271 $ 90,988,885 Dividends and distributions reinvested -- -- 2,635,092 71,461,980 Issued in connection with the acquisition of Oppenheimer Time Fund--Note 5 -- -- 11,277,345 315,314,574 Redeemed (3,410,400) (99,985,908) (2,909,180) (80,154,348) ---------- ----------- ---------- ------------ Net increase (decrease) (1,266,905) $(36,452,771) 14,308,528 $397,611,091 ========== ============ ========== ============ - ------------------------------------------------------------------------------------------------------------------------------------ Class B: Sold 271,985 $8,107,895 107,562 $3,071,314 Dividends and distributions reinvested -- -- 3,988 107,888 Redeemed (199,970) (5,909,505) (11,032) (338,814) ---------- ----------- ---------- ------------ Net increase 72,015 $2,198,390 100,518 $2,840,388 ========== ============ ========== ============ - ------------------------------------------------------------------------------------------------------------------------------------ Class C: Sold 123,266 $3,630,882 257,084 $7,022,376 Dividends and distributions reinvested -- -- 22,545 604,205 Redeemed (45,915) (1,337,278) (60,076) (1,637,177) ---------- ----------- ---------- ------------ Net increase 77,351 $2,293,604 219,553 $5,989,404 ========== ============ ========== ============
1. For the six months 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 June 30, 1996, net unrealized appreciation on investments of $212,544,731 was composed of gross appreciation of $225,238,614, and gross depreciation of $12,693,883. 17 Oppenheimer Target Fund Notes to Financial Statements (Unaudited) (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 0.75% on the first $200 million of average annual net assets, 0.72% on the next $200 million, 0.69% on the next $200 million, 0.66% on the next $200 million and 0.60% in net assets in excess of $800 million. The Manager has voluntarily undertaken to waive a portion of its management fee, whereby the Fund shall pay an annual management fee of 0.58% of its net assets in excess of $1.5 billion. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent applicable regulatory limit on Fund expenses. For the six months ended June 30, 1996, commissions (sales charges paid by investors) on sales of Class A shares totaled $479,701, of which $153,815 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 $76,042 and $24,347, of which $4,456 was paid to an affiliated broker/dealer for Class B Shares. During the six months ended June 30, 1996, OFDI received contingent deferred sales charges of $1,327 and $1,677, 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. The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate that may not exceed 0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and other financial institutions quarterly for providing personal service and maintenance of accounts of their customers that hold Class A shares. During the six months ended June 30, 1996, OFDI paid $28,556 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. The Fund has adopted a compensation type Distribution and Service Plan for Class B shares to compensate OFDI for its services and costs in distributing Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B shares that are outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class B shares. Both fees are computed on the average annual net assets of Class B shares, determined as of the close of each regular business day. If the Plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plan was terminated. During the six months ended June 30, 1996, OFDI retained $20,472 as compensation for Class B sales commissions and service fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred unreimbursed expenses of $109,000 for Class B. The Fund has adopted a reimbursement type Distribution and Service Plan for Class C shares to reimburse OFDI for its services and costs in distributing Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives a service fee of 0.25% per year to reimburse dealers for providing personal services for accounts that hold Class C shares. Both fees are computed on the average annual net assets of Class C shares, determined as of the close of each regular business day. If the Plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plan was terminated. During the six months ended June 30, 1996, OFDI retained $23,264 as reimbursement for Class C sales commissions and service fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred unreimbursed expenses of $112,487 for Class C. 18 Oppenheimer Target Fund Oppenheimer Target Fund ================================================================================ Officers and Trustees Leon Levy, Chairman of the Board of Trustees Donald W. Spiro, Vice Chairman of the Board of Trustees Bridget A. Macaskill, Trustee and President Robert G. Galli, Trustee Benjamin Lipstein, Trustee Elizabeth B. Moynihan, Trustee Kenneth A. Randall, Trustee Edward V. Regan, Trustee Russell S. Reynolds, Jr., Trustee Sidney M. Robbins, Trustee Pauline Trigere, Trustee Clayton K. Yeutter, Trustee Robert C. Doll, Jr., Vice President Jane Putnam, Vice President George C. Bowen, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. 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 The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors. 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. 19 Oppenheimer Target Fund [BACK COVER] Information General Information Monday-Friday 8:30 a.m.-9 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 RS0320.001.0696 August 31, 1996 [Picture of Jennifer Leonard] [Caption] Jennifer Leonard, Customer Service Representative OppenheimerFunds Services "How may I help you?" As an Oppenheimer fund 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. [LOGO-OppenheimerFunds{R}] 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-----