Oppenheimer Capital Appreciation Fund

N-CSRS 1 d709725dncsrs.htm OPPENHEIMER CAPITAL APPRECIATION FUND Oppenheimer Capital Appreciation Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-3105

Oppenheimer Capital Appreciation Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924

(Address of principal executive offices) (Zip code)

Arthur S. Gabinet

OFI Global Asset Management, Inc.

Two World Financial Center, New York, New York 10281-1008

(Name and address of agent for service)

Registrant’s telephone number, including area code: (303) 768-3200

Date of fiscal year end: August 31

Date of reporting period: 2/28/2014

Item 1. Reports to Stockholders.

LOGO

Table of Contents


Fund Performance Discussion			3

Top Holdings and Allocations			6

Fund Expenses			9

Statement of Investments			11

Statement of Assets and Liabilities			14

Statement of Operations			16

Statements of Changes in Net Assets			17

Financial Highlights			18

Notes to Financial Statements			29

Board Approval of the Fund’s Investment Advisory and Sub-Advisory Agreements			41

Portfolio Proxy Voting Policies and Procedures; Updates to Statement of Investments			44

Trustees and Officers			45

Privacy Policy Notice			46

Class A Shares

AVERAGE ANNUAL TOTAL RETURNS AT 2/28/14


	Class A Shares of the Fund
	Without Sales Charge	With Sales Charge	S&P 500 Index	Russell 1000 Growth Index
6-Month	19.08%	12.23%	15.07%	17.84%
1-Year	26.50	19.23	25.37	29.14
5-Year	20.87	19.45	23.00	24.02
10-Year	5.38	4.75	7.16	7.77

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

2 OPPENHEIMER CAPITAL APPRECIATION FUND

Fund Performance Discussion

The Fund’s Class A shares (without sales charge) produced a cumulative total return of 19.08% during the reporting period. On a relative basis, the Fund outperformed the Russell 1000 Growth Index (the “Index”), which returned 17.84%. An overweight position in the health care sector, which was the strongest performing sector of the Index this period, as well as an underweight to consumer staples, benefited the Fund’s relative performance. In addition, stronger relative stock selection in the industrials and consumer discretionary sectors contributed to the Fund’s outperformance. The Fund underperformed the Index in the information technology and energy sectors, due primarily to weaker relative stock selection.

MARKET OVERVIEW

In the months prior to the start of the reporting period, financial markets encountered heightened volatility stemming from remarks by Ben Bernanke, the former chairman of the Federal Reserve (the “Fed”). These comments were widely interpreted as a signal that the central bank would begin to back away from its quantitative easing program sooner than most analysts had expected. The shift to a less accommodative policy stance appeared to be triggered by an accelerating U.S. economic recovery in which the unemployment rate declined, housing markets recovered and manufacturing activity increased.

After weathering bouts of volatility and rising long-term interest rates in the immediate wake of Mr. Bernanke’s comments, financial markets generally stabilized when investors came to recognize that plans to taper quantitative easing did not necessarily portend imminent increases in short-term rates. Investors generally lowered their economic expectations in October in the

midst of a 16-day U.S. government shutdown caused by Congress’s inability to agree on a funding resolution. At its October meeting, the Fed’s policymaking arm again postponed any cutbacks in quantitative easing, reflecting reduced expectations for economic growth over the near to intermediate term. The Fed responded to the strengthening economy at its mid-December meeting by implementing a modest cutback in its bond purchasing program.

In January 2014, investors worried that ongoing downturns in the emerging markets might dampen the U.S. economic recovery, leading to renewed volatility in equity markets. At its meeting in late January, the Fed agreed to continue cutting quantitative easing in measured steps, as long as the economy continues to grow as expected. The Fed continued to hold short-term interest rates at very low levels throughout the reporting period. In January 2014, Janet Yellen was also confirmed as the next Fed chairman.

3 OPPENHEIMER CAPITAL APPRECIATION FUND

FUND REVIEW

During the reporting period, the top three contributors to the Fund’s performance were Google, Inc., Facebook, Inc. and Biogen Idec, Inc. Search engine giant Google benefited from solid advertising growth, with video ads shown via its subsidiary YouTube boosting results. Growth in Google’s search business outside the U.S., especially in Japan and many developing markets also benefited. Facebook, the world’s number one social network, delivered strong evidence that it can thrive on smartphones and tablets, with increases in mobile advertising revenue. Biogen Idec is a global biotechnology company that benefited from strong sales of its multiple sclerosis drug Tecfidera, which was approved by the U.S. Food and Drug Administration in March 2013. Towards the end of the reporting period, Tecfidera was approved for use in Europe.

Also contributing positively to performance were Gilead Sciences, Inc. and The Walt Disney Co. Gilead Sciences is a research-based biopharmaceutical company that discovers, develops and commercializes medicines. The company benefited from sales of its new hepatitis C drug Sovaldi and its flagship HIV drugs. Shares of entertainment company Walt Disney rallied in February 2014 after the company reported an increase in profit, helped by the success of its movies “Thor: The Dark World” and “Frozen”.

While detractors from performance were limited this reporting period, the most

significant were Teradata Corp., LinkedIn Corp. and Citrix Systems, Inc. Teradata, a provider of analytic data solutions through its database management service, warned third quarter results would miss analysts’ expectations and cut its full-year outlook, saying its sales were weak outside the U.S. and Europe. Management noted that international macro challenges were delaying some opportunities. We exited our position during the reporting period. LinkedIn, the largest professional networking website, issued a sales forecast that trailed analysts’ estimates and reported slowing growth in each of its three business lines. Citrix Systems, maker of virtualization and content delivery software and other cloud computing system products, released third quarter 2013 earnings results that were well below management’s prior guidance. We also exited our position in Citrix Systems during the period.

STRATEGY & OUTLOOK

The Fund continues to operate with the philosophy that long-term market outperformance can be achieved by investing in a managed portfolio of high quality growth stocks. We combine strategic top-down sector analysis with bottom up fundamental research, focusing on high quality companies with historically consistent growth and capital discipline.

The U.S. economy remains resilient, but continues to grow at a below normal expansionary pace and with subpar labor

4 OPPENHEIMER CAPITAL APPRECIATION FUND

participation. The U.S. economy has been supported by strong productivity gains, low structural energy costs and a relatively attractive currency. Looking forward, we believe the U.S. economy may retain many of these tailwinds and for the markets to reward differentiated valuations to those companies demonstrating consistent quality, growth, and innovation. We believe that companies with capital discipline, strong management, and sustainable competitive advantages have the greatest prospects for outperformance over time.

LOGO

Michael Kotlarz

Portfolio Manager

5 OPPENHEIMER CAPITAL APPRECIATION FUND

Top Holdings and Allocations

TOP TEN COMMON STOCK HOLDINGS


Apple, Inc.		5.9%
Biogen Idec, Inc.		4.0
Facebook, Inc., Cl. A		4.0
Google, Inc., Cl. A		3.6
Gilead Sciences, Inc.		3.6
Walt Disney Co. (The)		3.1
MasterCard, Inc., Cl. A		2.4
EOG Resources, Inc.		2.1
EMC Corp.		2.1
CVS Caremark Corp.		2.1

Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2014, and are based on net assets. For more current Fund holdings, please visit oppenheimerfunds.com.

TOP TEN COMMON STOCK INDUSTRIES


Biotechnology		12.0%
Internet Software & Services		9.7
Computers & Peripherals		9.2
Media		6.4
Pharmaceuticals		5.9
Capital Markets		5.5
IT Services		5.3
Specialty Retail		3.8
Oil, Gas & Consumable Fuels		3.6
Internet & Catalog Retail		3.3

Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2014, and are based on net assets.

SECTOR ALLOCATION

LOGO

Portfolio holdings and allocations are subject to change. Percentages are as of February 28, 2014, and are based on the total market value of common stocks.

6 OPPENHEIMER CAPITAL APPRECIATION FUND

Share Class Performance

AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 2/28/14


	Inception Date	6-Month	1-Year	5-Year	10-Year
Class A (OPTFX)	1/22/81	19.08%	26.50%	20.87%	5.38%
Class B (OTGBX)	11/1/95	18.65%	25.53%	19.87%	4.87%
Class C (OTFCX)	12/1/93	18.63%	25.53%	19.93%	4.57%
Class I (OPTIX)	12/29/11	19.31%	27.08%	21.56%*	N/A
Class N (OTCNX)	3/1/01	18.94%	26.20%	20.58%	5.07%
Class Y (OTCYX)	11/3/97	19.23%	26.93%	21.35%	5.79%

AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 2/28/14
	Inception Date	6-Month	1-Year	5-Year	10-Year
Class A (OPTFX)	1/22/81	12.23%	19.23%	19.45%	4.75%
Class B (OTGBX)	11/1/95	13.65%	20.53%	19.68%	4.87%
Class C (OTFCX)	12/1/93	17.63%	24.53%	19.93%	4.57%
Class I (OPTIX)	12/29/11	19.31%	27.08%	21.56%*	N/A
Class N (OTCNX)	3/1/01	17.94%	25.20%	20.58%	5.07%
Class Y (OTCYX)	11/3/97	19.23%	26.93%	21.35%	5.79%

* Shows performance since inception.

Performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C and N shares, the contingent deferred sales charge of 1% for the 1-year period. There is no sales charge for Class I and Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the 10-year return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized.

The Fund’s performance is compared to the performance of the S&P 500 Index, a broad-based measure of domestic stock performance, and the Russell 1000 Growth Index, which measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Indices are unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the Index. Index performance includes reinvestment of income, but does not reflect

7 OPPENHEIMER CAPITAL APPRECIATION FUND

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

The Fund’s investment strategy and focus can change over time. The mention of specific fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. or its affiliates.

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

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

8 OPPENHEIMER CAPITAL APPRECIATION FUND

Fund Expenses

Fund Expenses. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended February 28, 2014.

Actual Expenses. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in the Statement of Additional Information). Therefore, the “hypothetical” section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

9 OPPENHEIMER CAPITAL APPRECIATION FUND


Actual	Beginning Account Value September 1, 2013		Ending Account Value February 28, 2014		Expenses Paid During 6 Months Ended February 28, 2014
Class A	$	1,000.00	$	1,190.80	$	5.77
Class B		1,000.00		1,186.50		9.91
Class C		1,000.00		1,186.30		9.91
Class I		1,000.00		1,193.10		3.43
Class N		1,000.00		1,189.40		7.19
Class Y		1,000.00		1,192.30		4.47

Hypothetical (5% return before expenses)
Class A		1,000.00		1,019.54		5.32
Class B		1,000.00		1,015.77		9.14
Class C		1,000.00		1,015.77		9.14
Class I		1,000.00		1,021.67		3.16
Class N		1,000.00		1,018.25		6.63
Class Y		1,000.00		1,020.73		4.12

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended February 28, 2014 are as follows:


Class	Expense Ratios
Class A		1.06	%
Class B		1.82
Class C		1.82
Class I		0.63
Class N		1.32
Class Y		0.82

The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. The “Financial Highlights” tables in the Fund’s financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable.

10 OPPENHEIMER CAPITAL APPRECIATION FUND



STATEMENT OF INVESTMENTS February 28, 2014 Unaudited


	Shares		Value

Common Stocks—97.9%

Consumer Discretionary—16.4%

Auto Components—0.3%

Magna International, Inc.	144,420	$	12,870,711

Hotels, Restaurants & Leisure—0.5%

Chipotle Mexican Grill, Inc.¹	49,220		27,819,636

Household Durables—0.5%

Harman International Industries, Inc.	242,200		25,365,606

Internet & Catalog Retail—3.3%

Amazon.com, Inc.¹	150,590		54,528,639

Priceline.com, Inc.¹	36,430		49,138,241

TripAdvisor, Inc.¹	652,050		65,361,492

			169,028,372

Media—6.4%

Time Warner, Inc.	1,074,740		72,147,296

Twenty-First Century Fox, Inc., Cl. B	3,105,360		101,017,361

Walt Disney Co. (The)	1,942,484		156,972,132

			330,136,789

Specialty Retail—3.8%

Home Depot, Inc. (The)	874,470		71,732,774

O'Reilly Automotive, Inc.¹	84,434		12,736,869

Tiffany & Co.	409,439		38,180,187

TJX Cos., Inc. (The)	1,130,122		69,457,298

			192,107,128

Textiles, Apparel & Luxury Goods—1.6%

Nike, Inc., Cl. B	864,276		67,672,811

VF Corp.	286,480		16,784,863

			84,457,674

Consumer Staples—6.1%

Beverages—2.0%

Brown-Forman Corp., Cl. B	763,823		64,008,367

SABMiller plc	799,290		39,136,619

			103,144,986


	Shares		Value

Food & Staples Retailing—2.8%

Costco Wholesale Corp.	319,055	$	37,265,624

CVS Caremark Corp.	1,445,070		105,692,420

			142,958,044

Food Products—1.3%

Hershey Co. (The)	644,550		68,206,281

Energy—4.7%

Energy Equipment & Services—1.1%

Halliburton Co.	380,100		21,665,700

Oceaneering International, Inc.	462,050		33,073,539

			54,739,239

Oil, Gas & Consumable Fuels—3.6%
Antero Resources Corp.¹	493,000		29,747,620

EOG Resources, Inc.	572,060		108,359,605

Pioneer Natural Resources Co.	247,210		49,733,708

			187,840,933

Financials—7.3%

Capital Markets—5.5%

Ameriprise Financial, Inc.	429,280		46,787,227

Charles Schwab Corp. (The)	2,055,990		54,504,295

Goldman Sachs Group, Inc. (The)	312,490		52,013,961

Invesco Ltd.	1,548,150		53,101,545

Northern Trust Corp.	1,184,380		73,253,903

			279,660,931

Insurance—1.5%

Aon plc	933,080		79,871,648

Real Estate Investment Trusts (REITs)—0.3%

American Tower Corp.	186,660		15,207,190

Health Care—23.5%

Biotechnology—12.0%

Amgen, Inc.	489,800		60,744,996

Biogen Idec, Inc.¹	604,100		205,804,788

Celgene Corp.¹	607,806		97,704,815

Gilead Sciences, Inc.¹	2,245,370		185,894,182

11 OPPENHEIMER CAPITAL APPRECIATION FUND



STATEMENT OF INVESTMENTS Unaudited / Continued


	Shares		Value

Biotechnology (Continued)

Vertex Pharmaceuticals, Inc.¹	785,140	$	63,486,420

			613,635,201

Health Care Providers & Services—1.6%

UnitedHealth Group, Inc.	1,035,080		79,980,632

Health Care Technology—1.4%

Cerner Corp.¹	1,173,940		72,044,698

Life Sciences Tools & Services—2.6%

Agilent Technologies, Inc.	925,690		52,699,532

Thermo Fisher Scientific, Inc.	637,080		79,341,943

			132,041,475

Pharmaceuticals—5.9%

Actavis plc¹	67,480		14,900,933

Allergan, Inc.	377,930		47,997,110

Bristol-Myers Squibb Co.	1,601,363		86,105,288

Pfizer, Inc.	3,106,170		99,739,119

Roche Holding AG	176,564		54,386,882

			303,129,332

Industrials—8.1%

Aerospace & Defense—2.8%

B/E Aerospace, Inc.¹	639,790		53,902,307

Precision Castparts Corp.	348,220		89,798,974

			143,701,281

Building Products—1.0%

Allegion plc¹	369,253		20,068,901

Fortune Brands Home & Security, Inc.	672,110		31,414,421

			51,483,322

Electrical Equipment—0.9%

AMETEK, Inc.	856,360		45,592,606

Machinery—2.6%

Caterpillar, Inc.	156,650		15,190,351

Ingersoll-Rand plc	1,028,980		62,911,837

Parker Hannifin Corp.	462,480		55,751,964

			133,854,152


	Shares		Value

Trading Companies & Distributors—0.8%

United Rentals, Inc.¹	439,140	$	38,793,628

Information Technology—28.7%

Communications Equipment—1.2%

Cisco Systems, Inc.	2,883,960		62,870,328

Computers & Peripherals—9.2%

Apple, Inc.	575,724		302,968,998

EMC Corp.	4,052,720		106,870,226

Western Digital Corp.	689,330		59,964,817

			469,804,041

Internet Software & Services—9.7%

Facebook, Inc., Cl. A¹	3,002,160		205,527,874

Google, Inc., Cl. A¹	153,407		186,489,219

LinkedIn Corp., Cl. A¹	501,395		102,304,636

			494,321,729

IT Services—5.3%

FleetCor Technologies, Inc.¹	361,100		46,917,723

MasterCard, Inc., Cl. A	1,596,320		124,065,990

Visa, Inc., Cl. A	452,119		102,151,767

			273,135,480

Semiconductors & Semiconductor Equipment—0.9%
Xilinx, Inc.	892,000		46,562,400

Software—2.4%

Autodesk, Inc.¹	1,822,270		95,596,284

Salesforce.com, Inc.¹	455,590		28,415,148

			124,011,432

Materials—3.1%

Chemicals—3.1%

Dow Chemical Co. (The)	578,470		28,177,274

Methanex Corp.	534,700		37,605,451

PPG Industries, Inc.	465,060		91,998,169

			157,780,894

Total Common Stocks (Cost $3,438,119,561)			5,016,157,799

12 OPPENHEIMER CAPITAL APPRECIATION FUND


	Shares		Value

Investment Company—2.0%
Oppenheimer Institutional Money Market Fund, Cl. E, 0.07%^2,3 (Cost $102,006,572)	102,006,572	$	102,006,572

Total Investments, at Value (Cost $3,540,126,133)	99.9%		5,118,164,371

Assets in Excess of Other Liabilities	0.1		4,033,198

Net Assets	100.0%	$	5,122,197,569

Footnotes to Statement of Investments

1. Non-income producing security.

2. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended February 28, 2014, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:


	Shares August 30, 2013^a		Gross Additions		Gross Reductions		Shares February 28, 2014
Oppenheimer Institutional Money Market Fund, Cl. E		82,389,901		492,958,935		473,342,264		102,006,572

					Value		Income
Oppenheimer Institutional Money Market Fund, Cl. E					$	102,006,572	$	38,830

a. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

3. Rate shown is the 7-day yield as of February 28, 2014.

See accompanying Notes to Financial Statements.

13 OPPENHEIMER CAPITAL APPRECIATION FUND



STATEMENT OF ASSETS AND LIABILITIES February 28, 2014 Unaudited



Assets
Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $3,438,119,561)	$	5,016,157,799
Affiliated companies (cost $102,006,572)		102,006,572

		5,118,164,371

Cash		54

Receivables and other assets:
Investments sold		73,031,446
Dividends		5,583,768
Shares of beneficial interest sold		666,090
Other		909,179

Total assets		5,198,354,908

Liabilities
Payables and other liabilities:
Investments purchased		69,295,874
Shares of beneficial interest redeemed		3,513,451
Trustees’ compensation		1,825,603
Distribution and service plan fees		783,284
Transfer and shareholder servicing agent fees		701,721
Other		37,406

Total liabilities		76,157,339

Net Assets	$	5,122,197,569



Composition of Net Assets
Par value of shares of beneficial interest	$	83,634

Additional paid-in capital		3,190,443,083

Accumulated net investment loss		(2,807,066	)

Accumulated net realized gain on investments and foreign currency transactions		356,337,750

Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies		1,578,140,168

Net Assets	$	5,122,197,569

14 OPPENHEIMER CAPITAL APPRECIATION FUND



Net Asset Value Per Share

Class A Shares:
Net asset value and redemption price per share (based on net assets of $3,280,592,782 and
53,140,715 shares of beneficial interest outstanding)	$	61.73

Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)	$	65.50


Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $145,049,952 and 2,726,647 shares of beneficial interest outstanding)	$	53.20


Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $413,255,330 and 7,813,283 shares of beneficial interest outstanding)	$	52.89


Class I Shares:
Net asset value, redemption price and offering price per share (based on net assets of $987,659,337 and 15,263,846 shares of beneficial interest outstanding)	$	64.71


Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $97,993,505 and 1,636,989 shares of beneficial interest outstanding)	$	59.86


Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $197,646,663 and 3,052,515 shares of beneficial interest outstanding)	$	64.75

See accompanying Notes to Financial Statements.

15 OPPENHEIMER CAPITAL APPRECIATION FUND



STATEMENT OF OPERATIONS For the Six Months Ended February 28, 2014 Unaudited



Investment Income
Interest	$	644

Dividends:
Unaffiliated companies		24,952,311
Affiliated companies		38,830

Other income		157,250

Total investment income		25,149,035


Expenses
Management fees		14,536,190

Distribution and service plan fees:
Class A		3,589,229
Class B		715,364
Class C		1,922,000
Class N		233,672

Transfer and shareholder servicing agent fees:
Class A		3,394,325
Class B		158,274
Class C		425,336
Class I		136,333
Class N		104,645
Class Y		326,070

Shareholder communications:
Class A		68,795
Class B		4,301
Class C		9,263
Class I		4
Class N		1,462
Class Y		315

Trustees’ compensation		80,812

Custodian fees and expenses		26,999

Other		67,830

Total expenses		25,801,219
Less waivers and reimbursements of expenses		(44,182	)

Net expenses		25,757,037


Net Investment Loss		(608,002	)


Realized and Unrealized Gain
Net realized gain on:
Investments from unaffiliated companies		543,661,074
Foreign currency transactions		49,010

Net realized gain		543,710,084

Net change in unrealized appreciation/depreciation on:
Investments		312,038,696
Translation of assets and liabilities denominated in foreign currencies		4,453,955

Net change in unrealized appreciation/depreciation		316,492,651


Net Increase in Net Assets Resulting from Operations	$	859,594,733

See accompanying Notes to Financial Statements.

16 OPPENHEIMER CAPITAL APPRECIATION FUND



STATEMENTS OF CHANGES IN NET ASSETS


	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013¹

Operations
Net investment income (loss)	$	(608,002	)	$	25,406,330

Net realized gain		543,710,084			848,720,867

Net change in unrealized appreciation/depreciation		316,492,651			(318,291,841	)

Net increase in net assets resulting from operations		859,594,733			555,835,356


Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A		(1,203,712	)		(17,674,751	)
Class B		—			—
Class C		—			—
Class I		(4,185,120	)		(122	)
Class N		—			(353,022	)
Class Y		(937,902	)		(10,993,756	)

		(6,326,734	)		(29,021,651	)


Distributions from net realized gain:
Class A		(132,893,015	)		—
Class B		(7,081,230	)		—
Class C		(19,214,661	)		—
Class I		(37,225,264	)		—
Class N		(4,208,661	)		—
Class Y		(15,709,886	)		—

		(216,332,717	)		—


Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A		(11,571,703	)		(387,486,821	)
Class B		(15,578,323	)		(58,024,908	)
Class C		4,028,047			(47,282,115	)
Class I		32,786,241			805,304,671
Class N		(6,912,854	)		(21,645,169	)
Class Y		(196,050,071	)		(886,658,353	)

		(193,298,663	)		(595,792,695	)


Net Assets
Total increase (decrease)		443,636,619			(68,978,990	)

Beginning of period		4,678,560,950			4,747,539,940

End of period (including accumulated net investment income (loss) of $(2,807,066) and $4,127,670, respectively)	$	5,122,197,569		$	4,678,560,950

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

See accompanying Notes to Financial Statements.

17 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS


Class A	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Year Ended August 31, 2012			Year Ended August 31, 2011			Year Ended August 31, 2010			Year Ended August 31, 2009

Per Share Operating Data
Net asset value, beginning of period	$	54.14		$	48.38		$	42.66		$	35.63		$	35.42		$	45.49

Income (loss) from investment operations:
Net investment income (loss)²		(0.01	)		0.27			0.13			0.07			(0.05	)		(0.04	)
Net realized and unrealized gain (loss)		10.17			5.79			5.66			6.96			0.26			(10.03	)

Total from investment operations		10.16			6.06			5.79			7.03			0.21			(10.07	)

Dividends and/or distributions to shareholders:
Dividends from net investment income		(0.02	)		(0.30	)		(0.07	)		0.00			0.00			0.00
Distributions from net realized gain		(2.55	)		0.00			0.00			0.00			0.00			0.00

Total dividends and/or distributions to shareholders		(2.57	)		(0.30	)		(0.07	)		0.00			0.00			0.00

Net asset value, end of period	$	61.73		$	54.14		$	48.38		$	42.66		$	35.63		$	35.42


Total Return, at Net Asset Value³		19.08	%		12.61	%		13.61	%		19.73	%		0.59	%		(22.14	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	3,280,593		$	2,886,673		$	2,945,709		$	2,942,695		$	3,109,737		$	3,596,953

Average net assets (in thousands)	$	3,113,704		$	2,929,516		$	2,918,247		$	3,466,080		$	3,621,517		$	3,413,157

Ratios to average net assets:⁴
Net investment income (loss)		(0.03)%			0.53%			0.28%			0.16%			(0.14)%			(0.12)%
Total expenses⁵		1.06%			1.11%			1.13%			1.15%			1.19%			1.28%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.06%			1.11%			1.13%			1.15%			1.19%			1.19%

Portfolio turnover rate		39%			61%			26%			30%			63%			60%

18 OPPENHEIMER CAPITAL APPRECIATION FUND

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

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

3. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			1.06%
		Year Ended August 30, 2013			1.11%
		Year Ended August 31, 2012			1.13%
		Year Ended August 31, 2011			1.15%
		Year Ended August 31, 2010			1.19%
		Year Ended August 31, 2009			1.28%

See accompanying Notes to Financial Statements.

19 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS Continued


Class B	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Year Ended August 31, 2012			Year Ended August 31, 2011			Year Ended August 31, 2010			Year Ended August 31, 2009

Per Share Operating Data
Net asset value, beginning of period	$	47.12		$	42.20		$	37.46		$	31.57		$	31.64		$	40.95

Income (loss) from investment operations:
Net investment loss²		(0.20	)		(0.13	)		(0.22	)		(0.27	)		(0.33	)		(0.25	)
Net realized and unrealized gain
(loss)		8.83			5.05			4.96			6.16			0.26			(9.06	)

Total from investment operations		8.63			4.92			4.74			5.89			(0.07	)		(9.31	)

Dividends and/or distributions to shareholders:
Dividends from net investment income		0.00			0.00			0.00			0.00			0.00			0.00
Distributions from net realized gain		(2.55	)		0.00			0.00			0.00			0.00			0.00

Total dividends and/or distributions to shareholders		(2.55	)		0.00			0.00			0.00			0.00			0.00

Net asset value, end of period	$	53.20		$	47.12		$	42.20		$	37.46		$	31.57		$	31.64


Total Return, at Net Asset Value³		18.65	%		11.66	%		12.65	%		18.66	%		(0.22	)%		(22.74	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	145,050		$	143,066		$	183,302		$	214,595		$	263,009		$	355,286

Average net assets (in thousands)	$	145,148		$	161,182		$	198,133		$	270,227		$	328,873		$	350,743

Ratios to average net assets:⁴
Net investment loss		(0.80)%			(0.29)%			(0.57)%			(0.71)%			(0.95)%			(0.91)%
Total expenses⁵		1.82%			2.09%			2.17%			2.19%			2.24%			2.20%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.82%			1.95%			1.97%			2.02%			2.01%			1.97%

Portfolio turnover rate		39%			61%			26%			30%			63%			60%

20 OPPENHEIMER CAPITAL APPRECIATION FUND

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

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

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			1.82%
		Year Ended August 30, 2013			2.09%
		Year Ended August 31, 2012			2.17%
		Year Ended August 31, 2011			2.19%
		Year Ended August 31, 2010			2.24%
		Year Ended August 31, 2009			2.20%

See accompanying Notes to Financial Statements.

21 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS Continued


Class C	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Year Ended August 31, 2012			Year Ended August 31, 2011			Year Ended August 31, 2010			Year Ended August 31, 2009

Per Share Operating Data
Net asset value, beginning of period	$	46.87		$	41.95		$	37.22		$	31.33		$	31.39		$	40.62

Income (loss) from investment operations:
Net investment loss²		(0.20	)		(0.11	)		(0.20	)		(0.24	)		(0.31	)		(0.24	)
Net realized and unrealized gain (loss)		8.77			5.03			4.93			6.13			0.25			(8.99	)

Total from investment operations		8.57			4.92			4.73			5.89			(0.06	)		(9.23	)

Dividends and/or distributions to shareholders:
Dividends from net investment income		0.00			0.00			0.00			0.00			0.00			0.00
Distributions from net realized gain		(2.55	)		0.00			0.00			0.00			0.00			0.00

Total dividends and/or distributions to shareholders		(2.55	)		0.00			0.00			0.00			0.00			0.00

Net asset value, end of period	$	52.89		$	46.87		$	41.95		$	37.22		$	31.33		$	31.39


Total Return, at Net Asset Value³		18.63	%		11.73	%		12.71	%		18.80	%		(0.19	)%		(22.72	)%

Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	413,255		$	362,314		$	369,379		$	385,530		$	390,864		$	448,301

Average net assets (in thousands)	$	390,161		$	364,712		$	372,103		$	433,187		$	455,897		$	420,699

Ratios to average net assets:⁴
Net investment loss		(0.79)%			(0.25)%			(0.52)%			(0.62)%			(0.91)%			(0.89)%
Total expenses⁵		1.82%			1.89%			1.93%			1.93%			1.97%			2.01%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.82%			1.89%			1.93%			1.93%			1.96%			1.95%

Portfolio turnover rate		39%			61%			26%			30%			63%			60%

22 OPPENHEIMER CAPITAL APPRECIATION FUND

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

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

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			1.82%
		Year Ended August 30, 2013			1.89%
		Year Ended August 31, 2012			1.93%
		Year Ended August 31, 2011			1.93%
		Year Ended August 31, 2010			1.97%
		Year Ended August 31, 2009			2.01%

See accompanying Notes to Financial Statements.

23 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS Continued


Class I	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Period Ended August 31, 2012²

Per Share Operating Data
Net asset value, beginning of period	$	56.75		$	50.71		$	44.87

Income (loss) from investment operations:
Net investment income³		0.12			0.28			0.28
Net realized and unrealized gain		10.68			6.31			5.56

Total from investment operations		10.80			6.59			5.84

Dividends and/or distributions to shareholders:
Dividends from net investment income		(0.29	)		(0.55	)		0.00
Distributions from net realized gain		(2.55	)		0.00			0.00

Total dividends and/or distributions to shareholders		(2.84	)		(0.55	)		0.00

Net asset value, end of period	$	64.71		$	56.75		$	50.71



Total Return, at Net Asset Value⁴		19.31	%		13.14	%		13.02	%


Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	987,659		$	835,858		$	12

Average net assets (in thousands)	$	917,019		$	167,432		$	11

Ratios to average net assets:⁵
Net investment income		0.39%			0.51%			0.86%
Total expenses⁶		0.63%			0.65%			0.62%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.63%			0.65%			0.62%

Portfolio turnover rate		39%			61%			26%

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

2. For the period from December 29, 2011 (inception of offering) to August 31, 2012.

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

4. Assumes an initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

5. Annualized for periods less than one full year.

6. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			0.63%
		Year Ended August 30, 2013			0.65%
		Period Ended August 31, 2012			0.62%

See accompanying Notes to Financial Statements.

24 OPPENHEIMER CAPITAL APPRECIATION FUND


Class N	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Year Ended August 31, 2012			Year Ended August 31, 2011			Year Ended August 31, 2010			Year Ended August 31, 2009

Per Share Operating Data
Net asset value, beginning of period	$	52.61		$	47.01		$	41.49		$	34.75		$	34.60		$	44.55

Income (loss) from investment operations:
Net investment income (loss)²		(0.08	)		0.14			0.00	³		(0.05	)		(0.11	)		(0.12	)
Net realized and unrealized gain (loss)		9.88			5.63			5.52			6.79			0.26			(9.83	)

Total from investment operations		9.80			5.77			5.52			6.74			0.15			(9.95	)

Dividends and/or distributions to shareholders:
Dividends from net investment income		0.00			(0.17	)		0.00			0.00			0.00			0.00
Distributions from net realized gain		(2.55	)		0.00			0.00			0.00			0.00			0.00

Total dividends and/or distributions to shareholders		(2.55	)		(0.17	)		0.00			0.00			0.00			0.00

Net asset value, end of period	$	59.86		$	52.61		$	47.01		$	41.49		$	34.75		$	34.60



Total Return, at Net Asset Value⁴		18.94	%		12.31	%		13.30	%		19.40	%		0.43	%		(22.33	)%


Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	97,994		$	92,488		$	103,023		$	120,751		$	135,235		$	152,558

Average net assets (in thousands)	$	95,957		$	98,344		$	109,283		$	142,248		$	155,296		$	150,598

Ratios to average net assets:⁵
Net investment income (loss)		(0.30)%			0.28%			0.01%			(0.11)%			(0.29)%			(0.40)%
Total expenses⁶		1.32%			1.37%			1.39%			1.41%			1.35%			1.77%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.32%			1.37%			1.39%			1.41%			1.34%			1.45%

Portfolio turnover rate		39%			61%			26%			30%			63%			60%

25 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS Continued

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

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

3. Less than $0.005 per share.

5. Annualized for periods less than one full year.

6. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			1.32%
		Year Ended August 30, 2013			1.37%
		Year Ended August 31, 2012			1.39%
		Year Ended August 31, 2011			1.41%
		Year Ended August 31, 2010			1.35%
		Year Ended August 31, 2009			1.77%

See accompanying Notes to Financial Statements.

26 OPPENHEIMER CAPITAL APPRECIATION FUND


Class Y	Six Months Ended February 28, 2014 (Unaudited)			Year Ended August 30, 2013 ¹			Year Ended August 31, 2012			Year Ended August 31, 2011			Year Ended August 31, 2010			Year Ended August 31, 2009

Per Share Operating Data
Net asset value, beginning of period	$	56.72		$	50.67		$	44.70		$	37.18		$	36.81		$	47.07

Income (loss) from investment operations:
Net investment income²		0.07			0.54			0.33			0.26			0.11			0.09
Net realized and unrealized gain (loss)		10.66			6.01			5.91			7.26			0.26			(10.35	)

Total from investment operations		10.73			6.55			6.24			7.52			0.37			(10.26	)

Dividends and/or distributions to shareholders:
Dividends from net investment income		(0.15	)		(0.50	)		(0.27	)		0.00			0.00			0.00
Distributions from net realized gain		(2.55	)		0.00			0.00			0.00			0.00			0.00

Total dividends and/or distributions to shareholders		(2.70	)		(0.50	)		(0.27	)		0.00			0.00			0.00

Net asset value, end of period	$	64.75		$	56.72		$	50.67		$	44.70		$	37.18		$	36.81



Total Return, at Net Asset Value³		19.23	%		13.06	%		14.05	%		20.23	%		1.01	%		(21.80	)%


Ratios/Supplemental Data
Net assets, end of period (in thousands)	$	197,647		$	358,162		$	1,146,115		$	1,118,117		$	1,081,226		$	1,042,550

Average net assets (in thousands)	$	299,462		$	996,554		$	1,122,130		$	1,238,025		$	1,096,076		$	974,326

Ratios to average net assets:⁴
Net investment income		0.24%			1.00%			0.69%			0.58%			0.28%			0.29%
Total expenses⁵		0.82%			0.71%			0.72%			0.72%			0.77%			0.81%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.82%			0.71%			0.72%			0.72%			0.77%			0.78%

Portfolio turnover rate		39%			61%			26%			30%			63%			60%

27 OPPENHEIMER CAPITAL APPRECIATION FUND



FINANCIAL HIGHLIGHTS Continued

1. August 30, 2013 represents the last business day of the Fund’s 2013 fiscal year. See Note 1 of the accompanying Notes.

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

4. Annualized for periods less than one full year.

5. Total expenses including indirect expenses from affiliated fund were as follows:


		Six Months Ended February 28, 2014			0.82%
		Year Ended August 30, 2013			0.71%
		Year Ended August 31, 2012			0.72%
		Year Ended August 31, 2011			0.72%
		Year Ended August 31, 2010			0.77%
		Year Ended August 31, 2009			0.81%

See accompanying Notes to Financial Statements.

28 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS February 28, 2014 Unaudited

1. Significant Accounting Policies

Oppenheimer Capital Appreciation 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 adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.

The Fund offers Class A, Class C, Class I, Class N and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds will be allowed. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C and Class N shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class I and Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class I and Class Y shares. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N shares have separate distribution and/or service plans under which they pay fees. Class I and Class Y shares do not pay such fees. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.

The following is a summary of significant accounting policies consistently followed by the Fund.

Previous Annual Period. The last day of the Fund’s fiscal year was the last day the New York Stock Exchange was open for trading. The Fund’s financial statements have been presented through that date to maintain consistency with the Fund’s net asset value calculations used for shareholder transactions.

Investment in Oppenheimer Institutional Money Market Fund. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (“IMMF”) to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is the investment adviser of IMMF, and the Sub-Adviser provides investment and related advisory services to IMMF. When applicable, the Fund’s investment in IMMF is included in the Statement of Investments. Shares of IMMF are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of IMMF’s Class E expenses, including its management fee. The Manager

29 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

1. Significant Accounting Policies (Continued)

will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF.

Foreign Currency Translation. The Fund’s accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of the New York Stock Exchange (the “Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Trustees.

Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates.

The effect of changes in foreign currency exchange rates on investments is separately identified from the fluctuations arising from changes in market values of securities held and reported with all other foreign currency gains and losses in the Fund’s Statement of Operations.

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remain open for the three preceding fiscal reporting period ends.

During the fiscal year ended August 30, 2013, the Fund utilized $706,908,943 of capital loss carryforward to offset capital gains realized in that fiscal year.

Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of dividends and distributions made during the fiscal year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividends and

30 OPPENHEIMER CAPITAL APPRECIATION FUND



1. Significant Accounting Policies (Continued)

distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or net realized gain was recorded by the Fund.

The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of February 28, 2014 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.


Federal tax cost of securities	$	3,540,742,383

Gross unrealized appreciation	$	1,599,682,274
Gross unrealized depreciation		(22,260,286	)

Net unrealized appreciation	$	1,577,421,988

Trustees’ Compensation. The Fund has adopted an unfunded retirement plan (the “Plan”) for the Fund’s independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the “Freeze Date”) and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended February 28, 2014, the Fund’s projected benefit obligations, payments to retired trustees and accumulated liability were as follows:


Projected Benefit Obligations Increased	$	2,499
Payments Made to Retired Trustees		137,213
Accumulated Liability as of February 28, 2014		878,879

The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of trustees’ fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance with the compensation deferral plan.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ

31 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

1. Significant Accounting Policies (Continued)

from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager.

The tax character of distributions is determined as of the Fund’s fiscal year end. Therefore, a portion of the Fund’s distributions made to shareholders prior to the Fund’s fiscal year end may ultimately be categorized as a tax return of capital.

Investment Income. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.

Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.

Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.

Indemnifications. The Fund’s organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

32 OPPENHEIMER CAPITAL APPRECIATION FUND



2. Securities Valuation

The Fund calculates the net asset value of its shares as of the close of the New York Stock Exchange (the “Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading.

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

Valuation Methods and Inputs

Securities are valued using unadjusted quoted market prices, when available, as supplied primarily by third party pricing services or dealers.

The following methodologies are used to determine the market value or the fair value of the types of securities described below:

Securities traded on a registered U.S. securities exchange (including exchange-traded derivatives other than futures and futures options) are valued based on the last sale price of the security reported on the principal exchange on which it is traded, prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the current day’s closing “bid” and “asked” prices, and if not, at the current day’s closing bid price. A security of a foreign issuer traded on a foreign exchange, but not listed on a registered U.S. securities exchange, is valued based on the last sale price on the principal exchange on which the security is traded, as identified by the third party pricing service used by the Manager, prior to the time when the Fund’s assets are valued. If the last sale price is unavailable, the security is valued at the most recent official closing price on the principal exchange on which it is traded. If the last sales price or official closing price for a foreign security is not available, the security is valued at the mean between the bid and asked price per the exchange or, if not available from the exchange, obtained from two dealers. If bid and asked prices are not available from either the exchange or two dealers, the security is valued by using one of the following methodologies (listed in order of priority): (1) using a bid from the exchange, (2) the mean between the bid and asked price as provided by a single dealer, or (3) a bid from a single dealer.

Shares of a registered investment company that are not traded on an exchange are valued at that investment company’s net asset value per share.

Corporate and government debt securities (of U.S. or foreign issuers) and municipal debt securities, event-linked bonds, loans, mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers who may use matrix pricing methods to determine the evaluated prices.

Short-term money market type debt securities with a remaining maturity of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (amortized cost), which approximates market value. Short-term debt securities with a

33 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

2. Securities Valuation (Continued)

remaining maturity in excess of sixty days are valued at the mean between the “bid” and “asked” prices utilizing evaluated prices obtained from third party pricing services or broker-dealers.

A description of the standard inputs that may generally be considered by the third party pricing vendors in determining their evaluated prices is provided below.


Security Type		Standard inputs generally considered by third-party pricing vendors
Corporate debt, government debt, municipal, mortgage-backed and asset-backed securities		Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, the credit quality, yield, maturity, and other appropriate factors.
Loans		Information obtained from market participants regarding reported trade data and broker-dealer price quotations.
Event-linked bonds		Information obtained from market participants regarding reported trade data and broker-dealer price quotations.

If a market value or price cannot be determined for a security using the methodologies described above, or if, in the “good faith” opinion of the Manager, the market value or price obtained does not constitute a “readily available market quotation,” or a significant event has occurred that would materially affect the value of the security the security is fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. Fair value determinations by the Manager are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined. Those fair valuation standardized methodologies include, but are not limited to, valuing securities at the last sale price or initially at cost and subsequently adjusting the value based on: changes in company specific fundamentals, changes in an appropriate securities index, or changes in the value of similar securities which may be further adjusted for any discounts related to security-specific resale restrictions. When possible, such methodologies use observable market inputs such as unadjusted quoted prices of similar securities, observable interest rates, currency rates and yield curves. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those securities nor can it be assured that the Fund can obtain the fair value assigned to a security if it were to sell the security.

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

34 OPPENHEIMER CAPITAL APPRECIATION FUND

2. Securities Valuation (Continued)

methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available.

Classifications

Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Various data inputs are used in determining the value of each of the Fund’s investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards:

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

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

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

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

The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities as of February 28, 2014 based on valuation input level:


	Level 1— Unadjusted Quoted Prices		Level 2— Other Significant Observable Inputs		Level 3— Significant Unobservable Inputs		Value
Assets Table
Investments, at Value:
Common Stocks
Consumer Discretionary	$	841,785,916	$	—	$	—	$	841,785,916
Consumer Staples		275,172,692		39,136,619		—		314,309,311
Energy		242,580,172		—		—		242,580,172
Financials		374,739,769		—		—		374,739,769
Health Care		1,146,444,456		54,386,882		—		1,200,831,338
Industrials		413,424,989		—		—		413,424,989
Information Technology		1,470,705,410		—		—		1,470,705,410
Materials		157,780,894		—		—		157,780,894
Investment Company		102,006,572		—		—		102,006,572
Total Assets	$	5,024,640,870	$	93,523,501	$	—	$	5,118,164,371

Currency contracts and forwards, if any, are reported at their unrealized appreciation/ depreciation at measurement date, which represents the change in the contract’s value from trade date. Futures, if any, are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.

35 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

3. Shares of Beneficial Interest

The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:


	Six Months Ended February 28, 2014						Year Ended August 30, 2013
	Shares			Amount			Shares			Amount
Class A
Sold		1,722,908		$	100,578,350			3,926,283		$	199,857,379
Dividends and/or distributions reinvested		2,245,665			130,428,213			351,648			17,019,773
Redeemed		(4,147,889	)		(242,578,266	)		(11,848,340	)		(604,363,973	)

Net decrease		(179,316	)	$	(11,571,703	)		(7,570,409	)	$	(387,486,821	)



Class B
Sold		22,345		$	1,135,359			49,377		$	2,215,184
Dividends and/or distributions reinvested		140,374			7,036,983			—			—
Redeemed		(472,066	)		(23,750,665	)		(1,356,800	)		(60,240,092	)

Net decrease		(309,347	)	$	(15,578,323	)		(1,307,423	)	$	(58,024,908	)



Class C
Sold		450,587		$	22,702,310			751,615		$	33,502,328
Dividends and/or distributions reinvested		359,818			17,933,311			—			—
Redeemed		(728,114	)		(36,607,574	)		(1,826,459	)		(80,784,443	)

Net increase (decrease)		82,291		$	4,028,047			(1,074,844	)	$	(47,282,115	)



Class I
Sold		608,315		$	37,300,031			15,113,037		$	827,409,053
Dividends and/or distributions reinvested		680,969			41,409,750			—			—
Redeemed		(753,002	)		(45,923,540	)		(385,696	)		(22,104,382	)

Net increase		536,282		$	32,786,241			14,727,341		$	805,304,671



Class N
Sold		105,689		$	6,006,188			258,765		$	12,794,833
Dividends and/or distributions reinvested		71,443			4,025,808			6,978			328,808
Redeemed		(298,037	)		(16,944,850	)		(699,149	)		(34,768,810	)

Net decrease		(120,905	)	$	(6,912,854	)		(433,406	)	$	(21,645,169	)



Class Y
Sold		375,701		$	22,913,337			3,627,917		$	191,817,054
Dividends and/or distributions reinvested		259,407			15,792,699			211,758			10,706,472
Redeemed		(3,897,208	)		(234,756,107	)		(20,142,196	)		(1,089,181,879	)

Net decrease		(3,262,100	)	$	(196,050,071	)		(16,302,521	)	$	(886,658,353	)

36 OPPENHEIMER CAPITAL APPRECIATION FUND

4. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended February 28, 2014 were as follows:


	Purchases		Sales
Investment securities	$	1,877,607,280	$	2,290,759,541

5. Fees and Other Transactions with Affiliates

Management Fees. Under the investment advisory agreement, the Fund pays the Manager a management fee based on the daily net assets of the Fund at an annual rate as shown in the following table:


Fee Schedule
Up to $200 million	0.75	%
Next $200 million	0.72
Next $200 million	0.69
Next $200 million	0.66
Next $700 million	0.60
Next $1 billion	0.58
Next $2 billion	0.56
Next $2 billion	0.54
Next $2 billion	0.52
Next $2.5 billion	0.50
Over $11 billion	0.48

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

Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. Fees incurred by the Fund with respect to these services are detailed in the Statement of Operations.

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

37 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

5. Fees and Other Transactions with Affiliates (Continued)

Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.

Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the daily net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares daily net assets and 0.25% on Class N shares daily net assets. The Distributor also receives a service fee of 0.25% per year under each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. The Distributor determines its uncompensated expenses under the Plans at calendar quarter ends. The Distributor’s aggregate uncompensated expenses under the Plans at December 31, 2013 were as follows:


Class B	$	31,215,932
Class C		23,632,593
Class N		6,812,076

Sales Charges. Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.

38 OPPENHEIMER CAPITAL APPRECIATION FUND

5. Fees and Other Transactions with Affiliates (Continued)


Six Months Ended	Class A Front-End Sales Charges Retained by Distributor		Class A Contingent Deferred Sales Charges Retained by Distributor		Class B Contingent Deferred Sales Charges Retained by Distributor		Class C Contingent Deferred Sales Charges Retained by Distributor		Class N Contingent Deferred Sales Charges Retained by Distributor

February 28, 2014		$346,662		$3,384		$74,770		$8,633		$322

Waivers and Reimbursements of Expenses. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF. During the six months ended February 28, 2014, the Manager waived fees and/or reimbursed the Fund $44,182 for IMMF management fees.

The Transfer Agent has contractually agreed to limit transfer and shareholder servicing agent fees for Classes B, C, N and Y shares to 0.35% of average annual net assets per class and for Class A shares to 0.30% of average annual net assets of the class.

Some of these undertakings may be modified or terminated at any time; some may not be modified or terminated until after one year from the date of the current prospectus, as indicated therein.

6. Pending Litigation

Since 2009, seven class action lawsuits have been pending in the U.S. District Court for the District of Colorado against OppenheimerFunds, Inc. (“OFI”), OppenheimerFunds Distributor, Inc., the Fund’s principal underwriter and distributor (the “Distributor”), and certain funds (but not including the Fund) advised by OFI Global Asset Management, Inc. and distributed by the Distributor (the “Defendant Funds”). The lawsuits also name as defendants certain officers and current and former trustees of the respective Defendant Funds. The lawsuits raise claims under federal securities law and allege, among other things, that the disclosure documents of the respective Defendant Funds contained misrepresentations and omissions and that the respective Defendant Funds’ investment policies were not followed. The plaintiffs in these actions seek unspecified damages, equitable relief and awards of attorneys’ fees and litigation expenses. The Defendant Funds’ Boards of Trustees have also engaged counsel to represent the Funds and the present and former Independent Trustees named in those suits. On March 5, 2014, the parties in six of these lawsuits executed stipulations and agreements of settlement resolving those actions. The settlements are subject to a variety of contingencies, including approval by the court. The settlements do not resolve a seventh outstanding lawsuit relating to Oppenheimer California Municipal Fund.

Other class action and individual lawsuits have been filed since 2008 in various state and federal courts against OFI and certain of its affiliates by investors seeking to recover investments they allegedly lost as a result of the “Ponzi” scheme run by Bernard L. Madoff and his firm, Bernard L. Madoff Investment Securities, LLC (“BLMIS”). Plaintiffs in these suits allege that they suffered losses as a result of their investments in several funds managed by an affiliate of OFI and assert a variety of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and violation of federal and state securities

39 OPPENHEIMER CAPITAL APPRECIATION FUND



NOTES TO FINANCIAL STATEMENTS Unaudited / Continued

6. Pending Litigation (Continued)

laws and regulations, among others. They seek unspecified damages, equitable relief and awards of attorneys’ fees and litigation expenses. Neither the Distributor, nor any of the Oppenheimer mutual funds, their independent trustees or directors are named as defendants in these lawsuits. None of the Oppenheimer mutual funds invested in any funds or accounts managed by Madoff or BLMIS. On February 28, 2011, a stipulation of partial settlement of three groups of consolidated putative class action lawsuits relating to these matters was filed in the U.S. District Court for the Southern District of New York. On August 19, 2011, the court entered an order and final judgment approving the settlement as fair, reasonable and adequate. In September 2011, certain parties filed notices of appeal from the court’s order approving the settlement. The settlement does not resolve other outstanding lawsuits against OFI and its affiliates relating to BLMIS.

On April 16, 2010, a lawsuit was filed in New York state court against (i) OFI, (ii) an affiliate of OFI and (iii) AAArdvark IV Funding Limited (“AAArdvark IV”), an entity advised by OFI’s affiliate, in connection with investments made by the plaintiffs in AAArdvark IV. Plaintiffs alleged breach of contract and common law fraud claims against the defendants and sought compensatory damages, costs and disbursements, including attorney fees. On April 11, 2013, the court granted defendants’ motion for summary judgment, dismissing plaintiffs’ fraud claim with prejudice and dismissing their contract claim without prejudice, and granted plaintiffs leave to replead their contract claim to assert a cause of action for specific performance within 30 days. On May 9, 2013, plaintiffs filed a notice of appeal from the court’s dismissal order. On January 7, 2014, the appellate court affirmed the trial court’s dismissal order. On March 28, 2014, the parties filed a stipulation of discontinuance dismissing the lawsuit with prejudice. On July 15, 2011, a lawsuit was filed in New York state court against OFI, an affiliate of OFI and AAArdvark Funding Limited (“AAArdvark I”), an entity advised by OFI’s affiliate, in connection with investments made by the plaintiffs in AAArdvark I. The complaint alleged breach of contract and common law fraud claims against the defendants and sought compensatory damages, costs and disbursements, including attorney fees. On March 28, 2014, the parties filed a stipulation of discontinuance dismissing the lawsuit with prejudice. On November 9, 2011, a lawsuit was filed in New York state court against OFI, an affiliate of OFI and AAArdvark XS Funding Limited (“AAArdvark XS”), an entity advised by OFI’s affiliate, in connection with investments made by the plaintiffs in AAArdvark XS. The complaint alleged breach of contract against the defendants and sought compensatory damages, costs and disbursements, including attorney fees. On November 8, 2013, the parties filed a stipulation of discontinuance dismissing the lawsuit with prejudice.

OFI believes the lawsuits and appeals described above are without legal merit and, with the exception of actions it has settled, is defending against them vigorously. While it is premature to render any opinion as to the outcome in these lawsuits, or whether any costs that the Defendant Funds may bear in defending the suits might not be reimbursed by insurance, OFI believes that these suits should not impair the ability of OFI or the Distributor to perform their respective duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the operations of any of the Oppenheimer mutual funds.

40 OPPENHEIMER CAPITAL APPRECIATION FUND

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AND

SUB-ADVISORY AGREEMENTS Unaudited

The Fund has entered into an investment advisory agreement with OFI Global Asset Management, Inc. (“OFI Global” or the “Adviser”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”) (“OFI Global” and “OFI” together the “Managers”) and OFI Global has entered into a sub-advisory agreement with OFI whereby OFI provides investment sub-advisory services to the Fund (collectively, the “Agreements”). Each year, the Board of Trustees (the “Board”), including a majority of the independent Trustees, is required to determine whether to renew the Agreements. The Investment Company Act of 1940, as amended, requires that the Board request and evaluate, and that the Managers provide, such information as may be reasonably necessary to evaluate the terms of the Agreements. The Board employs an independent consultant to prepare a report that provides information, including comparative information that the Board requests for that purpose. In addition to in-person meetings focused on this evaluation, the Board receives information throughout the year regarding Fund services, fees, expenses and performance.

The Adviser, Sub-Adviser and the independent consultant provided information to the Board on the following factors: (i) the nature, quality and extent of the Managers’ services, (ii) the investment performance of the Fund and the Managers, (iii) the fees and expenses of the Fund, including comparative expense information, (iv) the profitability of the Managers and their affiliates, including an analysis of the cost of providing services, (v) whether economies of scale are realized as the Fund grows and whether fee levels reflect these economies of scale for Fund investors and (vi) other benefits to the Managers from their relationship with the Fund. The Board was aware that there are alternatives to retaining the Managers.

Outlined below is a summary of the principal information considered by the Board as well as the Board’s conclusions.

Nature, Quality and Extent of Services. The Board considered information about the nature, quality and extent of the services provided to the Fund and information regarding the Managers’ key personnel who provide such services. The Sub-Adviser’s duties include providing the Fund with the services of the portfolio manager and the Sub-Adviser’s investment team, who provide research, analysis and other advisory services in regard to the Fund’s investments; securities trading services; oversight of third-party service providers; monitoring compliance with applicable Fund policies and procedures and adherence to the Fund’s investment restrictions; and risk management. The Managers are responsible for providing certain administrative services to the Fund as well. Those services include providing and supervising all administrative and clerical personnel who are necessary in order to provide effective corporate administration for the Fund; compiling and maintaining records with respect to the Fund’s operations; preparing and filing reports required by the Securities and Exchange Commission; preparing periodic reports regarding the operations of the Fund for its shareholders; preparing proxy materials for shareholder meetings; and preparing the registration statements required by Federal and state securities laws for the sale of the Fund’s shares. The Managers also provide the Fund with office space, facilities and equipment.

The Board also considered the quality of the services provided and the quality of the Managers’ resources that are available to the Fund. The Board took account of the fact that the Sub-Adviser has had over fifty years of experience as an investment adviser and that its assets under management rank it among the top mutual fund managers in the United States.

41 OPPENHEIMER CAPITAL APPRECIATION FUND

BOARD APPROVAL OF THE FUND’S INVESTMENT ADVISORY AND

SUB-ADVISORY AGREEMENTS Unaudited / Continued

The Board evaluated the Sub-Adviser’s advisory, administrative, accounting, legal, compliance services and risk management, and information the Board has received regarding the experience and professional qualifications of the Managers’ key personnel and the size and functions of its staff. In its evaluation of the quality of the portfolio management services provided, the Board considered the experience of Michael Kotlarz, the portfolio manager for the Fund, and the Sub-Adviser’s investment team and analysts. The Board members also considered the totality of their experiences with the Managers as directors or trustees of the Fund and other funds advised by the Managers. The Board considered information regarding the quality of services provided by affiliates of the Managers, which its members have become knowledgeable about in connection with the renewal of the Fund’s service agreements. The Board concluded, in light of the Managers’ experience, reputation, personnel, operations and resources that the Fund benefits from the services provided under the Agreement.

Investment Performance of the Fund, the Adviser and the Sub-Adviser. Throughout the year, the Adviser and the Sub-Adviser provided information on the investment performance of the Fund, the Adviser and the Sub-Adviser, including comparative performance information. The Board also reviewed information, prepared by the Adviser, the Sub-Adviser and the independent consultant, comparing the Fund’s historical performance to its benchmark and to the performance of other retail large growth funds. The Board noted that the Fund’s one-, three-, five-, and ten-year performance below its category median.

Costs of Services by the Adviser. The Board reviewed the fees paid to the Adviser and the other expenses borne by the Fund. The Board also considered the comparability of the fees charged and the services provided to the Fund to the fees and services for other clients or accounts advised by the Adviser. The independent consultant provided comparative data in regard to the fees and expenses of the Fund and other retail front-end load large growth funds with comparable asset levels and distribution features. The Board noted that the Fund’s contractual management fees and total expenses were lower than its category median and peer group median.

Economies of Scale and Profits Realized by the Adviser and Sub-Adviser. The Board considered information regarding the Managers’ costs in serving as the Fund’s investment adviser and sub-adviser, including the costs associated with the personnel and systems necessary to manage the Fund, and information regarding the Managers’ profitability from their relationship with the Fund. The Board reviewed whether the Managers may realize economies of scale in managing and supporting the Fund. The Board noted that the Fund currently has management fee breakpoints, which are intended to share with Fund shareholders economies of scale that may exist as the Fund’s assets grow.

Other Benefits to the Managers. In addition to considering the profits realized by the Managers, the Board considered information that was provided regarding the direct and indirect benefits the Managers receive as a result of their relationship with the Fund, including compensation paid to the Managers’ affiliates and research provided to the Adviser in connection with permissible brokerage arrangements (soft dollar arrangements). The Board also considered that the Managers must be able to pay and retain experienced professional personnel at competitive rates to provide quality services to the Fund.

Conclusions. These factors were also considered by the independent Trustees meeting separately from the full Board, assisted by experienced counsel to the Fund and to the

42 OPPENHEIMER CAPITAL APPRECIATION FUND

independent Trustees. Fund counsel and the independent Trustees’ counsel are independent of the Managers within the meaning and intent of the Securities and Exchange Commission Rules.

Based on its review of the information it received and its evaluations described above, the Board, including a majority of the independent Trustees, decided to continue the Agreements through September 30, 2014. In arriving at its decision, the Board did not identify any factor or factors as being more important than others, but considered all of the above information, and considered the terms and conditions of the Agreements, including the management fees, in light of all the surrounding circumstances.

43 OPPENHEIMER CAPITAL APPRECIATION FUND

PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;

UPDATES TO STATEMENTS OF INVESTMENTS Unaudited

The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities (“portfolio proxies”) held by the Fund. A description of the Fund’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (ii) on the Fund’s website at oppenheimerfunds.com, and (iii) on the SEC’s website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund’s voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), and (ii) in the Form N-PX filing on the SEC’s website at www.sec.gov.

The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at www.sec.gov. Those forms may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

Householding—Delivery of Shareholder Documents

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

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

44 OPPENHEIMER CAPITAL APPRECIATION FUND



OPPENHEIMER CAPITAL APPRECIATION FUND


Trustees and Officers		Brian F. Wruble, Chairman of the Board of Trustees and Trustee
		David K. Downes, Trustee
		Matthew P. Fink, Trustee
		Edmund P. Giambastiani, Jr., Trustee
		Mary F. Miller, Trustee
		Joel W. Motley, Trustee
		Joanne Pace, Trustee
		Joseph M. Wikler, Trustee
		Peter I. Wold, Trustee
		William F. Glavin, Jr., Trustee, President and Principal Executive Officer
		Michael Kotlarz, Vice President
		Arthur S. Gabinet, Secretary and Chief Legal Officer
		Christina M. Nasta, Vice President and Chief Business Officer
		Mark S. Vandehey, Vice President and Chief Compliance Officer
		Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer

Manager		OFI Global Asset Management, Inc.

Sub-Adviser		OppenheimerFunds, Inc.

Distributor		OppenheimerFunds Distributor, Inc.

Transfer and Shareholder Servicing Agent		OFI Global Asset Management, Inc.
Sub-Transfer Agent		Shareholder Services, Inc. DBA OppenheimerFunds Services

Independent Registered Public Accounting Firm		KPMG LLP

Legal Counsel		Kramer Levin Naftalis & Frankel LLP

		The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent registered public accounting firm.

45 OPPENHEIMER CAPITAL APPRECIATION FUND



PRIVACY POLICY NOTICE

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

Information Sources

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

•

Applications or other forms

•

When you create a user ID and password for online account access

•

When you enroll in eDocs Direct, our electronic document delivery service

•

Your transactions with us, our affiliates or others

•

A software program on our website, often referred to as a “cookie,” which indicates which parts of our site you’ve visited

•

When you set up challenge questions to reset your password online

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

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

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

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

Protection of Information

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

Disclosure of Information

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

Right of Refusal

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

46 OPPENHEIMER CAPITAL APPRECIATION FUND

Internet Security and Encryption

In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/or personal information should only be communicated via email when you are advised that you are using a secure website.

As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.

We do not guarantee or warrant that any part of our website, including files available for download, are free of viruses or other harmful code. It is your responsibility to take appropriate precautions, such as use of an anti-virus software package, to protect your computer hardware and software.

•

All transactions, including redemptions, exchanges and purchases, are secured by SSL and 128-bit encryption. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format.

•

Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data.

•

You can exit the secure area by either closing your browser, or for added security, you can use the Log Out button before you close your browser.

Other Security Measures

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

How You Can Help

You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, do not allow it to be used by anyone else. Also, take special precautions when accessing your account on a computer used by others.

Who We Are

This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., and each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated November 2013. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about these privacy policies, write to us at P.O. Box 5270, Denver, CO 80217-5270, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com or call us at 1.800.CALL OPP (225.5677).

47 OPPENHEIMER CAPITAL APPRECIATION FUND

LOGO

Item 2. Code of Ethics.

Not applicable to semiannual reports.

Item 3. Audit Committee Financial Expert.

Not applicable to semiannual reports.

Item 4. Principal Accountant Fees and Services.

Not applicable to semiannual reports.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Schedule of Investments.

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

b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

The Fund’s Governance Committee Provisions with Respect to Nominations of Directors/Trustees to the Respective Boards

None

Item 11. Controls and Procedures.

Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of 2/28/2014, the registrant’s principal executive officer and principal financial officer found the registrant’s disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission.

There have been no changes in the registrant’s internal controls over financial reporting that occurred during the registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)	(1) Not applicable to semiannual reports.

(2) Exhibits attached hereto.

(3) Not applicable.

(b)	Exhibit attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Oppenheimer Capital Appreciation Fund


By:		/s/ William F. Glavin, Jr.
		William F. Glavin, Jr.
		Principal Executive Officer

Date:		4/9/2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ William F. Glavin, Jr.
		William F. Glavin, Jr.
		Principal Executive Officer

Date:		4/9/2014


By:		/s/ Brian W. Wixted
		Brian W. Wixted
		Principal Financial Officer

Date:		4/9/2014