-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NgLz3z/kgvX0NZSVFuxyRD3A3zuFMr+6hVnDzTahjHOxr+kU8J5/SiayoE9wj2wW IkA89d+fFjF+VZnelpuWfQ== 0000356865-96-000017.txt : 19961212 0000356865-96-000017.hdr.sgml : 19961212 ACCESSION NUMBER: 0000356865-96-000017 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER SERIES FUND INC CENTRAL INDEX KEY: 0000356865 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061052841 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03346 FILM NUMBER: 96678998 BUSINESS ADDRESS: STREET 1: 140 GARDEN ST CITY: HARTFORD STATE: CT ZIP: 06154 BUSINESS PHONE: 2039875002 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-30D 1 OPPENHEIMER DISCIPLINED VALUE FUND - A/R [COVER PAGE] OPPENHEIMER DISCIPLINED VALUE FUND Annual Report October 31, 1996 [PHOTO]Pool Party "We have a lot of IMPORTANT goals, so we need our money to GROW solidly over time." [LOGO]OppenheimerFunds/r/ - ---- NEWS - ---------------- BEAT THE AVERAGE - ---------------- Cumulative Total Return for the 5-Year Period Ended 9/30/96: Oppenheimer Disciplined Value Fund Class A (at net asset value)(1) - ------- 117.94% - ------- Lipper Growth Funds Average for 247 Growth Funds for the 5-Year Period Ended 9/30/96(3) - ------ 92.28% - ------ The Fund's Class A shares were ranked **** among 1,684 (3-year), 1,014 (5-year) and 560 (10-year) equity funds for the combined 3-, 5- and 10-year periods ended 9/30/96 by MORNINGSTAR MUTUAL FUNDS.(4) This Fund is for people who seek long-term growth and feel most comfortable investing in well-established, yet UNDERVALUED companies. - ------------------------ HOW YOUR FUND IS MANAGED - ------------------------ Oppenheimer Disciplined Value Fund seeks long-term growth of capital through investment primarily in common stocks with low price/earnings ratios and better-than-anticipated earnings. Current income is a secondary consideration. The management team employs a disciplined bottom-up approach to security selection. - ----------- PERFORMANCE - ----------- Cumulative total return for the 12 months ended 9/30/96 for Class A shares was 16.12%, without deducting sales charges. Cumulative total return for Class B shares since inception on 10/1/95 was 16.83%, without deducting sales charges. Cumulative total return for Class C shares since inception on 5/1/96 was 3.14%, without deducting sales charges.(1) Your Fund's average annual total returns for Class A shares for the 1-, 5- and 10-year periods ended 9/30/96 were 9.44%, 15.48% and 14.32%, respectively. For Class B shares, cumulative total return since inception on 10/1/95 was 11.83%. For Class C shares, cumulative total return since inception on 5/1/96 was 2.14%.(2) - ------- OUTLOOK - ------- "Although we cannot predict the future, we feel that market valuations are extended and vulnerable to a correction. If a correction occurs, we will look for further opportunities to purchase out-of-favor stocks with positive earnings surprises at lower prices." Peter Antos, Michael Strathearn and Kenneth White Portfolio Managers October 31, 1996 Total returns include change in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. All classes of shares have the same investment portfolio but different expenses. For more complete information, please review the prospectus carefully before you invest. Prior to March 1, 1996, the Fund had a different investment adviser. However, the prior portfolio management team is now employed by OppenheimerFunds, Inc., the current adviser. 1. Includes change in net asset value per share without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns include the current maximum initial sales charge of 5.75%. Class A shares were first publicly offered on 9/16/85. The Fund's maximum sales charge for Class A shares was less during a portion of some of the periods shown, and actual investment results will be different as a result. Class B returns include the applicable contingent deferred sales charge of 5% (since inception). Class C returns include the applicable contingent deferred sales charge of 1%. An explanation of the different performance calculations is in the Fund's prospectus. Class B and C shares are subject to an annual .75% asset-based sales charge. 3. Source: Lipper Analytical Services, 9/30/96, an independent mutual fund monitoring service. The average is shown for comparative purposes only. Funds included in the index may have different investment policies and risks than the Fund. Oppenheimer Disciplined Value Fund is characterized by Lipper as a growth fund. Lipper performance is based on total return and does not take sales charges into account. 4. Source: MORNINGSTAR MUTUAL FUNDS, 9/30/96. Morningstar rankings are based on risk-adjusted investment return, after considering sales charges and expenses. Investment return measures a fund's (or class's) 3-, 5- and 10-year (depending on the inception of the class or fund) average annual total returns in excess of 90-day U.S. Treasury bill returns. Risk measures a fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk and returns are combined to produce star rankings, reflecting performance relative to the average fund in the fund's category. The top 10% of funds in each investment class receive 5 stars; the next 22.5%, 4 stars; the middle 35%, 3 stars; the next 22.5%, 2 stars; and the bottom 10%, 1 star. The 4-star current ranking is a weighted average of the 3-, 5- and 10-year rankings for the Fund's Class A shares, which were 3, 4 and 4 stars, respectively, weighted 20%/30%/50%. The 1-year star ranking is 3 stars, but is not included in Morningstar's overall ranking calculations. There were 1,684 funds in the 1-year period. Rankings are subject to change monthly. The Fund's Class A, B and C shares have the same investment portfolio but different expenses. 2 Oppenheimer Disciplined Value Fund [PHOTO]Bridget A. Macaskill Bridget A. Macaskill President Oppenheimer Disciplined Value Fund DEAR SHAREHOLDER, Following a summer of uncertainty surrounding the economy and the stock market, the arrival of fall brought renewed vigor to both. Most notable, the Dow Jones Industrial Average broke out of its fluctuating pattern and burst through the once-unimaginable 6,000 mark, sending many stock prices to all-time highs. But as the Dow began accelerating faster than the economy, a debate erupted about how long this bull run could last. Looking back, the autumn rally was clearly a result of three main factors: solid corporate profits, low inflation and stabilized interest rates, all of which attracted investors to Wall Street. And though the stock market is currently highly valued, there continue to be a number of positive economic influences that may extend the market's uphill run. We consider the leading catalyst to be the robust returns from corporate America, where a strong economy boosted third-quarter earnings. To date, we're still witnessing a cycle of events that could maintain the appeal of these companies to investors. For example, corporate streamlining efforts, such as spinoffs of non-core businesses, and consolidation within industries are helping to increase the cash flow of many firms. In return, additional cash flows enable these companies to add shareholder value by initiating stock repurchasing programs. As corporations buy back record amounts of their own stocks, they are reducing the supply and thereby raising the book value of their outstanding shares, a move which further contributes to higher stock prices. Additionally, the demand for stocks remains strong, largely because, as many experts believe, investors are taking more responsibility for their retirement investments. Indeed, as the country's baby boomers near retirement, they are becoming increasingly aware of the need to secure their own financial future, because they expect less and less from standard company pensions or Social Security. As a result, equity mutual funds have become the fastest growing means by which these investors are seeking to achieve their long-term goals. While these signs appear favorable for many well-managed companies, stock valuations remain at historically high levels, causing us to become more cautious about the market overall. We do not, however, expect to see a significant market decline. In fact, we are confident that as long as corporate earnings stay healthy, there will continue to be numerous investment opportunities available to fill the demand for stocks. Nevertheless, it is becoming more difficult to uncover true values and justify higher prices. Therefore, we believe the correct approach to take at this point is to carefully evaluate companies based on individual merits, such as strong management, fundamental business policies and long-term prospects for the future. Your portfolio manager discusses the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. We look forward to helping you reach your investment goals in the future. /s/Bridget Macaskill Bridget Macaskill November 21, 1996 3 Oppenheimer Disciplined Value Fund PETER ANTOS MICHAEL STRATHEARN KENNETH WHITE Portfolio Managers An interview with your Fund's managers. HOW DID THE FUND PERFORM OVER THE PAST YEAR? Although we have continued our time-tested strategy of targeting stocks with low price-to-earnings ratios and recent positive earnings surprises, 1996 has not been a great year for the Fund. In the past, this approach led us to undervalued stocks that performed well over time. This year, however, investors were anxious about the economic and political environments and were willing to pay for more highly valued stocks that offered a greater level of certainty. As a result, our type of undervalued stocks were out of favor in this year's growing but volatile market. While 1996 has not provided the best environment for the Fund, our stock discipline which emphasizes low P/E, positive-earnings-surprise, has a clearly superior record relative to other funds in the same category over the past ten years. With only a few periods of underperformance in the Fund's history, we remain committed to this strategy and expect superior performance going forward. WHAT CHARACTERISTICS DO YOU LOOK FOR WHEN EVALUATING STOCKS? We screen the universe for out-of-favor, undervalued stocks that have had recent positive earnings surprises. Unexpected by Wall Street analysts, these surprise gains are leading indicators that out-of-favor stocks may be ready to make a comeback. We manage from the bottom up, looking at companies rather than sectors, to find those investments with the most growth potential. WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE? A few strong companies in the technology sector, specifically personal computer manufacturers, provided the Fund with some real winners. Early in the period, investors' feelings that the marketplace was flooded with PCs, turned the market negative on the sector. As prices dropped, we identified high quality companies with positive earnings potential and bought stocks at low prices that have since appreciated. DID ANY INVESTMENTS NEGATIVELY IMPACT THE PORTFOLIO? Although they performed well for the Fund in the last quarter of 1995, agricultural companies have underperformed this year. Because of low worldwide supplies of grain and increasing food consumption in developing countries, we had expected performance to remain strong well into 1996. It appears, however, that these stocks had moved too far, too fast late last year and since then have dropped back to more realistic valuations. WHAT IS YOUR OUTLOOK FOR THE FUND? Despite disappointing performance during this period, our discipline has proven itself to be very strong over time. As a result, we do not intend to alter our strategy, and will continue to look for opportunities in undervalued companies. Although we cannot predict the future, we feel that market valuations are extended and vulnerable to a correction. If a correction occurs, we will look for further opportunities to purchase out-of-favor stocks with positive earnings surprises at lower prices.// 4 Oppenheimer Disciplined Value Fund
========================================= STATEMENT OF INVESTMENTS October 31, 1996 FACE MARKET VALUE AMOUNT SEE NOTE 1 ================================================================================================================================== U.S. GOVERNMENT OBLIGATIONS - 13.8% - ---------------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank Consolidated Disc. Nts., 5.50%, 11/1/96 $18,800,000 $ 18,800,000 ----------------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., 5.18%, 11/18/96 7,000,000 6,982,877 ------------- Total U.S. Government Obligations (Cost $25,782,877) 25,782,877 SHARES ================================================================================================================================== COMMON STOCKS - 85.7% - ---------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS - 5.0% - ---------------------------------------------------------------------------------------------------------------------------------- CHEMICALS - 2.7% ----------------------------------------------------------------------------------------------------------------------- Cabot Corp. 12,500 301,562 ----------------------------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 31,300 2,218,387 ----------------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 58,700 2,502,087 ------------- 5,022,036 - ---------------------------------------------------------------------------------------------------------------------------------- METALS - 1.0% ----------------------------------------------------------------------------------------------------------------------- UCAR International, Inc. (1) 45,400 1,776,275 - ---------------------------------------------------------------------------------------------------------------------------------- PAPER - 1.3% ----------------------------------------------------------------------------------------------------------------------- Fort Howard Corp. (1) 95,700 2,452,312 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS - 9.4% - ---------------------------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING - 0.7% ----------------------------------------------------------------------------------------------------------------------- Black & Decker Corp. 37,300 1,394,087 - ---------------------------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT - 2.1% ----------------------------------------------------------------------------------------------------------------------- AMR Corp. (1) 30,600 2,570,400 ----------------------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A (1) 43,500 1,440,937 ------------- 4,011,337 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL - 5.0% ----------------------------------------------------------------------------------------------------------------------- Eckerd Corp. (1) 77,700 2,156,175 ----------------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc. (1) 76,500 2,524,500 ----------------------------------------------------------------------------------------------------------------------- Price/Costco, Inc. (1) 109,100 2,168,362 ----------------------------------------------------------------------------------------------------------------------- U.S. Industries, Inc. (1) 91,400 2,467,800 ------------- 9,316,837 - ---------------------------------------------------------------------------------------------------------------------------------- RETAIL: SPECIALTY - 1.6% ----------------------------------------------------------------------------------------------------------------------- Toys 'R' Us, Inc. (1) 85,500 2,896,312 - ---------------------------------------------------------------------------------------------------------------------------------- CONSUMER NON-CYCLICALS - 14.0% - ---------------------------------------------------------------------------------------------------------------------------------- BEVERAGES - 1.5% ----------------------------------------------------------------------------------------------------------------------- Anheuser-Busch Cos., Inc. 72,900 2,806,650 - ---------------------------------------------------------------------------------------------------------------------------------- FOOD - 5.9% ----------------------------------------------------------------------------------------------------------------------- American Stores Co. 77,400 3,202,425 ----------------------------------------------------------------------------------------------------------------------- Archer-Daniels-Midland Co. 143,390 3,118,732 ----------------------------------------------------------------------------------------------------------------------- Dole Food Co. 44,500 1,735,500 ----------------------------------------------------------------------------------------------------------------------- Kroger Co. (1) 65,100 2,905,088 ------------- 10,961,745
5 Oppenheimer Disciplined Value Fund
========================================= STATEMENT OF INVESTMENTS (Continued) MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS - 1.5% ----------------------------------------------------------------------------------------------------------------------- Bristol-Myers Squibb Co. 26,900 $ 2,844,675 - ---------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES - 2.4% ----------------------------------------------------------------------------------------------------------------------- Columbia/HCA Healthcare Corp. 56,700 2,027,025 ----------------------------------------------------------------------------------------------------------------------- OrNda Healthcorp (1) 92,400 2,517,900 ------------- 4,544,925 - ---------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS - 2.7% ----------------------------------------------------------------------------------------------------------------------- Premark International, Inc. 125,800 2,626,075 ----------------------------------------------------------------------------------------------------------------------- Tupperware Corp. 48,500 2,491,688 ------------- 5,117,763 - ---------------------------------------------------------------------------------------------------------------------------------- ENERGY - 5.2% - ---------------------------------------------------------------------------------------------------------------------------------- OIL-INTEGRATED - 5.2% ----------------------------------------------------------------------------------------------------------------------- Amoco Corp. 32,200 2,439,150 ----------------------------------------------------------------------------------------------------------------------- Chevron Corp. 61,500 4,043,625 ----------------------------------------------------------------------------------------------------------------------- Mobil Corp. 28,500 3,327,375 ------------- 9,810,150 - ---------------------------------------------------------------------------------------------------------------------------------- FINANCIAL - 13.6% - ---------------------------------------------------------------------------------------------------------------------------------- BANKS - 7.4% ----------------------------------------------------------------------------------------------------------------------- Bank of Boston Corp. 60,300 3,859,200 ----------------------------------------------------------------------------------------------------------------------- BankAmerica Corp. 48,700 4,456,050 ----------------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 9,000 771,750 ----------------------------------------------------------------------------------------------------------------------- NationsBank Corp. 25,500 2,403,375 ----------------------------------------------------------------------------------------------------------------------- PNC Bank Corp. 66,300 2,403,375 ------------- 13,893,750 - ---------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL - 2.4% ----------------------------------------------------------------------------------------------------------------------- Crescent Real Estate Equities, Inc. 36,400 1,519,700 ----------------------------------------------------------------------------------------------------------------------- Salomon, Inc. 65,300 2,946,663 ------------- 4,466,363 - ---------------------------------------------------------------------------------------------------------------------------------- INSURANCE - 3.8% ----------------------------------------------------------------------------------------------------------------------- AFLAC, Inc. 68,900 2,764,613 ----------------------------------------------------------------------------------------------------------------------- General Re Corp. 11,300 1,663,925 ----------------------------------------------------------------------------------------------------------------------- Travelers/Aetna Property Casualty Corp., Cl. A 91,300 2,739,000 ------------- 7,167,538 - ---------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL - 12.6% - ---------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING - 11.2% ----------------------------------------------------------------------------------------------------------------------- AGCO Corp. 92,900 2,357,338 ----------------------------------------------------------------------------------------------------------------------- Case Corp. 62,200 2,892,300 ----------------------------------------------------------------------------------------------------------------------- Deere & Co. 61,000 2,546,750 ----------------------------------------------------------------------------------------------------------------------- General Signal Corp. 62,400 2,542,800 ----------------------------------------------------------------------------------------------------------------------- Ingersoll-Rand Co. 58,600 2,439,225 ----------------------------------------------------------------------------------------------------------------------- Mark IV Industries, Inc. 50,902 1,100,756 ----------------------------------------------------------------------------------------------------------------------- Textron, Inc. 44,000 3,905,000 ----------------------------------------------------------------------------------------------------------------------- Tyco International Ltd. 64,400 3,195,850 ------------- 20,980,019
6 Oppenheimer Disciplined Value Fund
==================================== STATEMENT OF INVESTMENTS (Continued) MARKET VALUE SHARES SEE NOTE 1 - ---------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION - 1.4% ----------------------------------------------------------------------------------------------------------------------- PACCAR, Inc. 15,300 $ 852,975 ----------------------------------------------------------------------------------------------------------------------- Union Pacific Corp. 32,600 1,829,675 ------------- 2,682,650 - ---------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY - 14.4% - ---------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE - 9.0% ----------------------------------------------------------------------------------------------------------------------- General Dynamics Corp. 40,300 2,765,588 ----------------------------------------------------------------------------------------------------------------------- Goodrich (B.F.) Co. 42,300 1,792,463 ----------------------------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 39,071 3,501,738 ----------------------------------------------------------------------------------------------------------------------- McDonnell Douglas Corp. 67,900 3,700,550 ----------------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 44,600 2,453,000 ----------------------------------------------------------------------------------------------------------------------- TRW, Inc. 28,700 2,597,350 ------------- 16,810,689 - ---------------------------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE - 3.6% ----------------------------------------------------------------------------------------------------------------------- Dell Computer Corp. (1) 25,200 2,050,650 ----------------------------------------------------------------------------------------------------------------------- Gateway 2000, Inc. (1) 21,600 1,016,550 ----------------------------------------------------------------------------------------------------------------------- Storage Technology Corp. (New) (1) 86,300 3,678,538 ------------- 6,745,738 - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRONICS - 1.8% ----------------------------------------------------------------------------------------------------------------------- Atmel Corp. (1) 8,400 213,150 ----------------------------------------------------------------------------------------------------------------------- Intel Corp. 23,500 2,582,063 ----------------------------------------------------------------------------------------------------------------------- Waters Corp. (1) 17,400 539,400 ------------- 3,334,613 - ---------------------------------------------------------------------------------------------------------------------------------- UTILITIES - 11.5% - ---------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES - 4.9% ----------------------------------------------------------------------------------------------------------------------- American Electric Power Co., Inc. 33,100 1,373,650 ----------------------------------------------------------------------------------------------------------------------- CalEnergy, Inc. (1) 48,000 1,392,000 ----------------------------------------------------------------------------------------------------------------------- Entergy Corp. 77,700 2,175,600 ----------------------------------------------------------------------------------------------------------------------- FPL Group, Inc. 44,300 2,037,800 ----------------------------------------------------------------------------------------------------------------------- Texas Utilities Co. 54,900 2,223,450 ------------- 9,202,500 - ---------------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES - 5.4% ----------------------------------------------------------------------------------------------------------------------- Columbia Gas System, Inc. (The) 86,600 5,260,950 ----------------------------------------------------------------------------------------------------------------------- PanEnergy Corp. 101,900 3,923,150 ----------------------------------------------------------------------------------------------------------------------- Questar Corp. 27,900 1,004,400 ------------- 10,188,500 - ---------------------------------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES - 1.2% ----------------------------------------------------------------------------------------------------------------------- GTE Corp. 50,900 2,144,163 ------------- Total Common Stocks (Cost $134,182,459) 160,571,627 ----------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $159,965,336) 99.5% 186,354,504 ----------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.5 999,004 ------ ------------- NET ASSETS 100.0% $187,353,508 ====== =============
1. Non-income producing security. See accompanying Notes to Financial Statements. 7 Oppenheimer Disciplined Value Fund
==================================================== STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996 ================================================================================================================================== ASSETS Investments, at value (cost $159,965,336) - see accompanying statement $186,354,504 -------------------------------------------------------------------------------------------------- Cash 1,903,355 -------------------------------------------------------------------------------------------------- Receivables: Investments sold 855,619 Shares of capital stock sold 404,481 Interest and dividends 127,102 ------------- Total assets 189,645,061 ================================================================================================================================== LIABILITIES Payables and other liabilities: Investments purchased 2,107,323 Shares of capital stock redeemed 46,764 Distribution and service plan fees 32,317 Transfer and shareholder servicing agent fees 12,790 Directors' fees 7,976 Other 84,383 ------------- Total liabilities 2,291,553 ================================================================================================================================== NET ASSETS $187,353,508 ============= ================================================================================================================================== COMPOSITION OF Par value of shares of capital stock $ 9,534 NET ASSETS -------------------------------------------------------------------------------------------------- Additional paid-in capital 147,179,680 -------------------------------------------------------------------------------------------------- Undistributed net investment income 479,425 -------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 13,295,701 -------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments - Note 3 26,389,168 ------------- Net assets $187,353,508 ============= ================================================================================================================================== NET ASSET VALUE Class A Shares: PER SHARE Net asset value and redemption price per share (based on net assets of $180,784,352 and 9,201,201 shares of capital stock outstanding) $19.65 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $20.85 -------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $5,854,228 and 296,100 shares of capital stock outstanding) $19.77 -------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $714,928 and 36,533 shares of capital stock outstanding) $19.57
See accompanying Notes to Financial Statements. 8 Oppenheimer Disciplined Value Fund
==================================================================== STATEMENT OF OPERATIONS FOR THE TEN MONTHS ENDED OCTOBER 31, 1996(1) ================================================================================================================================== INVESTMENT INCOME Dividends (net of foreign withholding taxes of $1,451) $ 1,741,056 -------------------------------------------------------------------------------------------------- Interest (net of foreign withholding taxes of $1,612) 735,017 ------------- Total income 2,476,073 ================================================================================================================================== EXPENSES Management fees - Note 4 719,186 -------------------------------------------------------------------------------------------------- Distribution and service plan fees - Note 4: Class A 275,407 Class B 24,189 Class C 1,717 -------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees - Note 4 154,397 -------------------------------------------------------------------------------------------------- Custodian fees and expenses 41,841 -------------------------------------------------------------------------------------------------- Legal and auditing fees 38,719 -------------------------------------------------------------------------------------------------- Shareholder reports 32,274 -------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 14,944 Class B 1,470 Class C 211 -------------------------------------------------------------------------------------------------- Accounting service fees 12,500 -------------------------------------------------------------------------------------------------- Directors' fees and expenses - Note 1 7,976 -------------------------------------------------------------------------------------------------- Other 1,613 ------------- Total expenses 1,326,444 ================================================================================================================================== NET INVESTMENT INCOME 1,149,629 ================================================================================================================================== REALIZED AND Net realized gain on investments 13,385,207 UNREALIZED GAIN -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 665,122 ------------- Net realized and unrealized gain 14,050,329 ================================================================================================================================== NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 15,199,958 =============
1. The Fund changed its fiscal year end from December 31 to October 31. See accompanying Notes to Financial Statements. 9 Oppenheimer Disciplined Value Fund
=================================== STATEMENTS OF CHANGES IN NET ASSETS TEN MONTHS YEAR ENDED ENDED OCTOBER 31, DECEMBER 31, 1996(1) 1995 ================================================================================================================================== OPERATIONS Net investment income $ 1,149,629 $ 1,501,707 --------------------------------------------------------------------------------------------------- Net realized gain 13,385,207 7,939,891 ---------------------------------- Net change in unrealized appreciation or depreciation 665,122 20,902,301 ---------------------------------- Net increase in net assets resulting from operations 15,199,958 30,343,899 ================================================================================================================================== DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income: TO SHAREHOLDERS Class A (669,566) (1,491,101) Class B (11,039) (561) Class C (1,428) -- -------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (841,952) (7,649,952) Class B (19,962) (42,834) Class C (1,789) -- ================================================================================================================================== CAPITAL STOCK Net increase in net assets resulting from capital TRANSACTIONS stock transactions - Note 2: Class A 49,316,623 18,560,935 Class B 4,851,609 724,308 Class C 696,522 -- ================================================================================================================================== NET ASSETS Total increase 68,518,976 40,444,694 -------------------------------------------------------------------------------------------------- Beginning of period 118,834,532 78,389,838 ---------------------------------- End of period (including undistributed net investment income of $479,425 and $11,438, respectively) $187,353,508 $118,834,532 ==================================
1. The Fund changed its fiscal year end from December 31 to October 31. See accompanying Notes to Financial Statements. 10 Oppenheimer Disciplined Value Fund
==================== FINANCIAL HIGHLIGHTS CLASS A ---------------------------------------------------------------------------- TEN MONTHS ENDED OCTOBER 31, YEAR ENDED DECEMBER 31, 1996(3) 1995 1994 1993 1992 1991 =================================================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $17.84 $14.20 $15.14 $14.20 $14.40 $11.62 - ------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .15 .25 .22 .30 .26 .25 Net realized and unrealized gain (loss) 1.88 4.88 (.32) 2.64 1.44 4.00 - ------------------------------------------------------------------------------------------------------------------- Total income (loss) from investment operations 2.03 5.13 (.10) 2.94 1.70 4.25 - ------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.10) (.25) (.22) (.30) (.26) (.25) Distributions from net realized gain (.12) (1.24) (.62) (1.70) (1.64) (1.22) - ------------------------------------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.22) (1.49) (.84) (2.00) (1.90) (1.47) - ------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $19.65 $17.84 $14.20 $15.14 $14.20 $14.40 ========================================================================== =================================================================================================================== TOTAL RETURN, AT NET ASSET VALUE(4) 11.41% 36.40% (0.65)% 20.91% 11.99% 36.91% =================================================================================================================== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $180,784 $118,118 $78,390 $64,495 $45,600 $40,716 - ------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $135,940 $ 98,063 $71,956 $54,682 $42,432 $36,087 - ------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (loss) 1.01%(5) 1.53% 1.50% 1.95% 1.74% 1.74% Expenses 1.13%(5) 1.22% 1.02% 1.05% 1.12% 1.19% - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(6) 73.9% 69.7% 98.5% 99.7% 141.7% 148.3% Average brokerage commission rate(7) $0.0697 -- -- -- -- --
1. For the period from May 1, 1996 (inception of offering) to October 31, 1996. 2. For the period from October 1, 1995 (inception of offering) to December 31, 1995. 3. The Fund changed its fiscal year end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc. became the investment adviser to the Fund. 4. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 5. Annualized. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended October 31, 1996 were $128,801,684 and $90,147,069, respectively. 7. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period, divided by the total number of related shares purchased and sold.
==================== FINANCIAL HIGHLIGHTS CLASS B CLASS C -------------------------------- ------------ TEN MONTHS PERIOD PERIOD ENDED ENDED ENDED OCTOBER 31, DECEMBER 31, OCTOBER 31, 1996(3) 1995(2) 1996(1) ======================================================================================== PER SHARE OPERATING DATA: Net asset value, beginning of period $18.08 $17.83 $18.79 - ---------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .05 .02 .06 Net realized and unrealized gain (loss) 1.83 1.40 .94 - ---------------------------------------------------------------------------------------- Total income (loss) from investment operations 1.88 1.42 1.00 - ---------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.07) (.02) (.10) Distributions from net realized gain (.12) (1.15) (.12) - ---------------------------------------------------------------------------------------- Total dividends and distributions to shareholders (.19) (1.17) (.22) - ---------------------------------------------------------------------------------------- Net asset value, end of period $19.77 $18.08 $19.57 ================================================= ======================================================================================== TOTAL RETURN, AT NET ASSET VALUE(4) 10.43% 8.04% 5.35% ======================================================================================== RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $5,854 $717 $715 - ---------------------------------------------------------------------------------------- Average net assets (in thousands) $2,903 $306 $342 - ---------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (loss) 0.22%(5) 0.21%(5) 0.04%(5) Expenses 1.88%(5) 1.97%(5) 1.87%(5) - ---------------------------------------------------------------------------------------- Portfolio turnover rate(6) 73.9% 69.7% 73.9% Average brokerage commission rate(7) $0.0697 -- $0.0697
See accompanying Notes to Financial Statements. 11 Oppenheimer Disciplined Value Fund ============================= Notes to Financial Statements ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Disciplined Value Fund (the Fund), a series of Oppenheimer Series Fund, Inc. (the Company), is registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. On August 15, 1996, the Board of Directors elected to change the fiscal year end of the Fund from December to October. Accordingly, these financial statements include information for the ten month period from January 1, 1996 to October 31, 1996. The Fund's investment objective is to seek capital appreciation by investing primarily in common stocks with low price-earnings ratios and better-than-anticipated earnings. Until March 18, 1996, the Fund and the Company were named Connecticut Mutual Growth Account and Connecticut Mutual Investment Accounts, Inc., respectively. On January 27, 1996, the policyholders of Connecticut Mutual Life Insurance Company (CML) approved a merger of CML with Massachusetts Mutual Life Insurance Company (MML). In connection with this change, effective March 18, 1996, OppenheimerFunds, Inc. (the Manager) became the adviser of the Company. The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All three classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. ---------------------------------------------------------------------------- INVESTMENT VALUATION. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Directors. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or are valued under consistently applied procedures established by the Board of Directors to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. ---------------------------------------------------------------------------- REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. 12 Oppenheimer Disciplined Value Fund ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. ---------------------------------------------------------------------------- DIRECTORS' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the ten months ended October 31, 1996, a provision of $7,976 was made for the Fund's projected benefit obligations, resulting in an accumulated liability of $7,976. ---------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. ---------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. ---------------------------------------------------------------------------- CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. During the ten month period ended October 31, 1996, the Fund adjusted the classification of investment income and capital gain (loss) to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. During the ten month period ended October 31, 1996, amounts have been reclassified to reflect an increase in paid-in capital of $648, a decrease in accumulated net realized gain of $1,039, and an increase in undistributed net investment income of $391. ---------------------------------------------------------------------------- OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 13 Oppenheimer Disciplined Value Fund ========================================= Notes to Financial Statements (Continued) ================================================================================ 2. SHARES OF CAPITAL STOCK The Fund has authorized 450 million of $0.001 par value shares of capital stock. Transactions in shares of capital stock were as follows:
TEN MONTHS ENDED OCTOBER 31, 1996(2) YEAR ENDED DECEMBER 31, 1995(1) ------------------------------------ ------------------------------- SHARES AMOUNT SHARES AMOUNT ------------------------------------------------------------------------------------------------------------- Class A: Sold 3,132,678 $ 59,597,763 1,242,427 $ 20,678,025 Dividends and distributions reinvested 79,955 1,491,345 513,302 9,039,419 Redeemed (630,553) (11,772,485) (657,052) (11,156,509) ---------- ------------- ---------- ------------- Net increase 2,582,080 $ 49,316,623 1,098,677 $ 18,560,935 ========== ============= ========== ============= -------------------------------------------------------------------------------------------------------------- Class B: Sold 261,924 $ 4,955,930 37,415 $ 684,870 Dividends and distributions reinvested 1,535 28,899 2,434 43,392 Redeemed (6,999) (133,220) (209) (3,954) ---------- ------------- ---------- ------------- Net increase 256,460 $ 4,851,609 39,640 $ 724,308 ========== ============= ========== ============= -------------------------------------------------------------------------------------------------------------- Class C: Sold 36,414 $ 694,306 -- $ -- Dividends and distributions reinvested 172 3,206 -- -- Redeemed (53) (990) -- -- ---------- ------------- ---------- ------------- Net increase 36,533 $ 696,522 -- $ -- ========== ============= ========== =============
1. For the year ended December 31, 1995 for Class A shares and for the period from October 1, 1995 (inception of offering) to December 31, 1995 for Class B shares. 2. For the ten months ended October 31, 1996 for Class A and Class B shares and for the period from May 1,1996 (inception of offering) to October 31, 1996 for Class C shares. The Fund changed its fiscal year end from December 31 to October 31. ================================================================================ 3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS At October 31, 1996, net unrealized appreciation on investments of $26,389,168 was composed of gross appreciation of $27,298,502, and gross depreciation of $909,334. ================================================================================ 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.625% of the first $300 million of average annual net assets, 0.500% of the next $100 million and 0.450% of net assets in excess of $400 million. Prior to March 18, 1996, management fees were paid to G. R. Phelps & Co. (the former Manager) at an annual rate of 0.625% of the Fund's average net assets. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent applicable regulatory limit on Fund expenses. For the period ended October 31, 1996, commissions (sales charges paid by investors) on sales of Class A shares totaled $534,988, of which $341,543 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and Class C shares totaled $149,781 and $6,734, of which $79,814 and $4,696, respectively, were paid to an affiliated broker/dealer. During the period ended October 31, 1996, OFDI received contingent deferred sales charges of $3,336 upon redemption of Class B shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. 14 Oppenheimer Disciplined Value Fund ============================================================================ 4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED) OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OFS's total costs of providing such services are allocated ratably to these companies. The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate that may not exceed 0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and other financial institutions quarterly for providing personal service and maintenance of accounts of their customers that hold Class A shares. During the period ended October 31, 1996, OFDI paid $191,634 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. The Fund has adopted a compensation type Distribution and Service Plan for Class B shares to compensate OFDI for its services and costs in distributing Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B shares. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class B shares. Both fees are computed on the average annual net assets of Class B shares, determined as of the close of each regular business day. During the period ended October 31, 1996, OFDI retained $20,026 as compensation for Class B sales commissions and service fee advances, as well as financing costs. If the Plan is terminated by the Fund, the Board of Directors may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plan was terminated. As of October 31, 1996, OFDI had incurred unreimbursed expenses of $153,254 for Class B. The Fund has adopted a compensation type Distribution and Service Plan for Class C shares to compensate OFDI for its services and costs in distributing Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class C shares. Both fees are computed on the average annual net assets of Class C shares, determined as of the close of each regular business day. During the period ended October 31, 1996, OFDI retained $1,623 as reimbursement for Class C sales commissions and service fee advances, as well as financing costs. If the Plan is terminated by the Fund, the Board of Directors may allow the Fund to continue payments of the asset-based sales charge to OFDI for certain expenses it incurred before the Plan was terminated. As of October 31, 1996, OFDI had incurred unreimbursed expenses of $11,314 for Class C. 15 Oppenheimer Disciplined Value Fund Independent Auditors' Report ================================================================================ The Board of Directors and Shareholders of Oppenheimer Disciplined Value Fund: We have audited the accompanying statements of investments and assets and liabilities of Oppenheimer Disciplined Value Fund (formerly Connecticut Mutual Growth Account) as of October 31, 1996, and the related statement of operations, the statement of changes in net assets and the financial highlights for the ten month period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statement of changes in net assets for the year ended December 31, 1995 and the financial highlights for the five years ended December 31, 1995 were audited by other auditors whose report dated February 9, 1996 expressed an unqualified opinion on this information. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1996 by correspondence with the custodian and brokers; and where confirmations were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Value Fund as of October 31, 1996, and the results of its operations, the changes in its net assets, and the financial highlights for the ten month period ended October 31, 1996, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP Denver, Colorado November 21, 1996 16 Oppenheimer Disciplined Value Fund Federal Income Tax Information (Unaudited) ================================================================================ In early 1997 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1996. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Dividends paid by the Fund during the ten months ended October 31, 1996 which are not designated as capital gain distributions should be multiplied by 48.50% to arrive at the net amount eligible for the corporate dividend- received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax adviser for specific guidance. 17 Oppenheimer Disciplined Value Fund Oppenheimer Disciplined Value Fund A Series of Oppenheimer Series Fund, Inc. ================================================================================ OFFICERS AND DIRECTORS Leon Levy, Chairman of the Board of Directors Donald W. Spiro, Vice Chairman of the Board of Directors Bridget A. Macaskill, Director and President Robert G. Galli, Director Benjamin Lipstein, Director Elizabeth B. Moynihan, Director Kenneth A. Randall, Director Edward V. Regan, Director Russell S. Reynolds, Jr., Director Sidney M. Robbins, Director Pauline Trigere, Director Clayton K. Yeutter, Director Peter M. Antos, Vice President Robert C. Doll, Jr., Vice President Stephen F. Libera, Vice President Michael C. Strathearn, Vice President Kenneth B. White, Vice President Arthur J. Zimmer, Vice President George C. Bowen, Treasurer Robert J. Bishop, Assistant Treasurer Scott T. Farrar, Assistant Treasurer Andrew J. Donohue, Secretary Robert G. Zack, Assistant Secretary ================================================================================ INVESTMENT ADVISER OppenheimerFunds, Inc. ================================================================================ DISTRIBUTOR OppenheimerFunds Distributor, Inc. ================================================================================ TRANSFER AND OppenheimerFunds Services SHAREHOLDER SERVICING AGENT ================================================================================ CUSTODIAN OF State Street Bank and Trust Company PORTFOLIO SECURITIES ================================================================================ INDEPENDENT AUDITORS KPMG Peat Marwick LLP ================================================================================ LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein This is a copy of a report to shareholders of Oppenheimer Disciplined Value Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Disciplined Value Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 18 Oppenheimer Disciplined Value Fund - ----------------------- OPPENHEIMERFUNDS FAMILY - ----------------------- ================================================================================ OppenheimerFunds offers over 50 funds designed to fit virtually every investment goal. Whether you're investing for retirement, your children's education or tax-free income, we have the funds to help you seek your objective. When you invest with OppenheimerFunds, you can feel comfor- table knowing that you are investing with a respected financial institution with over 35 years of experience in helping people just like you reach their financial goals. And you're investing with a leader in global, growth stock and flexible fixed-income investments--with over 3 million shareholder accounts and more than $55 billion under OppenheimerFunds' management and that of our affiliates. At OppenheimerFunds, we don't charge a fee to exchange shares. And you can exchange shares easily by mail or by tele- phone.(1) For more information on Oppenheimer funds, please con- tact your financial adviser or call us at 1-800-525-7048 for a prospectus. You may also write us at the address shown on the back cover. As always, please read the prospectus carefully before you invest. ================================================================================ STOCK FUNDS Developing Markets Fund Growth Fund Global Emerging Growth Fund Global Fund Enterprise Fund(2) Quest Global Value Fund International Growth Fund Disciplined Value Fund Discovery Fund Oppenheimer Fund Quest Small Cap Value Fund Value Stock Fund Gold & Special Minerals Fund Quest Value Fund Target Fund ================================================================================ STOCK & BOND Main Street Income & Growth Fund Equity Income Fund FUNDS Quest Opportunity Value Fund Disciplined Allocation Fund Total Return Fund Asset Allocation Fund Quest Growth & Income Value Fund Strategic Income & Growth Fund Global Growth & Income Fund Bond Fund for Growth ================================================================================ BOND FUNDS International Bond Fund Bond Fund High Yield Fund U.S. Government Trust Champion Income Fund Limited-Term Government Fund Strategic Income Fund ================================================================================ MUNICIPAL California Municipal Fund(3) Insured Municipal Fund FUNDS Florida Municipal Fund(3) Intermediate Municipal Fund New Jersey Municipal Fund(3) New York Municipal Fund(3) Rochester Division Pennsylvania Municipal Fund(3) Rochester Fund Municipals Municipal Bond Fund Limited Term New York Municipal Fund ================================================================================ MONEY MARKET Money Market Fund Cash Reserves FUNDS(4) ================================================================================ LIFESPAN Growth Fund Income Fund Balanced Fund 1. Exchange privileges are subject to change or termination. Shares may be exchanged only for shares of the same class of eligible funds. 2. Effective 4/1/96, the Fund is closed to new investors. 3. Available only to investors in certain states. 4. An investment in money market funds is neither insured nor guaranteed by the U.S. government and there can be no assurance that a money market fund will be able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. -c-Copyright 1996 OppenheimerFunds, Inc. All rights reserved. 19 Oppenheimer Disciplined Value Fund [BACK COVER} INFORMATION GENERAL INFORMATION Monday-Friday 8:30 a.m.-9 p.m. ET Saturday 10 a.m.-2 p.m. ET - -------------- 1-800-525-7048 - -------------- TELEPHONE TRANSACTIONS Monday-Friday 8:30 a.m.-8 p.m. ET - -------------- 1-800-852-8457 - -------------- PHONELINK 24 hours a day, automated information and transactions - -------------- 1-800-533-3310 - -------------- TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) Monday-Friday 8:30 a.m.-8 p.m. ET - -------------- 1-800-843-4461 - -------------- OPPENHEIMERFUNDS INFORMATION HOTLINE 24 hours a day, timely and insightful messages on the economy and issues that affect your investments - -------------- 1-800-835-3104 - -------------- RA0375.001.1096 December 31, 1996 - ------------------------------------------------------------------------------ "HOW MAY I HELP YOU?" [PHOTO]Customer Service Representative Customer Service Representative OppenheimerFunds Services As an Oppenheimer funds shareholder, you have some special privileges. Whether it's automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that "links" your Oppenheimer funds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get automated information with OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you access to a variety of fund, account, and market information. Of course, you can always speak with a Customer Service Representative during the General Information hours shown at the left. You can count on us whenever you need assistance. That's why the International Customer Service Association, an independent, nonprofit organization made up of over 3,200 customer service management professionals from around the country, honored the Oppenheimer funds' transfer agent, OppenheimerFunds Services, with their Award of Excellence in 1993. So call us today--we're here to help. - ------------------------------------------------------------------------------ [LOGO] OPPENHEIMERFUNDS-R- -------------- OppenheimerFunds Distributor, Inc. Bulk Rate P.O. 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