-----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, BWAYNprhuVUdaOFlNRT9eukjC5/rjEZ6BhzDh/1Wx6hbeZTg3UJzONUnFKEt3SO9 fLH8m8nKUtNJoLcDRVM2tA== 0000950146-96-001580.txt : 19960906 0000950146-96-001580.hdr.sgml : 19960906 ACCESSION NUMBER: 0000950146-96-001580 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960905 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS 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: 96625951 BUSINESS ADDRESS: STREET 1: 140 GARDEN ST CITY: HARTFORD STATE: CT ZIP: 06154 BUSINESS PHONE: 2039875002 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-30D 1 OPPENHEIMER DISCIPLINED ALLOCATION FUND S/A/R [FRONT COVER] Oppenheimer Disciplined Allocation Fund Semiannual Report June 30, 1996 [PICTURE OF BARBQ] "We need the comfort of having a variety of different investments, but the convenience of doing it with one fund." [LOGO] OppenheimerFunds (R) News Beat the Average Total Return for the 5-Year Period Ended 6/30/96: Oppenheimer Disciplined Allocation Fund Class A (at net asset value)(1) 81.88% Lipper Balanced Funds Average(3) 73.99% This Fund is for people who want a simple way to pursue favorable opportunities across many different types of investments. How Your Fund Is Managed Oppenheimer Disciplined Allocation Fund seeks to maximize total investment return (including capital appreciation and income) principally by allocating assets among stocks, corporate bonds, U.S. government securities and money market instruments. The management team arrives at the portfolio allocation through a disciplined use of a multidimensional model. This model is analyzed monthly and allocation changes typically occur in small increments, to try to achieve a relatively lower risk profile for the portfolio. Performance Cumulative total returns for the six months ended 6/30/96 for Class A and Class B shares were 2.37% and 1.94%, respectively.(1) Your Fund's average annual total returns for Class A shares for the 1-, 5-, and 10-year periods ended 6/30/96 were 5.79%, 11.38% and 9.93%, respectively. For Class B shares, cumulative total return since inception of the class on 10/2/95 was 1.97%.(2) Outlook "We are very optimistic. This is a Fund with an impressive long-term track record and a proven investment technique that emphasizes undervalued stocks and bond holdings. As the stock market returns to more normal valuation levels and the bond market recovers, we believe the Fund will perform well--continuing to offer reduced risk and competitive returns." Peter Antos, Portfolio Manager June 30, 1996 Total returns include change in share price and reinvestment of dividends and capital gains distributions. Past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. 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 advisor. However, the prior portfolio management team are now employed by OppenheimerFunds, Inc., the current advisor. 1. Based on the change in net asset value per share for the period shown, without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns show results of hypothetical investments including 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 return includes the applicable contingent deferred sales charge of 5% (1-year). Effective 5/1/96, the Fund offered Class C shares, for which performance data is not yet available. An explanation of the different performance calculations is in the Fund's prospectus. 3. Source: Lipper Analytical Services, 6/30/96, an independent mutual fund monitoring service. The Lipper total return average for the 5-year period was for 69 balanced funds. The average is shown for comparative purposes only. Oppenheimer Disciplined Allocation Fund is characterized by Lipper as a balanced fund. Lipper performance does not take sales charges into consideration. 2 Oppenheimer Disciplined Allocation Fund Dear Shareholder, [PHOTO-BRIDGET A. MACASKILL] Bridget A. Macaskill President Oppenheimer Disciplined Allocation Fund Against all odds, the stock market showed remarkable strength during the first five months of 1996. However, in the few months that followed, the market experienced significant volatility that resulted in a decline in the Dow of about 7 percent. Many experts said the stock market, having advanced to record heights in 1995 and void of any real market correction since 1990, was due for a downturn. This was, after all, the longest bull market of the post-World War II era. Thanks to the 10% rise in blue chip stocks during the first half of 1996 and the early success of small stocks, the decline that occurred recently was somewhat cushioned. While it's impossible to tell what will happen next, we are optimistic that this turn was a correction within a bull market rather than the onset of a bear market. What made the market perform so well during the first part of the year? It was another surprise: corporate profits. Between 1992 and 1995, corporate profits of U.S. companies advanced at a double-digit rate. Investors widely expected this year's profit tallies to be flat compared to 1995. After all, the economy had been sluggish--growing at an annual rate of just 2.3% in the first quarter of 1996. But corporate America continued to perform. The reason corporate profits were so strong is that many U.S. companies continued to successfully reduce costs. Often when a company achieves a small increase in sales, the benefit goes straight to the bottom line. Indeed, the U.S. Commerce Department reports indicated that corporate profits rose 15% for the four quarters ended March 1996, while the economy grew only marginally. Still, profits are not what they were in the early 1990s. That's why investors are seeking out companies that can grow earnings regardless of the fortunes of the economy. Which is just what many small companies in such fields as technology, healthcare and specialty retailing have been doing, growing earnings at double-digit--and even triple-digit rates. So it's not surprising that the stocks of many of these small fast-growing companies have been such strong performers. The early strength of the stock market is all the more remarkable when you consider that during the same period, interest rates moved up sharply. The yield on the benchmark 30-year U.S. Treasury bond rose from about 6% in January to over 7% today. Interest rates have been rising partly because investors are concerned that the economy is growing fast enough to generate higher inflation. However, we are watching this very closely, and would become very cautious regarding the stock market's performance if inflation were to flare up. As always, remember stock investments are generally meant for long-term growth objectives, and often involve short-term volatility. So, it's critical for investors to keep their focus on long-term goals and to put near-term setbacks in proper prospective. Your portfolio managers discuss the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. We look forward to helping you reach your investment goals in the future. /s/ Bridget A. Macaskill Bridget A. Macaskill July 22, 1996 3 Oppenheimer Disciplined Allocation Fund Peter Antos Portfolio Manager Q + A An interview with your Fund's managers. How did the Fund perform over the past six months? While our long-term record is very strong, the Fund has lagged its competitors moderately over the fiscal period. There are two reasons for this. First, as a relatively conservative, value-oriented fund, we owned a smaller percentage of stocks than did our peers during much of this period. With stocks so clearly outperforming bonds, this positioning hurt our performance. Second, our investment discipline involves looking for undervalued, out-of-favor stocks. Though this strategy is significantly responsible for our strong long-term results, these stocks underperformed over the last six months. What investments made positive contributions to performance? The Fund benefited most from its aerospace and retail holdings. That's because we were able to buy stocks in the aerospace industry when it was out of favor due to lingering concern about cuts in defense spending. However, cost-cutting, consolidations and a pickup in demand from commercial airlines led to better-than-expected earnings for many of these companies, which in turn helped drive their stock prices higher. By owning retailing companies that focused on making their core businesses more profitable, the Fund was able to capture higher stock prices. The retailers that did particularly well for us had strong cash flows and used their cash in ways that benefited shareholders -- such as stock buybacks and strategic acquisitions. Did any investments negatively impact the portfolio? In a year where the stock market was remarkably strong, and the bond market unexpectedly weak, income-producing equity investments were relatively poor performers. So our exposure to two higher yielding sectors of the market, financial and utility stocks, hindered the Fund's performance. Additionally, due to the recent rise in interest rates, our bond holdings have been down as well. On the other hand, our asset allocation discipline led us to a relatively low weighting in bonds early in the year. What areas are you currently targeting? We continue to employ a disciplined value-oriented investment style that emphasizes stocks with relatively low prices and positive earnings surprises. We have recently reduced stock exposure, and added to our bond and cash holdings, in line with our asset allocation discipline. What is your outlook for the Fund? We are very optimistic. This is a Fund with an impressive long-term track record and a proven investment technique that emphasizes undervalued stock and bond holdings. The Fund provides investors with a relatively conservative way to take advantage of the market's growth potential. As the stock market returns to more normal valuation levels and the bond market recovers, we believe the Fund will perform well--and we hope to offer reduced risk and competitive returns. [solid box] 4 Oppenheimer Disciplined Allocation Fund Statement of Investments June 30, 1996 (Unaudited)
Face Market Value Amount See Note 1 =================================================================================================================================== Short-Term Notes--13.8% - ----------------------------------------------------------------------------------------------------------------------------------- Barnett Banks, 5.43%, 7/1/96 $ 3,000,000 $ 3,000,000 --------------------------------------------------------------------------------------------------------------- Countrywide Home Loan, 5.38%, 7/8/96 2,230,000 2,227,659 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank, 5.52%, 7/1/96 8,700,000 8,700,000 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., 5.29%, 7/5/96 10,000,000 9,994,122 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp., 5.27%, 7/1/96 4,600,000 4,600,000 --------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 5.25%, 7/2/96 3,250,000 3,249,517 ------------ Total Short-Term Notes (Cost $31,771,298) 31,771,298 =================================================================================================================================== Mortgage-Backed Obligations--8.5% - ----------------------------------------------------------------------------------------------------------------------------------- Chase Commercial Mortgage Securities Corp., Commercial Mortgage Obligations, Series 1996-1, Cl. A2, 7.60%, 7/1/26 1,500,000 1,515,900 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp.: Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Series 1992-15, Cl. KZ, 7%, 2/25/22 672,662 542,964 Gtd. Multiclass Mtg. Participation Certificates, 6%, 3/1/09 951,159 907,758 Gtd. Multiclass Mtg. Participation Certificates, Series 1337, Cl. D, 6%, 8/15/07 1,000,000 899,060 Gtd. Multiclass Mtg. Participation Certificates, Series 1820, Cl. Pl, 5.75%, 7/15/06 1,000,000 966,437 Gtd. Multiclass Mtg. Participation Certificates, Series 1994-43, Cl. PE, 6%, 12/25/19 800,000 779,000 Series 1849, Cl. VA, 6%, 12/15/10 989,585 968,557 --------------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: 6%, 12/1/03 999,027 965,949 6.50%, 3/1/26 760,946 711,721 7.50%, 1/1/08--6/1/08 1,126,578 1,134,763 --------------------------------------------------------------------------------------------------------------- GE Capital Mortgage Securities, Inc., Series HE2, Cl. A3, 7.30%, 3/25/12 700,000 701,750 --------------------------------------------------------------------------------------------------------------- Government National Mortgage Assn.: 6.50%, 10/15/23--4/15/24 5,922,735 5,547,917 7%, 4/15/09--2/15/24 1,663,116 1,618,048 7.50%, 3/15/09 869,816 879,871 8%, 5/15/17 566,640 577,968 --------------------------------------------------------------------------------------------------------------- Green Tree Financial Corp., Series 1994-7, Cl. A3, 8%, 3/15/20 500,000 510,780 --------------------------------------------------------------------------------------------------------------- Housing Securities, Inc., Series 1994-3, Cl. A3, 7.25%, 9/25/12 418,990 419,765 ------------ Total Mortgage-Backed Obligations (Cost $19,725,405) 19,648,208 =================================================================================================================================== U.S. Government Obligations--9.8% - ----------------------------------------------------------------------------------------------------------------------------------- U.S. Treasury Bonds: 7.50%, 11/15/16 5,235,000 5,499,996 8.75%, 5/15/17 8,250,000 9,787,883 --------------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.75%, 8/15/03 300,000 285,702 6.75%, 6/30/99 500,000 505,780 7.25%, 8/15/04 1,500,000 1,553,670 7.50%, 11/15/01 4,900,000 5,115,159 ------------ Total U.S. Government Obligations (Cost $21,917,195) 22,748,190
5 Oppenheimer Disciplined Allocation Fund
Statement of Investments June 30, 1996 (Unaudited) (Continued) Face Market Value Amount See Note 1 =================================================================================================================================== Foreign Government Obligations--0.2% - ----------------------------------------------------------------------------------------------------------------------------------- Colombia (Republic of) Unsub. Nts., 7.125%, 5/11/98 $ 300,000 $ 297,750 --------------------------------------------------------------------------------------------------------------- United Mexican States Bonds, 6.97%, 8/12/00 250,000 223,125 ------------ Total Foreign Government Obligations (Cost $537,487) 520,875 =================================================================================================================================== Non-Convertible Corporate Bonds and Notes--21.3% - ----------------------------------------------------------------------------------------------------------------------------------- Basic Materials--2.4% - ----------------------------------------------------------------------------------------------------------------------------------- Chemicals--1.3% Burmah Castrol PLC, 7% Gtd. Medium-Term Nts., 12/15/97 500,000 505,745 --------------------------------------------------------------------------------------------------------------- FMC Corp., 8.75% Sr. Nts., 4/1/99 500,000 520,295 --------------------------------------------------------------------------------------------------------------- Lyondell Petrochemical Co., 8.25% Nts., 3/15/97 1,100,000 1,113,233 --------------------------------------------------------------------------------------------------------------- Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 500,000 590,890 --------------------------------------------------------------------------------------------------------------- PPG Industries, Inc., 9% Debs., 5/1/21 250,000 288,475 ------------ 3,018,638 - ----------------------------------------------------------------------------------------------------------------------------------- Metals--0.4% Alcan Aluminum Ltd., 9.625% Debs., 7/15/19 850,000 930,572 - ----------------------------------------------------------------------------------------------------------------------------------- Paper--0.7% Celulosa Arauco y Constitucion SA, 7.25% Debs., 6/11/98 500,000 503,750 --------------------------------------------------------------------------------------------------------------- Georgia-Pacific Corp., 9.85% Credit Sensitive Nts., 6/15/97 750,000 772,380 --------------------------------------------------------------------------------------------------------------- Kimberly-Clark Corp., 7.875% Debs., 2/1/23 290,000 291,230 ------------ 1,567,360 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Cyclicals--1.8% - ----------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--0.7% Blockbuster Entertainment Corp., 6.625% Sr. Nts., 2/15/98 500,000 497,355 --------------------------------------------------------------------------------------------------------------- Walt Disney Co., 6.375% Sr. Unsec. Bonds, Series A, 3/30/01 1,250,000 1,227,700 ------------ 1,725,055 - ----------------------------------------------------------------------------------------------------------------------------------- Media--0.6% Reed Elsevier, Inc., 6.625% Nts., 10/15/23 400,000 346,180 --------------------------------------------------------------------------------------------------------------- Tele-Communications, Inc., 7.14% Sr. Medium-Term Nts., 2/3/98 400,000 402,804 --------------------------------------------------------------------------------------------------------------- Time Warner, Inc., 7.45% Nts., 2/1/98 700,000 707,581 ------------ 1,456,565 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: General--0.5% Federated Department Stores, Inc., 10% Sr. Nts., 2/15/01 350,000 368,375 --------------------------------------------------------------------------------------------------------------- Sears Roebuck & Co., 8.39% Medium-Term Nts., 3/23/99 300,000 313,218 --------------------------------------------------------------------------------------------------------------- Wal-Mart Stores, Inc., 5.875% Nts., 10/15/05 500,000 456,650 ------------ 1,138,243 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Non-Cyclicals--2.4% - ----------------------------------------------------------------------------------------------------------------------------------- Beverages--0.3% Bass America, Inc., 6.75% Gtd. Nts., 8/1/99 250,000 249,260 --------------------------------------------------------------------------------------------------------------- Fomento Economico Mexico SA, 9.50% Unsub. Nts., 7/22/97 450,000 457,875 ------------ 707,135 - ----------------------------------------------------------------------------------------------------------------------------------- Food--0.9% ConAgra, Inc., 9.75% Sr. Nts., 11/1/97 500,000 519,280 --------------------------------------------------------------------------------------------------------------- CPC International, Inc., 6.15% Unsec. Nts., Series C, 1/15/06 500,000 466,240 --------------------------------------------------------------------------------------------------------------- Dole Food Co., 6.75% Nts., 7/15/00 530,000 522,829 --------------------------------------------------------------------------------------------------------------- Great Atlantic & Pacific Tea Co., 9.125% Debs., 1/15/98 500,000 515,625 ------------ 2,023,974
6 Oppenheimer Disciplined Allocation Fund
Face Market Value Amount See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--0.4% Roche Holdings, Inc., 2.75% Bonds, 4/14/00 $ 950,000 $ 837,781 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--0.2% Tenet Healthcare Corp., 8.625% Sr. Unsec. Nts., 12/1/03 500,000 507,500 - ----------------------------------------------------------------------------------------------------------------------------------- Household Goods--0.6% Black & Decker Corp., 6.625% Nts., 11/15/00 700,000 691,404 --------------------------------------------------------------------------------------------------------------- Electrolux AB, 7.75% Sr. Unsub. Debs., 6/17/97 500,000 505,625 --------------------------------------------------------------------------------------------------------------- Procter & Gamble Co., 9.36% Debs., 1/1/21 250,000 296,138 ------------ 1,493,167 - ----------------------------------------------------------------------------------------------------------------------------------- Energy--2.5% - ----------------------------------------------------------------------------------------------------------------------------------- Energy Services & Producers--0.6% Coastal Corp., 8.125% Sr. Nts., 9/15/02 500,000 521,295 --------------------------------------------------------------------------------------------------------------- Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01 500,000 511,250 --------------------------------------------------------------------------------------------------------------- Petroliam Nasional Berhad, 6.875% Nts., 7/1/03(1) 500,000 492,400 ------------ 1,524,945 - ----------------------------------------------------------------------------------------------------------------------------------- Oil-Integrated--1.9% BP America, Inc., 8.875% Gtd. Debs., 12/1/97 500,000 517,530 --------------------------------------------------------------------------------------------------------------- Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 915,000 885,711 --------------------------------------------------------------------------------------------------------------- Norsk Hydro AS, 8.75% Bonds, 10/23/01 500,000 531,250 --------------------------------------------------------------------------------------------------------------- Occidental Petroleum Corp., 6.27% Medium-Term Nts., 11/8/00 1,000,000 971,166 --------------------------------------------------------------------------------------------------------------- Phillips Petroleum Co., 7.53% Pass-Through Certificates, Series 1994-A1, 9/27/98 777,471 797,332 --------------------------------------------------------------------------------------------------------------- TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 500,000 603,515 ------------ 4,306,504 - ----------------------------------------------------------------------------------------------------------------------------------- Financial--8.5% - ----------------------------------------------------------------------------------------------------------------------------------- Banks--1.3% BankAmerica Corp., 6% Nts., 7/15/97 500,000 499,630 --------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 250,000 278,725 --------------------------------------------------------------------------------------------------------------- Citicorp, 5.625% Sr. Nts., 2/15/01 550,000 524,304 --------------------------------------------------------------------------------------------------------------- First Fidelity Bancorporation, 8.50% Sub. Capital Nts., 4/1/98 500,000 516,165 --------------------------------------------------------------------------------------------------------------- Fleet Mtg./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 250,000 279,738 --------------------------------------------------------------------------------------------------------------- Marshall & Ilsley Corp., 6.95% Medium-Term Nts., Series C, 3/31/97 500,000 503,210 --------------------------------------------------------------------------------------------------------------- Mellon Financial Bank Corp., 6.50% Gtd. Sr. Nts., 12/1/97 400,000 400,588 ------------ 3,002,360 - ----------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--6.8% American General Finance Corp., 7.70% Sr. Nts., 11/15/97 500,000 508,020 --------------------------------------------------------------------------------------------------------------- American General Finance Corp., 8.50% Sr. Nts., 8/15/98 500,000 518,770 --------------------------------------------------------------------------------------------------------------- Aristar, Inc., 8.125% Sr. Nts., 12/1/97 250,000 255,575 --------------------------------------------------------------------------------------------------------------- Associates Corp. of North America, 6.75% Sr. Nts., 10/15/99 500,000 501,150 --------------------------------------------------------------------------------------------------------------- Capital One Financial Corp., 6.83% Sr. Nts., 5/17/99 500,000 499,304 --------------------------------------------------------------------------------------------------------------- Chrysler Financial Corp., 5.875% Nts., 2/7/01 1,000,000 960,920 --------------------------------------------------------------------------------------------------------------- Commercial Credit Co., 5.55% Unsec. Nts., 2/15/01 1,000,000 952,260 --------------------------------------------------------------------------------------------------------------- Countrywide Funding Corp., 6.05% Gtd. Medium-Term Nts., Series D, 3/1/01 400,000 383,797 --------------------------------------------------------------------------------------------------------------- Countrywide Funding Corp., 6.085% Gtd. Medium-Term Nts., Series B, 7/14/99 500,000 490,900 --------------------------------------------------------------------------------------------------------------- Countrywide Funding Corp., 6.57% Gtd. Medium-Term Nts., Series A, 8/4/97 250,000 251,068 --------------------------------------------------------------------------------------------------------------- Fleet Mtg. Group, Inc., 6.125% Nts., 8/15/97 1,000,000 996,430 --------------------------------------------------------------------------------------------------------------- Fleet Mtg. Group, Inc., 6.50% Nts., 9/15/99 250,000 248,643
7 Oppenheimer Disciplined Allocation Fund
Statement of Investments June 30, 1996 (Unaudited) (Continued) Face Market Value Amount See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Diversified Financial (continued) Ford Motor Credit Co., 6.25% Unsub. Nts., 2/26/98 $ 500,000 $ 499,025 --------------------------------------------------------------------------------------------------------------- Ford Motor Credit Co., 8% Nts., 12/1/97 500,000 511,290 --------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 5.65% Medium-Term Nts., 12/15/97 1,000,000 991,577 --------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 7.75% Medium-Term Nts., 1/17/97 750,000 756,728 --------------------------------------------------------------------------------------------------------------- Golden West Financial Corp., 10.25% Sub. Nts., 5/15/97 500,000 516,470 --------------------------------------------------------------------------------------------------------------- Household Finance Corp. Ltd., 6% Gtd. Sr. Nts., 6/30/98 250,000 247,350 --------------------------------------------------------------------------------------------------------------- Household International, BV, 6% Gtd. Sr. Nts., 3/15/99 500,000 490,015 --------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 6% Nts., 3/1/01 500,000 482,244 --------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 6.50% Nts., 4/1/01 500,000 491,200 --------------------------------------------------------------------------------------------------------------- Norwest Financial, Inc., 6.50% Sr. Nts., 11/15/97 500,000 501,735 --------------------------------------------------------------------------------------------------------------- Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 750,000 772,013 --------------------------------------------------------------------------------------------------------------- Salomon, Inc., 8.69% Sr. Medium-Term Nts., Series D, 3/1/99 1,000,000 1,038,390 --------------------------------------------------------------------------------------------------------------- Sears Roebuck Acceptance Corp., 5.99% Medium-Term Nts., Series 1, 12/26/00 500,000 483,300 --------------------------------------------------------------------------------------------------------------- TransAmerica Finance Corp., 6.75% Sr. Nts., 8/15/97 500,000 502,000 --------------------------------------------------------------------------------------------------------------- TransAmerica Finance Corp., 6.80% Sr. Nts., 3/15/99 250,000 251,010 --------------------------------------------------------------------------------------------------------------- U.S. Leasing International, 7% Nts., 11/1/97 500,000 504,630 ------------ 15,605,814 - ----------------------------------------------------------------------------------------------------------------------------------- Insurance--0.4% Equitable Life Assurance Society (U.S.A.), 6.95% Surplus Nts., 12/1/05(1) 500,000 480,065 --------------------------------------------------------------------------------------------------------------- Sun America, Inc., 9% Sr. Nts., 1/15/99 450,000 469,539 ------------ 949,604 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial--1.5% - ----------------------------------------------------------------------------------------------------------------------------------- Industrial Services--0.1% PHH Corp., 6.50% Nts., 2/1/00 350,000 345,755 - ----------------------------------------------------------------------------------------------------------------------------------- Manufacturing--0.6% Mark IV Industries, Inc., 8.75% Sub. Nts., 4/1/03 400,000 400,000 --------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 10% Debs., 8/1/98 375,000 399,679 --------------------------------------------------------------------------------------------------------------- Tenneco, Inc., 9.25% Sr. Nts., 11/1/96 500,000 504,745 ------------ 1,304,424 - ----------------------------------------------------------------------------------------------------------------------------------- Transportation--0.8% Federal Express Corp., 6.25% Nts., 4/15/98 750,000 744,255 --------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 7% Nts., 6/15/00 500,000 498,905 --------------------------------------------------------------------------------------------------------------- Union Pacific Corp., 7.60% Nts., 5/1/05 500,000 505,420 ------------ 1,748,580 - ----------------------------------------------------------------------------------------------------------------------------------- Technology--0.5% - ----------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--0.3% British Aerospace PLC, 8% Debs., 5/27/97 500,000 506,875 --------------------------------------------------------------------------------------------------------------- Coltec Industries, Inc., 9.75% Sr. Nts., 4/1/00 250,000 255,000 ------------ 761,875 - ----------------------------------------------------------------------------------------------------------------------------------- Telecommunications- Technology--0.2% MCI Communications Corp., 7.125% Sr. Nts., 1/20/00 500,000 504,780 - ----------------------------------------------------------------------------------------------------------------------------------- Utilities--1.5% - ----------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--0.3% Consumers Power Co., 8.75% Mtg. Nts., 2/15/98 500,000 514,110 --------------------------------------------------------------------------------------------------------------- El Paso Electric Co., 7.25% First Mtg. Nts., Series A, 2/1/99 250,000 246,150 ------------ 760,260
8 Oppenheimer Disciplined Allocation Fund
Face Market Value Amount See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Gas Utilities--0.9% Arkla, Inc., 9.875% Nts., 4/15/97 $ 750,000 $ 769,583 --------------------------------------------------------------------------------------------------------------- Columbia Gas Systems, Inc., 6.80% Nts., Series C, 11/28/05 500,000 478,325 --------------------------------------------------------------------------------------------------------------- Transco Energy Co., 9.625% Debs., 6/15/00 250,000 269,633 --------------------------------------------------------------------------------------------------------------- Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs., 2/1/06 650,000 601,795 ------------ 2,119,336 - ----------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--0.3% GTE Corp., 8.85% Debs., 3/1/98 750,000 777,578 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $49,596,312) 49,117,805 Shares =================================================================================================================================== Common Stocks--45.4% - ----------------------------------------------------------------------------------------------------------------------------------- Basic Materials--2.4% - ----------------------------------------------------------------------------------------------------------------------------------- Chemicals--1.9% Cabot Corp. 43,200 1,058,400 --------------------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 20,300 1,344,875 --------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 35,100 1,395,225 --------------------------------------------------------------------------------------------------------------- W.R. Grace & Co. 9,600 680,400 ------------ 4,478,900 - ----------------------------------------------------------------------------------------------------------------------------------- Steel--0.5% UCAR International, Inc.(2) 28,700 1,194,638 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Cyclicals--6.9% - ----------------------------------------------------------------------------------------------------------------------------------- Autos & Housing--1.4% Chrysler Corp. 27,000 1,674,000 --------------------------------------------------------------------------------------------------------------- Ford Motor Co. 43,500 1,408,312 ------------ 3,082,312 - ----------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--1.6% AMR Corp.(2) 20,000 1,820,000 --------------------------------------------------------------------------------------------------------------- Grand Casinos, Inc.(2) 33,700 867,775 --------------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A(2) 25,700 1,015,150 ------------ 3,702,925 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: General--3.4% Eckerd Corp.(2) 63,800 1,443,475 --------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc.(2) 24,800 846,300 --------------------------------------------------------------------------------------------------------------- Price/Costco, Inc.(2) 52,100 1,126,662 --------------------------------------------------------------------------------------------------------------- Sears Roebuck & Co. 35,200 1,711,600 --------------------------------------------------------------------------------------------------------------- U.S. Industries, Inc.(2) 65,700 1,585,012 --------------------------------------------------------------------------------------------------------------- Waban, Inc.(2) 45,500 1,086,312 ------------ 7,799,361 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: Specialty--0.5% Tandy Corp. 23,600 1,118,050 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Non-Cyclicals--6.4% - ----------------------------------------------------------------------------------------------------------------------------------- Beverages--0.8% Anheuser-Busch Cos., Inc. 23,500 1,762,500 - ----------------------------------------------------------------------------------------------------------------------------------- Food--2.7% American Stores Co. 48,400 1,996,500 --------------------------------------------------------------------------------------------------------------- Archer-Daniels-Midland Co. 78,400 1,499,400 --------------------------------------------------------------------------------------------------------------- Dole Food Co. 19,000 817,000 --------------------------------------------------------------------------------------------------------------- Kroger Co.(2) 45,900 1,813,050 ------------ 6,125,950
9 Oppenheimer Disciplined Allocation Fund
Statement of Investments June 30, 1996 (Unaudited) (Continued) Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--0.7% Bristol-Myers Squibb Co. 17,800 $ 1,602,000 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--0.9% Columbia/HCA Healthcare Corp. 13,900 741,912 --------------------------------------------------------------------------------------------------------------- OrNda Healthcorp(2) 53,000 1,272,000 ------------ 2,013,912 - ----------------------------------------------------------------------------------------------------------------------------------- Household Goods--1.3% Black & Decker Corp. 30,800 1,189,650 --------------------------------------------------------------------------------------------------------------- Premark International, Inc. 30,700 567,950 --------------------------------------------------------------------------------------------------------------- Tupperware Corp.(2) 30,700 1,297,075 ------------ 3,054,675 - ----------------------------------------------------------------------------------------------------------------------------------- Energy--2.5% - ----------------------------------------------------------------------------------------------------------------------------------- Oil-Integrated--2.5% Amoco Corp. 24,000 1,737,000 --------------------------------------------------------------------------------------------------------------- Chevron Corp. 29,600 1,746,400 --------------------------------------------------------------------------------------------------------------- Mobil Corp. 20,600 2,309,775 ------------ 5,793,175 - ----------------------------------------------------------------------------------------------------------------------------------- Financial--6.7% - ----------------------------------------------------------------------------------------------------------------------------------- Banks--4.0% Bank of Boston Corp. 43,900 2,173,050 --------------------------------------------------------------------------------------------------------------- BankAmerica Corp. 31,400 2,378,550 --------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 25,544 1,804,045 --------------------------------------------------------------------------------------------------------------- PNC Bank Corp. 47,300 1,407,175 --------------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 6,300 1,504,912 ------------ 9,267,732 - ----------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--1.6% Federal Home Loan Mortgage Corp. 9,800 837,900 --------------------------------------------------------------------------------------------------------------- Salomon, Inc. 66,000 2,904,000 ------------ 3,741,900 - ----------------------------------------------------------------------------------------------------------------------------------- Insurance--1.1% General Re Corp. 1,300 197,925 --------------------------------------------------------------------------------------------------------------- TIG Holdings, Inc. 33,100 959,900 --------------------------------------------------------------------------------------------------------------- Travelers/Aetna Property Casualty Corp., Cl. A(2) 47,500 1,347,812 ------------ 2,505,637 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial--4.1% - ----------------------------------------------------------------------------------------------------------------------------------- Manufacturing--4.1% AGCO Corp. 55,400 1,537,350 --------------------------------------------------------------------------------------------------------------- Case Corp. 39,200 1,881,600 --------------------------------------------------------------------------------------------------------------- Harnischfeger Industries, Inc. 28,800 957,600 --------------------------------------------------------------------------------------------------------------- Mark IV Industries, Inc. 35,939 813,120 --------------------------------------------------------------------------------------------------------------- Textron, Inc. 32,000 2,556,000 --------------------------------------------------------------------------------------------------------------- Tyco International Ltd. 42,600 1,735,950 ------------ 9,481,620 - ----------------------------------------------------------------------------------------------------------------------------------- Technology--9.8% - ----------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--4.5% General Dynamics Corp. 23,200 1,438,400 --------------------------------------------------------------------------------------------------------------- Goodrich (B.F.) Co. 30,800 1,151,150 --------------------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 26,271 2,206,764
10 Oppenheimer Disciplined Allocation Fund
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense (continued) McDonnell Douglas Corp. 38,800 $ 1,881,800 --------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 33,100 1,894,975 --------------------------------------------------------------------------------------------------------------- TRW, Inc. 20,300 1,824,463 ------------ 10,397,552 - ----------------------------------------------------------------------------------------------------------------------------------- Computer Hardware--3.1% Dell Computer Corp.(2) 22,100 1,124,338 --------------------------------------------------------------------------------------------------------------- Gateway 2000, Inc.(2) 18,900 642,600 --------------------------------------------------------------------------------------------------------------- Storage Technology Corp. (New)(2) 57,400 2,195,550 --------------------------------------------------------------------------------------------------------------- Xerox Corp. 60,600 3,242,100 ------------ 7,204,588 - ----------------------------------------------------------------------------------------------------------------------------------- Electronics--1.5% Intel Corp. 18,000 1,321,875 --------------------------------------------------------------------------------------------------------------- Varian Associates, Inc. 26,800 1,386,900 --------------------------------------------------------------------------------------------------------------- Waters Corp.(2) 24,500 808,500 ------------ 3,517,275 - ----------------------------------------------------------------------------------------------------------------------------------- Telecommunications- Technology--0.7% AT&T Corp. 26,400 1,636,800 - ----------------------------------------------------------------------------------------------------------------------------------- Utilities--6.6% - ----------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--3.1% American Electric Power Co., Inc. 21,900 933,488 --------------------------------------------------------------------------------------------------------------- Calenergy, Inc.(2) 56,500 1,440,750 --------------------------------------------------------------------------------------------------------------- Entergy Corp. 58,100 1,648,588 --------------------------------------------------------------------------------------------------------------- FPL Group, Inc. 38,200 1,757,200 --------------------------------------------------------------------------------------------------------------- Texas Utilities Co. 34,300 1,466,325 ------------ 7,246,351 - ----------------------------------------------------------------------------------------------------------------------------------- Gas Utilities--2.2% Columbia Gas System, Inc. (The) 50,900 2,653,163 --------------------------------------------------------------------------------------------------------------- PanEnergy Corp. 73,000 2,399,875 ------------ 5,053,038 - ----------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--1.3% Ameritech Corp. 22,700 1,347,813 --------------------------------------------------------------------------------------------------------------- GTE Corp. 38,000 1,700,500 ------------ 3,048,313 ------------ Total Common Stocks (Cost $92,213,874) 104,829,204 - ----------------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $215,761,571) 99.0% 228,635,580 - ----------------------------------------------------------------------------------------------------------------------------------- Other Assets Net of Liabilities 1.0 2,291,632 ----- ------------ Net Assets 100.0% $230,927,212 ===== ============
1. Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $1,318,645 or 0.57% of the Fund's net assets, at June 30, 1996. 2. Non-income producing security. See accompanying Notes to Financial Statements. 11 Oppenheimer Disciplined Allocation Fund
Statement of Assets and Liabilities June 30, 1996 (Unaudited) =================================================================================================================================== Assets Investments, at value (cost $215,761,571)--see accompanying statement $228,635,580 --------------------------------------------------------------------------------------------------------------- Cash 87,189 --------------------------------------------------------------------------------------------------------------- Receivables: Investments sold 4,095,983 Interest and dividends 1,534,569 Shares of beneficial interest sold 21,369 ------------ Total assets 234,374,690 --------------------------------------------------------------------------------------------------------------- =================================================================================================================================== Liabilities Payables and other liabilities: Investments purchased 3,095,871 Transfer and shareholder servicing agent fees 126,794 Shares of beneficial interest redeemed 113,547 Shareholder reports 18,482 Other 92,784 ------------ Total liabilities 3,447,478 =================================================================================================================================== Net Assets $230,927,212 =================================================================================================================================== Composition of Net Assets Par value of shares of capital stock $ 14,857 --------------------------------------------------------------------------------------------------------------- Additional paid-in capital 202,362,105 --------------------------------------------------------------------------------------------------------------- Undistributed net investment income 335,204 --------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 15,341,037 --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 12,874,009 ------------ Net assets $230,927,212 ============ =================================================================================================================================== Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $228,331,603 and 14,691,924 shares of capital stock outstanding) $ 15.54 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 16.49 --------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $2,581,520 and 164,283 shares of capital stock outstanding) $ 15.71 --------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $14,089 and 908 shares of capital stock outstanding) $ 15.52 See accompanying Notes to Financial Statements.
12 Oppenheimer Disciplined Allocation Fund
Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited) =================================================================================================================================== Investment Income Interest $ 3,929,386 --------------------------------------------------------------------------------------------------------------- Dividends 1,056,966 ------------ Total income 4,986,352 =================================================================================================================================== Expenses Management fees--Note 4 708,319 --------------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 281,098 Class B 8,911 Class C 9 --------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 188,308 --------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 40,098 --------------------------------------------------------------------------------------------------------------- Legal and auditing fees 31,242 --------------------------------------------------------------------------------------------------------------- Shareholder reports 27,449 --------------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 3,129 Class B 670 Class C 5 --------------------------------------------------------------------------------------------------------------- Other 60,807 ------------ Total expenses 1,350,045 =================================================================================================================================== Net Investment Income 3,636,307 =================================================================================================================================== Realized and Unrealized Gain (Loss) Net realized gain on investments 15,484,901 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments (13,808,239) ------------ Net realized and unrealized gain 1,676,662 =================================================================================================================================== Net Increase in Net Assets Resulting From Operations $ 5,312,969 ============
See accompanying Notes to Financial Statements. 13 Oppenheimer Disciplined Allocation Fund Statements of Changes in Net Assets
Six Months Ended Year Ended June 30, 1996 December 31, (Unaudited) 1995 =================================================================================================================================== Operations Net investment income $ 3,636,307 $ 8,004,370 --------------------------------------------------------------------------------------------------------------- Net realized gain 15,484,901 7,754,106 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation (13,808,239) 26,965,439 ------------ ------------ Net increase in net assets resulting from operations 5,312,969 42,723,915 =================================================================================================================================== Dividends and Distributions To Shareholders Dividends from net investment income: Class A (3,338,644) (7,977,727) Class B (30,901) (2,581) Class C (191) -- --------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (786,402) (7,615,071) Class B (8,459) (20,687) Class C (45) -- =================================================================================================================================== Capital Stock Transactions Net increase in net assets resulting from capital stock transactions--Note 2: Class A 9,071,282 13,085,898 Class B 1,944,026 651,526 Class C 14,297 -- =================================================================================================================================== Net Assets Total increase 12,177,932 40,845,273 --------------------------------------------------------------------------------------------------------------- Beginning of period 218,749,280 177,904,007 ------------ ------------ End of period (including undistributed net investment income of $335,204 and $68,633, respectively) $230,927,212 $218,749,280 ============ ============
See accompanying Notes to Financial Statements. 14 Oppenheimer Disciplined Allocation Fund
Financial Highlights Class A Class B Class C ---------------------------------------------------------------- -------------------- ------------ Six Months Six Months Period Ended Ended Period Ended June 30, June 30, Ended June 30, 1996 Year Ended December 31, 1996 Dec. 31, 1996 (Unaudited) 1995 1994 1993 1992 1991 (Unaudited) 1995(2) (Unaudited)(1) =================================================================================================================================== Per Share Operating Data: Net asset value, beginning of period $ 15.46 $ 13.44 $ 14.54 $ 13.81 $ 14.02 $ 11.94 $ 15.66 $ 15.48 $ 15.71 - ----------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .25 .60 .55 .48 .50 .54 .15 .07 .04 Net realized and unrealized gain (loss) .11 2.59 (.86) 1.70 .86 2.79 .15 .70 .05 -------- -------- -------- -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations .36 3.19 (.31) 2.18 1.36 3.33 .30 .77 .09 - ----------------------------------------------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.23) (.60) (.55) (.48) (.50) (.54) (.20) (.07) (.23) Distributions from net realized gain on investments (.05) (.57) (.24) (.97) (1.07) (.71) (.05) (.52) (.05) -------- -------- -------- -------- -------- -------- -------- -------- -------- Total dividends and distributions to shareholders (.28) (1.17) (.79) (1.45) (1.57) (1.25) (.25) (.59) (.28) - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 15.54 $ 15.46 $ 13.44 $ 14.54 $ 13.81 $ 14.02 $ 15.71 $ 15.66 $ 15.52 ======== ======== ======== ======== ======== ======== ======== ======== ======== =================================================================================================================================== Total Return, at Net Asset Value(3) 2.37% 23.95% (2.11)% 15.89% 9.90% 28.21% 1.94% 4.93% 0.62% =================================================================================================================================== Ratios/Supplemental Data: Net assets, end of period (in thousands) $228,332 $218,099 $177,904 $171,205 $109,701 $ 86,455 $ 2,582 $ 650 $ 14 - ----------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $227,211 $200,172 $187,655 $138,629 $ 96,016 $ 74,749 $ 1,818 $ 375 $ 6 - ----------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income (loss) 3.20%(4) 4.00% 3.80% 3.40% 3.61% 4.02% 2.46%(4) 0.73%(4) 2.13%(4) Expenses 1.18%(4) 1.17% 0.96% 1.02% 1.11% 1.20% 1.93%(4) 1.92%(4) 1.93%(4) - ----------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(5) 53.4% 55.2% 115.0% 155.2% 177.9% 122.4% 53.4% 55.2% 53.4% Average brokerage commission rate(6) $ 0.0700 -- -- -- -- -- $ 0.0700 -- $ 0.0700
1. For the period from May 1, 1996 (inception of offering) to June 30, 1996. 2. For the period from October 1, 1995 (inception of offering) to December 31, 1995. 3. 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. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended June 30, 1996 were $128,544,938 and $102,626,386, respectively. 6. Total brokerage commissions paid on applicable purchases and sales of portfolio securities for the period divided by the total number of related shares purchased and sold. See accompanying Notes to Financial Statements. 15 Oppenheimer Disciplined Allocation Fund Notes to Financial Statements (Unaudited) ================================================================================ 1. Significant Accounting Policies Oppenheimer Disciplined Allocation 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. The Fund's investment objective is to seek high total investment return (current income and capital appreciation in the value of its shares). Until March 18, 1996, the Fund and the Company were named Connecticut Mutual Total Return 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 line with this change, effective March 1, 1996, OppenheimerFunds, Inc. (the Manager) became the advisor of Oppenheimer Series Fund, Inc. The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All three classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Investment Valuation. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of 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. - -------------------------------------------------------------------------------- Foreign Currency Translation. The accounting records of the Fund are maintained in U.S. dollars. Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing rates of exchange. Amounts related to the purchase and sale of securities and investment income are translated at the rates of exchange prevailing on the respective dates of such transactions. 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 and Gains and Losses. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- Federal Taxes. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. - -------------------------------------------------------------------------------- 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 primarily because of paydown gains and losses and the recognition of certain foreign currency gains (losses) as ordinary income (loss) for 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. 16 Oppenheimer Disciplined Allocation Fund ================================================================================ 1. Significant Accounting Policies (continued) 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. Discount on securities purchased is amortized over the life of the respective securities, in accordance with federal income tax requirements. Realized gains and losses on investments and options written and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. ================================================================================ 2. Shares of 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:
Six Months Ended June 30, 1996(2) Year Ended December 31, 1995(1) -------------------------------- -------------------------------- Shares Amount Shares Amount - ----------------------------------------------------------------------------------------------------------------------------------- Class A: Sold 1,507,853 $ 23,604,696 1,998,083 $ 29,691,366 Dividends and distributions reinvested 260,740 4,025,897 1,003,774 15,305,644 Redeemed (1,184,753) (18,559,311) (2,126,335) (31,911,112) ------------ ------------ ------------ ------------ Net increase 583,840 $ 9,071,282 875,522 $ 13,085,898 ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------------- Class B: Sold 142,432 $ 2,258,168 40,033 $ 628,572 Dividends and distributions reinvested 2,413 37,670 1,471 22,954 Redeemed (22,066) (351,812) -- -- ------------ ------------ ------------ ------------ Net increase 122,779 $ 1,944,026 41,504 $ 651,526 ============ ============ ============ ============ - ----------------------------------------------------------------------------------------------------------------------------------- Class C: Sold 894 $ 14,079 -- $ -- Dividends and distributions reinvested 14 218 -- -- Redeemed -- -- -- -- ------------ ------------ ------------ ------------ Net increase 908 $ 14,297 -- $ -- ============ ============ ============ ============
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 six months ended June 30, 1996 for Class A and Class B shares and for the period from May 1, 1996 (inception of offering) to June 30, 1996 for Class C shares. ================================================================================ 3. Unrealized Gains and Losses on Investments At June 30, 1996, net unrealized appreciation of investments and options written of $12,874,009 was composed of gross appreciation of $15,481,603, and gross depreciation of $2,607,594. 17 Oppenheimer Disciplined Allocation Fund Notes to Financial Statements (Unaudited) (Continued) ================================================================================ 4. Management Fees And Other Transactions With Affiliates Management fees paid to the Manager are in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.625% on the first $300 million of average annual net assets, 0.50% on the next $100 million and 0.45% on net assets in excess of $400 million. Prior to March 1, 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 six months ended June 30, 1996, commissions (sales charges paid by investors) on sales of Class A shares totaled $486,730, of which $267,467 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 $44,891, of which $38,929 was paid to an affiliated broker/dealer for Class B shares. During the six months ended June 30, 1996, OFDI received contingent deferred sales charges of $12,039 upon redemption of Class B shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OFS's total costs of providing such services are allocated ratably to these companies. The Fund has adopted a Service Plan for Class A shares to reimburse OFDI for a portion of its costs incurred in connection with the personal service and maintenance of accounts that hold Class A shares. Reimbursement is made quarterly at an annual rate that may not exceed 0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse brokers, dealers, banks and other financial institutions quarterly for providing personal service and maintenance of accounts of their customers that hold Class A shares. During the six months ended June 30, 1996, OFDI paid $151,358 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. The Fund has adopted a compensation type Distribution and Service Plan for Class B shares to compensate OFDI for its services and costs in distributing Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B shares that are outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class B shares. Both fees are computed on the average annual net assets of Class B shares, determined as of the close of each regular business day. If the Plan is terminated by the Fund, the Board of 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. During the six months ended June 30, 1996, OFDI retained $5,014 as compensation for Class B sales commissions and service fee advances, as well as financing costs. As of June 30, 1996, OFDI had incurred unreimbursed expenses of $64,810 for Class B. The Fund has adopted a reimbursement type Distribution and Service Plan for Class C shares to reimburse OFDI for its services and costs in distributing Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also receives a service fee of 0.25% per year to reimburse dealers for providing personal services for accounts that hold Class C shares. Both fees are computed on the average annual net assets of Class C shares, determined as of the close of each regular business day. If the Plan is terminated by the Fund, the Board of 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. 18 Oppenheimer Disciplined Allocation Fund Oppenheimer Disciplined Allocation Fund A Series of Oppenheimer Series Fund, Inc. ================================================================================ Officers and Leon Levy, Chairman of the Board of Directors 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 Advisor OppenheimerFunds, Inc. ================================================================================ Distributor OppenheimerFunds Distributor, Inc. ================================================================================ Transfer and OppenheimerFunds Services Shareholder Servicing Agent ================================================================================ Custodian of State Street Bank and Trust Company Portfolio Securities ================================================================================ Independent KPMG Peat Marwick LLP Auditors ================================================================================ Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors. This is a copy of a report to shareholders of Oppenheimer Disciplined Allocation Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Disciplined Allocation Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 19 Oppenheimer Disciplined Allocation 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 RS0205.001.0696 August 31, 1996 [Picture of Jennifer Leonard] [Caption] Jennifer Leonard, Customer Service Representative OppenheimerFunds Services "How may I help you?" As an Oppenheimer fund shareholder, you have some special privileges. Whether it's automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that "links" your Oppenheimer funds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get automated information with OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you access to a variety of fund, account, and market information. Of course, you can always speak with a Customer Service Representative during the General Information hours shown at the left. You can count on us whenever you need assistance. That's why the International Customer Service Association, an independent, nonprofit organization made up of over 3,200 customer service management professionals from around the country, honored the Oppenheimer funds' transfer agent, OppenheimerFunds Services, with their Award of Excellence in 1993. So call us today--we're here to help. [LOGO] OppenheimerFunds(R) OppenheimerFunds Distributor, Inc. P.O. Box 5270 Denver, CO 80217-5270 - ----------------- Bulk Rate U.S. Postage PAID Permit No. 469 Denver, CO - ----------------- -----END PRIVACY-ENHANCED MESSAGE-----