-----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, VR7XTPaujdqQpkB6h1vp5qDhudEZwRzWguGF/fh5HtoFW57WtkrbeO9fjL2SfTmH qOUU5gWwHbiejosJxYEg5Q== 0000950146-96-001590.txt : 19960906 0000950146-96-001590.hdr.sgml : 19960906 ACCESSION NUMBER: 0000950146-96-001590 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: 96626042 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 SEMI ANNUAL REPORT [FRONT COVER] Oppenheimer Disciplined Value Fund Semiannual Report June 30, 1996 [Picture of 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 Total Return for the 5-Year Period Ended 6/30/96: Oppenheimer Disciplined Value Fund Class A (at net asset value)(1) 130.40% Lipper Growth Funds Average(3) 100.05% The Fund's Class A shares were ranked **** among 1,583 equity funds as of 6/30/96 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 returns for the six months ended 6/30/96 for Class A and Class B shares were 6.08% and 5.51%, 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 15.54%, 16.78% and 12.97%, respectively. For Class B shares, cumulative total return since inception of the class on 10/1/95 was 8.99%.(2) Outlook "We are optimistic. As the stock market moves from its current phase to one that is more focused on intrinsic value, we believe the Fund will again be positioned to perform well." 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 246 growth funds. The average is shown for comparative purposes only. Oppenheimer Disciplined Value Fund is characterized by Lipper as a growth fund. Lipper performance does not take sales charges into consideration. 4. Source: Morningstar Mutual Funds, 6/30/96. Morningstar, Inc., an independent mutual fund monitoring service, produces proprietary monthly rankings of funds in broad investment categories (equity, taxable bond, tax-exempt bond, or "hybrid") 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. Five stars is the "highest" ranking (top 10%), four stars is "above average" (next 22.5%) and one star is the lowest (bottom 10%). The 4-star current ranking is a weighted average of the 3-, 5-, and 10-year rankings for the class, which were 3, 4, and 4 stars, respectively, weighted 20%/30%/50%. There were 1,583, 997, and 539 funds ranked in these respective periods. Rankings are subject to change. The Fund's Class A, B, and C shares have the same portfolio. 2 Oppenheimer Disciplined Value Fund [PHOTO-BRIDGET A. MACASKILL] Bridget A. Macaskill President Oppenheimer Disciplined Value Fund Dear Shareholder, Against all odds, the stock market showed remarkable strength during the first five months of 1996. However, in the few months that followed, the market experienced significant volatility that resulted in a decline in the Dow of about 7 percent. Many experts said the stock market, having advanced to record heights in 1995 and void of any real market correction since 1990, was due for a downturn. This was, after all, the longest bull market of the post-World War II era. Thanks to the 10% rise in blue chip stocks during the first half of 1996 and the early success of small stocks, the decline that occurred recently was somewhat cushioned. While it's impossible to tell what will happen next, we are optimistic that this turn was a correction within a bull market rather than the onset of a bear market. What made the market perform so well during the first part of the year? It was another surprise: corporate profits. Between 1992 and 1995, corporate profits of U.S. companies advanced at a double-digit rate. Investors widely expected this year's profit tallies to be flat compared to 1995. After all, the economy had been sluggish--growing at an annual rate of just 2.3% in the first quarter of 1996. But corporate America continued to perform. The reason corporate profits were so strong is that many U.S. companies continued to successfully reduce costs. Often when a company achieves a small increase in sales, the benefit goes straight to the bottom line. Indeed, the U.S. Commerce Department reports indicated that corporate profits rose 15% for the four quarters ended March 1996, while the economy grew only marginally. Still, profits are not what they were in the early 1990s. That's why investors are seeking out companies that can grow earnings regardless of the fortunes of the economy. Which is just what many small companies in such fields as technology, healthcare and specialty retailing have been doing, growing earnings at double-digit--and even triple-digit rates. So it's not surprising that the stocks of many of these small fast-growing companies have been such strong performers. The early strength of the stock market is all the more remarkable when you consider that during the same period, interest rates moved up sharply. The yield on the benchmark 30-year U.S. Treasury bond rose from about 6% in January to over 7% today. Interest rates have been rising partly because investors are concerned that the economy is growing fast enough to generate higher inflation. However, we are watching this very closely, and would become very cautious regarding the stock market's performance if inflation were to flare up. As always, remember stock investments are generally meant for long-term growth objectives, and often involve short-term volatility. So, it's critical for investors to keep their focus on long-term goals and to put near-term setbacks in proper prospective. Your portfolio managers discuss the outlook for your Fund in light of these broad issues on the following pages. Thank you for your confidence in OppenheimerFunds. We look forward to helping you reach your investment goals in the future. /s/ Bridget A. Macaskill Bridget A. Macaskill July 22, 1996 3 Oppenheimer Disciplined Value Fund Peter Antos Portfolio Manager Q + A An interview with your Fund's managers. How did the Fund perform over the past six months? The Fund's performance was good, although it lagged the broader market slightly over the period. This was primarily due to fears about the maturity of the current economic cycle and our investment strategy. Our strategy--to buy stocks that have low price/earnings ratios and positive earnings surprises--has led us to undervalued stocks that we expect will perform well in the future. However, these types of stocks were somewhat out of favor with investors over the past six months. What investments made positive contributions to performance? The Fund benefited most from our 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 an increase in demand from commercial airlines led to better-than-expected earnings for many of these companies which, in turn, drove stocks 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. On the other hand, we were able to limit some of the decline in our financial stocks by selling a portion of those holdings early in the year. What areas are you currently targeting? Within the portfolio, we have decreased ownership of financial and utility stocks and added more cyclical and technology stocks. Here again, we are looking for well-managed, strong companies that are temporarily out of favor with the market. Our goal is to buy them at a low cost and then profit when their strengths are recognized. What is your outlook for the Fund? We are optimistic. This is a fund with an impressive long-term track record and a proven investment technique. It's also a relatively conservative way to take advantage of the market's growth potential. As the stock market moves from its current phase to one that is more focused on intrinsic value, we believe the Fund will again be positioned to perform well. Though, year-to-date, we're lagging the market somewhat, the Fund incurred less risk compared to the market, and still enjoyed competitive returns. [solid box] 4 Oppenheimer Disciplined Value Fund
Statement of Investments June 30, 1996 (Unaudited) Face Market Value Amount See Note 1 =================================================================================================================================== Short-Term Notes--10.2% - ----------------------------------------------------------------------------------------------------------------------------------- Federal Home Loan Bank, 5.52%, 7/1/96 $ 5,000,000 $ 5,000,000 --------------------------------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corp.: 5.27%, 7/1/96 3,100,000 3,100,000 5.29%, 7/5/96 5,000,000 4,997,061 --------------------------------------------------------------------------------------------------------------- Merrill Lynch & Co., Inc., 5.34%, 7/1/96 995,000 995,000 -------------- Total Short-Term Notes (Cost $14,092,061) 14,092,061 Shares =================================================================================================================================== Common Stocks--88.8% - ----------------------------------------------------------------------------------------------------------------------------------- Basic Materials--3.5% - ----------------------------------------------------------------------------------------------------------------------------------- Chemicals--3.5% Cabot Corp. 47,200 1,156,400 --------------------------------------------------------------------------------------------------------------- Potash Corp. of Saskatchewan, Inc. 24,100 1,596,625 --------------------------------------------------------------------------------------------------------------- Union Carbide Corp. 38,500 1,530,375 --------------------------------------------------------------------------------------------------------------- W.R. Grace & Co. 7,000 496,125 -------------- 4,779,525 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Cyclicals--14.4% - ----------------------------------------------------------------------------------------------------------------------------------- Autos & Housing--2.6% Chrysler Corp. 30,200 1,872,400 --------------------------------------------------------------------------------------------------------------- Ford Motor Co. 54,800 1,774,150 -------------- 3,646,550 - ----------------------------------------------------------------------------------------------------------------------------------- Leisure & Entertainment--3.4% AMR Corp.(1) 24,600 2,238,600 --------------------------------------------------------------------------------------------------------------- Grand Casinos, Inc.(1) 42,300 1,089,225 --------------------------------------------------------------------------------------------------------------- Northwest Airlines Corp., Cl. A(1) 35,000 1,382,500 -------------- 4,710,325 - ----------------------------------------------------------------------------------------------------------------------------------- Metals--1.1% UCAR International, Inc.(1) 36,500 1,519,313 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: General--6.3% Eckerd Corp.(1) 57,500 1,300,937 --------------------------------------------------------------------------------------------------------------- Federated Department Stores, Inc.(1) 31,500 1,074,937 --------------------------------------------------------------------------------------------------------------- Price/Costco, Inc.(1) 65,000 1,405,625 --------------------------------------------------------------------------------------------------------------- Sears Roebuck & Co. 39,100 1,901,237 --------------------------------------------------------------------------------------------------------------- U.S. Industries, Inc.(1) 80,200 1,934,825 --------------------------------------------------------------------------------------------------------------- Waban, Inc.(1) 45,300 1,081,537 -------------- 8,699,098 - ----------------------------------------------------------------------------------------------------------------------------------- Retail: Specialty--1.0% Tandy Corp. 29,700 1,407,037 - ----------------------------------------------------------------------------------------------------------------------------------- Consumer Non-Cyclicals--12.9% - ----------------------------------------------------------------------------------------------------------------------------------- Beverages--1.6% Anheuser-Busch Cos., Inc. 29,300 2,197,500 - ----------------------------------------------------------------------------------------------------------------------------------- Food--5.6% American Stores Co. 62,200 2,565,750 --------------------------------------------------------------------------------------------------------------- Archer-Daniels-Midland Co. 109,800 2,099,925 --------------------------------------------------------------------------------------------------------------- Dole Food Co. 23,100 993,300 --------------------------------------------------------------------------------------------------------------- Kroger Co.(1) 52,300 2,065,850 -------------- 7,724,825
5 Oppenheimer Disciplined Value Fund Statement of Investments (Unaudited) (Continued)
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Drugs--1.4% Bristol-Myers Squibb Co. 22,200 $ 1,998,000 - ----------------------------------------------------------------------------------------------------------------------------------- Healthcare/Supplies & Services--1.8% Columbia/HCA Healthcare Corp. 21,700 1,158,237 --------------------------------------------------------------------------------------------------------------- OrNda Healthcorp(1) 57,000 1,368,000 -------------- 2,526,237 - ----------------------------------------------------------------------------------------------------------------------------------- Household Goods--2.5% Black & Decker Corp. 30,000 1,158,750 --------------------------------------------------------------------------------------------------------------- Premark International, Inc. 39,000 721,500 --------------------------------------------------------------------------------------------------------------- Tupperware Corp.(1) 39,000 1,647,750 -------------- 3,528,000 - ----------------------------------------------------------------------------------------------------------------------------------- Energy--4.6% - ----------------------------------------------------------------------------------------------------------------------------------- Oil-Integrated--4.6% Amoco Corp. 25,900 1,874,512 --------------------------------------------------------------------------------------------------------------- Chevron Corp. 32,200 1,899,800 --------------------------------------------------------------------------------------------------------------- Mobil Corp. 22,900 2,567,662 -------------- 6,341,974 - ----------------------------------------------------------------------------------------------------------------------------------- Financial--12.8% - ----------------------------------------------------------------------------------------------------------------------------------- Banks--7.4% Bank of Boston Corp. 48,500 2,400,750 --------------------------------------------------------------------------------------------------------------- BankAmerica Corp. 35,900 2,719,425 --------------------------------------------------------------------------------------------------------------- Chase Manhattan Corp. (New) 24,936 1,761,105 --------------------------------------------------------------------------------------------------------------- PNC Bank Corp. 53,300 1,585,675 --------------------------------------------------------------------------------------------------------------- Wells Fargo & Co. 7,100 1,696,013 -------------- 10,162,968 - ----------------------------------------------------------------------------------------------------------------------------------- Diversified Financial--3.3% Federal Home Loan Mortgage Corp. 12,300 1,051,650 --------------------------------------------------------------------------------------------------------------- Salomon, Inc. 78,700 3,462,800 -------------- 4,514,450 - ----------------------------------------------------------------------------------------------------------------------------------- Insurance--2.1% General Re Corp. 1,600 243,600 --------------------------------------------------------------------------------------------------------------- TIG Holdings, Inc. 30,900 896,100 --------------------------------------------------------------------------------------------------------------- Travelers/Aetna Property Casualty Corp., Cl. A(1) 60,200 1,708,175 -------------- 2,847,875 - ----------------------------------------------------------------------------------------------------------------------------------- Industrial--8.3% - ----------------------------------------------------------------------------------------------------------------------------------- Manufacturing--8.3% AGCO Corp. 74,700 2,072,925 --------------------------------------------------------------------------------------------------------------- Case Corp. 50,000 2,400,000 --------------------------------------------------------------------------------------------------------------- Harnischfeger Industries, Inc. 29,800 990,850 --------------------------------------------------------------------------------------------------------------- Mark IV Industries, Inc. 40,902 925,408 --------------------------------------------------------------------------------------------------------------- Textron, Inc. 35,400 2,827,575 --------------------------------------------------------------------------------------------------------------- Tyco International Ltd. 51,800 2,110,850 -------------- 11,327,608
6 Oppenheimer Disciplined Value Fund
Market Value Shares See Note 1 - ----------------------------------------------------------------------------------------------------------------------------------- Technology--19.7% - ----------------------------------------------------------------------------------------------------------------------------------- Aerospace/Defense--9.3% General Dynamics Corp. 25,400 $ 1,574,800 --------------------------------------------------------------------------------------------------------------- Goodrich (B.F.) Co. 40,600 1,517,425 --------------------------------------------------------------------------------------------------------------- Lockheed Martin Corp. 31,371 2,635,164 --------------------------------------------------------------------------------------------------------------- McDonnell Douglas Corp. 54,600 2,648,100 --------------------------------------------------------------------------------------------------------------- Rockwell International Corp. 41,100 2,352,975 --------------------------------------------------------------------------------------------------------------- TRW, Inc. 23,100 2,076,113 -------------- 12,804,577 - ----------------------------------------------------------------------------------------------------------------------------------- Computer Hardware--6.0% Dell Computer Corp.(1) 24,600 1,251,525 --------------------------------------------------------------------------------------------------------------- Gateway 2000, Inc.(1) 21,700 737,800 --------------------------------------------------------------------------------------------------------------- Storage Technology Corp. (New)(1) 69,400 2,654,550 --------------------------------------------------------------------------------------------------------------- Xerox Corp. 68,100 3,643,350 -------------- 8,287,225 - ----------------------------------------------------------------------------------------------------------------------------------- Electronics--2.9% Intel Corp. 18,900 1,387,969 --------------------------------------------------------------------------------------------------------------- Varian Associates, Inc. 29,600 1,531,800 --------------------------------------------------------------------------------------------------------------- Waters Corp.(1) 30,600 1,009,800 -------------- 3,929,569 - ----------------------------------------------------------------------------------------------------------------------------------- Telecommunications- Technology--1.5% AT&T Corp. 33,000 2,046,000 - ----------------------------------------------------------------------------------------------------------------------------------- Utilities--12.6% - ----------------------------------------------------------------------------------------------------------------------------------- Electric Utilities--5.8% American Electric Power Co., Inc. 26,600 1,133,825 --------------------------------------------------------------------------------------------------------------- Calenergy, Inc.(1) 62,300 1,588,650 --------------------------------------------------------------------------------------------------------------- Entergy Corp. 62,500 1,773,438 --------------------------------------------------------------------------------------------------------------- FPL Group, Inc. 35,600 1,637,600 --------------------------------------------------------------------------------------------------------------- Texas Utilities Co. 44,100 1,885,275 -------------- 8,018,788 - ----------------------------------------------------------------------------------------------------------------------------------- Gas Utilities--4.2% Columbia Gas System, Inc. (The) 59,100 3,080,588 --------------------------------------------------------------------------------------------------------------- PanEnergy Corp. 81,900 2,692,463 -------------- 5,773,051 - ----------------------------------------------------------------------------------------------------------------------------------- Telephone Utilities--2.6% Ameritech Corp. 25,700 1,525,938 --------------------------------------------------------------------------------------------------------------- GTE Corp. 44,500 1,991,375 -------------- 3,517,313 -------------- Total Common Stocks (Cost $102,521,514) 122,307,808 - ----------------------------------------------------------------------------------------------------------------------------------- Total Investments, at Value (Cost $116,613,575) 99.0% 136,399,869 - ----------------------------------------------------------------------------------------------------------------------------------- Other Assets Net of Liabilities 1.0 1,416,629 -------------- -------------- Net Assets 100.0% $ 137,816,498 ============== ==============
1. Non-income producing security. See accompanying Notes to Financial Statements. 7 Oppenheimer Disciplined Value Fund
Statement of Assets and Liabilities June 30, 1996 (Unaudited) =================================================================================================================================== Assets Investments, at value (cost $116,613,575)--see accompanying statement $136,399,869 --------------------------------------------------------------------------------------------------------------- Cash 105,596 --------------------------------------------------------------------------------------------------------------- Receivables: Investments sold 3,120,053 Interest and dividends 202,111 Shares of capital stock sold 126,688 ------------ Total assets 139,954,317 =================================================================================================================================== Liabilities Payables and other liabilities: Investments purchased 1,955,189 Transfer and shareholder servicing agent fees 63,555 Shares of capital stock redeemed 58,200 Other 60,875 ------------ Total liabilities 2,137,819 =================================================================================================================================== Net Assets $137,816,498 ============ =================================================================================================================================== Composition of Net Assets Par value of shares of capital stock $ 7,362 --------------------------------------------------------------------------------------------------------------- Additional paid-in capital 105,402,560 --------------------------------------------------------------------------------------------------------------- Undistributed net investment income 30,527 --------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investment transactions 12,589,755 --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 19,786,294 ------------ Net assets $137,816,498 ============ =================================================================================================================================== Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $134,146,921 and 7,167,885 shares of capital stock outstanding) $ 18.71 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 19.85 --------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $3,374,558 and 178,641 shares of capital stock outstanding) $ 18.89 --------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price and offering price per share (based on net assets of $295,019 and 15,781 shares of capital stock outstanding) $ 18.69
See accompanying Notes to Financial Statements. 8 Oppenheimer Disciplined Value Fund
Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited) =================================================================================================================================== Investment Income Dividends $ 1,085,366 --------------------------------------------------------------------------------------------------------------- Interest 409,274 ------------ Total income 1,494,640 ------------ =================================================================================================================================== Expenses Management fees--Note 4 406,151 --------------------------------------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 160,068 Class B 9,378 Class C 192 --------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 112,809 --------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 33,302 --------------------------------------------------------------------------------------------------------------- Shareholder reports 19,047 --------------------------------------------------------------------------------------------------------------- Legal and auditing fees 15,408 --------------------------------------------------------------------------------------------------------------- Registration and filing fees: Class A 3,504 Class B 903 Class C 105 --------------------------------------------------------------------------------------------------------------- Other 32,290 ------------ Total expenses 793,157 =================================================================================================================================== Net Investment Income 701,483 =================================================================================================================================== Realized and Unrealized Gain (Loss) Net realized gain on investments 12,678,792 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments (5,937,752) ------------ Net realized and unrealized gain 6,741,040 =================================================================================================================================== Net Increase in Net Assets Resulting From Operations $ 7,442,523 ============
See accompanying Notes to Financial Statements. 9 Oppenheimer Disciplined Value Fund Statements of Changes in Net Assets
Six Months Ended Year Ended June 30, 1996 December 31, (Unaudited) 1995 =================================================================================================================================== Operations Net investment income $ 701,483 $ 1,501,707 --------------------------------------------------------------------------------------------------------------- Net realized gain 12,678,792 7,939,891 --------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation (5,937,752) 20,902,301 ------------- ------------- 7,442,523 30,343,899 =================================================================================================================================== Dividends and Distributions To Shareholders Dividends from net investment income: Class A (670,183) (1,491,101) Class B (10,783) (561) Class C (1,428) -- --------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (842,977) (7,649,952) Class B (19,507) (42,834) Class C (1,789) -- =================================================================================================================================== Capital Stock Transactions Net increase in net assets resulting from capital stock transactions--Note 2: Class A 10,162,839 18,560,935 Class B 2,619,254 724,308 Class C 304,017 -- =================================================================================================================================== Net Assets Total increase 18,981,966 40,444,694 --------------------------------------------------------------------------------------------------------------- Beginning of period 118,834,532 78,389,838 ------------- ------------- End of period (including undistributed net investment income of $30,527 and $11,438, respectively) $ 137,816,498 $ 118,834,532 ============= =============
See accompanying Notes to Financial Statements. 10 Oppenheimer Disciplined Value Fund Financial Highlights
Class A --------------------------------------------------------------------------------------- Six Months Ended June 30, 1996 Year Ended December 31, (Unaudited) 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 .10 .25 .22 .30 .26 .25 Net realized and unrealized gain (loss) .98 4.88 (.32) 2.64 1.44 4.00 -------- -------- ------- ------- ------- ------- Total income (loss) from investment operations 1.08 5.13 (.10) 2.94 1.70 4.25 - ------------------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.09) (.25) (.22) (.30) (.26) (.25) Distributions from net realized gain on investments (.12) (1.24) (.62) (1.70) (1.64) (1.22) -------- -------- ------- ------- ------- ------- Total dividends and distributions to shareholders (.21) (1.49) (.84) (2.00) (1.90) (1.47) Net asset value, end of period $18.71 $17.84 $14.20 $15.14 $14.20 $14.40 ======== ======== ======= ======= ======= ======= ==================================================================================================================================== Total Return, at Net Asset Value(3) 6.08% 36.40% (0.65)% 20.91% 11.99% 36.91% ==================================================================================================================================== Ratios/Supplemental Data: Net assets, end of period (in thousands) $134,147 $118,118 $78,390 $64,495 $45,600 $40,716 - ------------------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $130,129 $98,063 $71,956 $54,682 $42,432 $36,087 - ------------------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 1.08%(4) 1.53% 1.50% 1.95% 1.74% 1.74% Expenses 1.20%(4) 1.22% 1.02% 1.05% 1.12% 1.19% - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(5) 50.1% 69.7% 98.5% 99.7% 141.7% 148.3% Average brokerage commission rate(6) $0.0689 -- -- -- -- -- Class B Class C ------------------------------- -------------- Six Months Period Period Ended Ended Ended June 30, 1996 Dec. 31, June 30, 1996 (Unaudited) 1995(2) (Unaudited)(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 .02 .02 -- Net realized and unrealized gain (loss) .98 1.40 .11 ------ ------ ------ Total income (loss) from investment operations 1.00 1.42 .11 - -------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.07) (.02) (.09) Distributions from net realized gain on investments (.12) (1.15) (.12) ------ ------ ------ Total dividends and distributions to shareholders (.19) (1.17) (.21) - -------------------------------------------------------------------------------------------- Net asset value, end of period $18.89 $18.08 $18.69 ====== ====== ====== ============================================================================================ Total Return, at Net Asset Value(3) 5.51% 8.04% 0.61% ============================================================================================ Ratios/Supplemental Data: Net assets, end of period (in thousands) $3,375 $717 $295 - -------------------------------------------------------------------------------------------- Average net assets (in thousands) $1,914 $306 $124 - -------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 0.36%(4) 0.21%(4) (.05)%(4) Expenses 1.95%(4) 1.97%(4) 1.95%(4) - -------------------------------------------------------------------------------------------- Portfolio turnover rate(5) 50.1% 69.7% 50.1% Average brokerage commission rate(6) $0.0689 -- $0.0689
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 $65,709,638 and $58,010,432, 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. 11 Oppenheimer Disciplined Value Fund Notes to Financial Statements (Unaudited) - -------------------------------------------------------------------------------- 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. The Fund's investment objective is to seek capital appreciation. 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 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. - -------------------------------------------------------------------------------- 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. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. - -------------------------------------------------------------------------------- Other. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 12 Oppenheimer Disciplined Value Fund - -------------------------------------------------------------------------------- 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 820,549 $ 15,210,232 1,242,427 $ 20,678,025 Dividends and distributions reinvested 79,652 1,485,690 513,302 9,039,419 Redeemed (351,437) (6,533,083) (657,052) (11,156,509) ------------ ------------ ------------ ------------ Net increase 548,764 $ 10,162,839 1,098,677 $ 18,560,935 ============ ============ ============ ============ - ------------------------------------------------------------------------------------------------------------------------------------ Class B: Sold 139,006 $ 2,619,349 37,415 $ 684,870 Dividends and distributions reinvested 1,498 28,207 2,434 43,392 Redeemed (1,503) (28,302) -- (3,954) ------------ ------------ ------------ ------------ Net increase 139,001 $ 2,619,254 39,640 $ 724,308 ============ ============ ============ ============ - ------------------------------------------------------------------------------------------------------------------------------------ Class C: Sold 15,609 $ 300,811 -- $ -- Dividends and distributions reinvested 172 3,206 -- -- Redeemed -- -- -- -- ------------ ------------ ------------ ------------ Net increase 15,781 $ 304,017 -- $ -- ============ ============ ============ ============
1. For the year ended December 31, 1995 for Class A 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 on investments of $19,786,294 was composed of gross appreciation of $20,905,996, and gross depreciation of $1,119,702. 13 Oppenheimer Disciplined Value Fund Notes to Financial Statements (Unaudited) (Continued) - -------------------------------------------------------------------------------- 4. Management Fees And Other Transactions With Affiliates Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund which provides for a fee of 0.625% 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. The Manager has voluntarily undertaken to waive a portion of its management fee, whereby the Fund shall pay an annual management fee of 0.58% of its net assets in excess of $1.5 billion. 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 $357,824, of which $191,911 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 $68,383 and $2,998, of which $49,165 and $2,740, respectively, was paid to an affiliated broker/dealer. 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 $89,682 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 $5,623 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 $80,403 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. 14 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 Advisor OppenheimerFunds, Inc. - -------------------------------------------------------------------------------- Distributor OppenheimerFunds Distributor, Inc. - -------------------------------------------------------------------------------- Transfer and Shareholder Servicing Agent OppenheimerFunds Services - -------------------------------------------------------------------------------- Custodian of Portfolio Securities State Street Bank and Trust Company - -------------------------------------------------------------------------------- Independent Auditors KPMG Peat Marwick LLP - -------------------------------------------------------------------------------- Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors. This is a copy of a report to shareholders of Oppenheimer 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. 15 Oppenheimer Disciplined Value Fund 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 RS0375.001.0696 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-----