-----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, MLR3wF25LHZjjcMSfJdyLSgt2ztgtooZH8TXf05dC/nLYR0yPw7IrTiUwsvnmr2v K0NWIsQrDHX7KmcO24h4gw== 0001005477-99-000004.txt : 19990105 0001005477-99-000004.hdr.sgml : 19990105 ACCESSION NUMBER: 0001005477-99-000004 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19990104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER SERIES FUND INC CENTRAL INDEX KEY: 0000356865 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 061052841 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-03346 FILM NUMBER: 99500414 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123230200 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL INVESTMENT ACCOUNTS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CONNECTICUT MUTUAL LIQUID ACCOUNT INC DATE OF NAME CHANGE: 19851106 N-30D 1 ANNUAL REPORT --------------------------------------- Annual Report October 31, 1998 --------------------------------------- OPPENHEIMER Disciplined Allocation Fund [GRAPHIC OMITTED] [OPPENHEIMER LOGO] OppenheimerFunds(R) THE RIGHT WAY TO INVEST Contents 3 President's Letter 4 An Interview with Your Fund's Managers 9 Fund Performance - --------------------------------------- 13 Financial Statements 40 Independent Auditors' Report - --------------------------------------- 41 Federal Income Tax Information 42 Officers and Directors 44 Information and Services Report highlights - -------------------------------------------------------------------------------- o The Fund's holdings in cash, U.S. government securities and high-quality corporate bonds helped cushion the effect of declines in the stock market. o When stock prices began to slide, we increased our defensive holdings among consumer staples and utility companies, and shifted a larger percentage of our assets into bonds. o We believe the Fund's strategy of allocating assets among undervalued stocks, high-quality bonds and cash should continue to offer significant opportunities for high levels of risk-adjusted returns. Avg Annual Total Returns For the 1-Year Period Ended 10/31/98 Class A Without With Sales Chg.(1) Sales Chg.(2) - --------------------------------------- 5.93% -0.17% - --------------------------------------- Class B Without With Sales Chg.(1) Sales Chg.(2) - --------------------------------------- 5.10% 0.50% - --------------------------------------- Class C Without With Sales Chg.(1) Sales Chg.(2) - --------------------------------------- 5.10% 4.19% - --------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. In reviewing performance and rankings, please remember that past performance does not guarantee future results. Investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Because of ongoing market volatility, the Fund's performance may be subject to substantial short-term changes. For updates on the Fund's performance, please contact your financial advisor, call us at 1-800-525-7048 or visit our website, www.oppenheimerfunds.com. Prior to March 1, 1996, the Fund had a different investment advisor. However, the prior portfolio management team is now employed by OppenheimerFunds, Inc., the current advisor. 1. Includes changes in net asset value per share without deducting any sales charges. 2. Class A return includes the current maximum initial sales charge of 5.75%. Class B return includes the applicable contingent deferred sales charge of 5%. Class C return includes the contingent deferred sales charge of 1%. Class B and C shares are subject to an annual 0.75% asset-based sales charge. An explanation of the different performance calculations is contained in the Fund's prospectus. 2 Oppenheimer Disciplined Allocation Fund [PHOTO OMITTED] Bridget A. Macaskill President Oppenheimer Disciplined Allocation Fund Dear shareholder, - -------------------------------------------------------------------------------- In retrospect, 1998 has been an unsettling year for the financial markets. Around the world, stock and bond markets experienced considerable instability, with particular tumult being felt in Southeast Asia, Russia and Latin America. The U.S. stock market was not immune from the extreme volatility, as it climbed to record levels through July before correcting sharply in the third quarter and rebounding to new highs in the fourth quarter. In the bond market, yields on U.S. Treasury securities declined to record lows before rising modestly late in the year. Does the swift recovery of the U.S. stock market and the favorable economic environment for the bond market mean that domestic stocks and bonds will continue to prosper? We are optimistic over the long term, but we do expect that concerns about corporate earnings growth in a slow-growth economy will contribute to more stock market volatility in 1999. In the bond market, the Federal Reserve Board's decisions to reduce short-term interest rates should help create a positive climate for fixed-income securities. While lower interest rates are generally good for bond prices, it will become more difficult for bond funds to maintain their dividends at current levels if yields decline further. As an Oppenheimer fund shareholder, you may wonder how this potential volatility will affect you. If you maintain a long-term perspective, as we do, short-term volatility over the coming months should have little bearing on your ability to achieve your future financial goals. That's why we continue to suggest that you adhere to your long-term investment plan. In fact, we are very encouraged that most of our shareholders stayed the course during last summer's stock market correction, avoiding the temptation of selling into a temporarily declining market. Finally, I would like to thank those shareholders who contacted us about our revised account statement. Response has been very positive, and we are pleased that many of you find the new format easier to read and more informative. If you have any questions about the new statement or any other matter, please don't hesitate to call us at 1-800-525-7048. In the meantime, thank you for choosing OppenheimerFunds, The Right Way to Invest. Sincerely, /s/ Bridget A. Macaskill Bridget A. Macaskill November 20, 1998 3 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- "We focused the Fund's stock purchases among industries likely to perform well even if the economy continues to slow." An interview with your Fund's managers - -------------------------------------------------------------------------------- How did the Fund perform during the last twelve months? Despite the disappointing performance of the Fund's stock holdings, our disciplined strategy of allocating assets among stocks, bonds and cash enabled us to limit risks and losses during this very volatile fiscal period, which ended October 31, 1998. What made this such a challenging period? Trouble surfaced in Asia more than a year ago, when an economic slowdown caused many Asian countries to devalue their currencies and emerging financial markets to fall sharply. Concerns about the impact of reduced global spending on corporate profits eventually affected the financial markets of developed nations as well. We first saw the impact in the United States in late 1997, when the stock markets experienced a brief, but sharp, decline. Stock performance rebounded in early 1998 as investor concerns eased. However, the recovery proved short-lived. Economic difficulties persisted in emerging markets throughout the world. In the late spring, signs appeared that U.S. corporate profit growth was suffering as a result of weakening global demand for a wide range of products. Average stock prices fell as investors sought the safety of government bonds and securities issued by only the largest and most visible companies. Historically, the undervalued stocks in which the Fund invests have proven to be bargains over the long term, but they have tended to underperform the market during times of slowing corporate earnings growth and investor uncertainty. Such an environment is generally 4 Oppenheimer Disciplined Allocation Fund [PHOTO OMITTED] Portfolio Management Team (l to r) Kenneth White Peter Antos Michael Strathearn Stephen Libera Arthur Zimmer* *Not shown favorable for only the safest and most predictable investments. Accordingly, despite the potential for positive earnings surprises, the Fund's investments suffered this spring and summer. Prices, though already low, fell further. On the other hand, the Fund benefited from its investments in U.S. Treasury bonds and, to a lesser extent, investment-grade corporate bonds. Investors throughout the world searching for safe, high-quality securities turned to these asset classes for shelter. How did you manage the Fund in light of these conditions? In May, we reallocated our assets with the goal of reducing our stock exposure. By August, when the stock market correction touched bottom, we had reduced our stock holdings from approximately 52% of the Fund's assets at the beginning of the period to about 43% on August 31. By contrast, the Fund's bond holdings increased from approximately 39% of assets at the beginning of the period to nearly 45% by the end of August. Our relatively large percentage of bond and cash holdings helped offset much of the poor performance in the equity portion of the Fund, with bonds performing well during the stock market's summer slump. As the Fund's fiscal year came to a close, we increased our stock holdings to nearly 50% of the Fund's assets to take advantage of developing market strength. 5 Oppenheimer Disciplined Allocation Fund Avg Annual Total Returns For the Periods Ended 9/30/98(1) Class A 1 year 5 year 10 year - --------------------------------------- - -6.68% 8.08% 11.55% - --------------------------------------- Class B Since 1 year 5 year Inception - --------------------------------------- - -6.04% N/A 8.68% - --------------------------------------- Class C Since 1 year 5 year Inception - --------------------------------------- - -2.66% N/A 9.06% - --------------------------------------- An interview with your Fund's managers - -------------------------------------------------------------------------------- We also took action within individual asset classes. In the stock portion of the portfolio, we made a significant move away from companies that have a large exposure to worldwide economic activity, especially to Asia. For example, we reduced our holdings among financial institutions, many of which participated in loans to Asian companies, and other Asian-based investments. We also reduced our holdings in companies that produce basic materials, such as metals, chemicals and paper, because, as Asian companies reduce their manufacturing and exporting, they also reduce their consumption of these materials. Instead, we focused the Fund's stock purchases among industries likely to perform well even if the economy continues to slow, especially in those companies with stable earnings and improving management practices. We made purchases among companies that produce consumer staples in the food and beverage industries, and increased the Fund's holdings among utilities companies, such as Columbia Energy Group and Bell Atlantic Corp. As stock prices fell during the summer, we also took the opportunity to add to the Fund's holdings of reasonably priced technology stocks, such as, Compaq Computer Corp. and International Business Machines Corp., and biotechnology and healthcare stocks, such as, Amgen, Inc. and Genzyme Corp. (General Division). 6 Oppenheimer Disciplined Allocation Fund On the bond side of the portfolio, we maintained a relatively long average duration. Duration is a measure of a bond's sensitivity to changes in interest rates. The longer a portfolio's average duration, the higher the returns investors are likely to receive in an environment of falling interest rates. In anticipation of continued low inflation, we kept our duration longer than our estimate of the average flexibly managed fund. As a result, the bond portion of the portfolio performed relatively strongly. We also benefited from our focus on investment-quality bonds of industry leaders with improving credit funda mentals. These securities held their value during the period much better than higher yielding, but riskier, low-grade securities. What is your outlook for the future in light of worldwide economic difficulties? It is impossible to predict exactly when the economy will recover from the effects of the global downturn. However, we believe the Fund's performance during this difficult time illustrates the advantages of our active, disciplined approach to asset allocation. When stock markets perform 1. Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Class A returns include the current maximum initial sales charge of 5.75%. Class A shares were first publicly offered on 9/16/85. The Fund's maximum sales charge for Class A shares was lower prior to 3/18/96, so actual performance may have been higher. Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception on 10/2/95). Class C returns for the one-year period include the contingent deferred sales charge of 1%. Class C shares have an inception date of 5/1/96. Class B and C shares are subject to an annual 0.75% asset-based sales charge. An explanation of the different performance calculations is contained in the Fund's prospectus. 7 Oppenheimer Disciplined Allocation Fund [The following table was represented by a pie chart in the printed materials.] Asset Allocation(2) o Equities 51.0% o Bonds 37.3 o Cash Equivalents 11.7 well, our stock holdings should position investors to benefit from the opportunities for capital appreciation. When stock markets perform poorly, our cash and bond holdings provide a cushion against losses. In past years, many of the markets' best returns have come from companies that meet our criteria of better-than-expected earnings at bargain prices. That's why we remain committed to our strategy, and why Oppenheimer Disciplined Allocation Fund remains part of The Right Way to Invest. Top 10 Stock Holdings(2) - -------------------------------------------------------------------------------- International Business Machines Corp. 1.9% - -------------------------------------------------------------------------------- US West, Inc. 1.5 - -------------------------------------------------------------------------------- AT&T Corp. 1.4 - -------------------------------------------------------------------------------- Amgen, Inc. 1.3 - -------------------------------------------------------------------------------- Genzyme Corp. (General Division) 1.3 - -------------------------------------------------------------------------------- Bell Atlantic Corp. 1.3 - -------------------------------------------------------------------------------- Compaq Computer Corp. 1.2 - -------------------------------------------------------------------------------- Columbia Energy Group 1.2 - -------------------------------------------------------------------------------- Textron, Inc. 1.1 - -------------------------------------------------------------------------------- Fort James Corp. 1.1 - -------------------------------------------------------------------------------- Top 5 Sectors(2) - -------------------------------------------------------------------------------- Computer Hardware 6.5% - -------------------------------------------------------------------------------- Telephone Utilities 4.9 - -------------------------------------------------------------------------------- Banks 3.9 - -------------------------------------------------------------------------------- Food 3.7 - -------------------------------------------------------------------------------- Manufacturing 3.3 - -------------------------------------------------------------------------------- 2. Portfolio is subject to change. Percentages are as of October 31, 1998 and are based on total market value of investments. 8 Oppenheimer Disciplined Allocation Fund Fund performance - -------------------------------------------------------------------------------- How Has the Fund Performed? Below is a discussion, by the Manager, of the Fund's per formance during its fiscal year ended October 31,1998, followed by a graphical comparison of the Fund's performance to appropriate broad-based market indices. o Management's Discussion of Performance. During the past fiscal year that ended October 31, 1998, Oppenheimer Disciplined Allocation Fund's performance was affected by weakness in U.S. stock markets. These difficulties arose from pressures on earnings and uncertainties regarding the Asian and emerging market financial crisis. Losses were limited by the relatively strong performance of the Fund's bond portfolio and its cash holdings. We shifted some of the Fund's assets from stocks to bonds during the period, while reserving the flexibility to make opportu nistic stock trades as market conditions warranted. In October, we increased the Fund's exposure to stocks to take advantage of renewed market strength. Within the stock portion of the portfolio, we focused on defensive positions in such areas as consumer staples and utilities, and purchased undervalued stocks in the technology and biotech industries. Among bonds, we focused on investment-grade instruments, and maintained a relatively long duration. The Fund's portfolio holdings, allocations and our management strategies are subject to change. o Comparing the Fund's Performance to the Market. The graphs that follow show the performance of a hypothetical $10,000 investment in each class of shares of the Fund held until October 31, 1998. In the case of Class A shares, performance is measured over a 10-year period; in the case of Class B, performance is measured from inception of the class on October 2, 1995; and in the case of Class C shares, performance is measured from inception of the class on May 1, 1996. The Fund's performance reflects the deduction of the 5.75% maximum initial sales charge on Class A shares, the 5% (1-year) and 3% (since inception) applicable contingent deferred sales charge for Class B, and the 1% (1-year) contingent deferred sales charge for Class C shares. The graphs assume that all dividends and capital gains distributions were reinvested in additional shares. The Fund's performance is compared to the performance of the Standard & Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded as a general measure of the performance of the U.S. equity securities market, and the Merrill Lynch Corporate and Government Master Index, a broad-based index of U.S. Treasury and government agency securities, and corporate and Yankee bonds, regarded as a general measurement of the performance of the domestic debt securities market. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains or transaction costs, and none of the data in the graphs shows the effect of taxes. The Fund's performance reflects the effects of Fund business and operating expenses. While index comparisons may be useful to provide a benchmark for the Fund's performance, it must be noted that the Fund's investments are not limited to the securities in the indices. 9 Oppenheimer Disciplined Allocation Fund Fund performance - -------------------------------------------------------------------------------- Class A Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer Disciplined Allocation Fund (Class A), S&P 500 Index and Merrill Lynch Corporate and Government Master Index [The following table was represented by a line graph in the printed materials.] Oppenheimer Disciplined Merrill Lynch Corporate Allocation Fund Class A S&P 500 Index and Gov't Master Index 12.31.87 9425 10000 10000 12.31.88 10405 11656 10772 12.31.89 12758 15343 12293 12.31.90 12731 14866 13338 12.31.91 16322 19386 15457 12.31.92 17937 20861 16645 12.31.93 20788 22958 18485 12.31.94 20350 23261 17849 12.31.95 25224 31991 21276 10.31.96 26805 37309 21744 10.31.97 31851 49285 23695 10.31.98 33738 60122 26135 Average Annual Total Return of Class A Shares of the Fund at 10/31/98(2) 1 Year -0.17% 5 Year 8.86% 10 Year 11.82% Class B Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer Disciplined Allocation Fund (Class B), S&P 500 Index and Merrill Lynch Corporate and Government Master Index [The following table was represented by a line graph in the printed materials.] Oppenheimer Disciplined Merrill Lynch Corporate Allocation Fund Class B S&P 500 Index and Gov't Master Index 10.2.95 10000 10000 10000 12.31.95 10493 10602 10463 10.31.96 11071 12364 10693 10.31.97 13059 16332 11652 10.31.98 13425 19924 12852 Average Annual Total Return of Class B Shares of the Fund at 10/31/98(3) 1 Year 0.50% Life 10.03% 10 Oppenheimer Disciplined Allocation Fund Class C Shares Comparison of Change in Value of $10,000 Hypothetical Investments in: Oppenheimer Disciplined Allocation Fund (Class C), S&P 500 Index and Merrill Lynch Corporate and Government Master Index [The following table was represented by a line graph in the printed materials.] Oppenheimer Disciplined Merrill Lynch Corporate Allocation Fund Class C S&P 500 Index and Gov't Master Index 5.1.96 10000 10000 10000 10.31.96 10408 10908 10524 10.31.97 12274 14409 11469 10.31.98 12900 17577 12650 Average Annual Total Return of Class C Shares of the Fund at 10/31/98(4) 1 Year 4.19% Life 10.72% The returns and the ending account values in the graphs show change in share value and include reinvestment of all dividends and capital gains distributions. The performance information for both indices in the graphs begins on 12/31/87 for Class A, 9/29/95 for Class B, and 4/30/96 for Class C. 1. The Fund changed its fiscal year end from December to October. 2. The average annual total returns are shown net of the applicable 5.75% maximum initial sales charge. 3. Class B shares of the Fund were first publicly offered on 10/2/95. The average annual total returns are shown net of the applicable 5% and 3% contingent deferred sales charges, respectively, for the one-year period and the life of the class. The ending account value in the graph is net of the applicable 3% contingent deferred sales charge. Different contingent deferred sales charges applied to redemptions of Class B shares prior to 3/18/96. 4. Class C shares of the Fund were first publicly offered on 5/1/96. The average annual total returns are shown net of the applicable 1% contingent deferred sales charge for the one-year period. Past performance is not predictive of future performance. Graphs are not drawn to the same scale. 11 Oppenheimer Disciplined Allocation Fund Financials - -------------------------------------------------------------------------------- 12 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments October 31, 1998 - --------------------------------------------------------------------------------
Market Value Shares See Note 1 ==================================================================================================================================== Common Stocks--49.9% - ------------------------------------------------------------------------------------------------------------------------------------ Basic Materials--0.8% - ------------------------------------------------------------------------------------------------------------------------------------ Metals--0.8% Aluminum Co. of America 33,300 $ 2,639,025 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Cyclicals--6.3% - ------------------------------------------------------------------------------------------------------------------------------------ Autos & Housing--2.5% Federal-Mogul Corp. 58,300 3,159,131 - ------------------------------------------------------------------------------------------------------------------------------------ Hertz Corp., Cl. A 20,700 741,319 - ------------------------------------------------------------------------------------------------------------------------------------ Maytag Corp. 57,700 2,852,544 - ------------------------------------------------------------------------------------------------------------------------------------ Republic Industries, Inc.(1) 41,100 660,169 - ------------------------------------------------------------------------------------------------------------------------------------ Whirlpool Corp. 15,500 794,375 ------------ 8,207,538 - ------------------------------------------------------------------------------------------------------------------------------------ Leisure & Entertainment--1.7% Alaska Air Group, Inc.(1) 17,200 618,125 - ------------------------------------------------------------------------------------------------------------------------------------ AMR Corp.(1) 18,800 1,259,600 - ------------------------------------------------------------------------------------------------------------------------------------ Delta Air Lines, Inc. 4,600 485,587 - ------------------------------------------------------------------------------------------------------------------------------------ Eastman Kodak Co. 28,200 2,185,500 - ------------------------------------------------------------------------------------------------------------------------------------ Hasbro, Inc. 20,000 701,250 - ------------------------------------------------------------------------------------------------------------------------------------ Outback Steakhouse, Inc.(1) 7,200 249,300 - ------------------------------------------------------------------------------------------------------------------------------------ Wendy's International, Inc. 1,200 25,200 ------------ 5,524,562 - ------------------------------------------------------------------------------------------------------------------------------------ Retail: General--1.8% Dayton Hudson Corp. 31,600 1,339,050 - ------------------------------------------------------------------------------------------------------------------------------------ Federated Department Stores, Inc.(1) 24,800 953,250 - ------------------------------------------------------------------------------------------------------------------------------------ Fruit of the Loom, Inc., Cl. A(1) 31,700 483,425 - ------------------------------------------------------------------------------------------------------------------------------------ K Mart Corp.(1) 33,700 476,012 - ------------------------------------------------------------------------------------------------------------------------------------ Nordstrom, Inc. 19,200 524,400 - ------------------------------------------------------------------------------------------------------------------------------------ Sears Roebuck & Co. 48,000 2,157,000 ------------ 5,933,137 - ------------------------------------------------------------------------------------------------------------------------------------ Retail: Specialty--0.3% Payless ShoeSource, Inc.(1) 21,900 1,027,931
13 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Non-Cyclicals--11.6% - ------------------------------------------------------------------------------------------------------------------------------------ Beverages--0.7% Anheuser-Busch Cos., Inc. 40,200 $ 2,389,387 - ------------------------------------------------------------------------------------------------------------------------------------ Food--3.7% Albertson's, Inc. 42,000 2,333,625 - ------------------------------------------------------------------------------------------------------------------------------------ General Mills, Inc. 28,000 2,058,000 - ------------------------------------------------------------------------------------------------------------------------------------ IBP, Inc. 85,200 2,305,725 - ------------------------------------------------------------------------------------------------------------------------------------ Kroger Co.(1) 58,100 3,224,550 - ------------------------------------------------------------------------------------------------------------------------------------ Safeway, Inc.(1) 41,500 1,984,219 ------------ 11,906,119 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Drugs--2.6% Amgen, Inc.(1) 53,900 4,234,519 - ------------------------------------------------------------------------------------------------------------------------------------ Genzyme Corp. (General Division)(1) 100,500 4,227,281 ------------ 8,461,800 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Supplies & Services--1.9% Bard (C.R.), Inc. 57,400 2,450,262 - ------------------------------------------------------------------------------------------------------------------------------------ Tenet Healthcare Corp.(1) 86,930 2,428,607 - ------------------------------------------------------------------------------------------------------------------------------------ WellPoint Health Networks, Inc.(1) 18,500 1,362,062 ------------ 6,240,931 - ------------------------------------------------------------------------------------------------------------------------------------ Household Goods--2.7% Dial Corp. (The) 83,400 2,298,712 - ------------------------------------------------------------------------------------------------------------------------------------ Fort James Corp. 89,350 3,601,922 - ------------------------------------------------------------------------------------------------------------------------------------ Premark International, Inc. 91,500 2,899,406 ------------ 8,800,040 - ------------------------------------------------------------------------------------------------------------------------------------ Energy--1.1% - ------------------------------------------------------------------------------------------------------------------------------------ Oil-Integrated--1.1% Exxon Corp. 32,100 2,287,125 - ------------------------------------------------------------------------------------------------------------------------------------ Mobil Corp. 18,800 1,422,925 ------------ 3,710,050 - ------------------------------------------------------------------------------------------------------------------------------------ Financial--6.6% - ------------------------------------------------------------------------------------------------------------------------------------ Banks--3.8% Bank One Corp. 67,300 3,289,287 - ------------------------------------------------------------------------------------------------------------------------------------ BankBoston Corp. 77,000 2,834,562 - ------------------------------------------------------------------------------------------------------------------------------------ First Union Corp. 59,500 3,451,000 - ------------------------------------------------------------------------------------------------------------------------------------ Golden West Financial Corp. 30,200 2,738,762 ------------ 12,313,611
14 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Insurance--2.8% ACE Ltd. 29,600 $ 1,002,700 - ------------------------------------------------------------------------------------------------------------------------------------ Allstate Corp. 41,900 1,804,319 - ------------------------------------------------------------------------------------------------------------------------------------ American International Group, Inc. 31,100 2,651,275 - ------------------------------------------------------------------------------------------------------------------------------------ Conseco, Inc. 40,300 1,397,906 - ------------------------------------------------------------------------------------------------------------------------------------ Equitable Cos., Inc. 18,600 911,400 - ------------------------------------------------------------------------------------------------------------------------------------ Travelers Property Casualty Corp., Cl. A 43,500 1,334,906 ------------ 9,102,506 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial--5.5% - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Materials--1.0% Owens Corning 37,300 1,354,456 - ------------------------------------------------------------------------------------------------------------------------------------ USG Corp. 37,500 1,788,281 ------------ 3,142,737 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Services--1.2% Viad Corp. 70,500 1,934,344 - ------------------------------------------------------------------------------------------------------------------------------------ Waste Management, Inc. (New) 40,165 1,812,446 ------------ 3,746,790 - ------------------------------------------------------------------------------------------------------------------------------------ Manufacturing--3.3% Ingersoll-Rand Co. 55,650 2,810,325 - ------------------------------------------------------------------------------------------------------------------------------------ PACCAR, Inc. 32,400 1,413,450 - ------------------------------------------------------------------------------------------------------------------------------------ Textron, Inc. 49,000 3,644,375 - ------------------------------------------------------------------------------------------------------------------------------------ United Technologies Corp. 28,600 2,724,150 ------------ 10,592,300 - ------------------------------------------------------------------------------------------------------------------------------------ Technology--9.6% - ------------------------------------------------------------------------------------------------------------------------------------ Aerospace/Defense--1.6% General Dynamics Corp. 58,000 3,432,875 - ------------------------------------------------------------------------------------------------------------------------------------ Lockheed Martin Corp. 17,371 1,934,695 ------------ 5,367,570 - ------------------------------------------------------------------------------------------------------------------------------------ Computer Hardware--6.4% Apple Computer, Inc.(1) 66,300 2,461,387 - ------------------------------------------------------------------------------------------------------------------------------------ Compaq Computer Corp. 119,500 3,779,188 - ------------------------------------------------------------------------------------------------------------------------------------ International Business Machines Corp. 40,100 5,952,344 - ------------------------------------------------------------------------------------------------------------------------------------ Lexmark International Group, Inc., Cl. A(1) 24,700 1,727,456 - ------------------------------------------------------------------------------------------------------------------------------------ Seagate Technology, Inc.(1) 42,300 1,115,663 - ------------------------------------------------------------------------------------------------------------------------------------ Storage Technology Corp. (New)(1) 68,800 2,300,500 - ------------------------------------------------------------------------------------------------------------------------------------ Xerox Corp. 34,700 3,361,563 ------------ 20,698,101
15 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Market Value Shares See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Computer Software/Services--1.0% First Data Corp. 38,200 $ 1,012,300 - ------------------------------------------------------------------------------------------------------------------------------------ Network Associates, Inc.(1) 49,300 2,095,250 ------------ 3,107,550 - ------------------------------------------------------------------------------------------------------------------------------------ Telecommunications/Technology--0.6% 3Com Corp.(1) 55,500 2,001,469 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities--8.4% - ------------------------------------------------------------------------------------------------------------------------------------ Electric Utilities--2.5% Baltimore Gas & Electric Co. 51,500 1,615,813 - ------------------------------------------------------------------------------------------------------------------------------------ Edison International 61,100 1,611,513 - ------------------------------------------------------------------------------------------------------------------------------------ FPL Group, Inc. 49,000 3,065,563 - ------------------------------------------------------------------------------------------------------------------------------------ Montana Power Co. 44,100 1,910,081 ------------ 8,202,970 - ------------------------------------------------------------------------------------------------------------------------------------ Gas Utilities--1.1% Columbia Energy Group 63,650 3,683,744 - ------------------------------------------------------------------------------------------------------------------------------------ Telephone Utilities--4.8% AT&T Corp. 70,100 4,363,725 - ------------------------------------------------------------------------------------------------------------------------------------ Bell Atlantic Corp. 78,360 4,162,875 - ------------------------------------------------------------------------------------------------------------------------------------ Century Telephone Enterprises, Inc. 17,600 999,900 - ------------------------------------------------------------------------------------------------------------------------------------ Frontier Corp. 39,000 1,172,438 - ------------------------------------------------------------------------------------------------------------------------------------ US West, Inc. 83,900 4,813,763 ------------ 15,512,701 ------------ Total Common Stocks (Cost $145,694,225) 162,312,569 ==================================================================================================================================== Other Securities--0.2% - ------------------------------------------------------------------------------------------------------------------------------------ Ingersoll-Rand International Finance Corp. I, 6.22% Preferred Redeemable Increased Dividend Equity Securities, 5/16/01 (Cost $750,000) 30,000 785,625 Units ==================================================================================================================================== Rights, Warrants and Certificates--0.0% - ------------------------------------------------------------------------------------------------------------------------------------ Concentric Network Corp. Wts., Exp. 12/07(2) 100 10,000 - ------------------------------------------------------------------------------------------------------------------------------------ Dairy Mart Convenience Stores, Inc. Wts., Exp. 12/01(2) 666 173 - ------------------------------------------------------------------------------------------------------------------------------------ Intermedia Communications, Inc. Wts., Exp. 6/00(2) 100 6,948 - ------------------------------------------------------------------------------------------------------------------------------------ Microcell Telecommunications, Inc. Wts., Exp. 6/06(2) 500 9,063 - ------------------------------------------------------------------------------------------------------------------------------------ Nextel International Ltd. Wts., Exp. 4/07(2) 100 263 - ------------------------------------------------------------------------------------------------------------------------------------ Price Communications Corp. Wts., Exp. 8/07(2) 516 15,480 - ------------------------------------------------------------------------------------------------------------------------------------ Signature Brands, Inc. Wts., Exp. 12/49(2) 100 2,012 ------------ Total Rights, Warrants and Certificates (Cost $8,004) 43,939
16 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 ==================================================================================================================================== Asset-Backed Securities--1.0% - ------------------------------------------------------------------------------------------------------------------------------------ Dayton Hudson Credit Card Master Trust, Asset-Backed Certificates, Series 1997-1, Cl. A, 6.25%, 8/25/05 $ 125,000 $ 128,476 - ------------------------------------------------------------------------------------------------------------------------------------ Housing Securities, Inc., Series 1993-G, Cl. G4, 6.625%, 1/25/09 750,000 754,448 - ------------------------------------------------------------------------------------------------------------------------------------ IROQUOIS Trust, Asset-Backed Amortizing Nts., Series 1997-2, Cl. A, 6.752%, 6/25/07(2) 1,175,000 1,194,736 - ------------------------------------------------------------------------------------------------------------------------------------ Olympic Automobile Receivables Trust, Automobile Receivables-Backed Nts., Series 1997-A, Cl. A-5, 6.80%, 2/15/05 1,150,000 1,173,180 ------------ Total Asset-Backed Securities (Cost $3,203,513) 3,250,840 ==================================================================================================================================== Mortgage-Backed Obligations--5.7% - ------------------------------------------------------------------------------------------------------------------------------------ Chase Commercial Mortgage Securities Corp., Commercial Mtg. Obligations, Series 1996-1, Cl. A2, 7.60%, 3/18/06 1,500,000 1,622,813 - ------------------------------------------------------------------------------------------------------------------------------------ Countrywide Funding Corp., Mtg. Pass-Through Certificates, Series 1994-10, Cl. A3, 6%, 5/25/09 250,000 251,483 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Farm Credit Bank, Medium-Term Nts., 5.24%, 10/1/08 1,750,000 1,733,197 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates: Series 1711, Cl. EA, 7%, 3/15/24 200,000 204,686 Series 1987, Cl. K, 7.50%, 9/15/27(2) 176,576 176,577 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg. Participation Certificates: 6%, 3/1/09 814,446 820,083 Series 1337, Cl. D, 6%, 8/15/07 1,000,000 1,000,620 Series 1820, Cl. PL, 5.75%, 7/15/06 1,000,000 1,005,930 Series 1843, Cl. VB, 7%, 4/15/03 65,000 67,051 Series 1849, Cl. VA, 6%, 12/15/10 824,531 837,411 Series 1994-43, Cl. PE, 6%, 12/25/19 800,000 805,000 - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security: Series 1542, Cl. QC, 7.937%, 10/15/20(3) 400,000 51,250 Series 1583, Cl. IC, 6.762%-7.846%, 1/15/20(3) 2,518,751 201,500 Series 1661, Cl. PK, 9.687%, 11/15/06(3) 511,906 31,994 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn.: 6%, 12/1/03 685,614 688,665 6.50%, 3/1/26-4/1/26 765,210 771,624 7%, 4/1/00 45,722 46,016 7.50%, 1/1/08-6/1/08 670,390 688,478
17 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 ==================================================================================================================================== Mortgage-Backed Obligations (continued) Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Multiclass Mtg. Participation Certificates, Trust 1992-15, Cl. KZ, 7%, 2/25/22 $ 796,254 $ 808,938 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Trust 1993-181, Cl. C, 5.40%, 10/25/02 46,188 46,030 Trust 1993-190, Cl. Z, 5.85%, 7/25/08 410,432 412,099 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security, Trust 1993-223, Cl. PM, 7.448%, 10/25/23(3) 1,587,257 201,375 - ------------------------------------------------------------------------------------------------------------------------------------ GE Capital Mortgage Services, Inc., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1994-7, Cl. A18, 6%, 2/25/09 1,143,592 1,092,840 - ------------------------------------------------------------------------------------------------------------------------------------ Government National Mortgage Assn.: 7%, 4/15/09-2/15/24 1,275,446 1,306,816 7.50%, 3/15/09 494,780 509,213 8%, 5/15/17 378,404 395,716 - ------------------------------------------------------------------------------------------------------------------------------------ IMC Home Equity Trust, Asset-Backed Home Equity Securities, Series 1998-3, Cl. A5, 6.36%, 8/20/22(4) 700,000 701,094 - ------------------------------------------------------------------------------------------------------------------------------------ Norwest Asset Securities Corp., Mtg. Pass-Through Certificates, Series 1997-14, Cl. A-3, 6.75%, 10/25/27 1,000,000 1,007,810 - ------------------------------------------------------------------------------------------------------------------------------------ Residential Accredit Loans, Inc., Mtg. Asset-Backed Pass-Through Certificates, Series 1997-QS9, Cl. 2, 6.75%, 9/25/27 875,000 873,626 ------------ Total Mortgage-Backed Obligations (Cost $18,051,958) 18,359,935 ==================================================================================================================================== U.S. Government Obligations--9.3% - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Bonds: 6%, 2/15/26 7,050,000 7,702,132 7.50%, 11/15/16(5) 2,000,000 2,495,626 8.75%, 5/15/17(5) 8,250,000 11,537,113 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Nts.: 5.625%, 2/15/06 5,600,000 5,990,253 6.125%, 8/15/07 1,250,000 1,378,908 6.50%, 8/15/05 1,000,000 1,115,938 ------------ Total U.S. Government Obligations (Cost $26,507,430) 30,219,970
18 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 ==================================================================================================================================== Foreign Government Obligations--0.1% - ------------------------------------------------------------------------------------------------------------------------------------ United Mexican States Bonds, 6.97%, 8/12/00 (Cost $246,255) $ 250,000 $ 237,500 ==================================================================================================================================== Municipal Bonds and Notes--0.3% - ------------------------------------------------------------------------------------------------------------------------------------ CA Infrastructure & ED Bank Special Purpose Trust Certificates, Series 1997-1, 6.28%, 9/25/05 (Cost $1,001,493) 1,000,000 1,021,900 ==================================================================================================================================== Non-Convertible Corporate Bonds and Notes--20.0% - ------------------------------------------------------------------------------------------------------------------------------------ Basic Materials--0.9% - ------------------------------------------------------------------------------------------------------------------------------------ Chemicals--0.4% Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 565,000 757,817 - ------------------------------------------------------------------------------------------------------------------------------------ PPG Industries, Inc., 9% Debs., 5/1/21 315,000 405,259 ------------ 1,163,076 - ------------------------------------------------------------------------------------------------------------------------------------ Metals--0.3% Alcan Aluminum Ltd., 9.625% Debs., 7/15/19 975,000 1,048,700 - ------------------------------------------------------------------------------------------------------------------------------------ Paper--0.2% Aracruz Celulose SA, 10.375% Debs., 1/31/02(2) 750,000 613,125 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Cyclicals--2.0% - ------------------------------------------------------------------------------------------------------------------------------------ Autos & Housing--0.3% Black & Decker Corp., 6.625% Nts., 11/15/00 810,000 834,181 - ------------------------------------------------------------------------------------------------------------------------------------ Leisure & Entertainment--0.6% Hilton Hotels Corp., 7.375% Nts., 6/1/02 50,000 49,724 - ------------------------------------------------------------------------------------------------------------------------------------ Paramount Communications, Inc., 7.50% Sr. Nts., 1/15/02 750,000 796,754 - ------------------------------------------------------------------------------------------------------------------------------------ Tricon Global Restaurants, Inc., 7.45% Sr. Unsec. Nts., 5/15/05 1,000,000 1,020,025 ------------ 1,866,503 - ------------------------------------------------------------------------------------------------------------------------------------ Media--0.7% Reed Elsevier, Inc., 6.625% Nts., 10/15/23(6) 400,000 420,432 - ------------------------------------------------------------------------------------------------------------------------------------ TCI Communications, Inc., 6.375% Sr. Unsub. Nts., 5/1/03 500,000 517,696 - ------------------------------------------------------------------------------------------------------------------------------------ TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 875,000 960,371 - ------------------------------------------------------------------------------------------------------------------------------------ Viacom, Inc., 6.75% Sr. Unsec. Nts., 1/15/03 500,000 513,945 ------------ 2,412,444 - ------------------------------------------------------------------------------------------------------------------------------------ Retail: General--0.4% Federated Department Stores, Inc., 6.125% Cv. Sub. Nts., 9/1/01(4) 750,000 764,002 - ------------------------------------------------------------------------------------------------------------------------------------ Price/Costco Cos., Inc., 7.125% Sr. Nts., 6/15/05 550,000 593,571 ------------ 1,357,573
19 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Consumer Non-Cyclicals--2.3% - ------------------------------------------------------------------------------------------------------------------------------------ Food--1.1% CPC International, Inc., 6.15% Unsec. Nts., Series C, 1/15/06 $ 500,000 $ 521,454 - ------------------------------------------------------------------------------------------------------------------------------------ Dole Food Co. Inc., 6.75% Nts., 7/15/00 650,000 658,562 - ------------------------------------------------------------------------------------------------------------------------------------ Grand Metro Inventory Corp., 7.125% Nts., 9/15/04 1,250,000 1,343,149 - ------------------------------------------------------------------------------------------------------------------------------------ RACERS-Kellogg-98-1, 5.75% Nts., 2/2/01(6) 1,000,000 1,013,108 ------------ 3,536,273 - ------------------------------------------------------------------------------------------------------------------------------------ Healthcare/Supplies & Services--0.3% Columbia/HCA Healthcare Corp., 6.875% Nts., 7/15/01 120,000 117,307 - ------------------------------------------------------------------------------------------------------------------------------------ Tenet Healthcare Corp.: 8% Sr. Nts., 1/15/05 325,000 332,898 8.625% Sr. Unsec. Nts., 12/1/03 500,000 526,252 ------------ 976,457 - ------------------------------------------------------------------------------------------------------------------------------------ Household Goods--0.9% Dial Corp. (The), 5.89% Medium-Term Nts., Series A, 10/22/01 750,000 760,060 - ------------------------------------------------------------------------------------------------------------------------------------ Fort James Corp.: 6.234% Nts., 3/15/01 250,000 256,723 6.875% Sr. Nts., 9/15/07 1,000,000 1,035,441 - ------------------------------------------------------------------------------------------------------------------------------------ Kimberly-Clark Corp., 7.875% Debs., 2/1/23 355,000 391,805 - ------------------------------------------------------------------------------------------------------------------------------------ Procter & Gamble Co., 9.36% Debs., Series A, 1/1/21 250,000 324,914 ------------ 2,768,943 - ------------------------------------------------------------------------------------------------------------------------------------ Energy--2.3% - ------------------------------------------------------------------------------------------------------------------------------------ Energy Services & Producers--1.4% Chesapeake Energy Corp., 7.875% Sr. Nts., Series B, 3/15/04 750,000 596,250 - ------------------------------------------------------------------------------------------------------------------------------------ Coastal Corp.: 8.125% Sr. Nts., 9/15/02 565,000 607,175 8.75% Sr. Nts., 5/15/99 35,000 35,550 - ------------------------------------------------------------------------------------------------------------------------------------ Columbia Gas System, Inc., 6.80% Nts., Series C, 11/28/05 500,000 529,402 - ------------------------------------------------------------------------------------------------------------------------------------ Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 990,000 1,052,200 - ------------------------------------------------------------------------------------------------------------------------------------ Petroliam Nasional Berhad, 6.875% Nts., 7/1/03(2) 500,000 396,183 - ------------------------------------------------------------------------------------------------------------------------------------ TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 500,000 649,985 - ------------------------------------------------------------------------------------------------------------------------------------ Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs., 2/1/06 750,000 771,638 ------------ 4,638,383
20 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Oil-Integrated--0.9% Gulf Canada Resources Ltd.: 8.25% Sr. Nts., 3/15/17 $ 575,000 $ 538,703 9% Debs., 8/15/99 325,000 326,370 - ------------------------------------------------------------------------------------------------------------------------------------ Norcen Energy Resources Ltd., 6.80% Debs., 7/2/02 1,000,000 1,011,783 - ------------------------------------------------------------------------------------------------------------------------------------ Petroleum Geo-Services ASA, 7.50% Nts., 3/31/07 825,000 876,614 - ------------------------------------------------------------------------------------------------------------------------------------ Standard Oil Co., 9% Debs., 6/1/19 65,000 66,309 ------------ 2,819,779 - ------------------------------------------------------------------------------------------------------------------------------------ Financial--5.5% - ------------------------------------------------------------------------------------------------------------------------------------ Banks--1.2% Capital One Bank, Inc., 6.375% Sr. Nts., 2/15/03 500,000 507,079 - ------------------------------------------------------------------------------------------------------------------------------------ Chase Manhattan Corp. (New), 10.125% Sub. Nts., 11/1/00 250,000 272,634 - ------------------------------------------------------------------------------------------------------------------------------------ Citicorp, 5.625% Sr. Nts., 2/15/01 635,000 640,479 - ------------------------------------------------------------------------------------------------------------------------------------ Fleet Mtg./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 360,000 400,320 - ------------------------------------------------------------------------------------------------------------------------------------ Greenpoint Bank (Brooklyn, New York), 6.70% Medium-Term Sr. Bank Nts., 7/15/02 1,000,000 1,036,424 - ------------------------------------------------------------------------------------------------------------------------------------ Integra Financial Corp., 6.50% Sub. Nts., 4/15/00 110,000 112,067 - ------------------------------------------------------------------------------------------------------------------------------------ People's Bank of Bridgeport (Connecticut), 7.20% Sub. Nts., 12/1/06 1,000,000 1,064,668 ------------ 4,033,671 - ------------------------------------------------------------------------------------------------------------------------------------ Diversified Financial--2.5% American General Institutional Capital B, 8.125% Bonds, Series B, 3/15/46(6) 575,000 629,447 - ------------------------------------------------------------------------------------------------------------------------------------ Capital One Financial Corp., 7.25% Nts., 12/1/03 480,000 480,757 - ------------------------------------------------------------------------------------------------------------------------------------ Commercial Credit Co., 5.55% Unsec. Nts., 2/15/01 1,130,000 1,134,696 - ------------------------------------------------------------------------------------------------------------------------------------ Countrywide Home Loans, Inc., 6.05% Medium-Term Nts., Series D, 3/1/01 700,000 706,383 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., Medium-Term Nts., 6.56%, 11/13/01 100,000 100,156 - ------------------------------------------------------------------------------------------------------------------------------------ Fleet Mtg. Group, Inc., 6.50% Nts., 9/15/99 250,000 252,138 - ------------------------------------------------------------------------------------------------------------------------------------ Ford Motor Credit Co., 6% Sr. Unsec. Nts., 1/14/03 1,000,000 1,012,104 - ------------------------------------------------------------------------------------------------------------------------------------ General Electric Capital Corp., 5.77% Nts., Series A, 8/27/01 1,000,000 1,023,930 - ------------------------------------------------------------------------------------------------------------------------------------ General Motors Acceptance Corp., 5.625% Nts., 2/15/01 162,000 163,311 - ------------------------------------------------------------------------------------------------------------------------------------ GS Escrow Corp., 6.75% Sr. Nts., 8/1/01(6) 1,000,000 979,418 - ------------------------------------------------------------------------------------------------------------------------------------ Norsk Hydro AS, 8.75% Bonds, 10/23/01 500,000 549,063 - ------------------------------------------------------------------------------------------------------------------------------------ PHH Corp., 6.50% Nts., 2/1/00 350,000 355,076 - ------------------------------------------------------------------------------------------------------------------------------------ Sears Roebuck Acceptance Corp., 6% Unsec. Bonds, 3/20/03 750,000 764,951 ------------ 8,151,430
21 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Insurance--1.2% Cigna Corp., 7.90% Nts., 12/14/98 $ 120,000 $ 120,318 - ------------------------------------------------------------------------------------------------------------------------------------ Conseco Financing Trust III, 8.796% Bonds, 4/1/27 850,000 872,073 - ------------------------------------------------------------------------------------------------------------------------------------ Conseco, Inc., 6.40% Nts., 6/15/01 500,000 494,985 - ------------------------------------------------------------------------------------------------------------------------------------ Equitable Life Assurance Society (U.S.A.), 6.95% Surplus Nts., 12/1/05(6) 500,000 532,530 - ------------------------------------------------------------------------------------------------------------------------------------ GenAmerica Capital I, 8.525% Nts., 6/30/27(6) 750,000 751,860 - ------------------------------------------------------------------------------------------------------------------------------------ Life Re Capital Trust I, 8.72% Nts., 6/15/27(6) 500,000 568,117 - ------------------------------------------------------------------------------------------------------------------------------------ Travelers Property Casualty Corp., 6.75% Nts., 4/15/01 615,000 638,951 ------------ 3,978,834 - ------------------------------------------------------------------------------------------------------------------------------------ Real Estate Investment Trusts--0.6% Chelsea GCA Realty Partner, Inc., 7.75% Unsec. Nts., 1/26/01 1,050,000 1,061,944 - ------------------------------------------------------------------------------------------------------------------------------------ First Industrial LP, 7.15% Bonds, 5/15/27 560,000 558,605 - ------------------------------------------------------------------------------------------------------------------------------------ Simon DeBartolo Group, Inc., 6.625% Nts., 6/15/03(6) 500,000 489,531 ------------ 2,110,080 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial--3.6% - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Materials--0.3% American Standard Cos., Inc., 10.875% Sr. Nts., 5/15/99(2) 840,000 858,900 - ------------------------------------------------------------------------------------------------------------------------------------ Industrial Services--2.4% Fred Meyer, Inc., 7.375% Sr. Nts., 3/1/05 1,250,000 1,318,801 - ------------------------------------------------------------------------------------------------------------------------------------ Norse CBO Ltd., 6.515% Collateralized Bond Obligations, Series 1A, Cl. A3, 8/13/10(2) 1,000,000 995,000 - ------------------------------------------------------------------------------------------------------------------------------------ Owens-Illinois, Inc., 7.15% Sr. Nts., 5/15/05 1,000,000 1,006,326 - ------------------------------------------------------------------------------------------------------------------------------------ Raytheon Co., 6.45% Nts., 8/15/02 500,000 517,909 - ------------------------------------------------------------------------------------------------------------------------------------ Sony Corp., 6.125% Bonds, 3/4/03 750,000 766,075 - ------------------------------------------------------------------------------------------------------------------------------------ Sun Co., Inc., 7.95% Debs., 12/15/01 1,175,000 1,258,041 - ------------------------------------------------------------------------------------------------------------------------------------ Tyco International Group SA, 6.125% Nts., 11/1/08(6) 500,000 495,590 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Industries, Inc., 7.125% Sr. Nts., 10/15/03(2) 500,000 501,550 - ------------------------------------------------------------------------------------------------------------------------------------ USI American Holdings, Inc., 7.25% Sr. Nts., Series B, 12/1/06 830,000 855,974 ------------ 7,715,266
22 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Manufacturing--0.3% U.S. Filter Corp., 6.375% Bonds, 5/15/01(6) $1,000,000 $ 999,626 - ------------------------------------------------------------------------------------------------------------------------------------ Transportation--0.6% CSX Corp., 7.05% Debs., 5/1/02 145,000 152,181 - ------------------------------------------------------------------------------------------------------------------------------------ Federal-Mogul Corp., 7.50% Nts., 7/1/04 500,000 492,548 - ------------------------------------------------------------------------------------------------------------------------------------ Norfolk Southern Corp., 7.35% Nts., 5/15/07 125,000 137,152 - ------------------------------------------------------------------------------------------------------------------------------------ Union Pacific Corp.: 7% Nts., 6/15/00 605,000 619,538 7.60% Nts., 5/1/05 500,000 538,732 ------------ 1,940,151 - ------------------------------------------------------------------------------------------------------------------------------------ Technology--1.3% - ------------------------------------------------------------------------------------------------------------------------------------ Aerospace/Defense--0.6% Lockheed Martin Corp., 6.85% Unsec. Nts., 5/15/01 1,250,000 1,300,543 - ------------------------------------------------------------------------------------------------------------------------------------ Northwest Airlines Corp., 8.375% Unsec. Nts., 3/15/04 750,000 764,492 ------------ 2,065,035 - ------------------------------------------------------------------------------------------------------------------------------------ Telecommunications/Technology--0.7% AT&T Capital Corp., 6.25% Medium-Term Nts., Series F, 5/15/01 725,000 710,878 - ------------------------------------------------------------------------------------------------------------------------------------ US West Capital Funding, Inc., 6.125% Nts., 7/15/02 500,000 516,008 - ------------------------------------------------------------------------------------------------------------------------------------ Worldcom, Inc., 6.25% Sr. Unsec. Nts., 8/15/03 1,000,000 1,038,171 ------------ 2,265,057 - ------------------------------------------------------------------------------------------------------------------------------------ Utilities--2.1% - ------------------------------------------------------------------------------------------------------------------------------------ Electric Utilities--0.8% El Paso Electric Co., 8.25% First Mtg. Bonds, Series C, 2/1/03 500,000 530,000 - ------------------------------------------------------------------------------------------------------------------------------------ Hawaiian Electric Industries, Inc., 6.31% Medium-Term Nts., Series B, 2/19/02 1,000,000 1,022,482 - ------------------------------------------------------------------------------------------------------------------------------------ Niagara Mohawk Power Corp., 7.125% Sr. Unsec. Nts., Series C, 7/1/01 1,000,000 1,018,321 ------------ 2,570,803
23 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Investments (Continued) - --------------------------------------------------------------------------------
Face Market Value Amount See Note 1 - ------------------------------------------------------------------------------------------------------------------------------------ Gas Utilities--1.0% Northern Illinois Gas Co., 6.45% First Mtg. Bonds, 8/1/01 $ 680,000 $ 697,281 - ------------------------------------------------------------------------------------------------------------------------------------ Southern California Gas Co., 6.38% Medium-Term Nts., 10/29/01 500,000 518,700 - ------------------------------------------------------------------------------------------------------------------------------------ Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 825,000 861,861 - ------------------------------------------------------------------------------------------------------------------------------------ Williams Cos., Inc., 6.20% Nts., 8/1/02 1,250,000 1,273,985 ------------ 3,351,827 - ------------------------------------------------------------------------------------------------------------------------------------ Telephone Utilities--0.3% Ameritech Capital Funding Corp., 5.65% Unsec. Nts., 1/15/01 850,000 868,185 ------------ Total Non-Convertible Corporate Bonds and Notes (Cost $63,833,000) 64,944,302 ==================================================================================================================================== Convertible Corporate Bonds and Notes--0.0% - ------------------------------------------------------------------------------------------------------------------------------------ BankAmerica Corp. (New), 8.50% Sub. Capital Nts., 3/1/99 40,000 40,388 - ------------------------------------------------------------------------------------------------------------------------------------ Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(7) 100,000 -- ------------ Total Convertible Corporate Bonds and Notes (Cost $135,112) 40,388 ==================================================================================================================================== Short-Term Notes--8.8% (8) - ------------------------------------------------------------------------------------------------------------------------------------ Federal Home Loan Mortgage Corp.: 4.78%, 11/4/98 8,000,000 7,996,813 5.14%, 11/12/98 5,600,000 5,591,290 5.425%, 11/17/98 10,000,000 9,978,756 - ------------------------------------------------------------------------------------------------------------------------------------ Federal National Mortgage Assn., 5.145%, 11/10/98 5,000,000 4,993,569 ------------ Total Short-Term Notes (Cost $28,560,428) 28,560,428 ==================================================================================================================================== Repurchase Agreements--2.7% - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreement with Zion First National Bank, 5.38%, dated 10/30/98, to be repurchased at $8,703,901 on 11/2/98, collateralized by U.S. Treasury Nts., 7.50%, 11/15/01, with a value of $8,887,611 (Cost $8,700,000) 8,700,000 8,700,000 - ------------------------------------------------------------------------------------------------------------------------------------ Total Investments, at Value (Cost $296,691,418) 98.0% 318,477,396 - ------------------------------------------------------------------------------------------------------------------------------------ Other Assets Net of Liabilities 2.0 6,658,836 ------------ ------------ Net Assets 100.0% $325,136,232 ============ ============
24 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. Non-income producing security. 2. Identifies issues considered to be illiquid or restricted--See Note 6 of Notes to Financial Statements. 3. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities typically decline in price as interest rates decline. Most other fixed income securities increase in price when interest rates decline. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The price of these securities is typically more sensitive to changes in prepayment rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest rates disclosed represent current yields based upon the current cost basis and estimated timing and amount of future cash flows. 4. Represents the current interest rate for a variable rate security. 5. Securities with an aggregate market value of $3,202,415 are held in collateralized accounts to cover initial margin requirements on open futures sales contracts. See Note 5 of Notes to Financial Statements. 6. Represents securities sold under Rule 144A, which are exempt from registration under the Securities Act of 1933, as amended. These securities have been determined to be liquid under guidelines established by the Board of Directors. These securities amount to $6,879,659 or 2.12% of the Fund's net assets as of October 31, 1998. 7. Non-income producing security--issuer is in default. 8. Short-term notes are generally traded on a discount basis; the interest rate is the discount rate received by the Fund at the time of purchase. See accompanying Notes to Financial Statements. 25 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Assets and Liabilities October 31, 1998 - -------------------------------------------------------------------------------- ================================================================================ Assets Investments, at value (cost $296,691,418)--see accompanying statement $318,477,396 - -------------------------------------------------------------------------------- Cash 119,647 - -------------------------------------------------------------------------------- Receivables and other assets: Investments sold 5,804,204 Interest, dividends and principal paydowns 2,225,440 Daily variation on futures contracts--Note 5 311,025 Shares of capital stock sold 165,252 Other 6,538 ------------ Total assets 327,109,502 ================================================================================ Liabilities Payables and other liabilities: Investments purchased 1,286,460 Shares of capital stock redeemed 350,875 Directors' fees--Note 1 126,704 Distribution and service plan fees 68,641 Shareholder reports 46,648 Transfer and shareholder servicing agent fees 39,052 Other 54,890 ------------ Total liabilities 1,973,270 ================================================================================ Net Assets $325,136,232 ============ ================================================================================ Composition of Net Assets Par value of shares of capital stock $ 21,031 - -------------------------------------------------------------------------------- Additional paid-in capital 294,014,624 - -------------------------------------------------------------------------------- Undistributed net investment income 986,365 - -------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 4,944,552 - -------------------------------------------------------------------------------- Net unrealized appreciation on investments and translation of assets and liabilities denominated in foreign currencies 25,169,660 ------------ Net assets $325,136,232 ============ 26 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ Net Asset Value Per Share Class A Shares: Net asset value and redemption price per share (based on net assets of $298,558,127 and 19,323,008 shares of capital stock outstanding) $15.45 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $16.39 - -------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $21,753,878 and 1,392,591 shares of capital stock outstanding) $15.62 - -------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $4,824,227 and 315,163 shares of capital stock outstanding) $15.31 See accompanying Notes to Financial Statements. 27 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statement of Operations For the Year Ended October 31, 1998 - -------------------------------------------------------------------------------- =============================================================================== Investment Income Interest $ 9,484,998 - ------------------------------------------------------------------------------- Dividends (net of foreign withholding taxes of $17,270) 1,929,206 ------------ Total income 11,414,204 =============================================================================== Expenses Management fees--Note 4 1,774,240 - ------------------------------------------------------------------------------- Distribution and service plan fees--Note 4: Class A 671,280 Class B 141,994 Class C 28,515 - ------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 258,679 - ------------------------------------------------------------------------------- Shareholder reports 67,412 - ------------------------------------------------------------------------------- Directors' fees and expenses--Note 1 30,000 - ------------------------------------------------------------------------------- Legal, auditing and other professional fees 29,150 - ------------------------------------------------------------------------------- Registration and filing fees: Class A 19,750 Class B 3,812 Class C 962 - ------------------------------------------------------------------------------- Accounting service fees--Note 4 15,000 - ------------------------------------------------------------------------------- Custodian fees and expenses 11,183 - ------------------------------------------------------------------------------- Insurance expenses 9,762 - ------------------------------------------------------------------------------- Other 36,942 ------------ Total expenses 3,098,681 =============================================================================== Net Investment Income 8,315,523 ================================================================================ Realized and Unrealized Gain (Loss) Net realized gain (loss) on: Investments 4,973,557 Closing of futures contracts 76,396 Foreign currency transactions (2,730) ------------ Net realized gain 5,047,223 - ------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments: Investments 233,468 Translation of assets and liabilities denominated in foreign currencies 579 ------------ Net change 234,047 ------------ Net realized and unrealized gain 5,281,270 =============================================================================== Net Increase in Net Assets Resulting from Operations $ 13,596,793 ============ See accompanying Notes to Financial Statements. 28 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Year Ended October 31, 1998 1997 =================================================================================================== Operations Net investment income $ 8,315,523 $ 7,729,813 - --------------------------------------------------------------------------------------------------- Net realized gain 5,047,223 27,308,175 - --------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation 234,047 7,070,415 ------------- ------------- Net increase in net assets resulting from operations 13,596,793 42,108,403 =================================================================================================== Dividends and Distributions to Shareholders Dividends from net investment income: Class A (7,782,493) (8,280,055) Class B (326,896) (168,085) Class C (68,904) (21,190) - --------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A (26,053,041) (19,860,930) Class B (1,001,059) (389,052) Class C (171,534) (21,246) =================================================================================================== Capital Stock Transactions Net increase (decrease) in net assets resulting from capital stock transactions--Note 2: Class A 75,962,031 (2,888,598) Class B 13,987,615 4,390,846 Class C 3,532,579 1,194,708 =================================================================================================== Net Assets Total increase 71,675,091 16,064,801 - --------------------------------------------------------------------------------------------------- Beginning of period 253,461,141 237,396,340 ------------- ------------- End of period (including undistributed net investment income of $986,365 and $828,581, respectively) $ 325,136,232 $ 253,461,141 ============= =============
See accompanying Notes to Financial Statements. 29 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Financial Highlights - --------------------------------------------------------------------------------
Class A ------------------------------------------ Year Ended October 31, 1998 1997 1996(3) ========================================================================================= Per Share Operating Data Net asset value, beginning of period $16.81 $16.00 $15.46 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .45 .51(4) .46 Net realized and unrealized gain (loss) .45 2.25(4) .49 ------ ------ ------ Total income (loss) from investment operations .90 2.76 .95 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.45) (.56) (.36) Distributions from net realized gain (1.81) (1.39) (.05) ------ ------ ------ Total dividends and distributions to shareholders (2.26) (1.95) (.41) - ----------------------------------------------------------------------------------------- Net asset value, end of period $15.45 $16.81 $16.00 ====== ====== ====== ========================================================================================= Total Return, at Net Asset Value(5) 5.93% 18.82% 6.27% ========================================================================================= Ratios/Supplemental Data Net assets, end of period (in thousands) $298,558 $243,267 $233,289 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $268,715 $238,821 $228,203 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 2.96% 3.17% 3.52%(6) Expenses 1.04% 1.11% 1.11%(6) - ----------------------------------------------------------------------------------------- Portfolio turnover rate(7) 96.9% 98.0% 85.4%
Class A ---------------------------------------- Year Ended December 31, 1995 1994 1993 ======================================================================================= Per Share Operating Data Net asset value, beginning of period $13.44 $14.54 $13.81 - --------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .60 .55 .48 Net realized and unrealized gain (loss) 2.59 (.86) 1.70 ------ ------ ------ Total income (loss) from investment operations 3.19 (.31) 2.18 - --------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.60) (.55) (.48) Distributions from net realized gain (.57) (.24) (.97) ------ ------ ------ Total dividends and distributions to shareholders (1.17) (.79) (1.45) - --------------------------------------------------------------------------------------- Net asset value, end of period $15.46 $13.44 $14.54 ====== ====== ====== ======================================================================================= Total Return, at Net Asset Value(5) 23.95% (2.11)% 15.89% ======================================================================================= Ratios/Supplemental Data Net assets, end of period (in thousands) $218,099 $177,904 $171,205 - --------------------------------------------------------------------------------------- Average net assets (in thousands) $200,172 $187,655 $138,629 - --------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 4.00% 3.80% 3.40% Expenses 1.17% 0.96% 1.02% - --------------------------------------------------------------------------------------- Portfolio turnover rate(7) 55.2% 115.0% 155.2%
1. For the period from May 1, 1996 (inception of offering) to October 31, 1996. 2. For the period from October 2, 1995 (inception of offering) to December 31, 1995. 3. For the ten months ended October 31, 1996. The Fund changed its fiscal year end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc. became the investment advisor to the Fund. 4. Per share amounts calculated based on the average shares outstanding during the period. 5. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 30 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Class B ------------------------------------------------------------------ Period Ended Year Ended October 31, December 31, 1998 1997 1996(3) 1995(2) ============================================================================================================ Per Share Operating Data Net asset value, beginning of period $16.99 $16.16 $15.66 $15.48 - ------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .36 .40(4) .31 .07 Net realized and unrealized gain (loss) .43 2.27(4) .54 .70 ------ ------ ------ ------ Total income (loss) from investment operations .79 2.67 .85 .77 - ------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.35) (.45) (.30) (.07) Distributions from net realized gain (1.81) (1.39) (.05) (.52) ------ ------ ------ ------ Total dividends and distributions to shareholders (2.16) (1.84) (.35) (.59) - ------------------------------------------------------------------------------------------------------------ Net asset value, end of period $15.62 $16.99 $16.16 $15.66 ====== ====== ====== ====== ============================================================================================================ Total Return, at Net Asset Value(5) 5.10% 17.96% 5.51% 4.93% ============================================================================================================ Ratios/Supplemental Data Net assets, end of period (in thousands) $21,754 $8,720 $3,919 $650 - ------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $14,235 $6,183 $2,324 $375 - ------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 2.19% 2.32% 2.86%(6) 0.73%(6) Expenses 1.80% 1.89% 1.85%(6) 1.92%(6) - ------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(7) 96.9% 98.0% 85.4% 55.2%
Class C ---------------------------------------- Year Ended October 31, 1998 1997 1996(1) ========================================================================================= Per Share Operating Data Net asset value, beginning of period $16.70 $15.93 $15.71 - ----------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .37 .44(4) .30 Net realized and unrealized gain (loss) .40 2.19(4) .32 ------ ------ ------ Total income (loss) from investment operations .77 2.63 .62 - ----------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.35) (.47) (.35) Distributions from net realized gain (1.81) (1.39) (.05) ------ ------ ------ Total dividends and distributions to shareholders (2.16) (1.86) (.40) - ----------------------------------------------------------------------------------------- Net asset value, end of period $15.31 $16.70 $15.93 ====== ====== ====== ========================================================================================= Total Return, at Net Asset Value(5) 5.10% 17.93% 4.08% ========================================================================================= Ratios/Supplemental Data Net assets, end of period (in thousands) $4,824 $1,473 $188 - ----------------------------------------------------------------------------------------- Average net assets (in thousands) $2,861 $ 805 $ 57 - ----------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 2.18% 2.18% 2.90%(6) Expenses 1.80% 1.92% 1.87%(6) - ----------------------------------------------------------------------------------------- Portfolio turnover rate(7) 96.9% 98.0% 85.4%
6. Annualized. 7. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended October 31, 1998 were $257,540,992 and $247,354,113, respectively. See accompanying Notes to Financial Statements. 31 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- ================================================================================ 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 to maximize total investment return (including both capital appreciation and income) principally by allocating its assets among stocks, corporate bonds, U.S. Government securities and money market instruments according to changing market conditions. The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class C shares. Class A shares are sold with a front-end sales charge. Class B and Class C shares may be subject to a contingent deferred sales charge. All 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 that class and exclusive voting rights with respect to matters affecting that class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- Investment Valuation. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Directors. Such securities which cannot be valued by an 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 foreign 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. 32 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Repurchase Agreements. The Fund requires the custodian to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all securities held as collateral for repurchase agreements. The market value of the underlying securities is required to be at least 102% of the resale price at the time of purchase. If the seller of the agreement defaults and the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of the value of the collateral by the Fund may be delayed or limited. - -------------------------------------------------------------------------------- Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. - -------------------------------------------------------------------------------- Directors' Fees and Expenses. The Fund has adopted a nonfunded retirement plan for the Fund's independent directors. Benefits are based on years of service and fees paid to each director during the years of service. During the year ended October 31, 1998, a provision of $3,008 was made for the Fund's projected benefit obligations and payments of $4,526 were made to retired directors, resulting in an accumulated liability of $124,637 as of October 31, 1998. The Board of Directors has adopted a deferred compensation plan for independent Directors that enables a Director to elect to defer receipt of all or a portion of annual fees they are entitled to receive from the Fund. Under the plan, the compensation deferred by a Director is periodically adjusted as though an equivalent amount had been invested in shares of one or more Oppenheimer funds selected by the Director. The amount paid to the Director under the plan will be determined based upon the performance of the selected funds. Deferral of Directors' fees under the plan will not materially affect the Fund's assets, liabilities or net income per share. - -------------------------------------------------------------------------------- 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. 33 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 1. Significant Accounting Policies (continued) Classification of Distributions to Shareholders. Net investment income (loss) and net realized gain (loss) may differ for financial statement and tax purposes 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 distributions made during the year from net investment income or net realized gains may differ from its 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 fiscal year in which the income or realized gain was recorded by the Fund. The Fund adjusts the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, during the year ended October 31, 1998, amounts have been reclassified to reflect a decrease in additional paid-in capital of $21,580, an increase in undistributed net investment income of $20,554, and an increase in accumulated net realized gain on investments of $1,026. - -------------------------------------------------------------------------------- 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 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. 34 Oppenheimer Disciplined Allocation 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:
Year Ended October 31, 1998 Year Ended October 31, 1997 ---------------------------- ---------------------------- Shares Amount Shares Amount - --------------------------------------------------------------------------------------------- Class A: Sold 1,454,634 $ 22,895,924 1,295,002 $ 20,645,750 Dividends and distributions reinvested 2,193,655 33,253,817 1,821,876 27,715,425 Issued in connection with the acquisition of Oppenheimer LifeSpan Balanced Fund--Note 7 4,023,572 64,135,741 -- -- Redeemed (2,818,335) (44,323,451) (3,224,574) (51,249,773) ------------ ------------ ------------ ------------ Net increase (decrease) 4,853,526 $ 75,962,031 (107,696) $ (2,888,598) ============ ============ ============ ============ - --------------------------------------------------------------------------------------------- Class B: Sold 589,123 $ 9,351,049 279,134 $ 4,555,544 Dividends and distributions reinvested 84,350 1,293,844 35,724 551,096 Issued in connection with the acquisition of Oppenheimer LifeSpan Balanced Fund--Note 7 328,973 5,299,757 -- -- Redeemed (123,259) (1,957,035) (43,911) (715,794) ------------ ------------ ------------ ------------ Net increase 879,187 $ 13,987,615 270,947 $ 4,390,846 ============ ============ ============ ============ - --------------------------------------------------------------------------------------------- Class C: Sold 193,669 $ 2,998,346 80,502 $ 1,266,698 Dividends and distributions reinvested 15,173 228,310 2,629 40,489 Issued in connection with the acquisition of Oppenheimer LifeSpan Balanced Fund--Note 7 70,016 1,105,546 -- -- Redeemed (51,932) (799,623) (6,697) (112,479) ------------ ------------ ------------ ------------ Net increase 226,926 $ 3,532,579 76,434 $ 1,194,708 ============ ============ ============ ============
================================================================================ 3. Unrealized Gains and Losses on Investments As of October 31, 1998, net unrealized appreciation on investments of $21,785,978 was composed of gross appreciation of $27,458,842, and gross depreciation of $5,672,864. 35 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Notes to Financial Statements (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% of the first $300 million of average annual net assets, 0.50% of the next $100 million and 0.45% of average annual net assets in excess of $400 million. The Manager acts as the accounting agent for the Fund at an annual fee of $15,000, plus out-of-pocket costs and expenses reasonably incurred. The Fund's management fee for the year ended October 31, 1998 was 0.62% of the average annual net assets for Class A, Class B and Class C shares. For the year ended October 31, 1998, commissions (sales charges paid by investors) on sales of Class A shares totaled $481,886, of which $397,054 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 A, Class B and Class C shares totaled $27,571, $316,680 and $21,560, respectively. Amounts paid to an affiliated broker/dealer for Class B and Class C shares were $111,293 and $5,503, respectively. During the year ended October 31, 1998, OFDI received contingent deferred sales charges of $30,404 and $2,562, respectively, upon redemption of Class B and Class C shares as reimbursement for sales commissions advanced by OFDI at the time of sale of such shares. OppenheimerFunds Services (OFS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund and other Oppenheimer funds. OFS's total costs of providing such services are allocated ratably to these funds. 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 shareholder 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 year ended October 31, 1998, OFDI paid $557,688 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses. 36 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ The Fund has adopted Distribution and Service Plans for Class B and Class C shares to compensate OFDI for its costs in distributing Class B and Class C shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class B and Class C shares, for its services rendered in distributing Class B and Class C shares. OFDI also receives a service fee of 0.25% per year to compensate dealers for providing personal services for accounts that hold Class B and Class C shares. Each fee is computed on the average annual net assets of Class B or Class C shares, determined as of the close of each regular business day. During the year ended October 31, 1998, OFDI paid $11,835 and $3,586, respectively, to an affiliated broker/dealer as compensation for Class B and Class C personal service and maintenance expenses and retained $122,183 and $22,102, respectively, as compensation for Class B and Class C sales commissions and service fee advances, as well as financing costs. If either 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 distributing shares before the Plan was terminated. As of October 31, 1998, OFDI had incurred excess distribution and servicing costs of $623,479 for Class B and $52,326 for Class C. ================================================================================ 5. Futures Contracts The Fund may buy and sell index futures contracts in order to gain exposure to or protect against changes in interest rates. The Fund may also buy or write put or call options on these futures contracts. The Fund generally sells futures contracts to hedge against increases in interest rates and the resulting negative effect on the value of fixed rate portfolio securities. The Fund may also purchase futures contracts to gain exposure to changes in interest rates as it may be more efficient or cost effective than actually buying fixed income securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin) in an amount equal to a certain percentage of the contract value. Subsequent payments (variation margin) are made or received by the Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. The Fund recognizes a realized gain or loss when the contract is closed or expires. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. The Statement of Assets and Liabilities reflects a receivable and/or payable for the daily mark to market for variation margin. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities. 37 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Notes to Financial Statements (Continued) - -------------------------------------------------------------------------------- ================================================================================ 5. Futures Contracts (continued) As of October 31, 1998, the Fund had outstanding futures contracts as follows:
Number of Valuation as of Unrealized Contract Description Expiration Date Contracts October 31, 1998 Appreciation - ----------------------------------------------------------------------------------------------- Contracts to Purchase Standard & Poor's 500 Index 12/98 143 $39,510,900 $3,383,103 ==========
================================================================================ 6. Illiquid and Restricted Securities As of October 31, 1998, investments in securities included issues that are illiquid or restricted. Restricted securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and are valued under methods approved by the Board of Directors as reflecting fair value. A security may be considered illiquid if it lacks a readily available market or if its valuation has not changed for a certain period of time. The Fund intends to invest no more than 10% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid or restricted securities. Certain restricted securities, eligible for resale to qualified institutional investors, are not subject to that limit. The aggregate value of illiquid or restricted securities subject to this limitation as of October 31, 1998, was $4,780,010, which represents 1.47% of the Fund's net assets. ================================================================================ 7. Acquisition of Oppenheimer LifeSpan Balanced Fund On June 12, 1998, the Fund acquired all the net assets of Oppenheimer LifeSpan Balanced Fund, pursuant to an agreement and plan of reorganization approved by the Oppenheimer LifeSpan Balanced Fund shareholders on June 9, 1998. The Fund issued (at an exchange ratio of 0.711330 for Class A, 0.789560 for Class B and 0.716167 for Class C of the Fund to one share of Oppenheimer LifeSpan Balanced Fund) 4,023,572, 328,973 and 70,016 shares of capital stock for Class A, Class B and Class C, respectively, valued at $64,135,741, $5,299,757 and $1,105,546 in exchange for the net assets, resulting in combined Class A net assets of $313,743,282, Class B net assets of $18,371,573 and Class C net assets of $3,985,465 on June 12, 1998. The net assets acquired included net unrealized appreciation of $3,969,222. The exchange qualified as a tax-free reorganization for federal income tax purposes. 38 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 8. Bank Borrowings The Fund may borrow from a bank for temporary or emergency purposes including, without limitation, funding of shareholder redemptions provided asset coverage for borrowings exceeds 300%. The Fund has entered into an agreement which enables it to participate with other Oppenheimer funds in an unsecured line of credit with a bank, which permits borrowings up to $400 million, collectively. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such loan is executed. The Fund also pays a commitment fee equal to its pro rata share of the average unutilized amount of the credit facility at a rate of 0.0575% per annum. The Fund had no borrowings outstanding during the year ended October 31, 1998. 39 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Independent Auditors' Report - -------------------------------------------------------------------------------- ================================================================================ The Board of Directors and Shareholders of Oppenheimer Disciplined Allocation Fund: We have audited the accompanying statements of investments and assets and liabilities of Oppenheimer Disciplined Allocation Fund as of October 31, 1998, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the two-year period then ended and the ten months ended October 31, 1996. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the years in the three-year period ended December 31, 1995 were audited by other auditors whose report dated February 9, 1996, expressed an unqualified opinion on this information. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1998, by correspondence with the custodian and brokers; and where confirmations were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer Disciplined Allocation Fund as of October 31, 1998, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the two-year period then ended and the ten months ended October 31, 1996, in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Denver, Colorado November 20, 1998 40 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Federal Income Tax Information (Unaudited) - -------------------------------------------------------------------------------- ================================================================================ In early 1999 shareholders will receive information regarding all dividends and distributions paid to them by the Fund during calendar year 1998. Regulations of the U.S. Treasury Department require the Fund to report this information to the Internal Revenue Service. Distributions of $1.9057, $1.8734 and $1.8746 per share were paid to Class A, Class B and Class C shareholders, respectively, on December 30, 1997, of which, for each class of shares, $0.4267 was designated as a capital gain distribution in the "28% Rate Group" and $0.5383 was designated as a capital gain distribution in the "20% Rate Group" for federal income tax purposes. Whether received in stock or cash, the capital gain distribution should be treated by shareholders as a gain from the sale of capital assets. Dividends paid by the Fund during the year ended October 31, 1998, which are not designated as capital gain distributions should be multiplied by 22.40% to arrive at the net amount eligible for the corporate dividend-received deduction. The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance. 41 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- Oppenheimer Disciplined Allocation 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 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 The Bank of New York Portfolio Securities ================================================================================ Independent Auditors KPMG Peat Marwick LLP ================================================================================ Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein This is a copy of a report to shareholders of Oppenheimer Disciplined 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, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. 42 Oppenheimer Disciplined Allocation Fund - -------------------------------------------------------------------------------- OppenheimerFunds Family - -------------------------------------------------------------------------------- ================================================================================================================= Real Asset Funds - ----------------------------------------------------------------------------------------------------------------- Real Asset Fund Gold & Special Minerals Fund ================================================================================================================= Global Stock Funds - ----------------------------------------------------------------------------------------------------------------- Developing Markets Fund International Growth Fund Quest Global Value Fund International Small Global Fund Global Growth & Income Fund Company Fund ================================================================================================================= Stock Funds - ----------------------------------------------------------------------------------------------------------------- Enterprise Fund MidCap Fund Growth Fund Discovery Fund Capital Appreciation Fund Disciplined Value Fund Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund ================================================================================================================= Stock & Bond Funds - ----------------------------------------------------------------------------------------------------------------- Main Street Income & Total Return Fund Disciplined Allocation Fund Growth Fund Quest Balanced Multiple Strategies Fund Quest Opportunity Value Fund(1) Convertible Securities Fund(2) Value Fund Equity Income Fund ================================================================================================================= Taxable Bond Funds - ----------------------------------------------------------------------------------------------------------------- International Bond Fund Champion Income Fund U.S. Government Trust World Bond Fund Strategic Income Fund Limited-Term Government Fund High Yield Fund Bond Fund ================================================================================================================= Municipal Bond Funds - ----------------------------------------------------------------------------------------------------------------- California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division: Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund ================================================================================================================= Money Market Funds(4) - ----------------------------------------------------------------------------------------------------------------- Money Market Fund Cash Reserves
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value Fund." 2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth." 3. Available only to investors in certain states. 4. An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although these funds may seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. (C)Copyright 1998 OppenheimerFunds, Inc. All rights reserved. 43 Oppenheimer Disciplined Allocation Fund Information and services - -------------------------------------------------------------------------------- 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 or by visiting our website. 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 or website 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, or visit us at our website at www.oppenheimerfunds.com--we're here to help. Internet 24-hr access to account information. Online transactions now available - ------------------------- www.oppenheimerfunds.com - ------------------------- General Information Mon-Fri 8:30am-9pm ET Sat 10am-4pm ET - ------------------------- 1-800-525-7048 - ------------------------- Account Transactions Mon-Fri 8:30am-8pm ET - ------------------------- 1-800-852-8457 - ------------------------- PhoneLink 24-hr automated information and automated transactions - ------------------------- 1-800-533-3310 - ------------------------- Telecommunication Device for the Deaf (TDD) Mon-Fri 8:30am-2pm 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 - ------------------------- [LOGO] OppenheimerFunds(R) Distributor, Inc. RA0205.001.1098 December 30, 1998 -----END PRIVACY-ENHANCED MESSAGE-----