0000912057-95-007269.txt : 19950905 0000912057-95-007269.hdr.sgml : 19950905 ACCESSION NUMBER: 0000912057-95-007269 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950901 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER INTEGRITY FUNDS CENTRAL INDEX KEY: 0000701265 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042912220 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-03420 FILM NUMBER: 95569998 BUSINESS ADDRESS: STREET 1: 3410 S GALENA CITY: DENVER STATE: CO ZIP: 80231 BUSINESS PHONE: 3036713200 MAIL ADDRESS: STREET 2: 3410 SOUTH GALENA STREET 3RD FL CITY: DENVER STATE: CO ZIP: 80231 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL INTEGRITY FUNDS DATE OF NAME CHANGE: 19910329 FORMER COMPANY: FORMER CONFORMED NAME: MASSMUTUAL LIQUID ASSETS TRUST DATE OF NAME CHANGE: 19880403 N-30D 1 N-30D OPPENHEIMER VALUE STOCK FUND Semiannual Report June 30, 1995 [PHOTO] "We want to invest for GROWTH in high-quality companies that pay dividends... but we want to buy these stocks at attractive PRICES." [LOGO] OPPENHEIMERFUNDS THIS FUND IS FOR PEOPLE WHO SEEK LONG-TERM GROWTH AND CURRENT INCOME FROM A FUND THAT LOOKS FOR GOOD VALUES WHEN BUYING STOCKS OF WELL-ESTABLISHED COMPANIES. NEWS ------------------------ BEAT THE AVERAGE ------------------------ Total Return for the 1-Year Period Ended 6/30/95: Oppenheimer Value Stock Fund Class A (at net asset value)1 ------------------------ 20.13% ------------------------ Lipper Growth & Income Funds Average3 ------------------------ 19.74% ------------------------ ------------------------------------------------------------------------------- HOW YOUR FUND IS MANAGED ------------------------------------------------------------------------------- Oppenheimer Value Stock Fund's basic investment strategy is to "buy low, sell high." The Fund's managers invest in stocks they believe are priced below their historical valuations, and sell stocks when they think they are overvalued. This strategy offers the potential for long-term capital appreciation because the Fund intends to invest in quality, well-established companies, and provide excellent value for your money. ------------------------------------------------------------------------------- PERFORMANCE ------------------------------------------------------------------------------- Total return at net asset value for the 6 months ended 6/30/95 was 15.64% for Class A shares and 15.15% for Class B shares.1 Your Fund's average annual total returns at maximum offering price for Class A shares for the 1- and 5-year periods ended 6/30/95 and since inception of the Class on 12/22/86 were 13.23%, 10.18% and 10.38%, respectively. For Class B shares, average annual total returns for the 1-year period ended 6/30/95 and since inception of the Class on 5/1/93 were 14.12% and 9.00%, respectively.2 ------------------------------------------------------------------------------- OUTLOOK ------------------------------------------------------------------------------- "We're hoping for better buying opportunities as the year continues. When the markets go straight up, it's hard to get your teeth into anything at the prices you want to pay. While we don't believe the bull market's coming to an end, we expect that the market may begin to fluctuate as we approach the end of the year. This is where we expect we'll find good buys. We're holding around 10% cash at this time--which is relatively high for us--and that's what we'll use to take advantage of opportunities that arise." David Salerno, Portfolio Manager Concert Capital Management, The Fund's Sub-Advisor June 30, 1995 All figures assume reinvestment of dividends and capital gains distributions. Past performance is not indicative of future results. Investment and principal value on 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. 1. Based on the change in net asset value per share for the period shown, without deducting any sales charges. Such performance would have been lower if sales charges were taken into account. 2. Class A returns show results of hypothetical investments on 6/30/94, 6/30/90 and 12/22/86 (inception of class), after deducting the current maximum initial sales charge of 5.75%. The Fund's maximum sales charge rate for Class A shares was lower during a portion of some of the periods shown, and actual investment results will be different as a result of the change. Class B returns show results of hypothetical investments on 6/30/94 and 5/1/93 (inception of class), and the deduction of the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). An explanation of the different performance calculations is in the Fund's prospectus. 3. Source: Lipper Analytical Services. The Lipper total return average for the period ended 6/30/95 was for 374 growth and income funds. The average is shown for comparative purposes only. Oppenheimer Value Stock Fund is characterized by Lipper as a growth and income fund. Lipper performance does not take sales charges into consideration. 2 Oppenheimer Value Stock Fund Dear OppenheimerFunds Shareholder, In the first six months of 1995, the stock and bond markets have improved significantly. The Federal Reserve's seven interest rate hikes between February 1994 and February 1995 appear to have achieved their intended effect, as the rate of economic growth has slowed throughout the year. This economic outlook of sustainable, healthy growth with low inflation, falling interest rates, and talk of deficit reduction inspired investors' confidence in the stock market. As a result, the Dow Jones Industrial Average hit record highs repeatedly in the first half of the year. The stock market has been strong for other reasons as well. Overall, corporate America has done an excellent job of restructuring, and has become more productive and profitable. Combined with continued investment in technology and increased competitiveness abroad as a result of a weaker dollar, these events resulted in spectacular first quarter earnings reports. While the market's rise this year has been dramatic, it has caused our equity investment team to become slightly more cautious. Because the market has already registered significant gains this year, the stock market is starting to see signs of short-term volatility, and your Fund's managers want to protect the gains the Fund has made. Still, the market's expansion has been fueled by underlying fundamental strengths. So, while we are cautious, we believe it has room to continue. Congress's continuing emphasis on deficit reduction, plus Washington's commitment to correcting our trade imbalance, should benefit the market--in addition to attracting foreign investments to U.S. stocks, creating even greater demand and possibly pushing their prices up further. Should the economy slow more than anticipated, however, we would expect to see earnings slow eventually, which could cause the market to hesitate. In this event, smaller companies and international stocks could begin to outperform the large, globally-oriented companies that have led the market so far this year. However, until your Fund's managers see signs of either increased inflation or recession on the horizon, they remain constructive on the market in general and will view any volatility in the near term as a time to search for buying opportunities. At OppenheimerFunds, our approach to the stock market is to invest with a long-term view, to participate in upswings while remaining prudent, and, finally, to know when to become more defensive to protect the gains we have made. Your portfolio manager discusses the outlook for your Fund on the following pages. Thank you for your confidence in OppenheimerFunds, and we look forward to helping you continue to reach your investment goals in the future. /s/ James C. Swain /s/ Jon S. Fossel James C. Swain Jon S. Fossel July 24, 1995 [PHOTO] James C. Swain Chairman Oppenheimer Value Stock Fund [PHOTO] Jon S. Fossel President Oppenheimer Value Stock Fund 3 Oppenheimer Value Stock Fund DAVID SALERNO Porfolio Manager Q+A An interview with the Fund's managers. THE FUND HAS DONE VERY WELL OVER THE PAST SIX MONTHS. TO WHAT EXTENT HAVE VALUE STOCKS, IN GENERAL, SHARED IN THIS YEAR'S MARKET EXPANSION? Fully. Since the beginning of the year, growth and value stocks have been par- ticipating in the upswing side by side. Rather than differentiating between stocks based on those characteristics, so far this year the market has been favoring large-cap stocks over smaller ones. That's something we expect to see reverse as the year continues. WHAT HAVE YOU ADDED TO THE PORTFOLIO, AND WHY? We've only added four names to the portfolio over this period because the market's been so strong. We refuse to pay high prices for stocks, so we plan to turn short-term volatility to our advantage. We've added American Brands, which sold its tobacco business in the U.S. last year and without the litigation liability that goes along with tobacco, the company's stock will probably sell more like a consumer products firm. We've also added Sears. With the company scheduled to spin off the rest of its holdings in Allstate over the summer, we believe that it's a very inexpensive way to invest in the retail sector. In addition, we bought AT&T. We want to participate in the long distance telecommunications industry as well as the global information network, and we think AT&T will be a leader in equipment and systems integration. And finally, we purchased Albertson's, the fourth largest supermarket chain with strong positions in the West and South. The food retailing group has been out of favor because the lack of price inflation on food has squeezed operating margins.1 HOW ARE YOU POSITIONING THE FUND IN LIGHT OF CURRENT ECONOMIC AND MARKET CONDITIONS? We're a bottom-up manager, meaning we generally consider company and stock fundamentals before considering a macroeconomic outlook. In the first half of '95, however, we've been increasing our position in consumer non-durables, or companies that are not generally affected by economic cycles, through positions in Bristol-Myers and American Brands. Companies in this sector should be able to maintain profitability even in a slower economy. By the same token, we've been sellers in more cyclical areas. We've reduced our commodity chemicals holdings--companies like DuPont and Eastman Chemical. We've also reduced Parker-Hannifin and Dover, two machinery companies. WHAT IS YOUR OUTLOOK FOR THE FUND FOR THE REMAINDER OF 1995? We're hoping for better buying opportunities as the year continues. When the markets go straight up, it's hard to get your teeth into anything at the prices you want to pay. While we don't believe the bull market is coming to an end, we expect that the market may begin to fluctuate as we approach the end of the year. This is where we expect we'll find good buys. We're holding around 10% cash at this time--which is relatively high for us--and that's what we'll use when we see opportunities arise. 1. The Fund's portfolio is subject to change. 4 Oppenheimer Value Stock Fund STATEMENT OF INVESTMENTS JUNE 30, 1995 (UNAUDITED)
FACE MARKET VALUE AMOUNT SEE NOTE 1 ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM NOTES--10.6% ------------------------------------------------------------------------------------------------------------------------------------ ConAgra, Inc., 6.17%, 7/14/95 $1,900,000 $1,895,767 ----------------------------------------------------------------------------------------------------------------------------------- Eastman Chemical Co., 6.10%, 7/20/95 1,570,000 1,564,945 ----------------------------------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., 5.95%-5.97%, 7/5/95 985,000 984,347 ----------------------------------------------------------------------------------------------------------------------------------- Illinois Power Co., 6.10%, 7/11/95 1,955,000 1,951,687 ----------------------------------------------------------------------------------------------------------------------------------- Rite Aid Corp., 6.15%, 7/13/95 1,940,000 1,936,023 ----------------------------------------------------------------------------------------------------------------------------------- Ryder System, Inc., 6.10%, 7/6/95 2,000,000 1,998,306 ----------------------------------------------------------------------------------------------------------------------------------- Textron Financial Corp., 6.07%, 7/10/95 2,000,000 1,996,965 ----------------------------------------------------------------------------------------------------------------------------------- Tyson Foods, Inc., 6.07%, 7/12/95 2,000,000 1,996,291 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL SHORT-TERM NOTES (COST $14,324,331) 14,324,331 SHARES ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--89.5% ----------------------------------------------------------------------------------------------------------------------------------- BASIC MATERIALS--8.4% ----------------------------------------------------------------------------------------------------------------------------------- CHEMICALS--4.4% Du Pont (E.I.) De Nemours & Co. 20,000 1,375,000 ----------------------------------------------------------------------------------------------------------------------------------- Eastman Chemical Co. 31,800 1,892,100 ----------------------------------------------------------------------------------------------------------------------------------- Lubrizol Corp. (The) 40,000 1,415,000 ----------------------------------------------------------------------------------------------------------------------------------- Nalco Chemical Co. 33,000 1,200,375 ----------------------------------------------------------------------------------------------------------------------------------- 5,882,475 ----------------------------------------------------------------------------------------------------------------------------------- METALS--0.7% Reynolds Metals Co. 18,500 957,375 ----------------------------------------------------------------------------------------------------------------------------------- PAPER--3.3% Westvaco Corp. 34,500 1,526,625 ----------------------------------------------------------------------------------------------------------------------------------- Weyerhaeuser Co. 61,500 2,898,188 ----------------------------------------------------------------------------------------------------------------------------------- 4,424,813 ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER CYCLICALS--13.6% ----------------------------------------------------------------------------------------------------------------------------------- AUTOS & HOUSING--5.2% Ford Motor Co. 52,500 1,561,875 ----------------------------------------------------------------------------------------------------------------------------------- Genuine Parts Co. 50,500 1,912,688 ----------------------------------------------------------------------------------------------------------------------------------- Goodyear Tire & Rubber Co. 49,500 2,041,875 ----------------------------------------------------------------------------------------------------------------------------------- Stanley Works (The) 39,000 1,477,125 ----------------------------------------------------------------------------------------------------------------------------------- 6,993,563 ----------------------------------------------------------------------------------------------------------------------------------- LEISURE & ENTERTAINMENT--1.1% Eastman Kodak Co. 25,000 1,515,625 ----------------------------------------------------------------------------------------------------------------------------------- MEDIA--3.0% Dun & Bradstreet Corp. (The) 37,000 1,942,500 ----------------------------------------------------------------------------------------------------------------------------------- McGraw-Hill, Inc. 27,000 2,048,625 ----------------------------------------------------------------------------------------------------------------------------------- 3,991,125 ----------------------------------------------------------------------------------------------------------------------------------- RETAIL: GENERAL--4.3% Kmart Corp. 7,300 106,763 ----------------------------------------------------------------------------------------------------------------------------------- May Department Stores Co. 51,500 2,143,688 ----------------------------------------------------------------------------------------------------------------------------------- Penney (J.C.) Co., Inc. 14,500 696,000 ----------------------------------------------------------------------------------------------------------------------------------- Sears, Roebuck & Co. 24,000 1,437,000 ----------------------------------------------------------------------------------------------------------------------------------- VF Corp. 26,500 1,424,375 ----------------------------------------------------------------------------------------------------------------------------------- 5,807,826
5 Oppenheimer Value Stock Fund STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES SEE NOTE 1 ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER NON-CYCLICALS--16.4% ------------------------------------------------------------------------------------------------------------------------------------ BEVERAGES--2.0% Brown-Forman Corp., Cl. B 40,500 $1,351,688 ----------------------------------------------------------------------------------------------------------------------------------- PepsiCo, Inc. 28,000 1,277,500 ----------------------------------------------------------------------------------------------------------------------------------- 2,629,188 ----------------------------------------------------------------------------------------------------------------------------------- FOOD--4.2% Albertson's, Inc. 22,700 675,320 ----------------------------------------------------------------------------------------------------------------------------------- Archer-Daniels-Midland Co. 69,990 1,303,560 ----------------------------------------------------------------------------------------------------------------------------------- CPC International, Inc. 36,000 2,223,000 ----------------------------------------------------------------------------------------------------------------------------------- Pioneer Hi-Bred International, Inc. 33,000 1,386,000 ----------------------------------------------------------------------------------------------------------------------------------- 5,587,880 ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/DRUGS--6.7% Bristol-Myers Squibb Co. 58,000 3,951,250 ----------------------------------------------------------------------------------------------------------------------------------- Pfizer, Inc. 35,000 3,233,125 ----------------------------------------------------------------------------------------------------------------------------------- Schering-Plough Corp. 40,600 1,791,475 ----------------------------------------------------------------------------------------------------------------------------------- 8,975,850 ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE/SUPPLIES & SERVICES--1.3% Becton, Dickinson & Co. 31,000 1,805,750 ----------------------------------------------------------------------------------------------------------------------------------- HOUSEHOLD GOODS--0.9% Clorox Co. (The) 19,500 1,272,375 ----------------------------------------------------------------------------------------------------------------------------------- TOBACCO--1.3% American Brands, Inc. 45,500 1,808,625 ----------------------------------------------------------------------------------------------------------------------------------- ENERGY--7.7% ----------------------------------------------------------------------------------------------------------------------------------- ENERGY SERVICES & PRODUCERS--1.2% Kerr-McGee Corp. 28,900 1,549,763 ----------------------------------------------------------------------------------------------------------------------------------- OIL-INTEGRATED--6.5% Amoco Corp. 37,000 2,465,125 ----------------------------------------------------------------------------------------------------------------------------------- Atlantic Richfield Co. 17,500 1,920,625 ----------------------------------------------------------------------------------------------------------------------------------- Chevron Corp. 53,500 2,494,438 ----------------------------------------------------------------------------------------------------------------------------------- Mobil Corp. 20,000 1,920,000 ----------------------------------------------------------------------------------------------------------------------------------- 8,800,188 ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL--10.9% ----------------------------------------------------------------------------------------------------------------------------------- BANKS--6.4% Bank of New York, Inc. 57,900 2,337,713 ----------------------------------------------------------------------------------------------------------------------------------- Comerica, Inc. 60,000 1,927,500 ----------------------------------------------------------------------------------------------------------------------------------- CoreStates Financial Corp. 54,000 1,883,250 ----------------------------------------------------------------------------------------------------------------------------------- Norwest Corp. 41,500 1,193,125 ----------------------------------------------------------------------------------------------------------------------------------- Wachovia Corp. 35,540 1,270,555 ----------------------------------------------------------------------------------------------------------------------------------- 8,612,143
6 Oppenheimer Value Stock Fund
MARKET VALUE SHARES SEE NOTE 1 ------------------------------------------------------------------------------------------------------------------------------------ DIVERSIFIED FINANCIAL--1.4% American Express Co. 52,500 $1,844,063 ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE--3.1% Jefferson-Pilot Corp. 18,550 1,015,613 ------------------------------------------------------------------------------------------------ Safeco Corp. 41,500 2,383,656 ------------------------------------------------------------------------------------------------ Unitrin, Inc. 17,500 831,250 ---------- 4,230,519 ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL--15.6% ----------------------------------------------------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--8.3% AMP, Inc. 74,400 3,143,400 ----------------------------------------------------------------------------------------------------------------------------------- General Electric Co. 60,500 3,410,688 ------------------------------------------------------------------------------------------------ Grainger (W.W.), Inc. 27,000 1,586,250 ------------------------------------------------------------------------------------------------ Honeywell, Inc. 32,500 1,401,563 ------------------------------------------------------------------------------------------------ Hubbell, Inc., Cl. B 28,997 1,638,331 ---------- 11,180,232 ----------------------------------------------------------------------------------------------------------------------------------- INDUSTRIAL SERVICES--1.3% Donnelley (R.R.) & Sons Co. 48,000 1,728,000 ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING--4.0% Dover Corp. 19,300 1,404,075 ------------------------------------------------------------------------------------------------ General Signal Corp. 36,500 1,450,875 ------------------------------------------------------------------------------------------------ Harsco Corp. 23,000 1,213,250 ------------------------------------------------------------------------------------------------ Parker-Hannifin Corp. 37,500 1,359,375 ---------- 5,427,575 ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION--2.0% Norfolk Southern Corp. 29,000 1,953,875 ------------------------------------------------------------------------------------------------ Roadway Services, Inc. 15,000 708,750 ---------- 2,662,625 ----------------------------------------------------------------------------------------------------------------------------------- TECHNOLOGY--13.2% ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/DEFENSE--2.0% Boeing Co. (The) 26,500 1,659,563 ------------------------------------------------------------------------------------------------ TRW, Inc. 12,500 998,438 ---------- 2,658,001 ----------------------------------------------------------------------------------------------------------------------------------- COMPUTER HARDWARE--5.5% International Business Machines Corp. 13,500 1,296,000 ------------------------------------------------------------------------------------------------ Minnesota Mining & Manufacturing Co. 45,000 2,576,250 ------------------------------------------------------------------------------------------------ Pitney Bowes, Inc. 47,500 1,822,813 ------------------------------------------------------------------------------------------------ Xerox Corp. 14,500 1,700,125 ---------- 7,395,188
7 Oppenheimer Value Stock Fund STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
MARKET VALUE SHARES SEE NOTE 1 ------------------------------------------------------------------------------------------------------------------------------------ ELECTRONICS--2.6% Hewlett-Packard Co. 48,000 $3,576,000 ----------------------------------------------------------------------------------------------------------------------------------- TELECOMMUNICATIONS- TECHNOLOGY--3.1% AT&T Corp. 51,000 2,709,375 ------------------------------------------------------------------------------------------------ Frontier Corp. 59,000 1,416,000 ---------- 4,125,375 ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES--3.7% ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--1.9% Niagara Mohawk Power Corp. 56,500 833,375 ------------------------------------------------------------------------------------------------ NIPSCO Industries, Inc. 21,500 731,000 ------------------------------------------------------------------------------------------------ SCANA Corp. 45,500 1,018,063 ---------- 2,582,438 ----------------------------------------------------------------------------------------------------------------------------------- GAS UTILITIES--0.4% Consolidated Natural Gas Co. 12,500 471,875 ----------------------------------------------------------------------------------------------------------------------------------- TELEPHONE UTILITIES--1.4% Ameritech Corp. 23,000 1,012,000 ------------------------------------------------------------------------------------------------ Southern New England Telecommunications Corp. 26,500 934,125 ---------- 1,946,125 ----------------------------------------------------------------------------------------------------------------------------------- Total Common Stocks (Cost $92,036,929) 120,442,580 ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (Cost $106,361,260) 100.1% 134,766,911 ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (91,577) ------ ------------ NET ASSETS 100.0% $134,675,334 ------ ------------ ------ ------------
See accompanying Notes to Financial Statements. 8 Oppenheimer Value Stock Fund STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1995 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $106,361,260)--see accompanying statement $134,766,911 ------------------------------------------------------------------------------------------------- Receivables: Shares of beneficial interest sold 347,940 Interest and dividends 255,194 ------------------------------------------------------------------------------------------------ Other 15,539 ------------------------------------------------------------------------------------------------ Total assets 135,385,584 ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft 85,092 ------------------------------------------------------------------------------------------------ Payables and other liabilities: Shares of beneficial interest redeemed 286,584 Investments purchased 198,831 Distribution and service plan fees--Note 4 79,486 Transfer and shareholder servicing agent fees 7,398 Trustees' fees 855 Other 52,004 ------------------------------------------------------------------------------------------------ Total liabilities 710,250 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $134,675,334 ------------ ------------ ----------------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF Paid-in capital $104,210,490 NET ASSETS ----------------------------------------------------------------------------------------------- Undistributed net investment income 128,240 ------------------------------------------------------------------------------------------------ Accumulated net realized gain from investment transactions 1,930,952 ------------------------------------------------------------------------------------------------ Net unrealized appreciation on investments--Note 3 28,405,652 ------------ Net assets $134,675,334 ------------ ------------ ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE Class A Shares: PER SHARE Net asset value and redemption price per share (based on net assets of $115,655,447 and 7,123,352 shares of beneficial interest outstanding) $16.24 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $17.23 ------------------------------------------------------------------------------------------------ Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $19,019,887 and 1,178,067 shares of beneficial interest outstanding) $16.14
See accompanying Notes to Financial Statements. 9 Oppenheimer Value Stock Fund STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME Interest $ 384,980 ------------------------------------------------------------------------------------------------- Dividends 1,595,245 ----------------------------------------------------------------------------------------------------------------------------------- Total income 1,980,225 ----------------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fees--Note 4 441,669 ------------------------------------------------------------------------------------------------ Distribution and service plan fees: Class A--Note 4 128,508 Class B--Note 4 72,934 ------------------------------------------------------------------------------------------------ Transfer and shareholder servicing agent fees--Note 4 76,210 ------------------------------------------------------------------------------------------------ Shareholder reports 27,516 ------------------------------------------------------------------------------------------------ Custodian fees and expenses 7,949 ------------------------------------------------------------------------------------------------ Registration and filing fees: Class A 5,754 Class B 2,103 ------------------------------------------------------------------------------------------------ Legal and auditing fees 5,823 ------------------------------------------------------------------------------------------------ Trustees' fees and expenses 3,183 ------------------------------------------------------------------------------------------------ Other 156 ----------- Total expenses 771,805 ----------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 1,208,420 ----------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED Net realized gain on investments 1,899,595 GAIN ON INVESTMENTS ------------------------------------------------------------------------------------------------ Net change in unrealized appreciation or depreciation on investments 14,050,826 ----------- Net realized and unrealized gain on investments 15,950,421 ----------------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,158,841 ----------- -----------
See accompanying Notes to Financial Statements. 10 Oppenheimer Value Stock Fund STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1995 DECEMBER 31, (UNAUDITED) 1994 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 1,208,420 $ 2,055,994 ----------------------------------------------------------------------------------------------------------- Net realized gain on investments 1,899,595 2,820,946 ---------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 14,050,826 (1,764,415) ------------ ------------ Net increase in net assets resulting from operations 17,158,841 3,112,525 ----------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND Dividends from net investment income: DISTRIBUTIONS TO Class A ($.13 and $.31 per share, respectively) (912,291) (1,921,684) SHAREHOLDERS Class B ($.082 and $.209 per share, respectively) (88,015) (130,461) ---------------------------------------------------------------------------------------------------------- Dividends in excess of net investment income: Class A ($.01 per share) -- (74,310) Class B ($.01 per share) -- (5,047) ---------------------------------------------------------------------------------------------------------- Distributions from net realized gain on investments: Class A ($.395 per share) -- (2,490,365) Class B ($.395 per share) -- (290,318) ----------------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST Net increase in net assets resulting from Class A TRANSACTIONS beneficial interest transactions--Note 2 8,733,244 3,834,762 ---------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from Class B beneficial interest transactions--Note 2 6,162,895 5,957,338 ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase 31,054,674 7,992,440 ---------------------------------------------------------------------------------------------------------- Beginning of period 103,620,660 95,628,220 ------------ ------------ End of period [including undistributed (overdistributed) net investment income of $128,240 and $(79,874), respectively] $134,675,334 $103,620,660 ------------ ------------ ------------ ------------
See accompanying Notes to Financial Statements. 11 Oppenheimer Value Stock Fund FINANCIAL HIGHLIGHTS
CLASS A ------------------------------------------------------------------ SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DECEMBER 31, (Unaudited) 1994 1993 1992 1991(2) 1990 ------------------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA: Net asset value, beginning of period $14.16 $14.41 $14.19 $13.57 $11.39 $12.08 ------------------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income .16 .31 .29 .32 .33 .37 Net realized and unrealized gain (loss) on investments 2.05 .16 .98 .97 2.49 (.57) ------ ------ ------ ------ ------ ----- Total income (loss) from investment operations 2.21 .47 1.27 1.29 2.82 (.20) ------------------------------------------------------------------------------------------------------------------------ Dividends and distributions to shareholders: Dividends from net investment income (.13) (.31) (.29) (.32) (.33) (.39) Dividends in excess of net investment income -- (.01) -- -- -- -- Distributions from net realized gain on investments -- (.40) (.76) (.35) (.31) (.10) ------ ------ ------ ------ ------ ----- Total dividends and distributions to shareholders (.13) (.72) (1.05) (.67) (.64) (.49) ------------------------------------------------------------------------------------------------------------------------ Net asset value, end of period $16.24 $14.16 $14.41 $14.19 $13.57 $11.39 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------------------------------------------------------------------------------------------------------------------------ Total Return, at Net Asset Value(3) 15.64% 3.28% 8.97% 9.61% 25.23% (1.53)% ------------------------------------------------------------------------------------------------------------------------ Ratios/Supplemental Data: Net assets, end of period (in thousands) $115,655 $92,728 $90,470 $59,376 $49,381 $40,153 ------------------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $104,977 $90,158 $80,229 $53,485 $45,581 $39,104 ------------------------------------------------------------------------------------------------------------------------ Number of shares outstanding at end of period (in thousands) 7,123 6,548 6,280 4,184 3,639 3,526 ------------------------------------------------------------------------------------------------------------------------ Ratios to average net assets: Net investment income 2.13%(4) 2.16% 1.97% 2.34% 2.59% 3.22% Expenses, before voluntary reimbursement 1.20%(4) 1.27% 1.24% 1.19% 1.31% 1.36% Expenses, net of voluntary reimbursement N/A N/A N/A N/A 1.26% 1.30% ------------------------------------------------------------------------------------------------------------------------ Portfolio turnover rate(5) 7.5% 16.3% 24.3% 12.3% 14.5% 13.5% FINANCIAL HIGHLIGHTS CLASS B --------------------------------------- SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DECEMBER 31, (Unaudited) 1994 1993(1) ---------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $14.09 $14.35 $14.60 ---------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .11 .17 .17 Net realized and unrealized gain (loss) on investments 2.02 .19 .51 ------ ------ ------ Total income (loss) from investment operations 2.13 .36 .68 --------------------------------------------------------------------------------------------- Dividends and distributions to shareholders: Dividends from net investment income (.08) (.21) (.17) Dividends in excess of net investment income -- (.01) -- Distributions from net realized gain on investments -- (.40) (.76) ------ ------ ------ Total dividends and distributions to shareholders (.08) (.62) (.93) --------------------------------------------------------------------------------------------- Net asset value, end of period $16.14 $14.09 $14.35 ------ ------ ------ ------ ------ ------ --------------------------------------------------------------------------------------------- Total Return, at Net Asset Value(3) 15.15% 2.50% 4.63% --------------------------------------------------------------------------------------------- Ratios/Supplemental Data: Net assets, end of period (in thousands) $19,020 $10,893 $5,158 --------------------------------------------------------------------------------------------- Average net assets (in thousands) $14,729 $7,834 $2,527 --------------------------------------------------------------------------------------------- Number of shares outstanding at end of period (in thousands) 1,178 773 359 --------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 1.35%(4) 1.45% .97%(4) Expenses, before voluntary reimbursement 1.99%(4) 2.01% 2.14%(4) Expenses, net of voluntary reimbursement N/A N/A N/A --------------------------------------------------------------------------------------------- Portfolio turnover rate(5) 7.5% 16.3% 24.3% 1. For the period from May 1, 1993 (inception of offering) to December 31, 1993. 2. On March 28, 1991, Oppenheimer Management Corporation became the investment advisor to the Fund. 3. Assumes a hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods of less than one full year. 4. Annualized. 5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended June 30, 1995 were $18,123,183 and $8,078,381, respectively.
See accompanying Notes to Financial Statements. 12 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- 1. SIGNIFICANT Oppenheimer Value Stock Fund (the Fund) ACCOUNTING POLICIES is a separate fund of Oppenheimer Integrity Funds, a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended. The Fund's investment advisor is Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class B shares. Class A shares are sold with a front-end sales charge. Class B shares may be subject to a contingent deferred sales charge. Both classes of shares have identical rights to earnings, assets and voting privileges, except that each class has its own distribution and/or service plan, expenses directly attributable to a particular class and exclusive voting rights with respect to matters affecting a single class. Class B shares will automatically convert to Class A shares six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. -------------------------------------------------------------------------------- INVESTMENT VALUATION. Portfolio securities are valued at the close of the New York Stock Exchange on each trading day. Listed and unlisted securities for which such information is regularly reported are valued at the last sale price of the day or, in the absence of sales, at values based on the closing bid or asked price or the last sale price on the prior trading day. Long-term and short-term "non-money market" debt securities are valued by a portfolio pricing service approved by the Board of Trustees. Such securities which cannot be valued by the approved portfolio pricing service are valued using dealer-supplied valuations provided the Manager is satisfied that the firm rendering the quotes is reliable and that the quotes reflect current market value, or under consistently applied procedures established by the Board of Trustees to determine fair value in good faith. Short-term "money market type" debt securities having a remaining maturity of 60 days or less are valued at cost (or last determined market value) adjusted for amortization to maturity of any premium or discount. ------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES Income, expenses (other than those AND GAINS AND LOSSES. attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. ------------------------------------------------------------------------------- FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. ------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders are recorded on the ex-dividend date. ------------------------------------------------------------------------------- CLASSIFICATION OF DISTRIBUTIONS The character of the distributions made TO SHAREHOLDERS. during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. ------------------------------------------------------------------------------- OTHER. Investment transactions are accounted for on the date the investments are purchased or sold (trade date) and dividend income is recorded on the ex-dividend date. Realized gains and losses on investments and unrealized appreciation and depreciation are determined on an identified cost basis, which is the same basis used for federal income tax purposes. 13 Oppenheimer Value Stock Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) ------------------------------------------------------------------------------- 2. SHARES OF The Fund has authorized an unlimited BENEFICIAL INTEREST number of no par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DECEMBER 31, 1994 ------------------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT -------------------------------------------------------------------------------------------------------------------------------- Class A: Sold 943,616 $14,329,238 1,880,960 $27,360,226 Dividends and distributions reinvested 55,904 882,356 311,720 4,414,279 Redeemed (424,428) (6,478,350) (1,924,358) (27,939,743) -------- ---------- ---------- ----------- Net increase 575,092 $8,733,244 268,322 $3,834,762 -------- ---------- ---------- ----------- -------- ---------- ---------- ----------- --------------------------------------------------------------------------------------------------------------------------------- Class B: Sold 532,948 $8,103,073 499,617 $7,201,783 Dividends and distributions reinvested 5,031 79,269 28,292 397,953 Redeemed (132,874) (2,019,447) (114,417) (1,642,398) --------- ---------- ---------- ---------- Net increase 405,105 $6,162,895 413,492 $5,957,338 --------- ---------- ---------- ---------- --------- ---------- ---------- ----------
-------------------------------------------------------------------------------- 3. UNREALIZED GAINS AND At June 30, 1995, net unrealized appreciation LOSSES ON INVESTMENTS on investments of $28,405,652 was composed of gross appreciation of $29,116,886, and gross depreciation of $711,234. ------------------------------------------------------------------------------- 4. MANAGEMENT FEES AND Management fees paid to the Manager were in OTHER TRANSACTIONS accordance with the investment advisory WITH AFFILIATES agreement with the Fund which provides for a fee of .75% on the first $100 million of average annual net assets with a reduction of .03% on each $200 million thereafter, to .66% on net assets in excess of $500 million. The Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the most stringent state regulatory limit on Fund expenses. For the six months ended June 30, 1995, commissions (sales charges paid by investors) on sales of Class A shares totaled $146,295, of which $88,195 was retained by Oppenheimer Funds Distributor, Inc., (OFDI), a subsidiary of the Manager, as general distributor, and by an affiliated broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B shares totaled $204,892, of which $37,505 was paid to an affiliated broker/dealer. During the six months ended June 30, 1995, OFDI received contingent deferred sales charges of $26,549 upon redemption of Class B shares. Oppenheimer Shareholder Services (OSS), a division of the Manager, is the transfer and shareholder servicing agent for the Fund, and for other registered investment companies. OSS's total costs of providing such services are allocated ratably to these companies. Under separate approved plans, each class may expend up to .25% of its net assets annually to reimburse OFDI for costs incurred in connection with the personal service and maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers, banks and other institutions. In addition, Class B shares are subject to an asset-based sales charge of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its own resources at the time of sale and associated financing costs. In the event of termination or discontinuance of the Class B plan, the Board of Trustees may allow the Fund to continue payment of the asset-based sales charge to OFDI for distribution expenses incurred on Class B shares sold prior to termination or discontinuance of the plan. During the six months ended June 30, 1995, OFDI paid $82,299 and $2,598 to an affiliated broker/dealer as reimbursement for Class A and Class B personal service and maintenance expenses, respectively, and retained $63,391 as reimbursement for Class B sales commissions and service fee advances, as well as financing costs. -------------------------------------------------------------------------------- 5. DEFERRED TRUSTEE A former trustee elected to defer receipt COMPENSATION of fees earned. These deferred fees earn interest at a rate Compensation determined by the current Board of Trustees at the beginning of each calendar year, compounded each quarter-end. From January 1, 1995 through May 10, 1995, the Fund was incurring interest at a rate of 7.89% per annum. The final payment was made on May 10, 1995. 14 Oppenheimer Value Stock Fund OPPENHEIMER VALUE STOCK FUND A SERIES OF OPPENHEIMER INTEGRITY FUNDS -------------------------------------------------------------------------------- OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer Robert G. Avis, Trustee William A. Baker, Trustee Charles Conrad, Jr., Trustee Jon S. Fossel, Trustee and President Raymond J. Kalinowski, Trustee C. Howard Kast, Trustee Robert M. Kirchner, Trustee Ned M. Steel, Trustee Andrew J. Donohue, Vice President David B. Salerno, Vice President George C. Bowen, Vice President, Secretary and Treasurer Robert J. Bishop, Assistant Treasurer Scott Farrar, Assistant Treasurer Robert G. Zack, Assistant Secretary -------------------------------------------------------------------------------- INVESTMENT ADVISOR Oppenheimer Management Corporation -------------------------------------------------------------------------------- SUB-ADVISOR Concert Capital Management, Inc. -------------------------------------------------------------------------------- DISTRIBUTOR Oppenheimer Funds Distributor, Inc. -------------------------------------------------------------------------------- TRANSFER AND SHAREHOLDER Oppenheimer Shareholder Services SERVICING AGENT -------------------------------------------------------------------------------- CUSTODIAN OF The Bank of New York PORTFOLIO SECURITIES -------------------------------------------------------------------------------- INDEPENDENT AUDITORS Deloitte & Touche LLP -------------------------------------------------------------------------------- LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C. The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors. This is a copy of a report to shareholders of Oppenheimer Value Stock Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer Value Stock Fund. For material information concerning the Fund, see the Prospectus. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested. 15 Oppenheimer Value Stock Fund "HOW MAY I HELP YOU?" As an OppenheimerFunds shareholder, you have some special privileges. Whether its automatic investment plans, informative newsletters and hotlines, or ready account access, you can benefit from services designed to make investing simple. And when you need help, our Customer Service Representatives are only a toll-free phone call away. They can provide information about your account and handle administrative requests. You can reach them at our General Information number. When you want to make a transaction, you can do it easily by calling our toll-free Telephone Transactions number. And, by enrolling in AccountLink, a convenient service that links your OppenheimerFunds accounts and your bank checking or savings account, you can use the Telephone Transactions number to make investments. For added convenience, you can get auto-mated 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 OppenheimerFunds' transfer agent, Oppenheimer Shareholder Services, with their Award of Excellence in 1993. So call us today--we're here to help. Information GENERAL INFORMATION Monday-Friday 8:30 a.m.-8 p.m. ET Saturday 10 a.m.-2 p.m. ET ---------------------------------- 1-800-525-7048 ---------------------------------- TELEPHONE TRANSACTIONS Monday-Friday 8:30 a.m.-8 p.m. ET ---------------------------------- 1-800-852-8457 ---------------------------------- PHONELINK 24 hours a day, automated information and transactions ---------------------------------- 1-800-533-3310 ---------------------------------- TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) Monday-Friday 8:30 a.m.-8 p.m. ET ---------------------------------- 1-800-843-4461 ---------------------------------- OPPENHEIMERFUNDS INFORMATION HOTLINE 24 hours a day, timely and insightful messages on the economy and issues that affect your investments ---------------------------------- 1-800-835-3104 ---------------------------------- RS0325.001.0695 August 31, 1995 ------------------------------------------------------------------------------- Bulk Rate U.S. Postage PAID Permit No. 469 Denver, CO [LOGO] OPPENHEIMER FUNDS DISTRIBUTOR, INC. P.O. Box 5270 Denver, CO 80217-5270