-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JBFfBpDd/wQdKpF+IULkLmiirANBRSNhg3neiidDOKTw4mFOvSG4o5YDd0Ui3U7a uUjtXsEN8PJFsAdTJgippw== 0000912057-95-007116.txt : 19950901 0000912057-95-007116.hdr.sgml : 19950901 ACCESSION NUMBER: 0000912057-95-007116 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950830 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: 95568990 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 BOND FUND Semiannual Report June 30, 1995 [PHOTO] "To help pay for extras, I COUNT on the money I get from my investments." [LOGO] OPPENHEIMERFUNDS This Fund is for people who want solid INCOME. NEWS STANDARDIZED YIELD For the 30 Days Ended 6/30/95:(3) Class A - ------------------------------ 5.25% - ------------------------------ Class B - ------------------------------ 4.71% - ------------------------------ AS OF JULY 11, 1995, YOUR FUND'S NAME CHANGED FROM OPPENHEIMER INVESTMENT GRADE BOND FUND TO OPPENHEIMER BOND FUND, AND OPPENHEIMER MANAGEMENT CORPORATION ASSUMED RESPONSIBILITY FOR THE DAY-TO-DAY MANAGEMENT OF THE FUND'S PORTFOLIO. - ------------------------------------------------------------------------------- HOW YOUR FUND IS MANAGED - ------------------------------------------------------------------------------- Oppenheimer Bond Fund's portfolio is made up primarily of corporate bonds and government securities. Of these investments, corporate bonds often offer the highest yields, but can come in all different levels of quality and risk. That's why your Fund's manager is careful to allocate assets to seek high yields with less risk, thereby offering the potential for high current income. - ------------------------------------------------------------------------------- PERFORMANCE - ------------------------------------------------------------------------------- Total return at net asset value for the 6 months ended 6/30/95 was 11.51% for Class A shares and 11.09% 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 4/15/88 were 6.94%, 7.95% and 7.92%, 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 6.43% and 3.30%, respectively.(2) - ------------------------------------------------------------------------------- OUTLOOK - ------------------------------------------------------------------------------- "We don't expect dramatic changes in the bond market, but we will keep the portfolio in a somewhat defensive position, working to hold on to the advantages we've gained from what has so far been an excellent market." Mary Wilson, Portfolio Manager Massachusetts Mutual Life Insurance Co., The Fund's Former 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 4/15/88 (since inception), after deducting the current maximum initial sales charge of 4.75%. 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. Standardized yield is net investment income calculated on a yield-to-maturity basis for the 30-day period ended 6/30/95, divided by the maximum offering price at the end of the period, compounded semiannually and then annualized. Falling net asset values will tend to artificially raise yields. 2 Oppenheimer Bond Fund [PHOTO] James C. Swain Chairman Oppenheimer Bond Fund [PHOTO] Jon S. Fossel President Oppenheimer Bond Fund DEAR OPPENHEIMERFUNDS SHAREHOLDER, In contrast to last year, the first half of 1995 has been exceptionally good for the bond market. Almost all types of bonds have participated in the upswing and, in many cases, have more than made up for last year's declines in the first half alone--rewarding investors who were patient through the market's short-term difficulties. The strength of the current market adds to evidence showing, once again, that profitable investing calls for a long-term perspective. The single most important factor behind the bond rally was a change in the Federal Reserve's monetary policy. Between February 1994 and February 1995, the Fed raised rates aggressively to preempt possible rising inflation by slowing the economy to a more moderate growth rate--thus prolonging the current cycle of economic growth. As evidence began to mount that indicated the economy was indeed slowing, the Fed stopped raising rates. Indications now are that the desired slowdown, or "soft-landing" you may have read about, has been achieved. This has allowed rates to decline considerably, which in turn pushed bond prices up dramatically. While a near perfect landing is unlikely, our expectation going forward is that with the current fundamentals in place, we will continue to experience moderate, sustainable growth with relatively low inflation. We believe the Fed will not feel pressure to tighten monetary policy in the near term. Still, until the full extent of the economic slowdown is known, some questions remain. Signs of economic pickup later this year could motivate the Fed to raise rates again to combat potential inflation. The more likely scenario, however, is that the Fed might actually lower rates during the second half if the economy slows too much. In light of the uncertainties in the market, your Fund's managers remain cautious with an eye toward opportunity, so we're positioning investments somewhat defensively at this time. The bond markets have performed very well and we don't want to give back the gains the Fund has made. Thus, your Fund's managers continue to focus on the income potential of bonds, because this area has contributed most significantly and predictably to performance over time. Oppenheimer Management's fixed income investment team will continue to monitor the economy and market conditions going forward to keep ahead of significant events. We believe a conservative stance and an income orientation in addition to this year's strong capital appreciation justify a positive outlook for fixed income investments across the board. And finally, as mentioned in a recent mailing to you, your Fund's name changed to Oppenheimer Bond Fund on July 11, 1995, to more accurately reflect the Fund's greater investment flexibility. As of that date, Oppenheimer Management Corporation assumed responsibility for the day-to-day management of the Fund's portfolio. 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 3 Oppenheimer Bond Fund Q + A AN INTERVIEW WITH THE FUND'S MANAGERS. MARY WILSON Portfolio Manager A LOW-INFLATIONARY OUTLOOK FOR THE ECONOMY AND LOWER INTEREST RATES SPARKED A RALLY IN THE BOND MARKET OVER THE PAST SEVERAL MONTHS. WHAT EFFECT HAS THIS HAD ON THE FUND? The rally has been quite substantial, with interest rates falling dramatically since the first of the year. Intermediate-maturity bonds, where our holdings are presently concentrated, benefited from the rally in price, because interest rates on these bonds have come down more than they have in longer bonds. So, the effect of the rally for us from a total return perspective--or the combination of income and appreciation--has been very positive. The Fund is up almost 12% for the six months ended June 30, 1995. WHAT SHIFTS HAVE YOU MADE IN THE PORTFOLIO IN RESPONSE TO THE CHANGING MARKET? We haven't made many changes this year, because we'd already set ourselves up to take advantage of a bond market rally in 1995. Our weighting in Treasuries--one of the best performing sectors so far this year--is at about 28% of the portfolio. Our corporate bond position has been relatively stable at around 28%. Differences in income between corporate bonds of varying credit ratings are generally small right now, but where they have increased, we're engaging in very thorough hands-on credit analysis. Credit research, which was important in 1994, has become even more so in this environment.(1) HAVE LOWER INTEREST RATES REIGNITED PREPAYMENT RISK IN MORTGAGES? IF SO, WHAT IS YOUR STRATEGY FOR LIMITING IT? We've increased our holdings in mortgage-backed securities slightly. As usual, we're buying very well-seasoned paper--for example, mortgages that have lasted through several refinancing waves--so that we're not exposed to a great deal of prepayment risk. If rates continue to come down, however, we will expect to see some prepayments, even within our holdings of mortgage-backed bonds. One small strategic shift we've made in this arena is a move into the adjustable rate mortgage (ARM) market. We're buying primarily GNMA ARMs at this time, believing that they are an attractively priced sector of the mortgage market for nimble investors at this time. WHAT IS YOUR OUTLOOK FOR INTEREST RATES GOING FORWARD? We've had a substantial market rally, so much so that it's somewhat hard to imagine the rally will continue at this pace. At this time, we're looking for rates to stay near their current levels. However, there are two possibilities that could alter this view. If inflation should begin to show signs of increasing, the Fed might be tempted to raise rates again. IN LIGHT OF THESE POINTS, WHAT IS YOUR OUTLOOK FOR THE FUND? We're very pleased that the Fund has done so well for the period, both in terms of capturing the appreciation in the market and paying competitive income. We don't expect dramatic changes in the bond market, but we will keep the portfolio in a somewhat defensive position, working to hold on to the advantages we've gained from what has so far been an excellent market. / / 1. The Fund's portfolio is subject to change. 4 Oppenheimer Bond Fund FINANCIALS - ------------------------------------------------------------------------------- CONTENTS - ------------------------------------------------------------------------------- STATEMENT OF INVESTMENTS 6 STATEMENT OF ASSETS & LIABILITIES 10 STATEMENT OF OPERATIONS 11 STATEMENTS OF CHANGES IN NET ASSETS 12 FINANCIAL HIGHLIGHTS 13 NOTES TO FINANCIAL STATEMENTS 14 5 Oppenheimer Bond Fund --------------------------------------------------- Statement of Investments June 30, 1995 (Unaudited) ---------------------------------------------------
FACE MARKET VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM NOTES--24.6% - ------------------------------------------------------------------------------------------------------------------------------------ Baxter International, Inc., 6.05%, 7/7/95 $2,260,000 $2,257,721 -------------------------------------------------------------------------------------------------------- Boston Edison Co., 6.07%, 7/6/95 2,500,000 2,497,892 -------------------------------------------------------------------------------------------------------- Burlington Northern Railroad Co., 6.10%, 7/27/95 2,500,000 2,488,986 -------------------------------------------------------------------------------------------------------- ConAgra, Inc., 6.05%, 7/5/95 2,175,000 2,173,538 -------------------------------------------------------------------------------------------------------- Eastman Chemical Co., 6.10%, 7/20/95 2,400,000 2,392,273 -------------------------------------------------------------------------------------------------------- GTE Corp., 6.03%, 7/12/95 1,070,000 1,068,029 -------------------------------------------------------------------------------------------------------- Illinois Power Co., 6.07%, 7/18/95 1,590,000 1,585,442 -------------------------------------------------------------------------------------------------------- Indiana & Michigan Power Co., 6.05%--6.22%, 7/11/95 760,000 758,723 -------------------------------------------------------------------------------------------------------- Orix Credit Alliance, Inc., 6.11%, 7/14/95 2,500,000 2,494,484 -------------------------------------------------------------------------------------------------------- Pacific Telecom, Inc., 6.125%--6.15%, 7/31/95 1,345,000 1,338,135 -------------------------------------------------------------------------------------------------------- Rite Aid Corp., 6.05%, 7/19/95 1,730,000 1,724,767 -------------------------------------------------------------------------------------------------------- Ryder System, Inc., 6.15%, 7/28/95 2,500,000 2,488,469 -------------------------------------------------------------------------------------------------------- Sonat, Inc., 6.08%, 7/13/95 1,960,000 1,956,028 -------------------------------------------------------------------------------------------------------- SuperValu Stores, Inc., 6.10%, 8/1/95 1,985,000 1,974,573 -------------------------------------------------------------------------------------------------------- Textron Financial Corp., 6.07%, 7/10/95 2,500,000 2,496,206 -------------------------------------------------------------------------------------------------------- Tyson Foods, Inc., 6.05%, 7/21/95 1,490,000 1,484,992 ---------- Total Short-Term Notes (Cost $31,180,258) 31,180,258 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES--4.7% - ------------------------------------------------------------------------------------------------------------------------------------ AUTO LOAN--4.7% Daimler-Benz Vehicle Trust, Series 1994-A, Cl. A, 5.95%, 12/15/00 614,013 613,934 -------------------------------------------------------------------------------------------------------- Ford Credit Grantor Trust, Series 1994-B, Cl. A, 7.30%, 10/15/99 1,209,370 1,230,027 -------------------------------------------------------------------------------------------------------- General Motors Acceptance Corp., Grantor Trust, Series 1992-E, Cl. A, 4.75%, 8/15/97 311,342 309,704 -------------------------------------------------------------------------------------------------------- Nissan Auto Receivables Grantor Trust, Series 1994-A, Cl. A, 6.45%, 9/15/99 1,742,150 1,752,551 -------------------------------------------------------------------------------------------------------- World Omni Automobile Lease Securitization Trust, Series 1994-A, Cl. A, 6.45%, 9/25/00 2,000,000 2,011,600 --------- Total Asset-Backed Securities (Cost $5,867,852) 5,917,816 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ MORTGAGE-BACKED OBLIGATIONS--13.7% - ------------------------------------------------------------------------------------------------------------------------------------ GOVERNMENT AGENCY--12.1% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ FHLMC/FNMA/SPONSORED--7.4% Federal Home Loan Mortgage Corp.: Certificates of Participation, 9%, 3/1/17 734,171 766,178 Certificates of Participation, Series 17-039, 13.50%, 11/1/10 89,109 102,045 Certificates of Participation, Series 17-094, 12.50%, 4/1/14 48,706 55,287 Collateralized Mtg. Obligation Gtd. Multiclass Certificates of Participation, Series 1322, Cl. G, 7.50%, 2/15/07 2,000,000 2,074,660 Multiclass Gtd. Mtg. Participation Certificates, Series 1460, Cl. H, 7%, 5/15/07 1,500,000 1,521,300 -------------------------------------------------------------------------------------------------------- Federal National Mortgage Assn.: Gtd. Mtg. Pass-Through Certificates, 8%, 8/1/17 993,349 1,019,639 Collateralized Mtg. Obligation Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1993-175, Cl. PL, 5%, 10/25/02 2,000,000 1,958,640 Collateralized Mtg. Obligation Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 1993-191, Cl. PD, 5.40%, 3/25/04 1,500,000 1,459,950 Interest-Only Collateralized Mtg. Obligations, Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates, Trust 1992 G-57, Cl. SA, 35.85%, 10/25/22(1) 529,602 397,202 --------- 9,354,901
6 Oppenheimer Bond Fund
FACE MARKET VALUE AMOUNT SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ GNMA/GUARANTEED--4.7% Government National Mortgage Assn.: 10%, 11/15/09 $ 467,695 $ 507,265 12%, 1/15/99-5/15/14 76,028 81,435 12.75%, 6/15/15 43,874 50,737 6%, 10/20/24(2) 2,000,000 2,005,625 8%, 6/15/05-10/15/06 2,547,389 2,631,481 9%, 2/15/09-6/15/09 606,003 638,044 ---------- 5,914,587 - ------------------------------------------------------------------------------------------------------------------------------------ OTHER--1.6% JHM Mtg. Acceptance Corp., 8.96% Collateralized Mtg. Obligation Bonds, Series E, Cl. 5, 4/1/19 1,928,395 2,044,292 ---------- Total Mortgage-Backed Obligations (Cost $17,391,169) 17,313,780 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GOVERNMENT OBLIGATIONS--32.8% - ------------------------------------------------------------------------------------------------------------------------------------ AGENCY--3.2% - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ GOVERNMENT AGENCY/ Allentown, Pennsylvania, U.S. Government Gtd. Nts., Series A, 8.74%, 8/1/01 65,000 71,876 -------------------------------------------------------------------------------------------------------- FULL FAITH--3.2% Babylon, New York, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 115,000 112,592 -------------------------------------------------------------------------------------------------------- Bakersfield, California, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 255,000 249,661 -------------------------------------------------------------------------------------------------------- Boston, Massachusetts, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 795,000 778,355 -------------------------------------------------------------------------------------------------------- Buena Vista Township, New Jersey, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 270,000 264,347 -------------------------------------------------------------------------------------------------------- Buffalo, New York, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 400,000 391,625 -------------------------------------------------------------------------------------------------------- Detroit, Michigan, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 405,000 396,521 -------------------------------------------------------------------------------------------------------- Fajardo, Puerto Rico, U.S. Government Gtd. Nts., Series A, 8.74%, 8/1/01 300,000 331,735 -------------------------------------------------------------------------------------------------------- New Haven, Connecticut, U.S. Government Gtd. Nts., Series A, 8.74%, 8/1/01 400,000 442,299 -------------------------------------------------------------------------------------------------------- Roanoke, Virginia, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 220,000 215,394 -------------------------------------------------------------------------------------------------------- Sacramento County, California Redevelopment Agency, U.S. Government Gtd. Nts., Series 94A, 5.93%, 8/1/99 240,000 234,975 -------------------------------------------------------------------------------------------------------- Tacoma, Washington, U.S. Government Gtd. Nts., Series 94A, 5.93%, 8/1/99 165,000 161,545 -------------------------------------------------------------------------------------------------------- Trenton, New Jersey, U.S. Government Gtd. Nts., Series A, 5.93%, 8/1/99 135,000 132,174 -------------------------------------------------------------------------------------------------------- Tujillo Alto, Puerto Rico, U.S. Government Gtd. Nts., Series A, 8.74%, 8/1/01 235,000 259,851 ---------- 4,042,950 - ------------------------------------------------------------------------------------------------------------------------------------ TREASURY--29.6% - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury Bonds: 11.125%, 8/15/03 1,000,000 1,309,062 7.125%, 2/15/23 3,600,000 3,801,373 7.25%, 8/15/22 3,650,000 3,899,795 7.875%, 2/15/21 900,000 1,025,156 8%, 11/15/21 2,000,000 2,311,874 8.875%, 8/15/17 4,500,000 5,622,188 STRIPS, Zero Coupon, 2/15/15 13,500,000 3,526,994 -------------------------------------------------------------------------------------------------------- U.S. Treasury Nts.: 5.75%, 8/15/03 1,150,000 1,116,219 6.375%, 8/15/02 750,000 758,438 7.25%, 8/15/04 1,000,000 1,068,125 7.50%, 11/15/01 5,500,000 5,902,188 7.50%, 2/15/05 6,500,000 7,082,965 ---------- 37,424,377 ---------- Total U.S. Government Obligations (Cost $40,475,081) 41,467,327 ----------
7 Oppenheimer Bond Fund --------------------------------------------------- STATEMENT OF INVESTMENTS (Unaudited) (Continued) ---------------------------------------------------
FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS AND NOTES--30.1% - ----------------------------------------------------------------------------------------------------------------------------------- BASIC INDUSTRY--4.4% - ----------------------------------------------------------------------------------------------------------------------------------- METALS/MINING--3.0% AMAX, Inc., 9.875% Nts., 6/13/01 $1,000,000 $1,126,492 ------------------------------------------------------------------------------------------------------- Newmont Mining Corp., 8.625% Nts., 4/1/02 1,000,000 1,077,506 ------------------------------------------------------------------------------------------------------- Teck Corp., 8.70% Debs., 5/1/02 1,500,000 1,617,678 --------- 3,821,676 - ----------------------------------------------------------------------------------------------------------------------------------- PAPER--1.4% Georgia-Pacific Corp., 9.95% Debs., 6/15/02 1,500,000 1,744,662 - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER RELATED--3.6% - ----------------------------------------------------------------------------------------------------------------------------------- CONSUMER PRODUCTS--0.8% Toro Co. (The), 11% Debs., 8/1/17 1,000,000 1,074,560 - ----------------------------------------------------------------------------------------------------------------------------------- HEALTHCARE--2.8% Grace (W.R.) & Co., 7.25% Medium-Term Nts., 7/15/97 2,000,000 2,024,448 ------------------------------------------------------------------------------------------------------- Imcera Group, Inc., 6% Nts., 10/15/03 500,000 474,124 ------------------------------------------------------------------------------------------------------- Service Corp. International, 7% Sr. Nts., 6/1/15 1,000,000 1,019,000 ---------- 3,517,572 - ----------------------------------------------------------------------------------------------------------------------------------- ENERGY--1.2% Enron Corp., 8.10% Nts., 12/15/96 1,500,000 1,538,329 - ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL SERVICES--8.0% - ----------------------------------------------------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL--6.8% Enterprise Rent-A-Car USA Finance Co., 7.875% Nts., 3/15/98(3) 1,500,000 1,538,292 ------------------------------------------------------------------------------------------------------- Ford Motor Credit Co., 9.90% Medium-Term Nts., 11/6/97 2,000,000 2,098,914 ------------------------------------------------------------------------------------------------------- Goldman Sachs Group LP, 6.20% Nts., 2/15/01 1,500,000 1,432,031 ------------------------------------------------------------------------------------------------------- Leucadia National Corp., 7.75% Sr. Nts., 8/15/13 2,000,000 1,949,960 ------------------------------------------------------------------------------------------------------- Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 1,500,000 1,555,368 --------- 8,574,565 - ----------------------------------------------------------------------------------------------------------------------------------- INSURANCE--1.2% Comdisco, Inc., 6.50% Nts., 6/15/00 1,500,000 1,486,972 - ----------------------------------------------------------------------------------------------------------------------------------- MANUFACTURING--5.8% - ----------------------------------------------------------------------------------------------------------------------------------- AEROSPACE/ELECTRONICS/ McDonnell Douglas Corp., 9.25% Nts., 4/1/02 1,500,000 1,690,873 ------------------------------------------------------------------------------------------------------- COMPUTERS--3.3% Rolls-Royce Capital, Inc., 7.125% Gtd. Unsec. Unsub. Nts., 7/29/03 2,500,000 2,510,938 --------- 4,201,811 - ----------------------------------------------------------------------------------------------------------------------------------- AUTOMOTIVE--0.8% Chrysler Corp., 10.40% Nts., 8/1/99 1,000,000 1,062,621 - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL GOODS--1.7% Thomas & Betts Corp., 8.25% Sr. Nts., 1/15/04 1,000,000 1,079,045 ------------------------------------------------------------------------------------------------------- Westinghouse Electric Corp., 8.375% Nts., 6/15/02 1,000,000 1,054,497 --------- 2,133,542 - ----------------------------------------------------------------------------------------------------------------------------------- MEDIA--3.3% - ----------------------------------------------------------------------------------------------------------------------------------- CABLE TELEVISION--2.0% Tele-Communications, Inc., 5.28% Medium-Term Nts., 8/20/96 1,000,000 985,566 - ----------------------------------------------------------------------------------------------------------------------------------- Tele-Communications, Inc., 8.25% Sr. Nts., 1/15/03 1,500,000 1,546,320 --------- 2,531,886 8 Oppenheimer Bond Fund --------------------------------------------------- STATEMENT OF INVESTMENTS (Unaudited) (Continued) --------------------------------------------------- FACE MARKET VALUE AMOUNT SEE NOTE 1 - ----------------------------------------------------------------------------------------------------------------------------------- PUBLISHING/PRINTING--1.3% Valassis Communications, Inc., 9.55% Sr. Nts., 12/1/03 $1,500,000 $1,684,645 - ----------------------------------------------------------------------------------------------------------------------------------- OTHER--0.5% - ----------------------------------------------------------------------------------------------------------------------------------- CONGLOMERATES--0.5% Textron, Inc., 9.55% Medium-Term Nts., 3/19/01 500,000 567,789 - ----------------------------------------------------------------------------------------------------------------------------------- TRANSPORTATION--2.5% - ----------------------------------------------------------------------------------------------------------------------------------- AIR TRANSPORTATION--2.5% AMR Corp., 9% Debs., 8/1/12 1,500,000 1,617,442 ------------------------------------------------------------------------------------------------------- United Air Lines, Inc., 10.11% Equipment Trust Certificates, Series 91B, 2/19/06 1,430,581 1,550,909 --------- 3,168,351 - ----------------------------------------------------------------------------------------------------------------------------------- UTILITIES--0.8% - ----------------------------------------------------------------------------------------------------------------------------------- ELECTRIC UTILITIES--0.8% Tenaga Nasional Berhad, 7.875% Nts., 6/15/04(3) 1,000,000 1,058,726 --------- Total Corporate Bonds and Notes (Cost $36,708,104) 38,167,707 SHARES - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--0.0% - ----------------------------------------------------------------------------------------------------------------------------------- Foodbrands America, Inc. (Cost $0) 2,113 27,996 - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $131,622,464) 105.9% 134,074,884 - ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (5.9) (7,509,860) ---------- ---------- NET ASSETS 100.0% $126,565,024 ---------- ---------- ---------- ---------- 1. Interest rate resets monthly, inversely related to LIBOR. Interest-Only Strips represent the right to receive the monthly interest payments on an underlying pool of mortgage loans. These securities are subject to the risk of accelerated principal paydowns as interest rates decline. The principal amount represents the notional amount on which current interest is calculated. 2. When-issued security to be delivered and settled after June 30, 1995. 3. Represents a security sold under Rule 144A, which is exempt from registration under the Securities Act of 1933, as amended. This security has been determined to be liquid under guidelines established by the Board of Trustees. These securities amount to $2,597,018 or 2.05% of the Fund's net assets, at June 30, 1995. See accompanying Notes to Financial Statements.
9 Oppenheimer Bond Fund ------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES June 30, 1995 (Unaudited) -------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- ASSETS Investments, at value (cost $131,622,464)--see accompanying statement $134,074,884 ------------------------------------------------------------------------------------------------------- Receivables: Investments sold 10,861,821 Interest and principal paydowns 1,593,375 Shares of beneficial interest sold 251,712 ------------------------------------------------------------------------------------------------------- Other 26,066 ---------- Total assets 146,807,858 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES Bank overdraft 75,439 ------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 19,267,031 Dividends 499,146 Shares of beneficial interest redeemed 294,005 Distribution and service plan fees--Note 4 72,871 Transfer and shareholder servicing agent fees 9,378 Other 24,964 --------- Total liabilities 20,242,834 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $126,565,024 ------------ ------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ COMPOSITION OF Paid-in capital $127,974,410 NET ASSETS ------------------------------------------------------------------------------------------------------- Overdistributed net investment income (204,540) ------------------------------------------------------------------------------------------------------- Accumulated net realized loss from investment transactions (3,657,266) ------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments--Note 3 2,452,420 ------------ Net assets $126,565,024 ------------ ------------ - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE Class A Shares: PER SHARE Net asset value and redemption price per share (based on net assets of $118,864,206 and 10,995,949 shares of beneficial interest outstanding) $10.81 Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $11.35 ------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price and offering price per share (based on net assets of $7,700,818 and 712,334 shares of beneficial interest outstanding) $10.81 See accompanying Notes to Financial Statements.
10 Oppenheimer Bond Fund - -------------------------------------------------------------------------- STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1995 (Unaudited) - --------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME Interest $ 4,185,138 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- EXPENSES Management fees--Note 4 276,022 ---------------------------------------------------------------------- Distribution and service plan fees: Class A--Note 4 131,136 Class B--Note 4 27,526 ---------------------------------------------------------------------- Transfer and shareholder servicing agent fees--Note 4 106,447 ---------------------------------------------------------------------- Shareholder reports 40,946 ---------------------------------------------------------------------- Custodian fees and expenses 12,853 ---------------------------------------------------------------------- Legal and auditing fees 10,458 ---------------------------------------------------------------------- Registration and filing fees: Class A 559 Class B 810 ---------------------------------------------------------------------- Other 8,053 ------------ Total expenses 614,810 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- NET INVESTMENT INCOME 3,570,328 - ------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED Net realized gain on investments 213,049 GAIN ON INVESTMENTS ---------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 8,295,969 ----------- Net realized and unrealized gain on investments 8,509,018 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,079,346 ----------- -----------
See accompanying Notes to Financial Statements. 11 Oppenheimer Bond Fund --------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS ---------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30, 1995 DECEMBER 31, (UNAUDITED) 1994 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 3,570,328 $ 6,537,608 ----------------------------------------------------------------------------------------- Net realized gain (loss) on investments 213,049 (2,274,518) ----------------------------------------------------------------------------------------- Net change in unrealized appreciation or depreciation on investments 8,295,969 (8,559,673) ------------ ------------ Net increase (decrease) in net assets resulting from operations 12,079,346 (4,296,583) - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income: TO SHAREHOLDERS Class A ($.3324 and $.6539 per share, respectively) (3,416,487) (6,381,575) Class B ($.2934 and $.5754 per share, respectively) (153,487) (156,032) ----------------------------------------------------------------------------------------- Dividends in excess of net investment income: Class A ($.0306 per share) -- (298,880) Class B ($.027 per share) -- (7,308) - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from TRANSACTIONS Class A beneficial interest transactions--Note 2 14,123,914 (3,255,547) ----------------------------------------------------------------------------------------- Net increase in net assets resulting from Class B beneficial interest transactions--Note 2 3,840,990 1,918,288 - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS Total increase (decrease) 26,474,276 (12,477,637) ----------------------------------------------------------------------------------------- Beginning of period 100,090,748 112,568,385 ------------ ------------ End of period (including overdistributed net investment income of $204,540 and $204,894, respectively) $126,565,024 $100,090,748 ------------ ------------ ------------ ------------
See accompanying Notes to Financial Statements. 12 Oppenheimer Bond 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 $10.01 $11.12 $10.74 $10.80 $9.86 $10.29 - -------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .33 .65 .69 .75 .82 .88(3) Net realized and unrealized gain (loss) on investments .80 (1.08) .40 (.05) .90 (.43) -------- -------- -------- -------- -------- -------- Total income (loss) from investment operations 1.13 (.43) 1.09 .70 1.72 .45 - -------------------------------------------------------------------------------------------------------------------------------- Dividends to shareholders: Dividends from net investment income (.33) (.65) (.71) (.76) (.78) (.88) Dividends in excess of net investment income -- (.03) -- -- -- -- -------- -------- -------- -------- -------- -------- Total dividends to shareholders (.33) (.68) (.71) (.76) (.78) (.88) - -------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.81 $ 10.01 $ 11.12 $ 10.74 $ 10.80 $ 9.86 -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(4) 11.51% (3.87)% 10.30% 6.77% 18.28% 4.74% - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $118,864 $ 96,640 $110,759 $106,290 $ 90,623 $ 87,021 - -------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $107,151 $102,168 $111,702 $ 98,672 $ 86,471 $ 90,065 - -------------------------------------------------------------------------------------------------------------------------------- Number of shares outstanding at end of period (in thousands) 10,996 9,653 9,963 9,899 8,390 8,829 - -------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 6.43%(5) 6.25% 6.20% 7.00% 8.02% 8.85% Expenses 1.06%(5) 1.06% 1.06% 1.10% 1.23% 1.24%(3) - -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate(6) 86.9% 70.3% 110.1% 116.4% 97.1% 80.4%
CLASS B ---------------------------------------- SIX MONTHS ENDED JUNE 30, 1995 YEAR ENDED DEC. 31, (UNAUDITED) 1994 1993(1) ---------------------------------------- ---------------------------------------- PER SHARE OPERATING DATA: Net asset value, beginning of period $10.01 $11.11 $11.10 - ------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income .31 .58 .40 Net realized and unrealized gain (loss) on investments .78 (1.08) .03 -------- -------- -------- Total income (loss) from investment operations .09 (.50) .43 - ------------------------------------------------------------------------------- Dividends to shareholders: Dividends from net investment income (.29) (.57) (.42) Dividends in excess of net investment income -- (.03) -- -------- -------- -------- Total dividends to shareholders (.29) (.60) (.42) - ------------------------------------------------------------------------------- Net asset value, end of period $ 10.81 $ 10.01 $ 11.11 -------- -------- -------- -------- -------- -------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE(4) 11.09% (4.53)% 3.91% - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (in thousands) $ 7,701 $ 3,451 $ 1,809 - ------------------------------------------------------------------------------- Average net assets (in thousands) $ 5,571 $ 2,747 $ 922 - ------------------------------------------------------------------------------- Number of shares outstanding at end of period (in thousands) 712 345 163 - ------------------------------------------------------------------------------- Ratios to average net assets: Net investment income 5.54%(5) 5.53% 4.80%(5) Expenses 1.85%(5) 1.78% 1.90%(5) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- Portfolio turnover rate(6) 86.9% 70.3% 110.1% 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. Net investment income would have been $.87 per share absent the voluntary expense limitation, resulting in an expense ratio of 1.26%. 4. 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. 5. Annualized. 6. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation. Purchases and sales of investment securities (excluding short-term securities) for the period ended June 30, 1995 were $89,966,334 and $89,236,960, respectively.
See accompanying Notes to Financial Statements. 13 Oppenheimer Bond Fund --------------------------------------------------- NOTES TO FINANCIAL STATEMENTS (Unaudited) --------------------------------------------------- - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- 1. SIGNIFICANT Oppenheimer Bond Fund (the Fund), operating under the ACCOUNTING POLICIES name Oppenheimer Investment Grade Bond Fund, through July 10, 1995, 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 AND GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class) and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class. ------------------------------------------------------ FEDERAL TAXES. The Fund intends to continue to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income, including any net realized gain on investments not offset by loss carryovers, to shareholders. Therefore, no federal income or excise tax provision is required. ------------------------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately for Class A and Class B shares from net investment income each day the New York Stock Exchange is open for business and pay such dividends monthly. Distributions from net realized gains on investments, if any, will be declared at least once each year. ------------------------------------------------------ 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. The character of the distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also due to timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gain (loss) was recorded by the Fund. 14 Oppenheimer Bond Fund - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 1. SIGNIFICANT OTHER. Investment transactions are accounted for on ACCOUNTING POLICIES the date the investments are purchased or sold (CONTINUED) (trade 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. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 2. SHARES OF The Fund has authorized an unlimited number of no BENEFICIAL INTEREST 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 2,460,939 $25,703,467 1,071,379 $11,256,317 Dividends reinvested 181,231 1,895,693 323,100 3,353,309 Redeemed (1,299,494) (13,475,246) (1,704,508) (17,865,173) ---------- ----------- ---------- ----------- Net increase (decrease) 1,342,676 $14,123,914 (310,029) $(3,255,547) ---------- ----------- ---------- ----------- ---------- ----------- ---------- ----------- --------------------------------------------------------------------------------------- Class B: Sold 519,473 $ 5,406,619 293,817 $ 3,089,618 Dividends reinvested 9,622 100,824 11,974 123,504 Redeemed (161,421) (1,666,453) (123,969) (1,294,834) ---------- ----------- ---------- ----------- Net increase 367,674 $ 3,840,990 181,822 $ 1,918,288 ---------- ----------- ---------- ----------- ---------- ----------- ---------- -----------
- ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 3. UNREALIZED GAINS AND At June 30, 1995, net unrealized appreciation on LOSSES ON INVESTMENTS investments of $2,452,420 was composed of gross appreciation of $3,509,324, and gross depreciation of $1,056,904. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 4. MANAGEMENT FEES Management fees paid to the Manager were AND OTHER in accordance with the investment advisory TRANSACTIONS WITH agreement with the Fund which provides for a fee of AFFILIATES .50% on the first $100 million of average annual net assets with a reduction of .05% on each $200 million thereafter, to .35% 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. At a meeting held on July 10, 1995, shareholders of Oppenheimer Bond Fund approved a new investment advisory agreement. Subsequent to July 10, management fees are as follows: .75% of the first $200 million of the Fund's average annual net assets, .72% of the next $200 million, .69% of the next $200 million, .66% of the next $200 million, .60% of the next $200 million, and .50% of aggregate net assets over $1 billion. For the six months ended June 30, 1995, commissions (sales charges paid by investors) on sales of Class A shares totaled $76,610, of which $25,631 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 $80,287, of which $5,165 was paid to an affiliated broker/dealer. During the six months ended June 30, 1995, OFDI received contingent deferred sales charges of $4,962 upon redemption of Class B shares, as reimbursement for sales commissions advanced by OFDI at the time of sale of such 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. 15 Oppenheimer Bond Fund NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 4. MANAGEMENT FEES Under separate approved plans, each class may AND OTHER expend up to .25% of its net assets annually to TRANSACTIONS WITH reimburse OFDI for costs incurred in connection AFFILIATES with the personal service and maintenance of (CONTINUED) 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 $70,318 to an affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses, and retained $24,009 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 of fees COMPENSATION earned. These deferred fees earn interest at a rate 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. 16 Oppenheimer Bond Fund OPPENHEIMER BOND 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 P. Negri, Vice President David Rosenberg, 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 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 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 Bond Fund. This report must be preceded by a Prospectus of Oppenheimer Bond 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. 17 Oppenheimer Bond Fund OPPENHEIMERFUNDS FAMILY - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ OppenheimerFunds offers over 30 funds designed to fit virtually every investment goal. Whether you're investing for retirement, your children's education or tax-free income, we have the funds to help you seek your objective. When you invest with OppenheimerFunds, you can feel comfortable knowing that you are investing with a respected financial institution with over 30 years of experience in helping people just like you reach their financial goals. And you're investing with a leader in global, growth stock and flexible fixed income investments--with over 2.6 million shareholder accounts and more than $35 billion under Oppenheimer's management and that of our affiliates. At OppenheimerFunds, we don't charge a fee to exchange shares of eligible funds of the same class. And you can exchange shares easily by mail or by telephone(1). For more information on OppenheimerFunds, please contact your financial advisor or call us at 1-800-525-7048 for a prospectus. You may also write us at the address shown on the back cover. As always, please read the prospectus carefully before you invest. - ----------------------------------------------------------------------------- - -----------------------------------------------------------------------------
STOCK FUNDS Discovery Fund Global Fund Global Emerging Growth Fund(2) Oppenheimer Fund Target Fund Value Stock Fund Growth Fund(3) Gold & Special Minerals Fund - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- STOCK & BOND FUNDS Main Street Income & Growth Fund Equity Income Fund Total Return Fund Asset Allocation Fund Global Growth & Income Fund - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- BOND FUNDS High Yield Fund Strategic Short-Term Income Fund Champion High Yield Fund International Bond Fund Strategic Income & Growth Fund Bond Fund(4) Strategic Income Fund U.S. Government Trust Strategic Investment Grade Bond Fund Limited-Term Government Fund - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- TAX-EXEMPT FUNDS New York Tax-Exempt Fund(5) New Jersey Tax-Exempt Fund(5) California Tax-Exempt Fund(5) Tax-Free Bond Fund Pennsylvania Tax-Exempt Fund(5) Insured Tax-Exempt Bond Fund Florida Tax-Exempt Fund(5) Intermediate Tax-Exempt Bond Fund - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- MONEY MARKET FUNDS Money Market Fund Cash Reserves
1. Exchange privileges are subject to change or termination. 2. Formerly Global Bio-Tech Fund. 3. Formerly Special Fund. 4. Formerly Investment Grade Bond Fund. 5. Available only to residents of certain states. OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203. -C- Copyright 1995 Oppenheimer Management Corporation. All rights reserved. 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 - -------------- RSO285.001.0695 August 31, 1995 - ------------------------------------------------------------------------------ "HOW MAY I HELP YOU?" [PHOTO] Jennifer Leonard, Customer Service Representative Oppenheimer Shareholder Services As an OppenheimerFunds 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-tree 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 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 OppenheimerFunds' transfer agent, Oppenheimer Shareholder Services, with their Award of Excellence in 1993. So call us today--we're here to help. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ [LOGO] Oppenheimer Funds-C- Oppenheimer Funds Distributor, Inc. P.O. Box 5270 Denver, CO 80217-5270 - ------------------ Bulk Rate U.S. Postage PAID Permit No. 469 Denver, CO - ------------------ -----END PRIVACY-ENHANCED MESSAGE-----