OPPENHEIMER MULTI-SECTOR INCOME TRUST

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sc+EMc79fmho/g6ZGAYxLywkKozoftaFlJfcxLLLmZzVVsoob7iDeLLPcHBBfa8V tvA5RxYcphHiSHrw00JLwA== 0000829801-02-000003.txt : 20020414 0000829801-02-000003.hdr.sgml : 20020414 ACCESSION NUMBER: 0000829801-02-000003 CONFORMED SUBMISSION TYPE: N-2/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20020228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER MULTI SECTOR INCOME TRUST CENTRAL INDEX KEY: 0000829801 IRS NUMBER: 133448960 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-20191 FILM NUMBER: 02561523 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OPPENHEIMER MULTI SECTOR INCOME TRUST CENTRAL INDEX KEY: 0000829801 IRS NUMBER: 133448960 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-2/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-05473 FILM NUMBER: 02561524 BUSINESS ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 2123230200 MAIL ADDRESS: STREET 1: 498 SEVENTH AVENUE STREET 2: 14TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10018 N-2/A 1 n2body.htm BODY OF N2 OPPENHEIMER MULTI-SECTOR INCOME TRUST

As Filed with the Securities and Exchange
Commission on February 28, 2002

Registration No. 811-5473

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/

Amendment No. 17 /X/

OPPENHEIMER MULTI-SECTOR INCOME TRUST

(Exact Name of Registrant as Specified in Charter)

498 Seventh Avenue
New York, New York 10018

(Address of Principal Executive Offices)

212-323-0250

- -
(Registrant's Telephone Number)

ROBERT G. ZACK, ESQ.
OppenheimerFunds, Inc.
498 Seventh Avenue
New York, New York 10018

(Name and Address of Agent for Service)

FORM N-2

OPPENHEIMER MULTI-SECTOR INCOME TRUST

Cross Reference Sheet

Part A of
Form N-2
Item No. Prospectus Heading

1 *
2 *
3 *
4 *
5 *
6 *
7 *
8 General Description of the Registrant
9 Management
10 Capital Stock, Long-Term Debt, and Other Securities
11 *
12 *
13 See Item 15 of the Statement of Additional Information

Part B of
Form N-2
Item No. Heading In Statement of Additional Information

14 Cover Page
15 Table of Contents
16 *
17 See Item 8 of the Prospectus
18 Management
19 Control Persons and Principal Holders of Securities
20 See Item 9 of the Prospectus
21 Brokerage Allocation and Other Practices
22 See Item 10 of the Prospectus
23 Financial Statements

* Not applicable or negative answer.

54
OPPENHEIMER MULTI-SECTOR INCOME TRUST

PART A

INFORMATION REQUIRED IN A PROSPECTUS

Item 1. Outside Front Cover.

Inapplicable.

Item 2. Inside Front and Outside Back Cover Page.

Inapplicable.

Item 3. Fee Table and Synopsis

Inapplicable.

Item 4. Financial Highlights.

Inapplicable.

Item 5. Plan of Distribution.

Inapplicable.

Item 6. Selling Shareholders.

Inapplicable.

Item 7. Use of Proceeds.

Inapplicable.

Item 8. General Description of the Registrant.

1. Oppenheimer Multi-Sector Income Trust (the "Fund" or "Registrant") is a closed-end diversified management investment
company organized as a Massachusetts business trust on February 22, 1988.

2, 3, and 4. The Fund's primary investment objective is high current income consistent with preservation of capital. Its
secondary objective is capital appreciation. In seeking those objectives, under normal market conditions, the Fund will allocate its
assets among seven sectors of the fixed-income securities market to take advantage of opportunities anticipated by OppenheimerFunds,
Inc., the Fund's investment advisor (the "Advisor"), which arise in particular sectors in various economic environments. The
Advisor's opinion as to such opportunities will be based on various factors which may affect the levels of income which can be
obtained from the different sectors, such as (i) the effect of interest rate changes, on a relative and absolute basis, on yields of
securities in the particular sectors, (ii) the effect of changes in tax laws and other legislation affecting securities in the
various sectors, (iii) changes in the relative values of foreign currencies, and (iv) perceived strengths of the abilities of issuers
in the various sectors to repay their obligations.

The sectors in which the Fund invests are not divided by industry but instead differ by type of security and issuer and
includes U.S. Government, Corporate, International, Asset-Backed (including Mortgage-Backed), Municipal, Convertible and Money Market
sectors. The Advisor believes that investing the Fund's assets in a portfolio comprised of three or more sectors, as opposed to
limiting investments to only one such sector, will enhance the Fund's ability to achieve high current income consistent with
preservation of capital or seek capital appreciation. The range of yields of the securities in each sector will differ from
securities in the others both on an absolute and a relative basis. It is not the intention of the Fund to always allocate its assets
to the sector with the highest range of yields as this may not be consistent with preservation of capital. The Advisor will,
however, monitor changes in relative yields of securities in the various sectors to help formulate its decisions on which sectors
present attractive investment opportunities at a particular time.

Historically, the markets for the sectors identified below have tended to behave somewhat independently and have at times
moved in opposite directions. For example, U.S. government securities (defined below) have generally been affected negatively by
concerns about inflation that might result from increased economic activity. Corporate debt securities and convertible securities,
on the other hand, have generally benefited from increased economic activity due to the resulting improvement in the credit quality
of corporate issuers which, in turn, has tended to cause a rise in the prices of common stock underlying convertible securities. The
converse has generally been true during periods of economic decline. Similarly, U.S. government securities can be negatively
affected by a decline in the value of the dollar against foreign currencies, while the non-dollar denominated securities of foreign
issuers held by U.S. investors have generally benefited from such decline. Investments in short-term money market securities tend to
decline less in value than long-term debt securities in periods of rising interest rates but do not rise as much in periods of
declining rates. At times the difference between yields on municipal securities and taxable securities does not fully reflect the
tax advantage of municipal securities. At such times investments in municipal securities tend to fare better in value than taxable
investments because the yield differential generally can be expected to increase again to reflect the tax advantage.

The Advisor believes that when financial markets exhibit this lack of correlation, an active allocation of investments among
these seven sectors can permit greater preservation of capital over the long term than would be obtained by investing permanently in
any one sector. To the extent that active allocation of investments among market sectors by the Advisor is successful in preserving
or increasing capital, the Fund's capacity to meet its primary objective of high current income should be enhanced over the longer
term. The Advisor also will utilize certain other investment techniques, including options and futures, intended to enhance income
and reduce market risk.

The Fund can invest in securities in the Corporate, International, Asset-Backed and Convertible Sectors which are in the
lowest rating category of each of Standard & Poor's Rating Service ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's"), or Fitch, Inc. ("Fitch") or another nationally recognized rating organization, or which are unrated. The description
and characteristics of the lowest rating category are discussed in the description of the Corporate Sector. In all other sectors,
the Fund will not invest in securities rated lower than those considered investment grade, i.e. "Baa" by Moody's or "BBB" by Standard
& Poor's, or Fitch. See "Investment Sectors in Which the Fund Invests" and Appendix A (Securities Ratings) to the Statement of
Additional Information. Unrated securities will be of comparable quality to those that are rated, in the opinion of the Advisor.
The seven sectors of the fixed-income securities market in which the Fund can invest are:

- - The U.S. Government Sector, consisting of debt obligations of the U.S. government and its agencies and instrumentalities
("U.S. government securities");

- - The Corporate Sector, consisting of non-convertible debt obligations or preferred stock of U.S. corporate issuers and
participation interests in senior, fully-secured loans made primarily to U.S. companies;

- - The International Sector, consisting of debt obligations (which may be denominated in foreign currencies) of foreign
governments and their agencies and instrumentalities, certain supranational entities and foreign and U.S. companies;

- - The Asset-Backed Sector, consisting of undivided fractional interests in pools of consumer loans and participation interests
in pools of residential mortgage loans;

- - The Municipal Sector, consisting of debt obligations of states, territories or possessions of the United States and the
District of Columbia or their political subdivisions, agencies, instrumentalities or authorities;

- - The Convertible Sector, consisting of debt obligations and preferred stock of U.S. corporations which are convertible into
common stock; and

- - The Money Market Sector, consisting of U.S. dollar-denominated debt obligations having a maturity of 397 days or less and
issued by the U.S. government or its agencies, certain domestic banks or corporations; or certain foreign governments,
agencies or banks; and repurchase agreements.

Current income, preservation of capital and, secondarily, possible capital appreciation will be considerations in the
allocation of assets among the seven investment sectors described above. The Advisor anticipates that at all times Fund assets will
be spread among three or more sectors. Securities in the first six sectors above have maturities in excess of 397 days. All
securities denominated in foreign currencies will be considered as part of the International Sector, regardless of maturity. The
Fund can also invest in options and futures related to securities in each of the sectors.

INVESTMENT SECTORS IN WHICH THE FUND INVESTS

The Fund's assets allocated to each of the sectors will be managed in accordance with the investment policies described
above. The Fund's portfolio might not always include all of the different types of investments described below. The allocation
among the different types of investments the Fund is permitted to invest in will vary over time based on the Advisor's evaluation of
economic and market conditions.

The U.S. Government Sector

Assets in this sector will be invested in U.S. government securities, which are obligations issued by or guaranteed by the
United States government or its agencies or instrumentalities. Certain of these obligations, including U.S. Treasury notes and
bonds, and Federal Housing Administration debentures, are supported by the full faith and credit of the United States. Certain other
U.S. government securities, issued or guaranteed by federal agencies or government-sponsored enterprises, are not supported by the
full faith and credit of the United States. These latter securities include obligations supported by the right of the issuer to
borrow from the U.S. Treasury, such as obligations of Federal Home Loan Banks, and obligations supported by the credit of the
instrumentality, such as Federal National Mortgage Association bonds. The Advisor will adjust the average maturity of the
investments held in this sector from time to time, depending on its assessment of relative yields of securities of different
maturities and its expectations of future changes in interest rates. U.S. government securities are considered among the most
creditworthy of fixed-income investments. Because of this, the yields available from U.S. government securities are generally lower
than the yields available from corporate debt securities. Nevertheless, the values of U.S. government securities (like those of
fixed-income securities generally) will change as interest rates fluctuate.

Zero Coupon Treasury Securities. The Fund can invest in "zero coupon" Treasury securities which are (a) U.S. Treasury notes
and bonds which have been stripped of their unmatured interest coupons and receipts or (b) certificates representing interests in
such stripped debt obligations and coupons. A zero coupon security pays no interest to its holder during its life. Accordingly,
such securities usually trade at a deep discount from their face or par value and will be subject to greater fluctuations of market
value in response to changing interest rates than debt obligations of comparable maturities which make current distribution of
interest. Current federal tax law requires that a holder of a zero coupon security accrue a portion of the discount at which the
security was purchased as income each year even though the holder receives no interest payment in cash on the security during the
year. The Fund will not invest more than 10% of its total assets at the time of purchase in zero coupon Treasury securities.

The Corporate Sector

Assets allocated to this sector will be invested in secured or unsecured non-convertible preferred stock and corporate debt
obligations, such as bonds, debentures and notes. The Fund can also acquire participation interests, as described below.

Ratings. Certain corporate fixed-income securities in which the Fund can invest may be unrated or in the lower rating
categories of recognized rating agencies, i.e., ratings below "Baa" by Moody's or below "BBB" by Standard & Poor's. Lower-rated
securities, commonly called junk bonds, will involve greater volatility of price and risk of principal and income (including the
possibility of default or bankruptcy of the issuer of such securities) than securities in the higher rating categories. The Fund's
investments in lower-rated securities can not exceed 75% of the Fund's total assets, with no more than 50% of the Fund's total assets
in lower-rated foreign securities (see "The International Sector," below).

The Fund's ability to increase its investments in high-yield securities will enable it to seek higher investment return.
However, high-yield securities, whether rated or unrated, could be subject to greater market fluctuations and risks of loss of income
and principal and could have less liquidity than lower yielding, higher-rated fixed-income securities. Principal risks of high-yield
securities include (i) limited liquidity and secondary market support, (ii) substantial market price volatility resulting from
changes in prevailing interest rates, (iii) subordination of the holder's claims to the prior claims of banks and other senior
lenders in bankruptcy proceedings, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of
declining interest rates, whereby the holder might receive redemption proceeds at times when only lower-yielding portfolio securities
are available for investment, (v) the possibility that earnings of the issuer can be insufficient to meet its debt service, and (vi)
the issuer's low creditworthiness and potential for insolvency during periods of rising interest rates and economic downturn.

The International Sector

The assets allocated to this sector will be invested in debt obligations (which may either be denominated in U.S. dollars or
in non-U.S. currencies), issued or guaranteed by foreign corporations, certain supranational entities (described below), and foreign
governments or their agencies or instrumentalities, and in debt obligations issued by U.S. corporations denominated in non-U.S.
currencies. All such securities are referred to as "foreign securities." The Fund's investments in foreign lower-rated securities
can not exceed 50% of the Fund's total assets. The Fund can invest in any country where the Advisor believes there is a potential to
achieve the Fund's investment objectives. The Fund may not invest more than 15% of its total assets in foreign securities of any one
country.
The percentage of the Fund's assets that will be allocated to this sector will vary on the relative yields of foreign and
U.S. securities, the economies of foreign countries, the condition of such countries' financial markets, the interest rate climate of
such countries and the relationship of such countries' currencies to the U.S. dollar. These factors are judged on the basis of
fundamental economic criteria (e.g., relative inflation levels and trends, growth rate forecasts, balance of payments status, and
economic policies) as well as technical and political data. The Fund's portfolio of foreign securities can include those of a number
of foreign countries or, depending upon market conditions, those of a single country.

The obligations of foreign governmental entities, including supranational entities, have various kinds of government
support, and may or may not be supported by the full faith and credit of a foreign government. Supranational entities include
international organizations designated or supported by governmental entities to promote economic reconstruction or development and
international banking institutions and related government agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian Development Bank and the Inter-American Development
Bank. The governmental members, or "stockholders," usually make initial capital contributions to the supranational entity and in
many cases are committed to make additional capital contributions if the supranational entity is unable to repay its borrowings.
Each supranational entity's lending activities are limited to a percentage of its total capital (including "callable capital"
contributed by members at the entity's call), reserves and net income. There can be no assurance that foreign governments will be
willing or able to honor their commitments.

Investing in foreign securities involves considerations and possible risks not typically associated with investing in
securities in the U.S. The values of foreign securities investments will be affected by changes in currency rates or exchange
control regulations or currency blockage, application of foreign tax laws, including withholding taxes, changes in governmental
administration or economic or monetary policy (in the U.S. or abroad) or changed circumstances in dealings between nations. Costs
will be incurred in connection with conversions between various currencies. Foreign brokerage commissions are generally higher than
commissions in the U.S. and foreign securities markets can be less liquid, more volatile and less subject to governmental supervision
than in the U.S. Investments in foreign countries could be affected by other factors not generally thought to be present in the
U.S., including expropriation or nationalization, confiscatory taxation, lack of uniform accounting and auditing standards, and
potential difficulties in enforcing contractual obligations, and could be subject to extended settlement periods. There could be
less information publicly available about foreign issuers than about U.S. issuers.

Because the Fund can purchase securities denominated in foreign currencies, a change in the value of any such currency
against the U.S. dollar will result in a change in the U.S. dollar value of the Fund's assets and the Fund's income available for
distribution. Because a portion of the Fund's investment income can be received or realized in foreign currencies, the Fund will be
required to compute and distribute its income in U.S. dollars, and absorb the cost of currency fluctuations. The Fund can engage in
foreign currency exchange transactions for hedging purposes to protect against changes in future exchange rates.

The values of foreign investments and the investment income derived from them can also be affected unfavorably by changes in
currency exchange control regulations. Although the Fund will invest only in securities denominated in foreign currencies that at
the time of investment do not have government-imposed restrictions on conversion into U.S. dollars, there can be no assurance against
subsequent imposition of currency controls. In addition, the values of foreign fixed-income investments will fluctuate in response
to changes in U.S. and foreign interest rates.

Special Risks of Emerging Market Countries. Investments in emerging market countries can involve further risks in addition
to those identified above for investments in foreign securities. Securities issued by emerging market countries and by companies
located in those countries can be subject to extended settlement periods, whereby the Fund might not receive principal and/or income
on a timely basis and its net asset value could be affected. There can be a lack of liquidity for emerging market securities;
interest rates and foreign currency exchange rates could be more volatile; sovereign limitations on foreign investments may be more
likely to be imposed; there can be significant balance of payment deficits; and their economies and markets can respond in a more
volatile manner to economic changes than those of developed countries.

The Asset-Backed Sector

Asset-Backed Securities. The Fund can invest in securities that represent undivided fractional interests in pools of
consumer loans, similar in structure to the mortgage-backed securities in which the Fund can invest described below. Payments of
principal and interest are passed through to holders of asset-backed securities and are typically supported by some form of credit
enhancement, such as a letter of credit, surety bond, limited guarantee by another entity or having a priority to certain of the
borrower's other obligations. The degree of credit enhancement varies and generally applies, until exhausted, to only a fraction of
the asset-backed security's par value. If the credit enhancement of any asset-backed security held by the Fund has been exhausted,
and if any required payments of principal and interest are not made with respect to the underlying loans, the Fund can then
experience losses or delays in receiving payment and a decrease in the value of the asset-backed security.

The value of asset-backed securities is affected by changes in the market's perception of the asset backing the security,
the creditworthiness of the servicing agent for the loan pool, the originator of the loans, or the financial institution providing
any credit enhancement, and is also affected if any credit enhancement is exhausted. The risks of investing in asset-backed
securities are ultimately dependent upon payment of the underlying consumer loans by the individuals, and the Fund would generally
have no recourse to the entity that originated the loans in the event of default by a borrower. The underlying loans are subject to
prepayments that shorten the weighted average life of asset-backed securities and can lower their return in the same manner as
described below for prepayments of a pool of mortgage loans underlying mortgage-backed securities.

Private and U.S. Government Issued Mortgage-Backed Securities and CMOs. The Fund can invest in securities that represent
participation interests in pools of residential mortgage loans, including collateralized mortgage obligations (CMOs). Some CMOs can
be issued or guaranteed by agencies or instrumentalities of the U.S. government (for example, Ginnie Maes, Freddie Macs and Fannie
Maes). Other CMOs are issued by private issuers, such as commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers. CMOs issued by such private issuers are not issued or guaranteed by
the U.S. government or its agencies and are, therefore, also subject to credit risks. Credit risk relates to the ability of the
issuer or a debt security to make interest or principal payments on the security as they become due. Securities issued or guaranteed
by the U.S. government are subject to little, if any, credit risk because they are backed by the "full faith and credit of the U.S.
government," which in general terms means that the U.S. Treasury stands behind the obligation to pay interest and principal.

The Fund's investments can include securities which represent participation interests in pools of residential mortgage loans
which may be issued or guaranteed by private issuers or by agencies or instrumentalities of the U.S. government. Such securities
differ from conventional debt securities which provide for periodic payment of interest in fixed or determinable amounts (usually
semi-annually) with principal payments at maturity or specified call dates. Mortgage-backed securities provide monthly payments
which are, in effect, a "pass-through" of the monthly interest and principal payments (including any prepayments) made by the
individual borrowers on the pooled mortgage loans.

The yield on mortgage-backed securities is based on the average expected life of the underlying pool of mortgage loans,
which is computed on the basis of the maturities of the underlying instruments. The actual life of any particular pool will be
shortened by unscheduled or early payments of principal and interest. The occurrence of prepayments is affected by a wide range of
economic, demographic and social factors and, accordingly, it is not possible to predict accurately the average life of a particular
pool. The yield on such pools is usually computed by using the historical record of prepayments for that pool, or in the case of
newly-issued mortgages, the prepayment history of similar pools. The actual prepayment experience of a pool of mortgage loans can
cause the yield realized by the Fund to differ from the yield calculated on the basis of the expected average life of the pool.

The price and yields to maturity of CMOs are, in part, determined by assumptions about cash-flows from the rate of payments
of underlying mortgages. However, changes in prevailing interest rates can cause the rate of prepayments of underlying mortgages to
change. In general, prepayments on fixed rate mortgage loans increase during periods of falling interest rates and decrease during
periods of rising interest rates. Faster than expected prepayments of underlying mortgages will reduce the market value and yield to
maturity of issued CMOs. If prepayments of mortgages underlying a short-term or intermediate-term CMO occur more slowly than
anticipated because of rising interest rates, the CMO effectively can become a longer-term security. The prices of long-term debt
securities generally fluctuate more widely than those of shorter-term securities in response to changes in interest rates which, in
turn, can result in greater fluctuations in the Fund's share prices.

Prepayments tend to increase during periods of falling interest rates, while during periods of rising interest rates
prepayments will most likely decline. When prevailing interest rates rise, the value of a pass-through security can decrease as do
other debt securities, but, when prevailing interest rates decline, the value of pass-through securities is not likely to rise on a
comparable basis with other debt securities because of the pre-payment feature of pass-through securities. The Fund's reinvestment
of scheduled principal payments and unscheduled prepayments it receives can occur at higher or lower rates than the original
investment, thus affecting the yield of the Fund. Monthly interest payments received by the Fund have a compounding effect which can
increase the yield to shareholders more than debt obligations that pay interest semi-annually.

Because of those factors, mortgage-backed securities can be less effective than Treasury bonds of similar maturity at
maintaining yields during periods of declining interest rates. Accelerated prepayments adversely affect yields for pass-through
securities purchased at a premium (i.e., a price in excess of principal amount) and can involve additional risk of loss of principal
because the premium may not have been fully amortized at the time the obligation is repaid. The opposite is true for pass-through
securities purchased at a discount. The Fund can purchase mortgage-backed securities at a premium or at a discount.

Some mortgage-backed securities issued or guaranteed by U.S. government agencies or instrumentalities are backed by the full
faith and credit of the U.S. Treasury (e.g., direct pass-through certificates of the Government National Mortgage Association); some
are supported by the right of the issuer to borrow from the U.S. government (e.g., obligations of Federal Home Loan Banks); and some
are backed by only the credit of the issuer itself (e.g., obligations of the Federal National Mortgage Association). Such guarantees
do not extend to the value or yield of the mortgage-backed securities themselves or to the value of the Fund's shares.

Interest Rate Risks. Although U.S. government securities involve little credit risk, their market values will fluctuate
until they mature, depending on prevailing interest rates. When prevailing interest rates go up, the market value of already issued
debt securities tends to go down. When interest rates go down, the market value of already issued debt securities tends to go up.
The magnitude of those fluctuations generally will be greater when the average maturity of the Fund's portfolio securities is
longer. Certain of the Fund's investments, such as I/Os, P/Os and mortgage-backed securities such as CMOs, can be very sensitive to
interest rate changes and their values can be quite volatile.

The Fund can invest in "stripped" mortgage-backed securities or CMOs. Stripped mortgage-backed securities usually have two
classes. The classes receive different proportions of the interest and principal distributions on the pool of mortgage assets that
act as collateral for the security. In certain cases, one class will receive all of the interest payments (and is known as an
"I/O"), while the other class will receive all of the principal value on maturity (and is known as a "P/O").

The yield to maturity on the class that receives only interest is extremely sensitive to the rate of payment of the
principal on the underlying mortgages. Principal prepayments increase that sensitivity. Stripped securities that pay "interest
only" are therefore subject to greater price volatility when interest rates change, and they have the additional risk that if the
underlying mortgages are prepaid, the Fund will lose the anticipated cash flow from the interest on the prepaid mortgages. That risk
is increased when general interest rates fall, and in times of rapidly falling interest rates, the Fund might receive back less than
its investment.

The value of "principal only" securities generally increases as interest rates decline and prepayment rates rise. The price
of these securities is typically more volatile than that of coupon-bearing bonds of the same maturity.

Stripped securities are generally purchased and sold by institutional investors through investment banking firms. At
present, established trading markets have not yet developed for these securities. Therefore, some stripped securities could be
deemed "illiquid." If the Fund holds illiquid stripped securities, the amount it can hold will be subject to the Fund's investment
limitations set forth under "Direct Placements and Other Illiquid Securities."

The Fund can also enter into "forward roll" transactions with banks or other buyers that provide for future delivery of the
mortgage-backed securities in which the Fund can invest. The Fund would be required to deposit liquid assets of any type, including
equity and debt securities of any grade to its custodian bank in an amount equal to its purchase payment obligation under the roll.

GNMA Certificates. Certificates of the Government National Mortgage Association ("GNMA Certificates") are mortgage-backed
securities which evidence an undivided interest in a pool or pools of mortgages. The GNMA Certificates that the Fund can purchase
are of the "modified pass-through" type, which entitle the holder to receive timely payment of all interest and principal payments
due on the mortgage pool, net of fees paid to the "issuer" and GNMA, regardless of whether the mortgagor actually makes the payment.

The National Housing Act authorizes GNMA to guarantee the timely payment of principal and interest on securities backed by a
pool of mortgages insured by the Federal Housing Administration ("FHA") or guaranteed by the Veterans Administration ("VA"). The
GNMA guarantee is backed by the full faith and credit of the U.S. government. GNMA is also empowered to borrow without limitation
from the U.S. Treasury if necessary to make any payments required under its guarantee.

The average life of a GNMA Certificate is likely to be substantially shorter than the original maturity of the mortgages
underlying the securities. Prepayments of principal by mortgagors and mortgage foreclosures will usually result in the return of the
greater part of principal investment long before the maturity of the mortgages in the pool. Foreclosures impose no risk to principal
investment because of the GNMA guarantee, except to the extent that the Fund has purchased the certificates at a premium in the
secondary market.

FHLMC Securities. The Federal Home Loan Mortgage Corporation ("FHLMC") was created to promote development of a nationwide
secondary market for conventional residential mortgages. FHLMC issues two types of mortgage pass-through securities ("FHLMC
Certificates"): mortgage participation certificates ("PCS") and guaranteed mortgage certificates ("GMCs"). PCS resemble GNMA
Certificates in that each PC represents a pro rata share of all interest and principal payments made and owed on the underlying
pool. FHLMC guarantees timely monthly payment of interest on PCS and the ultimate payment of principal.

GMCs also represent a pro rata interest in a pool of mortgages. However, these instruments pay interest semi-annually and
return principal once a year in guaranteed minimum payments. The expected average life of these securities is approximately 10
years. The FHLMC guarantee is not backed by the full faith and credit of the United States.

FNMA Securities. The Federal National Mortgage Association ("FNMA") was established to create a secondary market in
mortgages insured by the FHA. FNMA issues guaranteed mortgage pass-through certificates ("FNMA Certificates"). FNMA Certificates
resemble GNMA Certificates in that each FNMA Certificate represents a pro rata share of all interest and principal payments made and
owed on the underlying pool. FNMA guarantees timely payment of interest and principal on FNMA Certificates. The FNMA guarantee is
not backed by the full faith and credit of the United States.

The Municipal Sector

The assets of this sector will be invested in obligations issued by or on behalf of states, territories or possessions of
the United States and the District of Columbia or their political subdivisions, agencies, instrumentalities or authorities (municipal
bonds). At the time of purchase, all securities in this sector will be rated within the four highest grades assigned by Moody's,
Standard & Poor's, Fitch ("Baa" or better by Moody's or "BBB" or better by Standard & Poor's), or another nationally recognized
rating organization, or unrated securities which are of comparable quality in the opinion of the Advisor. Any income earned on
municipal bonds which the Fund distributes to shareholders would be treated as taxable income to such shareholders.

The Fund does not expect to invest in municipal bonds for tax-exempt income to distribute to shareholders, but to take
advantage of yield differentials with other debt securities, which can be reflected in bond prices, and thus reflect potential for
capital appreciation. Because municipal bonds are generally exempt from federal taxation they normally yield much less than taxable
fixed-income securities. At times, however, the yield differential narrows from its normal range. This can occur, for example, when
the demand for U.S. government securities substantially increases in times of economic stress or when investors seeking safety are
willing to pay more for such securities thereby reducing the yield. It also can occur when investors perceive a threat to the
continuation of the tax-exempt status of municipal bonds through possible Congressional or State action. When this happens,
investors are not willing to pay as much for municipal bonds, thereby reducing prices and increasing their yield compared to taxable
obligations. If such situations occur, investments in the Municipal Sector can be more attractive than other sectors even though
such investments continue to offer lower yields than taxable securities because if the yield differential returns to normal ranges,
the value of municipal bonds relative to taxable fixed-income securities will have increased, i.e. depreciated less or appreciated
more. Such an investment would help the Fund achieve its objective of capital preservation or capital appreciation. It would also
help achieve its objective of high income because the Fund's net asset value per share would be higher than it otherwise would have
been, thereby permitting it to earn additional income on those assets.

Municipal bonds include debt obligations issued to obtain funds for various public purposes, including the construction of a
wide range of public facilities such as airports, highways, bridges, schools, hospitals, housing, mass transportation, streets, and
water and sewer works. Other public purposes for which municipal bonds can be issued include the refunding of outstanding
obligations, obtaining funds for general operating expenses and obtaining funds to lend to other public institutions and facilities.

The two principal classifications of municipal bonds are (1) "general obligation" and (2) "revenue" (or "special tax")
bonds. General obligation bonds are secured by the issuer's pledge of its full faith, credit and unlimited taxing power for the
payment of principal and interest. Revenue or special tax bonds are payable only from the revenues derived from a particular
facility or class of facilities or project or, in a few cases, from the proceeds of a special excise or other tax but are not
supported by the issuer's power to levy general taxes. There are variations in the security of municipal bonds, both within a
particular classification and between classifications, depending on numerous factors. The yields of municipal bonds depend on, among
other things, general money market conditions, general conditions of the Municipal Bond market, size of a particular offering, the
maturity of the obligation and rating of the issue, and are generally lower than those of taxable investments.

The Convertible Sector

Assets allocated to this sector will be invested in securities (bonds, debentures, corporate notes, preferred stocks and
units with warrants attached) which are convertible into common stock. Common stock received upon conversion can be retained in the
Fund's portfolio to permit orderly disposition or to establish a holding period to avoid possible adverse federal income tax
consequences to the Fund or shareholders.

Convertible securities can provide a potential for current income through interest and dividend payments and at the same
time provide an opportunity for capital appreciation by virtue of their convertibility into common stock. The rating requirements to
which the Fund is subject when investing in corporate fixed-income securities and foreign securities (see above) also apply to the
Fund's investments in domestic and foreign convertible securities, respectively.

Convertible securities rank senior to common stock in a corporation's capital structure and, therefore, can entail less risk
than the corporation's common stock. The value of a convertible security is a function of its "investment value" (its value without
considering its conversion privilege) and its "conversion value" (the security's worth if it were to be exchanged pursuant to its
conversion privilege for the underlying security at the market value of the underlying security).

To the extent that a convertible security's investment value is greater than its conversion value, its price will be
primarily a reflection of such investment value and its price will be likely to increase when interest rates fall and decrease when
interest rates rise as with other fixed-income securities (the credit standing of the issuer and other factors may also have an
effect on the convertible security's value). If the conversion value exceeds the investment value, the price of the convertible
security will rise above its investment value and, in addition, will sell at some premium over its conversion value, which represents
the price investors are willing to pay for the privilege of purchasing a fixed-income security with a possibility of capital
appreciation due to the conversion privilege. At such times the price of the convertible security will tend to fluctuate directly
with the price of the underlying equity security. Convertible securities can be purchased by the Fund at varying price levels above
their investment values and/or their conversion values in keeping with the Fund's objectives.

The Money Market Sector

Assets in this sector will be invested in the following U.S. dollar-denominated debt obligations maturing in 397 days or
less:

(1) U.S. government securities: Obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities.

(2) Bank Obligations: Certificates of deposit, bankers' acceptances, loan participation agreements, time deposits, and
letters of credit if they are payable in the United States or London, England, and are issued or guaranteed by a
domestic or foreign bank having total assets in excess of $1 billion.

(3) Commercial Paper: Obligations rated "A-1," "A-2" or "A-3" by Standard & Poor's or Prime-1, Prime-2 or Prime-3 by
Moody's or if not rated, issued by a corporation having an existing debt security rated "A" or better by Standard &
Poor's or "A" or better by Moody's.

(4) Corporate Obligations: Corporate debt obligations (including master demand notes but not including commercial paper) if they
are issued by domestic corporations and are rated "A" or better by Standard & Poor's or "A" or better by Moody's or
unrated securities which are of comparable quality in the opinion of the Advisor.

(5) Other Obligations: Obligations of the type listed in (1) through (4) above, but not satisfying the standards set
forth therein, if they are (a) subject to repurchase agreements or (b) guaranteed as to principal and interest by a
domestic or foreign bank having total assets in excess of $1 billion, by a corporation whose commercial paper can be
purchased by the Fund, or by a foreign government having an existing debt security rated "AA" or "Aa" or better.

(6) Board-Approved Instruments: Other short-term investments of a type which the Board determines presents minimal credit
risks and which are of "high quality" as determined by any major rating service or, in the case of an instrument that
is not rated, of comparable quality as determined by the Board.

Bank time deposits can be non-negotiable until expiration and can impose penalties for early withdrawal. Master demand
notes are corporate obligations which permit the investment of fluctuating amounts by the Fund at varying rates of interest pursuant
to direct arrangements between the Fund, as lender, and the borrower. They permit daily changes in the amounts borrowed. The Fund
has the right to increase the amount under the note at any time up to the full amount provided by the note agreement, or to decrease
the amount, and the borrower can prepay up to the full amount of the note without penalty. These notes may or may not be backed by
bank letters of credit. Because these notes are direct lending arrangements between the lender and borrower, it is not generally
contemplated that they will be traded, and there is no secondary market for them, although they are redeemable (and thus immediately
repayable by the borrower) at principal amount, plus accrued interest, at any time.

The Fund has no limitation on the type of issuer from whom these notes will be purchased; however, in connection with such
purchase and on an ongoing basis, subject to policies established by the Board of Trustees, the Advisor will consider the earning
power, cash flow and other liquidity ratios of the issuer, and its ability to pay principal and interest on demand, including a
situation in which all holders of such notes made demand simultaneously. Investments in bank time deposits and master demand notes
are subject to the investment limitation on securities that are not readily marketable set forth under "Special Investment Techniques
- -- Direct Placements and Other Illiquid Securities."

Because the Fund can invest in U.S. dollar-denominated securities of foreign banks and foreign branches of U.S. banks, the
Fund can be subject to additional investment risks which can include future political and economic developments of the country in
which the bank is located, possible imposition of withholding taxes on interest income payable on the securities, possible seizure or
nationalization of foreign deposits, the possible establishment of exchange control regulations or the adoption of other governmental
restrictions that might affect the payment of principal and interest on such securities. Additionally, not all of the U.S. federal
and state banking laws and regulations applicable to domestic banks relating to maintenance of reserves, loan limits and promotion of
financial soundness apply to foreign branches of domestic banks, and none of them apply to foreign banks.

SPECIAL INVESTMENT TECHNIQUES

In conjunction with the investments in the seven sectors described above, the Fund can use the following special investment
techniques, however, the Fund's portfolio might not always include all of the different types of investment described below.

Direct Placements and Other Illiquid Securities

The Fund can invest up to 20% of its assets in securities purchased in direct placements which are subject to statutory or
contractual restrictions and delays on resale (restricted securities). This policy does not limit the acquisition of restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of 1933 that are determined to be liquid by the Board
of Trustees or the Advisor under Board-approved guidelines. Such guidelines take into account trading activity for such securities
and the availability of reliable pricing information, among other factors. If there is a lack of trading interest in particular Rule
144A securities, the Fund's holdings of those securities can be illiquid. Restricted securities may generally be resold only in
privately-negotiated transactions with a limited number of purchasers or in a public offering registered under the Securities Act of
1933 and are, therefore, unlike securities which are traded in the open market and can be expected to be sold immediately if the
market demand is adequate. If restricted securities are substantially comparable to registered securities of the same issuer which
are readily marketable, the Fund can not purchase them unless they are offered at a discount from the market price of the registered
securities. Generally, no restricted securities will be purchased unless the issuer has agreed to register the securities at its
expense within a specific time period. Adverse conditions in the public securities market at certain times can preclude a public
offering of an issuer's unregistered securities. There can be undesirable delays in selling restricted securities at prices
representing fair value.

The Fund can invest up to an additional 10% of its assets in securities which, although not restricted, are not readily
marketable. Such securities can include bank time deposits, master demand notes described in the Money Market Sector and certain
puts and calls which are traded in the over-the-counter markets. The Advisor monitors holdings of illiquid securities on an ongoing
basis to determine whether to sell any holdings to maintain adequate liquidity. Illiquid securities include repurchase agreements
maturing in more than seven days, or certain participation interests other than those with puts exercisable within seven days.

Repurchase Agreements

Any of the securities permissible for purchase for one of its sectors can be acquired by the Fund subject to repurchase
agreements with commercial banks with total assets in excess of $1 billion or securities dealers with a net worth in excess of $50
million. In a repurchase transaction, at the time the Fund acquires a security, it simultaneously resells it to the vendor and must
deliver that security to the vendor on a specific future date. The repurchase price exceeds the purchase price by an amount that
reflects an agreed-upon interest rate effective for the period during which the repurchase agreement is in effect. The majority of
these transactions run from day to day, and delivery pursuant to the resale typically will occur within one to five days of the
purchase. The Fund will not enter into a repurchase transaction of more than seven days. Repurchase agreements are considered
"loans" under the Investment Company Act of 1940 (the "1940 Act"), collateralized by the underlying security. The Fund's repurchase
agreements will require that at all times while the repurchase agreement is in effect, the collateral's value must equal or exceed
the repurchase price to collateralize the loan fully. The Advisor will monitor the collateral daily and, in the event its value
declines below the repurchase price, will immediately demand additional collateral be deposited. If such demand is not met within
one day, the existing collateral will be sold. Additionally, the Advisor will consider the creditworthiness of the vendor. If the
vendor fails to pay the agreed-upon resale price on the delivery date, the Fund's risks in such event can include any decline in
value of the collateral to an amount which is less than 100% of the repurchase price, any costs of disposing of such collateral, and
loss from any delay in foreclosing on the collateral. There is no limit on the amount of the Fund's assets that can be subject to
repurchase agreements.

When-Issued and Delayed-Delivery Transactions

The Fund can purchase asset-backed securities, municipal bonds and other debt securities on a "when-issued" basis, and can
purchase or sell such securities on a "delayed-delivery" basis. "When-issued" or "delayed-delivery" refers to securities whose terms
and indenture are available and for which a market exists, but which are not available for immediate delivery. Although the Fund
will enter into such transactions for the purpose of acquiring securities for its portfolio for delivery pursuant to option contracts
it has entered into; the Fund can dispose of a commitment prior to settlement. The Fund does not intend to make such purchases for
speculative purposes. When such transactions are negotiated, the price (which is generally expressed in yield terms) is fixed at the
time the commitment is made, but delivery and payment for the securities take place at a later date. During the period between
commitment by the Fund and settlement, no payment is made for the securities purchased, and no interest accrues to the Fund from the
transaction until the Fund receives the security at settlement of the trade. Such securities are subject to market fluctuations; the
value at delivery can be less than the purchase price. The Fund will identify to its custodian, liquid assets on its records as
segregated of any type, including equity and debt securities of any grade at least equal to the value of purchase commitments until
payment is made. Such securities can bear interest at a lower rate than longer term securities. The commitment to purchase a
security for which payment will be made on a future date can be deemed a separate security and involve a risk of loss if the value of
the security declines prior to the settlement date, which risk is in addition to the risk of decline of the Fund's other assets.

Hedging

The Fund can purchase futures contracts; forward contracts; call and put options on securities, futures, indices and foreign
currencies; and enter into interest rate swap agreements. These are referred to as "Hedging Instruments." The Fund is not obligated
to use hedging instruments even though it is permitted to use them in the Advisor's discretion, as described below.

Hedging Instruments can be used to attempt to protect against possible declines in the market value of the Fund's portfolio
from downward trends in securities markets, to protect the Fund's unrealized gains in the value of its securities which have
appreciated, to facilitate selling securities for investment reasons, to establish a position in the securities markets as a
temporary substitute for purchasing particular securities, or to reduce the risk of adverse currency fluctuations.

The Fund's strategy of hedging with futures and options on futures will be incidental to the Fund's activities in the
underlying cash market. Covered calls and puts can also be written on securities to attempt to increase the Fund's income. The Fund
will not use futures and options on futures for speculation. The hedging instruments the Fund can use are described below. As of
the date of this Registration Statement, the Fund does not intend to enter into futures, forward contracts and options on futures if
after any such purchase, the sum of margin deposits on futures and premiums paid on futures options would exceed 5% of the value of
the Fund's total assets.

|_| Futures. The Fund can buy and sell futures contracts that relate to (1) stock indices (referred to as stock index
futures), other securities indices (together with stock index futures, referred to as financial futures), (3) interest rates
(referred to as interest rate futures), (4) foreign currencies (referred to as forward contracts), or (5) commodities (referred to as
commodity futures.) An interest rate future obligates the seller to deliver and the purchaser to take a specific type of debt
security at a specific future date for a fixed price. That obligation can be satisfied by actual delivery of the debt security or by
entering into an offsetting contract. A bond index assigns relative values to the bonds included in that index and is used as a
basis for trading long-term bond index futures contracts. Bond index futures reflect the price movements of bonds included in the
index. They differ from interest rate futures in that settlement is made in cash rather than by delivery; or settlement can be made
by entering into an offsetting contract.

|_| Put and Call Options. The Fund can buy and sell exchange-traded and over-the-counter put and call options, including
index options, securities options, currency options, commodities options, and options on the other types of futures described in
"futures," above. A call or put can be purchased only if, after the purchase, the value of all call and put options held by the Fund
will not exceed 5% of the Fund's total assets.

If the Fund sells (that is, writes) a call option, it must be "covered." That means the Fund must own the security subject
to the call while the call is outstanding, or, for other types of written calls, the Fund must segregate liquid assets to enable it
to satisfy its obligations if the call is exercised. Up to 25% of the Fund's total assets can be subject to calls.

The Fund can buy puts whether or not it holds the underlying investment in the portfolio. If the Fund writes a put, the put
must be covered by segregated liquid assets. The Fund will not write puts if more than 50% of the Fund's net assets would have to be
segregated to cover put options.

|_| Foreign Currency Options. The Fund can purchase and write puts and calls on foreign currencies that are traded on a
securities or commodities exchange or quoted by major recognized dealers in such options, for the purpose of protecting against
declines in the dollar value of foreign securities and against increases in the dollar cost of foreign securities to be acquired. If
a rise is anticipated in the dollar value of a foreign currency in which securities to be acquired are denominated, the increased
cost of such securities can be partially offset by purchasing calls or writing puts on that foreign currency. If a decline in the
dollar value of a foreign currency is anticipated, the decline in value of portfolio securities denominated in that currency can be
partially offset by writing calls or purchasing puts on that foreign currency. However, in the event of currency rate fluctuations
adverse to the Fund's position, it would either lose the premium it paid and incur transaction costs, or purchase or sell the foreign
currency at a disadvantageous price.

|_| Forward Contracts. The Fund can enter into foreign currency exchange contracts ("forward contracts"), which obligate
the seller to deliver and the purchaser to take a specific foreign currency at a specific future date for a fixed price. The Fund
can enter into a Forward Contract in order to "lock in" the U.S. dollar price of a security denominated in a foreign currency, or to
protect against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and a foreign currency.
There is a risk that use of forward contracts can reduce the gain that would otherwise result from a change in the relationship
between the U.S. dollar and a foreign currency. Forward contracts include standardized foreign currency futures contracts which are
traded on exchanges and are subject to procedures and regulations applicable to other futures. The Fund can also enter into a
Forward Contract to sell a foreign currency denominated in a currency other than that in which the underlying security is
denominated. This is done in the expectation that there is a greater correlation between the foreign currency of the Forward
Contract and the foreign currency of the underlying investment than between the U.S. dollar and the currency of the underlying
investment. This technique is referred to as "cross hedging." The success of cross hedging is dependent on many factors, including
the ability of the Advisor to correctly identify and monitor the correlation between foreign currencies and the U.S. dollar. To the
extent that the correlation is not identical, the Fund can experience losses or gains on both the underlying security and the cross
currency hedge.

The Fund will not speculate in foreign currency exchange contracts. There is no limitation as to the percentage of the
Fund's assets that can be committed to foreign currency exchange contracts. The Fund does not enter into such forward contracts or
maintain a net exposure in such contracts to the extent that the Fund would be obligated to deliver an amount of foreign currency in
excess of the value of the Fund's assets denominated in that currency or enter into a cross hedge unless it is denominated in a
currency or currencies that the Advisor believes will have price movements that tend to correlate closely with the currency in which
the investment being hedged is denominated.

There are certain risks in writing calls. If a call written by the Fund is exercised, the Fund foregoes any profit from any
increase in the market price above the call price of the underlying investment on which the call was written. In addition, the Fund
could experience capital losses that might cause previously distributed short-term capital gains to be re-characterized as
non-taxable return of capital to shareholders. In writing puts, there is the risk that the Fund could be required to buy the
underlying security at a disadvantageous price. The principal risks relating to the use of futures are: (a) possible imperfect
correlation between the prices of the futures and the market value of the securities in the Fund's portfolio; (b) possible lack of a
liquid secondary market for closing out a futures position; (c) the need for additional skills and techniques beyond those required
for normal portfolio management; and (d) losses on futures resulting from interest rate movements not anticipated by the Advisor.

? Interest Rate Swaps and Total Return Swaps. In an interest rate swap, the Fund and another party exchange their right to
receive or their obligation to pay interest on a security. For example, they might swap the right to receive fixed rate payments for
floating rate payments. The Fund enters into swaps only on securities it owns. The Fund can not enter into swaps with respect to
more than 25% of its total assets. Also, the Fund will identify on its books liquid assets of any type, including equity and debt
securities of any grade, to cover any amounts it could owe under swaps that exceed the amounts it is entitled to receive, and it will
adjust that amount daily, as needed.

In addition, the Fund may invest in total return swaps with appropriate counterparties. In a total return swap, one party
pays a rate of interest in exchange for the total rate of return on another investment. For example, if the Fund wished to invest in
a particular security, it could instead enter into a total return swap and receive the total return of that security, less the
"funding cost," which would be a floating interest rate payment to the counterparty.

Under a swap agreement, the Fund typically will pay a fee determined by multiplying the face value of the swap agreement by
an agreed-upon interest rate. If the underlying asset value declines over the term of the swap, the Fund would be required to pay
the dollar value of that decline to the counterparty in addition to its fee payments.

Swap agreements entail both interest rate risk and credit risk. There is a risk that, based on movements of interest rates
in the future, the payments made by the Fund under a swap agreement will be greater than the payments it receives. Credit risk
arises from the possibility that the counterparty will default. If the counterparty defaults, the Fund's loss will consist of the
net amount of contractual interest payments that the Fund has not yet received. The Manager will monitor the creditworthiness of
counterparties to the Fund's interest rate swap transactions on an ongoing basis.

|_| Derivative Investments. The Fund can invest in a number of different kinds of "derivative investments." In general, a
"derivative investment" is a specially designed investment whose performance is linked to the performance of another investment or
security, such as an option, future, index, currency or commodity. The Fund can not purchase or sell physical commodities or
commodity contracts; however this does not prevent the Fund from buying or selling options and futures contracts or from investing in
securities or other instruments backed by physical commodities. In the broadest sense, derivative investments include
exchange-traded options and futures contracts. The risks of investing in derivative investments include not only the ability of the
company issuing the instrument to pay the amount due on the maturity of the instrument, but also the risk that the underlying
investment or security might not perform the way the Advisor expected it to perform. The performance of derivative investments can
also be influenced by interest rate changes in the U.S. and abroad. All of this can mean that the Fund will realize less principal
and/or income than expected. Certain derivative investments held by the Fund can trade in the over-the-counter market and can be
illiquid. Derivative investments used by the Fund are used in some cases for hedging purposes and in other cases for "non-hedging"
investment purposes to seek income or total return. In the broadest sense, exchange-traded options and futures contracts (discussed
in "Hedging," above) can be considered "derivative investments."

The Fund can invest in different types of derivatives, generally known as "Structured Investments." "Index-linked" or
"commodity -linked" notes are debt securities of companies that call for interest payments and/or payment on the maturity of the note
in different terms than the typical note where the borrower agrees to make fixed interest payments and to pay a fixed sum on the
maturity of the note. Principal and/or interest payments on an index-linked note depend on the performance of one or more market
indices, such as the S&P 500 Index or a weighted index of commodity futures, such as crude oil, gasoline and natural gas. Further
examples of derivative investments the Fund can invest in include "debt exchangeable for common stock" of an issuer or "equity-linked
debt securities" of an issuer. At maturity, the principal amount of the security is exchanged for common stock of the issuer or is
payable in an amount based on the issuer's common stock price at the time of maturity. In either case there is a risk that the
amount payable at maturity will be less than the principal amount of the debt.

The Fund can also invest in currency-indexed securities. Typically these are short-term or intermediate-term debt
securities having a value at maturity, and/or interest rates determined by reference to one or more specified foreign currencies.
Certain currency-indexed securities purchased by the Fund can have a payout factor tied to a multiple of the movement of the U.S.
dollar (or the foreign currency in which the security is denominated) against the movement in the U.S. dollar, the foreign currency,
another currency, or an index. Such securities can be subject to increased principal risk and increased volatility than comparable
securities without a payout factor in excess of one, but the Advisor believes the increased yield justifies the increased risk.

|_| Participation Interests. The Fund can acquire interests in loans that are made to U.S. companies, foreign companies
and foreign governments (the "borrower"). They can be interests in, or assignments of, the loan and are acquired from banks or
brokers that have made the loan or have become members of the lending syndicate. The Fund will not invest, at the time of
investment, more than 5% of its net assets in participation interests of the same borrower. The Advisor has set certain
creditworthiness standards for borrowers, and monitors their creditworthiness. The value of loan participation interests depends
primarily upon the creditworthiness of the borrower, and its ability to pay interest and principal. Borrowers can have difficulty
making payments. If a borrower fails to make scheduled interest or principal payments, the Fund could experience a decline in the
net asset value of its shares. Some borrowers can have senior securities rated as low as "C" by Moody's or "D" by Standard & Poor's,
but can be deemed acceptable credit risks. Participation interests are subject to the Fund's limitations on investments in illiquid
securities.

Loans of Portfolio Securities

To attempt to increase its income, the Fund can lend its portfolio securities if, after any loan, the value of the
securities loaned does not exceed 25% of the total value of its assets. Under applicable regulatory requirements (which are subject
to change), the loan collateral must, on each business day, be at least equal to the value of the loaned securities and must consist
of cash, bank letters of credit or U.S. government securities. To be acceptable as collateral, letters of credit must obligate a
bank to pay amounts demanded by the Fund if the demand meets the terms of the letter. Such terms and the issuing bank must be
satisfactory to the Fund. The Fund receives an amount equal to the dividends or interest on loaned securities and also receives one
or more of (a) negotiated loan fees, (b) interest on securities used as collateral, or (c) interest on short-term debt securities
purchased with such loan collateral; either type of interest may be shared with the borrower. The Fund can also pay reasonable
finder's, custodian and administrative fees.

The terms of the Fund's loans must meet certain tests under the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code" or the "Code"), and permit the Fund to reacquire loaned securities on five days' notice or in time to vote on any
important matter. The Fund will make such loans only to banks and securities dealers with whom it can enter into repurchase
transactions. If the borrower fails to return this loaned security the Fund's risks include: (1) any costs in disposing of the
collateral; (2) loss from a decline in value of the collateral to an amount less than 100% of the securities loaned; (3) being unable
to exercise its voting or consent rights with respect to the security; and (4) any loss arising from the Fund being unable to timely
settle a sale of such securities.

Borrowing

From time to time, the Fund can increase its ownership of securities by borrowing up to 10% of the value of its net assets
from banks and investing the borrowed funds (on which the Fund will pay interest). After any such borrowing, the Fund's total
assets, less its liabilities other than borrowings, must remain equal to at least 300% of all borrowings, as set forth in the
Investment Company Act. Interest on borrowed money is an expense the Fund would not otherwise incur, so that it can have
substantially reduced net investment income during periods of substantial borrowings. The Fund's ability to borrow money from banks
subject to the 300% asset coverage requirement is a fundamental policy.

The Fund can also borrow to finance repurchases and/or tenders of its shares and can also borrow for temporary purposes in
an amount not exceeding 5% of the value of the Fund's total assets. Any investment gains made with the proceeds obtained from
borrowings in excess of interest paid on the borrowings will cause the net income per share or the net asset value per share of the
Fund's shares to be greater than would otherwise be the case. On the other hand, if the investment performance of the securities
purchased fails to cover their cost (including any interest paid on the money borrowed) to the Fund, then the net income per share or
net asset value per share of the Fund's shares will be less than would otherwise have been the case. This speculative factor is
known as "leverage."

Although such borrowings would therefore involve additional risk to the Fund, the Fund will only borrow if such additional
risk of loss of principal is considered by the Advisor to be appropriate in relation to the Fund's primary investment objective of
high current income consistent with preservation of capital. The Advisor will make this determination by examining both the market
for securities in which the Fund invests and interest rates in general to ascertain that the climate is sufficiently stable to
warrant borrowing.

Portfolio Turnover

Because the Fund will actively use trading to benefit from short-term yield disparities among different issues of
fixed-income securities or otherwise to achieve its investment objective and policies, the Fund can be subject to a greater degree of
portfolio turnover than might be expected from investment companies which invest substantially all of their assets on a long-term
basis. The Fund cannot accurately predict its portfolio turnover rate, but it is anticipated that its annual turnover rate generally
will not exceed 400% (excluding turnover of securities having a maturity of one year or less).

The Advisor will monitor the Fund's tax status under the Internal Revenue Code during periods in which the Fund's annual
turnover rate exceeds 100%. Higher portfolio turnover results in increased Fund expenses, including brokerage commissions, dealer
mark-ups and other transaction costs on the sale of securities and on the reinvestment in other securities. To the extent that
increased portfolio turnover results in sales of securities held less than three months, the Fund's ability to qualify as a
"regulated investment company" under the Internal Revenue Code can be affected.

Defensive Strategies

There can be times when, in the Advisor's judgment, conditions in the securities markets would make pursuing the Fund's
primary investment strategy inconsistent with the best interests of its shareholders. At such times, the Fund may employ alternative
strategies primarily seeking to reduce fluctuations in the value of the Fund's assets. In implementing these defensive strategies,
the Fund can invest all or any portion of its assets in nonconvertible high-grade debt securities, or U.S. government and agency
obligations. The Fund can also hold a portion of its assets in cash or cash equivalents. It is impossible to predict when, or for
how long, alternative strategies will be utilized.

Effects of Interest Rate Changes

During periods of falling interest rates, the values of outstanding long term fixed-income securities generally rise.
Conversely, during periods of rising interest rates, the values of such securities generally decline. The magnitude of these
fluctuations will generally be greater for securities with longer maturities. If the Advisor's expectation of changes in interest
rates or its evaluation of the normal yield relationships in the fixed-income markets proves to be incorrect, the Fund's income, net
asset value and potential capital gain can be decreased or its potential capital loss can be increased.

Although changes in the value of the Fund's portfolio securities subsequent to their acquisition are reflected in the net
asset value of the Fund's shares, such changes will not affect the income received by the Fund from such securities. The dividends
paid by the Fund will increase or decrease in relation to the income received by the Fund from its investments, which will in any
case be reduced by the Fund's expenses before being distributed to the Fund's shareholders.

INVESTMENT RESTRICTIONS

The Fund has adopted the following investment restrictions, which together with its investment objectives, are fundamental
policies changeable only with the approval of the holders of a "majority" of the Fund's outstanding voting securities, defined in the
1940 Act as the affirmative vote of the lesser of (a) more than 50% of the outstanding shares of the Fund, or (b) 67% or more of the
shares present or represented by proxy at a meeting if more than 50% of the Fund's outstanding shares are represented at the meeting
in person or by proxy. Unless it is specifically stated that a percentage restriction applies on an ongoing basis, it applies only
at the time the Fund makes an investment, and the Fund need not sell securities to meet the percentage limits if the value of the
investment increases in proportion to the size of the Fund. Under these restrictions, the Fund will not do any of the following:

o As to 75% of its total assets, the Fund will not invest in securities of any one issuer (other than the United States
government, its agencies or instrumentalities) if after any such investment either (a) more than 5% of the Fund's total
assets would be invested in the securities of that issuer, or (b) the Fund would then own more than 10% of the voting
securities of that issuer;

o The Fund will not concentrate investments to the extent of 25% or more of its total assets in securities of issuers in the
same industry; provided that this limitation shall not apply with respect to investments in U.S. government securities;

o The Fund will not make loans except through (a) the purchase of debt securities in accordance with its investment objectives
and policies; (b) the lending of portfolio securities as described above; or (c) the acquisition of securities subject to
repurchase agreements;

o The Fund will not borrow money, except in conformity with the restrictions stated above under "Borrowing";

o The Fund will not pledge, hypothecate, mortgage or otherwise encumber its assets, except to secure permitted borrowings or
for the escrow arrangements contemplated in connection with the use of Hedging Instruments;

o The Fund will not participate on a joint or joint and several basis in any securities trading account;

o The Fund will not invest in companies for the purpose of exercising control or management thereof;

o The Fund will not make short sales of securities or maintain a short position, unless at all times when a short position is
open it owns an equal amount of such securities or by virtue of ownership of other securities has the right, without
payment of any further consideration, to obtain an equal amount of the securities sold short ("short sales against the
box"). Because changes in federal income tax laws would not enable the Fund to defer realization of gain or loss for
federal income tax purposes, short sales against the box therefore would not be used by the Fund;

o The Fund will not invest in (a) real estate, except that it can purchase and sell securities of companies which deal in real
estate or interests therein; (b) commodities or commodity contracts (except that the Fund can purchase and sell hedging
instruments whether or not they are considered to be a commodity or commodity contract); or (c) interests in oil, gas or
other mineral exploration or development programs;

o The Fund will not act as an underwriter of securities, except insofar as the Fund might be deemed to be an underwriter for
purposes of the Securities Act of 1933 in the resale of any securities held for its own portfolio;

o The Fund will not purchase securities on margin, except that the Fund can make margin deposits in connection with any of the
Hedging Instruments it can use; or

o The Fund will not issue "senior securities," but this does not prohibit certain investment activities for which assets of
the Fund are designated as segregated, or margin, collateral, or escrow arrangements are established, to cover the related
obligations. Examples of those activities include borrowing money, reverse repurchase agreements, delayed-delivery
agreements and when-issued arrangements for portfolio securities transactions and contracts to buy or sell derivatives,
hedging instruments or options or futures.

5. The shares of beneficial interest of the Fund, $.01 par value per share (the "shares"), are listed and traded on The New
York Stock Exchange (the "NYSE"). The following table sets forth for the shares for the periods indicated: (a) the per
share high sales price on the NYSE, the net asset value per share as of the last day of the week immediately preceding
such day and the premium or discount (expressed as a percentage of net asset value) represented by the difference
between such high sales price and the corresponding net asset value and (b) the per share low sales price on the NYSE,
the net asset value per share as of the last day of the week immediately preceding such day and the premium or discount
(expressed as a percentage of net asset value) represented by the difference between such low sales price and the
corresponding net asset value.

Market Price High;(1) Market Price Low;(1)
NAV and Premium/ NAV and Premium/
Ended Discount That Day(2) Discount That Day(2)
- -------- ---------------------------- ----------------------------

1/31/99 Market: $9.56 Market: $8.50
NAV: $9.87 NAV: $9.94
Premium//Discount: -3.14% Premium//Discount: -14.49%

4/30/99 Market: $8.94 Market: $8.50
NAV: $9.79 NAV: $10.00
Premium//Discount: -8.71% Premium//Discount: -17.65%

7/31/99 Market: $8.88 Market: $8.50
NAV: $10.07 NAV: $9.67
Premium//Discount: -11.87% Premium//Discount: -12.10%

10/31/99 Market: $8.75 Market: $7.87
NAV: $9.54 NAV: $9.41
Premium//Discount: -8.28% Premium//Discount: -16.37%

1/31/00 Market: $8.25 Market: $7.31
NAV: $9.55 NAV: $9.52
Premium//Discount: -13.61% Premium//Discount: -23.21%

4/30/00 Market: $7.75 Market: $7.31
NAV: $9.38 NAV: $9.48
Premium//Discount: -17.38% Premium//Discount: -22.89%

7/31/00 Market: $8.31 Market: $7.38
NAV: $9.22 NAV: $9.00
Premium//Discount: -9.87% Premium//Discount: -18.00%

10/31/00 Market: $8.44 Market: $7.25
NAV: $9.20 NAV: $8.90
Premium//Discount: -8.26% Premium//Discount: -18.54%

1/31/01 Market: $8.74 Market: $7.60
NAV: $9.06 NAV: $8.61
Premium//Discount: -3.53% Premium//Discount: -11.73%

4/30/01 Market: $8.63 Market: $8.63
NAV: $8.59 NAV: $8.59
Premium//Discount: 0.45% Premium//Discount: 0.45%

7/31/01 Market: $8.93 Market: $8.90
NAV: $8.42 NAV: $8.42
Premium//Discount: 6.00% Premium//Discount: 5.64 %

10/31/01 Market: $8.08 Market: $8.01
NAV: $8.37 NAV: $8.37
Premium//Discount: -3.41% Premium//Discount: -4.25%

1/31/02 Market: $8.91 Market: $8.88
NAV: $8.42 NAV: $8.42
Premium//Discount: 5.79% Premium//Discount: 5.43%

- ---------------
1. As reported by the NYSE.
2. The Fund's computation of net asset value (NAV) is as of the close of trading on the last day of the week immediately preceding
the day for which the high and low market price is reported and the premium or discount (expressed as a percentage of net asset
value) is calculated based on the difference between the high or low market price and the corresponding net asset value for that day,
divided by the net asset value.

The Board of Trustees of the Fund has determined that it could be in the interests of Fund shareholders for the Fund to take
action to attempt to reduce or eliminate a market value discount from net asset value. To that end, the Fund could, from time to
time, either repurchase shares in the open market or, subject to conditions imposed from time to time by the Board, make a tender
offer for a portion of the Fund's shares at their net asset value per share. Subject to the Fund's fundamental policy with respect
to borrowings, the Fund could incur debt to finance repurchases and/or tenders. Interest on any such borrowings will reduce the
Fund's net income. In addition, the acquisition of shares by the Fund will decrease the total assets of the Fund and therefore will
have the effect of increasing the Fund's expense ratio. If the Fund must liquidate portfolio securities to purchase shares tendered,
the Fund could be required to sell portfolio securities for other than investment purposes and could realize gains and losses. Gains
realized on securities held for less than three months could affect the Fund's ability to retain its status as a regulated investment
company under the Internal Revenue Code.

In addition to open-market share purchases and tender offers, the Board could also seek shareholder approval to convert the
Fund to an open-end investment company if the Fund's shares trade at a substantial discount. If the Fund's shares have traded on the
NYSE at an average discount from net asset value of more than 10%, determined on the basis of the discount as of the end of the last
trading day in each week during the period of 12 calendar weeks ending October 31 in such year, the Trustees will consider
recommending to shareholders a proposal to convert the Fund to an open-end company. If during a year in which the Fund's shares
trade at the average discount stated, and for the period described, in the preceding sentence the Fund also receives written requests
from the holders of 10% or more of the Fund's outstanding shares that a proposal to convert to an open end company be submitted to
the Fund's shareholders, within six months the Trustees will submit a proposal to the Fund's shareholders, to the extent consistent
with the 1940 Act, to amend the Fund's Declaration of Trust to convert the Fund from a closed-end to an open-end investment company.
If the Fund converted to an open-end investment company, it would be able continuously to issue and offer its shares for sale, and
each share of the Fund could be tendered to the Fund for redemption at the option of the shareholder, at a redemption price equal to
the current net asset value per share. To meet such redemption request, the Fund could be required to liquidate portfolio
securities. Its shares would no longer be listed on the NYSE. The Fund cannot predict whether any repurchase of shares made while
the Fund is a closed-end investment company would decrease the discount from net asset value at which the shares trade. To the
extent that any such repurchase decreased the discount from net asset value to an amount below 10% during the measurement period
described above, the Fund would not be required to submit to shareholders a proposal to convert the Fund to an open-end investment
company.

Item 9. Management

1(a). The Fund is governed by a Board of Trustees, which is responsible under Massachusetts law for protecting the
interests of shareholders. The Trustees meet periodically throughout the year to oversee the Fund's activities, review its
performance, and review the actions of the Advisor. The Fund is required to hold annual shareholder meetings for the election of
trustees and the ratification of its independent auditors. The Fund can also hold shareholder meetings from time to time for other
important matters, and shareholders have the right to call a meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.

1(b). The Advisor, a Colorado corporation with its principal offices at 498 Seventh Ave., New York, New York 10018,
acts as investment advisor for the Fund under an investment advisory agreement (the "Advisory Agreement") under which it provides
ongoing investment advice and conducts the investment operations of the Fund, including purchases and sales of its portfolio
securities, under the general supervision and control of the Trustees of the Fund. The Advisor also acts as accounting agent for the
Fund.

The Advisor has operated as an investment advisor since January 1960. The Advisor billionand its subsidiaries and affiliates
managed more than $120 billion in assets as of December 31, 52001, including other Oppenheimer funds with more than 6.3 million
shareholder accounts. The Advisor is located at 488 Seventh Avenue, New York, New York 10018.

The Advisor provides office space and investment advisory services for the Fund and pays all compensation of those
Trustees and officers of the Fund who are affiliated persons of the Advisor. Under the Advisory Agreement, the Fund pays the Advisor
an advisory fee computed and paid weekly at an annual rate of 0.65 of 1% of the net assets of the Fund at the end of that week. The
Fund also pays the Advisor an annual fee of $24,000 plus out-of-pocket costs and expenses reasonably incurred, for performing limited
accounting services for the Fund. During the fiscal years ended October 31, 2000,1999, 2000, and 2001 the Fund paid management fees
to the Advisor of $1,857,232, $1,761,032 and $1,634,705, respectively. The Fund incurred approximately $43,144 in expenses for the
fiscal year ended October 31, 2001 for services provided by Shareholder Financial Services, Inc., a subsidiary of the Advisor that
acts as transfer agent, shareholder servicing agent and dividend paying agent for the Fund.

Under the Advisory Agreement, the Fund pays certain of its other costs not paid by the Advisor, including:
(a) brokerage and commission expenses,
(b) federal, state, local and foreign taxes, including issue and transfer taxes, incurred by or levied on the Fund,
(c) interest charges on borrowings,
(d) the organizational and offering expenses of the Fund, whether or not advanced by the Advisor,
(e) fees and expenses of registering the shares of the Fund under the appropriate federal securities laws and of qualifying
shares of the Fund under applicable state securities laws,
(f) fees and expenses of listing and maintaining the listings of the Fund's shares on any national securities exchange,
(g) expenses of printing and distributing reports to shareholders,
(h) costs of shareholder meetings and proxy solicitation,
(i) charges and expenses of the Fund's custodian bank and Registrar, Transfer and Dividend Disbursing Agent,
(j) compensation of the Fund's Trustees who are not interested persons of the Advisor,
(k) legal and auditing expenses,
(l) the cost of certificates representing the Fund's shares,
(m) costs of stationery and supplies, and
(n) insurance premiums.

The Advisor has advanced certain of the Fund's organizational and offering expenses, which were repaid by the Fund. There
is no expense limitation provision.

Each year, the Board of Trustees, including a majority of the Independent Trustees, is required to approve the renewal of
the investment advisory agreement. The Investment Company Act requires that the Board request and evaluate and the Manager provide
such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement. The board employs an
independent consultant to prepare a report that provides such information as the Board requests for this purpose. The Board reviews
the foregoing information in arriving at its decision to renew the investment advisory agreement. Among other factors, the Board
considered:
o The nature, cost, and quality of the services provided to the Fund and its shareholders;
o The profitability of the Fund to the Manager;
o The investment performance of the Fund;
o Economies of scale that may be available to the Fund from the Manager;
o Fees paid by other mutual funds for similar services;
o The value and quality of any other benefits or services received by the Fund from its relationship with the Manager, and
o The direct and indirect benefits the Manager received from its relationship with the Fund. These included services provided
by the General Distributor and the Transfer Agent, and brokerage and soft dollar arrangements permissible under Section
28(e) of the Securities Exchange Act.

The Board generally considers that the Manager must be able to pay and retain high quality personnel at competitive rates to
provide services to the Fund. The Board also generally considers that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to provide quality services to the Fund and its shareholders in adverse
times. The Board also considers the investment performance of other mutual funds advised by the Manager. The Board is aware that
there are alternatives to the use of the Manager. General Counsel to the Fund assists the Board in its deliberations. General
Counsel is independent within the meaning and intent of the SEC Rules regarding the independence of counsel. In arriving at a
decision, the Board does not single out any one factor or group of factors as being more important than other factors, but considers
all factors together. The Board judges the terms and conditions of the Agreement, including the investment advisory fee, in light of
all of the surrounding circumstances.

1(c). The Portfolio managers of the Fund are Arthur Steinmetz and Caleb Wong. Mr. Steinmetz is a Vice President of
the Fund and a Senior Vice President of the Advisor and Mr. Wong is a Vice President of both the Fund and the Advisor. Messrs.
Steinmetz and Wong have been the persons principally responsible for the day-to-day management of the Trust's portfolio since
February 1, 1999. Prior to February 1999, Mr. Steinmetz served as a portfolio manager and officer of other Oppenheimer funds. Mr.
Wong worked on fixed-income quantitative research and risk management for the Advisor since July 1996, prior to which we was enrolled
in the Ph.D. program for Economics as the University of Chicago. Other members of the Advisor's fixed-income portfolio department,
particularly portfolio analysts, traders and other portfolio managers provide the Fund's portfolio managers with support in managing
the Fund's portfolio.

1(d). Inapplicable.

1(e). The Bank of New York, 48 Wall Street, New York, New York, acts as the custodian bank for the Fund's assets
held in the United States. The Advisor and its affiliates have banking relationships with the custodian bank. The Advisor has
represented to the Fund that its banking relationships with the custodian bank have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the custodian bank. It will be the practice of the Fund to deal with the
custodian bank in a manner uninfluenced by any banking relationship the custodian bank may have with the Advisor and its affiliates.
Rules adopted under the 1940 Act permit the Fund to maintain its securities and cash in the custody of certain eligible banks and
securities depositories. Pursuant to those Rules, the Fund's portfolio of securities and cash, when invested in foreign securities,
will be held in foreign banks and securities depositories approved by the Trustees of the Fund in accordance with the rules of the
Securities and Exchange Commission.

Shareholder Financial Services, Inc. ("SFSI"), a subsidiary of the Advisor, acts as primary transfer agent, shareholder
servicing agent and dividend paying agent for the Fund. SFSI is paid an agreed upon fee for each account plus out-of-pocket costs
and expenses. United Missouri Trust Company of New York acts as co-transfer agent and co-registrar with SFSI to provide such
services as SFSI may request.

1(f). See 1(b) above.

1(g). Inapplicable.

2. Inapplicable.

3. None as of February 25, 2002.

Item 10. Capital Stock, Long-Term Debt, and Other Securities.

1. The Fund is authorized to issue an unlimited number of shares of beneficial interest, $.01 par value. The Fund's shares
have no preemptive, conversion, exchange or redemption rights. Each share has equal voting, dividend, distribution and liquidation
rights. All shares outstanding are, and, when issued, those offered hereby will be, fully paid and nonassessable. Shareholders are
entitled to one vote per share. All voting rights for the election of Trustees are noncumulative, which means that the holders of
more than 50% of the shares can elect 100% of the Trustees then nominated for election if they choose to do so and, in such event,
the holders of the remaining shares will not be able to elect any Trustees. Under the rules of the NYSE applicable to listed
companies, the Fund is required to hold an annual meeting of shareholders in each year.

Under Massachusetts law, under certain circumstances shareholders could be held personally liable for the obligations of the
Fund. However, the Declaration of Trust disclaims shareholder liability for actions or obligations of the Fund and requires that
notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by the Fund. The Declaration
of Trust provides for indemnification by the Fund for all losses and expenses of any shareholder held personally liable for
obligations of the Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The likelihood of such circumstances is remote.

Pursuant to the Trust's Dividend Reinvestment and Cash Purchase Plan (the "Plan"), all dividends and capital gains
distributions ("Distributions") declared by the Trust will be automatically reinvested in additional full and fractional shares of
the Trust ("shares") unless (i) a shareholder elects to receive cash or (ii) shares are held in nominee name, in which event the
nominee should be consulted as to participation in the Plan. Shareholders that participate in the Plan ("Participants") may, at
their option, make additional cash investments in shares, semi-annually in amounts of at least $100, through payment to Shareholder
Financial Services, Inc., the agent for the Plan (the "Agent"), and a service fee of $0.75.

Depending upon the circumstances hereinafter described, Plan shares will be acquired by the Agent for the Participant's
account through receipt of newly issued shares or the purchase of outstanding shares on the open market. If the market price of
shares on the relevant date (normally the payment date) equals or exceeds their net asset value, the Agent will ask the Trust for
payment of the Distribution in additional shares at the greater of the Trust's net asset value determined as of the date of purchase
or 95% of the then-current market price. If the market price is lower than net asset value, the Distribution will be paid in cash,
which the Agent will use to buy shares on The New York Stock Exchange (the "NYSE"), or otherwise on the open market to the extent
available. If the market price exceeds the net asset value before the Agent has completed its purchases, the average purchase price
per share paid by the Agent may exceed the net asset value, resulting in fewer shares being acquired than if the Distribution had
been paid in shares issued by the Trust.

Participants may elect to withdraw from the Plan at any time and thereby receive cash in lieu of shares by sending
appropriate written instructions to the Agent. Elections received by the Agent will be effective only if received more than ten days
prior to the record date for any Distribution; otherwise, such termination will be effective shortly after the investment of such
Distribution with respect to any subsequent Distribution. Upon withdrawal from or termination of the Plan, all shares acquired under
the Plan will remain in the Participant's account unless otherwise requested. For full shares, the Participant may either: (1)
receive without charge a share certificate for such shares; or (2) request the Agent (after receipt by the Agent of signature
guaranteed instructions by all registered owners) to sell the shares acquired under the Plan and remit the proceeds less any
brokerage commissions and a $2.50 service fee. Fractional shares may either remain in the Participant's account or be reduced to
cash by the Agent at the current market price with the proceeds remitted to the Participant. Shareholders who have previously
withdrawn from the Plan may rejoin at any time by sending written instructions signed by all registered owners to the Agent.

There is no direct charge for participation in the Plan; all fees of the Agent are paid by the Trust. There are no
brokerage charges for shares issued directly by the Trust. However, each Participant will pay a pro rata share of brokerage
commissions incurred with respect to open market purchases of shares to be issued under the Plan. Participants will receive tax
information annually for their personal records and to assist in federal income tax return preparation. The automatic reinvestment
of Distributions does not relieve Participants of any income tax that may be payable on Distributions.

The Plan may be terminated or amended at any time upon 30 days' prior written notice to Participants which, with respect to
a Plan termination, must precede the record date of any Distribution by the Trust. Additional information concerning the Plan may be
obtained by shareholders holding shares registered directly in their names by writing the Agent, Shareholder Financial Services,
Inc., P.O. Box 173673, Denver, CO, 80217-3673 or by calling 1.800.647.7374. Shareholders holding shares in nominee name should
contact their brokerage firm or other nominee for more information.

The Fund presently has provisions in its Declaration of Trust and By-Laws (together, the "Charter Documents") which could
have the effect of limiting (i) the ability of other entities or persons to acquire control of the Fund, (ii) the Fund's freedom to
engage in certain transactions or (iii) the ability of the Fund's Trustees or shareholders to amend the Charter Documents or effect
changes in the Fund's management. Those provisions of the Charter Documents may be regarded as "anti-takeover" provisions.
Specifically, under the Fund's Declaration of Trust, the affirmative vote of the holders of not less than two thirds (66-2/3%) of the
Fund's shares outstanding and entitled to vote is required to authorize the consolidation of the Fund with another entity, a merger
of the Fund with or into another entity (except for certain mergers in which the Fund is the successor), a sale or transfer of all or
substantially all of the Fund's assets, the dissolution of the Fund, the conversion of the Fund to an open-end company, and any
amendment of the Fund's Declaration of Trust that would affect any of the other provisions requiring a two-thirds vote. However, a
"majority" shareholder vote, as defined in the Charter Documents, shall be sufficient to approve any of the foregoing transactions
that have been recommended by two-thirds of the Trustees. Notwithstanding the foregoing, if a corporation, person or entity is
directly, or indirectly through its affiliates, the beneficial owner of more than 5% of the outstanding shares of the Fund, the
affirmative vote of 80% (which is higher than that required under the 1940 Act) of the outstanding shares of the Fund is required
generally to authorize any of the following transactions or to amend the provisions of the Declaration of Trust relating to
transactions involving: (i) a merger or consolidation of the Fund with or into any such corporation or entity, (ii) the issuance of
any securities of the Fund to any such corporation, person or entity for cash; (iii) the sale, lease or exchange of all or any
substantial part of the assets of the Fund to any such corporation, entity or person (except assets having an aggregate market value
of less than $1,000,000); or (iv) the sale, lease or exchange to the Fund, in exchange for securities of the Fund, of any assets of
any such corporation, entity or person (except assets having an aggregate fair market value of less than $1,000,000). If two-thirds
of the Board of Trustees has approved a memorandum of understanding with such beneficial owner, however, a majority shareholder vote
will be sufficient to approve the foregoing transactions. Reference is made to the Charter Documents of the Fund, on file with the
Securities and Exchange Commission, for the full text of these provisions.

2. Inapplicable.

3. Inapplicable.

4. The Fund qualified for treatment as, and elected to be, a regulated investment company ("RIC") under Subchapter M of the
Internal Revenue Code for its taxable year ended October 31, 2001, and intends to continue to qualify as a RIC for each subsequent
taxable year. However, the Fund reserves the right not to qualify under Subchapter M as a RIC in any year or years.

For each taxable year that the Fund qualifies for treatment as a RIC, the Fund (but not its shareholders) will not be
required to pay federal income tax. Shareholders will normally have to pay federal income taxes, and any state income taxes, on the
dividends and distributions they receive from the Fund. Such dividends and distributions derived from net investment income or
short-term capital gains are taxable to the shareholder as ordinary dividend income regardless of whether the shareholder receives
such distributions in additional shares or in cash. Since the Fund's income is expected to be derived primarily from interest rather
than dividends, only a small portion, if any, of such dividends and distributions is expected to be eligible for the federal
dividends-received deduction available to corporations. The Fund does not anticipate that any portion of its dividends or
distributions will qualify for pass-through treatment as "exempt-interest dividends" since less than 50% of its assets is permitted
to be invested in municipal obligations.

Long-term or short-term capital gains may be generated by the sale of portfolio securities and by transactions in options
and futures contracts. Distributions of long-term capital gains, if any, are taxable to shareholders as long-term capital gains
regardless of how long a shareholder has held the Fund's shares and regardless of whether the distribution is received in additional
shares or in cash. For federal income tax purposes, if a capital gain distribution is received with respect to shares held for six
months or less, any loss on a subsequent sale or exchange of such shares will be treated as long-term capital loss to the extent of
such long-term capital gain distribution. Capital gains distributions are not eligible for the dividends-received deduction.

Any dividend or capital gains distribution received by a shareholder from an investment company will have the effect of
reducing the net asset value of the shareholder's stock in that company by the exact amount of the dividend or capital gains
distribution. Furthermore, capital gains distributions and dividends are subject to federal income taxes. If prior distributions
made by the Fund must be re-characterized as a non-taxable return of capital at the end of the fiscal year as a result of the effect
of the Fund's investment policies, they will be identified as such in notices sent to shareholders.

The tax treatment of listed put and call options written or purchased by the Fund on debt securities and of future contracts
entered into by the Fund will be governed by Section 1256 of the Internal Revenue Code. Absent a tax election to the contrary, each
such position held by the Fund will be marked-to-market (i.e., treated as if it were closed out) on the last business day of each
taxable year of the Fund, and all gain or loss associated with transactions in such positions will be treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. Positions of the Fund which consist of at least one debt security and
at least one option or futures contract which substantially diminishes the Fund's risk of loss with respect of such debt security
could be treated as "mixed straddles" which are subject to the straddle rules of Section 1092 of the Code, the operation of which may
cause deferral of losses, adjustments in the holding periods of debt securities and conversion of short-term capital losses into
long-term capital losses. Certain tax elections exist for mixed straddles which reduce or eliminate the operation of the straddle
rules. The Fund will monitor its transactions in options and futures contracts and may make certain tax elections in order to
mitigate the effect of these rules and prevent disqualification of the Fund as a regulated investment company under Subchapter M of
the Code. Such tax election may result in an increase in distribution of ordinary income (relative to long-term capital gains) to
shareholders.

The Internal Revenue Code requires that a holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each year even though the Fund receives no interest payment in cash on the
security during the year. As an investment company, the Fund must pay out substantially all of its net investment income each year.
Accordingly, the Fund may be required to pay out as an income distribution each year an amount which is greater than the total amount
of cash interest the Fund actually received. Such distributions will be made from the cash assets of the Fund or by liquidation of
portfolio securities, if necessary. If a distribution of cash necessitates the liquidation of portfolio securities, the Advisor will
select which securities to sell. The Fund may realize a gain or loss from such sales. In the event the Fund realizes net capital
gains from such transactions, its shareholders may receive a larger capital gain distribution than they would in the absence of such
transactions.

It is the Fund's present policy, which may be changed by the Board of Trustees, to pay monthly dividends to shareholders
from net investment income of the Fund. The Fund intends to distribute all of its net investment income on an annual basis. The
Fund will distribute all of its net realized long-term and short-term capital gains, if any, at least once per year. The Fund may,
but is not required to, make such distributions on a more frequent basis to the extent permitted by applicable law and regulations.

Under the Internal Revenue Code, by December 31 each year, the Fund must distribute a specified minimum percentage
(currently 98%) of its taxable investment income earned from January 1 through December 31 of that year and 98% of its capital gains
realized in the period from November 1 of the prior year through October 31 of that year, or else the Fund must pay an excise tax on
amounts not distributed. While it is presently anticipated that the Fund will meet those requirements, the Fund's Board and the
Advisor might determine in a particular year it would be in the best interests of the Fund not to make such distributions at the
mandated level and to pay the excise tax which would reduce the amount available for distributions to shareholders. If the Fund pays
a dividend in January which was declared in the previous December to shareholders of record on a date in December, then such dividend
or distribution will be treated for tax purposes as being paid in December and will be taxable to shareholders as if received in
December.

Under the Fund's Dividend Reinvestment Plan (the "Plan"), all of the Fund's dividends and distributions to shareholders will
be reinvested in full and fractional shares. With respect to distributions made in shares issued by the Fund pursuant to the Plan,
the amount of the distribution for tax purposes is the fair market value of the shares issued on the reinvestment date. In the case
of shares purchased on the open market, a participating shareholder's tax basis in each share is its cost. In the case of shares
issued by the Fund, the shareholder's tax basis in each share received is its fair market value on the reinvestment date.

Distributions of investment company taxable income to shareholders who are nonresident alien individuals or foreign
corporations will generally be subject to a 30% United States withholding tax under provisions of the Internal Revenue Code
applicable to foreign individuals and entities, unless a reduced rate of withholding or a withholding exemption is provided under an
applicable treaty.

Under Section 988 of the Code, foreign currency gain or loss with respect to foreign currency-denominated debt
instruments and other foreign currency-denominated positions held or entered into by the Fund will be ordinary income or loss. In
addition, foreign currency gain or loss realized with respect to certain foreign currency "hedging" transactions will be treated as
ordinary income or loss.

5. The following information is provided as of February 25, 2002:

(1) (2) (3) (4)
Amount
Amount Held Outstanding
by Registrant Exclusive of
Amount or for its Amount Shown
Title of Class Authorized Account Under (3)
- -------------- ---------- ------------- ------------

Shares of Unlimited None 29,202,560
Beneficial
Interest, $.01
par value

Item 11. Defaults and Arrears on Senior Securities.

Inapplicable.

Item 12. Legal Proceedings.

Inapplicable.

Item 13. Table of Contents of the Statement of Additional Information.

Reference is made to Item 15 of the Statement of Additional Information.

Oppenheimer Multi-Sector Income Trust

6803 S. Tucson Way, Englewood, Colorado 80112
1.800.647.7374

Statement of Additional Information dated February 28, 2002

This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund
and supplements information in the Prospectus dated February 28, 2002. It should be read together with the Prospectus, and the
Registration Statement on Form N-2, of which the Prospectus and this Statement of Additional Information are a part, can be inspected
and copied at public reference facilities maintained by the Securities and Exchange Commission (the "SEC") in Washington, D.C. and
certain of its regional offices, and copies of such materials can be obtained at prescribed rates from the Public Reference Branch,
Office of Consumer Affairs and Information Services, SEC, Washington, D.C., 20549.

TABLE OF CONTENTS

Page

Investment Objectives and Policies........................................................................*
Management................................................................................................
Control Persons and Principal Holders of Securities.......................................................
Investment Advisory and Other Services....................................................................
Brokerage Allocation and Other Practices..................................................................
Tax Status ...............................................................................................
Financial Statements......................................................................................

- -----------------
*See Prospectus

PART B

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

Item 14. Cover Page.

Reference is made to the preceding page.

Item 15. Table of Contents.

Reference is made to the preceding page and to Items 16 through 23 of the Statement of Additional Information set
forth below.

Item 16. General Information and History.

Inapplicable.

Item 17. Investment Objectives and Policies.

Reference is made to Item 8 of the Prospectus.

Item 18. Management.

1. and 2. The Fund's Trustees and officers and their positions held with the Fund and length of service in such position(s) and their
principal occupations and business affiliations during the past five years are listed below. Each of the Trustees except Mr. Murphy
is an independent trustee, as defined in the Investment Company Act. Mr. Murphy is an "interested trustee," because he is affiliated
with the Manager by virtue of his positions as an officer and director of the Manager, and as a shareholder of its parent company.
Mr. Murphy was elected as a Trustee of the Fund with the understanding that in the event his affiliation with the Manager is
Eachterminated, he will resign as a trustee of the Fund and the other Board I Funds for which he is a trustee or director. All
information is as of December 31, 2001. All of the Trustees are Trustees or Directors of the following Oppenheimer funds1 (referred
to as "Board I Funds"):

Oppenheimer California Municipal Fund Oppenheimer International Growth Fund
Oppenheimer Capital Appreciation Fund Oppenheimer International Small Company Fund
Oppenheimer Capital Preservation Fund Oppenheimer Money Market Fund, Inc.
Oppenheimer Concentrated Growth Fund Oppenheimer Multiple Strategies Fund
Oppenheimer Developing Markets Fund Oppenheimer Multi-Sector Income Trust
Oppenheimer Discovery Fund Oppenheimer Multi-State Municipal Trust
Oppenheimer Emerging Growth Fund Oppenheimer Municipal Bond Fund
Oppenheimer Emerging Technologies Fund Oppenheimer New York Municipal Fund
Oppenheimer Enterprise Fund Oppenheimer Series Fund, Inc.
Oppenheimer Europe Fund Oppenheimer Special Value Fund
Oppenheimer Global Fund Oppenheimer Trinity Core Fund
Oppenheimer Global Growth & Income Fund Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Gold & Special Minerals Fund Oppenheimer Trinity Value Fund
Oppenheimer Growth Fund Oppenheimer U.S. Government Trust

In addition to being a trustee or director of the Board I Funds, Mr. Galli is also a director or trustee of 10 other
portfolios in the OppenheimerFunds complex.

Messrs. Spiro, Murphy, Bishop, Farrar, Molleur, Steinmetz, Wong, Wixted and Zack, and Mses. Feld and Ives
respectively hold the same offices with the other Board I Funds as with the Fund. As of February 25, 2002, the Trustees and officers
of the Fund as a group owned of record or beneficially less than 1% of each class of shares of the Fund. The foregoing statement
does not reflect ownership of shares of the Fund held of record by an employee benefit plan for employees of the Manager, other than
the shares beneficially owned under the plan by the officers of the Fund listed above. In addition, each Independent Trustee, and his
or her family members, do not own securities of either the Manager or Distributor of the Board I funds or any person directly or
indirectly controlling, controlled by or under common control with the Manager or Distributor. Mr. Reynolds has reported that he has
a controlling interest in The Directorship Search Group, Inc., a director recruiting firm that provided consulting services to
Massachusetts Mutual Life Insurance Company (which controls the Manager and the Distributor) aggregating $100,000 for the calendar
year ended December 31, 2001, an amount representing less than 5% of the firm's annual revenues. The Independent Trustees have
unanimously (except for Mr. Reynolds' abstention) determined that the consulting arrangements between The Directorship Group, Inc.
and Massachusetts Mutual Life Insurance Company were not material business or professional relationships that would compromise Mr.
Reynolds' status as an Independent Trustee.

Independent Trustees

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Aggregate Dollar
Name, Address,2 Age, Range of Shares
Position(s) Held with Principal Occupation(s) During Past 5 Years / Other Dollar Range of Owned in any of
Fund and Length of Time Trusteeships Held by Trustee / Number of Portfolios Shares Owned in the Board I
Served3 in Fund Complex Overseen by Trustee the Fund Funds

- -------------------------- ------------------------------------------------------ ----------------- ------------------
- -------------------------- ------------------------------------------------------ ----------------- ------------------

Leon Levy, Chairman of General Partner of Odyssey Partners, L.P. $0 $0
the Board of Trustees (investment partnership) (since 1982) and Chairman
Trustee since 1988 of the Board of Avatar Holdings, Inc. (real estate
Age: 76 development) (since 1981). Director/trustee of 31
investment companies in the OppenheimerFunds
complex. Director/trustee of 31 investment companies
in the OppenheimerFunds complex.

Robert G. Galli, A Trustee or Director of other Oppenheimer funds. $0 Over $100,0004
Trustee since 1993 Formerly Vice Chairman of the Manager (October 1995
Age: 68 - December 1997). Director/trustee of 41 investment
companies in the OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Phillip A. Griffiths, The Director of the Institute for Advanced Study,
Trustee since 1999 Princeton, N.J. (since 1991), director of GSI
Age: 63 Lumonics (since 2001) and a member of the National
Academy of Sciences (since 1979); formerly (in
descending chronological order) a director of
Bankers Trust Corporation, Provost and Professor of $0 $10,001-$50,000
Mathematics at Duke University, a director of
Research Triangle Institute, Raleigh, N.C., and a
Professor of Mathematics at Harvard University.
Director/trustee of 30 investment companies in the
OppenheimerFunds complex.

Benjamin Lipstein, Professor Emeritus of Marketing, Stern Graduate
Trustee since 1988 School of Business Administration, New York
Age: 78 University. Director/trustee of 31 investment $0 Over $100,000
companies in the OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Elizabeth B. Moynihan, Author and architectural historian; a trustee of the
Trustee since 1992 Freer Gallery of Art and Arthur M. Sockler Gallery
Age: 72 (Smithsonian Institute), Trustees Council of the
National Building Museum; a member of the Trustees $0 $50,001 -
Council, Preservation League of New York State. $100,000
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Kenneth A. Randall, A director of Dominion Resources, Inc. (electric
Trustee since 1988 utility holding company) and Prime Retail, Inc.
Age: 74 (real estate investment trust); formerly a director
of Dominion Energy, Inc. (electric power and oil &
gas producer), President and Chief Executive Officer
of The Conference Board, Inc. (international
economic and business research) and a director of $0 Over $100,000
Lumbermens Mutual Casualty Company, American
Motorists Insurance Company and American
Manufacturers Mutual Insurance Company.
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

erome Levy Economics Institute, Bard College;

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Edward V. Regan, President, Baruch College, CUNY; a director of
Trustee since 1993 RBAsset (real estate manager); a director of
Age: 71 OffitBank; formerly Trustee, Financial Accounting
Foundation (FASB and GASB); Senior Fellow of Jerome
Levy Economics Institute, Bard College; Chairman of $50,001 -
Municipal Assistance Corporation for the City of New $0 $100,000
York; New York State Comptroller and Trustee of New
York State and Local Retirement Fund.
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

Russell S. Reynolds, Jr., Chairman of The Directorship Search Group, Inc. $0 $10,001 - $50,000
Trustee since 1989 (corporate governance consulting and executive
Age: 70 recruiting) (since 1993); a director of Professional
Staff Limited (a U.K. temporary staffing company)
(since 1995); a life trustee of International House
(non-profit educational organization), and a trustee
of the Greenwich Historical Society (since 1996).
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

Donald W. Spiro, Vice Chairman Emeritus of the Manager (since 1991). $0 Over $100,000
Chairman of the Board of Formerly he held the following positions: Chairman
Trustees, (November 1987 - January 1991) and a director
Trustee since 1985 (January 1969 - August 1999) of the Manager;
Age: 76 President and Director of OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager and
the Fund's Distributor (July 1978 - January 1992).
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

Clayton K. Yeutter, Of Counsel, Hogan & Hartson (a law firm) (since $0 $1-$10,000
Trustee since 1991 1993). Other directorships: Caterpillar, Inc. (since
Age: 71 1993) and Weyerhaeuser Co. (since 1999).
Director/trustee of 31 investment companies in the
OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Interested Trustee and Officer

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Name, Address,5 Age, Principal Occupation(s) During Past 5 Years / Other Dollar Range of Aggregate Dollar
Range of Shares
Position(s) Held with Owned in any of
Fund and Length of Time Trusteeships Held by Trustee / Number of Portfolios Shares Owned in the Oppenheimer
Served6 in Fund Complex Overseen by Trustee the Fund Funds7

John V. Murphy, Chairman, Chief Executive Officer and director $0 $50,001 -
President and Trustee (since June 30, 2001) and President (since September
Trustee since October 2000) of the Manager; President and a trustee of
2001 other Oppenheimer funds; President and a director
Age: 52 (since July 2001) of Oppenheimer Acquisition Corp.,
the Manager's parent holding company, and of
Oppenheimer Partnership Holdings, Inc. (since July
2001), a holding company subsidiary of the Manager;
Chairman and a director (since July 2001) of
Shareholder Services, Inc. and of Shareholder
Financial Services, Inc., transfer agent
subsidiaries of the Manager; President (since
November 1, 2001) and a director (since July 2001)
of Oppenheimer Real Asset Management, Inc., an
investment advisor subsidiary of the Manager;
President and a director (since July 2001) of
OppenheimerFunds Legacy Program, a charitable trust
program established by the Manager; a director
(since November 2001) of Trinity Investment
Management Corp. and Tremont Advisers, Inc.,
investment advisory affiliates of the Manager, and
of OAM Institutional, Inc. (since November 2001), an
investment advisory subsidiary of the Manager, and
of HarbourView Asset Management Corporation and OFI
Private Investments, Inc. (since July 2001),
investment advisor subsidiaries of the Manager;
formerly President and trustee (from November 1999 $100,000
to November 2001) of MML Series Investment Fund and
MassMutual Institutional Funds, open-end investment
companies; Chief Operating Officer (from September
2000 to July 2001) of the Manager; Executive Vice
President of Massachusetts Mutual Life Insurance
Company (from February 1997 to August 2000); a
director (from 1999 to 2000) of C.M. Life Insurance
Company; President, Chief Executive Officer and a
director (from 1999 to 2000) of MML Bay State Life
Insurance Company; Executive Vice President,
director and Chief Operating Officer (from 1995 to
1997) of David L. Babson & Company, Inc., an
investment advisor; Senior Vice President and
director (from 1995 to 1997) of Potomac Babson Inc.,
an investment advisor subsidiary of David L. Babson
& Company, Inc.; Senior Vice President (from 1995 to
1997) and director (from 1995 to 1999) of DBL
Acquisition Corporation, a holding company for
investment advisers; a director (from 1989 to 1998)
of Emerald Isle Bancorp and Hibernia Savings Bank,
wholly-owned subsidiary of Emerald Isle Bancorp; and
Chief Operating Officer (from 1993 to 1996) of
Concert Capital Management, Inc., an investment
advisor. Director/trustee of 62 investment companies
in the OppenheimerFunds complex.

- -------------------------- ------------------------------------------------------ ----------------- ------------------

Officers of the Fund

- ------------------------------------------------ -------------------------------------------------------------

Name, Address,8 Age, Position(s) Held with Principal Occupation(s) During Past 5
Fund and Length of Time Served9

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Arthur P. Steinmetz, Vice President and Senior Vice President of the Manager (since March 1993) and
Portfolio Manager since 1999 of HarbourView Asset Management Corporation (since March
Age: 43 2000); an officer and portfolio manager of other
Oppenheimer funds.

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Caleb Wong, Vice President and Portfolio Vice President (since June 1999) of the Advisor; worked in
Manager since 1999 fixed-income quantitative research and risk management for
Age: 36 the Advisor (since July 1996); formerly Assistant Vice
President of the Advisor (January 1997 - June 1999); before
joining the Advisor in July 1996 he was enrolled in the
Ph.D. program for Economics at the University of Chicago.

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Brian W. Wixted, Treasurer, Principal Senior Vice President and Treasurer (since March 1999) of
Financial and Accounting Officer since April the Manager; Treasurer (since March 1999) of HarbourView
1999 Asset Management Corporation, Shareholder Services, Inc.,
Age: 42 Oppenheimer Real Asset Management Corporation, Shareholder
Financial Services, Inc. and Oppenheimer Partnership
Holdings, Inc., of OFI Private Investments, Inc. (since
March 2000) and of OppenheimerFunds International Ltd. and
Oppenheimer Millennium Funds plc (since May 2000);
Treasurer and Chief Financial Officer (since May 2000) of
Oppenheimer Trust Company; Assistant Treasurer (since March
1999) of Oppenheimer Acquisition Corp.; an officer of other
Oppenheimer funds; formerly Principal and Chief Operating
Officer, Bankers Trust Company - Mutual Fund Services
Division (March 1995 - March 1999); Vice President and
Chief Financial Officer of CS First Boston Investment
Management Corp. (September 1991 - March 1995).

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Robert J. Bishop, Assistant Treasurer Vice President of the Manager/Mutual Fund Accounting (since
since May 1996 May 1996); an officer of other
Age: 42 Oppenheimer funds; formerly an Assistant Vice President of
the Manager/Mutual Fund Accounting (April 1994 - May 1996)
and a Fund Controller of the Manager.

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Scott T. Farrar, Assistant Treasurer Vice President of the Manager/Mutual Fund Accounting (since
since May 1996 May 1996); Assistant Treasurer of Oppenheimer Millennium
Age: 36 Funds plc (since October 1997); an officer of other
Oppenheimer Funds; formerly an Assistant Vice President of
the Manager/Mutual Fund Accounting (April 1994 - May 1996),
and a Fund Controller of the Manager.

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Robert G. Zack, Secretary Senior Vice President (since May 1985) and General Counsel
since October 2001 (since February 2002) of the Manager; Assistant Secretary
Age: 53 of Shareholder Services, Inc. (since May 1985), Shareholder
Financial Services, Inc. (since November 1989);
OppenheimerFunds International Ltd. and Oppenheimer
Millennium Funds plc (since October 1997); an officer of
other Oppenheimer funds; formerly, Acting General Counsel
(November 2001 -February 2002) and Assistant General
Counsel ( -October 2001) of the Manager.

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Denis R. Molleur, Assistant Secretary Vice President and Senior Counsel of the Manager (since
since November 2001 July 1999); an officer of other Oppenheimer funds; formerly
Age: 44 a Vice President and Associate Counsel of the Manager
(September 1995 - July 1999).

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Katherine P. Feld, Assistant Secretary Vice President and Senior Counsel of the Manager (since
since November 2001 July 1999); an officer of other Oppenheimer funds; formerly
Age: 43 a Vice President and Associate Counsel of the Manager (June
1990 - July 1999).

- ------------------------------------------------ -------------------------------------------------------------
- ------------------------------------------------ -------------------------------------------------------------

Kathleen T. Ives, Assistant Secretary Vice President and Assistant Counsel of the Manager (since
since November 2001 June 1998); an officer of other Oppenheimer funds; formerly
Age: 36 an Assistant Vice President and Assistant Counsel of the
Manager (August 1997 - June 1998); and Assistant Counsel of
the Manager (August 1994-August 1997).

- ------------------------------------------------ -------------------------------------------------------------

The Board of Trustees does not have an executive or investment committee. The Fund is governed by a Board of Trustees, which
is responsible for protecting the interests of shareholders under Massachusetts law. The Trustees meet periodically throughout the
year to oversee the Fund's activities, review its performance, and review the actions of the Manager.

The Board of Trustees has an Audit Committee, a Study Committee and a Proxy Committee. The members of the Audit Committee
are Kenneth Randall (Chairman), Benjamin Lipstein and Edward Regan. The Audit Committee held four meetings during the Fund's fiscal
year ended October 31, 2001. The Audit Committee provides the Board with recommendations regarding the selection of the Fund's
independent auditor. The Audit Committee also reviews the scope and results of audits and the audit fees charged, reviews reports
from the Fund's independent auditor concerning the Fund's internal accounting procedures, and controls and reviews reports of the
Manager's internal auditor, among other duties as set forth in the Committee's charter.

The members of the Study Committee are Benjamin Lipstein (Chairman), Robert Galli and Elizabeth Moynihan. The Study
Committee held seven meetings during the Fund's fiscal year ended October 31, 2001. The Study Committee evaluates and reports to the
Board on the Fund's contractual arrangements, including the Investment Advisory and Distribution Agreements, transfer and shareholder
service agreements and custodian agreements as well as the policies and procedures adopted by the Fund to comply with the Investment
Company Act of 1940 and other applicable law, among other duties as set forth in the Committee's charter.

The members of the Proxy Committee are Edward Regan (Chairman), Russell Reynolds and Clayton Yeutter. The Proxy Committee
held one meeting during the fiscal year ended October 31, 2001. The Proxy Committee provides the Board with recommendations for
proxy voting and monitors proxy voting by the Fund.

3. Inapplicable.

4. The officers of the Fund and one Trustee of the Fund (Mr. Murphy) who are affiliated with the Advisor receive no salary or fee
from the Fund. The remaining Trustees of the Fund received the compensation shown below. The compensation from the Fund was paid
during its fiscal year ended October 31, 2001. The compensation from all of the Board I Funds (including the Fund) was received as a
director, trustee or member of a committee of the boards of those funds during the calendar year 2001.

Trustee's Name Aggregate Compensation Retirement Total
Benefits Compensation
Accrued as Part from all
Of Fund Board I
And Other Positions from Fund1 Expenses Funds (33 Funds)2

Leon Levy
Chairman $1,699 None $173,700

Robert G. Galli
Study Committee Member $1,034 None $202,8863

Phillip A. Griffiths $537 None $54,8894

Benjamin Lipstein
Study Committee Chairman,
Audit Committee Member $1,469 None $150,152

Elizabeth B. Moynihan
Study Committee Member $1,034 None $105,760

Kenneth A. Randall
Audit Committee Chairman $949 None $97,012

Edward V. Regan
Proxy Committee Chairman,
Audit Committee Member $939 None $95,960

Russell S. Reynolds, Jr.
Proxy Committee
Member $702 None $71,792
Donald W. Spiro $627 None $64,080

Clayton K. Yeutter
Proxy Committee
Member $702 None $71,7925

1. Aggregate compensation includes fees, deferred compensation, if any, and retirement plan benefits accrued for a Trustee for the
fiscal year ended October 31, 2001. No retirement benefit expenses were accrued by the Fund for the fiscal year ended October 31,
2001.
2. For the 2001 calendar year.
3. Total compensation for the 2001 calendar year includes compensation received for serving as a Trustee or Director of 10
additional Oppenheimer funds.
4. Includes $537 deferred under Deferred Compensation Plan described below.
5. Includes $176 deferred under Deferred Compensation Plan described below.

The Fund has adopted a retirement plan that provides for payment to a retired Trustee of up to 80% of the average
compensation paid during that Trustee's five years of service in which the highest compensation was received. A Trustee must serve in
that capacity for any of the Board I Funds for at least 15 years to be eligible for the maximum payment. Because each Trustee's
retirement benefits will depend on the amount of the Trustee's future compensation and length of service, the amount of those
benefits cannot be determined at this time, nor can the Fund estimate the number of years of credited service that will be used to
determine those benefits.

Deferred Compensation Plan for Trustees. The Board of Trustees has adopted a Deferred Compensation Plan for disinterested trustees
that enables them to elect to defer receipt of all or a portion of the annual fees they are entitled to receive from the Fund. Under
the plan, the compensation deferred by a Trustee is periodically adjusted as though an equivalent amount had been invested in shares
of one or more Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under the plan will be determined based
upon the performance of the selected funds. Deferral of Trustees' fees under the plan will not materially affect the Fund's assets,
liabilities or net income per share. The plan will not obligate the Fund to retain the services of any Trustee or to pay any
particular level of compensation to any Trustee. Pursuant to an Order issued by the Securities and Exchange Commission, the Fund may
invest in the funds selected by the Trustee under the plan without shareholder approval for the limited purpose of determining the
value of the Trustee's deferred fee account.

Item 19. Control Persons and Principal Holders of Securities.

1. Inapplicable.

2.As of February 25, 2002, the only persons who owned of record or was known by the Fund to own beneficially 5% or more of
the outstanding shares of the Fund were Donaldson Lufkin and Jenrette Securities Corp., One Pershing Plaza, Jersey City, New Jersey
07303, which owned 1,533,797 shares (5.25% of the then outstanding shares); AG Edwards & Sons, Inc., One North Jefferson Avenue, St.
Louis, Missouri 63101 which owned 2,053,608 shares (7.03% of the then outstanding shares); UBS Paine Webber, 1000 Harbor Boulevard,
6th Floor, Weehawken, New Jersey 07087, which owned 3,318,600 shares (11.37% of the then outstanding shares); Salomon Smith Barney,
Inc., 333 W. 34th Street New York, New York 10001, which owned 1,811,623 shares (6.21% of the then outstanding shares); First
Clearing Corp., 10700 Wheat First Drive, Glen Allen, VA 23606, which owned 1,975,907 shares (6.77% of the then outstanding shares);
Merrill Lynch, Pierce Fenner & Smith Safekeeping, 4 Corporate Place, Piscataway, NJ, , which owned 5,152,123 shares (17.65% of the
then outstanding shares); and Prudential Securities, Inc., One York Plaza, 8th Floor, New York, New York 10004, which owned 1,758,872
shares (6.02% of the then outstanding shares).

3. As of February 25, 2002, the trustees and officers of the Fund as a group owned less than 1% of the outstanding
shares.

Item 20. Investment Advisory and Other Services.

Reference is made to Item 9 of the Prospectus.

Item 21. Brokerage Allocation and Other Practices.

1 and 2. During the fiscal years ended October 31, 1999, 2000 and 2001, the Fund paid approximately $99,598, $163,358 and
$622,063 respectively, in brokerage commissions. The Fund will not effect portfolio transactions through any broker (i) which is an
affiliated person of the Fund, (ii) which is an affiliated person of such affiliated person or (iii) an affiliated person of which is
an affiliated person of the Fund or its Advisor. There is no principal underwriter of shares of the Fund. As most purchases of
portfolio securities made by the Fund are principal transactions at net prices, the Fund incurs little or no brokerage costs. The
Fund deals directly with the selling or purchasing principal or market maker without incurring charges for the services of a broker
on its behalf unless it is determined that a better price or execution may be obtained by using the services of a broker. Purchases
of portfolio securities from underwriters include a commission or concession paid by the issuer to the underwriter, and purchases
from dealers include a spread between the bid and asked price. Transactions in foreign securities markets generally involve the
payment of fixed brokerage commissions, which are usually higher than those in the United States. The Fund seeks to obtain prompt
execution of orders at the most favorable net price.

3. The advisory agreement between the Fund and the Advisor (the "Advisory Agreement") contains provisions relating to
the selection of brokers, dealers and futures commission merchants (collectively referred to as "brokers") for the Fund's portfolio
transactions. The Advisor is authorized by the Advisory Agreement to employ brokers as may, in its best judgment based on all
relevant factors, implement the policy of the Fund to obtain, at reasonable expense, the "best execution" (prompt and reliable
execution at the most favorable price obtainable) of such transactions. The Advisor need not seek competitive bidding but is
expected to minimize the commissions paid to the extent consistent with the interests and policies of the Fund. The Fund will not
effect portfolio transactions through affiliates of the Advisor.

Certain other investment companies advised by the Advisor and its affiliates have investment objectives and policies similar
to those of the Fund. If possible, concurrent orders to purchase or sell the same security by more than one of the accounts managed
by the Advisor or its affiliates are combined. The transactions effected pursuant to such combined orders are averaged as to price
and allocated in accordance with the purchase or sale orders actually placed for each account. If transactions on behalf of more
than one fund during the same period increase the demand for securities being purchased or the supply of securities being sold, there
may be an adverse effect on price or quantity. When the Fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transactions in the security to which the option relates.

Under the Advisory Agreement, if brokers are used for portfolio transactions, the Advisor may select brokers for their
execution and/or research services, on which no dollar value can be placed. Information received by the Advisor for those other
accounts may or may not be useful to the Fund. The commissions paid to such dealers may be higher than another qualified dealer
would have charged if a good faith determination is made by the Advisor that the commission is reasonable in relation to the services
provided. Subject to applicable regulations, sales of shares of the Fund and/or investment companies advised by the Advisor or its
affiliates may also be considered as a factor in directing transactions to brokers, but only in conformity with the price, execution
and other considerations and practices discussed above.

Such research, which may be provided by a broker through a third party, includes information on particular companies and
industries as well as market, economic or institutional activity areas. It serves to broaden the scope and supplement the research
activities of the Advisor, to make available additional views for consideration and comparisons, and to enable the Advisor to obtain
market information for the valuation of securities held in the Fund's portfolio or being considered for purchase.

4. During the fiscal years ended October 31, 1999, no money was paid to brokers as commissions in return for research
services. During the fiscal year ended October 31, 2000, $302 was paid to brokers as commissions in return for research services.
During the fiscal year ended October 31, 2001, $7,709 was paid to brokers as commissions in return for research services.

5. Inapplicable.

Item 22. Tax Status.

Reference is made to Item 10 of the Prospectus.

Item 23. Financial Statements at fiscal year-end October 31, 2001.

Independent Auditors' Report

Oppenheimer Multi-Sector Income Trust

The Board of Trustees and Shareholders of Oppenheimer Multi-Sector Income
Trust:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Multi-Sector Income Trust, including the statement of investments,
as of October 31, 2001, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended. These financial statements and financial high-
lights are the responsibility of the Trust's management. Our responsibility is
to express an opinion on these financial statements and financial highlights
based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of October 31, 2001, by correspondence with the custo-
dian and brokers or by other appropriate auditing procedures where replies from
brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evalu-
ating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above pre-
sent fairly, in all material respects, the financial position of Oppenheimer
Multi-Sector Income Trust as of October 31, 2001, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America.

KPMG LLP

Denver, Colorado
November 21, 2001

Statement of Investments October 31, 2001

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

U.S. Government Sector--2.2%
U.S. Government Obligations--2.2%
U.S. Treasury Bonds:
6.375%, 8/15/27(/1/)(/2/).............................. $2,000,000 $2,368,594
STRIPS, 5.99%, 11/15/18(/1/)(/3/)...................... 1,100,000 448,917
U.S. Treasury Nts.:
5.25%, 5/15/04(/1/).................................... 700,000 743,094
6.50%, 2/15/10......................................... 1,540,000 1,787,724
----------
5,348,329
----------

Date Strike Contracts
------- ------ ---------

Options Purchased--0.0%
U.S. Treasury Nts., 5%, 8/15/11
Call(/4/)............................... 11/7/01 103.21% 2,300 62,891
----------
Total U.S. Government Sector (Cost
$4,847,288)............................. 5,411,220
----------

Shares
------

Convertible Sector--1.9%
Preferred Stocks--1.4%
Crown American Realty Trust, 11% Cum., Series A, Non-Vtg.... 4,000 200,000
Dobson Communications Corp.:
12.25% Sr. Exchangeable, Non-Vtg.(/5/)..................... 985 977,612
13% Sr. Exchangeable, Non-Vtg.(/5/)........................ 413 405,772
e.spire Communications, Inc., 12.75% Jr. Redeemable, Non-
Vtg.(/4/)(/5/)............................................. 249 25
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable,
Series B, Non-Vtg.(/4/)(/6/)............................... 4,000 57,000
Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable, Non-
Vtg.(/4/)(/5/)............................................. 4,000 13,000
Intermedia Communications, Inc., 13.50% Exchangeable, Series
B(/5/)..................................................... 600 634,500
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable
Exchangeable, Non-Vtg.(/4/)(/5/)(/6/)...................... 3,031 379
Nextel Communications, Inc., 11.125% Exchangeable, Series E,
Non-Vtg.(/5/).............................................. 450 172,125
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable,
Non-Vtg.(/5/).............................................. 28 248,500
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-
Vtg.(/5/).................................................. 302 257,455
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series
A(/4/)..................................................... 5,750 541,938
----------
3,508,306
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Market Value
Units See Note 1
------- ------------

Rights, Warrants and Certificates--0.5%
CellNet Data Systems, Inc. Wts., Exp. 10/1/07(/4/)(/6/).. 404 $ 4
Chesapeake Energy Corp. Wts.:
Exp. 1/23/03(/4/)(/6/).................................. 6,053 --
Exp. 1/23/03(/4/)(/6/).................................. 3,455 --
Exp. 9/1/04(/4/)(/6/)................................... 10,150 --
COLO.com, Inc. Wts., Exp. 3/15/10(/4/)(/6/).............. 300 3
Concentric Network Corp. Wts., Exp. 12/15/07(/4/)(/6/)... 600 360
Decrane Aircraft Holdings, Inc. Wts., Exp.
9/30/08(/4/)(/6/)....................................... 800 --
e.spire Communications, Inc. Wts., Exp.
11/1/05(/4/)(/6/)....................................... 700 14
Equinix, Inc. Wts., Exp. 12/1/07(/4/)(/6/)............... 400 6,050
Horizon PCS, Inc. Wts., Exp. 10/1/10(/4/)(/6/)........... 999 50,075
ICG Communications, Inc. Wts., Exp. 9/15/05(/4/)(/6/).... 4,125 41
ICO Global Communication Holdings Ltd. Wts.:
Exp. 5/16/06(/4/)(/6/).................................. 6,035 302
Exp. 5/16/06(/6/)....................................... 9 2
In-Flight Phone Corp. Wts., Exp. 8/31/02(/4/)(/6/)....... 900 --
Insilco Corp. Wts., Exp. 8/15/07(/4/)(/6/)............... 720 7
KMC Telecom Holdings, Inc. Wts., Exp. 4/15/08(/4/)(/6/).. 920 46
Leap Wireless International, Inc. Wts., Exp.
4/15/10(/4/)(/6/)....................................... 400 16,050
Long Distance International, Inc. Wts., Exp.
4/13/08(/4/)(/6/)....................................... 400 2
Loral Space &amp;amp;amp;amp;amp;amp;amp;amp; Communications Ltd. Wts., Exp.
1/15/07(/4/)(/6/)....................................... 975 10
Millenium Seacarriers, Inc. Wts., Exp.
7/15/05(/4/)(/6/)....................................... 700 7
Morgan Stanley Dean Witter &amp;amp;amp;amp;amp;amp;amp;amp; Co. Wts., Exp. 6/5/03(/6/).. 124,725 999,272
Ntelos, Inc. Wts., Exp. 8/15/10(/4/)(/6/)................ 500 2,562
Pathmark Stores, Inc. Wts., Exp. 9/19/10(/6/)............ 6,738 60,642
Protection One, Inc. Wts., Exp. 6/30/05(/4/)(/6/)........ 6,400 320
Republic Technologies International LLC Wts., Exp.
7/15/09(/4/)(/6/)....................................... 200 2
Verado Holdings, Inc., Cl. B Wts., Exp.
4/15/08(/4/)(/6/)....................................... 500 938
----------
1,136,709
----------
Total Convertible Sector (Cost $6,143,654)............... 4,645,015
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Market Value
Shares See Note 1
---------- ------------

Corporate Sector--35.7%
Common Stocks--0.1%
Aurora Foods, Inc.(/4/)(/6/).......................... 5,313 $ 11,556
Capital Gaming International, Inc.(/4/)(/6/).......... 18 --
Focal Communications Corp.(/6/)....................... 138,744 72,147
ICO Global Communication Holdings Ltd.(/6/)........... 24,061 48,122
OpTel, Inc., Non-Vtg.(/4/)(/6/)....................... 815 8
Star Gas Partners LP.................................. 220 4,732
WRC Media Corp.(/4/)(/6/)............................. 676 7
----------
136,572
----------

Principal
Amount
----------

Corporate Bonds and Notes--35.2%
Aerospace/Defense--0.5%
Alliant Techsystems, Inc., 8.50% Sr. Unsec. Sub. Nts.,
5/15/11.............................................. $ 200,000 211,000
BE Aerospace, Inc.:
8.875% Sr. Unsec. Sub. Nts., 5/1/11.................. 200,000 151,000
9.50% Sr. Unsec. Sub. Nts., 11/1/08.................. 200,000 160,000
Decrane Aircraft Holdings, Inc., 12% Sr. Unsec. Sub.
Nts., Series B, 9/30/08.............................. 800,000 724,000
----------
1,246,000
----------
Chemicals--0.7%
Huntsman Corp./ICI Chemical Co. plc, Zero Coupon Sr.
Unsec. Disc. Nts., 13.08%, 12/31/09(/3/)............. 1,150,000 244,375
Lyondell Chemical Co.:
9.625% Sr. Sec. Nts., Series A, 5/1/07............... 100,000 96,250
9.875% Sec. Nts., Series B, 5/1/07................... 400,000 385,000
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts.,
6/15/07(/6/)(/7/).................................... 400,000 92,000
Polymer Group, Inc.:
8.75% Sr. Sub. Nts., 3/1/08.......................... 500,000 192,500
9% Sr. Unsec. Sub. Nts., Series B, 7/1/07............ 250,000 96,250
Sterling Chemicals, Inc.:
11.75% Sr. Unsec. Sub. Nts., 8/15/06(/7/)............ 200,000 25,000
12.375% Sr. Sec. Nts., Series B, 7/15/06(/7/)........ 600,000 492,000
----------
1,623,375
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
-------------- ------------

Consumer Non-Durables--0.8%
AKI, Inc., 10.50% Sr. Unsec. Nts., 7/1/08.......... $ 600,000 $ 570,000
Boyds Collection Ltd. (The), 9% Sr. Unsec. Sub.
Nts., Series B, 5/15/08........................... 293,000 295,197
Consoltex Group, Inc., 11% Sr. Sub. Nts., Series B,
10/1/03(/7/)...................................... 370,000 94,350
Globe Manufacturing Corp., 10% Sr. Unsec. Sub.
Nts., Series B, 8/1/08(/4/)(/7/).................. 400,000 --
Holmes Products Corp., 9.875% Sr. Unsec. Sub. Nts.,
Series B, 11/15/07................................ 400,000 92,000
Levi Strauss & Co., 11.625% Sr. Unsec. Nts.,
1/15/08........................................... 100,000 70,500
Revlon Consumer Products Corp., 9% Sr. Nts.,
11/1/06........................................... 600,000 435,000
Salton, Inc., 10.75% Sr. Unsec. Sub. Nts.,
12/15/05.......................................... 400,000 336,000
Styling Technology Corp., 10.875% Sr. Unsec. Sub.
Nts., 7/1/08(/4/)(/6/)(/7/)....................... 400,000 40
----------
1,893,087
----------
Energy--3.0%
Chesapeake Energy Corp., 8.125% Sr. Unsec. Nts.,
4/1/11............................................ 1,000,000 980,000
Denbury Management, Inc., 9% Sr. Sub. Nts.,
3/1/08............................................ 400,000 374,000
Frontier Oil Corp., 11.75% Sr. Nts., 11/15/09...... 600,000 639,000
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts.,
Series B, 2/15/08(/4/)............................ 380,000 267,900
Hornbeck-Leevac Marine Services, Inc., 10.625% Sr.
Nts., 8/1/08(/8/)................................. 750,000 716,250
Nuevo Energy Co., 9.375% Sr. Unsec. Sub. Nts.,
Series B, 10/1/10................................. 300,000 289,500
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts.,
Series B, 5/15/08................................. 484,000 517,880
Pogo Producing Co., 8.75% Sr. Sub. Nts., Series B,
5/15/07........................................... 790,000 805,800
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08.. 800,000 732,000
SESI LLC, 8.875% Sr. Unsec. Nts., 5/15/11.......... 500,000 475,000
Statia Terminals International NV/Statia Terminals
(Canada), Inc., 11.75% First Mtg. Nts., Series B,
11/15/03(/4/)..................................... 200,000 208,000
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07... 535,000 553,725
Universal Compression Holdings, Inc., 0%/9.875% Sr.
Disc. Nts., 2/15/08(/9/).......................... 700,000 654,500
----------
7,213,555
----------
Financial--3.1%
AmeriCredit Corp., 9.875% Gtd. Sr. Nts., 4/15/06... 300,000 262,500
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A,
3/15/05(/7/)...................................... 400,000 90,000
Conseco, Inc., 10.75% Sr. Unsec. Nts., 6/15/08..... 300,000 144,000
Development Bank of Japan (The), 1.75% Unsec. Nts.,
6/21/10........................................... JPY 63,000,000 539,827
Fuji JGB Investment LLC:
9.87% Non-Cum. Bonds, Series A, 12/31/49(/10/).... 140,000 132,526
9.87% Non-Cum. Bonds, Series A,
12/31/49(/8/)(/10/).............................. 1,595,000 1,509,853

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------- ------------

Financial (Continued)
IBJ Preferred Capital Co. (The) LLC:
8.79% Bonds, 12/29/49(/8/)(/10/).................. $ 1,210,000 $1,078,691
8.79% Non-Cum. Bonds, Series A, 12/29/49(/10/).... 85,000 75,776
IStar Financial, Inc., 8.75% Sr. Unsec. Nts.,
8/15/08........................................... 250,000 250,975
KFW International Finance, Inc., 1.75% Bonds,
3/23/10........................................... JPY 5,000,000 43,597
LaBranche & Co., Inc., 12% Sr. Unsec. Sub. Nts.,
3/2/07............................................ 250,000 271,250
Meristar Hospitality Corp., 9.125% Sr. Nts.,
1/15/11........................................... 400,000 344,000
Pemex Project Funding Master Trust, 9.125% Unsec.
Unsub. Nts., 10/13/10............................. 1,545,000 1,626,112
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr.
Sec. Nts., Series B, 4/1/08(/4/).................. 700,000 682,500
Tokai Preferred Capital Co. LLC, 9.98% Non-Cum.
Bonds, Series A, 12/29/49(/8/)(/10/).............. 575,000 549,303
----------
7,600,910
----------
Food & Drug--0.5%
Family Restaurants, Inc., 9.75% Sr. Nts.,
2/1/02(/4/)(/6/)(/7/)............................. 300,000 16,875
Fleming Cos., Inc.:
10.125% Sr. Unsec. Nts., 4/1/08................... 200,000 210,000
10.625% Sr. Sub. Nts., Series B, 7/31/07.......... 400,000 405,000
Pantry, Inc. (The), 10.25% Sr. Sub. Nts.,
10/15/07.......................................... 775,000 716,875
----------
1,348,750
----------
Food/Tobacco--0.4%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B,
7/1/08............................................ 300,000 259,500
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series
B, 2/1/05......................................... 650,000 393,250
Smithfield Foods, Inc., 7.625% Sr. Unsec. Sub.
Nts., 2/15/08..................................... 400,000 396,000
----------
1,048,750
----------
Forest Products/Containers--1.5%
Ball Corp.:
7.75% Sr. Unsec. Nts., 8/1/06(/4/)................ 300,000 315,000
8.25% Sr. Unsec. Sub. Nts., 8/1/08(/4/)........... 400,000 420,000
Gaylord Container Corp., 9.75% Sr. Unsec. Nts.,
Series B, 6/15/07................................. 300,000 244,500
Packaging Corp. of America, 9.625% Sr. Unsec. Sub.
Nts., 4/1/09...................................... 300,000 326,250
Riverwood International Corp.:
10.25% Sr. Nts., 4/1/06........................... 600,000 624,000
10.875% Sr. Sub. Nts., 4/1/08..................... 400,000 388,000
SD Warren Co., 14% Unsec. Nts., 12/15/06(/5/)...... 556,199 603,476

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Forest Products/Containers (Continued)
Stone Container Corp.:
9.25% Sr. Unsec. Nts., 2/1/08......................... $ 250,000 $ 263,750
9.75% Sr. Unsec. Nts., 2/1/11......................... 400,000 423,000
----------
3,607,976
----------
Gaming/Leisure--2.4%
Aztar Corp., 9% Sr. Sub. Nts., 8/15/11(/8/)............ 250,000 253,125
Capital Gaming International, Inc., 11.50% Promissory
Nts., 8/1/1995(/4/)(/6/)(/7/)......................... 5,500 --
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07........ 435,000 337,125
Felcor Lodging LP, 8.50% Sr. Nts., 6/1/11(/8/)......... 285,000 256,500
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07.... 700,000 741,125
Mandalay Resort Group, 10.25% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07...................................... 500,000 476,250
Meristar Hospitality Corp., 9% Sr. Nts., 1/15/08....... 200,000 174,000
MGM Mirage, Inc., 8.375% Sr. Unsec. Sub. Nts., 2/1/11.. 1,100,000 1,023,000
Mohegan Tribal Gaming Authority:
8.375% Sr. Sub. Nts., 7/1/11(/8/)..................... 400,000 416,000
8.75% Sr. Unsec. Sub. Nts., 1/1/09.................... 500,000 525,000
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(/9/).................... 500,000 425,000
9.25% Sr. Nts., 4/1/06................................ 300,000 301,500
Six Flags Entertainment Corp., 8.875% Sr. Nts.,
4/1/06................................................ 440,000 443,300
Station Casinos, Inc., 9.75% Sr. Sub. Nts., 4/15/07.... 300,000 294,000
Venetian Casino Resort LLC/Las Vegas Sands, Inc.,
12.25% Mtg. Nts., 11/15/04............................ 200,000 182,500
----------
5,848,425
----------
Healthcare--2.1%
DaVita, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B,
4/15/11............................................... 500,000 527,500
Fresenius Medical Care Capital Trust II, 7.875% Nts.,
2/1/08................................................ 600,000 603,000
ICN Pharmaceuticals, Inc., 9.75% Sr. Nts.,
11/15/08(/4/)......................................... 415,000 460,650
Magellan Health Services, Inc., 9% Sr. Sub. Nts.,
2/15/08............................................... 550,000 536,250
Tenet Healthcare Corp.:
8.125% Sr. Unsec. Sub. Nts., Series B, 12/1/08........ 250,000 271,250
8.625% Sr. Sub. Nts., 1/15/07......................... 750,000 794,250
Triad Hospitals, Inc., 8.75% Sr. Unsec. Nts., Series B,
5/1/09................................................ 1,500,000 1,620,000
VanGuard Health Systems, Inc., 9.75% Sr. Sub. Nts.,
8/1/11(/8/)........................................... 400,000 422,000
----------
5,234,900
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
--------- ------------

Housing--0.8%
Blum CB Corp., 11.25% Sr. Unsec. Sub. Nts.,
6/15/11(/8/).......................................... $250,000 $ 213,750
D.R. Horton, Inc., 9.75% Sr. Sub. Nts., 9/15/10........ 500,000 503,750
KB Home, 9.50% Sr. Unsec. Sub. Nts., 2/15/11........... 500,000 498,125
Nortek, Inc.:
9.125% Sr. Unsec. Nts., Series B, 9/1/07.............. 300,000 293,145
9.25% Sr. Nts., Series B, 3/15/07..................... 300,000 292,500
9.875% Sr. Unsec. Sub. Nts., 6/15/11.................. 100,000 90,000
----------
1,891,270
----------
Information Technology--0.8%
Amkor Technology, Inc., 9.25% Sr. Unsec. Sub. Nts.,
2/15/08............................................... 500,000 427,500
Cherokee International LLC, 10.50% Sr. Unsec. Sub.
Nts., Series B, 5/1/09................................ 500,000 267,500
Chippac International Ltd., 12.75% Sr. Unsec. Sub.
Nts., Series B, 8/1/09................................ 200,000 151,000
Fairchild Semiconductor Corp.:
10.375% Sr. Unsec. Nts., 10/1/07...................... 500,000 507,500
10.50% Sr. Unsec. Sub. Nts., 2/1/09................... 350,000 358,750
Fisher Scientific International, Inc., 9% Sr. Unsec.
Sub. Nts., 2/1/08..................................... 185,000 188,700
----------
1,900,950
----------
Manufacturing--1.5%
Actuant Corp., 13% Sr. Sub. Nts., 5/1/09............... 300,000 316,500
Agco Corp., 9.50% Sr. Unsec. Nts., 5/1/08.............. 500,000 517,500
Blount, Inc., 13% Sr. Sub. Nts., 8/1/09................ 400,000 214,000
Burke Industries, Inc., 10% Sr. Sub. Nts.,
8/15/07(/4/)(/7/)..................................... 700,000 63,000
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub.
Nts., 3/1/08.......................................... 350,000 171,500
Grove Worldwide LLC, 9.25% Sr. Sub. Nts.,
5/1/08(/4/)(/7/)...................................... 700,000 31,500
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub.
Nts., 8/1/07(/4/)..................................... 600,000 393,000
Insilco Corp., 12% Sr. Sub. Nts., 8/15/07(/4/)......... 800,000 124,000
International Wire Group, Inc., 11.75% Sr. Sub. Nts.,
Series B, 6/1/05...................................... 700,000 612,500
Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts.,
7/1/08(/4/)........................................... 280,000 51,800
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub.
Nts., Series B, 6/15/07(/4/).......................... 500,000 432,500
Terex Corp., 8.875% Sr. Unsec. Sub. Nts., 4/1/08....... 300,000 286,500
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03..... 525,000 506,625
----------
3,720,925
----------
Media/Entertainment: Broadcasting--1.0%
Chancellor Media Corp., 8.75% Sr. Unsec. Sub. Nts.,
Series B, 6/15/07..................................... 700,000 736,750
Cumulus Media, Inc., 10.375% Sr. Unsec. Sub. Nts.,
7/1/08................................................ 500,000 515,000

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Media/Entertainment: Broadcasting (Continued)
Emmis Communications Corp., 8.125% Sr. Unsec. Sub.
Nts., Series B, 3/15/09.............................. $ 600,000 $ 574,500
Radio One, Inc., 8.875% Sr. Sub. Nts., 7/1/11(/8/).... 200,000 209,500
Spanish Broadcasting System, Inc., 9.625% Sr. Sub.
Nts., 11/1/09........................................ 300,000 284,250
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs.,
6/15/07.............................................. 100,000 84,000
----------
2,404,000
----------
Media/Entertainment: Cable/Wireless Video--3.0%
Adelphia Communications Corp.:
8.125% Sr. Nts., Series B, 7/15/03................... 250,000 240,313
8.375% Sr. Nts., Series B, 2/1/08.................... 100,000 89,000
9.875% Sr. Nts., Series B, 3/1/07.................... 565,000 531,100
10.25% Sr. Unsec. Sub. Nts., 6/15/11................. 950,000 888,250
10.875% Sr. Unsec. Nts., 10/1/10..................... 300,000 289,500
Charter Communications Holdings LLC/Charter
Communications Holdings Capital Corp.:
0%/9.92% Sr. Unsec. Disc. Nts., 4/1/11(/9/).......... 850,000 601,375
10% Sr. Nts., 4/1/09................................. 100,000 102,500
10% Sr. Unsec. Sub. Nts., 5/15/11.................... 200,000 203,000
10.75% Sr. Unsec. Nts., 10/1/09...................... 1,500,000 1,578,750
11.125% Sr. Unsec. Nts., 1/15/11..................... 400,000 425,000
Classic Cable, Inc., 10.50% Sr. Sub. Nts.,
3/1/10(/7/).......................................... 300,000 102,000
EchoStar Broadband Corp., 10.375% Sr. Unsec. Nts.,
10/1/07.............................................. 750,000 787,500
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09.... 500,000 512,500
Mediacom LLC/Mediacom Capital Corp., 9.50% Sr. Unsec.
Nts., 1/15/13........................................ 700,000 717,500
NTL, Inc., 10% Sr. Nts., Series B, 2/15/07............ 250,000 138,750
United International Holdings, Inc., 0%/10.75% Sr.
Disc. Nts., Series B, 2/15/08(/9/)................... 600,000 99,000
----------
7,306,038
----------
Media/Entertainment: Diversified Media--1.1%
Adelphia Communications Corp., 10.25% Sr. Unsec. Nts.,
11/1/06.............................................. 400,000 382,000
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts.,
2/1/11............................................... 500,000 457,500
Key3Media Group, Inc., 11.25% Sr. Sub. Nts., 6/15/11.. 1,000,000 790,000
Lamar Advertising Co., 8.625% Sr. Sub. Nts., 9/15/07.. 500,000 515,625
Penton Media, Inc., 10.375% Sr. Sub. Nts.,
6/15/11(/8/)......................................... 250,000 152,500
WRC Media, Inc./Weekly Reader Corp./Compass Learning
Corp., 12.75% Sr. Sub. Nts., 11/15/09................ 500,000 482,500
----------
2,780,125
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Media/Entertainment: Telecommunications--1.3%
Allegiance Telecom, Inc., 0%/11.75% Sr. Unsec. Disc.
Nts., Series B, 2/15/08(/9/)......................... $500,000 $205,000
COLO.com, Inc., 13.875% Sr. Nts.,
3/15/10(/4/)(/6/)(/7/)............................... 300,000 51,000
Concentric Network Corp., 12.75% Sr. Unsec. Nts.,
12/15/07............................................. 495,000 91,575
Covad Communications Group, Inc., 0%/13.50% Sr. Disc.
Nts., 3/15/08(/7/)(/9/).............................. 300,000 46,500
Equinix, Inc., 13% Sr. Unsec. Nts., 12/1/07(/4/)...... 400,000 122,000
Exodus Communications, Inc., 11.25% Sr. Nts.,
7/1/08(/7/).......................................... 500,000 111,250
Focal Communications Corp., 11.875% Sr. Unsec. Nts.,
Series B, 1/15/10.................................... 75,000 27,375
Global Crossing Holdings Ltd., 8.70% Sr. Unsec. Nts.,
8/1/07............................................... 200,000 32,000
Globix Corp., 12.50% Sr. Unsec. Nts., 2/1/10.......... 300,000 61,500
Intermedia Communications, Inc., 0%/12.25% Sr. Disc.
Nts., Series B, 3/1/09(/9/).......................... 500,000 432,500
KMC Telecom Holdings, Inc., 0%/12.50% Sr. Unsec. Disc.
Nts., 2/15/08(/9/)................................... 900,000 31,500
Leap Wireless International, Inc., 0%/14.50% Sr.
Unsec. Disc. Nts., 4/15/10(/9/)...................... 500,000 165,000
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08(/9/)............... 750,000 187,500
0%/12.875% Sr. Unsec. Disc. Nts., 3/15/10(/9/)....... 600,000 126,000
McLeodUSA, Inc., 8.125% Sr. Unsec. Nts., 2/15/09...... 400,000 93,000
Metromedia Fiber Network, Inc.:
10% Sr. Nts., 12/15/09............................... 300,000 67,500
10% Sr. Unsec. Nts., Series B, 11/15/08.............. 200,000 45,000
MGC Communications, Inc./Mpower Holding Corp., 13% Sr.
Unsec. Nts., 4/1/10.................................. 200,000 31,000
NorthPoint Communications Group, Inc., 12.875% Nts.,
2/15/10(/6/)(/7/).................................... 300,000 58,500
Ntelos, Inc., 13% Sr. Nts., 8/15/10(/4/).............. 500,000 377,500
OpTel, Inc., 13% Sr. Nts., Series B,
2/15/05(/4/)(/6/)(/7/)............................... 250,000 101,250
PSINet, Inc.:
10.50% Sr. Unsec. Nts., 12/1/06(/7/)................. EUR500,000 28,147
11% Sr. Nts., 8/1/09(/7/)............................ 600,000 45,000
RCN Corp., 10.125% Sr. Unsec. Nts., 1/15/10........... 179,000 65,335
Rhythms NetConnections, Inc., 14% Sr. Unsec. Nts.,
Series B, 2/15/10(/7/)............................... 400,000 19,000
Teligent, Inc., 11.50% Sr. Nts., 12/1/07(/4/)(/7/).... 200,000 1,000
Time Warner Telecom LLC/Time Warner Telecom, Inc.,
9.75% Sr. Nts., 7/15/08.............................. 200,000 153,000
Time Warner Telecom, Inc., 10.125% Sr. Unsec. Sub.
Nts., 2/1/11......................................... 200,000 153,000
Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08(/7/)...... 195,000 975
Williams Communications Group, Inc.:
10.875% Sr. Unsec. Nts., 10/1/09..................... 200,000 85,000
11.875% Sr. Unsec. Nts., 8/1/10...................... 100,000 42,500

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Media/Entertainment: Telecommunications (Continued)
XO Communications, Inc.:
0%/12.25% Sr. Unsec. Disc. Nts., 6/1/09(/9/)......... $ 200,000 $ 17,000
9% Sr. Unsec. Nts., 3/15/08.......................... 250,000 43,750
9.625% Sr. Nts., 10/1/07............................. 100,000 17,500
10.75% Sr. Unsec. Nts., 11/15/08..................... 200,000 39,000
----------
3,174,657
----------
Media/Entertainment: Wireless Communications--4.6%
Alamosa Delaware, Inc., 12.50% Sr. Unsec. Nts.,
2/1/11............................................... 200,000 199,000
American Cellular Corp., 9.50% Sr. Sub. Nts.,
10/15/09............................................. 600,000 606,000
American Tower Corp., 9.375% Sr. Nts., 2/1/09......... 500,000 408,750
CellNet Data Systems, Inc., 0%/14% Sr. Unsec. Disc.
Nts., 10/1/07(/4/)(/7/)(/9/)......................... 554,000 693
Crown Castle International Corp.:
0%/10.375% Sr. Disc. Nts., 5/15/11(/9/).............. 550,000 327,250
0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(/9/)...... 800,000 644,000
9.375% Sr. Nts., 8/1/11.............................. 200,000 175,000
Horizon PCS, Inc., 0%/14% Sr. Unsec. Sub. Nts.,
10/1/10(/9/)......................................... 1,000,000 500,000
Leap Wireless International, Inc., 12.50% Sr. Nts.,
4/15/10.............................................. 400,000 286,000
Loral Space & Communications Ltd., 9.50% Sr. Nts.,
1/15/06.............................................. 250,000 136,250
Millicom International Cellular SA, 13.50% Sr. Disc.
Nts., 6/1/06......................................... 205,000 126,075
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(/9/)............... 250,000 155,625
9.375% Sr. Unsec. Nts., 11/15/09..................... 400,000 282,000
Omnipoint Corp., 11.50% Sr. Nts., 9/15/09(/8/)........ 200,000 231,000
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts.,
8/15/04(/4/)(/6/)(/7/)............................... 175,000 3,500
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts.,
1/15/07(/4/)(/9/).................................... 1,150,000 546,250
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts.,
3/15/08(/9/)......................................... 200,000 89,000
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B,
5/15/08.............................................. 600,000 609,000
SBA Communications Corp.:
0%/12% Sr. Unsec. Disc. Nts., 3/1/08(/9/)............ 1,300,000 916,500
10.25% Sr. Unsec. Nts., 2/1/09....................... 200,000 161,000
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts.,
7/15/08(/9/)......................................... 600,000 201,000
TeleCorp PCS, Inc.:
0%/11.625% Sr. Unsec. Sub. Disc. Nts., 4/15/09(/9/).. 200,000 176,500
10.625% Sr. Unsec. Sub. Nts., 7/15/10................ 800,000 932,000

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Media/Entertainment: Wireless Communications
(Continued)
Tritel PCS, Inc.:
0%/12.75% Sr. Unsec. Sub. Disc. Nts., 5/15/09(/9/)... $ 400,000 $ 349,500
10.375% Sr. Sub. Nts., 1/15/11....................... 500,000 576,250
Triton PCS, Inc.:
0%/11% Sr. Unsec. Sub. Disc. Nts., 5/1/08(/9/)....... 250,000 228,750
9.375% Sr. Unsec. Sub. Nts., 2/1/11.................. 100,000 105,500
US Unwired, Inc., 0%/13.375% Sr. Unsec. Sub. Disc.
Nts., Series B, 11/1/09(/9/)......................... 800,000 508,000
VoiceStream Wireless Corp., 10.375% Sr. Unsec. Nts.,
11/15/09............................................. 1,500,000 1,717,500
-----------
11,197,893
-----------
Metals/Minerals--1.1%
AK Steel Corp.:
7.875% Sr. Unsec. Nts., 2/15/09...................... 300,000 282,000
9.125% Sr. Nts., 12/15/06............................ 250,000 250,000
Century Aluminum Co., 11.75% Sr. Sec. Nts.,
4/15/08(/8/)......................................... 400,000 394,500
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series
B, 5/15/08........................................... 800,000 464,000
Kaiser Aluminum & Chemical Corp.:
10.875% Sr. Nts., Series B, 10/15/06................. 300,000 220,500
12.75% Sr. Sub. Nts., 2/1/03......................... 500,000 242,500
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts.,
7/15/08(/9/)......................................... 500,000 191,875
Metallurg, Inc., 11% Sr. Nts., 12/1/07(/4/)........... 200,000 173,000
National Steel Corp., 9.875% First Mtg. Bonds, Series
D, 3/1/09............................................ 250,000 63,750
United States Steel LLC, 10.75% Sr. Nts., 8/1/08...... 500,000 452,500
-----------
2,734,625
-----------
Retail--0.5%
Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts.,
5/1/08(/9/).......................................... 500,000 347,500
Finlay Enterprises, Inc., 9% Debs., 5/1/08............ 500,000 427,500
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08.... 300,000 263,250
Ingram Micro, Inc., 9.875% Sr. Sub. Nts.,
8/15/08(/8/)......................................... 300,000 277,500
-----------
1,315,750
-----------
Service--2.1%
Allied Waste North America, Inc.:
7.875% Sr. Unsec. Nts., Series B, 1/1/09............. 100,000 99,500
8.875% Sr. Nts., Series B, 4/1/08.................... 1,000,000 1,030,000
10% Sr. Unsec. Sub. Nts., Series B, 8/1/09........... 1,000,000 1,017,500
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts.,
3/15/08(/4/)(/9/).................................... 150,000 10,875

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Service (Continued)
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts.,
3/15/08(/4/)......................................... $ 400,000 $ 200,000
Budget Group, Inc., 9.125% Sr. Unsec. Nts., 4/1/06.... 600,000 165,000
Comforce Operating, Inc., 12% Sr. Nts., Series B,
12/1/07.............................................. 200,000 151,000
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07............ 600,000 591,000
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec.
Sub. Nts., 8/15/08................................... 610,000 619,150
Kindercare Learning Centers, Inc., 9.50% Sr. Sub.
Nts., 2/15/09........................................ 250,000 243,750
Protection One, Inc./Protection One Alarm Monitoring,
Inc., 7.375% Sr. Unsec. Nts., 8/15/05................ 400,000 322,000
Safety-Kleen Corp., 9.25% Sr. Unsec. Nts.,
5/15/09(/4/)(/6/)(/7/)............................... 50,000 5
United Rentals, Inc.:
9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09........ 250,000 235,000
10.75% Sr. Unsec. Nts., 4/15/08(/8/)................. 500,000 527,500
-----------
5,212,280
-----------
Transportation--1.2%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05.. 1,000,000 467,500
Amtran, Inc., 10.50% Sr. Nts., 8/1/04................. 1,450,000 906,250
Atlas Air, Inc.:
9.25% Sr. Nts., 4/15/08.............................. 200,000 141,000
9.375% Sr. Unsec. Nts., 11/15/06..................... 300,000 211,500
Dura Operating Corp., 9% Sr. Unsec. Sub. Nts., Series
D, 5/1/09............................................ 600,000 513,000
Navigator Gas Transport plc, 10.50% First Priority
Ship Mtg. Nts., 6/30/07(/8/)......................... 750,000 343,125
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts.,
Series D, 6/15/07.................................... 400,000 122,000
Sea Containers Ltd., 7.875% Sr. Nts., 2/15/08......... 500,000 212,500
-----------
2,916,875
-----------
Utility--1.2%
AES Corp. (The), 8.75% Sr. Unsec. Unsub. Nts.,
6/15/08.............................................. 250,000 235,000
Azurix Corp., 10.75% Sr. Unsec. Nts., Series B,
2/15/10.............................................. 200,000 177,000
Caithness Coso Funding Corp., 9.05% Sr. Sec. Nts.,
Series B, 12/15/09................................... 500,000 484,375
CMS Energy Corp., 9.875% Sr. Unsec. Nts., 10/15/07.... 800,000 864,640
El Paso Electric Co., 9.40% First Mtg. Sec. Nts.,
Series E, 5/1/11..................................... 470,000 536,959
ESI Tractebel Acquisition Corp., 7.99% Sec. Bonds,
Series B, 12/30/11................................... 500,000 529,173
-----------
2,827,147
-----------
86,048,263
-----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------- ------------

Loan Participations--0.4%
Shoshone Partners Loan Trust Sr. Nts., 4.03%,
4/28/02 (representing a basket of reference loans
and a total return swap between Chase Manhattan
Bank and the Trust)(/4/)(/10/)..................... $ 2,500,000 $ 1,013,545
-----------
Total Corporate Sector (Cost $107,342,766).......... 87,198,380
-----------
International Sector--28.6%
Corporate Bonds and Notes--5.2%
Chemicals--0.1%
Messer Griesheim Holding AG, 10.375% Sr. Nts.,
6/1/11(/4/)........................................ EUR 400,000 362,081
-----------
Energy--0.7%
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08... 1,200,000 990,000
Petroleos Mexicanos, 9.50% Sr. Sub. Nts., 9/15/27... 585,000 606,937
-----------
1,596,937
-----------
Financial--1.0%
Eurofima, 7.50% Sr. Unsec. Unsub. Nts., 11/4/02..... DEM 770,000 367,934
European Investment Bank, 3% Eligible Interest Nts.,
9/20/06............................................ JPY45,000,000 413,623
Gold Eagle Capital Ltd., 7.981% Sec. Nts.,
4/8/02(/4/)(/10/).................................. 500,000 503,950
Hanvit Bank:
12.75% Unsec. Sub. Nts., 3/1/10(/8/)(/9/).......... 85,000 91,964
12.75% Unsec. Sub. Nts., 3/1/10(/9/)............... 430,000 465,228
Inter-American Development Bank, 1.90% Unsec. Bonds,
7/8/09............................................. JPY 9,000,000 79,353
Korea Exchange Bank:
13.75% Unsec. Sub. Bonds, 6/30/10(/9/)............. 395,000 424,131
13.75% Unsec. Unsub. Bonds, 6/30/10(/8/)(/10/)..... 20,000 21,518
Oesterreichische Kontrollbank AG, 1.80% Unsec. Nts.,
3/22/10............................................ JPY 5,000,000 43,748
-----------
2,411,449
-----------
Food/Tobacco--0.5%
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec.
Sub. Nts., 11/15/07(/4/)........................... 565,000 423,750
United Biscuits Finance plc, 10.75% Sr. Sub. Nts.,
4/15/11(/8/)....................................... GBP 500,000 787,140
-----------
1,210,890
-----------
Forest Products/Containers--0.1%
Doman Industries Ltd., 8.75% Sr. Nts., 3/15/04...... 750,000 202,500
-----------
Gaming/Leisure--0.3%
Intrawest Corp., 9.75% Sr. Nts., 8/15/08............ 700,000 644,000
-----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------ ------------

Information Technology--0.1%
Flextronics International Ltd., 9.875% Sr. Unsec.
Sub. Nts., 7/1/10.................................. $ 200,000 $ 209,000
----------
Media/Entertainment: Cable/Wireless Video--1.6%
Diamond Cable Communications plc, 11.75% Sr. Disc.
Nts., 12/15/05..................................... 1,600,000 784,000
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08....... 200,000 145,000
NTL Communications Corp.:
0%/11.50% Sr. Nts., 11/15/09(/9/).................. EUR 750,000 224,612
0%/12.375% Sr. Unsec. Nts., Series B,
10/1/08(/9/)...................................... 200,000 77,000
9.875% Sr. Unsec. Nts., Series B, 11/15/09......... EUR 500,000 237,560
11.50% Sr. Unsec. Nts., Series B, 10/1/08.......... 700,000 409,500
NTL, Inc., 0%/10.75% Sr. Unsec. Unsub. Nts., Series
B, 4/1/08(/9/)..................................... GBP 250,000 138,159
Telewest Communications plc:
0%/9.25% Sr. Disc. Nts., 4/15/09(/9/).............. 250,000 108,125
0%/9.875% Sr. Disc. Nts., 4/15/09(/9/)............. GBP 450,000 294,496
11% Sr. Disc. Debs., 10/1/07....................... 500,000 392,500
11.25% Sr. Nts., 11/1/08........................... 1,035,000 822,825
United Pan-Europe Communications NV:
0%/13.75% Sr. Unsec. Disc. Nts., Series B,
2/1/10(/9/)....................................... 1,000,000 86,250
10.875% Sr. Nts., 8/1/09........................... EUR 750,000 92,885
----------
3,812,912
----------
Media/Entertainment: Diversified Media--0.1%
Imax Corp., 7.875% Sr. Nts., 12/1/05................ 700,000 213,500
----------
Media/Entertainment: Telecommunications--0.3%
360networks, Inc., 13% Sr. Unsec. Nts.,
5/1/08(/4/)(/7/)................................... EUR 600,000 365
COLT Telecom Group plc, 0%/12% Sr. Unsec. Disc.
Nts., 12/15/06(/9/)................................ 600,000 504,000
FLAG Telecom Holdings Ltd., 11.625% Sr. Nts.,
3/30/10............................................ EUR 200,000 63,049
Global TeleSystems, Inc., 10.50% Sr. Unsec. Bonds,
12/1/06(/7/)....................................... EUR 500,000 42,783
Jazztel plc, 13.25% Sr. Unsec. Nts., 12/15/09....... EUR 250,000 86,692
KPNQwest BV, 8.875% Sr. Nts., 2/1/08(/4/)........... EUR 250,000 114,839
Tele1 Europe BV, 11.875% Sr. Nts., 12/1/09.......... EUR 200,000 44,134
----------
855,862
----------
Media/Entertainment: Wireless Communications--0.1%
Microcell Telecommunications, Inc., 0%/12% Sr.
Unsec. Disc. Nts., 6/1/09(/9/)..................... 750,000 213,750
----------
Service--0.1%
Petroleos Mexicanos, 9.375% Sr. Unsec. Bonds,
12/2/08............................................ 300,000 324,375
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------------- ------------

Transportation--0.0%
Pacific & Atlantic Holdings, Inc., 10.50% Sec.
Nts., 12/31/07(/4/)............................. $ 135,339 $ 61,579
-----------
Utility--0.2%
AES Drax Energy Ltd., 11.50% Sr. Sec. Sub. Nts.,
8/30/10......................................... 600,000 540,000
-----------
12,658,835
-----------

Shares
----------------

Preferred Stocks--0.0%
Pacific & Atlantic Holdings, Inc., 7.50% Cum.
Cv., Series A(/4/)(/5/)(/6/).................... 7,031 38,671
-----------
Common Stocks--0.0%
COLT Telecom Group plc, ADR(/6/)................. 7,020 50,193
-----------

Units
----------------

Rights, Warrants and Certificates--0.0%
Microcell Telecommunications, Inc. Wts., Exp.
6/1/06(/6/)(/8/)................................ 2,800 8,646
Telus Corp. Wts., Exp. 9/15/05(/6/).............. 539 4,851
Mexico Value Rts., Exp. 6/30/03(/6/)............. 28,538 170
-----------
13,667
-----------

Principal
Amount
----------------

Structured Instruments--1.3%
Deutsche Bank AG, South Korean Won Linked Nts.,
5.60%, 5/9/02................................... KRW 292,500,000 227,213
ING Barings LLC, Zero Coupon Russian Equity
Linked Nts., 4/19/02............................ 3,400 216,274
Standard Chartered Bank, Philippines Peso/New
Taiwan Dollar Linked Nts., 9.28%, 1/14/02....... 305,000 305,153
Standard Chartered Bank, South Korean Won Linked
Nts., 5.48%, 5/28/02............................ KRW1,930,915,000 1,504,026
UBS AG Australian Dollar Property Index Linked
Nts., 7%, 7/30/02............................... AUD 1,550,000 822,115
-----------
3,074,781
-----------
Foreign Government Obligations--21.9%
Argentina--0.0%
Buenos Aires (Province of) Bonds, Bonos de
Consolidacion de Deudas, Series PBA1, 3.172%,
4/1/070(/10/)................................... ARP 113,510 33,416
-----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------- ------------

Austria--1.2%
Austria (Republic of) Nts., Series EMTN, 5.50%,
10/20/07.......................................... EUR 2,800,000 $ 2,699,758
Austria (Republic of) Unsub. Nts., 5.25%, 1/4/11... EUR 110,000 103,654
-----------
2,803,412
-----------
Belgium--2.2%
Belgium (Kingdom of) Bonds, Series 35, 5.75%,
9/28/10........................................... EUR 5,370,000 5,229,504
-----------
Brazil--4.0%
Brazil (Federal Republic of) Bonds:
8.875%, 4/15/24................................... 3,604,000 2,063,290
9.625%, 7/15/05................................... 540,000 472,500
10.25%, 1/11/06................................... 945,000 841,050
12.25%, 3/6/30.................................... 1,750,000 1,299,375
Series 15 yr., 3.25%, 4/15/09(/10/)............... 273,529 197,625
Brazil (Federal Republic of) Debt Capitalization
Bonds, Series 20 yr., 8%, 4/15/14................. 2,945,533 2,002,963
Brazil (Federal Republic of) Debt Conversion Bonds:
Series 18 yr., 3.25%, 4/15/12(/10/)............... 710,000 420,675
Series D, 3.25%, 4/15/12(/10/).................... 760,000 450,300
Brazil (Federal Republic of) Eligible Interest
Bonds, 3.188%, 4/15/06(/10/)...................... 559,440 458,741
Brazil (Federal Republic of) Gtd. Disc. Bonds,
3.188%, 4/15/24(/10/)............................. 910,000 600,600
Brazil (Federal Republic of) Unsec. Unsub. Bonds:
11%, 8/17/40...................................... 1,160,000 769,080
11.25%, 7/26/07................................... 180,000 157,050
-----------
9,733,249
-----------
Bulgaria--0.2%
Bulgaria (Republic of) Disc. Bonds, Tranche A,
4.562%, 7/28/24(/10/)............................. 260,000 205,400
Bulgaria (Republic of) Interest Arrears Debs.,
Series PDI, 4.562%, 7/28/11(/10/)................. 326,700 257,276
-----------
462,676
-----------
Canada--0.1%
Canada (Government of) Nts., 0.70%, 3/20/06........ JPY 3,000,000 24,901
Ontario (Province of) Unsec. Unsub. Nts., 1.875%,
1/25/10........................................... JPY27,000,000 235,843
-----------
260,744
-----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
-------------- ------------

Colombia--0.3%
Colombia (Republic of) Unsec. Unsub. Bonds,
8.375%, 2/15/27.................................. $ 235,000 $ 168,025
Colombia (Republic of) Unsec. Unsub. Nts.:
9.75%, 4/23/09................................... 55,000 57,681
11.375%, 1/31/08................................. EUR 420,000 383,734
----------
609,440
----------
Dominican Republic--0.2%
Dominican Republic Unsec. Unsub. Bonds, 9.50%,
9/27/06(/8/)..................................... 470,000 464,712
----------
Ecuador--0.3%
Ecuador (Republic of) Unsec. Bonds, 5%,
8/15/30(/10/).................................... 2,035,000 829,262
----------
France--1.2%
France (Government of) Bonds, Obligations
Assimilables du Tresor:
5.50%, 4/25/07................................... EUR 190,000 183,951
5.50%, 10/25/10.................................. EUR 2,910,000 2,813,945
----------
2,997,896
----------
Germany--0.7%
Germany (Republic of) Bonds:
5.25%, 7/4/10.................................... EUR 1,140,000 1,091,076
Series 98, 5.25%, 1/4/08......................... EUR 730,000 701,630
----------
1,792,706
----------
Great Britain--0.4%
United Kingdom Treasury Bonds, 7.75%, 9/8/06...... GBP 610,000 1,008,659
----------
Hungary--0.7%
Hungary (Government of) Bonds:
Series 04/J, 8.50%, 10/12/04..................... HUF303,360,000 1,063,152
Series 05/E, 9.25%, 5/12/05...................... HUF122,150,000 441,191
Series 06/E, 8.50%, 5/12/06...................... HUF 81,850,000 292,458
----------
1,796,801
----------
Italy--0.1%
Italy (Republic of) Treasury Bonds, Buoni del
Tesoro Poliennali, 4.25%, 11/1/09................ EUR 165,000 145,955
----------
Ivory Coast--0.0%
Ivory Coast (Government of) Past Due Interest
Bonds, Series F, 3/29/18(/6/)(/7/)............... FRF 4,569,500 100,391
----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------- ------------

Mexico--2.6%
United Mexican States Bonds:
5.01%, 12/31/19................................... DEM 885,000 $ 343,370
11.375%, 9/15/16.................................. 315,000 381,150
11.50%, 5/15/26................................... 310,000 389,050
Series MTN, 8.30%, 8/15/31........................ 3,425,000 3,258,887
United Mexican States Collateralized Fixed Rate Par
Bonds, Series B, 6.25%, 12/31/19.................. 335,000 322,437
United Mexican States Nts., 8.375%, 1/14/11........ 415,000 426,620
United Mexican States Sr. Nts., 8.625%, 3/12/08.... 1,165,000 1,237,812
----------
6,359,326
----------
Norway--0.5%
Norway (Government of) Bonds, 5.75%, 11/30/04...... NOK10,620,000 1,193,831
----------
Panama--0.3%
Panama (Republic of) Bonds:
9.375%, 4/1/29.................................... 326,000 337,736
10.75%, 5/15/20................................... 150,000 154,875
Panama (Republic of) Interest Reduction Bonds,
4.75%, 7/17/14(/10/).............................. 284,074 243,594
----------
736,205
----------
Philippines--0.6%
Philippines (Republic of) Bonds, 9.50%, 10/21/24... 375,000 372,187
Philippines (Republic of) Nts., 10.625%, 3/16/25... 585,000 497,250
Philippines (Republic of) Unsec. Bonds, 9.875%,
1/15/19........................................... 685,000 560,844
----------
1,430,281
----------
Poland--0.1%
Poland (Republic of) Bonds, Series 0506, 8.50%,
5/12/06........................................... PLZ 1,325,000 301,475
----------
Portugal--0.1%
Portugal (Republic of) Obrig Do Tes Medio Prazo
Unsec. Unsub. Nts., 5.85%, 5/20/10................ EUR 305,000 298,778
----------
Russia--3.2%
Russian Federation Unsec. Unsub. Nts.:
8.25%, 3/31/10.................................... 110,731 87,062
10%, 6/26/07...................................... 2,550,000 2,336,438
Russian Federation Unsub. Bonds, 8.25%, 3/31/10.... 2,355,000 1,861,039
Russian Federation Unsub. Nts., 5%, 3/31/30(/10/).. 6,323,750 3,026,863

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
------------- ------------

Russia (Continued)
Russian Ministry of Finance Unsec. Debs., Series IV,
3%, 5/14/03(/4/)................................... $ 565,000 $ 505,322
-----------
7,816,724
-----------
Spain--0.3%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion
del Estado, 5.40%, 7/30/11......................... EUR 695,000 652,153
-----------
The Netherlands--1.0%
Netherlands (Government of The) Bonds, 5.50%,
7/15/10............................................ EUR 2,490,000 2,406,463
-----------
Turkey--0.2%
Turkey (Republic of) Bonds, 11.75%, 6/15/10(/11/)... 175,000 160,563
Turkey (Republic of) Sr. Unsec. Unsub. Nts.,
11.875%, 1/15/30(/11/)............................. 125,000 108,438
Turkey (Republic of) Sr. Unsub. Bonds, 12.375%,
6/15/09............................................ 132,000 123,090
-----------
392,091
-----------
Ukraine--0.5%
Ukraine (Republic of) Sr. Unsec. Nts., 11%,
3/15/07............................................ 1,427,860 1,256,160
-----------
Venezuela--0.9%
Venezuela (Republic of) Bonds, 9.25%, 9/15/27....... 145,000 96,570
Venezuela (Republic of) Debs., Series DL, 4.75%,
12/18/07(/10/)..................................... 2,702,109 2,144,799
-----------
2,241,369
-----------
53,353,679
-----------
Loan Participations--0.2%
Algeria (Republic of) Trust III Nts., Tranche 3,
0.938%, 3/4/10(/4/)(/10/).......................... JPY23,687,263 137,154
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 5.094%, 1/1/09(/4/)(/10/)............... 314,821 274,682
-----------
411,836
-----------
Total International Sector (Cost $76,812,042)....... 69,601,662
-----------
Asset-Backed Sector--63.7%
Asset-Backed Securities--2.2%
Conseco Finance, Home Equity Loan Pass-Through
Certificates, Series 2001-D, Cl. M2, 4.25%,
11/15/32(/10/)..................................... 2,400,000 2,400,000
Lehman ABS Corp., Commercial Mtg. Pass-Through
Certificates, Series 2001-B, Cl. A4, 5.27%,
9/15/18(/12/)...................................... 2,000,000 2,011,875
Principal Residential Mortgage Capital Resources
Trust, Real Estate Mtg. Investment Conduit
Participation Certificates, Series 2000-1, Cl. B,
4.112%, 6/20/05(/4/)(/10/)......................... 1,000,000 992,812
-----------
5,404,687
-----------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
----------- ------------

Government Agency--52.0%
FHLMC/FNMA/Sponsored--50.4%
Federal Home Loan Mortgage Corp., 12%, 5/1/10-6/1/15.. $ 564,719 $ 652,456
Federal Home Loan Mortgage Corp., Gtd. Real Estate
Mtg. Investment Conduit Participation Certificates,
Series 1331, Cl. Z, 8%, 4/15/07...................... 1,670,073 1,730,613
Federal Home Loan Mortgage Corp., Gtd. Real Estate
Mtg. Investment Conduit Pass-Through Certificates,
Series 2054, Cl. TE, 6.25%, 4/15/24.................. 534,000 558,030
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 194, Cl. IO, (3.504)%, 4/1/28(/13/)........... 1,446,698 237,575
Series 197, Cl. IO, 3.441%, 4/1/28(/13/)............. 3,768,820 688,988
Series 199, Cl. IO, 1.077%, 8/1/28(/13/)............. 9,952,925 1,684,222
Series 202, Cl. IO, (1.90)%, 4/1/29(/13/)............ 33,978,502 5,510,888
Series 208, Cl. IO, (3.38)%, 6/1/30(/13/)............ 5,306,659 613,583
Federal National Mortgage Assn.:
6%, 11/25/31(/11/)(/12/)............................. 26,900,000 27,219,572
6.50%, 11/25/28(/1/)(/12/) .......................... 60,600,000 62,304,678
6.50%, 1/1/29........................................ 9,231,915 9,521,983
7%, 9/2/29-12/1/29................................... 2,408,284 2,512,300
7.50%, 6/1/10-9/1/29................................. 6,754,805 7,082,869
11%, 7/1/16.......................................... 230,777 259,001
13%, 6/1/15.......................................... 443,144 527,200
Federal National Mortgage Assn., Gtd. Real Estate Mtg.
Investment Conduit
Pass-Through Certificates, Trust 1999-29, Cl. D,
6.50%, 12/25/26...................................... 1,914,400 1,983,185
------------
123,087,143
------------
GNMA/Guaranteed--1.6%
Government National Mortgage Assn.:
6%, 11/20/31(/12/)................................... 2,750,000 2,796,420
7%, 1/15/28-3/15/28.................................. 604,598 632,834
7.75%, 7/20/27....................................... 116,128 120,211
11%, 10/20/19........................................ 141,707 162,928
12%, 11/20/13-9/20/15................................ 133,658 156,754
------------
3,869,147
------------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
----------- ------------

Private--9.5%
Commercial--3.8%
Asset Securitization Corp., Commercial Mtg. Pass-
Through Certificates, Series 1995-MD4, Cl. A5,
7.384%, 8/13/29...................................... $ 1,500,000 $ 1,540,195
Capital Lease Funding Securitization LP, Interest-Only
Corporate-Backed Pass-Through Certificates, Series
1997-CTL1, 11.036%, 6/22/24(/4/)(/13/)............... 10,019,011 307,615
Commercial Mortgage Acceptance Corp., Interest-Only
Stripped Mtg.-Backed Security, Series 1996-C1, Cl. X-
2, 27.02%, 12/25/20(/4/)(/13/)....................... 4,581,282 2,863
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-
Through Certificates, Series 1997-CHL1, Cl. C,
8.112%, 7/25/06(/4/)(/10/)........................... 800,000 784,000
First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mtg. Pass-Through Certificates, Series
1997-C2, Cl. F, 7.50%, 9/18/15....................... 600,000 507,188
GMAC Commercial Mortgage Securities, Inc., Interest-
Only Stripped Mtg.-Backed Security Pass-Through
Certificates, Series 1997-C1, Cl. X, 7.755%,
7/15/27(/13/)........................................ 3,078,212 216,196
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-
Through Certificates, Series 1996-MC2, Cl. F, 5.75%,
12/21/26............................................. 1,600,000 1,402,750
Prudential Mortgage Capital Co. II LLC, Commercial
Mtg. Pass-Through Certificates, Series PRU-HTG 2000-
C1, Cl. A2, 7.306%, 10/6/15.......................... 3,700,000 4,079,250
Strategic Hotel Capital, Inc., Commercial Mtg.
Obligations, Series 2001-SCH1, Cl. E, 4.725%,
4/17/06(/4/)(/10/)................................... 498,956 482,896
------------
9,322,953
------------
Residential--5.7%
Lehman Structured Securities Corp., Collateralized
Mtg. Obligations,
Series 2001-GE4, Cl. A, 6%, 10/25/30................. 1,500,000 1,492,500
PNC Mortgage Securities Corp., Collateralized Mtg.
Obligations Pass-Through Certificates, Series 1998-
11, Cl. 1A5, 6.50%, 11/25/28......................... 10,000,000 10,253,100
Salomon Brothers Mortgage Securities VII, Inc.,
Commercial Mtg. Pass-Through Certificates, Series
1996-B, Cl. 1, 7.136%, 4/25/26(/4/).................. 1,176,002 893,762
Structured Asset Securities Corp., Collateralized Mtg.
Obligations,
Series 2001-1, Cl. A, 7.50%, 7/25/30(/4/)............ 1,278,357 1,271,966
------------
13,911,328
------------
Total Asset-Backed Sector (Cost $158,043,034)......... 155,595,258
------------

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

Principal Market Value
Amount See Note 1
---------- ------------

Money Market Sector--3.6%
Short-Term Notes--1.2%
American Home Products, 2.35%, 1/29/02.............. $1,500,000 $ 1,491,918
Victory Receivables Corp., 2.70%, 11/26/01.......... 1,500,000 1,497,188
------------
2,989,106
------------
Repurchase Agreements--2.4%
Repurchase agreement with Deutsche Bank Securities,
Inc., 2.54%, dated 10/31/01, to be repurchased at
$5,890,416 on 11/1/01, collateralized by
U.S. Treasury Bonds, 8.125%-8.75%, 8/15/20-8/15/21,
with a value of $6,029,935......................... 5,890,000 5,890,000
------------
Total Money Market Sector (Cost $8,878,473)......... 8,879,106
------------
Total Investments, at Value (Cost $362,067,257)..... 135.7% 331,330,641
------------
Liabilities in Excess of Other Assets............... (35.7) (87,164,332)
---------- ------------
Net Assets.......................................... 100.0% $244,166,309
========== ============

Principal amount is reported in U.S. Dollars, except for those denoted in the
following currencies:

ARP--Argentine Peso HUF--Hungarian Forint
AUD--Australian Dollar JPY--Japanese Yen
DEM--German Mark KRW--South Korean Won
EUR--Euro NOK--Norwegian Krone
FRF--French Franc PLZ--Polish Zloty
GBP--British Pound Sterling

1. Securities with an aggregate market value of $3,393,098 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.

2. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.

3. Zero coupon bond reflects the effective yield on the date of purchase.

4. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.

5. Interest or dividend is paid in kind.

6. Non-income-producing security.

7. Issuer is in default.

Statement of Investments October 31, 2001 (Continued)

Oppenheimer Multi-Sector Income Trust

8. Represents securities
sold under Rule 144A, which are exempt from registration under the Securities
Act of 1933, as amended. These securities have been determined to be liquid
under guidelines established by the Board of Trustees. These securities amount
to $8,925,077 or 3.66% of the Trust&#146;s net assets as of October 31, 2001.

9. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.

10. Represents the current interest rate for a variable or increasing rate
security.

11. A sufficient amount of liquid assets has been designated to cover
outstanding written options, as follows:

Principal (000s) Expiration Exercise Premium Market Value
Subject to Call Dates Price Received See Note 1
---------------- ---------- -------- -------- ------------

Federal National
Mortgage Assn.,
6%, 11/25/31 Call...... 4,500 11/7/01 .9991% $20,391 $57,656
Turkey (Republic of)
Bonds,
11.75%, 6/15/10 Call... 175 1/24/02 .9175 3,150 3,873
Turkey (Republic of) Sr.
Unsec. Unsub. Nts.,
11.875%, 1/15/30 Call.. 125 1/24/02 .8675 3,125 3,150
------- -------
$26,666 $64,679
======= =======

12. When-issued security to be delivered and settled after October 31, 2001.

13. Interest-Only Strips
represent the right to receive the monthly interest payments on an underlying
pool of mortgage loans. These securities typically decline in price as interest
rates decline. Most other fixed income securities increase in price when
interest rates decline. The principal amount of the underlying pool represents
the notional amount on which current interest is calculated. The price of these
securities is typically more sensitive to changes in prepayment rates than
traditional mortgage-backed securities (for example, GNMA pass-throughs).
Interest rates disclosed represent current yields based upon the current cost
basis and estimated timing and amount of future cash flows.

See accompanying Notes to Financial Statements.

Statement of Assets and Liabilities October 31, 2001

Oppenheimer Multi-Sector Income Trust

ASSETS
Investments, at value (cost $362,067,257)--see accompanying
statement....................................................... $331,330,641
Cash............................................................. 2,109,103
Unrealized appreciation on foreign currency contracts............ 67,125
Receivables and other assets:
Investments sold (including $13,542,249 sold on a when-issued
basis)......................................................... 14,037,479
Interest, dividends and principal paydowns...................... 4,588,199
Daily variation on futures contracts............................ 833,365
Other........................................................... 1,909
------------
Total assets................................................... 352,967,821
------------
LIABILITIES
Unrealized depreciation on foreign currency contracts............ 30,281
Options written, at value (premiums received $26,666)--see
accompanying statement.......................................... 64,679
Payables and other liabilities:
Investments purchased (including $106,841,306 purchased on a
when-issued basis)............................................. 108,375,870
Dividends....................................................... 113,299
Trustees' compensation.......................................... 77,307
Closed foreign currency contracts............................... 54,812
Shareholder reports............................................. 15,572
Management and administrative fees.............................. 15,075
Other........................................................... 54,617
------------
Total liabilities.............................................. 108,801,512
------------
NET ASSETS....................................................... $244,166,309
============
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest....................... $ 291,875
Additional paid-in capital....................................... 307,087,761
Undistributed (overdistributed) net investment income............ (696,954)
Accumulated net realized gain (loss) on investments and foreign
currency transactions........................................... (35,545,255)
Net unrealized appreciation (depreciation) on investments and
translation of assets and liabilities denominated in foreign
currencies...................................................... (26,971,118)
------------
NET ASSETS--applicable to 29,187,484 shares of beneficial
interest outstanding............................................ $244,166,309
============
NET ASSET VALUE PER SHARE........................................ $8.37

See accompanying Notes to Financial Statements.

Statement of Operations For the Year Ended October 31, 2001

Oppenheimer Multi-Sector Income Trust

INVESTMENT INCOME
Interest......................................................... $ 23,823,146
Dividends........................................................ 669,594
------------
Total income................................................... 24,492,740
------------
EXPENSES
Management fees.................................................. 1,634,705
Shareholder reports.............................................. 81,757
Transfer and shareholder servicing agent fees.................... 43,144
Custodian fees and expenses...................................... 44,049
Accounting service fees.......................................... 24,000
Registration and filing fees..................................... 21,455
Other............................................................ 48,693
------------
Total expenses................................................. 1,897,803
Less reduction to custodian expenses......................... (7,601)
------------
Net expenses................................................... 1,890,202
------------
NET INVESTMENT INCOME............................................ 22,602,538
------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (including premiums on options exercised).......... (6,754,384)
Closing of futures contracts................................... (160,750)
Closing and expiration of option contracts written............. 135,677
Foreign currency transactions.................................. (1,171,986)
------------
Net realized gain (loss)..................................... (7,951,443)
------------
Net change in unrealized appreciation (depreciation) on:
Investments.................................................... (6,850,703)
Translation of assets and liabilities denominated in foreign
currencies.................................................... 1,950,517
------------
Net change................................................... (4,900,186)
------------
Net realized and unrealized gain (loss).......................... (12,851,629)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $ 9,750,909
============

See accompanying Notes to Financial Statements.

Statements of Changes in Net Assets

Oppenheimer Multi-Sector Income Trust

Year Ended October 31,
2001 2000
------------ ------------

OPERATIONS
Net investment income (loss)....................... $ 22,602,538 $ 25,018,327
Net realized gain (loss)........................... (7,951,443) (10,854,137)
Net change in unrealized appreciation
(depreciation).................................... (4,900,186) (7,258,671)
------------ ------------
Net increase (decrease) in net assets resulting
from operations................................... 9,750,909 6,905,519
------------ ------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income............... (22,861,344) (19,768,847)
Tax return of capital distribution ................ (959,803) --
Distributions in excess of net realized gain....... -- (4,688,650)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS
Proceeds from shares issued to shareholders in
reinvestment of dividends......................... 607,802 --
------------ ------------
NET ASSETS
Total decrease..................................... (13,462,436) (17,551,978)
Beginning of period................................ 257,628,745 275,180,723
------------ ------------
End of period [including undistributed
(overdistributed) net investment income of
$(696,954) and $(297,342), respectively].......... $244,166,309 $257,628,745
============ ============

See accompanying Notes to Financial Statements.

Financial Highlights

Oppenheimer Multi-Sector Income Trust

Year Ended October 31,
2001 2000 1999 1998 1997
-------- -------- -------- -------- --------

PER SHARE OPERATING DATA
Net asset value,
beginning of period.... $8.85 $9.45 $9.82 $10.61 $10.52
-------- -------- -------- -------- --------
Income (loss) from
investment operations:
Net investment income... .78 (/1/) .86 .87 .79 .89
Net realized and
unrealized gain
(loss)................. (.44)(/1/) (.62) (.43) (.75) .08
-------- -------- -------- -------- --------
Total income (loss) from
investment operations.. .34 .24 .44 .04 .97
-------- -------- -------- -------- --------
Dividend and/or
distributions to
shareholders:
Dividends from net
investment income...... (.79) (.68) (.81) (.78) (.88)
Tax return of capital
distribution........... (.03) (.16) -- (.05) --
-------- -------- -------- -------- --------
Total dividends and/or
distributions to
shareholders........... (.82) (.84) (.81) (.83) (.88)
-------- -------- -------- -------- --------
Net asset value, end of
period................. $8.37 $8.85 $9.45 $9.82 $10.61
======== ======== ======== ======== ========
Market value, end of
period................. $8.08 $7.88 $8.06 $9.38 $10.13
======== ======== ======== ======== ========

TOTAL RETURN, AT MARKET
VALUE(/2/)............. 12.79% 6.93% (6.64)% 0.17% 11.40%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in thousands).. $244,166 $257,629 $275,181 $285,907 $308,972
Average net assets (in
thousands)............. $251,362 $269,849 $285,213 $304,773 $308,712
Ratios to average net
assets:(/3/)
Net investment
income............... 8.99%(/1/) 9.27% 8.86% 7.56% 8.42%
Expenses.............. 0.75% 0.84% 1.03% 1.01%(/4/) 0.99%(/4/)
Portfolio turnover
rate................... 133% 104% 159% 402% 259%

1. Without the adoption of
the change in amortization method as discussed in Note 1 in the Notes to
Financial Statements, these amounts would have been:

Net investment income $.79
Net realized and unrealized
gain (loss) (.45)
Net investment income ratio 9.19%

2. Assumes a $1,000
hypothetical purchase at the current market price 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 a sale at the current market
price on the last business day of the period. Total return does not reflect
sales charges or brokerage commissions.

3. Annualized for periods of less than one full year.

4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements

Notes to Financial Statements

Oppenheimer Multi-Sector Income Trust

1. Significant Accounting Policies

Oppenheimer Multi-Sector
Income Trust (the Trust) is registered under the Investment Company Act of 1940,
as amended, as a closed-end management investment company. The Trust&#146;s
investment objective is to seek high current income consistent with preservation
of capital. The Trust&#146;s investment advisor is OppenheimerFunds, Inc. (the
Manager). The following is a summary of significant accounting policies
consistently followed by the Trust.

Securities Valuation.
Securities listed or traded on National Stock Exchanges or other domestic or
foreign exchanges are valued based on the last sale price of the security traded
on that exchange prior to the time when the Trust&#146;s assets are valued. In
the absence of a sale, the security is valued at the last sale price on the
prior trading day, if it is within the spread of the closing bid and asked
prices, and if not, at the closing bid price. Securities (including restricted
securities) for which quotations are not readily available are valued primarily
using dealer-supplied valuations, a portfolio pricing service authorized by the
Board of Trustees, or at their fair value. Fair value is determined in good
faith under consistently applied procedures under the supervision of the Board
of Trustees. Short-term &#147;money market type&#148; debt securities with
remaining maturities of sixty days or less are valued at amortized cost (which
approximates market value).

Structured Notes. The Trust
invests in foreign- currency-linked structured notes whose market values and
redemption prices are linked to foreign currency exchange rates. The structured
notes are leveraged, which increases the volatility of each note&#146;s market
value relative to the change in the underlying foreign currency exchange rate.
Fluctuations in value of these securities are recorded as unrealized gains and
losses in the accompanying financial statements. The Trust records a realized
gain or loss when a structured note is sold or matures. As of October 31, 2001,
the market value of these securities comprised 1.3% of the Trust&#146;s net
assets and resulted in unrealized gains in the current period of $56,895. The
Trust also hedges a portion of the foreign currency exposure generated by these
securities, as discussed in Note 5.

Securities Purchased on a
When-Issued Basis. Delivery and payment for securities that have been purchased
by the Trust on a when-issued basis can take place a month or more after the
trade date. Normally the settlement date occurs within six months after the
trade date; however, the Trust may, from time to time, purchase securities whose
settlement date extends beyond six months or more beyond trade date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Trust
maintains segregated assets with a market value equal to or greater than the
amount of its commitments. These transactions of securities on a when-issued
basis may increase the volatility of the Trust&#146;s net asset value to the
extent the Trust makes such transactions while remaining substantially fully
invested. As of October 31, 2001, the Trust had entered into

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

net outstanding when-issued transactions of $93,299,057.

In connection with its
ability to purchase securities on a when-issued basis, the Trust may enter into
forward roll transactions with respect to mortgage-related securities. Forward
roll transactions require the sale of securities for delivery in the current
month, and a simultaneous agreement with the same counterparty to repurchase
similar (same type, coupon and maturity) but not identical securities on a
specified future date. The forward roll may not extend for a period of greater
than one year. The Trust generally records the incremental difference between
the forward purchase and sell of each forward roll as interest income.

Risks to the Trust of
entering into forward roll transactions include the potential inability of the
counterparty to meet the terms of the agreement; the potential of the Trust to
receive inferior securities to what was sold to the counterparty at redelivery;
counterparty credit risk; and the potential pay down speed variance between the
mortgage-related pools.

Security Credit Risk. The
Trust invests in high-yield securities, which may be subject to a greater degree
of credit risk, greater market fluctuations and risk of loss of income and
principal, and may be more sensitive to economic conditions than lower yielding,
higher rated fixed income securities. The Trust may acquire securities in
default, and is not obligated to dispose of securities whose issuers
subsequently default. As of October 31, 2001, securities with an aggregate
market value of $1,617,124, representing 0.66% of the Trust&#146;s net assets,
were in default.

Foreign Currency Translation. The accounting records of the Trust are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of exchange.
Amounts related to the purchase and sale of foreign securities and investment
income are translated at the rates of exchange prevailing on the respective
dates of such transactions.

The effect of changes in
foreign currency exchange rates on investments is separately identified from the
fluctuations arising from changes in market values of securities held and
reported with all other foreign currency gains and losses in the Trust&#146;s
Statement of Operations.

Repurchase Agreements. The
Trust requires its custodian bank to take possession, to have legally segregated
in the Federal Reserve Book Entry System or to have segregated within the
custodian&#146;s vault, all securities held as collateral for repurchase
agreements. The market value of the underlying securities is required to be at
least 102% of the resale price at the time of purchase. If the seller of the
agreement defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the value of the collateral by
the Trust may be delayed or limited.

Federal Taxes. The Trust
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.

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

As of October 31, 2001, the
Trust had available for federal income tax purposes unused capital loss
carryovers as follows:

Expiring
--------

2003 $ 7,982,990
2006 1,509,541
2007 11,561,894
2008 5,440,197
2009 4,239,210
-----------
Total $30,733,832
===========

Trustees&#146;
Compensation. The Trust has adopted an unfunded retirement plan for the
Trust&#146;s independent Board of Trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service. During the
year ended October 31, 2001, the Trust&#146;s projected benefit obligations were
decreased by $42,293 and payments of $13,985 were made to retired trustees,
resulting in an accumulated liability of $75,335 as of October 31, 2001.

The Board of Trustees has
adopted a deferred compensation plan for independent trustees that enables
trustees to elect to defer receipt of all or a portion of annual compensation
they are entitled to receive from the Trust. Under the plan, the compensation
deferred is periodically adjusted as though an equivalent amount had been
invested for the Board of Trustees in shares of one or more Oppenheimer funds
selected by the trustee. The amount paid to the Board of Trustees under the plan
will be determined based upon the performance of the selected funds. Deferral of
trustees&#146; fees under the plan will not affect the net assets of the Trust,
and will not materially affect the Trust&#146;s assets, liabilities or net
investment income per share.

Dividends and Distributions
to Shareholders. Dividends and distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.

Classification of Dividends
and Distributions to Shareholders. Net investment income (loss) and net realized
gain (loss) may differ for financial statement and tax purposes primarily
because of the recognition of certain foreign currency gains (losses) as
ordinary income (loss) for tax purposes. The character of dividends and
distributions made during the fiscal 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 dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or realized gain was recorded by the Trust.

The Trust adjusts the
classification of distributions to shareholders to reflect the differences
between financial statement amounts and distributions determined in accordance
with income tax regulations. Accordingly, during the year ended October 31,
2001, amounts have been reclassified to reflect an increase in overdistributed
net investment income of $140,806. Accumulated net realized loss was decreased
by the same amount. As noted in the Statement of Changes in Net Assets, the
Trust realized a tax return of capital of $959,803. Net assets of the Trust were
unaffected by the reclassifications.

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

Investment Income. Dividend
income is recorded on the ex-dividend date or upon ex-dividend notification in
the case of certain foreign dividends where the ex- dividend date may have
passed. Non-cash dividends included in dividend income, if any, are recorded at
the fair market value of the securities received. Interest income, which
includes accretion of discount and amortization of premium, is accrued as
earned.

Security Transactions. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.

Other. The Trust adopted
the provisions of the AICPA Audit and Accounting Guide for Investment Companies,
as revised, effective for fiscal years beginning after December 15, 2000. The
Trust elected to begin amortizing premiums on debt securities effective January
1, 2001. Prior to this date, the Trust did not amortize premiums on debt
securities. The cumulative effect of this accounting change had no impact on the
total net assets of the Trust, but resulted in a $450,127 decrease to cost of
securities and a corresponding $450,127 decrease in net unrealized depreciation,
based on securities held as of December 31, 2000. For the year ended October 31,
2001, interest income decreased by $500,611, net realized loss on investments
increased by $304,238, and the change in net unrealized depreciation on
investments decreased by $804,849.

The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.

2. Shares of Beneficial Interest

The Trust has authorized an unlimited number of $.01 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:

Year Ended Year Ended
October 31, October 31,
2001 2000
--------------- -------------
Shares Amount Shares Amount
------ -------- ------ ------

Net increase from dividends reinvested............ 71,416 $607,802 -- $--

3. Purchases and Sales of Securities

The aggregate cost of
purchases and proceeds from sales of securities, other than short-term
obligations, for the year ended October 31, 2001, were $394,326,940 and
$364,855,569, respectively.

As of October 31, 2001, unrealized appreciation (depreciation) based on cost of

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

securities for federal income tax purposes of $363,425,019 was:

Gross unrealized appreciation.................................... $ 7,839,386
Gross unrealized depreciation.................................... (39,933,764)
------------
Net unrealized appreciation (depreciation)....................... $(32,094,378)
============

4. Fees and Other Transactions with Affiliates

Management Fees. Management
fees paid to the Manager were in accordance with the investment advisory
agreement with the Trust which provides for an annual fee of 0.65% on the
Trust&#146;s average annual net assets.

Accounting Fees. The Manager acts as the accounting agent for the Trust at an
annual fee of $24,000, plus out-of-pocket costs and expenses reasonably
incurred.

Transfer Agent Fees. Shareholder Financial Services, Inc. (SFSI), a wholly-
owned subsidiary of the Manager, is the transfer agent and registrar for the
Trust. Fees paid to SFSI are based on the number of accounts and the number of
shareholder transactions, plus out-of-pocket costs and expenses.

5. Foreign Currency Contracts

A foreign currency contract
is a commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate.

The Trust may enter into
foreign currency contracts for operational purposes and to seek to protect
against adverse exchange rate fluctuations. Risks to the Trust include the
potential inability of the counterparty to meet the terms of the contract.

The net U.S. dollar value
of foreign currency underlying all contractual commitments held by the Trust and
the resulting unrealized appreciation or depreciation are determined using
foreign currency exchange rates as provided by a reliable bank, dealer or
pricing service. Unrealized appreciation and depreciation on foreign currency
contracts are reported in the Statement of Assets and Liabilities as a
receivable or payable and in the Statement of Operations with the change in
unrealized appreciation or depreciation.

The Trust may realize a
gain or loss upon the closing or settlement of the foreign currency
transactions. Such realized gains and losses are reported with all other foreign
currency gains and losses in the Statement of Operations.

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

As of October 31, 2001, the Trust had outstanding foreign currency contracts as
follows:

Valuation
Contract as of
Expiration Amount October 31, Unrealized Unrealized
Contract Description Dates (000s) 2001 Appreciation Depreciation
- -------------------- ---------- -------- ----------- ------------ ------------

Contracts to Purchase
British Pound Sterling
(GBP).................. 11/21/01 GBP 260 $ 377,690 $ 6,280 $ --
Euro (EUR).............. 11/30/01 EUR 3,090 2,779,919 29,819 --
Japanese Yen (JPY)...... 11/5/01 JPY245,000 2,002,194 3,662 --
------- -------
39,761 --
------- -------
Contracts to Sell
Australian Dollar
(AUD).................. 1/9/02 AUD 3,170 1,593,168 3,086 --
British Pound Sterling 11/23/01- GBP 1,255 1,822,483 -- 20,679
(GBP).................. 11/29/01
Euro (EUR).............. 11/13/01- EUR 1,695 1,525,750 897 9,602
11/21/01
Japanese Yen (JPY)...... 11/20/01 JPY236,374 1,933,558 23,381 --
------- -------
27,364 30,281
------- -------
Total Unrealized
Appreciation and
Depreciation........... $67,125 $30,281
======= =======

6. Futures Contracts

A futures contract is a
commitment to buy or sell a specific amount of a commodity or financial
instrument at a particular price on a stipulated future date at a negotiated
price. Futures contracts are traded on a commodity exchange. The Trust may buy
and sell futures contracts that relate to broadly based securities indices
&#147;financial futures&#148; or debt securities &#147;interest rate
futures&#148; in order to gain exposure to or to seek to protect against changes
in market value of stock and bonds or interest rates. The Trust may also buy or
write put or call options on these futures contracts.

The Trust generally sells
futures contracts to hedge against increases in interest rates and decreases in
market value of portfolio securities. The Trust may also purchase futures
contracts to gain exposure to market changes as it may be more efficient or cost
effective than actually buying fixed income securities.

Upon entering into a futures contract, the Trust is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Trust each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

Trust recognizes a realized gain or loss when the contract is closed or
expires.

Securities held in
collateralized accounts to cover initial margin requirements on open futures
contracts are noted in the Statement of Investments. The Statement of Assets and
Liabilities reflects a receivable and/or payable for the daily mark to market
for variation margin. Realized gains and losses are reported on the Statement of
Operations as closing and expiration of futures contracts.

Risks of entering into
futures contracts (and related options) include the possibility that there may
be an illiquid market and that a change in the value of the contract or option
may not correlate with changes in the value of the underlying securities.

As of October 31, 2001, the
Trust had outstanding futures contracts as follows:

Valuation
as of Unrealized
Expiration Number of October 31, Appreciation
Contract Description Dates Contracts 2001 (Depreciation)
- -------------------- ---------- --------- ----------- --------------

Contracts to Purchase
Crude Oil..................... 11/19/01 20 $ 423,600 $ (34,300)
DAX Index..................... 12/21/01 4 412,386 47,332
Euro-Bundesobligation......... 12/6/01 18 1,815,811 67,444
FTSE 100 Index................ 12/21/01 1 73,224 (814)
Japan (Government of) Bonds,
10 yr........................ 12/11/01 1 1,148,646 9,477
Nasdaq 100.................... 12/20/01 10 1,369,000 (23,000)
Nikkei 225 Index.............. 12/13/01 2 104,400 275
United Kingdom Long Gilt...... 12/27/01 2 343,244 3,781
U.S. Long Bond................ 12/19/01 198 21,866,625 1,062,726
U.S. Treasury Nts., 2 yr...... 12/27/01 132 28,010,813 688,875
U.S. Treasury Nts., 5 yr...... 12/19/01 276 30,321,188 641,148
U.S. Treasury Nts., 10 yr..... 12/19/01 329 36,688,641 1,302,874
----------
$3,765,818
==========

7. Option Activity

The Trust may buy and sell
put and call options, or write put and covered call options on portfolio
securities in order to produce incremental earnings or protect against changes
in the value of portfolio securities.

The Trust generally
purchases put options or writes covered call options to hedge against adverse
movements in the value of portfolio holdings. When an option is written, the
Trust receives a premium and becomes obligated to sell or purchase the
underlying security at a fixed price, upon exercise of the option.

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

Options are valued daily
based upon the last sale price on the principal exchange on which the option is
traded and unrealized appreciation or depreciation is recorded. The Trust will
realize a gain or loss upon the expiration or closing of the option transaction.
When an option is exercised, the proceeds on sales for a written call option,
the purchase cost for a written put option, or the cost of the security for a
purchased put or call option is adjusted by the amount of premium received or
paid.

Securities designated to
cover outstanding call options are noted in the Statement of Investments where
applicable. Shares subject to call, expiration date, exercise price, premium
received and market value are detailed in a note to the Statement of
Investments. Options written are reported as a liability in the Statement of
Assets and Liabilities. Realized gains and losses are reported in the Statement
of Operations.

The risk in writing a call
option is that the Trust gives up the opportunity for profit if the market price
of the security increases and the option is exercised. The risk in writing a put
option is that the Trust may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Trust pays a premium whether or not the option is exercised. The Trust also has
the additional risk of not being able to enter into a closing transaction if a
liquid secondary market does not exist.

Written option activity for
the year ended October 31, 2001 was as follows:

Call Options Put Options
--------------------- -----------------------
Principal/ Principal/
Number of Amount of Number of Amount of
Contracts Premiums Contracts Premiums
---------- --------- ------------ ---------

Options outstanding as of
October 31, 2000............... 415 $ 4,897 2,566,500 $ 26,692
Options written................. 1,419,045 218,490 227,082,462 138,014
Options closed or expired....... (21,490) (149,583) (229,648,962) (164,706)
Options exercised............... (1,393,170) (47,138) -- --
---------- --------- ------------ ---------
Options outstanding as of
October 31, 2001............... 4,800 $ 26,666 -- $ --
========== ========= ============ =========

Notes to Financial Statements (Continued)

Oppenheimer Multi-Sector Income Trust

8. Illiquid or Restricted Securities

As of October 31, 2001,
investments in securities included issues that are illiquid or restricted.
Restricted securities are often purchased in private placement transactions, are
not registered under the Securities Act of 1933, may have contractual
restrictions on resale, and are valued under methods approved by the Board of
Trustees as reflecting fair value. A security may also be considered illiquid if
it lacks a readily available market or if its valuation has not changed for a
certain period of time. The Trust intends to invest no more than 15% of its net
assets (determined at the time of purchase and reviewed periodically) in
illiquid or restricted securities. Certain restricted securities, eligible for
resale to qualified institutional investors, are not subject to that limitation.
The aggregate value of illiquid or restricted securities subject to this
limitation as of October 31, 2001, was $13,989,287, which represents 5.73% of
the Trust&#146;s net assets, of which $11,556 is considered restricted.
Information concerning restricted securities is as follows:

Valuation
as of Unrealized
Acquisition October 31, Appreciation
Security Date Cost 2001 (Depreciation)
- -------- ----------- ---- ----------- --------------

Stocks and/or Warrants
Aurora Foods, Inc................... 9/18/00 $-- $11,556 $11,556

Appendix A

RATINGS DEFINITIONS

Below are summaries of the rating definitions used by the nationally-recognized rating agencies listed below. Those ratings represent
the opinion of the agency as to the credit quality of issues that they rate. The summaries below are based upon publicly-available
information provided by the rating organizations.

Moody's Investors Service, Inc. ("Moody's")

LONG-TERM (TAXABLE) BOND RATINGS

Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the smallest degree of investment risk. Interest payments are
protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely
to change, the changes that can be expected are most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together with the "Aaa" group, they comprise what are
generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as
with "Aaa" securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which
make the long-term risk appear somewhat larger than that of "Aaa" securities.

A: Bonds rated "A" possess many favorable investment attributes and are to be considered as upper-medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to
impairment some time in the future.

Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and have
speculative characteristics as well.

Ba: Bonds rated "Ba" are judged to have speculative elements. Their future cannot be considered well-assured. Often the protection
of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this class.

B: Bonds rated "B" generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be small.

Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or there may be present elements of danger with respect to
principal or interest.

Ca: Bonds rated "Ca" represent obligations which are speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Con. (...): Bonds for which the security depends on the completion of some act or the fulfillment of some condition are rated
conditionally. These bonds are secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in
operating experience, (c) rentals that begin when facilities are completed, or (d) payments to which some other limiting condition
attaches. The parenthetical rating denotes probable credit stature upon completion of construction or elimination of the basis of the
condition.

Moody's applies numerical modifiers 1, 2, and 3 in each generic rating classification from "Aa" through "Caa." The modifier "1"
indicates that the obligation ranks in the higher end of its generic rating category; the modifier "2" indicates a mid-range ranking;
and the modifier "3" indicates a ranking in the lower end of that generic rating category. Advanced refunded issues that are secured
by certain assets are identified with a # symbol.

Short-Term Ratings - Taxable Debt

These ratings apply to the ability of issuers to honor senior debt obligations having an original maturity not exceeding one year:

Prime-1: Issuer has a superior ability for repayment of senior short-term debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt obligations. Earnings trends and coverage ratios, while
sound, may be more subject to variation. Capitalization characteristics, while appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and
market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt
protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained.

Not Prime: Issuer does not fall within any Prime rating category.

Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("Standard & Poor's")

LONG-TERM CREDIT RATINGS

AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment
on the obligation is extremely strong.

AA: Bonds rated "AA" differ from the highest rated bonds only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

A: Bonds rated "A" are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still
strong.

BBB: Bonds rated "BBB" exhibit adequate protection parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

BB, B, CCC, CC, and C

Obligations rated `BB', `B', `CCC', `CC', and `C' are regarded as having significant speculative characteristics. `BB' indicates the
least degree of speculation and `C' the highest. While such obligations will likely have some quality and protective characteristics,
these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB: Bonds rated "BB" are less vulnerable to nonpayment than other speculative issues. However, they face major ongoing uncertainties
or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation.

B: Bonds rated "B" are more vulnerable to nonpayment than bonds rated "BB", but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity
or willingness to meet its financial commitment on the obligation.

CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or
economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

CC: Bonds rated "CC" are currently highly vulnerable to nonpayment.

C: Subordinated debt or preferred stock obligations rated "C" are currently highly vulnerable to nonpayment. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are
being continued. A "C" also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is
currently paying.

D: Bonds rated "D" are in payment default. The "D" rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during
such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.

The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the
major rating categories. The "r" symbol is attached to the ratings of instruments with significant noncredit risks.

SHORT-TERM ISSUE CREDIT RATINGS

A-1: A short-term bond rated "A-1" is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its
financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This
indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term bond rated "A-2" is somewhat more susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the
obligation is satisfactory.

A-3: A short-term bond rated "A-3" exhibits adequate protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

B: A short-term bond rated "B" is regarded as having significant speculative characteristics. The obligor currently has the capacity
to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

C: A short-term bond rated "C" is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and
economic conditions for the obligor to meet its financial commitment on the obligation.

D: A short-term bond rated "D" is in payment default. The "D" rating category is used when payments on an obligation are not made on
the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made
during such grace period. The "D" rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

Fitch, Inc.

INTERNATIONAL LONG-TERM CREDIT RATINGS

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of credit risk. They are assigned only in the case of
exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected
by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of credit risk. They indicate a very strong capacity for
timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments
is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than
is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a low expectation of credit risk. The capacity for timely
payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more
likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse
economic change over time. However, business or financial alternatives may be available to allow financial commitments to be met.
Securities rated in this category are not investment grade.

B: Highly Speculative. "B" ratings indicate that significant credit risk is present, but a limited margin of safety remains.
Financial commitments are currently being met. However, capacity for continued payment is contingent upon a sustained, favorable
business and economic environment.

CCC, CC C: High Default Risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon
sustained, favorable business or economic developments. A "CC" rating indicates that default of some kind appears probable. "C"
ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or full
recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be
estimated with any precision, the following serve as general guidelines. "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest. "DD" indicates potential recoveries in the range of 50%-90%, and "D" the
lowest recovery potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their obligations. Entities rated "DDD" have the highest prospect
for resumption of performance or continued operation with or without a formal reorganization process. Entities rated "DD" and "D" are
generally undergoing a formal reorganization or liquidation process; those rated "DD" are likely to satisfy a higher portion of their
outstanding obligations, while entities rated "D" have a poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote relative status within the major rating categories. Plus
and minus signs are not added to the "AAA" category or to categories below "CCC," nor to short-term ratings other than "F1" (see
below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS

F1: Highest credit quality. Strongest capacity for timely payment of financial commitments. May have an added "+" to denote any
exceptionally strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as
great as in the case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments is adequate. However, near-term adverse changes could
result in a reduction to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in
financial and economic conditions.

C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.

D: Default. Denotes actual or imminent payment default.

C-A-5
C-A-1

C-31
C-1

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits.

1. Financial Statements at fiscal year-end October 31, 2000.

(a) Statement of Investments - (See Part B, Statement of Additional Information): Filed herewith.

(b) Statement of Assets and Liabilities - (See Part B, Statement of Additional Information): Filed herewith.

(d) Statements of Changes in Net Assets - (See Part B, Statement of Additional Information): Filed herewith.

(e) Financial Highlights - (See Part B, Statement of Additional Information): Filed herewith.

(f) Notes to Financial Statements - (See Part B, Statement of Additional Information): Filed herewith.

2. Exhibits:

(a) (1) Declaration of Trust of Registrant: Filed with Registrant's Registration Statement, 2/2/88,
refiled with Registrant's Amendment No. 8, 2/27/95, and incorporated herein by reference.

(2) Amendment No. 1 dated as of March 10, 1988 to Declaration of Trust of Registrant: Filed with
Amendment No. 2 to Registrant's Registration Statement, 3/24/88, refiled with Registrant's Amendment No. 8, 2/27/95, pursuant to Item
102 of Regulation S-T, and incorporated herein by reference.

(3) Amendment No. 2 dated November 6, 1989 to Declaration of Trust of Registrant: Filed with
Registrant's Post-Effective Amendment No. 8, 2/27/95, and incorporated herein by reference.

(b) By-Laws of Registrant (amended by-laws): Filed herewith.

(d) Specimen certificate for shares of Beneficial Interest, $.01 par value: Filed herewith.

(e) Inapplicable

(f) Inapplicable

(g) (1) Investment Advisory Agreement with Oppenheimer Management Corporation dated 10/22/90 - Filed with
Amendment No. 5 to Registrant's Registration Statement dated 2/27/91, refiled with Amendment No. 8 to Registrant's Registration
Statement, and incorporated herein by reference.

(h) Form of Underwriting Agreement: Filed with Amendment No. 2 to Registrant's Registration Statement, 3/24/88,
refiled with Registrant's Post-Effective Amendment No. 8, 2/27/95, pursuant to Item 102 of Regulation S-T, and incorporated herein by
reference.

(i) (1) Amended and Reinstated Retirement Plan for Non-Interested Trustees or Directors dated 8/9/01:
Previously filed with Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg.
No. 2-82590), 10/25/01, and incorporated herein by reference.

(2) Form of Deferred Compensation Plan for Disinterested Trustees/Directors: Filed with Post-Effective
Amendment No. 33, of the Registration Statement for Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590), 10/28/98, and
incorporated herein by reference.

(j) (1) Co-Custody Agreement, dated 8/18/92 - Previously filed with Amendment No. 8 to Registrant's
Registration Statement, and incorporated herein by reference.

(2) Amended and Restated Foreign Custody Manager Agreement dated 4/3/01: Previously filed with
Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590),
10/25/01, and incorporated herein by reference.

(3) Amendment dated 4/3/01 to Custody Agreement dated 11/12/92: Previously filed with
Post-Effective Amendment No. 34 to the Registration Statement of Oppenheimer Gold & Special Minerals Fund (Reg. No. 2-82590),
10/25/01, and incorporated herein by reference.

(k) Accounting Service Agreement previously filed with Registrant's Amendment No. 9 under the Investment
Company Act of 1940, 2/29/96, and incorporated herein by reference.

(l) Inapplicable

(m) Inapplicable

(n) Inapplicable

(o) Inapplicable

(p) Inapplicable

(q) Inapplicable

Item 25. Marketing Arrangements.

Inapplicable.

Item 26. Other Expenses of Issuance and Distribution.

Inapplicable.

Item 27. Persons Controlled by or under Common Control.

None.

Item 28. Number of Holders of Securities.

(1) (2)
Number of Record Holders

Title of Class at February 25, 2002

- -------------- ------------------------
Shares of Beneficial Interest, 2,709
$.01 par value

Item 29. Indemnification.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Act") may be permitted to
trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer, or controlling person of the Registrant in connection
with the successful defense of any action, suit or proceeding) is asserted against the Registrant by such trustee, officer or
controlling person, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed
in the Act, and will be governed by the final adjudication of such issue.

The Registrant hereby undertakes that it will apply the indemnification provision of its By-laws in a manner consistent with
Release 11330 of the Securities and Exchange Commission under the Investment Company Act of 1940, so long as the interpretation
therein of Sections 17(h) and 17(i) of the Investment Company Act remains in effect.

Registrant, in conjunction with the Registrant's Trustees, and other registered management investment companies managed by
the Advisor, generally maintains insurance on behalf of any person who is or was a Trustee, officer, employee, or agent of
Registrant. However, in no event will Registrant pay that portion of the premium, if any, for insurance to indemnify any such person
for any act for which Registrant itself is not permitted to indemnify him.

Item 30. Business and Other Connections of Investment Advisor

(a) OppenheimerFunds, Inc. is the investment advisor of the Registrant; it and certain subsidiaries and affiliates act in the
same capacity to other registered investment companies as described in Parts A and B hereof and listed in Item 29(b) below.

(b) There is set forth below information as to any other business, profession, vocation or employment of a substantial nature in
which each officer and director of OppenheimerFunds, Inc. is, or at any time during the past two fiscal years has been, engaged for
his/her own account or in the capacity of director, officer, employee, partner or trustee.

Name and Current Position with Other Business and Connections
OppenheimerFunds, Inc.("OFI") During the Past Two Years
- ----------------------------- -------------------------

Timothy L. Abbuhl,
Assistant Vice President None.

Amy B. Adamshick,

Vice President Formerly at Scudder Kemper Investments (July 1998 - May 2000)

Charles E. Albers,
Senior Vice President None.

Edward J. Amberger,
Assistant Vice President None.

Janette Aprilante,

Vice President and Secretary None.

Hany S. Ayad,

Assistant Vice President None.

Victor W. Babin,
Senior Vice President None.

Bruce L. Bartlett,
Senior Vice President None.

John Michael Banta

Assistant Vice President None.

Lerae A. Barela

Assistant Vice President None.

George Batejan,
Executive Vice President/

Chief Information Officer None.

Kevin Baum,
Assistant Vice President None.

Connie Bechtolt,
Assistant Vice President None.

Robert Behal

Assistant Vice President None.

Kathleen Beichert,
Vice President None.

Rajeev Bhaman,
Vice President None.

Mark Binning,
Assistant Vice President None.

Erik S. Berg
Assistant Vice President None

Robert J. Bishop,
Vice President None.

John R. Blomfield,
Vice President None.

Chad Boll,
Assistant Vice President None.

Lowell Scott Brooks,
Vice President None.

Richard Buckmaster
Vice President None.

Scott Burroughs
Vice President None.

Adele A. Campbell,
Assistant Vice President & Assistant
Treasurer: Rochester Division None.

Claudia Calich
Assistant Vice President None

Michael A. Carbuto,
Vice President None.

Ronald G. Chibnik

Assistant Vice President None.

Peter V. Cocuzza,
Vice President None.

Julie C. Cusker,
Assistant Vice President:
Rochester Division None.

John Damian
Vice President None.

O. Leonard Darling,
Vice Chairman, Executive Vice
President and Chief Investment

Officer and Director Chairman of the Board and a director (since June 1999) and Senior Managing
Director (since December 1998) of HarbourView Asset Management Corporation; a
director (since July 2001) of Oppenheimer Acquisition Corp.; a director (since
March 2000) of OFI Private Investments, Inc.; Chairman of the Board, Senior
Managing Director and director (since February 2001) of OAM Institutional, Inc.;
Trustee (since 1993) of Awhtolia College - Greece.

John M. Davis,
Assistant Vice President None.

Robert A. Densen,
Senior Vice President None.

Ruggero de'Rossi,
Vice President Formerly, Chief Strategist at ING Barings (July
1998 - March 2000).

Craig P. Dinsell,
Executive Vice President None.

Randall C. Dishmon,
Assistant Vice President None.

Rebecca K. Dolan
Assistant Vice President None.

Steven D. Dombrower,
Vice President None.

Bruce C. Dunbar,
Vice President None.

Richard Edmiston,
Assistant Vice President None.

Daniel R. Engstrom,
Assistant Vice President None.

Armand B. Erpf,
Assistant Vice President None.

George R. Evans,
Vice President None.

Edward N. Everett,
Assistant Vice President None.

George Fahey,
Vice President None.

Leslie A. Falconio,
Vice President None.

Scott T. Farrar,
Vice President Assistant Treasurer of Oppenheimer Millennium Funds plc; an officer of other
Oppenheimer funds.

Katherine P. Feld,
Vice President, Senior Counsel

and Secretary Vice President and Assistant Counsel of the Manager (since June 1998); an
officer of other Oppenheimer funds; formerly an Assistant Vice President and
Assistant Counsel of the Manager (August 1997 - June 1998); and Assistant
Counsel of the Manager (August 1994-August 1997).

Ronald H. Fielding,
Senior Vice President;
Chairman: Rochester Division Director of ICI Mutual Insurance Company; Governor of St. John's College;
Director of International Museum of Photography at George Eastman House; an
officer and/or portfolio manager of certain Oppenheimer funds.

Paul Fitzsimmons
Assistant Vice President None.

P. Lyman Foster,
Senior Vice President Formerly, Vice President of Prudential Investments (August 1999-April 2000).

David J. Foxhoven,
Assistant Vice President None.

Colleen M. Franca,
Assistant Vice President None.

Crystal French,
Vice President None.

Dan P. Gangemi,
Vice President None.

Dan Gagliardo
Assistant Vice President None.

Subrata Ghose,
Assistant Vice President Formerly, Equity Analyst at Fidelity Investments (1995 - March 2000).

Charles W. Gilbert,
Assistant Vice President None.

Alan C. Gilston,
Vice President None.

Jill E. Glazerman,
Vice President None.

Paul M. Goldenberg,

Vice President None.

Mikhail Y. Goldverg,

Assistant Vice President None.

Laura Granger,
Vice President Formerly, Portfolio Manager at Fortis Advisors (July 1998-October 2000).

Jeremy H. Griffiths,
Executive Vice President,
Chief Financial Officer and

Director Chief Financial Officer, Treasurer and director of Oppenheimer Acquisition
Corp.; Executive Vice President of HarbourView Asset Management Corporation;
President and director of OppenheimerFunds International Ltd.; President. Chief
Executive Officer, Chairman of the Board and director of Oppenheimer Trust
Company; director of Trinity Investment Management Corp., Secretary/Treasurer
and director of OppenheimerFunds Legacy Program (a Colorado non-profit
corporation); Executive Vice President of OFI Private Investments, Inc.;
Executive Vice President of OAM Institutional, Inc. and a Member and Fellow of
the Institute of Chartered Accountants.

Robert Grill,
Senior Vice President None.

Robert Guy,
Senior Vice President None.

David Hager
Vice President None.

Robert Haley,
Assistant Vice President None.

Marilyn Hall

Vice President None.

Kelly Haney,
Assistant Vice President None.

Thomas B. Hayes,
Vice President None.

Dorothy F. Hirshman,
Vice President None.

Merryl I. Hoffman,
Vice President and
Senior Counsel Secretary of Oppenheimer Trust Company.

Merrell I. Hora,
Vice President None.

Scott T. Huebl,
Vice President None.

Margaret Hui,
Assistant Vice President Formerly Vice President - Syndications of Sanwa Bank California (January 1998 -
September 1999).

James G. Hyland,

Assistant Vice President None.

Steve P. Ilnitzki,
Senior Vice President Formerly Vice President of Product Management at Ameritrade (until March 2000).

Kathleen T. Ives,
Vice President and

Assistant Counsel An officer of other OppenheimerFunds.

William Jaume,
Vice President Senior Vice President (since April 2000) of HarbourView Asset Management
Corporation; and of OAM Institutional, Inc. (since February 2001).

Frank V. Jennings,
Vice President None.

John Jennings,

Vice President None.

Lewis A. Kamman,
Vice President None.

Jennifer E. Kane,
Assistant Vice President None.

Lynn O. Keeshan,
Senior Vice President None.

Thomas W. Keffer,
Senior Vice President None.

Kristina J. Keller,
Vice President None.

Michael Keogh,

Vice President None.

Michael Kirkpatrick,
Assistant Vice President None.

Garrett K. Kolb
Assistant Vice President None.

Teresa Kong

Assistant Vice President None.

Walter G. Konops,
Assistant Vice President None.

Avram D. Kornberg,
Senior Vice President None.

James Kourkoulakos,

Vice President. None.

John S. Kowalik,

Senior Vice President None.

Joseph Krist,
Assistant Vice President None.

Guy E. Leaf

Vice President None.

Christopher M. Leavy,

Senior Vice President Formerly Vice President and Portfolio Manager at Morgan Stanley Investment
Management (1997-September 2000).

Dina C. Lee,
Assistant Vice President and
Assistant Counsel Formerly an attorney with Van Eck Global (until December 2000).

Laura Leitzinger
Vice President None.

Michael S. Levine,
Vice President None.

Gang Li
Assistant Vice President None.

Shanquan Li,
Vice President None.

Mitchell J. Lindauer,
Vice President and Assistant
General Counsel None.

Bill Linden

Assistant Vice President None.

Malissa B. Lischin,
Assistant Vice President Formerly Associate Manager, Investment Management Analyst at Prudential (1996 -
March 2000).

Reed Litchner
Vice President None.

David P. Lolli,
Assistant Vice President None.

Daniel G. Loughran
Vice President: Rochester Division None.

Patricia A. Lovett
Vice President None.

David M. Mabry,
Vice President None.

Randy Manske
Assistant Vice President None.

Steve Macchia,
Vice President None.

Marianne Manzolillo,
Assistant Vice President Formerly, Vice President for DLJ High Yield Research Department (February 1993 -
July 2000).

Philip T. Masterson,
Vice President and
Associate Counsel None.

Lisa Migan,
Assistant Vice President None.

Andrew J. Mika,
Senior Vice President Formerly a Second Vice President for Guardian Investments (June 1990 - October
1999).

Joy Milan,
Vice President None.

Denis R. Molleur,
Vice President and
Senior Counsel An officer of other Oppenheimer Funds.

Nikolaos D. Monoyios,
Vice President None.

John Murphy,
Chairman, President, Chief Executive
Officer and Director President, Chief Executive Officer and director of OFI Private Investments,
Inc., an investment adviser subsidiary of the Manager; Chairman and director of
Shareholder Services, Inc. and Shareholder Financial Services, Inc., transfer
agent subsidiaries of the Manager; President and director of Oppenheimer
Acquisition Corp., the Manager's parent holding company; President and director
of Oppenheimer Partnership Holdings, Inc., a holding company subsidiary of the
Manager; President and director of OppenheimerFunds International Ltd., an
offshore fund management subsidiary of the Manager and of Oppenheimer Millennium
Funds plc; director of HarbourView Asset Management Corporation and Oppenheimer
Real Asset Management, Inc., investment adviser subsidiaries of the Manager;
President and director of OppenheimerFunds Legacy Program, a Colorado non-profit
corporation; director of OAM Institutional, Inc.; President and a trustee of
other Oppenheimer funds; director of David L. Babson Acquisition Corp.

Thomas J. Murray,
Vice President None.

Kenneth Nadler,
Vice President None.

David Negri,
Senior Vice President None.

Richard Nichols
Vice President None.

Barbara Niederbrach,
Assistant Vice President None.

Robert A. Nowaczyk,
Vice President None.

Raymond C. Olson,
Assistant Vice President None.

Gina M. Palmieri,
Vice President None.

Mark Paris
Assistant Vice President None.

Frank J. Pavlak,

Vice President None.

David P. Pellegrino,
Vice President None.

Allison C. Pells

Assistant Vice President None.

James F. Phillips,
Assistant Vice President None.

Jane C. Putnam,
Vice President None.

Michael E. Quinn,
Vice President None.

Julie S. Radtke,
Vice President None.

Kristina Richardson
Assistant Vice President None.

Norma J. Rapini,
Assistant Vice President:
Rochester Division None.

Thomas P. Reedy,
Vice President Vice President (since April 1999) of HarbourView Asset Management Corporation.

John Reinhardt,

Vice President: Rochester Division None.

David Robertson,
Senior Vice President Formerly Director of Sales & Marketing at Schroder Investment Management North
America (March 1998-March 2000).

Rob Robis

Assistant Vice President None.

Antoinette Rodriguez,
Assistant Vice President None.

Jeffrey S. Rosen,
Vice President None.

Richard H. Rubinstein,
Senior Vice President None.

James H. Ruff,
Executive Vice President President and director of OppenheimerFunds Distributor, Inc.; Executive Vice
President (since March 2000) of OFI Private Investments, Inc.

Andrew Ruotolo
Executive Vice President President and director of Shareholder Services, Inc.; formerly Chief Operations
Officer for American International Group (August 1997-September 1999).

Rohit Sah,
Assistant Vice President None.

Valerie Sanders,
Vice President None.

Kenneth Schlupp
Vice President Assistant Vice President (since March 2000) of OFI Private Investments, Inc.

Jeffrey R. Schneider,

Vice President None.

Scott A. Schwegel
Assistant Vice President None.

Ellen P. Schoenfeld,
Vice President None.

Allan P. Sedmak
Assistant Vice President None.

Jennifer L. Sexton,
Vice President None.

Martha A. Shapiro,
Vice President None.

Steven J. Sheerin,
Vice President Formerly consultant with Pricewaterhouse Coopers (November 2000-May 2001) prior
to which he was a Vice President of Merrill Lynch Pierce Fenner & Smith, Inc.
(July 1998-October 2000).

Bonnie Sherman

Assistant Vice President None.

David C. Sitgreaves
Assistant Vice President None.

Enrique H. Smith

Assistant Vice President None.

Richard A. Soper,
Vice President None.

Keith J. Spencer,
Vice President None.

Cathleen R. Stahl,

Assistant Vice President Assistant Vice President & Manager of Women & Investing Program.

Richard A. Stein,

Vice President: Rochester Division None.

Arthur P. Steinmetz,
Senior Vice President None.

Jayne M. Stevlingson,
Vice President None.

Gregory J. Stitt,

Vice President None.

John P. Stoma,
Senior Vice President None.

Deborah A. Sullivan,
Assistant Vice President,
Assistant Counsel Formerly, Associate General Counsel, Chief Compliance Officer, Corporate
Secretary and Vice President of Winmill & Co. Inc. (formerly Bull & Bear Group,
Inc.), CEF Advisers, Inc. (formerly Bull & Bear Advisers, Inc.), Investor
Service Center, Inc. and Midas Management Corporation (November 1997 - March
2000).

Mary Sullivan,
Assistant Vice President None.

Kevin L. Surrett,
Assistant Vice President None.

Susan B. Switzer,
Vice President None.

Anthony A. Tanner,
Vice President: Rochester Division None.

Eamon Tubridy
Assistant Vice President None.

Cameron Ullyat
Assistant Vice President None.

Mark S. Vandehey,
Vice President None.

Maureen VanNorstrand,
Vice President None.

Phillip F. Vottiero,

Vice President None.

Samuel Sloan Walker,
Vice President None.

Teresa M. Ward,
Vice President None.

Darrin L. Watts
Assistant Vice President None.

Jerry A. Webman,

Senior Vice President None.

Christopher D. Weiler,
Assistant Vice President:
Rochester Division None.

Barry D. Weiss,

Vice President Formerly with Fitch IBCA (1996 - January 2000).

Christine Wells,
Vice President None.

Joseph J. Welsh,
Vice President None.

Catherine M. White,
Assistant Vice President Formerly, Assistant Vice President with Gruntal & Co. LLC (September 1998 -
October 2000); member of the American Society of Pension Actuaries (ASPA) since
1995.

William L. Wilby,
Senior Vice President Senior Investment Officer, Director of International Equities; Senior Vice
President of HarbourView Asset Management Corporation.

Donna M. Winn,

Senior Vice President Senior Vice President (since March 2000) of OFI Private Investments, Inc.

Kenneth Winston,
Senior Vice President Principal at Richards & Tierney, Inc. (until June 2001).

Brian W. Wixted,
Senior Vice President and

Treasurer Treasurer (since March 1999) of HarbourView Asset Management Corporation,
Shareholder Services, Inc., Oppenheimer Real Asset Management Corporation,
Shareholder Financial Services, Inc. and Oppenheimer Partnership Holdings, Inc.,
of OFI Private Investments, Inc. (since March 2000) and of OppenheimerFunds
International Ltd. and of Oppenheimer Millennium Funds plc (since May 2000), of
OAM Institutional, Inc. (since February 2001); Treasurer and Chief Financial
Officer (since May 2000) of Oppenheimer Trust Company; Assistant Treasurer
(since March 1999) of Oppenheimer Acquisition Corp. and of OppenheimerFunds
Legacy Program (since April 2000); an officer of other Oppenheimer funds.

Carol Wolf,
Senior Vice President An officer and/or portfolio manager of certain Oppenheimer funds; serves on the
Board of Chinese Children Adoption International Parents Council, Supporters of
Children, and the Advisory Board of Denver Children's Hospital Oncology
Department.

Kurt Wolfgruber,

Senior Vice President Senior Investment Officer, Director of Domestic Equities; member of the
Investment Product Review Committee and the Executive Committee of HarbourView
Asset Management Corporation.

Caleb C. Wong,

Vice President None.

Edward C. Yoensky
Assistant Vice President None.

Robert G. Zack,
Senior Vice President,
Assistant Secretary, and

General Counsel Assistant Secretary of Shareholder Services, Inc., Shareholder Financial
Services, Inc., OppenheimerFunds International Ltd. and Oppenheimer Millennium
Funds plc; an officer of other Oppenheimer funds.

Jill Zachman,
Assistant Vice President:
Rochester Division None.

Neal A. Zamore,
Vice President Formerly (until May 2000) Vice President at GE Capital.

Mark D. Zavanelli,
Vice President None.

Alex Zhou
Assistant Vice President None.

Arthur J. Zimmer,
Senior Vice President Senior Vice President (since April 1999) of HarbourView Asset Management
Corporation.

Susan Zimmerman,
Vice President None.

The Oppenheimer Funds include the Board I Funds, the Board II Funds and the Oppenheimer Board III Funds, as set forth below:

Board I Funds
-------------

Oppenheimer California Municipal Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Capital Preservation Fund
Oppenheimer Concentrated Growth Fund
Oppenheimer Developing Markets Fund
Oppenheimer Discovery Fund
Oppenheimer Emerging Growth Fund
Oppenheimer Emerging Technologies Fund
Oppenheimer Enterprise Fund
Oppenheimer Europe Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Growth Fund
Oppenheimer International Growth Fund
Oppenheimer International Small Company Fund
Oppenheimer Money Market Fund, Inc.
Oppenheimer Multi-Sector Income Trust
Oppenheimer Multi-State Municipal Trust
Oppenheimer Multiple Strategies Fund
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer Series Fund, Inc.
Oppenheimer Special Value Fund
Oppenheimer Trinity Core Fund
Oppenheimer Trinity Large Cap Growth Fund
Oppenheimer Trinity Value Fund
Oppenheimer U.S. Government Trust

Board II Funds
--------------

Centennial America Fund, L.P.
Centennial California Tax Exempt Trust
Centennial Government Trust
Centennial Money Market Trust
Centennial New York Tax Exempt Trust
Centennial Tax Exempt Trust
Oppenheimer Cash Reserves
Oppenheimer Champion Income Fund
Oppenheimer Capital Income Fund
Oppenheimer High Yield Fund
Oppenheimer Integrity Funds
Oppenheimer International Bond Fund
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Opportunity Fund
Oppenheimer Main Street Small Cap Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Municipal Fund
Oppenheimer Real Asset Fund
Oppenheimer Select Managers
Oppenheimer Senior Floating Rate Fund
Oppenheimer Strategic Income Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Variable Account Funds
Panorama Series Fund, Inc.

Board III Funds
---------------

Limited Term New York Municipal Fund
Oppenheimer Convertible Securities Fund
Oppenheimer MidCap Fund
Oppenheimer Quest Capital Value Fund, Inc.
Oppenheimer Quest For Value Funds
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Rochester Fund Municipals

The address of OppenheimerFunds, Inc., OppenheimerFunds Distributor, Inc., HarbourView Asset Management Corp., Oppenheimer
Partnership Holdings, Inc., and Oppenheimer Acquisition Corp. is 498 Seventh Avenue, New York, New York 10018.

The address of the Board I Funds, the Board II Funds and Board III Funds, Oppenheimer Funds, Shareholder Financial Services, Inc.,
Shareholder Services, Inc., OppenheimerFunds Services, Centennial Asset Management Corporation, Centennial Capital Corp., and
Oppenheimer Real Asset Management, Inc. is 6803 South Tucson Way, Englewood, Colorado 80112.

Item 29. Principal Underwriter

Inapplicable.

Item 31. Location of Accounts and Records.

All accounts, books and other documents, required to be maintained by the Registrant under Section 31(a) of the Investment Company
Act of 1940 and the Rule thereunder are maintained by OppenheimerFunds, Inc. at its offices at 6803 South Tucson Way, Englewood,
Colorado 80112.

Item 32. Management Services.

The Registrant is not a party to any management-related service contract not discussed in Part A of this Registration Statement.

Item 33. Undertakings.

1. The Registrant undertakes to suspend the offering of the shares covered hereby until it amends its prospectus if (1) subsequent
to the effective date of this Registration Statement, its net asset value per share declines more than 10 percent from its net asset
value per share as of the effective date of this Registration Statement, or (2) its net asset value increases to an amount greater
than its net proceeds as stated in the prospectus.

2. Inapplicable

3. Inapplicable

4. Inapplicable

5. Inapplicable

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and/or the Investment Company Act of 1940, the Registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and
State of New York on the 27th day of February, 2002.

Oppenheimer Multi-Sector Income Trust

By: /s/ John V. Murphy*

John V. Murphy, President

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following
persons in the capacities on the dates indicated:

Signatures Title Date
- ---------- ----- ----

/s/ Leon Levy* Chairman of the

Board of Trustees February 27, 2002

Leon Levy

/s/ Donald W. Spiro* Vice Chairman of the February 27, 2002
- ------------------------- Board and Trustee
Donald W. Spiro

/s/ John V. Murphy* President and
- ------------------------------ Chief Executive February 27, 2002
John V. Murphy Officer and Trustee

/s/ Brian Wixted* Treasurer,
Principal Financial

Brian Wixted and Accounting Officer February 27, 2002

/s/ Robert G. Galli* Trustee February 27, 2002

Robert G. Galli

/s/ Benjamin Lipstein* Trustee February 27, 2002

Benjamin Lipstein

/s/ Elizabeth B. Moynihan* Trustee February 27, 2002

Elizabeth B. Moynihan

/s/ Kenneth A. Randall* Trustee February 27, 2002

Kenneth A. Randall

/s/ Edward V. Regan* Trustee February 27, 2002

Edward V. Regan

/s/ Russell S. Reynolds, Jr.* Trustee February 27, 2002

Russell S. Reynolds, Jr.

/s/ Clayton K. Yeutter* Trustee February 27, 2002

Clayton K. Yeutter

*By: /s/ Robert G. Zack

Robert G. Zack

OPPENHEIMER MULTI-SECTOR INCOME TRUST
Registration No. 811-5473

Index to Exhibits

Exhibit No. Description
- ----------- -----------

24(2)(b) Bylaws

24(2)(d) Specimen certificate

24(1) Financial Statements and Independent Auditors' Report and Consent

680N2-02.doc

- --------

1 Mr. Murphy and Mr. Griffiths are not Directors of Oppenheimer Money Market Fund, Inc. and Mr. Murphy is not a Trustee of
Oppenheimer California Municipal Fund.
2 The address of each Trustee is 6803 S. Tucson Way, Englewood, CO 80112-3924.
3 Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
4 Includes shares owned by Mr. Galli in other Oppenheimer Funds for which he serves as director or trustee.
5 The address of Mr. Murphy is 498 Seventh Avenue, New York, NY 10018.
6 Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
7 Includes shares owned by Mr. Murphy in other Oppenheimer Funds for which he serves as director or trustee.
8 The address of each Officer is 498 Seventh Avenue, New York, NY 10018 except for Messrs. Bishop, Farrar and Wixted and Ms. Ives,
whose address is 6803 S. Tucson Way, Englewood, CO 80112-3924 .
9 Each Officer serves for an indefinite term, until his or her resignation, death or removal.

EX-99 3 sharecert.htm SPECIMEN SHARE CERTIFICATE OPPENHEIMER MULTI-SECTIOR INCOME TRUST

                                               Share Certificate (8-1/2" x 11")
                                               --------------------------------

I.       FACE OF  CERTIFICATE  (All text and other matter lies within  8-1/4" x 10-3/4"  decorative  border,  5/16"
         --------------------
         wide)

(at left)                                                                                                           (at right)
ORGANIZED UNDER THE                                                    THIS CERTIFICATE IS
LAWS OF THE COMMONWEALTH                             TRANSFERABLE IN DENVER,
OF MASSACHUSETTS                                              COLORADO OR IN THE CITY
                                                                                OF NEW YORK, NEW YORK

   NUMBER OF SHARES   SHARES

(at left, box for                                                                                           (at right, box for
share certificate number)                                                                                    number of shares)

                                                                                                                    (at right)
                                                                                                 CUSIP 683933 10 5
                                                                                                 SEE REVERSE FOR
                                                                                                 CERTAIN
DEFINITIONS

                                                (centered, the following text)
                                             OPPENHEIMER MULTI-SECTOR INCOME TRUST

(at left, the following text)
This Is to Certify That


(at left, the following text)
is the owner of

(beginning at left, the following text)
FULLY PAID AND NON-ASSESSABLE  SHARES OF BENEFICIAL  INTEREST $.01 PAR VALUE , OF OPPENHEIMER  MULTI-SECTOR  INCOME
TRUST (hereinafter  called the "Fund"),  transferable on the books of the Fund by the holder hereof in person or by
duly authorized  attorney,  upon surrender of this certificate  properly endorsed.  This certificate and the shares
represented  hereby are issued and shall be held subject to all of the  provisions of the  Declaration of Trust and
By-Laws of the Fund, each as from time to time amended,  to all of which the holder by acceptance  hereof expressly
assents.  This Certificate is not valid until countersigned and registered by the Transfer Agent and Registrar.

Witness the facsimile seal of the Fund and the facsimile signatures of its duly authorized officers.

(at left, the following text)                                 (at right, following text)
Dated:
(signature at left of seal)                                   Countersigned and Registered:
/s/ John V. Murphy                                   SHAREHOLDER FINANCIAL SERVICES, INC.
- -----------------------                     (Denver) Transfer Agent and President
Registrar

/s/ Brian W. Wixted                                  By:
- ------------------------                                               Authorized Signature
Treasurer

                                                              UNITED MISSOURI TRUST CO. OF NEW YORK
                                                              (New York)        Co-Transfer Agent
                                                              and Co-Registrar
                                                              By:
                                                              Authorized Signature


                                                          (centered)
                                                1-1/2" diameter facsimile seal
                                                         with legend
                                               OPPENHEIMER MULTI-SECTOR INCOME TRUST
                                                             2002
                                                              SEAL
                                                 COMMONWEALTH OF MASSACHUSETTS


II.      BACK OF CERTIFICATE (text reads from top to bottom of 11" dimension)
         -------------------

(beginning at left, the following text)
The following  abbreviations,  when used in the inscription on the face of this certificate,  shall be construed as
though they were written out in full according to applicable laws or regulations.

TEN COM                    - as tenants in common
TEN ENT           - as tenants by the entireties
JT TEN WROS       - as joint tenants with
NOT TC            - right of survivorship and not
                             as tenants in common
                                                                                                (at right, the following text,
                                                                                        parallel with the above abbreviations)
                                                                               UNIF GIFT MIN ACT - (      ) Custodian (      )
                                                                                 --------           --------
                                                                                  (Cust)                  (Minor)

                                                                                                               Under UGMA/UTMA
                                                                                                                (            )

- --------------
                                                                                                                    (State)
                                                (centered, the following text)
                            Additional abbreviations may also be used though not in the above list.

(beginning at left, the following text)
For value received ----------------- hereby sell, assign and transfer unto
- --------------------------------------------------------------------------
(PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE AND PROVIDE CERTIFICATION BY TRANSFEREE)

- --------------------------------------------------------------------------(PLEASE   PRINT  OR  TYPEWRITE  NAME  AND
ADDRESS OF ASSIGNEE)

- --------------------------------------------------------------------------

- ------------------------------------------------------------------- Shares
of the  beneficial  interest  represented  by the written  Certificate  and do hereby  irrevocably  constitute  and
appoint  ----------------------------  Attorney to transfer the said shares on the books of the within-named  Fund,
with full power of substitution in the premises.

Dated: -------------------------                                                             Signed: -------------------------
                                                                                              --------------------------------
                                                                                              (both must sign if joint owners)

                                                               Signature(s) guaranteed by     --------------------------------
                                                                                                           (Firm or Bank)

                                                                                              --------------------------------
                                                                                                                   (Officer)
                                                                                ----------------------------------------------
                                            The signature(s) to this assignment must
correspond with the name as written upon the face                                       for  the   certificate   in
every particular, without                                     alteration or enlargement or any change
whatever.

(beginning at left, the following text)
Signatures  must be guaranteed by a financial  institution of the type identified in the policies and procedures of
Shareholder Financial Servcies, Inc.

N1a/680/org/680ShareCertificate(0202).doc

EX-3.(II) 4 bylaws.htm BY-LAWS OPPENHEIMER MULTI-SECTOR INCOME TRUST

                                                             -1-
                                                            BY-LAWS
                                                              OF
                                            OPPENHEIMER MULTI-SECTOR INCOME TRUST
                                             As amended through December 14, 2000


                                                          ARTICLE I

                                                         Definitions
                                                         -----------

         The terms "Commission",  "Declaration",  "Distributor",  "Investment  Adviser",  "Majority  Shareholder Vote", "1940
                    ----------     -----------     -----------     -------------------     --------------------------    -----
Act", "Shareholder",  "Shares",  Transfer Agent", "Trust", "Trust Property", and "Trustees" have the respective meanings given
       -----------     ------    --------------    -----    --------------        --------
them in the  Declaration  of Trust of OPPENHEIMER  MULTI-SECTOR  INCOME TRUST dated February 22, 1988, as amended from time to
time.

                                                          ARTICLE II

                                                           Offices
                                                           -------

         SECTION 2.1. Principal  Office.  Until  changed  by  the  Trustees,   the  principal  office  of  the  Trust  in  the
                      ------------------
Commonwealth of Massachusetts shall be in the City of Boston, County of Suffolk.

         SECTION 2.2.      Other  Offices.  In addition to its principal  office in the  Commonwealth  of  Massachusetts,  the
                           --------------
Trust may have an office or offices in the City of New York,  State of New York,  and at such other places  within and without
the Commonwealth as the Trustees may from time to time designate or the business of the Trust may require.


                                                         ARTICLE III

                                                    Shareholders' Meetings
                                                    ----------------------

         SECTION 3.1. Place of  Meetings.  Meetings  of  Shareholders  shall be held at such  place,  within  or  without  the
                      ------------------
Commonwealth of Massachusetts, as may be designated from time to time by the Trustees.

         SECTION 3.2. Annual  Meetings.  An annual meeting of  Shareholders,  at which the  Shareholders  shall elect Trustees
                      ----------------
and transact  such other  business as may properly  come before the meeting,  shall be held each year on such date and at such
time as shall be fixed by the Board of Trustees.

         SECTION 3.3. Special  Meetings.  Special  meetings of  Shareholders of the Trust shall be held whenever called by the
                      -----------------
Board of Trustees or the  President  of the Trust.  Special  meetings of  Shareholders  shall also be called by the  Secretary
upon the written  request of the holders of Shares entitled to vote not less than  twenty-five  percent (25%) of all the votes
entitled to be cast at such  meeting.  Such  request  shall  state the  purpose or  purposes  of such  meeting and the matters
proposed to be acted on thereat.  The Secretary shall inform such  Shareholders of the reasonable  estimated cost of preparing
and  mailing  such notice of the  meeting,  and,  upon  payment to the Trust of such costs,  the  Secretary  shall give notice
stating the purpose or purposes of the meeting to all  entitled to vote at such  meeting.  No special  meeting  need be called
upon the  request of the  holders of Shares  entitled  to cast less than a majority  of all votes  entitled to be cast at such
meeting,  to  consider  any  matter  which  is  substantially  the same as a  matter  voted  upon at any  special  meeting  of
Shareholders held during the preceding twelve months.

         SECTION 3.4. Notice of Meetings.  Written or printed notice of every  Shareholders'  meeting stating the place, date,
                      ------------------
and  purpose or  purposes  thereof,  shall be given by the  Secretary  not less than ten (10) nor more than  ninety  (90) days
before such  meeting to each  Shareholder  entitled  to vote at such  meeting.  Such  notice  shall be deemed to be given when
deposited  in the United  States  mail,  postage  prepaid,  directed  to the  Shareholder  at his address as it appears on the
records of the Trust.  In lieu  thereof,  such notice  also may be  delivered  by such other  means,  for  example  electronic
delivery, to the extent consistent with applicable laws.

         SECTION 3.5. Quorum and  Adjournment  of Meetings.  Except as  otherwise  provided by law, by the  Declaration  or by
                      ------------------------------------
these By-Laws,  at all meetings of  Shareholders  the holders of a majority of the Shares issued and  outstanding and entitled
to vote  thereat,  present  in person or  represented  by proxy,  shall be  requisite  and shall  constitute  a quorum for the
transaction of business.  In the absence of a quorum,  the  Shareholders  present or represented by proxy and entitled to vote
thereat  shall have power to adjourn the meeting from time to time.  Any  adjourned  meeting may be held as adjourned  without
further  notice.  At any  adjourned  meeting at which a quorum  shall be present,  any business  may be  transacted  as if the
meeting had been held as originally called.

         If a quorum is present but sufficient  votes in favor of one or more  proposals  have not been  received,  any of the
persons  named as proxies or  attorneys-in-fact  may propose and  approve  one or more  adjournments  of the meeting to permit
further  solicitation of proxies with respect to any proposal.  All such  adjournments  will require the affirmative vote of a
majority  of the  shares  present  in person or by proxy at the  session of the  meeting  to be  adjourned.  Prior to any such
adjournment, any lawful business may be transacted.

         SECTION 3.6.      Voting Rights,  Proxies. At each meeting of Shareholders,  each holder of record of Shares entitled
                           -----------------------
to vote thereat shall be entitled to one vote in person or by proxy  Proxies may be given by or on behalf of a Shareholder  in
writing or by electronic  means,  including by  telephone,  facsimile or via the  Internet.  At all meetings of  Shareholders,
unless the voting is  conducted by  inspectors,  all  questions  relating to the  qualification  of voters and the validity of
proxies and the  acceptance  or rejection  of votes shall be decided by the chairman of the meeting.  Pursuant to a resolution
of a majority of the Trustees, proxies may be solicited in the name of one or more Trustees or Officers of the Trust.

         SECTION 3.7. Vote Required.  Except as otherwise  provided by law, by the  Declaration of Trust, or by these By-Laws,
                      -------------
at each meeting of Shareholders at which a quorum is present, all matters shall be decided by Majority Shareholder Vote.

         SECTION 3.8. Inspectors  of  Election.  In  advance  of  any  meeting  of  Shareholders,  the  Trustees  may  appoint
                      ------------------------
Inspectors  of Election to act at the meeting or any  adjournment  thereof.  If  Inspectors  of Election are not so appointed,
the  chairman  of any  meeting  of  Shareholders  may,  and on the  request of any  Shareholder  or his proxy  shall,  appoint
Inspectors  of Election of the  meeting.  In case any person  appointed  as  Inspector  fails to appear or fails or refuses to
act,  the vacancy may be filled by  appointment  made by the  Trustees  in advance of the  convening  of the meeting or at the
meeting by the person acting as chairman.  The Inspectors of Election shall  determine the number of Shares  outstanding,  the
Shares  represented  at the  meeting,  the  existence of a quorum,  the  authenticity,  validity and effect of proxies,  shall
receive  votes,  ballots or consents,  shall hear and determine all  challenges and questions in any way arising in connection
with the right to vote, shall count and tabulate all votes or consents,  determine the results,  and do such other acts as may
be proper to conduct the election or vote with  fairness to all  Shareholders.  On request of the chairman of the meeting,  or
of any  Shareholder  or his proxy,  the  Inspectors of Election shall make a report in writing of any challenge or question or
matter determined by them and shall execute a certificate of any facts found by them.

         SECTION 3.9. Inspection  of Books and Records.  Shareholders  shall have such rights and  procedures of inspection of
                      --------------------------------
the books and records of the Trust as are granted to Shareholders  under the  Corporations  and  Associations Law of the State
of Massachusetts.

         SECTION 3.10.Action by Shareholders  Without  Meeting.  Except as otherwise  provided by law, the provisions of these
                      ----------------------------------------
By-Laws  relating to notices and meetings to the  contrary  notwithstanding,  any action  required or permitted to be taken at
any  meeting of  Shareholders  may be taken  without a meeting if a majority  of the  Shareholders  entitled  to vote upon the
action  consent to the action in writing and such  consents  are filed with the records of the Trust.  Such  consent  shall be
treated for all purposes as a vote taken at a meeting of Shareholders.


                                                          ARTICLE IV

                                                           Trustees
                                                           --------

         SECTION 4.1. Meetings  of the  Trustees.  The  Trustees  may in their  discretion  provide  for  regular  or  special
                      --------------------------
meetings of the  Trustees.  Regular  meetings of the Trustees may be held at such time and place as shall be  determined  from
time to time by the  Trustees  without  further  notice.  Special  meetings of the  Trustees  may be called at any time by the
President and shall be called by the President or the Secretary upon the written request of any two (2) Trustees.


         SECTION 4.2. Notice of Special  Meetings.  Written  notice of special  meetings of the  Trustees,  stating the place,
                      ---------------------------
date and time  thereof,  shall be given not less  than two (2) days  before  such  meeting  to each  Trustee,  personally,  by
telegram,  by mail,  or by leaving such notice at his place of residence  or usual place of business.  If mailed,  such notice
shall be deemed to be given when  deposited  in the United  States  mail,  postage  prepaid,  directed  to the  Trustee at his
address as it appears on the  records of the  Trust.  Subject to the  provisions  of the 1940 Act,  notice or waiver of notice
need not specify the purpose of any special meeting.

         SECTION 4.3. Telephone  Meetings.  Except as may otherwise be required by law, any Trustee,  or any member or members
                      -------------------
of any committee  designated by the Trustees,  may  participate in a meeting of the Trustees,  or any such  committee,  as the
case may be, by means of a  conference  telephone or similar  communications  equipment  if all persons  participating  in the
meeting  can hear each other at the same time.  Participation  in a meeting by these means  constitutes  presence in person at
the meeting.

         SECTION 4.4. Quorum,  Voting and  Adjournment  of  Meetings.  At all  meetings  of the  Trustees,  a majority  of the
                      ----------------------------------------------
Trustees  shall be requisite to and shall  constitute a quorum for the  transaction of business.  If a quorum is present,  the
affirmative vote of a majority of the Trustees  present shall be the act of the Trustees,  unless the concurrence of a greater
proportion  is  expressly  required  for such  action by law,  the  Declaration  or these  By-Laws.  If at any  meeting of the
Trustees  there be less than a quorum  present,  the  Trustees  present  thereat may  adjourn  the meeting  from time to time,
without notice other than announcement at the meeting, until a quorum shall have been obtained.

         SECTION 4.5. Action by Trustees  Without  Meeting.  The provisions of these By-Laws  covering notices and meetings to
                      ------------------------------------
the contrary  notwithstanding,  and except as required by law, any action  required or permitted to be taken at any meeting of
the Trustees  may be taken  without a meeting if a consent in writing  setting  forth the action shall be signed by all of the
Trustees entitled to vote upon the action and such written consent is filed with the minutes of proceedings of the Trustees.

         SECTION 4.6. Expenses and Fees.  Each Trustee may be allowed  expenses,  if any,  for  attendance  at each regular or
                      -----------------
special  meeting  of the  Trustees,  and each  Trustee  who is not an officer or  employee  of the Trust or of its  investment
manager or underwriter or of any corporate  affiliate of any of said persons shall receive for services  rendered as a Trustee
of the Trust such  compensation as may be fixed by the Trustees.  Nothing herein  contained shall be construed to preclude any
Trustee from serving the Trust in any other capacity and receiving compensation therefor.

         SECTION 4.7. Execution of Instruments and Documents and Signing of Checks and Other  Obligations  and Transfers.  All
                      --------------------------------------------------------------------------------------------------
instruments,  documents  and other  papers  shall be executed  in the name and on behalf of the Trust and all  checks,  notes,
drafts and other  obligations for the payment of money by the Trust shall be signed,  and all transfer of securities  standing
in the name of the Trust shall be  executed,  by the  President,  any Vice  President  or the  Treasurer or by any one or more
officers or agents of the Trust as shall be designated for that purpose by vote of the Trustees.

         SECTION 4.8. Indemnification of Trustees, Officers, Employees and Agents.
                      -----------------------------------------------------------

                               (a)      As used in this  Declaration of Trust the following  terms shall have the meanings set
         forth below:
                               (i)      the term  "indemnitee"  shall mean any present or former Trustee,  officer or employee
         of the  Trust,  any  present  or former  Trustee,  partner,  Director  or  officer  of  another  trust,  partnership,
         corporation  or  association  whose  securities  are or were  owned by the  Trust or of which  the  Trust is or was a
         creditor  and who  served  or serves  in such  capacity  at the  request  of the  Trust,  and the  heirs,  executors,
         administrators,  successors  and assigns of any of the  foregoing;  however,  whenever  conduct by an  indemnitee  is
         referred  to,  the  conduct  shall  be that of the  original  indemnitee  rather  than  that of the  heir,  executor,
         administrator, successor or assignee;
                               (ii)     the term "covered proceeding" shall mean any threatened,  pending or completed action,
         suit or proceeding,  whether civil,  criminal,  administrative or  investigative,  to which an indemnitee is or was a
         party or is  threatened  to be made a party by reason of the fact or facts under which he or it is an  indemnitee  as
         defined above;
                               (iii)    the term  "disabling  conduct"  shall  mean  willful  misfeasance,  bad  faith,  gross
         negligence or reckless disregard of the duties involved in the conduct of the office in question;
                               (iv)     the  term  "covered  expenses"  shall  mean  expenses  (including   attorney's  fees),
         judgments,  fines and amounts paid in  settlement  actually and  reasonably  incurred by an  indemnitee in connection
         with a covered proceeding; and
                               (v)      the term  "adjudication of liability" shall mean, as to any covered  proceeding and as
         to any indemnitee, an adverse determination as to the indemnitee whether by judgment,  order, settlement,  conviction
         or upon a plea of nolo contendere or its equivalent.
                               (b)      The Trust shall not indemnify any indemnitee  for any covered  expenses in any covered
         proceeding if there has been an adjudication of liability  against such indemnitee  expressly based on a finding of a
         disabling conduct.
                               (c)      Except as set forth in paragraph (b) above,  the Trust shall  indemnify any indemnitee
         for covered  expenses in any covered  proceeding,  whether or not there is an  adjudication  of  liability as to such
         indemnitee,  such  indemnification  by the  Trust to be to the  fullest  extent  now or  hereafter  permitted  by any
         applicable  law unless the By-Laws limit or restrict the  indemnification  to which any  indemnitee  may be entitled.
         The Board of Trustees may adopt By-Law provisions to implement paragraphs (a), (b) and (c) hereof.
                               (d)      Nothing  herein shall be deemed to affect the right of the Trust and/or any indemnitee
         to acquire and pay for any insurance  covering any or all  indemnitees  to the extent  permitted by applicable law or
         to affect any other  indemnification  rights to which any  indemnitee  may be  entitled  to the extent  permitted  by
         applicable law. Such rights to  indemnification  shall not, except as otherwise  provided by law, be deemed exclusive
         of any other rights to which such indemnitee may be entitled under any statute, By-Law, contract or otherwise.
                               (e)      In case any Shareholder or former  Shareholder  shall be held to be personally  liable
         solely by reason of his being or having  been a  Shareholder  and not  because of his acts or  omissions  or for some
         other  reason,  the  Shareholder  or former  Shareholder  (or his heirs,  executors,  administrators  or other  legal
         representatives  or in the case of a corporation or other entity,  its corporate or other general successor) shall be
         entitled out of the Trust estate to be held harmless from and  indemnified  against all loss and expense arising from
         such  liability.  The Trust  shall,  upon  request  by the  Shareholder,  assume  the  defense of any such claim made
         against any Shareholder for any act or obligation of the Trust and satisfy any judgment thereon.

         SECTION 4.9  Removal,  Resignation  and  Retirement.  The Board of Trustees,  by the vote of a majority of the entire
                      --------------------------------------
Board,  may increase the number of Trustees to a number not exceeding  fifteen,  and may elect  Trustees to fill the vacancies
occurring for any reason,  including  vacancies  created by any such increase in the number of Trustees  until the next annual
meeting or until their  successors  are duly  elected and  qualify;  the Board of  Trustees,  by the vote of a majority of the
entire  Board,  may  likewise  decrease the number of Trustees to a number not less than three but the tenure of the office of
any Trustee  shall not be affected by any such  decrease.  In the event that after the proxy  material  has been printed for a
meeting of  Shareholders  at which  Trustees are to be elected and any one or more nominees  named in such proxy material dies
or become  incapacitated,  the authorized  number of Trustees shall be  automatically  reduced by the number of such nominees,
unless the Board of Trustees  prior to the meeting  shall  otherwise  determine.  A Trustee at any time may be removed  either
with or without cause by resolution  duly adopted by the  affirmative  votes of the holders of the majority of the outstanding
Shares of the Trust,  present in person or by proxy at any meeting of Shareholders  at which such vote may be taken,  provided
that a quorum is present.  Any Trustee at any time may be removed for cause by  resolution  duly adopted at any meeting of the
Board of Trustees  provided  that notice  thereof is  contained  in the notice of such  meeting  and that such  resolution  is
adopted by the vote of at least two thirds of the Trustees  whose removal is not proposed.  As used herein,  "for cause" shall
mean any cause which under Massachusetts law would permit the removal of a Trustee of a business trust.

         Any Trustee may resign or retire as Trustee by written  instrument  signed by him and delivered to the other Trustees
or to any officer of the Trust,  and such  resignation  or retirement  shall take effect upon such delivery or upon such later
date as is  specified  in such  instrument  and shall be  effective  as to the Trust and each  Series of the Trust  hereunder.
Notwithstanding  the  foregoing,  any and all Trustees,  other than an Independent  Trustee who was a Trustee  (whether or not
Independent) on the date of the adoption of the Trust's  Retirement Plan for  Non-Interested  Trustees or Directors,  shall be
subject to the provisions  with respect to mandatory  retirement set forth in the Retirement  Plan, as the same may be amended
from time to time.

                                                          ARTICLE V

                                                          Committees
                                                          ----------

         SECTION 5.1.          Executive  and Other  Committees.  The  Trustees,  by  resolution  adopted by a majority of the
                               --------------------------------
Trustees,  may designate an Executive  Committee and/or other committees,  each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees,  in the intervals  between meetings of the Trustees,  any or all of
the powers of the Trustees in the  management  of the  business and affairs of the Trust.  In the absence of any member of any
such committee,  the members thereof  present at any meeting,  whether or not they constitute a quorum,  may appoint a Trustee
to act in place of such absent member.  Each such committee shall keep a record of its proceedings.

         The Executive  Committee and any other committee  shall fix its own rules or procedure,  but the presence of at least
fifty  percent  (50%) of the members of the whole  committee  shall in each case be  necessary  to  constitute a quorum of the
committee and the affirmative  vote of the majority of the members of the committee  present at the meeting shall be necessary
to take action.

         All actions of the Executive  Committee  shall be reported to the Trustees at the meeting  thereof next succeeding to
the taking of such action.

         SECTION 5.2.          Advisory  Committee.  The Trustees may appoint an advisory committee which shall be composed of
                               -------------------
persons  who do not serve the Trust in any other  capacity  and which  shall  have  advisory  functions  with  respect  to the
investments  of the  Trust  but  which  shall  have no power to  determine  that any  security  or other  investment  shall be
purchased,  sold or otherwise  disposed of by the Trust. The number of persons  constituting any such advisory committee shall
be determined  from time to time by the  Trustees.  The members of any such advisory  committee may receive  compensation  for
their  services  and may be allowed such fees and  expenses  for the  attendance  at meetings as the Trustees may from time to
time determine to be appropriate.

         SECTION 5.3.          Committee  Action  Without  Meeting.  The  provisions  of these  By-Laws  covering  notices and
                               -----------------------------------
meetings to the contrary  notwithstanding,  and except as required by law, any action required or permitted to be taken at any
meeting of any  Committee of the Trustees  appointed  pursuant to Section 5.1 of these  By-Laws may be taken without a meeting
if a consent in writing  setting  forth the action shall be signed by all members of the  Committee  entitled to vote upon the
action and such written consent is filed with the records of the proceedings of the Committee.


                                                          ARTICLE VI

                                                           Officers
                                                           --------

         SECTION 6.1.          Executive Officers.  The executive officers of the Trust shall be a Chairman, a President,  one
                               ------------------
or more Vice  Presidents,  a Secretary  and a Treasurer.  The Chairman  shall be selected  from among the Trustees but none of
the other executive officers need be a Trustee.  Two or more officers,  except those of President and any Vice President,  may
be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity.


         The executive  officers of the Trust shall be elected annually by the Trustees and each executive  officer so elected
shall hold office until his successor is elected and has qualified.

         SECTION 6.2.          Other Officers and Agents.  The Trustees may also elect one or more Assistant Vice  Presidents,
                               -------------------------
Assistant  Secretaries  and Assistant  Treasurers and may elect,  or may delegate to the President the power to appoint,  such
other officers and agents as the Trustees shall at any time or from time to time deem advisable.

         SECTION 6.3.          Term and  Removal  and  Vacancies.  Each  officer  of the Trust  shall  hold  office  until his
                               ---------------------------------
successor is elected and has qualified.  Any officer or agent of the Trust may be removed by the Trustees  whenever,  in their
judgment,  the best  interests  of the Trust  will be served  thereby,  but such  removal  shall be without  prejudice  to the
contractual rights, if any, of the person so removed.

         SECTION 6.4.          Compensation of Officers.  The  compensation of officers and agents of the Trust shall be fixed
                               ------------------------
by the  Trustees,  or by the  President  to the extent  provided by the  Trustees  with  respect to officers  appointed by the
President.

         SECTION 6.5.          Power and Duties.  All officers and agents of the Trust,  as between  themselves and the Trust,
                               ----------------
shall have such  authority  and perform such duties in the  management of the Trust as may be provided in or pursuant to these
By-Laws, or to the extent not so provided, as may be prescribed by the Trustees;  provided,  that no rights of any third party
shall be affected or impaired by any such By-Law or resolution of the Trustees unless he has knowledge thereof.

         SECTION 6.6.          The  Chairman.  The  Chairman  shall  preside at all  meetings of the  Shareholders  and of the
                               -------------
Trustees, and he shall perform such other duties as the Trustees may from time to time prescribe.

         SECTION 6.7.          The President.  The President shall be the chief executive  officer of the Trust; he shall have
                               -------------
general and active  management  of the business of the Trust,  shall see that all orders and  resolutions  of the Trustees are
carried into effect,  and, in connection  therewith,  shall be authorized to delegate to one or more Vice  Presidents  such of
his powers and duties at such times and in such manner as he may deem advisable.

         SECTION 6.8.          The Vice  Presidents.  The Vice President shall be of such number and shall have such titles as
                               --------------------
may be determined from time to time by the Trustees.  The Vice  President,  or, if there be more than one, the Vice Presidents
in the order of their  seniority  as may be  determined  from time to time by the  Trustees or the  President,  shall,  in the
absence or  disability of the  President,  exercise the powers and perform the duties of the  President,  and he or they shall
perform such other duties as the Trustees or the President may from time to time prescribe.

         SECTION 6.9.          The Assistant Vice  Presidents.  The Assistant Vice  President,  or, if there be more than one,
                               ------------------------------
the  Assistant  Vice  Presidents,  shall perform such duties and have such powers as may be assigned them from time to time by
the Trustees or the President.

         SECTION 6.10.         The  Secretary.  The  Secretary  shall  attend all meetings of the Trustees and all meetings of
                               --------------
the  Shareholders  and record all the proceedings of the meetings of the Shareholders and of the Trustees in a book to be kept
for that  purpose,  and shall perform like duties for the standing  committees  when  required.  He shall give, or cause to be
given,  notice of all meetings of the Shareholders  and special meetings of the Trustees,  and shall perform such other duties
and have such powers as the Trustees,  or the President,  may from time to time  prescribe.  He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any  instrument  requiring it, and,  when so affixed,  it shall
be attested by his signature or by the signature of an Assistant Secretary.

         SECTION 6.11.         The  Assistant  Secretaries.  The  Assistant  Secretary,  or, if there be more  than  one,  the
                               ---------------------------
Assistant  Secretaries in the order  determined by the Trustees or the President,  shall,  in the absence or disability of the
Secretary,  perform the duties and  exercise  the powers of the  Secretary  and shall  perform such duties and have such other
powers as the Trustees or the President may from time to time prescribe.

         SECTION 6.12.         The  Treasurer.  The  Treasurer  shall be the chief  financial  officer of the Trust.  He shall
                               --------------
keep or cause to be kept full and accurate  accounts of receipts and  disbursements  in books  belonging to the Trust,  and he
shall render to the Trustees and the President,  whenever any of them require it, an account of his  transactions as Treasurer
and of the financial  condition of the Trust;  and he shall perform such other duties as the Trustees,  or the President,  may
from time to time prescribe.

         SECTION 6.13.         The Assistant  Treasurers.  The Assistant  Treasurer,  or, if there shall be more than one, the
                               -------------------------
Assistant  Treasurers in the order  determined by the Trustees or the  President,  shall,  in the absence or disability of the
Treasurer,  perform the duties and  exercise  the powers of the  Treasurer  and shall  perform such other duties and have such
other powers as the Trustees, or the President, may from time to time prescribe.

         SECTION 6.14.         Delegation  of Duties.  Whenever an officer is absent or  disabled,  or whenever for any reason
                               ---------------------
the  Trustees  may deem it  desirable,  the Trustees may delegate the powers and duties of an officer or officers to any other
officer or officers or to any Trustee or Trustees.


                                                         ARTICLE VII

                                                 Dividends and Distributions
                                                 ---------------------------

         Subject to any applicable  provisions of law and the Declaration,  dividends and distributions upon the Shares may be
declared at such intervals as the Trustees may determine,  in cash, in securities or other  property,  or in Shares,  from any
sources permitted by law, all as the Trustees shall from time to time determine.

         Inasmuch as the  computation  of net income and net  profits  from the sale of  securities  or other  properties  for
federal  income tax  purposes  may vary from the  computation  thereof on the records of the Trust,  the  Trustees  shall have
power,  in their  discretion,  to distribute  as income  dividends and as capital gain  distributions,  respectively,  amounts
sufficient to enable the Trust to avoid or reduce liability for federal income taxes.





                                                         ARTICLE VIII

                                                    Certificates of Shares
                                                    ----------------------

         SECTION 8.1.          Certificates  of  Shares.  Certificates  for  Shares of the Trust  shall be in such form and of
                               ------------------------
such design as the  Trustees  shall  approve,  subject to the right of the Trustees to change such form and design at any time
or from time to time, and shall be entered in the records of the Trust as they are issued.  Each such  certificate  shall bear
a  distinguishing  number;  shall exhibit the holder's name and certify the number of full Shares owned by such holder;  shall
be signed by or in the name of the Trust by the  President,  or a Vice  President,  and  countersigned  by the Secretary or an
Assistant  Secretary or the  Treasurer  and an  Assistant  Treasurer  of the Trust;  shall be sealed with the seal;  and shall
contain such recitals as may be required by law. Where any  certificate  is signed by a Transfer Agent or by a Registrar,  the
signature of such officers and the seal may be  facsimile,  printed or engraved.  The Trust may, at its option,  determine not
to issue a certificate or certificates to evidence Shares owned of record by any Shareholder.

         In case any officer or officers who shall have signed,  or whose facsimile  signature or signatures  shall appear on,
any such  certificate  or  certificates  shall cease to be such  officer or officers of the Trust,  whether  because of death,
resignation or otherwise,  before such  certificate or certificates  shall have been delivered by the Trust,  such certificate
or certificates shall,  nevertheless,  be adopted by the Trust and be issued and delivered as though the person or persons who
signed such  certificate or certificates or whose facsimile  signature or signatures shall appear therein had not ceased to be
such officer or officers of the Trust.
         No certificate shall be issued for any share until such share is fully paid.

         SECTION 8.2           Transfer  of  Shares.  Shares  shall be  transferable  on the books of the Trust by the  holder
                               --------------------
thereof  in  person  or by his  duly  authorized  attorney  or  legal  representative,  upon  surrender  and  cancellation  of
certificates,  if any, for the same number of Shares,  duly endorsed or  accompanied  by proper  instruments of assignment and
transfer,  with such proof of the  authenticity  of the  signature as the Trust or its agent may  reasonably  require;  in the
case of shares not represented by certificates, the same or similar requirements may be imposed by the Board of Trustees.
         SECTION 8.3           Share  Ledgers.  The  share  ledgers  of the  Trust,  containing  the name and  address  of the
                               --------------
Shareholders of the Trust and the number of shares held by them  respectively,  shall be kept at the principal  offices of the
Trust or, if the Trust employs a transfer agent, at the offices of the transfer agent of the Trust.

         SECTION 8.4.          Lost, Stolen,  Destroyed and Mutilated Certificates.  The Trustees may direct a new certificate
                               ---------------------------------------------------
or  certificates  to be issued in place of any  certificate or  certificates  theretofore  issued by the Trust alleged to have
been lost, stolen or destroyed,  upon satisfactory  proof of such loss, theft, or destruction;  and the Trustees may, in their
discretion,  require the owner of the lost,  stolen or  destroyed  certificate,  or his legal  representative,  to give to the
Trust and to such  Registrar,  Transfer Agent and/or  Transfer Clerk as may be authorized or required to countersign  such new
certificate  or  certificates,  a bond in such sum and of such type as they may direct,  and with such surety or sureties,  as
they may direct,  as indemnity  against any claim that may be against them or any of them on account of or in connection  with
the alleged loss, theft or destruction of any such certificate.







                                                          ARTICLE IX

                                                       Waiver of Notice
                                                       ----------------

         Whenever any notice of the time,  place or purpose of any meeting of Shareholders,  Trustees,  or of any committee is
required to be given in accordance with law or under the provisions of the  Declaration or these By-Laws,  a waiver thereof in
writing,  signed by the person or persons  entitled to such notice and filed with the records of the meeting,  whether  before
or after the holding  thereof,  or actual  attendance at the meeting of Shareholders,  Trustees or committee,  as the case may
be, in person, shall be deemed equivalent to the giving of such notice to such person.


                                                          ARTICLE X

                                                        Miscellaneous
                                                        -------------

         SECTION 10.1.         Location  of Books and  Records.  The books and  records of the Trust may be kept  outside  the
                               -------------------------------
Commonwealth of  Massachusetts  at such place or places as the Trustees may from time to time  determine,  except as otherwise
required by law.

         SECTION 10.2.         Record  Date.  The  Trustees  may fix in advance a date as the record  date for the  purpose of
                               ------------
determining  Shareholders  entitled  to notice of, or to vote at, any meeting of  Shareholders,  or  Shareholders  entitled to
receive payment of any dividend or the allotment of any rights,  or in order to make a determination  of Shareholders  for any
other  proper  purpose.  Such  date,  in any case,  shall be not more  than  ninety  (90)  days,  and in case of a meeting  of
Shareholders  not less than ten (10) days,  prior to the date on which  particular  action  requiring  such  determination  of
Shareholders  is to be taken.  In lieu of fixing a record date the  Trustees  may  provide  that the  transfer  books shall be
closed  for a stated  period but not to exceed,  in any case,  twenty  (20)  days.  If the  transfer  books are closed for the
purpose of  determining  Shareholders  entitled to notice of a vote at a meeting of  Shareholders,  such books shall be closed
for at least ten (10) days immediately preceding such meeting.
         SECTION 10.3.         Seal.  The  Trustees  shall  adopt a seal,  which  shall be in such  form and  shall  have such
                               ----
inscription  thereon as the  Trustees  may from time to time  provide.  The seal of the Trust may be affixed to any  document,
and the seal and its attestation may be  lithographed,  engraved or otherwise  printed on any document with the same force and
effect  as if it had been  imprinted  and  attested  manually  in the same  manner  and with the same  effect  as if done by a
Massachusetts business corporation under Massachusetts law.

         SECTION 10.4.         Fiscal  Year.  The  fiscal  year of the Trust  shall end on such  date as the  Trustees  may by
                               ------------
resolution  specify,  and the Trustees may by resolution change such date for future fiscal years at any time and from time to
time.

         SECTION 10.5.         Orders  for  Payment  of Money.  All  orders or  instructions  for the  payment of money of the
                               ------------------------------
Trust,  and all notes or other evidences of indebtedness  issued in the name of the Trust,  shall be signed by such officer or
officers  or such other  person or persons as the  Trustees  may from time to time  designate,  or as may be  specified  in or
pursuant to the agreement  between the Trust and the bank or trust company  appointed as Custodian of the securities and funds
of the Trust.


                                                          ARTICLE XI

                                             Compliance with Federal Regulations
                                             -----------------------------------

         The Trustees are hereby  empowered to take such action as they may deem to be necessary,  desirable or appropriate so
that the Trust is or shall be in compliance  with any federal or state statute,  rule or regulation  with which  compliance by
the Trust is required.


                                                         ARTICLE XII

                                                          Amendments
                                                          ----------

         These By-Laws may be amended,  altered,  or repealed,  or new By-Laws may be adopted,  (a) by a Majority  Shareholder
Vote, or (b) by the Trustees;  provided,  however, that no By-Law may be amended,  adopted or repealed by the Trustees if such
amendment,  adoption or repeal requires, pursuant to law, the Declaration,  or these By-Laws, a vote of the Shareholders.  The
Trustees shall in no event adopt By-Laws which are in conflict with the Declaration,  and any apparent  inconsistency shall be
construed in favor of the related provisions in the Declaration.


                                                         ARTICLE XIII

                                                     Declaration of Trust
                                                     --------------------

              The Declaration of Trust establishing  Oppenheimer  Special Government Trust, dated February 22, 1988, a copy of
which is on file in the office of the Secretary of the  Commonwealth  of  Massachusetts,  provides  that the name  Oppenheimer
Premium  Government  Fund refers to the Trustees under the  Declaration  collectively  as Trustees,  but not as individuals or
personally;  and no Trustee,  Shareholder,  officer,  employee or agent of the Trust shall be held to any personal  liability,
nor  shall  resort  be had to their  private  property  for the  satisfaction  of any  obligation  or claim or  otherwise,  in
connection with the affairs of said Trust, but the Trust Estate only shall be liable.




















Orgzn\680ByL-698.doc

EX-23 5 consent.htm CONSENT OF INDEPENDENT AUDITORS OPPENHEIMER MULTI-SECTOR INCOME TRUST

                                           INDEPENDENT AUDITORS' CONSENT

The Board of Trustees
Oppenheimer Multi-Sector Income Trust:

We consent to the use in this Registration Statement of Oppenheimer Multi-Sector Income Trust of our report dated
November 21, 2001 included in the Statement of Additional Information, which is a part of such Registration
Statement.






KPMG LLP

Denver, Colorado
February 27, 2002


















680-AudCon01.doc

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