Statement of Additional Information dated January 28, 2009, revised May 11, 2009

This Statement of Additional Information is not a Prospectus. This document contains additional information about the Fund and supplements information in the Prospectus dated January 28, 2009, as supplemented from time to time. It should be read together with the Prospectus. You can obtain the Prospectus by writing to the Fund's Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado 80217, or by calling the Transfer Agent at the toll-free number shown above, or by downloading it from the OppenheimerFunds Internet website at www.oppenheimerfunds.com.

The investment objective, the principal investment policies and the main risks of the Fund are described in the Prospectus. This Statement of Additional Information ("SAI") contains supplemental information about those policies and risks and the types of securities that the Fund's investment manager, OppenheimerFunds, Inc. (the "Manager"), can select for the Fund. Additional information is also provided about the strategies that the Fund may use to try to achieve its objective.

The Fund's Investment Policies. The composition of the Fund's portfolio and the techniques and strategies that the Manager may use in selecting portfolio securities will vary over time. The Fund is not required to use all of the investment techniques and strategies described below in seeking its goal. It may use some of the investment techniques and strategies at some times or not at all.

In selecting securities for the Fund's portfolio, the Manager evaluates the merits of particular securities primarily through the exercise of its own investment analysis. For example, with respect to corporate securities, that process may include, among other things, evaluation of the issuer's historical operations, prospects for the industry of which the issuer is part, the issuer's financial condition, its pending product developments and business (and those of its competitors), the effect of general market and economic conditions on the issuer's business, and legislative proposals that might affect the issuer.

The Manager might also consider the trading activity in the issuer's securities, present and anticipated cash flow, estimated current value of its assets in relation to their historical cost, the issuer's experience and managerial expertise, responsiveness to changes in interest rates and business conditions, debt maturity schedules, and current and future borrowing requirements.

The percentage of the Fund's assets that will be allocated to foreign securities will vary over time depending on a number of factors. Those factors may include the relative yields of foreign and U.S. securities, the economies of foreign countries, the condition of a country's financial markets, the interest rate climate of particular foreign countries and the relationship of particular foreign currencies to the U.S. dollar. The Manager analyzes fundamental economic criteria (for example, relative inflation levels and trends, growth rate forecasts, balance of payments status, and economic policies) as well as technical and political data.

Securities of foreign issuers that are represented by American Depository Receipts or that are listed on a U.S. securities exchange or traded in the U.S. over-the-counter markets are not considered "foreign securities" for the purpose of the Fund's investment allocations, because they are not subject to many of the special considerations and risks, discussed below, that apply to foreign securities traded and held abroad.

Investing in foreign securities offers potential benefits not available from investing solely in securities of domestic issuers. They include the opportunity to invest in foreign issuers that appear to offer growth potential, or in foreign countries with economic policies or business cycles different from those of the United States, or to reduce fluctuations in portfolio value by taking advantage of foreign stock markets that do not move in a manner parallel to U.S. markets.

The governmental members of these supra-national entities are "stockholders" that typically make capital contributions and may be committed to make additional capital contributions if the entity is unable to repay its borrowings. A supra-national entity's lending activities may be limited to a percentage of its total capital, reserves and net income. There can be no assurance that the constituent foreign governments will continue to be able or willing to honor their capitalization commitments for those entities.

The Fund can invest in U.S. dollar-denominated "Brady Bonds." These foreign debt obligations may be fixed-rate par bonds or floating-rate discount bonds. They are generally collateralized in full as to repayment of principal at maturity by U.S. Treasury zero-coupon obligations that have the same maturity as the Brady Bonds. Brady Bonds can be viewed as having three or four valuation components: (i) the collateralized repayment of principal at final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and (iv) any uncollateralized repayment of principal at maturity. Those uncollateralized amounts constitute what is called the "residual risk."

If there is a default on collateralized Brady Bonds resulting in acceleration of the payment obligations of the issuer, the zero-coupon U.S. Treasury securities held as collateral for the payment of principal will not be distributed to investors, nor will those obligations be sold to distribute the proceeds. The collateral will be held by the collateral agent to the scheduled maturity of the defaulted Brady Bonds. The defaulted bonds will continue to remain outstanding, and the face amount of the collateral will equal the principal payments which would have then been due on the Brady Bonds in the normal course. Because of the residual risk of Brady Bonds and the history of defaults with respect to commercial bank loans by public and private entities of countries issuing Brady Bonds, Brady Bonds are considered speculative investments.

In the past, U.S. government policies have discouraged certain investments abroad by U.S. investors, through taxation or other restrictions, and it is possible that such restrictions could be re-imposed.

· Currency Risk. The Fund may purchase securities denominated in foreign currencies and in derivative instruments linked to foreign currencies. A change in the value of such foreign currency against the U.S. dollar will result in a change in the U.S. dollar value of securities denominated in or derivatives linked to that foreign currency and a change in the amount of income the Fund has available for distribution. Because a portion of the Fund's investment income may be received in foreign currencies, the Fund will be required to compute its income in U.S. dollars for distribution to shareholders, and therefore the Fund will absorb the cost of currency fluctuations. After the Fund has distributed income, subsequent foreign currency losses may result in the Fund's having distributed more income in a particular fiscal period than was available from investment income, which could result in a return of capital to shareholders.

¦ Passive Foreign Investment Companies. Some securities of corporations domiciled outside the U.S. which the Fund may purchase, may be considered passive foreign investment companies ("PFICs") under U.S. tax laws. PFICs are those foreign corporations which generate primarily passive income. They tend to be growth companies or "start-up" companies. For federal tax purposes, a corporation is deemed a PFIC if 75% or more of the foreign corporation's gross income for the income year is passive income or if 50% or more of its assets are assets that produce or are held to produce passive income. Passive income is further defined as any income to be considered foreign personal holding company income within the subpart F provisions defined by Internal Revenue Code ("IRC") §954.

     Investing in PFICs involves the risks associated with investing in foreign securities, as described above. There are also the risks that the Fund may not realize that a foreign corporation it invests in is a PFIC for federal tax purposes. Federal tax laws impose severe tax penalties for failure to properly report investment income from PFICs. Following industry standards, the Fund makes every effort to ensure compliance with federal tax reporting of these investments. PFICs are considered foreign securities for the purposes of the Fund's minimum percentage requirements or limitations of investing in foreign securities.

     Subject to the limits under the Investment Company Act of 1940 (the "Investment Company Act"), the Fund may also invest in foreign mutual funds which are also deemed PFICs (since nearly all of the income of a mutual fund is generally passive income). Investing in these types of PFICs may allow exposure to various countries because some foreign countries limit, or prohibit, all direct foreign investment in the securities of companies domiciled therein.

     In addition to bearing their proportionate share of a fund's expenses (management fees and operating expenses), shareholders will also indirectly bear similar expenses of such entities. Additional risks of investing in other investment companies are described below under "Investment in Other Investment Companies."

n Debt Securities. The Fund can invest in a variety of debt securities to seek its objective. Foreign debt securities are subject to the risks of foreign securities described above.

The Fund's debt investments can include high-yield, non-investment-grade bonds (commonly referred to as "junk bonds"). Investment-grade bonds are bonds rated at least "Baa" by Moody's Investors Service, Inc. ("Moody's"), at least "BBB" by Standard & Poor's Ratings Services ("Standard & Poor's") or Fitch, Inc. ("Fitch"), or that have comparable ratings by another nationally-recognized rating organization.

In making investments in debt securities, the Manager may rely to some extent on the ratings of ratings organizations or it may use its own research to evaluate a security's credit-worthiness. If securities the Fund buys are unrated, they are assigned a rating by the Manager of comparable quality to bonds having similar yield and risk characteristics within a rating category of a rating organization.

The Fund does not have investment policies establishing specific maturity ranges for the Fund's investments, and they may be within any maturity range (short, medium or long) depending on the Manager's evaluation of investment opportunities available within the debt securities markets. The Fund may shift its investment focus to securities with longer maturities as interest rates decline and to securities with shorter maturities as interest rates rise.

"Lower-grade" debt securities are those rated below "investment grade" which means they have a rating lower than "Baa" by Moody's or lower than "BBB" by Standard & Poor's or Fitch, or similar ratings by other rating organizations. If they are unrated, and are determined by the Manager to be of comparable quality to debt securities rated below investment grade, they are considered part of the Fund's portfolio of lower-grade securities. The Fund can invest in securities rated as low as "C" or "D" or which may be in default at the time the Fund buys them.

Some of the special credit risks of lower-grade securities are discussed below. There is a greater risk that the issuer may default on its obligation to pay interest or to repay principal than in the case of investment grade securities. The issuer's low creditworthiness may increase the potential for its insolvency. An overall decline in values in the high-yield bond market is also more likely during a period of a general economic downturn. An economic downturn or an increase in interest rates could severely disrupt the market for high-yield bonds, adversely affecting the values of outstanding bonds as well as the ability of issuers to pay interest or repay principal. In the case of foreign high-yield bonds, these risks are in addition to the special risk of foreign investing discussed in the Prospectus and in this SAI.

To the extent they can be converted into stock, convertible securities may be less subject to some of these risks than non-convertible high-yield bonds, since stock may be more liquid and less affected by some of these risk factors.

While securities rated "Baa" by Moody's or "BBB" by Standard & Poor's or Fitch are investment grade and are not regarded as junk bonds, those securities may be subject to special risks, and have some speculative characteristics. Definitions of the debt security ratings categories of the principal rating organizations are included in Appendix A to this SAI.

Fluctuations in the market value of fixed-income securities after the Fund buys them will not affect the interest payable on those securities, nor the cash income from them. However, those price fluctuations will be reflected in the valuations of the securities, and therefore the Fund's net asset values will be affected by those fluctuations.

· Prepayment Risk. Certain fixed-income securities are subject to the risk of unanticipated prepayment. That is the risk that when interest rates fall, borrowers will prepay the loans that underlie these securities more quickly than expected, causing the issuer of the security to repay the principal prior to the security's expected maturity. The Fund may need to reinvest the proceeds at a lower interest rate, reducing its income. Securities subject to prepayment risk generally offer less potential for gains when prevailing interest rates fall. If the Fund buys those securities at a premium, accelerated prepayments on those securities could cause it to lose a portion of its principal investment represented by the premium. The impact of prepayments on the price of a security may be difficult to predict and may increase the security's price volatility. Interest-only and principal-only securities are especially sensitive to interest rate changes, which can affect not only their prices but can also change the income flows and prepayment assumptions about those investments.

· Extension Risk. If interest rates rise rapidly, repayments of principal on certain debt securities may occur at a slower rate than expected and the expected maturity of those securities could lengthen as a result. Those securities generally have a greater potential for loss when prevailing interest rates rise, which could cause their value to fall sharply.

     Mortgage-related securities that are issued or guaranteed by agencies or instrumentalities of the U.S. government have relatively little credit risk (depending on the nature of the issuer) but are subject to interest rate risks and prepayment risks, as described in the Prospectus. Mortgage-related securities issued by private issuers have greater credit risk.

     As with other debt securities, the prices of mortgage-related securities tend to move inversely to changes in interest rates. The Fund can buy mortgage-related securities that have interest rates that move inversely to changes in general interest rates, based on a multiple of a specific index. Although the value of a mortgage-related security may decline when interest rates rise, the converse is not always the case.

     In periods of declining interest rates, mortgages are more likely to be prepaid. Therefore, a mortgage-related security's maturity can be shortened by unscheduled prepayments on the underlying mortgages, and it is not possible to predict accurately the security's yield. The principal that is returned earlier than expected may have to be reinvested in other investments having a lower yield than the prepaid security. As a result, these securities may be less effective as a means of "locking in" attractive long-term interest rates, and they may have less potential for appreciation during periods of declining interest rates, than conventional bonds with comparable stated maturities.

Prepayment risks can lead to substantial fluctuations in the value of a mortgage-related security. In turn, this can affect the value of the Fund's shares. If a mortgage-related security has been purchased at a premium, all or part of the premium the Fund paid may be lost if there is a decline in the market value of the security, whether that results from interest rate changes or prepayments on the underlying mortgages. In the case of stripped mortgage-related securities, if they experience greater rates of prepayment than were anticipated, the Fund may fail to recoup its initial investment on the security.

During periods of rapidly rising interest rates, prepayments of mortgage-related securities may occur at slower than expected rates. Slower prepayments effectively may lengthen a mortgage-related security's expected maturity. Generally, that would cause the value of the security to fluctuate more widely in response to changes in interest rates. If the prepayments on the Fund's mortgage-related securities were to decrease broadly, the Fund's effective duration, and therefore its sensitivity to interest rate changes, would increase.

As with other debt securities, the values of mortgage-related securities may be affected by changes in the market's perception of the creditworthiness of the entity issuing the securities or guaranteeing them. Their values may also be affected by changes in government regulations and tax policies.

Each class of CMO, referred to as a "tranche," is issued at a specific coupon rate and has a stated maturity or final distribution date. Principal prepayments on the underlying mortgages may cause the CMO to be retired much earlier than the stated maturity or final distribution date. The principal and interest on the underlying mortgages may be allocated among the several classes of a series of a CMO in different ways. One or more tranches may have coupon rates that reset periodically at a specified increase over an index. These are floating rate CMOs, and typically have a cap on the coupon rate. Inverse floating rate CMOs have a coupon rate that moves in the opposite direction of an applicable index. The coupon rate on these CMOs will increase as general interest rates decrease. These are usually much more volatile than fixed rate CMOs or floating rate CMOs.

The Fund will only enter into "covered" rolls. To assure its future payment of the purchase price, the Fund will identify on its books liquid assets in an amount equal to the payment obligation under the roll.

These transactions have risks. During the period between the sale and the repurchase, the Fund will not be entitled to receive interest and principal payments on the securities that have been sold. It is possible that the market value of the securities the Fund sells may decline below the price at which the Fund is obligated to repurchase securities.

The Ginnie Maes in which the Fund invests are of the "fully modified pass-through" type. They provide that the registered holders of the Ginnie Maes will receive timely monthly payments of the pro-rata share of the scheduled principal payments on the underlying mortgages, whether or not those amounts are collected by the issuers. Amounts paid include, on a pro rata basis, any prepayment of principal of such mortgages and interest (net of servicing and other charges) on the aggregate unpaid principal balance of the Ginnie Maes, whether or not the interest on the underlying mortgages has been collected by the issuers.

The Ginnie Maes purchased by the Fund are guaranteed as to timely payment of principal and interest by GNMA. In giving that guaranty, GNMA expects that payments received by the issuers of Ginnie Maes on account of the mortgages backing the Ginnie Maes will be sufficient to make the required payments of principal of and interest on those Ginnie Maes. However, if those payments are insufficient, the guaranty agreements between the issuers of the Ginnie Maes and GNMA require the issuers to make advances sufficient for the payments. If the issuers fail to make those payments, GNMA will do so.

Under Federal law, the full faith and credit of the United States is pledged to the payment of all amounts that may be required to be paid under any guaranty issued by GNMA as to such mortgage pools. An opinion of an Assistant Attorney General of the United States, dated December 9, 1969, states that such guaranties "constitute general obligations of the United States backed by its full faith and credit." GNMA is empowered to borrow from the United States Treasury to the extent necessary to make any payments of principal and interest required under those guaranties.

Ginnie Maes are backed by the aggregate indebtedness secured by the underlying FHA-insured, FMHA-insured or VA-guaranteed mortgages. Except to the extent of payments received by the issuers on account of such mortgages, Ginnie Maes do not constitute a liability of those issuers, nor do they evidence any recourse against those issuers. Recourse is solely against GNMA. Holders of Ginnie Maes (such as the Fund) have no security interest in or lien on the underlying mortgages.

Monthly payments of principal will be made, and additional prepayments of principal may be made, to the Fund with respect to the mortgages underlying the Ginnie Maes owned by the Fund. All of the mortgages in the pools relating to the Ginnie Maes in the Fund are subject to prepayment without any significant premium or penalty, at the option of the mortgagors. While the mortgages on 1-to-4-family dwellings underlying certain Ginnie Maes have a stated maturity of up to 30 years, it has been the experience of the mortgage industry that the average life of comparable mortgages, as a result of prepayments, refinancing and payments from foreclosures, is considerably less.

The obligations of FHLMC under its guarantees are obligations solely of FHLMC and are not backed by the full faith and credit of the United States.

n "Stripped" Mortgage-Related Securities. The Fund may invest in stripped mortgage-related securities that are created by segregating the cash flows from underlying mortgage loans or mortgage securities to create two or more new securities. Each has a specified percentage of the underlying security's principal or interest payments. These are a form of derivative investment.

Mortgage securities may be partially stripped so that each class receives some interest and some principal. However, they may be completely stripped. In that case all of the interest is distributed to holders of one type of security, known as an "interest-only" security, or "I/O," and all of the principal is distributed to holders of another type of security, known as a "principal-only" security or "P/O." Strips can be created for pass-through certificates or CMOs.

The yields to maturity of I/Os and P/Os are very sensitive to principal repayments (including prepayments) on the underlying mortgages. If the underlying mortgages experience greater than anticipated prepayments of principal, the Fund might not fully recoup its investment in an I/O based on those assets. If underlying mortgages experience less than anticipated prepayments of principal, the yield on the P/Os based on them could decline substantially.

n Derivatives. The Fund can invest in a variety of derivative investments, including swaps, "structured" notes, convertible notes, options, forward contracts and futures contracts, to seek income or for hedging purposes. The use of derivatives requires special skills and knowledge of investment techniques that are different than what is required for normal portfolio management. If the Manager uses a derivative instrument at the wrong time or judges market conditions incorrectly, the use of derivatives may reduce the Fund's return.

The Fund may use derivative instruments under different circumstances in pursuit of the Fund's investment objective. For example, the Fund may use a derivative instrument when it provides greater liquidity than the underlying security, a pricing advantage or lower transaction cost. Although it is not obligated to do so, the Fund can use derivatives to hedge. To attempt to protect against declines in the market value of the Fund's portfolio, to permit the Fund to retain unrealized gains in the value of portfolio securities which have appreciated, or to facilitate selling securities for investment reasons, the Fund could:

The Fund can use hedging to establish a position in the securities market as a temporary substitute for purchasing particular securities. In that case the Fund would normally seek to purchase the securities and then terminate that hedging position. The Fund might also use this type of hedge to attempt to protect against the possibility that its portfolio securities would not be fully included in a rise in value of the market. To do so the Fund could:

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. The particular hedging strategies the Fund can use are described below. The Fund may employ new hedging strategies when they are developed, if those investment methods are consistent with the Fund's investment objectives and are permissible under applicable regulations governing the Fund.

· "Structured" Notes. The Fund can invest in "structured" notes, which are specially-designed derivative debt investments whose principal payments or interest payments are linked to the value of an underlying asset, such as an equity or debt security, currency, or commodity, or non-asset reference, such as an interest rate or index. The terms of the instrument may be "structured" by the purchaser (the Fund) and the borrower issuing the note.

The values of these notes will fall or rise in response to changes in the values of the underlying asset or reference and the Fund might receive less principal or interest if the underlying asset or reference does not perform as anticipated. In some cases, these notes may pay an amount based on a multiple of the relative change in value of the asset or reference. This type of note offers the potential for increased income or principal payments but at a greater risk of loss than a typical debt security of the same maturity and credit quality.

The values of these notes are also subject to both credit risk (if the counterparty fails to meet its obligations) and interest rate risk and therefore the Fund could receive more or less than it originally invested when a note matures. The prices of these notes may be very volatile and they may have a limited trading market, making it difficult for the Fund to value them or sell them at an acceptable price.

· Swaps. The Fund may enter into swap agreements, including interest rate, total return, credit default and volatility swaps. Swap agreements are two-party contracts entered into primarily by institutional investors for a specified period of time typically ranging from a few weeks to more than one year. In a standard swap transaction, two parties agree to exchange the returns (or the difference between the returns) earned or realized on a particular asset, such as an equity or debt security, commodity or currency, or non-asset reference, such as an interest rate or index. The swapped returns are generally calculated with respect to a notional amount, that is, the return on a particular dollar amount invested in the underlying asset or reference. The Fund may enter into swaps, including credit default swaps, that refer to an asset that the Fund does not own. The Fund may enter into a swap agreement to, among other reasons, gain exposure to certain markets in the most economical way possible, protect against currency fluctuations, or reduce risk arising from ownership of a particular security or instrument. The Fund will identify liquid assets on the Fund's books (such as cash or U.S. government securities) 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.

The Fund may enter into swap transactions with certain counterparties pursuant to master netting agreements. A master netting agreement provides that all swaps done between the Fund and that counterparty shall be regarded as parts of an integral agreement. If amounts are payable on a particular date in the same currency in respect of more than one swap transaction, the amount payable shall be the net amount. In addition, the master netting agreement may provide that if one party defaults generally or on any swap, the counterparty can terminate all outstanding swaps with that party.

The use of swap agreements by the Fund entails certain risks. The swaps market is generally unregulated. There is no central exchange or market for swap transactions and therefore they are less liquid investments than exchange-traded instruments and may be considered illiquid by the Fund. Swap agreements entail credit risk arising from the possibility that the counterparty will default. If the counterparty defaults, the Fund's loss will consist of the net amount of contractual payments that the Fund has not yet received. The Manager will monitor the creditworthiness of counterparties to the Fund's swap transactions on an ongoing basis. The Fund's successful use of swap agreements is dependent upon the Manager's ability to predict correctly whether certain types of investments are likely to produce greater returns than other investments. Swap agreements may effectively add leverage to the Fund's portfolio because the Fund would be subject to investment exposure on the notional amount of the swap.

· Interest Rate Swaps. The Fund may enter into interest rate swaps. In an interest rate swap, the Fund and another party exchange the right to receive or the obligation to pay interest on a security or other reference rate. For example, they might swap the right to receive floating rate payments for fixed rate payments. There is a risk that, based on movements of interest rates, the payments made by the Fund under a swap agreement will be greater than the payments it receives.

· Total Return Swaps. The Fund may enter into total return swaps, under which one party agrees to pay the other the total return of a defined underlying asset, such as a security or basket of securities, or non-asset reference, such as a securities index, during the specified period in return for periodic payments based on a fixed or variable interest rate or the total return from different underlying assets or references. Total return swaps could result in losses if the underlying asset or reference does not perform as anticipated by the Manager.

· Credit Default Swaps. The Fund may enter into credit default swaps. A credit default swap enables an investor to buy or sell protection against a credit event, such as an issuer's failure to make timely payments of interest or principal, bankruptcy or restructuring. The Fund may seek to enhance returns by selling protection or attempt to mitigate credit risk by buying protection against the occurrence of a credit event by a specified issuer. The Fund may enter into credit default swaps, both directly ("unfunded swaps") and indirectly ( "funded swaps") in the form of a swap embedded within a structured security. Unfunded and funded credit default swaps may refer to a single security or a basket of securities. Credit default swaps may refer to permissible investments indentified in the Prospectus and this SAI, including mortgage-related securities.

If the Fund buys credit protection using a credit default swap and a credit event occurs, the Fund will deliver the defaulted bonds underlying the swap and the swap counterparty will pay the par amount of the bonds. If the Fund sells credit protection using a credit default swap and a credit event occurs, the Fund will pay the par amount of the defaulted bonds underlying the swap and the swap counterparty will deliver the bonds. If the swap is on a basket of securities, the notional amount of the swap is reduced by the par amount of the defaulted bonds, and the fixed payments are then made on the reduced notional amount.

Risks of credit default swaps include counterparty credit risk (if the counterparty fails to meet its obligations) and the risk that the Fund will not properly assess the cost of the instrument based on the lack of transparency in the market. If the Fund is selling credit protection, there is a risk that a credit event will occur and that the Fund will have to pay par value on defaulted bonds. If the Fund is buying credit protection, there is a risk that no credit event will occur and the Fund will receive no benefit for the premium paid. In addition, if the Fund is buying credit protection and a credit event does occur, there is a risk when the Fund does not own the underlying security, that the Fund will have difficulty acquiring the bond on the open market and may receive adverse pricing.

· Volatility Swap Contracts. The Fund may enter into volatility swaps to hedge the direction of volatility in a particular asset or non-asset reference, or for other non-speculative purposes. For volatility swaps, counterparties agree to buy or sell volatility at a specific level over a fixed period. Volatility swaps are subject to credit risks (if the counterparty fails to meet its obligations), and the risk that the Manager is incorrect in forecasts of volatility of the underlying asset or reference.

· Swaption Transactions. The Fund may enter into a swaption transaction, which is a contract that grants the holder, in return for payment of the purchase price (the "premium") of the option, the right, but not the obligation, to enter into an interest rate swap at a preset rate within a specified period of time, with the writer of the contract. The writer of the contract receives the premium and bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap. Unrealized gains/losses on swaptions are reflected in investment assets and investment liabilities in the Fund's statement of financial condition.

Futures. The Fund can buy and sell futures contracts that relate to debt securities (these are referred to as "interest rate futures"), broadly-based securities indices ("stock index futures" and "bond index futures"), foreign currencies, commodities and an individual stock ("single stock futures").

A broadly-based stock index is used as the basis for trading stock index futures. They may in some cases be based on stocks of issuers in a particular industry or group of industries. A stock index assigns relative values to the securities included in the index and its value fluctuates in response to the changes in value of the underlying securities. A stock index cannot be purchased or sold directly. Bond index futures are similar contracts based on the future value of the basket of securities that comprise the index. These contracts obligate the seller to deliver, and the purchaser to take, cash to settle the futures transaction. There is no delivery made of the underlying securities to settle the futures obligation. Either party may also settle the transaction by entering into an offsetting contract.

An interest rate future obligates the seller to deliver (and the purchaser to take) cash or a specified type of debt security to settle the futures transaction. Either party could also enter into an offsetting contract to close out the position. Similarly, a single stock future obligates the seller to deliver (and the purchaser to take) cash or a specified equity security to settle the futures transaction. Either party could also enter into an offsetting contract to close out the position. Single stock futures trade on a very limited number of exchanges, with contracts typically not fungible among the exchanges.

The Fund can invest a portion of its assets in commodity futures contracts. Commodity futures may be based upon commodities within five main commodity groups: (1) energy, which includes crude oil, natural gas, gasoline and heating oil; (2) livestock, which includes cattle and hogs; (3) agriculture, which includes wheat, corn, soybeans, cotton, coffee, sugar and cocoa; (4) industrial metals, which includes aluminum, copper, lead, nickel, tin and zinc; and (5) precious metals, which includes gold, platinum and silver. The Fund may purchase and sell commodity futures contracts, options on futures contracts and options and futures on commodity indices with respect to these five main commodity groups and the individual commodities within each group, as well as other types of commodities.

No money is paid or received by the Fund on the purchase or sale of a future. Upon entering into a futures transaction, the Fund will be required to deposit an initial margin payment with the futures commission merchant (the "futures broker"). Initial margin payments will be deposited with the Fund's custodian bank in an account registered in the futures broker's name. However, the futures broker can gain access to that account only under specified conditions. As the future is marked to market (that is, its value on the Fund's books is changed) to reflect changes in its market value, subsequent margin payments, called variation margin, will be paid to or by the futures broker daily.

At any time prior to expiration of the future, the Fund may elect to close out its position by taking an opposite position, at which time a final determination of variation margin is made and any additional cash must be paid by or released to the Fund. Any loss or gain on the future is then realized by the Fund for tax purposes. All futures transactions (except forward contracts) are effected through a clearinghouse associated with the exchange on which the contracts are traded.

Put and Call Options. The Fund can buy and sell exchange-traded and over-the-counter put options ("puts") and call options ("calls"), including index options, securities options, currency options, commodities options and options on futures.

Writing Call Options. The Fund may write (that is, sell) calls. If the Fund sells 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 the call must be covered by segregating or indentifying liquid assets on the Fund's books to enable the Fund to satisfy its obligations if the call is exercised. There is no limit on the amount of the Fund's total assets that may be subject to covered calls the Fund writes.

From time to time, the Fund will write a call option that is not covered as indicated above but where the Fund will maintain, with its custodian for the term of the option, liquid assets in a segregated account having a value equal to the fluctuating market value of the optioned securities or currencies. While such an option would be "covered" with sufficient collateral to satisfy SEC prohibitions on issuing senior securities, this type of strategy would expose the funds to the risks of writing uncovered options. When writing uncovered call options, the Fund is subject to the risk of having to purchase the security or currency subject to the option at a price higher than the exercise price of the option. As the price of a security or currency could appreciate substantially, the Fund's loss could be significant.

When the Fund writes a call on a security, it receives cash (a premium). The Fund agrees to sell the underlying security to a purchaser of a corresponding call on the same security during the call period at a fixed exercise price regardless of market price changes during the call period. The call period is usually not more than nine months. The exercise price may differ from the market price of the underlying security. The Fund has the risk of loss that the price of the underlying security may decline during the call period. That risk may be offset to some extent by the premium the Fund receives. If the value of the investment does not rise above the call price, it is likely that the call will lapse without being exercised. In that case the Fund would keep the cash premium and the investment.

When the Fund writes a call on an index, it receives cash (a premium). If the buyer of the call exercises it, the Fund will pay an amount of cash equal to the difference between the closing price of the call and the exercise price, multiplied by a specific multiple that determines the total value of the call for each point of difference. If the value of the underlying investment does not rise above the call price, it is likely that the call will lapse without being exercised. In that case, the Fund would keep the cash premium.

The Fund's custodian bank, or a securities depository acting for the custodian, will act as the Fund's escrow agent, through the facilities of the Options Clearing Corporation ("OCC"), as to the investments on which the Fund has written calls traded on exchanges or as to other acceptable escrow securities. In that way, no margin will be required for such transactions. OCC will release the securities on the expiration of the option or when the Fund enters into a closing transaction.

When the Fund writes an over-the-counter ("OTC") option, it will enter into an arrangement with a primary U.S. government securities dealer which will establish a formula price at which the Fund will have the absolute right to repurchase that OTC option. The formula price will generally be based on a multiple of the premium received for the option, plus the amount by which the option is exercisable below the market price of the underlying security (i.e., the option is "in the money"). When the Fund writes an OTC option, it will treat as illiquid (for purposes of its restriction on holding illiquid securities) the market-to-market value of the underlying security, unless the option is subject to a buy-back agreement with the executing broker.

To terminate its obligation on a call it has written, the Fund may purchase a corresponding call in a "closing purchase transaction." The Fund will then realize a profit or loss, depending upon whether the net of the amount of the option transaction costs and the premium received on the call the Fund wrote is more or less than the price of the call the Fund purchases to close out the transaction. The Fund may realize a profit if the call expires unexercised, because the Fund will retain the underlying security and the premium it received when it wrote the call. Any such profits are considered short-term capital gains for federal income tax purposes, as are the premiums on lapsed calls. Then distributed by the Fund they are taxable as ordinary income. If the Fund cannot effect a closing purchase transaction due to the lack of a market, it will have to hold the callable securities until the call expires or is exercised.

The Fund may also write calls on a futures contract without owning the futures contract or securities deliverable under the contract. To do so, at the time the call is written, the Fund must cover the call by segregating or identifying an equivalent dollar amount of liquid assets as identified in the Fund's books. The Fund will segregate or indentify additional liquid assets if the value of the segregated or identified assets drops below 100% of the current value of the future. Because of this requirement, in no circumstances would the Fund's receipt of an exercise notice as to that future require the Fund to deliver a futures contract. It would simply put the Fund in a short futures position, which is permitted by the Fund's hedging policies.

A put option on securities gives the purchaser the right to sell, and the writer the obligation to buy, the underlying investment at the exercise price during the option period. A put must be covered by segregating liquid assets on the Fund's books.

If the Fund writes a put, the put must be covered by liquid assets identified in the Fund's books. The premium the Fund receives from writing a put represents a profit, as long as the price of the underlying investment remains equal to or above the exercise price. However, the Fund also assumes the obligation during the option period to buy the underlying investment from the buyer of the put at the exercise price, even if the value of the investment falls below the exercise price.

If a put the Fund has written expires unexercised, the Fund realizes a gain in the amount of the premium less the transaction costs incurred. If the put is exercised, the Fund must fulfill its obligation to purchase the underlying investment at the exercise price. That price will usually exceed the market value of the investment at that time. In that case, the Fund may incur a loss if it sells the underlying investment. That loss will be equal to the sum of the sale price of the underlying investment and the premium received minus the sum of the exercise price and any transaction costs the Fund incurred.

When writing a put option on a security, to secure its obligation to pay for the underlying security the Fund will deposit in escrow liquid assets with a value equal to or greater than the exercise price of the underlying securities. The Fund therefore forgoes the opportunity of investing the segregated or identified assets or writing calls against those assets.

As long as the Fund's obligation as the put writer continues, it may be assigned an exercise notice by the broker-dealer through which the put was sold. That notice will require the Fund to take delivery of the underlying security and pay the exercise price. The Fund has no control over when it may be required to purchase the underlying security, since it may be assigned an exercise notice at any time prior to the termination of its obligation as the writer of the put. That obligation terminates upon expiration of the put. It may also terminate if, before it receives an exercise notice, the Fund effects a closing purchase transaction by purchasing a put of the same series as it sold. Once the Fund has been assigned an exercise notice, it cannot effect a closing purchase transaction.

The Fund may decide to effect a closing purchase transaction to realize a profit on an outstanding put option it has written or to prevent the underlying security from being put. Effecting a closing purchase transaction will also permit the Fund to write another put option on the security, or to sell the security and use the proceeds from the sale for other investments. The Fund will realize a profit or loss from a closing purchase transaction depending on whether the cost of the transaction is less or more than the premium received from writing the put option. Any profits from writing puts are considered short-term capital gains for federal tax purposes, and when distributed by the Fund, are taxable as ordinary income.

Purchasing Puts and Calls. The Fund may purchase call options. When the Fund buys a call (other than in a closing purchase transaction), it pays a premium. The Fund then has the right to buy the underlying investment from a seller of a corresponding call on the same investment during the call period at a fixed exercise price.

The Fund benefits only if it sells the call at a profit or if, during the call period, the market price of the underlying investment is above the sum of the call price plus the transaction costs and the premium paid for the call and the Fund exercises the call. If the Fund does not exercise the call or sell it (whether or not at a profit), the call will become worthless at its expiration date. In that case the Fund will have paid the premium but lost the right to purchase the underlying investment.

The Fund can buy puts whether or not it owns the underlying investment. When the Fund purchases a put, it pays a premium and, except as to puts on indices, has the right to sell the underlying investment to a seller of a put on a corresponding investment during the put period at a fixed exercise price.

Buying a put on an investment the Fund does not own (such as an index or a future) permits the Fund either to resell the put or to buy the underlying investment and sell it at the exercise price. The resale price will vary inversely to the price of the underlying investment. If the market price of the underlying investment is above the exercise price and, as a result, the put is not exercised, the put will become worthless on its expiration date.

Buying a put on securities or futures the Fund owns enables the Fund to attempt to protect itself during the put period against a decline in the value of the underlying investment below the exercise price by selling the underlying investment at the exercise price to a seller of a corresponding put. If the market price of the underlying investment is equal to or above the exercise price and, as a result, the put is not exercised or resold, the put will become worthless at its expiration date. In that case the Fund will have paid the premium but lost the right to sell the underlying investment. However, the Fund may sell the put prior to its expiration. That sale may or may not be at a profit.

When the Fund purchases a call or put on an index or future, it pays a premium, but settlement is in cash rather than by delivery of the underlying investment to the Fund. Gain or loss depends on changes in the index in question (and thus on price movements in the securities market generally) rather than on price movements in individual securities or futures contracts.

Buying and Selling Options on Foreign Currencies. The Fund can buy and sell exchange-traded and over-the-counter put options and call options on foreign currencies. The Fund could use these calls and puts to try to protect against declines in the dollar value of foreign securities and increases in the dollar cost of foreign securities the Fund wants to acquire.

If the Manager anticipates a rise in the dollar value of a foreign currency in which securities to be acquired are denominated, the increased cost of those securities may be partially offset by purchasing calls or writing puts on that foreign currency. If the Manager anticipates a decline in the dollar value of a foreign currency, the decline in the dollar value of portfolio securities denominated in that currency might be partially offset by writing calls or purchasing puts on that foreign currency. However, the currency rates could fluctuate in a direction adverse to the Fund's position. The Fund will then have incurred option premium payments and transaction costs without a corresponding benefit.

A call the Fund writes on a foreign currency is "covered" if the Fund owns the underlying foreign currency covered by the call or has an absolute and immediate right to acquire that foreign currency without additional cash consideration (or it can do so for additional cash consideration segregated or identified on the Fund's books) upon conversion or exchange of other foreign currency held in its portfolio.

The Fund could write a call on a foreign currency to provide a hedge against a decline in the U.S. dollar value of a security which the Fund owns or has the right to acquire and which is denominated in the currency underlying the option. That decline might be one that occurs due to an expected adverse change in the exchange rate. This is known as a "cross-hedging" strategy. In those circumstances, the Fund covers the option by segregating or identifying liquid assets on the Fund's books.

Risks of Hedging with Options and Futures. The use of hedging strategies requires special skills and knowledge of investment techniques that are different than what is required for normal portfolio management. If the Manager uses a hedging strategy at the wrong time or judges market conditions incorrectly, hedging strategies may reduce the Fund's return. The Fund could also experience losses if the prices of its futures and options positions were not correlated with its other investments.

The Fund's option activities could affect its portfolio turnover rate and brokerage commissions. The exercise of calls written by the Fund might cause the Fund to sell related portfolio securities, thus increasing its turnover rate. The exercise by the Fund of puts on securities will cause the sale of underlying investments, increasing portfolio turnover. Although the decision whether to exercise a put it holds is within the Fund's control, holding a put might cause the Fund to sell the related investments for reasons that would not exist in the absence of the put.

The Fund could pay a brokerage commission each time it buys a call or put, sells a call or put, or buys or sells an underlying investment in connection with the exercise of a call or put. Those commissions could be higher on a relative basis than the commissions for direct purchases or sales of the underlying investments. Premiums paid for options are small in relation to the market value of the underlying investments. Consequently, put and call options offer large amounts of leverage. The leverage offered by trading in options could result in the Fund's net asset value being more sensitive to changes in the value of the underlying investment.

If a covered call written by the Fund is exercised on an investment that has increased in value, the Fund will be required to sell the investment at the call price. It will not be able to realize any profit if the investment has increased in value above the call price.

An option position may be closed out only on a market that provides secondary trading for options of the same series, and there is no assurance that a liquid secondary market will exist for any particular option. The Fund might experience losses if it could not close out a position because of an illiquid market for the future or option.

There is a risk in using short hedging by selling futures or purchasing puts on broadly-based indices or futures to attempt to protect against declines in the value of the Fund's portfolio securities. The risk is that the prices of the futures or the applicable index will correlate imperfectly with the behavior of the cash prices of the Fund's securities. For example, it is possible that while the Fund has used derivative instruments in a short hedge, the market may advance and the value of the securities held in the Fund's portfolio might decline. If that occurred, the Fund would lose money on the derivative instruments and also experience a decline in the value of its portfolio securities. However, while this could occur for a very brief period or to a very small degree, over time the value of a diversified portfolio of securities will tend to move in the same direction as the indices upon which the derivative instruments are based.

The risk of imperfect correlation increases as the composition of the Fund's portfolio diverges from the securities included in the applicable index. To compensate for the imperfect correlation of movements in the price of the portfolio securities being hedged and movements in the price of the hedging instruments, the Fund might use derivative instruments in a greater dollar amount than the dollar amount of portfolio securities being hedged. It might do so if the historical volatility of the prices of the portfolio securities being hedged is more than the historical volatility of the applicable index.

The ordinary spreads between prices in the cash and futures markets are subject to distortions, due to differences in the nature of those markets. First, all participants in the futures market are subject to margin deposit and maintenance requirements. Rather than meeting additional margin deposit requirements, investors may close futures contracts through offsetting transactions which could distort the normal relationship between the cash and futures markets. Second, the liquidity of the futures market depends on participants entering into offsetting transactions rather than making or taking delivery. To the extent participants decide to make or take delivery, liquidity in the futures market could be reduced, thus producing distortion. Third, from the point of view of speculators, the deposit requirements in the futures market are less onerous than margin requirements in the securities markets. Therefore, increased participation by speculators in the futures market may cause temporary price distortions.

The Fund can use derivative instruments to establish a position in the securities markets as a temporary substitute for the purchase of individual securities (long hedging) by buying futures and/or calls on such futures, broadly-based indices or on securities. It is possible that when the Fund does so the market might decline. If the Fund then concludes not to invest in securities because of concerns that the market might decline further or for other reasons, the Fund will realize a loss on the hedge position that is not offset by a reduction in the price of the securities purchased.

Forward Contracts. Forward contracts are foreign currency exchange contracts. They are used to buy or sell foreign currency for future delivery at a fixed price. The Fund can use them to "lock in" the U.S. dollar price of a security denominated in a foreign currency that the Fund has bought or sold, or to protect against possible losses from changes in the relative values of the U.S. dollar and a foreign currency. The Fund can also use "cross-hedging" where the Fund hedges against changes in currencies other than the currency in which a security it holds is denominated.

Under a forward contract, one party agrees to purchase, and another party agrees to sell, a specific currency at a future date. That date may be any fixed number of days from the date of the contract agreed upon by the parties. The transaction price is set at the time the contract is entered into. These contracts are traded in the inter-bank market conducted directly among currency traders (usually large commercial banks) and their customers.

The Fund may use forward contracts to protect against uncertainty in the level of future exchange rates. The use of forward contracts does not eliminate the risk of fluctuations in the prices of the underlying securities the Fund owns or intends to acquire, but it does fix a rate of exchange in advance. Although forward contracts may reduce the risk of loss from a decline in the value of the hedged currency, at the same time they limit any potential gain if the value of the hedged currency increases.

When the Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when it anticipates receiving dividend payments in a foreign currency, the Fund might desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of the dividend payments. To do so, the Fund could enter into a forward contract for the purchase or sale of the amount of foreign currency involved in the underlying transaction, in a fixed amount of U.S. dollars per unit of the foreign currency. This is called a "transaction hedge." The transaction hedge will protect the Fund against a loss from an adverse change in the currency exchange rates during the period between the date on which the security is purchased or sold or on which the payment is declared, and the date on which the payments are made or received.

The Fund could also use forward contracts to lock in the U.S. dollar value of portfolio positions. This is called a "position hedge." When the Fund believes that a foreign currency might suffer a substantial decline against the U.S. dollar, it could enter into a forward contract to sell an amount of that foreign currency approximating the value of some or all of the Fund's portfolio securities denominated in that foreign currency. When the Fund believes that the U.S. dollar might suffer a substantial decline against a foreign currency, it could enter into a forward contract to buy that foreign currency for a fixed dollar amount. Alternatively, the Fund could enter into a forward contract to sell a different foreign currency for a fixed U.S. dollar amount if the Fund believes that the U.S. dollar value of the foreign currency to be sold pursuant to its forward contract will fall whenever there is a decline in the U.S. dollar value of the currency in which portfolio securities of the Fund are denominated. That is referred to as a "cross hedge."

The Fund will cover its short positions in these cases by identifying on its books assets having a value equal to the aggregate amount of the Fund's commitment under forward contracts. The Fund will not enter into forward contracts or maintain a net exposure to such contracts if the consummation of the contracts would obligate the Fund to deliver an amount of foreign currency in excess of the value of the Fund's portfolio securities or other assets denominated in that currency or another currency that is the subject of the hedge.

However, to avoid excess transactions and transaction costs, the Fund may maintain a net exposure to forward contracts in excess of the value of the Fund's portfolio securities or other assets denominated in foreign currencies if the excess amount is "covered" by liquid securities denominated in any currency. The cover must be at least equal at all times to the amount of that excess. As one alternative, the Fund may purchase a call option permitting the Fund to purchase the amount of foreign currency being hedged by a forward sale contract at a price no higher than the forward contract price. As another alternative, the Fund may purchase a put option permitting the Fund to sell the amount of foreign currency subject to a forward purchase contract at a price as high or higher than the forward contact price.

The precise matching of the amounts under forward contracts and the value of the securities involved generally will not be possible because the future value of securities denominated in foreign currencies will change as a consequence of market movements between the date the forward contract is entered into and the date it is sold. In some cases the Manager might decide to sell the security and deliver foreign currency to settle the original purchase obligation. If the market value of the security is less than the amount of foreign currency the Fund is obligated to deliver, the Fund might have to purchase additional foreign currency on the "spot" (that is, cash) market to settle the security trade. If the market value of the security instead exceeds the amount of foreign currency the Fund is obligated to deliver to settle the trade, the Fund might have to sell on the spot market some of the foreign currency received upon the sale of the security. There will be additional transaction costs on the spot market in those cases.

The projection of short-term currency market movements is extremely difficult, and the successful execution of a short-term hedging strategy is highly uncertain. Forward contracts involve the risk that anticipated currency movements will not be accurately predicted, causing the Fund to sustain losses on these contracts and to pay additional transactions costs. The use of forward contracts in this manner might reduce the Fund's performance if there are unanticipated changes in currency prices to a greater degree than if the Fund had not entered into such contracts.

At or before the maturity of a forward contract requiring the Fund to sell a currency, the Fund might sell a portfolio security and use the sale proceeds to make delivery of the currency. In the alternative the Fund might retain the security and offset its contractual obligation to deliver the currency by purchasing a second contract. Under that contract the Fund will obtain, on the same maturity date, the same amount of the currency that it is obligated to deliver. Similarly, the Fund might close out a forward contract requiring it to purchase a specified currency by entering into a second contract entitling it to sell the same amount of the same currency on the maturity date of the first contract. The Fund would realize a gain or loss as a result of entering into such an offsetting forward contract under either circumstance. The gain or loss will depend on the extent to which the exchange rate or rates between the currencies involved moved between the execution dates of the first contract and offsetting contract.

The costs to the Fund of engaging in forward contracts varies with factors such as the currencies involved, the length of the contract period and the market conditions then prevailing. Because forward contracts are usually entered into on a principal basis, no brokerage fees or commissions are involved. Because these contracts are not traded on an exchange, the Fund must evaluate the credit and performance risk of the counterparty under each forward contract.

Although the Fund values its assets daily in terms of U.S. dollars, it does not intend to convert its holdings of foreign currencies into U.S. dollars on a daily basis. The Fund may convert foreign currency from time to time, and will incur costs in doing so. Foreign exchange dealers do not charge a fee for conversion, but they do seek to realize a profit based on the difference between the prices at which they buy and sell various currencies. Thus, a dealer might offer to sell a foreign currency to the Fund at one rate, while offering a lesser rate of exchange if the Fund desires to resell that currency to the dealer.

· Asset Coverage for Forward Contracts, Options, Futures, Options on Futures, Swaps and Short Sales. The Fund will comply with guidelines established by the Securities and Exchange Commission (the "SEC") and other applicable regulatory bodies with respect to coverage of options written by the Fund on securities and indexes, currency, interest rate and security index futures contracts and options on these futures contracts, forward currency contracts and short sales. These guidelines may, in certain instances, require segregation by the Fund of cash or liquid securities with its custodian or a designated sub-custodian to the extent the Fund's obligations with respect to these strategies are not otherwise "covered" through ownership of the underlying security or financial instrument or by other portfolio positions, or by other means consistent with applicable regulatory policies. Segregation of a large percentage of the Fund's assets could impede the Manager's ability to manage the Fund's portfolio.

Most swap agreements entered into by the Fund would calculate the obligations of the parties to the agreement on a "net basis" (i.e., the two payment streams are netted out with the Fund receiving or paying, as the case may be, only the net amount of the two payments). Consequently the Fund's current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). The Fund's current obligations under a swap agreement will be accrued daily (offset against any amounts owed to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the segregation of liquid assets having an aggregate net asset value at least equal to the accrued unpaid net amounts owed.

To the extent that the Fund enters into swaps on other than a net basis, the amount maintained in a segregated account will be the full amount of the Fund's obligations, if any, with respect to such swaps, accrued on a daily basis in an amount equal to or greater than the market value of the liabilities under the swap agreement or the amount it would have cost the Fund initially to make an equivalent direct investment, plus or minus any amount the Fund is obligated to pay or is to receive under the swap agreement. Inasmuch as segregated accounts are established for these transactions, the investment adviser and the Fund believe such obligations do not constitute senior securities and, accordingly, will not treat them as being subject to its borrowing restrictions. If there is a default by the other party to such a transaction, the Fund will have contractual remedies pursuant to the agreement related to the transaction.

Regulatory Aspects of Certain Derivative Instruments. The Commodities Futures Trading Commission (the "CFTC") recently eliminated limitations on futures trading by certain regulated entities including registered investment companies and consequently registered investment companies may engage in unlimited futures transactions and options thereon provided that the Fund claims an exclusion from regulation as a commodity pool operator. The Fund has claimed such an exclusion from registration as a commodity pool operator under the Commodity Exchange Act ("CEA"). The Fund may use futures and options for hedging and non-hedging purposes to the extent consistent with its investment objective, internal risk management guidelines adopted by the Fund's investment adviser (as they may be amended from time to time), and as otherwise set forth in the Fund's prospectus or this SAI.

Transactions in options by the Fund are subject to limitations established by the option exchanges. The exchanges limit the maximum number of options that may be written or held by a single investor or group of investors acting in concert. Those limits apply regardless of whether the options were written or purchased on the same or different exchanges or are held in one or more accounts or through one or more different exchanges or through one or more brokers. Thus, the number of options that the Fund may write or hold may be affected by options written or held by other entities, including other investment companies having the same advisor as the Fund (or an advisor that is an affiliate of the Fund's advisor). The exchanges also impose position limits on futures transactions. An exchange may order the liquidation of positions found to be in violation of those limits and may impose certain other sanctions.

Under the Investment Company Act, when the Fund purchases a future, it must maintain cash or readily marketable short-term debt instruments in an amount equal to the market value of the securities underlying the future, less the margin deposit applicable to it.

Tax Aspects of Certain Derivative Instruments. Certain foreign currency exchange contracts in which the Fund may invest are treated as "Section 1256 contracts" under the Internal Revenue Code. In general, gains or losses relating to Section 1256 contracts are characterized as 60% long-term and 40% short-term capital gains or losses under the Code. However, foreign currency gains or losses arising from Section 1256 contracts that are forward contracts generally are treated as ordinary income or loss. In addition, Section 1256 contracts held by the Fund at the end of each taxable year are "marked-to-market," and unrealized gains or losses are treated as though they were realized. These contracts also may be marked-to-market for purposes of determining the excise tax applicable to investment company distributions and for other purposes under rules prescribed pursuant to the Internal Revenue Code. An election can be made by the Fund to exempt those transactions from this mark-to-market treatment.

Certain forward contracts the Fund enters into may result in "straddles" for federal income tax purposes. The straddle rules may affect the character and timing of gains (or losses) recognized by the Fund on straddle positions. Generally, a loss sustained on the disposition of a position making up a straddle is allowed only to the extent that the loss exceeds any unrecognized gain in the offsetting positions making up the straddle. Disallowed loss is generally allowed at the point where there is no unrecognized gain in the offsetting positions making up the straddle, or the offsetting position is disposed of.

Under the Internal Revenue Code, the following gains or losses are treated as ordinary income or loss:

Currency gains and losses are offset against market gains and losses on each trade before determining a net "Section 988" gain or loss under the Internal Revenue Code for that trade, which may increase or decrease the amount of the Fund's investment income available for distribution to its shareholders.

n U.S. Government Securities. These are securities issued or guaranteed by the U.S. Treasury or other government agencies or federally-charted corporate entities referred to as "instrumentalities." The obligations of U.S. government agencies or instrumentalities in which the Fund may invest may or may not be guaranteed or supported by the "full faith and credit" of the United States. "Full faith and credit" means generally that the taxing power of the U.S. government is pledged to the payment of interest and repayment of principal on a security. If a security is not backed by the full faith and credit of the United States, the owner of the security must look principally to the agency issuing the obligation for repayment. The owner might not be able to assert a claim against the United States if the issuing agency or instrumentality does not meet its commitment. The Fund will invest in securities of U.S. government agencies and instrumentalities only if the Manager is satisfied that the credit risk with respect to the agency or instrumentality is minimal.

Zero-coupon securities do not make periodic interest payments and are sold at a deep discount from their face value at maturity. The buyer recognizes a rate of return determined by the gradual appreciation of the security, which is redeemed at face value on a specified maturity date. This discount depends on the time remaining until maturity, as well as prevailing interest rates, the liquidity of the security and the credit quality of the issuer. The discount typically decreases as the maturity date approaches.

Because zero-coupon securities pay no interest and compound semi-annually at the rate fixed at the time of their issuance, their value is generally more volatile than the value of other debt securities that pay interest. Their value may fall more dramatically than the value of interest-bearing securities when interest rates rise. When prevailing interest rates fall, zero-coupon securities tend to rise more rapidly in value because they have a fixed rate of return.

The Fund's investment in zero-coupon securities may cause the Fund to recognize income and make distributions to shareholders before it receives any cash payments on the zero-coupon investment. To generate cash to satisfy those distribution requirements, the Fund may have to sell portfolio securities that it otherwise might have continued to hold or to use cash flows from other sources such as the sale of Fund shares.

n Other Zero-Coupon Securities. The Fund may buy zero-coupon and delayed-interest securities, and "stripped" securities of corporations and of foreign government issuers. These are similar in structure to zero-coupon and "stripped" U.S. government securities, but in the case of foreign government securities, they may or may not be backed by the "full faith and credit" of the issuing foreign government. Zero-coupon securities issued by foreign governments and by corporations will be subject to greater credit risks than U.S. government zero-coupon securities.

n Portfolio Turnover. "Portfolio turnover" describes the rate at which the Fund traded its portfolio securities during its last fiscal year. For example, if a fund sold all of its securities during the year, its portfolio turnover rate would have been 100%. The Fund's portfolio turnover rate will fluctuate from year to year, and the Fund may continue to have a portfolio turnover rate of more than 100% annually.

Increased portfolio turnover creates higher brokerage and transaction costs for the Fund, which may reduce its overall performance. Additionally, the realization of capital gains from selling portfolio securities may result in distributions of taxable long-term capital gains to shareholders, since the Fund will normally distribute all of its capital gains realized each year, to avoid excise taxes under the Internal Revenue Code.

Other Investment Techniques and Strategies. In seeking its objective, the Fund may from time to time use the types of investment strategies and investments described below. It is not required to use all of these strategies at all times and at times may not use them.

¦ Investment in Other Investment Companies. The Fund can also invest in the securities of other investment companies, which can include open-end funds, closed-end funds and unit investment trusts, subject to the limits set forth in the Investment Company Act that apply to those types of investments. For example, the Fund can invest in Exchange-Traded Funds, which are typically open-end funds or unit investment trusts, listed on a stock exchange. The Fund might do so as a way of gaining exposure to the segments of the equity or fixed-income markets represented by the Exchange-Traded Funds' portfolio, at times when the Fund may not be able to buy those portfolio securities directly.

Investing in another investment company may involve the payment of substantial premiums above the value of such investment company's portfolio securities and is subject to limitations under the Investment Company Act. The Fund does not intend to invest in other investment companies unless the Manager believes that the potential benefits of the investment justify the payment of any premiums or sales charges. As a shareholder of an investment company, the Fund would be subject to its ratable share of that investment company's expenses, including its advisory and administration expenses.

n Participation Interests in Loans and Loan Investment Pools. The Fund may invest in participation interests, subject to the Fund's limitation on investments in illiquid investments. A participation interest is an undivided interest in a loan made by the issuing financial institution in the proportion that the buyer's participation interest bears to the total principal amount of the loan. The issuing financial institution may have no obligation to the Fund other than to pay the Fund the proportionate amount of the principal and interest payments it receives. The Fund can also buy interests in trusts and other pooled entities that invest primarily or exclusively in loan obligations, including entities sponsored and/or advised by the Manager or an affiliate.

Investments in participation interests and loan investment pools are primarily dependent upon the creditworthiness of the borrowing corporations, which are obligated to make payments of principal and interest on the underlying loans. There is a risk that a borrower may have difficulty making payments. If a borrower fails to pay scheduled interest or principal payments, the Fund could experience a reduction in its income. The value of the Fund's investment might also decline, which could affect the net asset value of the Fund's shares. If the issuer of the participation interest or the loan pool fails to perform its obligations, the Fund might incur costs and delays in realizing payment and suffer a loss of principal and/or interest.

n Asset-Backed Securities. Asset-backed securities are fractional interests in pools of assets, typically accounts receivable or consumer loans. They are issued by trusts or special-purpose corporations. They are similar to mortgage-backed securities, described above, and are backed by a pool of assets that consist of obligations of individual borrowers. The income from the pool is passed through to the holders of participation interest in the pools. The pools may offer a credit enhancement, such as a bank letter of credit, to try to reduce the risks that the underlying debtors will not pay their obligations when due. However, the enhancement, if any, might not be for the full par value of the security. If the enhancement is exhausted and any required payments of interest or repayments of principal are not made, the Fund could suffer losses on its investment or delays in receiving payment.

The value of an asset-backed security 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 has been exhausted. The risks of investing in asset-backed securities are ultimately related to payment of consumer loans by the individual borrowers. As a purchaser of an asset-backed security, 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, which may shorten the weighted average life of asset-backed securities and may lower their return, in the same manner as in the case of mortgage-backed securities and CMOs, described above. Unlike mortgage-backed securities, asset-backed securities typically do not have the benefit of a security interest in the underlying collateral.

Event-linked bonds may expose the Fund to certain other risks, including issuer default, adverse regulatory or jurisdictional interpretations, liquidity risk and adverse tax consequences. Lack of a liquid market may result in higher transaction costs and the possibility that the Fund may be forced to liquidate positions when it would not be advantageous to do so. Event-linked bonds are typically rated by one or more nationally recognized statistical rating organization and the Fund will only invest in event-linked bonds that meet the credit quality requirements for the Fund.

|X| Floating Rate and Variable Rate Obligations. Some securities the Fund can purchase have variable or floating interest rates. Variable rates are adjusted at stated periodic intervals. Variable rate obligations can have a demand feature that allows the Fund to tender the obligation to the issuer or a third party prior to its maturity. The tender may be at par value plus accrued interest, according to the terms of the obligations.

The interest rate on a floating rate demand note is adjusted automatically according to a stated prevailing market rate, such as a bank's prime rate, the 91-day U.S. Treasury Bill rate, or some other standard. The instrument's rate is adjusted automatically each time the base rate is adjusted. The interest rate on a variable rate note is also based on a stated prevailing market rate but is adjusted automatically at specified intervals of not less than one year. Generally, the changes in the interest rate on such securities reduce the fluctuation in their market value. As interest rates decrease or increase, the potential for capital appreciation or depreciation is less than that for fixed-rate obligations of the same maturity. The Manager may determine that an unrated floating rate or variable rate demand obligation meets the Fund's quality standards by reason of being backed by a letter of credit or guarantee issued by a bank that meets those quality standards.

Floating rate and variable rate demand notes that have a stated maturity in excess of one year may have features that permit the holder to recover the principal amount of the underlying security at specified intervals not exceeding one year and upon no more than 30 days' notice. The issuer of that type of note normally has a corresponding right in its discretion, after a given period, to prepay the outstanding principal amount of the note plus accrued interest. Generally, the issuer must provide a specified number of days' notice to the holder.

When such transactions are negotiated, the price (which is generally expressed in yield terms) is fixed at the time the commitment is made. Delivery and payment for the securities take place at a later date. The securities are subject to change in value from market fluctuations during the period until settlement. The value at delivery may be less than the purchase price. For example, changes in interest rates in a direction other than that expected by the Manager before settlement will affect the value of such securities and may cause a loss to the Fund. During the period between purchase and settlement, the Fund makes no payment to the issuer and no interest accrues to the Fund from the investment until it receives the security at settlement. There is a risk of loss to the Fund if the value of the security changes prior to the settlement date, and there is the risk that the other party may not perform.

The Fund may engage in when-issued transactions to secure what the Manager considers to be an advantageous price and yield at the time the obligation is entered into. When the Fund enters into a when-issued or delayed-delivery transaction, it relies on the other party to complete the transaction. Its failure to do so may cause the Fund to lose the opportunity to obtain the security at a price and yield the Manager considers to be advantageous.

When the Fund engages in when-issued and delayed-delivery transactions, it does so for the purpose of acquiring or selling securities consistent with its investment objective and policies for its portfolio or for delivery pursuant to options contracts it has entered into, and not for the purposes of investment leverage. Although the Fund will enter into when-issued or delayed-delivery purchase transactions to acquire securities, the Fund may dispose of a commitment prior to settlement. If the Fund chooses to dispose of the right to acquire a when-issued security prior to its acquisition or to dispose of its right to deliver or receive against a forward commitment, it may incur a gain or loss.

At the time the Fund makes the commitment to purchase or sell a security on a when-issued or delayed-delivery basis, it records the transaction on its books and reflects the value of the security purchased in determining the Fund's net asset value. In a sale transaction, it records the proceeds to be received. The Fund will identify on its books liquid assets at least equal in value to the value of the Fund's purchase commitments until the Fund pays for the investment.

When-issued and delayed-delivery transactions can be used by the Fund as a defensive technique to hedge against anticipated changes in interest rates and prices. For instance, in periods of rising interest rates and falling prices, the Fund might sell securities in its portfolio on a forward commitment basis to attempt to limit its exposure to anticipated falling prices. In periods of falling interest rates and rising prices, the Fund might sell portfolio securities and purchase the same or similar securities on a when-issued or delayed-delivery basis to obtain the benefit of currently higher cash yields.

n Short Sales. The Fund may make short sales of securities, either as a hedge against the potential decline in value of a security that the Fund owns or to realize appreciation when a security that the Fund does not own declines in value. The Fund may also use derivative instruments to create a position that is economically similar to a short sale. Making short sales in securities that it does not own exposes a Fund to risks associated with those securities. As a result, if a Fund makes short sales in securities that increase in value, it will likely underperform similar mutual funds that do not make short sales in securities they do not own. A Fund will incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date on which the Fund closes the position. A Fund will realize a gain if the security declines in price between those dates. There can be no assurance that a Fund will be able to close out a short sale position at any particular time or at an acceptable price. Although a Fund's gain is limited to the price at which it sold the security short, its potential loss is limited only by the maximum attainable price of the security, less the price at which the security was sold and may, theoretically, be unlimited.

The Fund will comply with guidelines established by the Securities and Exchange Commission and other applicable regulatory bodies with respect to coverage of short sales. These guidelines may, in certain instances, require segregation by the Fund of cash or liquid securities with its custodian or a designated sub-custodian to the extent the Fund's obligations with respect to these strategies are not otherwise "covered" through ownership of the underlying security or by other means consistent with applicable regulatory policies. Segregation of a large percentage of the Fund's assets could impede the Manager's ability to manage the Fund's portfolio.

n Repurchase Agreements. The Fund can acquire securities subject to repurchase agreements. It might do so for liquidity purposes to meet anticipated redemptions of Fund shares, or pending the investment of the proceeds from sales of Fund shares, or pending the settlement of portfolio securities transactions, or for temporary defensive purposes, as described below.

In a repurchase transaction, the Fund buys a security from, and simultaneously resells it to, an approved vendor for delivery on an agreed-upon future date. The resale 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. Approved vendors include U.S. commercial banks, U.S. branches of foreign banks, or broker-dealers that have been designated as primary dealers in government securities. They must meet credit requirements set by the Manager from time to time.

The majority of these transactions run from day to day, and delivery pursuant to the resale typically occurs within one to five days of the purchase. Repurchase agreements having maturity beyond seven days are subject to the Fund's limits on holding illiquid investments. The Fund will not enter into a repurchase agreement that causes more than 15% of its net assets when combined with other illiquid investments to be subject to repurchase agreements having a maturity beyond seven days. There is no limit on the amount of the Fund's net assets that may be subject to repurchase agreements having maturities of seven days or less.

Repurchase agreements, considered "loans" under the Investment Company Act, are collateralized by the underlying security. The Fund's repurchase agreements require that at all times while the repurchase agreement is in effect, the value of the collateral must equal or exceed the repurchase price to fully collateralize the repayment obligation. However, if the vendor fails to pay the resale price on the delivery date, the Fund may incur costs in disposing of the collateral and may experience losses if there is any delay in its ability to do so. The Manager will monitor the vendor's creditworthiness to confirm that the vendor is financially sound and will monitor the collateral's value on an on-going basis.

Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other affiliated entities managed by the Manager, may transfer uninvested cash balances into one or more joint repurchase accounts. These balances are invested in one or more repurchase agreements, secured by U.S. government securities. Securities that are pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each joint repurchase arrangement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention or sale of the collateral may be subject to legal proceedings.

n Illiquid and Restricted Securities. Under the policies and procedures established by the Fund's Board of Trustees, the Manager determines the liquidity of certain of the Fund's investments. To enable the Fund to sell its holdings of a restricted security not registered under the Securities Act of 1933, the Fund may have to cause those securities to be registered. The expenses of registering restricted securities may be negotiated by the Fund with the issuer at the time the Fund buys the securities. When the Fund must arrange registration because the Fund wishes to sell the security, a considerable period may elapse between the time the decision is made to sell the security and the time the security is registered so that the Fund could sell it. The Fund would bear the risks of any downward price fluctuation during that period.

The Fund may also acquire restricted securities through private placements. Those securities have contractual restrictions on their public resale. Those restrictions might limit the Fund's ability to dispose of the securities and might lower the amount the Fund could realize upon the sale.

The Fund has limitations that apply to purchases of restricted securities, as stated in the Prospectus. Those percentage restrictions do not limit purchases of restricted securities that are eligible for sale to qualified institutional purchasers under Rule 144A of the Securities Act of 1933, if those securities have been determined to be liquid by the Manager under Board-approved guidelines. Those guidelines take into account the trading activity for such securities and the availability of reliable pricing information, among other factors. If there is a lack of trading interest in a particular Rule 144A security, the Fund's holdings of that security may be considered to be illiquid.

Illiquid securities include repurchase agreements maturing in more than seven days and participation interests that do not have puts exercisable within seven days.

Other factors can affect a particular stock's price, such as poor earnings reports by the issuer, loss of major customers, major litigation against the issuer, or changes in government regulations affecting the issuer or its industry. The Fund can invest in securities of large companies and mid-size companies, but may also buy stocks of small companies, which may have more volatile stock prices than large companies.

· Preferred Stocks. Unlike common stock, preferred stock typically has a stated dividend rate payable from the corporation's earnings. Preferred stock dividends may be cumulative or non-cumulative, participating, or auction rate. "Cumulative" dividend provisions require all or a portion of prior unpaid dividends to be paid.

If interest rates rise, the fixed dividend on preferred stocks may be less attractive, causing the price of preferred stocks to decline. Preferred stock may have mandatory sinking fund provisions, as well as call/redemption provisions prior to maturity, which can be a negative feature when interest rates decline. Preferred stock also generally has a preference over common stock on the distribution of a corporation's assets in the event of liquidation of the corporation. Preferred stock may be "participating" stock, which means that it may be entitled to a dividend exceeding the stated dividend in certain cases. The rights of preferred stock on distribution of a corporation's assets in the event of a liquidation are generally subordinate to the rights associated with a corporation's debt securities.

While some convertible securities are a form of debt security, in many cases their conversion feature (allowing conversion into equity securities) causes them to be regarded by the Manager more as "equity equivalents." As a result, the rating assigned to the security has less impact on the Manager's investment decision than in the case of non-convertible fixed income securities.

To determine whether convertible securities should be regarded as "equity equivalents," the Manager examines the following factors:

n Loans of Portfolio Securities. The Fund may lend its portfolio securities pursuant to a Securities Lending Agency Agreement (the "Securities Lending Agreement") with Goldman Sachs Bank USA, doing business as Goldman Sachs Agency Lending ("Goldman Sachs"), subject to the restrictions stated in the Prospectus. The Fund will lend portfolio securities to attempt to increase its income. Goldman Sachs has agreed, in general, to guarantee the obligations of borrowers to return loaned securities and to be responsible for certain expenses relating to securities lending. Under the Securities Lending Agreement, the Fund's securities lending procedures and applicable regulatory requirements (which are subject to change), the Fund must receive collateral from the borrower consisting of cash, bank letters of credit or securities of the U.S. Government (or its agencies or instrumentalities). On each business day, the amount of collateral that the Fund has received must at least equal the value of the loaned securities. If the Fund receives cash collateral from the borrower, the Fund may invest that cash in certain high quality, short-term investments specified in its securities lending procedures. The Fund will be responsible for the risks associated with the investment of cash collateral, including the risk that the Fund may lose money on the investment or may fail to earn sufficient income to meet its obligations to the borrower.

The terms of the Fund's portfolio loans must comply with all applicable regulations and with the Fund's Securities Lending Procedures adopted by the Board. The terms of the loans must permit the Fund to recall loaned securities on five business days' notice and the Fund will seek to recall loaned securities in time to vote on any matters that the Manager determines would have a material effect on the Fund's investment. The Securities Lending Agreement may be terminated by either Goldman Sachs or the Fund on 30 days' written notice.

n Borrowing for Leverage. The Fund has the ability to borrow from banks on an unsecured basis to invest the borrowed funds in portfolio securities. This speculative technique is known as "leverage." The Fund cannot borrow money in excess of 33% of the value of its total assets (including the amount borrowed). The Fund may borrow only from banks and/or affiliated investment companies. Borrowing may entail "leverage," and may be a speculative investment strategy. Any borrowing will be made only from banks and, pursuant to the requirements of the Investment Company Act, will be made only to the extent that the value of the Fund's assets, less its liabilities other than borrowings, is equal to at least 300% of all Borrowings including the proposed borrowing, in the manner set forth in the Investment Company Act. If the value of the Fund's assets fails to meet this 300% asset coverage requirement, the Fund will reduce its bank debt within three days to meet the requirement. To do so, the Fund might have to sell a portion of its investments at a disadvantageous time.

The Fund will pay interest on these loans, and that interest expense will raise the overall expenses of the Fund and reduce its returns. If it does borrow, its expenses will be greater than comparable funds that do not borrow for leverage. Additionally, the Fund's net asset value per share might fluctuate more than that of funds that do not borrow. Currently, the Fund does not contemplate using this technique in the next year but if it does so, it will not likely be to a substantial degree.

Temporary Defensive and Interim Investments. For temporary defensive purposes in times of adverse or unstable market, economic or political conditions, the Fund can invest up to 100% of its assets in investments that may be inconsistent with the Fund's principal investment strategies. Generally the Fund would invest in shares of Oppenheimer Institutional Money Market Fund or in the types of money market instruments described above or in other short-term U.S. Government securities. The Fund might also hold these types of securities as interim investments pending the investment of proceeds from the sale of Fund shares or the sale of Fund portfolio securities or to meet anticipated redemptions of Fund shares. To the extent the Fund invests in these securities, it might not achieve its investment objective.

The Fund's investment objective is a fundamental policy. Other policies described in the Prospectus or this SAI are "fundamental" only if they are identified as such. The Fund's Board of Trustees can change non-fundamental policies without shareholder approval. However, significant changes to investment policies will be described in supplements or updates to the Prospectus or this SAI, as appropriate. The Fund's most significant investment policies are described in the Prospectus.

Unless the Prospectus or this SAI states that a percentage restriction applies on an ongoing basis, it applies only at the time the Fund makes an investment (except in the case of borrowing and investments in illiquid securities). 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.

For purposes of the Fund's policy not to concentrate its investments as described above, the Fund has adopted classifications of industries and groups of related industries. These classifications are not fundamental policies.

Disclosure of Portfolio Holdings. The Fund has adopted policies and procedures concerning the dissemination of information about its portfolio holdings by employees, officers and/or directors of the Manager, Distributor and Transfer Agent. These policies are designed to assure that non-public information about portfolio securities is distributed only for a legitimate business purpose, and is done in a manner that (a) conforms to applicable laws and regulations and (b) is designed to prevent that information from being used in a way that could negatively affect the Fund's investment program or enable third parties to use that information in a manner that is harmful to the Fund.

Until publicly disclosed, the Fund's portfolio holdings are proprietary, confidential business information. While recognizing the importance of providing Fund shareholders with information about their Fund's investments and providing portfolio information to a variety of third parties to assist with the management, distribution and administrative process, the need for transparency must be balanced against the risk that third parties who gain access to the Fund's portfolio holdings information could attempt to use that information to trade ahead of or against the Fund, which could negatively affect the prices the Fund is able to obtain in portfolio transactions or the availability of the securities that portfolio managers are trading on the Fund's behalf.

The Manager and its subsidiaries and affiliates, employees, officers, and directors, shall neither solicit nor accept any compensation or other consideration (including any agreement to maintain assets in the Fund or in other investment companies or accounts managed by the Manager or any affiliated person of the Manager) in connection with the disclosure of the Fund's non-public portfolio holdings. The receipt of investment advisory fees or other fees and compensation paid to the Manager and its subsidiaries pursuant to agreements approved by the Fund's Board shall not be deemed to be "compensation" or "consideration" for these purposes. It is a violation of the Code of Ethics for any covered person to release holdings in contravention of portfolio holdings disclosure policies and procedures adopted by the Fund.

A list of the top 20 portfolio securities holdings (based on invested assets), listed by security or by issuer, as of the end of each month may be disclosed to third parties (subject to the procedures below) no sooner than 15 days after month-end.

Except under special limited circumstances discussed below, month-end lists of the Fund's complete portfolio holdings may be disclosed no sooner than 30-days after the relevant month-end, subject to the procedures below. If the Fund's complete portfolio holdings have not been disclosed publicly, they may be disclosed pursuant to special requests for legitimate business reasons, provided that:

The Fund's complete portfolio holdings positions may be released to the following categories of entities or individuals on an ongoing basis, provided that such entity or individual either (1) has signed an agreement to keep such information confidential and not trade on the basis of such information or (2) is subject to fiduciary obligations, as a member of the Fund's Board, or as an employee, officer and/or director of the Manager, Distributor, or Transfer Agent, or their respective legal counsel, not to disclose such information except in conformity with these policies and procedures and not to trade for his/her personal account on the basis of such information:

Portfolio holdings information of the Fund may be provided, under limited circumstances, to brokers and/or dealers with whom the Fund trades and/or entities that provide investment coverage and/or analytical information regarding the Fund's portfolio, provided that there is a legitimate investment reason for providing the information to the broker, dealer or other entity. Month-end portfolio holdings information may, under this procedure, be provided to vendors providing research information and/or analytics to the Fund, with at least a 15-day delay after the month end, but in certain cases may be provided to a broker or analytical vendor with a 1-2 day lag to facilitate the provision of requested investment information to the Manager to facilitate a particular trade or the portfolio manager's investment process for the Fund. Any third party receiving such information must first sign the Manager's portfolio holdings non-disclosure agreement as a pre-condition to receiving this information.

Portfolio holdings information (which may include information on individual securities positions or multiple securities) may be provided to the entities listed below (1) by portfolio traders employed by the Manager in connection with portfolio trading, and (2) by the members of the Manager's Security Valuation Group and Accounting Departments in connection with portfolio pricing or other portfolio evaluation purposes:

Portfolio holdings information (which may include information on the Fund's entire portfolio or individual securities therein) may be provided by senior officers of the Manager or attorneys on the legal staff of the Manager, Distributor, or Transfer Agent, in the following circumstances:

Portfolio managers and analysts may, subject to the Manager's policies on communications with the press and other media, discuss portfolio information in interviews with members of the media, or in due diligence or similar meetings with clients or prospective purchasers of Fund shares or their financial intermediary representatives.

The Fund's shareholders may, under unusual circumstances (such as a lack of liquidity in the Fund's portfolio to meet redemptions), receive redemption proceeds of their Fund shares paid as pro rata shares of securities held in the Fund's portfolio. In such circumstances, disclosure of the Fund's portfolio holdings may be made to such shareholders.

Any permitted release of otherwise non-public portfolio holdings information must be in accordance with the then-current policy on approved methods for communicating confidential information.

The Chief Compliance Officer (the "CCO") of the Fund and the Manager, Distributor, and Transfer Agent shall oversee the compliance by the Manager, Distributor, Transfer Agent, and their personnel with these policies and procedures. At least annually, the CCO shall report to the Fund's Board on such compliance oversight and on the categories of entities and individuals to which disclosure of portfolio holdings of the Fund has been made during the preceding year pursuant to these policies. The CCO shall report to the Fund's Board any material violation of these policies and procedures and shall make recommendations to the Board as to any amendments that the CCO believes are necessary and desirable to carry out or improve these policies and procedures.

The Manager and/or the Fund have entered into ongoing arrangements to make available information about the Fund's portfolio holdings. One or more of the Oppenheimer funds may currently disclose portfolio holdings information based on ongoing arrangements to the following parties:

Organization and History. The Fund is an open-end, diversified management investment company with an unlimited number of authorized shares of beneficial interest. The Fund was organized as a Massachusetts business trust in May 1989.

n Classes of Shares. The Trustees are authorized, without shareholder approval, to create new series and classes of shares, to reclassify unissued shares into additional series or classes and to divide or combine the shares of a class into a greater or lesser number of shares without changing the proportionate beneficial interest of a shareholder in the Fund. Shares do not have cumulative voting rights, preemptive rights or subscription rights. Shares may be voted in person or by proxy at shareholder meetings.

The Fund currently has five classes of shares: Class A, Class B, Class C, Class N and Class Y. All classes invest in the same investment portfolio. Each class of shares:

Shares are freely transferable, and each share of each class has one vote at shareholder meetings, with fractional shares voting proportionally, on matters submitted to a vote of shareholders. Each share of the Fund represents an interest in the Fund proportionately equal to the interest of each other share of the same class.

n Meetings of Shareholders. As a Massachusetts business trust, the Fund is not required to hold, and does not plan to hold, regular annual meetings of shareholders, but may hold shareholder meetings from time to time on important matters or when required to do so by the Investment Company Act, or other applicable law. Shareholders have the right, upon a vote or declaration in writing of two-thirds of the outstanding shares of the Fund, to remove a Trustee or to take other action described in the Fund's Declaration of Trust.

The Trustees will call a meeting of shareholders to vote on the removal of a Trustee upon the written request of the record holders of 10% of its outstanding shares. If the Trustees receive a request from at least 10 shareholders stating that they wish to communicate with other shareholders to request a meeting to remove a Trustee, the Trustees will then either make the Fund's shareholder list available to the applicants or mail their communication to all other shareholders at the applicants' expense. The shareholders making the request must have been shareholders for at least six months and must hold shares of the Fund valued at $25,000 or more or constituting at least 1% of the Fund's outstanding shares. The Trustees may also take other action as permitted by the Investment Company Act.

n Shareholder and Trustee Liability. The Fund's Declaration of Trust contains an express disclaimer of shareholder or Trustee liability for the Fund's obligations. It also provides for indemnification and reimbursement of expenses out of the Fund's property for any shareholder held personally liable for its obligations. The Declaration of Trust also states that upon request, the Fund shall assume the defense of any claim made against a shareholder for any act or obligation of the Fund and shall satisfy any judgment on that claim. Massachusetts law permits a shareholder of a business trust (such as the Fund) to be held personally liable as a "partner" under certain circumstances. However, the risk that a Fund shareholder will incur financial loss from being held liable as a "partner" of the Fund is limited to the relatively remote circumstances in which the Fund would be unable to meet its obligations.

The Fund's contractual arrangements state that any person doing business with the Fund (and each shareholder of the Fund) agrees under its Declaration of Trust to look solely to the assets of the Fund for satisfaction of any claim or demand that may arise out of any dealings with the Fund and that the Trustees shall have no personal liability to any such person, to the extent permitted by law.

Board of Trustees and Oversight Committees. 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 Audit Committee held 5 meetings during the Fund's fiscal year ended September 30, 2008. The Review Committee held 4 meetings during the Fund's fiscal year ended September 30, 2008. The Governance Committee held 3 meetings during the Fund's fiscal year ended September 30, 2008.

The Board of Trustees has an Audit Committee, a Review Committee and a Governance Committee. Each committee is comprised solely of Trustees who are not "interested persons" under the Investment Company Act (the "Independent Trustees"). The members of the Audit Committee are George C. Bowen (Chairman), Edward L. Cameron, Robert J. Malone and F. William Marshall, Jr. The Audit Committee furnishes the Board with recommendations regarding the selection of the Fund's independent registered public accounting firm (also referred to as the "independent Auditors"). Other main functions of the Audit Committee, outlined in the Audit Committee Charter, include, but are not limited to: (i) reviewing the scope and results of financial statement audits and the audit fees charged; (ii) reviewing reports from the Fund's independent Auditors regarding the Fund's internal accounting procedures and controls; (iii) reviewing reports from the Manager's Internal Audit Department; (iv) reviewing certain reports from and meet periodically with the Funds' Chief Compliance Officer; (v) maintaining a separate line of communication between the Fund's independent Auditors and the Independent Trustees; (vi) reviewing the independence of the Fund's independent Auditors; and (vii) pre-approving the provision of any audit or non-audit services by the Fund's independent Auditors, including tax services, that are not prohibited by the Sarbanes-Oxley Act, to the Fund, the Manager and certain affiliates of the Manager.

The Review Committee is comprised solely of Independent Trustees. The members of the Review Committee are Sam Freedman (Chairman), Jon S. Fossel and Beverly L. Hamilton. Among other duties, as set forth in the Review Committee's Charter, the Review Committee reports and makes recommendations to the Board concerning the fees paid to the Fund's transfer agent and the Manager and the services provided to the Fund by the transfer agent and the Manager. The Review Committee also reviews the adequacy of the Fund's Codes of Ethics, the Fund's investment performance as well as the policies and procedures adopted by the Fund to comply with the Investment Company Act and other applicable law.

The Governance Committee is comprised solely of Independent Trustees. The members of the Governance Committee are Robert J. Malone (Chairman), William Armstrong, Edward L. Cameron, Beverly L. Hamilton and F. William Marshall, Jr. The Governance Committee has adopted a charter setting forth its duties and responsibilities. Among other duties, the Governance Committee reviews and oversees the Fund's governance guidelines, the adequacy of the Fund's Code of Ethics and the nomination of Trustees, including Independent Trustees. The Governance Committee has adopted a process for shareholder submission of nominees for board positions. Shareholders may submit names of individuals, accompanied by complete and properly supported resumes, for the Governance Committee's consideration by mailing such information to the Governance Committee in care of the Fund. The Governance Committee may consider such persons at such time as it meets to consider possible nominees. The Governance Committee, however, reserves sole discretion to determine which candidates for Trustees and Independent Trustees it will recommend to the Board and/or shareholders and it may identify candidates other than those submitted by Shareholders. The Governance Committee may, but need not, consider the advice and recommendation of the Manager and/or its affiliates in selecting nominees. The full Board elects new Trustees except for those instances when a shareholder vote is required.

Shareholders who desire to communicate with the Board should address correspondence to the Board or an individual Board member and may submit their correspondence electronically at www.oppenheimerfunds.com under the caption "contact us" or by mail to the Fund at the address below.

Trustees and Officers of the Fund. Except for Mr. Murphy, each of the Trustees is an Independent Trustee. All of the Trustees are also trustees or directors of the following Oppenheimer/Centennial funds (referred to as "Board II Funds"):

Present or former officers, directors, trustees and employees (and their immediate family members) of the Fund, the Manager and its affiliates, and retirement plans established by them for their employees are permitted to purchase Class A shares of the Fund and the other Oppenheimer funds at net asset value without sales charge. The sales charge on Class A shares is waived for that group because of the reduced sales efforts realized by the Distributor. Present or former officers, directors, trustees and employees (and their eligible family members) of the Fund, the Manager and its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals, are also permitted to purchase Class Y shares of the Oppenheimer funds that offer Class Y shares.

Messrs. Memani, Steinmetz, Welsh, Wong, Edwards, Legg, Murphy, Petersen, Vandehey, Wixted and Zack and Mss. Bullington, Bloomberg, Ives and Ruffle, who are officers of the Fund, hold the same offices with one or more of the other Board II Funds. As of January 2, 2009, the Trustees and officers of the Fund, as a group, owned of record or beneficially less than 1% of any class of shares of the Fund. The foregoing statement does not reflect ownership of shares held of record by an employee benefit plan for employees of the Manager, other than the shares beneficially owned under that plan by the officers of the Board II Funds. In addition, none of the Independent Trustees (nor any of their immediate family members) owns securities of either the Manager or the Distributor, or of any entity directly or indirectly controlling, controlled by or under common control with the Manager or the Distributor, of the Board II Funds.

Biographical Information. The Trustees and officers, their positions with the Fund, length of service in such position(s), and principal occupations and business affiliations during at least the past five years are listed in the charts below. The charts also include information about each Trustee's beneficial share ownership in the Fund and in all of the registered investment companies that the Trustee oversees in the Oppenheimer family of funds ("Supervised Funds"). The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal.

* Includes two open-end investment companies: MassMutual Select Funds and MML Series Investment Fund. In accordance with the instructions for SEC Form N-1A, for purposes of this section only, MassMutual Select Funds and MML Series Investment Fund are included in the "Fund Complex." The Manager does not consider MassMutual Select Funds and MML Series Investment Fund to be part of the OppenheimerFunds' "Fund Complex" as that term may be otherwise interpreted.

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. The address of Mr. Murphy is Two World Financial Center, 225 Liberty Street, 11^th Floor, New York, New York 10281-1008. Mr. Murphy serves as a Trustee for an indefinite term, or until his resignation, retirement, death or removal. He serves as an officer for an indefinite term, which would end: (a) upon the request of the Board, (b) if he is no longer an officer of the Manager, (c) if a material change in his duties occurs that are inconsistent with a position as officer the Fund, or (d) upon his resignation, retirement, or death. Mr. Murphy was elected as a Trustee of the Fund with the understanding that in the event he ceases to be the chief executive officer of the Manager, he will resign as a Trustee of the Fund and the other Board II Funds (defined above) for which he is a director or trustee.

The addresses of the officers in the chart below are as follows: for Messrs. Steinmetz, Memani, Wong, Edwards and Zack and Mss. Bloomberg and Ruffle, Two World Financial Center, 225 Liberty Street, New York, New York 10281-1008, for Messrs. Welsh, Legg, Petersen, Vandehey and Wixted and Mss. Bullington and Ives, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each officer serves for an indefinite term, which would end: (a) upon the request of the Board, (b) if he or she is no longer an officer of the Manager, (c) if a material change in his or her duties occurs that are inconsistent with a position as officer the Fund, or (d) upon his or her resignation, retirement, or death.

Remuneration of the Officers and Trustees. The officers and the interested Trustee of the Fund, who are affiliated with the Manager, receive no salary or fee from the Fund. The Independent Trustees received the compensation shown below from the Fund for serving as a Trustee and member of a committee (if applicable), with respect to the Fund's fiscal year ended September 30, 2008. The total compensation from the Fund and fund complex represents compensation received for serving as a Trustee and member of a committee (if applicable) of the Boards of the Fund and other funds in the OppenheimerFunds complex during the calendar year ended December 31, 2008.

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 SEC, the Fund may invest in the funds selected by the Trustees under the plan without shareholder approval for the limited purpose of determining the value of the Trustees' deferred compensation account.

n Major Shareholders. As of January 2, 2009, the only persons or entities who owned of record or were known by the Fund to own beneficially 5% or more of any class of the Fund's outstanding shares were:

Charles Schwab & Co, Inc., Special Custody Account for the Exclusive Benefit of Customers, Attn: Mutual Funds, 101 Montgomery St, San Francisco, CA 94104-4211, which owned 386,777,393.178 Class A shares (21.48% of the Class A shares then outstanding).
MLPF&S for the Sole Benefit of its Customers, Attn: Fund Admn #97G06, 4800 Deer Lake Drive E, Fl 3, Jacksonville, FL 32246-6484, which owned 32,981,879.874 Class C shares (9.39% of the Class C shares then outstanding).

Citigroup Global Markets Inc, Attn: Cindy Tempesta, 7^th Floor, 333 West 34^th Street, New York, NY 10001-2483, which owned 19,029,096.416 Class C shares (5.41% of the Class C shares then outstanding).

MLPF&S for the Sole Benefit of its Customers, Attn: Fund Admn #97G06, 4800 Deer Lake Drive E, Fl 3, Jacksonville, FL 32246-6484, which owned 7,599,341.340 Class N shares (16.54% of the Class C shares then outstanding).

Orchard Trust Co LLC, FBO Oppen RecordkeeperPro, 8515 E. Orchard Road, Greenwood Village, CO 80111-5002, which owned 3,318,214.879 Class N shares (7.22% of the Class N shares then outstanding).

LPL Financial, FBO Customer Accounts, Attn: Mutual Fund Operations, PO Box 509046, San Diego, CA 92150-9046, which owned 12,094,124.341 Class Y shares (15.92% of the Class Y shares then outstanding).

New Mexico Savings Plan, SE, Ages 6-8 Years Portfolio, Attn. Amy Sullivan, c/o Oppenheimerfunds, PO Box 5270, Denver, CO 80217-5270 which owned 8,012,993.146 Class Y shares (10.55% of Class Y shares then outstanding).

Citigroup Global Markets Inc, Attn: Cindy Tempesta, 7^th Floor, 333 West 34^th Street, New York, NY 10001-2483, which owned 5,403,778.126 Class Y shares (7.11% of the Class Y shares then outstanding).

Wachovia Bank FBO, Various Retirement Plans, 1525 West Wt Harris Blvd, Charlotte, NC 28288-1076, which owned 5,069,239.313 Class Y shares (6.67% of the Class Y shares then outstanding).

New Mexico Savings Plan, TEP, SE Diversified Income A, B & C Portfolio, Attn. Amy Sullivan, PO Box 5270, Denver, CO 80217-5270 which owned 4,802,188.313 Class Y shares (6.32% of Class Y shares then outstanding).

New Mexico Savings Plan, SE Moderately Aggressive Portfolio, Attn. Amy Sullivan, PO Box 5270, Denver, CO 80217-5270 which owned 4,449,418.082 Class Y shares (5.85% of Class Y shares then outstanding).

The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a holding company controlled by Massachusetts Mutual Life Insurance Company, a global, diversified insurance and financial services organization.

The Code of Ethics is an exhibit to the Fund's registration statement filed with the SEC and can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. You can obtain information about the hours of operation of the Public Reference Room by calling the SEC at 1.202.551.8090. The Code of Ethics can also be viewed as part of the Fund's registration statement on the SEC's EDGAR database at the SEC's Internet website at www.sec.gov. Copies may be obtained, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.

n Portfolio Proxy Voting. The Fund has adopted Portfolio Proxy Voting Policies and Procedures, which include Proxy Voting Guidelines, under which the Fund votes proxies relating to securities held by the Fund ("portfolio proxies"). OppenheimerFunds, Inc. generally undertakes to vote portfolio proxies with a view to enhancing the value of the company's stock held by the Funds. The Fund has retained an independent, third party proxy voting agent to vote portfolio proxies in accordance with the Fund's Proxy Voting Guidelines and to maintain records of such portfolio proxy voting. The Portfolio Proxy Voting Policies and Procedures include provisions to address conflicts of interest that may arise between the Fund and the Manager or the Manager's affiliates or business relationships. Such a conflict of interest may arise, for example, where the Manager or an affiliate of the Manager manages or administers the assets of a pension plan or other investment account of the portfolio company soliciting the proxy or seeks to serve in that capacity. The Manager and its affiliates generally seek to avoid such material conflicts of interest by maintaining separate investment decision making processes to prevent the sharing of business objectives with respect to proposed or actual actions regarding portfolio proxy voting decisions. Additionally, the Manager employs the following procedures, as long as OFI determines that the course of action is consistent with the best interests of the Fund and its shareholders: (1) if the proposal that gives rise to the conflict is specifically addressed in the Proxy Voting Guidelines, the Manager will vote the portfolio proxy in accordance with the Proxy Voting Guidelines, provided that they do not provide discretion to the Manager on how to vote on the matter; (2) if such proposal is not specifically addressed in the Proxy Voting Guidelines or the Proxy Voting Guidelines provide discretion to the Manager on how to vote, the Manager will vote in accordance with the third-party proxy voting agent's general recommended guidelines on the proposal provided that the Manager has reasonably determined that there is no conflict of interest on the part of the proxy voting agent; and (3) if neither of the previous two procedures provides an appropriate voting recommendation, the Manager may retain an independent fiduciary to advise the Manager on how to vote the proposal or may abstain from voting. The Proxy Voting Guidelines' provisions with respect to certain routine and non-routine proxy proposals are summarized below:

The Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30^th, no later than August 31^st of each year. The Fund's Form N-PX filing is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048 and (ii) on the SEC's website at www.sec.gov.

The Investment Advisory Agreement. The Manager provides investment advisory and management services to the Fund under an investment advisory agreement between the Manager and the Fund. The Manager selects securities for the Fund's portfolio and handles its day-to-day business. The portfolio manager of the Fund is employed by the Manager and is the person who is principally responsible for the day-to-day management of the Fund's portfolio. Other members of the Manager's Fixed Income Portfolio Team provide the portfolio managers with counsel and support in managing the Fund's portfolio.

The agreement requires the Manager, at its expense, to provide the Fund with adequate office space, facilities and equipment. It also requires the Manager to provide and supervise the activities of all administrative and clerical personnel required to provide effective administration for the Fund. Those responsibilities include the compilation and maintenance of records with respect to its operations, the preparation and filing of specified reports, and composition of proxy materials and registration statements for continuous public sale of shares of the Fund.

The Fund pays expenses not expressly assumed by the Manager under the advisory agreement. The advisory agreement lists examples of expenses paid by the Fund. The major categories relate to interest, taxes, brokerage commissions, fees to certain Trustees, legal and audit expenses, custodian and transfer agent expenses, share issuance costs, certain printing and registration costs and non-recurring expenses, including litigation costs. The management fees paid by the Fund to the Manager are calculated at the rates described in the Prospectus, which are applied to the assets of the Fund as a whole. The fees are allocated to each class of shares based upon the relative proportion of the Fund's net assets represented by that class. The management fees paid by the Fund to the Manager during its last three fiscal years were:

The investment advisory agreement states that in the absence of willful misfeasance, bad faith, gross negligence in the performance of its duties or reckless disregard of its obligations and duties under the investment advisory agreement, the Manager is not liable for any loss the Fund sustains in connection with matters to which the agreement relates.

The agreement permits the Manager to act as investment adviser for any other person, firm or corporation and to use the name "Oppenheimer" in connection with other investment companies for which it may act as investment adviser or general distributor. If the Manager shall no longer act as investment adviser to the Fund, the Manager may withdraw the right of the Fund to use the name "Oppenheimer" as part of its name.

Pending Litigation. During 2009, a number of complaints have been filed in federal courts against the Manager, the Distributor, and certain other mutual funds ("Defendant Funds") advised by the Manager and distributed by the Distributor. The complaints naming the Defendant Funds also name certain officers and trustees and former trustees of the respective Defendant Fund. The plaintiffs are seeking class action status on behalf of those who purchased shares of the respective Defendant Fund during a particular time period. The complaints against the Defendant Funds raise claims under federal securities laws to the effect that, among other things, the disclosure documents of the respective Defendant Fund contained misrepresentations and omissions, that such Defendant Fund's investment policies were not followed, and that such Defendant Fund and the other defendants violated federal securities laws and regulations. The plaintiffs seek unspecified damages, equitable relief and an award of attorneys' fees and litigation expenses.

A complaint brought in state court against the Manager, the Distributor and another subsidiary of the Manager (but not against the Fund), on behalf of the Oregon College Savings Plan Trust alleges a variety of claims, including breach of contract, breach of fiduciary duty, negligence and violation of state securities laws. Plaintiffs seek compensatory damages, equitable relief and an award of attorneys' fees and litigation expenses.

Other complaints have been filed in state and federal courts, by investors who made investments through an affiliate of the Manager, against the Manager and certain of its affiliates, regarding the alleged investment fraud perpetrated by Bernard Madoff and his firm ("Madoff"). Those lawsuits, in 2008 and 2009, allege a variety of claims, including breach of fiduciary duty, fraud, negligent misrepresentation, unjust enrichment, and violation of federal and state securities laws and regulations, among others. They seek unspecified damages, equitable relief and an award of attorneys' fees and litigation expenses. None of the suits have named the Distributor, any of the Oppenheimer mutual funds or any of their independent Trustees or Directors. None of the Oppenheimer funds invested in any funds or accounts managed by Madoff.

The Manager believes that the lawsuits described above are without legal merit and intends to defend them vigorously. The Defendant Funds' Boards of Trustees have also engaged counsel to defend the suits vigorously on behalf of those Funds, their boards and the individual independent Trustees named in those suits. While it is premature to render any opinion as to the likelihood of an outcome in these lawsuits, or whether any costs that the Defendant Funds may bear in defending the suits might not be reimbursed by insurance, the Manager believes that these suits should not impair the ability of the Manager or the Distributor to perform their respective duties to the Fund, and that the outcome of all of the suits together should not have any material effect on the operations of any of the Oppenheimer Funds.

Portfolio Managers. The Fund's portfolio is managed by Arthur Steinmetz, Krishna Memani, Joseph Welsh and Caleb Wong (each is referred to as a "Portfolio Manager" and collectively they are referred to as the "Portfolio Managers"). They are the persons who are responsible for the day-to-day management of the Fund's investments.

Other Accounts Managed. In addition to managing the Fund's investment portfolio, Messrs. Steinmetz, Memani, Welsh and Wong also manage other investment portfolios and other accounts, on behalf of the Manager or its affiliates. The following table provides information regarding the other portfolios and accounts managed by Messrs. Steinmetz, Memani, Welsh and Wong as of September 30, 2008. No portfolio or account has an advisory fee based on performance.

1. In millions.
2. Does not include personal accounts of portfolio managers and their families, which are subject to the Code of Ethics.
3. Messrs. Memani, Welsh and Wong did not become portfolio managers until April 2009.

As indicated above, the Portfolio Managers also manage other funds and accounts. Potentially, at times, those responsibilities could conflict with the interests of the Fund. That may occur whether the investment objectives and strategies of the other funds or accounts are the same as, or different from, the Fund's investment objectives and strategies. For example the Portfolio Managers may need to allocate investment opportunities between the Fund and another fund or account having similar objectives or strategies, or he may need to execute transactions for another fund or account that could have a negative impact on the value of securities held by the Fund. Not all funds and accounts advised by the Manager have the same management fee. If the management fee structure of another fund or account is more advantageous to the Manager than the fee structure of the Fund, the Manager could have an incentive to favor the other fund or account. However, the Manager's compliance procedures and Code of Ethics recognize the Manager's fiduciary obligation to treat all of its clients, including the Fund, fairly and equitably, and are designed to preclude the Portfolio Managers from favoring one client over another. It is possible, of course, that those compliance procedures and the Code of Ethics may not always be adequate to do so. At various times, the Fund's Portfolio Managers may manage other funds or accounts with investment objectives and strategies similar to those of the Fund, or he may manage funds or accounts with different investment objectives and strategies.

< Compensation of the Portfolio Managers. The Fund's Portfolio Managers are employed and compensated by the Manager, not the Fund. Under the Manager's compensation program for its Portfolio Managers and portfolio analysts, Fund performance is the most important element of compensation with half of annual cash compensation based on relative investment performance results of the funds or accounts they manage, rather than on the financial success of the Manager. This is intended to align the portfolio managers and analysts interests with the success of the funds and accounts and their shareholders. The Manager's compensation structure is designed to attract and retain highly qualified investment management professionals and to reward individual and team contributions toward creating shareholder value. As of September 30, 2008, the Portfolio Manager's compensation consisted of three elements: a base salary, an annual discretionary bonus and eligibility to participate in long-term awards of options and stock appreciation rights in regard to the common stock of the Manager's holding company parent as well as restricted shares of such common stock. Senior portfolio managers may also be eligible to participate in the Manager's deferred compensation plan.

The base pay component of each portfolio manager is reviewed regularly to ensure that it reflects the performance of the individual, is commensurate with the requirements of the particular portfolio, reflects any specific competence or specialty of the individual manager, and is competitive with other comparable positions. The annual discretionary bonus is determined by senior management of the Manager and is based on a number of factors, including, a fund's pre-tax performance for periods of up to five years, measured against an appropriate Lipper benchmark selected by management. The majority (80%) is based on three and five year data, with longer periods weighted more heavily. Below median performance in all three periods results in an extremely low, and in some cases no, performance based bonus. The Lipper benchmark used with respect to the Fund is Lipper- Multi-Sector Income Funds. Other factors considered include management quality (such as style consistency, risk management, sector coverage, team leadership and coaching) and organizational development. The Portfolio Managers' compensation is not based on the total value of the Fund's portfolio assets, although the Fund's investment performance may increase those assets. The compensation structure is also intended to be internally equitable and serve to reduce potential conflicts of interest between the Fund and other funds and accounts managed by the Portfolio Managers. The compensation structure of the other funds and accounts currently managed by the Portfolio Managers is the same as the compensation structure of the Fund, described above.

n Ownership of Fund Shares. As of September 30, 2008, the Portfolio Managers beneficially owned shares of the Fund as follows:

Brokerage Provisions of the Investment Advisory Agreement. One of the duties of the Manager under the investment advisory agreement is to arrange the portfolio transactions for the Fund. The advisory agreement contains provisions relating to the employment of broker-dealers to effect the Fund's portfolio transactions. The Manager is authorized by the advisory agreement to employ broker-dealers, including "affiliated brokers," as that term is defined in the Investment Company Act, that the Manager thinks, in its best judgment based on all relevant factors, will implement the policy of the Fund to obtain, at reasonable expense, the "best execution" of the Fund's portfolio transactions. "Best execution" means prompt and reliable execution at the most favorable price obtainable for the services provided. The Manager need not seek competitive commission bidding. However, it is expected to be aware of the current rates of eligible brokers and to minimize the commissions paid to the extent consistent with the interests and policies of the Fund as established by its Board of Trustees.

Under the investment advisory agreement, in choosing brokers to execute portfolio transactions for the Fund, the Manager may select brokers (other than affiliates) that provide both brokerage and research services to the Fund. The commissions paid to those brokers may be higher than another qualified broker would charge, if the Manager makes a good faith determination that the commission is fair and reasonable in relation to the services provided.

Brokerage Practices Followed by the Manager. The Manager allocates brokerage for the Fund subject to the provisions of the investment advisory agreement and other applicable rules and procedures described below.

The Manager's portfolio traders allocate brokerage based upon recommendations from the Manager's portfolio managers, together with the portfolio traders' judgment as to the execution capability of the broker or dealer. In certain instances, portfolio managers may directly place trades and allocate brokerage. In either case, the Manager's executive officers supervise the allocation of brokerage.

Transactions in securities other than those for which an exchange is the primary market are generally done with principals or market makers. In transactions on foreign exchanges, the Fund may be required to pay fixed brokerage commissions and therefore would not have the benefit of negotiated commissions that are available in U.S. markets. Brokerage commissions are paid primarily for transactions in listed securities or for certain fixed-income agency transactions executed in the secondary market. Otherwise, brokerage commissions are paid only if it appears likely that a better price or execution can be obtained by doing so. In an option transaction, the Fund ordinarily uses the same broker for the purchase or sale of the option and any transaction in the securities to which the option relates.

Other accounts advised by the Manager have investment policies similar to those of the Fund. Those other accounts may purchase or sell the same securities as the Fund at the same time as the Fund, which could affect the supply and price of the securities. If two or more accounts advised by the Manager purchase the same security on the same day from the same dealer, the transactions under those combined orders are averaged as to price and allocated in accordance with the purchase or sale orders actually placed for each account. When possible, the Manager tries to combine concurrent orders to purchase or sell the same security by more than one of the accounts managed by the Manager or its affiliates. The transactions under those combined orders are averaged as to price and allocated in accordance with the purchase or sale orders actually placed for each account.

Rule 12b-1 under the Investment Company Act prohibits any fund from compensating a broker or dealer for promoting or selling the fund's shares by (1) directing to that broker or dealer any of the fund's portfolio transactions, or (2) directing any other remuneration to that broker or dealer, such as commissions, mark-ups, mark downs or other fees from the fund's portfolio transactions, that were effected by another broker or dealer (these latter arrangements are considered to be a type of "step-out" transaction). In other words, a fund and its investment adviser cannot use the fund's brokerage for the purpose of rewarding broker-dealers for selling the fund's shares.

However, the Rule permits funds to effect brokerage transactions through firms that also sell fund shares, provided that certain procedures are adopted to prevent a quid pro quo with respect to portfolio brokerage allocations. As permitted by the Rule, the Manager has adopted procedures (and the Fund's Board of Trustees has approved those procedures) that permit the Fund to direct portfolio securities transactions to brokers or dealers that also promote or sell shares of the Fund, subject to the "best execution" considerations discussed above. Those procedures are designed to prevent: (1) the Manager's personnel who effect the Fund's portfolio transactions from taking into account a broker's or dealer's promotion or sales of the Fund shares when allocating the Fund's portfolio transactions, and (2) the Fund, the Manager and the Distributor from entering into agreements or understandings under which the Manager directs or is expected to direct the Fund's brokerage directly, or through a "step-out" arrangement, to any broker or dealer in consideration of that broker's or dealer's promotion or sale of the Fund's shares or the shares of any of the other Oppenheimer funds.

The investment advisory agreement permits the Manager to allocate brokerage for research services. The research services provided by a particular broker may be useful both to the Fund and to one or more of the other accounts advised by the Manager or its affiliates. Investment research may be supplied to the Manager by the broker or by a third party at the instance of a broker through which trades are placed.

Investment research services include information and analysis on particular companies and industries as well as market or economic trends and portfolio strategy, market quotations for portfolio evaluations, analytical software and similar products and services. If a research service also assists the Manager in a non-research capacity (such as bookkeeping or other administrative functions), then only the percentage or component that provides assistance to the Manager in the investment decision-making process may be paid in commission dollars.

Although the Manager currently does not do so, the Board of Trustees may permit the Manager to use stated commissions on secondary fixed-income agency trades to obtain research if the broker represents to the Manager that: (i) the trade is not from or for the broker's own inventory, (ii) the trade was executed by the broker on an agency basis at the stated commission, and (iii) the trade is not a riskless principal transaction. The Board of Trustees may also permit the Manager to use commissions on fixed-price offerings to obtain research, in the same manner as is permitted for agency transactions.

The research services provided by brokers broaden the scope and supplement the research activities of the Manager. That research provides additional views and comparisons for consideration, and helps the Manager to obtain market information for the valuation of securities that are either held in the Fund's portfolio or are being considered for purchase. The Manager provides information to the Board about the commissions paid to brokers furnishing such services, together with the Manager's representation that the amount of such commissions was reasonably related to the value or benefit of such services.

During the fiscal years ended September 30, 2006, 2007 and 2008, the Fund paid the total brokerage commissions indicated in the chart below. During the fiscal year ended September 30, 2008, the Fund did not execute any transactions through or pay any commissions to firms that provide research services.

* Amounts do not include spreads or commissions on principal transactions on a net trade basis.

The Distributor. Under its General Distributor's Agreement with the Fund, the Distributor acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. The Distributor bears the expenses normally attributable to sales, including advertising and the cost of printing and mailing prospectuses, other than those furnished to existing shareholders. The Distributor is not obligated to sell a specific number of shares.

The sales charges and concessions paid to, or retained by, the Distributor from the sale of shares and the contingent deferred sales charges retained by the Distributor on the redemption of shares during the Fund's three most recent fiscal years are shown in the tables below.

*Includes amounts retained by a broker-dealer that is an affiliate or a parent of the Distributor.

* The Distributor advances concession payments to financial intermediaries for certain sales of Class A shares and for sales of Class B, Class C and Class N shares from its own resources at the time of sale.

Distribution and Service Plans. The Fund has adopted a Service Plan for Class A shares and Distribution and Service Plans for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act. Under those plans the Fund pays the Distributor for all or a portion of its costs incurred in connection with the distribution and/or servicing of the shares of the particular class. Each plan has been approved by a vote of the Board of Trustees, including a majority of the Independent Trustees¹, cast in person at a meeting called for the purpose of voting on that plan.

Under the plans for a class, no payment will be made to any recipient in any period in which the aggregate net asset value of all Fund shares of that class held by the recipient for itself and its customers does not exceed a minimum amount, if any, that may be set from time to time by a majority of the Independent Trustees.

The Distributor does not receive or retain the service fee on Class A shares in accounts for which the Distributor has been listed as the broker-dealer of record. While the plan permits the Board to authorize payments to the Distributor to reimburse itself for services under the plan, the Board has not yet done so, except in the case of shares purchased prior to March 1, 2007 with respect to certain group retirement plans that were established prior to March 1, 2001 ("grandfathered retirement plans"). Prior to March 1, 2007, the Distributor paid the 0.25% service fee for grandfathered retirement plans in advance for the first year and retained the first year's service fee paid by the Fund with respect to those shares. After the shares were held for a year, the Distributor paid the ongoing service fees to recipients on a periodic basis. Such shares are subject to a contingent deferred sales charge if they are redeemed within 18 months. If Class A shares purchased in a grandfathered retirement plan prior to March 1, 2007 are redeemed within the first year after their purchase, the recipient of the service fees on those shares will be obligated to repay the Distributor a pro rata portion of the advance payment of those fees. For Class A shares purchased in grandfathered retirement plans on or after March 1, 2007, the Distributor does not make any payment in advance and does not retain the service fee for the first year. Such shares are not subject to the contingent deferred sales charge.

For the fiscal year ended September 30, 2008 payments under the Class A plan totaled $18,622,941, of which $2,555 was retained by the Distributor under the arrangement described above, regarding grandfathered retirement accounts, and included $625,191 paid to an affiliate of the Distributor's parent company. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent years. The Distributor may not use payments received under the Class A plan to pay any of its interest expenses, carrying charges, or other financial costs, or allocation of overhead.

Each plan permits the Distributor to retain both the asset-based sales charges and the service fees or to pay recipients the service fee on a periodic basis, without payment in advance. However, the Distributor currently intends to pay the service fee to recipients in advance for the first year after Class B, Class C and Class N shares are purchased. After the first year Class B, Class C or Class N shares are outstanding, after their purchase, the Distributor makes service fee payments periodically on those shares. The advance payment is based on the net asset value of shares sold. Shares purchased by exchange do not qualify for the advance service fee payment. If Class B, Class C or Class N shares are redeemed during the first year after their purchase, the recipient of the service fees on those shares will be obligated to repay the Distributor a pro rata portion of the advance payment of the service fee made on those shares. Class B, Class C or Class N shares may not be purchased by a new investor directly from the Distributor without the investor designating another registered broker-dealer. If a current investor no longer has another broker-dealer of record for an existing account, the Distributor is automatically designated as the broker-dealer of record, but solely for the purpose of acting as the investor's agent to purchase the shares. In those cases, the Distributor retains the asset-based sales charge paid on Class B, Class C and Class N shares, but does not retain any service fees as to the assets represented by that account.

The asset-based sales charge and service fees increase Class B and Class C expenses by 1.00% and the asset-based sales charge and service fees increase Class N expenses by 0.50% of the net assets per year of the respective classes.

The Distributor retains the asset-based sales charge on Class B and Class N shares. The Distributor retains the asset-based sales charge on Class C shares during the first year the shares are outstanding. It pays the asset-based sales charge as an ongoing concession to the recipient on Class C shares outstanding for a year or more. If a dealer has a special agreement with the Distributor, the Distributor will pay the Class B, Class C or Class N service fee and the asset-based sales charge to the dealer periodically in lieu of paying the sales concession and service fee in advance at the time of purchase.

The asset-based sales charge on Class B, Class C and Class N shares allow investors to buy shares without a front-end sales charge while allowing the Distributor to compensate dealers that sell those shares. The Fund pays the asset-based sales charge to the Distributor for its services rendered in distributing Class B, Class C and Class N shares. The payments are made to the Distributor in recognition that the Distributor:

The Distributor's actual expenses in selling Class B, Class C and Class N shares may be more than the payments it receives from the contingent deferred sales charges collected on redeemed shares and from the Fund under the plans. If either the Class B, Class C or Class N plan is terminated by the Fund, the Board of Trustees may allow the Fund to continue payments of the asset-based sales charge to the Distributor for distributing shares before the plan was terminated.

All payments under the plans are subject to the limitations imposed by the Conduct Rules of FINRA on payments of asset-based sales charges and service fees.

Financial intermediaries may receive various forms of compensation or reimbursement from the Fund in the form of 12b-1 plan payments as described in the preceding section of this SAI They may also receive payments or concessions from the Distributor, derived from sales charges paid by the clients of the financial intermediary, also as described in this SAI. Additionally, the Manager and/or the Distributor (including their affiliates) may make payments to financial intermediaries in connection with their offering and selling shares of the Fund and other Oppenheimer funds, providing marketing or promotional support, transaction processing and/or administrative services. Among the financial intermediaries that may receive these payments are brokers and dealers who sell and/or hold shares of the Fund, banks (including bank trust departments), registered investment advisers, insurance companies, retirement plan and qualified tuition program administrators, third party administrators, and other institutions that have selling, servicing or similar arrangements with the Manager or Distributor. The payments to intermediaries vary by the types of product sold, the features of the Fund share class and the role played by the intermediary.

Possible types of payments to financial intermediaries include, without limitation, those discussed below.

These payments may provide an incentive to financial intermediaries to actively market or promote the sale of shares of the Fund or other Oppenheimer funds, or to support the marketing or promotional efforts of the Distributor in offering shares of the Fund or other Oppenheimer funds. In addition, some types of payments may provide a financial intermediary with an incentive to recommend the Fund or a particular share class. Financial intermediaries may earn profits on these payments, since the amount of the payment may exceed the cost of providing the service. Certain of these payments are subject to limitations under applicable law. Financial intermediaries may categorize and disclose these arrangements to their clients and to members of the public in a manner different from the disclosures in the Fund's Prospectus and this SAI. You should ask your financial intermediary for information about any payments it receives from the Fund, the Manager or the Distributor and any services it provides, as well as the fees and commissions it charges.

Although brokers or dealers that sell Fund shares may also act as a broker or dealer in connection with the execution of the purchase or sale of portfolio securities by the Fund or other Oppenheimer funds, a financial intermediary's sales of shares of the Fund or such other Oppenheimer funds is not a consideration for the Manager when choosing brokers or dealers to effect portfolio transactions for the Fund or such other Oppenheimer funds.

Revenue sharing payments can pay for distribution-related or asset retention items including, without limitation,

Additionally, the Manager or Distributor may make payments for firm support, such as business planning assistance, advertising, and educating a financial intermediary's sales personnel about the Oppenheimer funds and shareholder financial planning needs.

For the year ended December 31, 2007, the following financial intermediaries and/or their respective affiliates offered shares of the Oppenheimer funds and received revenue sharing or similar distribution-related payments from the Manager or the Distributor for marketing or program support:

For the year ended December 31, 2007, the following firms, which in some cases are broker-dealers, received payments from the Manager or the Distributor for administrative or other services provided (other than revenue sharing arrangements), as described above:

Explanation of Performance Terminology. The Fund uses a variety of terms to illustrate its investment performance. Those terms include "cumulative total return," "average annual total return," "average annual total return at net asset value" and "total return at net asset value." An explanation of how total returns are calculated is set forth below. The charts below show the Fund's performance as of the Fund's most recent fiscal year end. You can obtain current performance information by calling the Fund's Transfer Agent at 1.800.225.5677 or by visiting the OppenheimerFunds Internet website at www.oppenheimerfunds.com.

The Fund's illustrations of its performance data in advertisements must comply with rules of the SEC. Those rules describe the types of performance data that may be used and how it is to be calculated. In general, any advertisement by the Fund of its performance data must include the average annual total returns for the advertised class of shares of the Fund.

Use of standardized performance calculations enables an investor to compare the Fund's performance to the performance of other funds for the same periods. However, a number of factors should be considered before using the Fund's performance information as a basis for comparison with other investments:

The performance of each class of shares is shown separately, because the performance of each class of shares will usually be different. That is because of the different kinds of expenses each class bears. The yields and total returns of each class of shares of the Fund are affected by market conditions, the quality of the Fund's investments, the maturity of debt investments, the types of investments the Fund holds, and its operating expenses that are allocated to the particular class.

Standardized yield is calculated using the following formula set forth in rules adopted by the SEC, designed to assure uniformity in the way that all funds calculate their yields:

c = the average daily number of shares of that class outstanding during the 30-day period that were entitled to receive dividends.

d = the maximum offering price per share of that class on the last day of the period, adjusted for undistributed net investment income.

The standardized yield for a particular 30-day period may differ from the yield for other periods. The SEC formula assumes that the standardized yield for a 30-day period occurs at a constant rate for a six-month period and is annualized at the end of the six-month period. Additionally, because each class of shares is subject to different expenses, it is likely that the standardized yields of the Fund's classes of shares will differ for any 30-day period.

The maximum offering price for Class A shares includes the current maximum initial sales charge. The maximum offering price for Class B, Class C and Class N shares is the net asset value per share, without considering the effect of contingent deferred sales charges. There is no sales charge on Class Y shares. The Class A dividend yield may also be quoted without deducting the maximum initial sales charge.

|X| Total Return Information. There are different types of "total returns" to measure the Fund's performance. Total return is the change in value of a hypothetical investment in the Fund over a given period, assuming that all dividends and capital gains distributions are reinvested in additional shares and that the investment is redeemed at the end of the period. Because of differences in expenses for each class of shares, the total returns for each class are separately measured. The cumulative total return measures the change in value over the entire period (for example, ten years). An average annual total return shows the average rate of return for each year in a period that would produce the cumulative total return over the entire period. However, average annual total returns do not show actual year-by-year performance. The Fund uses standardized calculations for its total returns as prescribed by the SEC. The methodology is discussed below.

In calculating total returns for Class A shares, the current maximum sales charge of 4.75% (as a percentage of the offering price) is deducted from the initial investment ("P" in the formula below) (unless the return is shown without sales charge, as described below). For Class B shares, payment of the applicable contingent deferred sales charge is applied, depending on the period for which the return is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in the third and fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none thereafter. For Class C shares, the 1.0% contingent deferred sales charge is deducted for returns for the one-year period. For Class N shares, the 1.0% contingent deferred sales charge is deducted for returns for the one-year period, and total returns for the periods prior to 03/01/01 (the inception date for Class N shares) are based on the Fund's Class A returns, adjusted to reflect the higher Class N 12b-1 fees. There is no sales charge on Class Y shares.

Other Performance Comparisons. The Fund compares its performance annually to that of an appropriate broadly-based market index in its Annual Report to shareholders. You can obtain that information by contacting the Transfer Agent at the addresses or telephone numbers shown on the cover of this SAI. The Fund may also compare its performance to that of other investments, including other mutual funds, or use rankings of its performance by independent ranking entities. Examples of these performance comparisons are set forth below.

|X| Lipper Rankings. From time to time the Fund may publish the ranking of the performance of its classes of shares by Lipper, Inc. ("Lipper"). Lipper is a widely-recognized independent mutual fund monitoring service. Lipper monitors the performance of regulated investment companies, including the Fund, and ranks their performance for various periods in categories based on investment styles. The Lipper performance rankings are based on total returns that include the reinvestment of capital gain distributions and income dividends but do not take sales charges or taxes into consideration. Lipper also publishes "peer-group" indices of the performance of all mutual funds in a category that it monitors and averages of the performance of the funds in particular categories.

n Morningstar Ratings. From time to time the Fund may publish the star rating of the performance of its classes of shares by Morningstar, Inc. ("Morningstar"), an independent mutual fund monitoring service. Morningstar rates mutual funds in their specialized market sector. The Fund is rated among multi-sector bond category.

Morningstar proprietary star ratings reflect historical risk-adjusted total investment return. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges and loads), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five-and ten-year (if applicable) Morningstar Rating metrics.

|X| Performance Rankings and Comparisons by Other Entities and Publications. From time to time the Fund may include in its advertisements and sales literature performance information about the Fund cited in newspapers and other periodicals such as The New York Times, The Wall Street Journal, Barron's, or similar publications. That information may include performance quotations from other sources, including Lipper and Morningstar. The performance of the Fund's classes of shares may be compared in publications to the performance of various market indices or other investments, and averages, performance rankings or other benchmarks prepared by recognized mutual fund statistical services.

Investors may also wish to compare the returns on the Fund's share classes to the return on fixed-income investments available from banks and thrift institutions. Those include certificates of deposit, ordinary interest-paying checking and savings accounts, and other forms of fixed or variable time deposits, and various other instruments such as Treasury bills. However, the Fund's returns and share price are not guaranteed or insured by the FDIC or any other agency and will fluctuate daily, while bank depository obligations may be insured by the FDIC and may provide fixed rates of return. Repayment of principal and payment of interest on Treasury securities is backed by the full faith and credit of the U.S. Government.

From time to time, the Fund may publish rankings or ratings of the Manager or Transfer Agent, and of the investor services provided by them to shareholders of the Oppenheimer funds, other than performance rankings of the Oppenheimer funds themselves. Those ratings or rankings of shareholder and investor services by third parties may include comparisons of their services to those provided by other mutual fund families selected by the rating or ranking services. They may be based upon the opinions of the rating or ranking service itself, using its research or judgment, or based upon surveys of investors, brokers, shareholders or others.

From time to time the Fund may include in its advertisements and sales literature the total return performance of a hypothetical investment account that includes shares of the Fund and other Oppenheimer funds. The combined account may be part of an illustration of an asset allocation model or similar presentation. The account performance may combine total return performance of the Fund and the total return performance of other Oppenheimer funds included in the account. Additionally, from time to time, the Fund's advertisements and sales literature may include, for illustrative or comparative purposes, statistical data or other information about general or specific market and economic conditions. That may include, for example,

Additional information is presented below about the methods that can be used to buy shares of the Fund. Appendix B contains more information about the special sales charge arrangements offered by the Fund, and the circumstances in which sales charges may be reduced or waived for certain classes of investors.

When you purchase shares of the Fund, your ownership interest in the shares of the Fund will be recorded as a book entry on the records of the Fund. The Fund will not issue or re-register physical share certificates.

AccountLink. When shares are purchased through AccountLink, each purchase must be at least $50 and shareholders must invest at least $500 before an Asset Builder Plan (described below) can be established on a new account. Accounts established prior to November 1, 2002 will remain at $25 for additional purchases. Shares will be purchased on the regular business day the Distributor is instructed to initiate the Automated Clearing House ("ACH") transfer to buy the shares. Dividends will begin to accrue on shares purchased with the proceeds of ACH transfers on the business day the Fund receives Federal Funds for the purchase through the ACH system before the close of the New York Stock Exchange (the "NYSE"). The NYSE normally closes at 4:00 p.m., but may close earlier on certain days. If Federal Funds are received on a business day after the close of the NYSE, the shares will be purchased and dividends will begin to accrue on the next regular business day. The proceeds of ACH transfers are normally received by the Fund three days after the transfers are initiated. If the proceeds of the ACH transfer are not received on a timely basis, the Distributor reserves the right to cancel the purchase order. The Distributor and the Fund are not responsible for any delays in purchasing shares resulting from delays in ACH transmissions.

Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge rate may be obtained for Class A shares under Right of Accumulation and Letters of Intent because of the economies of sales efforts and reduction in expenses realized by the Distributor, dealers and brokers making such sales. No sales charge is imposed in certain other circumstances described in Appendix B to this SAI because the Distributor or dealer or broker incurs little or no selling expenses.

The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which the Distributor acts as the distributor and currently include the following:

There is an initial sales charge on the purchase of Class A shares of each of the Oppenheimer funds described above except the money market funds. Under certain circumstances described in this SAI, redemption proceeds of certain money market fund shares may be subject to a contingent deferred sales charge.

Letter of Intent. Under a Letter of Intent (a "Letter"), you may be able to reduce the sales charge rate that applies to your purchases of Class A shares if you purchase Class A, Class B or Class C shares of the Fund or other Oppenheimer funds or Class A, Class B, Class C, Class G and Class H units purchased in advisor sold Section 529 plans, for which the Manager or the Distributor serves as the Program Manager or Program Distributor. A Letter is an investor's statement in writing to the Distributor of his or her intention to purchase a specified value of those shares or units during a 13-month period (the "Letter period"), which begins on the date of the investor's first share purchase following the establishment of the Letter. The sales charge on each purchase of Class A shares during the Letter period will be at the rate that would apply to a single lump-sum purchase of shares in the amount intended to be purchased. In submitting a Letter, the investor makes no commitment to purchase shares. However, if the investor does not fulfill the terms of the Letter within the Letter period, he or she agrees to pay the additional sales charges that would have been applicable to the purchases that were made. The investor agrees that shares equal in value to 2% of the intended purchase amount will be held in escrow by the Transfer Agent for that purpose, as described in "Terms of Escrow" below. It is the responsibility of the dealer of record and/or the investor to advise the Distributor about the Letter when placing purchase orders during the Letter period. The investor must also notify the Distributor or his or her financial intermediary of any qualifying 529 plan holdings.

To determine whether an investor has fulfilled the terms of a Letter, the Transfer Agent will count purchases of "qualified" Class A, Class B and Class C shares and Class A, Class B, Class C, Class G and Class H units during the Letter period. Purchases of Class N or Class Y shares, purchases made by reinvestment of dividends or capital gains distributions from the Fund or other Oppenheimer funds, purchases of Class A shares with redemption proceeds under the Reinvestment Privilege, and purchases of Class A shares of Oppenheimer Money Market Fund, Inc. or Oppenheimer Cash Reserves on which a sales charge has not been paid do not count as "qualified" shares for satisfying the terms of a Letter. An investor will also be considered to have fulfilled the Letter if the value of the investor's total holdings of qualified shares on the last day of the Letter period, calculated at the net asset value on that day, equals or exceeds the intended purchase amount.

If the terms of the Letter are not fulfilled within the Letter period, the concessions previously paid to the dealer of record for the account and the amount of sales charge retained by the Distributor will be adjusted on the first business day following the expiration of the Letter period to reflect the sales charge rates that are applicable to the actual total purchases.

If total eligible purchases during the Letter period exceed the intended purchase amount and also exceed the amount needed to qualify for the next sales charge rate reduction (stated in the Prospectus), the sales charges paid may be adjusted to that lower rate. That adjustment will only be made if and when the dealer returns to the Distributor the amount of the excess concessions allowed or paid to the dealer over the amount of concessions that are applicable to the actual amount of purchases. The reduced sales charge adjustment will be made by adding to the investors account the number of additional shares that would have been purchased if the lower sales charge rate had been used. Those additional shares will be determined using the net asset value per share in effect on the date of such adjustment.

By establishing a Letter, the investor agrees to be bound by the terms of the Prospectus, this SAI and the application used for a Letter, and if those terms are amended to be bound by the amended terms and that any amendments by the Fund will apply automatically to existing Letters. Group retirement plans qualified under section 401(a) of the Internal Revenue Code may not establish a Letter, however defined benefit plans and Single K sole proprietor plans may do so.

1. Out of the initial purchase, or out of subsequent purchases if necessary, the Transfer Agent will hold in escrow Fund shares equal to 2% of the intended purchase amount specified in the Letter. For example, if the intended purchase amount is $50,000, the escrow amount would be shares valued at $1,000 (computed at the offering price for a $50,000 share purchase). Any dividends and capital gains distributions on the escrowed shares will be credited to the investor's account.

2. If the Letter applies to more than one fund account, the investor can designate the fund from which shares will be escrowed. If no fund is selected, the Transfer Agent will escrow shares in the fund account that has the highest dollar balance on the date of the first purchase under the Letter. If there are not sufficient shares to cover the escrow amount, the Transfer Agent will escrow shares in the fund account(s) with the next highest balance(s). If there are not sufficient shares in the accounts to which the Letter applies, the Transfer Agent may escrow shares in other accounts that are linked for Right of Accumulation purposes. Additionally, if there are not sufficient shares available for escrow at the time of the first purchase under the Letter, the Transfer Agent will escrow future purchases until the escrow amount is met.

3. If, during the Letter period, an investor exchanges shares of the Fund for shares of another fund (as described in the Prospectus section titled "How to Exchange Shares"), the Fund shares held in escrow will automatically be exchanged for shares of the other fund and the escrow obligations will also be transferred to that fund.

4. If the total purchases under the Letter are less than the intended purchases specified, on the first business day after the end of the Letter period the Distributor will redeem escrowed shares equal in value to the difference between the dollar amount of the sales charges actually paid and the amount of the sales charges that would have been paid if the total purchases had been made at a single time. Any shares remaining after such redemption will be released from escrow.

5. If the terms of the Letter are fulfilled, the escrowed shares will be promptly released to the investor at the end of the Letter period.

6. By signing the Letter, the investor irrevocably constitutes and appoints the Transfer Agent as attorney-in-fact to surrender for redemption any or all escrowed shares.

Asset Builder Plans. As explained in the Prospectus, you must initially establish your account with $500. Subsequently, you can establish an Asset Builder Plan to automatically purchase additional shares directly from a bank account for as little as $50. For those accounts established prior to November 1, 2002 and which have previously established Asset Builder Plans, additional purchases will remain at $25. Shares purchased by Asset Builder Plan payments from bank accounts are subject to the redemption restrictions for recent purchases described in the Prospectus. Asset Builder Plans are available only if your bank is an ACH member. Asset Builder Plans may not be used to buy shares for OppenheimerFunds employer-sponsored qualified retirement accounts.
If you make payments from your bank account to purchase shares of the Fund, your bank account will be debited automatically. Normally the debit will be made two business days prior to the investment dates you selected on your application. Neither the Distributor, the Transfer Agent nor the Fund shall be responsible for any delays in purchasing shares that result from delays in ACH transmissions.

Before you establish Asset Builder payments, you should obtain a prospectus of the selected fund(s) from your financial advisor (or the Distributor) and request an application from the Distributor. Complete the application and return it. You may change the amount of your Asset Builder payment or you can terminate these automatic investments at any time by writing to the Transfer Agent. The Transfer Agent requires a reasonable period (approximately 10 days) after receipt of your instructions to implement them. The Fund reserves the right to amend, suspend or discontinue offering Asset Builder plans at any time without prior notice.

Retirement Plans. Certain types of retirement plans are entitled to purchase shares of the Fund without sales charges or at reduced sales charge rates, as described in Appendix B to this SAI. Certain special sales charge arrangements described in that Appendix apply to retirement plans whose records are maintained on a daily valuation basis by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper that has a contract or special arrangement with Merrill Lynch. If, on the date the plan sponsor signed the Merrill Lynch record keeping service agreement, the plan had less than $1 million in assets invested in applicable investments (other than assets invested in money market funds), then the retirement plan may purchase only Class C shares of the Oppenheimer funds. If, on the date the plan sponsor signed the Merrill Lynch record keeping service agreement, the plan had $1 million or more in assets but less than $5 million in assets invested in applicable investments (other than assets invested in money market funds), then the retirement plan may purchase only Class N shares of the Oppenheimer funds. If, on the date the plan sponsor signed the Merrill Lynch record keeping service agreement, the plan had $5 million or more in assets invested in applicable investments (other than assets invested in money market funds), then the retirement plan may purchase only Class A shares of the Oppenheimer funds.

OppenheimerFunds has entered into arrangements with certain record keepers whereby the Transfer Agent compensates the record keeper for its record keeping and account servicing functions that it performs on behalf of the participant accounts in a retirement plan. While such compensation may act to reduce the record keeping fees charged by the retirement plan's record keeper, that compensation arrangement may be terminated at any time, potentially affecting the record keeping fees charged by the retirement plan's record keeper.

Cancellation of Purchase Orders. Cancellation of purchase orders for the Fund's shares (for example, when a purchase check is returned to the Fund unpaid) causes a loss to be incurred when the net asset values of the Fund's shares on the cancellation date is less than on the purchase date. That loss is equal to the amount of the decline in the net asset value per share multiplied by the number of shares in the purchase order. The investor is responsible for that loss. If the investor fails to compensate the Fund for the loss, the Distributor will do so. The Fund may reimburse the Distributor for that amount by redeeming shares from any account registered in that investor's name, or the Fund or the Distributor may seek other redress.

Classes of Shares. Each class of shares of the Fund represents an interest in the same portfolio of investments of the Fund. However, each class has different shareholder privileges and features. The net income attributable to Class B, Class C or Class N shares and the dividends payable on Class B, Class C or Class N shares will be reduced by incremental expenses borne solely by that class. Those expenses include the asset-based sales charges to which Class B, Class C and Class N shares are subject.

The availability of different classes of shares permits an investor to choose the method of purchasing shares that is more appropriate for the investor. That may depend on the amount of the purchase, the length of time the investor expects to hold shares, and other relevant circumstances. Class A shares normally are sold subject to an initial sales charge. While Class B, Class C and Class N shares have no initial sales charge, the purpose of the deferred sales charge and asset-based sales charge on Class B, Class C and Class N shares is the same as that of the initial sales charge on Class A shares – to compensate the Distributor and brokers, dealers and financial institutions that sell shares of the Fund. A salesperson who is entitled to receive compensation from his or her firm for selling Fund shares may receive different levels of compensation for selling one class of shares rather than another.

The Distributor will not accept a purchase order of more than $100,000 for Class B shares or a purchase order of $1 million or more to purchase Class C shares on behalf of a single investor (not including dealer "street name" or omnibus accounts).

Class B, Class C or Class N shares may not be purchased by a new investor directly from the Distributor without the investor designating another registered broker-dealer.

Class A Shares Subject to a Contingent Deferred Sales Charge. Under a special arrangement with the Distributor, for purchases of Class A shares at net asset value, whether or not subject to a contingent deferred sales charge as described in the Prospectus, no sales concessions will be paid to the broker-dealer of record on sales of Class A shares purchased with the redemption proceeds of shares of another mutual fund offered as an investment option in a retirement plan in which Oppenheimer funds are also offered as investment options, if the purchase occurs more than 30 days after the Oppenheimer funds are added as an investment option under that plan. Additionally, that concession will not be paid on Class A share purchases by a retirement plan that are made with the redemption proceeds of Class N shares of an Oppenheimer fund held by the plan for more than 18 months.

|X| Class B Conversion. Under current interpretations of applicable federal income tax law by the Internal Revenue Service, the conversion of Class B shares to Class A shares 72 months after purchase is not treated as a taxable event for the shareholder. If those laws or the IRS interpretation of those laws should change, the automatic conversion feature may be suspended. In that event, no further conversions of Class B shares would occur while that suspension remained in effect. Although Class B shares could then be exchanged for Class A shares on the basis of relative net asset value of the two classes, without the imposition of a sales charge or fee, such exchange could constitute a taxable event for the shareholder, and absent such exchange, Class B shares might continue to be subject to the asset-based sales charge for longer than six years.

|X| Availability of Class N Shares. In addition to the description of the types of retirement plans which may purchase Class N shares contained in the prospectus, Class N shares also are offered to the following:

The sales concession and the advance of the service fee, as described in the Prospectus, will not be paid to dealers of record on sales of Class N shares on:

No sales concessions will be paid to the broker-dealer of record, as described in the Prospectus, on sales of Class N shares purchased with the redemption proceeds of shares of another mutual fund offered as an investment option in a retirement plan in which Oppenheimer funds are also offered as investment options under a special arrangement with the Distributor, if the purchase occurs more than 30 days after the Oppenheimer funds are added as an investment option under that plan.

|X| Allocation of Expenses. The Fund pays expenses related to its daily operations, such as custodian fees, Trustees' fees, transfer agency fees, legal fees and auditing costs. Those expenses are paid out of the Fund's assets and are not paid directly by shareholders. However, those expenses reduce the net asset values of shares, and therefore are indirectly borne by shareholders through their investment.

The methodology for calculating the net asset value, dividends and distributions of the Fund's share classes recognizes two types of expenses. General expenses that do not pertain specifically to any one class are allocated pro rata to the shares of all classes. The allocation is based on the percentage of the Fund's total assets that is represented by the assets of each class, and then equally to each outstanding share within a given class. Such general expenses include management fees, legal, bookkeeping and audit fees, printing and mailing costs of shareholder reports, Prospectuses, Statements of Additional Information and other materials for current shareholders, fees to unaffiliated Trustees, custodian expenses, share issuance costs, organization and start-up costs, interest, taxes and brokerage commissions, and non-recurring expenses, such as litigation costs.

Other expenses that are directly attributable to a particular class are allocated equally to each outstanding share within that class. Examples of such expenses include distribution and service plan (12b-1) fees, transfer and shareholder servicing agent fees and expenses, and shareholder meeting expenses (to the extent that such expenses pertain only to a specific class).

Fund Account Fees. As stated in the Prospectus, a $12 annual "Minimum Balance Fee" is assessed on each Fund account with a share balance valued under $500. The Minimum Balance Fee is automatically deducted from each such Fund account in September.

Listed below are certain cases in which the Fund has elected, in its discretion, not to assess the Fund Account Fees. These exceptions are subject to change:

To access account documents electronically via eDocs Direct, please visit the Service Center on our website at www.oppenheimerfunds.com and click the hyperlink "Sign Up for Electronic Document Delivery" under the heading "I Want To," or call 1.888.470.0862 for instructions.

Determination of Net Asset Values Per Share. The net asset values per share of each class of shares of the Fund are determined as of the close of business of the NYSE on each day that the NYSE is open. The calculation is done by dividing the value of the Fund's net assets attributable to a class by the number of shares of that class that are outstanding. The NYSE normally closes at 4:00 p.m., Eastern time, but may close earlier on some other days (for example, in case of weather emergencies or on days falling before a U.S. holiday). All references to time in this SAI mean "Eastern time." The NYSE's most recent annual announcement (which is subject to change) states that it will close on New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.

Dealers other than NYSE members may conduct trading in certain securities on days on which the NYSE is closed (including weekends and holidays) or after 4:00 p.m. on a regular business day. Because the Fund's net asset values will not be calculated on those days, the Fund's net asset values per share may be significantly affected on such days when shareholders may not purchase or redeem shares. Additionally, trading on many foreign stock exchanges and over-the-counter markets normally is completed before the close of the NYSE.

Changes in the values of securities traded on foreign exchanges or markets as a result of events that occur after the prices of those securities are determined, but before the close of the NYSE, will not be reflected in the Fund's calculation of its net asset values that day unless the Manager determines that the event is likely to effect a material change in the value of the security. The Manager, or an internal valuation committee established by the Manager, as applicable, may establish a valuation, under procedures established by the Board and subject to the approval, ratification and confirmation by the Board at its next ensuing meeting.

n Securities Valuation. The Fund's Board of Trustees has established procedures for the valuation of the Fund's securities. In general those procedures are as follows:

In the case of U.S. Government securities, mortgage-backed securities, corporate bonds and foreign government securities, when last sale information is not generally available, the Manager may use pricing services approved by the Board of Trustees. The pricing service may use "matrix" comparisons to the prices for comparable instruments on the basis of quality, yield and maturity. Other special factors may be involved (such as the tax-exempt status of the interest paid by municipal securities). The Manager will monitor the accuracy of the pricing services. That monitoring may include comparing prices used for portfolio valuation to actual sales prices of selected securities.

The closing prices in the New York foreign exchange market on a particular business day that are provided to the Manager by a bank, dealer or pricing service that the Manager has determined to be reliable are used to value foreign currency, including forward contracts, and to convert to U.S. dollars securities that are denominated in foreign currency.

Puts, calls, and futures are valued at the last sale price on the principal exchange on which they are traded, as determined by a pricing service approved by the Board of Trustees or by the Manager. If there were no sales that day, they shall be valued at the last sale price on the preceding trading day if it is within the spread of the closing "bid" and "asked" prices on the principal exchange on the valuation date. If not, the value shall be the closing bid price on the principal exchange on the valuation date. If the put, call or future is not traded on an exchange, it shall be valued by the mean between "bid" and "asked" prices obtained by the Manager from two active market makers. In certain cases that may be at the "bid" price if no "asked" price is available.

When the Fund writes an option, an amount equal to the premium received is included in the Fund's Statement of Assets and Liabilities as an asset. An equivalent credit is included in the liability section. The credit is adjusted ("marked-to-market") to reflect the current market value of the option. In determining the Fund's gain on investments, if a call or put written by the Fund is exercised, the proceeds are increased by the premium received. If a call or put written by the Fund expires, the Fund has a gain in the amount of the premium. If the Fund enters into a closing purchase transaction, it will have a gain or loss, depending on whether the premium received was more or less than the cost of the closing transaction. If the Fund exercises a put it holds, the amount the Fund receives on its sale of the underlying investment is reduced by the amount of premium paid by the Fund.

The information below supplements the terms and conditions for redeeming shares set forth in the Prospectus.

Checkwriting. When a check is presented to United Missouri Bank (the "Bank") for clearance, the Bank will ask the Fund to redeem a sufficient number of full and fractional shares in the shareholder's account to cover the amount of the check. This enables the shareholder to continue receiving dividends on those shares until the check is presented to the Fund. Checks may not be presented for payment at the offices of the Bank or the Fund's custodian bank. This limitation does not affect the use of checks for the payment of bills or to obtain cash at other banks. The Fund reserves the right to amend, suspend or discontinue offering checkwriting privileges at any time. The Fund will provide you notice whenever it is required to do so by applicable law.

In choosing to take advantage of the Checkwriting privilege, by signing the account application or by completing a Checkwriting card, each individual who signs:

Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of redemption proceeds may be delayed if the Fund's custodian bank is not open for business on a day when the Fund would normally authorize the wire to be made, which is usually the Fund's next regular business day following the redemption. In those circumstances, the wire will not be transmitted until the next bank business day on which the Fund is open for business. No dividends will be paid on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.

Reinvestment Privilege. Within six months of a redemption, a shareholder may reinvest all or part of the redemption proceeds of:

The reinvestment may be made without sales charge only in Class A shares of the Fund or any of the other Oppenheimer funds into which shares of the Fund are exchangeable as described in "How to Exchange Shares" below. Reinvestment will be at the net asset value next computed after the Transfer Agent receives the reinvestment order. The shareholder must ask the Transfer Agent for that privilege at the time of reinvestment. This privilege does not apply to Class C, Class N or Class Y shares. The Fund may amend, suspend or cease offering this reinvestment privilege at any time as to shares redeemed after the date of such amendment, suspension or cessation. This reinvestment privilege does not apply to reinvestment purchases made through automatic investment options.

Any capital gain that was realized when the shares were redeemed is taxable, and reinvestment will not alter any capital gains tax payable on that gain. If there has been a capital loss on the redemption, some or all of the loss may not be tax deductible, depending on the timing and amount of the reinvestment. Under the Internal Revenue Code, if the redemption proceeds of Fund shares on which a sales charge was paid are reinvested in shares of the Fund or another of the Oppenheimer funds within 90 days of payment of the sales charge, the shareholder's basis in the shares of the Fund that were redeemed may not include the amount of the sales charge paid. That would reduce the loss or increase the gain recognized from the redemption. However, in that case the sales charge would be added to the basis of the shares acquired by the reinvestment of the redemption proceeds.

Payments "In Kind." The Prospectus states that payment for shares tendered for redemption is ordinarily made in cash. However, under certain circumstances, the Board of Trustees of the Fund may determine that it would be detrimental to the best interests of the remaining shareholders of the Fund to make payment of a redemption order wholly or partly in cash. In that case, the Fund may pay the redemption proceeds in whole or in part by a distribution "in kind" of liquid securities from the portfolio of the Fund, in lieu of cash.

The Fund has elected to be governed by Rule 18f-1 under the Investment Company Act. Under that rule, the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day period for any one shareholder. If shares are redeemed in kind, the redeeming shareholder might incur brokerage or other costs in selling the securities for cash. The Fund will value securities used to pay redemptions in kind using the same method the Fund uses to value its portfolio securities described above under "Determination of Net Asset Values Per Share." That valuation will be made as of the time the redemption price is determined.

Involuntary Redemptions. The Fund's Board of Trustees has the right to cause the involuntary redemption of the shares held in any account if the aggregate net asset value of those shares is less than $500 or such lesser amount as the Board may fix. The Board will not cause the involuntary redemption of shares in an account if the aggregate net asset value of such shares has fallen below the stated minimum solely as a result of market fluctuations. If the Board exercises this right, it may also fix the requirements for any notice to be given to the shareholders in question (not less than 30 days). The Board may alternatively set requirements for the shareholder to increase the investment, or set other terms and conditions so that the shares would not be involuntarily redeemed.

Transfers of Shares. A transfer of shares to a different registration is not an event that triggers the payment of sales charges. Therefore, shares are not subject to the payment of a contingent deferred sales charge of any class at the time of transfer to the name of another person or entity. It does not matter whether the transfer occurs by absolute assignment, gift or bequest, as long as it does not involve, directly or indirectly, a public sale of the shares. When shares subject to a contingent deferred sales charge are transferred, the transferred shares will remain subject to the contingent deferred sales charge. It will be calculated as if the transferee shareholder had acquired the transferred shares in the same manner and at the same time as the transferring shareholder.

If less than all shares held in an account are transferred, and some but not all shares in the account would be subject to a contingent deferred sales charge if redeemed at the time of transfer, the priorities described in the Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C and Class N contingent deferred sales charge will be followed in determining the order in which shares are transferred.

Distributions From Retirement Plans. Requests for distributions from OppenheimerFunds-sponsored IRAs, SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial plans, 401(k) plans or pension or profit-sharing plans should be addressed to "Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address listed in "How To Sell Shares" in the Prospectus or on the back cover of this SAI. The request must:

Participants (other than self-employed plan sponsors) in OppenheimerFunds-sponsored pension or profit-sharing plans with shares of the Fund held in the name of the plan or its fiduciary may not directly request redemption of their accounts. The plan administrator or fiduciary must sign the request.

Distributions from pension and profit sharing plans are subject to special requirements under the Internal Revenue Code and certain documents (available from the Transfer Agent) must be completed and submitted to the Transfer Agent before the distribution may be made. Distributions from retirement plans are subject to withholding requirements under the Internal Revenue Code, and IRS Form W-4P (available from the Transfer Agent) must be submitted to the Transfer Agent with the distribution request, or the distribution may be delayed. Unless the shareholder has provided the Transfer Agent with a certified tax identification number, the Internal Revenue Code requires that tax be withheld from any distribution even if the shareholder elects not to have tax withheld. The Fund, the Manager, the Distributor, and the Transfer Agent assume no responsibility to determine whether a distribution satisfies the conditions of applicable tax laws and will not be responsible for any tax penalties assessed in connection with a distribution.

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The Distributor is the Fund's agent to repurchase its shares from authorized dealers or brokers on behalf of their customers. Shareholders should contact their broker or dealer to arrange this type of redemption. The repurchase price per share will be the net asset value next computed after the Distributor receives an order placed by the dealer or broker. However, if the Distributor receives a repurchase order from a dealer or broker after the close of the NYSE on a regular business day, it will be processed at that day's net asset value if the order was received by the dealer or broker from its customers prior to the time the NYSE closes. Normally, the NYSE closes at 4:00 p.m., but may do so earlier on some days.

Ordinarily, for accounts redeemed by a broker-dealer under this procedure, payment will be made within three business days after the shares have been redeemed upon the Distributor's receipt of the required redemption documents in proper form. The signature(s) of the registered owners on the redemption documents must be guaranteed as described in the Prospectus.

Automatic Withdrawal and Exchange Plans. Investors can authorize the Transfer Agent to redeem shares (having a value of at least $50) automatically on a monthly, quarterly, semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be redeemed three business days prior to the date requested by the shareholder for receipt of the payment. Automatic withdrawals of up to $1,500 per month may be requested by telephone if payments are to be made by check payable to all shareholders of record. Payments must also be sent to the address of record for the account and the address must not have been changed within the prior 30 days. Required minimum distributions from OppenheimerFunds-sponsored retirement plans may not be arranged on this basis.

Payments are normally made by check, but shareholders having AccountLink privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan payments transferred to the bank account designated on the account application or by signature-guaranteed instructions sent to the Transfer Agent. Shares are normally redeemed pursuant to an Automatic Withdrawal Plan three business days before the payment transmittal date you select in the account application. If a contingent deferred sales charge applies to the redemption, the amount of the check or payment will be reduced accordingly.

The Fund cannot guarantee receipt of a payment on the date requested. The Fund reserves the right to amend, suspend or discontinue offering these plans at any time without prior notice. Because of the sales charge assessed on Class A share purchases, shareholders should not make regular additional Class A share purchases while participating in an Automatic Withdrawal Plan. Class B, Class C and Class N shareholders should not establish automatic withdrawal plans, because of the potential imposition of the contingent deferred sales charge on such withdrawals (except where the Class B, Class C or Class N contingent deferred sales charge is waived as described in Appendix B to this SAI).

By requesting an Automatic Withdrawal or Exchange Plan, the shareholder agrees to the terms and conditions that apply to such plans, as stated below. These provisions may be amended from time to time by the Fund and/or the Distributor. When adopted, any amendments will automatically apply to existing Plans.

|X| Automatic Exchange Plans. Shareholders can authorize the Transfer Agent to automatically exchange a pre-determined amount of shares of the Fund for shares (of the same class) of other Oppenheimer funds that offer the exchange privilege on a monthly, quarterly, semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount that may be exchanged to each other fund account is $50. Instructions should be provided on the OppenheimerFunds application or signature-guaranteed instructions. Exchanges made under these plans are subject to the restrictions that apply to exchanges as set forth in "How to Exchange Shares" in the Prospectus and below in this SAI.

Automatic Withdrawal Plans. Fund shares will be redeemed as necessary to meet withdrawal payments. Shares acquired without a sales charge will be redeemed first. Shares acquired with reinvested dividends and capital gains distributions will be redeemed next, followed by shares acquired with a sales charge, to the extent necessary to make withdrawal payments. Depending upon the amount withdrawn, the investor's principal may be depleted. Payments made under these plans should not be considered as a yield or income on your investment.

The Transfer Agent will administer the investor's Automatic Withdrawal Plan as agent for the shareholder(s) (the "Planholder") who executed the plan authorization and application submitted to the Transfer Agent. Neither the Fund nor the Transfer Agent shall incur any liability to the Planholder for any action taken or not taken by the Transfer Agent in good faith to administer the plan. Share certificates will not be issued for shares of the Fund purchased for and held under the plan, but the Transfer Agent will credit all such shares to the account of the Planholder on the records of the Fund. Any share certificates held by a Planholder may be surrendered unendorsed to the Transfer Agent with the plan application so that the shares represented by the certificate may be held under the plan.

For accounts subject to Automatic Withdrawal Plans, distributions of capital gains must be reinvested in shares of the Fund, which will be done at net asset value without a sales charge. Dividends on shares held in the account may be paid in cash or reinvested.

Shares will be redeemed to make withdrawal payments at the net asset value per share determined on the redemption date. Checks or AccountLink payments representing the proceeds of Plan withdrawals will normally be transmitted three business days prior to the date selected for receipt of the payment, according to the choice specified in writing by the Planholder. Receipt of payment on the date selected cannot be guaranteed.

The amount and the interval of disbursement payments and the address to which checks are to be mailed or AccountLink payments are to be sent may be changed at any time by the Planholder by writing to the Transfer Agent. The Planholder should allow at least two weeks' time after mailing such notification for the requested change to be put in effect. The Planholder may, at any time, instruct the Transfer Agent by written notice to redeem all, or any part of, the shares held under the plan. That notice must be in proper form in accordance with the requirements of the then-current Prospectus of the Fund. In that case, the Transfer Agent will redeem the number of shares requested at the net asset value per share in effect and will mail a check for the proceeds to the Planholder.

The Planholder may terminate a plan at any time. The Fund may also give directions to the Transfer Agent to terminate a plan. The Transfer Agent will also terminate a plan upon its receipt of evidence satisfactory to it that the Planholder has died or is legally incapacitated. Upon termination of a plan by the Transfer Agent or the Fund, shares that have not been redeemed will be held in uncertificated form in the name of the Planholder. The account will continue as a dividend-reinvestment, uncertificated account unless and until proper instructions are received from the Planholder, his or her executor or guardian, or another authorized person.

If the Transfer Agent ceases to act as transfer agent for the Fund, the Planholder will be deemed to have appointed any successor transfer agent to act as agent in administering the plan.

As stated in the Prospectus, shares of a particular class of Oppenheimer funds having more than one class of shares may be exchanged only for shares of the same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a single class without a class designation are deemed "Class A" shares for this purpose. The prospectus of each of the Oppenheimer funds indicates which share class or classes that fund offers and provides information about limitations on the purchase of particular share classes, as applicable for the particular fund. You can also obtain a current list showing which funds offer which classes of shares by calling the Distributor at the telephone number indicated on the front cover of this SAI.

The Fund may amend, suspend or terminate the exchange privilege at any time. Although the Fund may impose those changes at any time, it will provide you with notice of the changes whenever it is required to do so by applicable law. It may be required to provide 60 days' notice prior to materially amending or terminating the exchange privilege, except in extraordinary circumstances.

|X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent deferred sales charge is imposed on exchanges of shares of any class purchased subject to a contingent deferred sales charge, with the following exceptions:

Shareholders owning shares of more than one class must specify which class of shares they wish to exchange.

|X| Telephone Exchange Requests. When exchanging shares by telephone, a shareholder must have an existing account in the fund to which the exchange is to be made. Otherwise, the investors must obtain a prospectus of that fund before the exchange request may be submitted. If all telephone lines are busy (which might occur, for example, during periods of substantial market fluctuations), shareholders might not be able to request exchanges by telephone and would have to submit written exchange requests.

Processing Exchange Requests. Shares to be exchanged are redeemed on the regular business day the Transfer Agent receives an exchange request in proper form (the "Redemption Date"). Normally, shares of the fund to be acquired are purchased on the Redemption Date, but such purchases may be delayed by either fund up to five business days if it determines that it would be disadvantaged by an immediate transfer of the redemption proceeds. The Fund reserves the right, in its discretion, to refuse any exchange request that may disadvantage it. For example, if the receipt of multiple exchange requests might require the disposition of portfolio securities at a time or at a price that might be disadvantageous to the Fund, the Fund may refuse the request.

When you exchange some or all of your shares from one fund to another, any special account features that are available in the new fund (such as an Asset Builder Plan or Automatic Withdrawal Plan) will be switched to the new fund account unless you tell the Transfer Agent not to do so.

In connection with any exchange request, the number of shares exchanged may be less than the number requested if the exchange or the number requested would include shares subject to a restriction cited in the Prospectus or this SAI, or would include shares covered by a share certificate that is not tendered with the request. In those cases, only the shares available for exchange without restriction will be exchanged.

The different Oppenheimer funds available for exchange have different investment objectives, policies and risks. A shareholder should assure that the fund selected is appropriate for his or her investment and should be aware of the tax consequences of an exchange. For federal income tax purposes, an exchange transaction is treated as a redemption of shares of one fund and a purchase of shares of another. "Reinvestment Privilege," above, discusses some of the tax consequences of reinvestment of redemption proceeds in such cases. The Fund, the Distributor, and the Transfer Agent are unable to provide investment, tax or legal advice to a shareholder in connection with an exchange request or any other investment transaction.

Dividends and Distributions. The Fund has no fixed dividend rate and there can be no assurance as to the payment of any dividends or the realization of any capital gains. The dividends and distributions paid by a class of shares will vary from time to time depending on market conditions, the composition of the Fund's portfolio, and expenses borne by the Fund or borne separately by a class. Dividends are calculated in the same manner, at the same time, and on the same day for each class of shares. However, dividends on Class B, Class C and Class N shares are expected to be lower than dividends on Class A and Class Y shares. That is because of the effect of the asset-based sales charge on Class B, Class C and Class N shares. Those dividends will also differ in amount as a consequence of any difference in the net asset values of the different classes of shares.

If a dividend check or a check representing an automatic withdrawal payment is returned to the Transfer Agent by the Postal Service as undeliverable, it will be reinvested in shares of the Fund. Returned checks for the proceeds of other redemptions will be invested in shares of Oppenheimer Money Market Fund, Inc. Reinvestment will be made as promptly as possible after the return of such checks to the Transfer Agent. Unclaimed accounts may be subject to state escheatment laws, and the Fund and the Transfer Agent will not be liable to shareholders or their representatives for compliance with those laws in good faith.

Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares. The federal tax treatment of the Fund's dividends and capital gains distributions is briefly highlighted in the Prospectus. The following is only a summary of certain additional tax considerations generally affecting the Fund and its shareholders.

The tax discussion in the Prospectus and this SAI is based on tax law in effect on the date of the Prospectus and this SAI. Those laws and regulations may be changed by legislative, judicial, or administrative action, sometimes with retroactive effect. State and local tax treatment of ordinary income dividends and capital gain dividends from regulated investment companies may differ from the treatment under the Internal Revenue Code described below. Potential purchasers of shares of the Fund are urged to consult their tax advisors with specific reference to their own tax circumstances as well as the consequences of federal, state and local tax rules affecting an investment in the Fund.

Qualification as a Regulated Investment Company. The Fund has elected to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended. As a regulated investment company, the Fund is not subject to federal income tax on the portion of its net investment income (that is, taxable interest, dividends, and other taxable ordinary income, net of expenses) and capital gain net income (that is, the excess of net long-term capital gains over net short-term capital losses) that it distributes to shareholders. That qualification enables the Fund to "pass through" its income and realized capital gains to shareholders without having to pay tax on them. This avoids a "double tax" on that income and capital gains, since shareholders normally will be taxed on the dividends and capital gains they receive from the Fund (unless their Fund shares are held in a retirement account or the shareholder is otherwise exempt from tax).

The Internal Revenue Code contains a number of complex tests relating to qualification that the Fund might not meet in a particular year. If it did not qualify as a regulated investment company, the Fund would be treated for tax purposes as an ordinary corporation and would receive no tax deduction for payments made to shareholders.

To qualify as a regulated investment company, the Fund must distribute at least 90% of its investment company taxable income (in brief, net investment income and the excess of net short-term capital gain over net long-term capital loss) for the taxable year. The Fund must also satisfy certain other requirements of the Internal Revenue Code, some of which are described below. Distributions by the Fund made during the taxable year or, under specified circumstances, within 12 months after the close of the taxable year, will be considered distributions of income and gains for the taxable year and will therefore count toward satisfaction of the above-mentioned requirement.

To qualify as a regulated investment company, the Fund must derive at least 90% of its gross income from dividends, interest, certain payments with respect to securities loans, gains from the sale or other disposition of stock or securities or foreign currencies (to the extent such currency gains are directly related to the regulated investment company's principal business of investing in stock or securities) and certain other income including net income derived from an interest in a qualified publicly traded partnership.

In addition to satisfying the requirements described above, the Fund must satisfy an asset diversification test in order to qualify as a regulated investment company. Under that test, at the close of each quarter of the Fund's taxable year, at least 50% of the value of the Fund's assets must consist of cash and cash items (including receivables), U.S. Government securities, securities of other regulated investment companies, and securities of other issuers. As to each of those issuers, the Fund must not have invested more than 5% of the value of the Fund's total assets in securities of each such issuer and the Fund must not hold more than 10% of the outstanding voting securities of each such issuer. No more than 25% of the value of its total assets may be invested in the securities of any one issuer (other than U.S. Government securities and securities of other regulated investment companies), or in two or more issuers which the Fund controls and which are engaged in the same or similar trades or businesses or in the securities of one or more qualified publicly traded partnerships. For purposes of this test, obligations issued or guaranteed by certain agencies or instrumentalities of the U.S. Government are treated as U.S. Government securities.

Excise Tax on Regulated Investment Companies. Under the Internal Revenue Code, by December 31 each year, the Fund must distribute 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 the current year. If it does not, the Fund must pay an excise tax on the amounts not distributed. It is presently anticipated that the Fund will meet those requirements. To meet this requirement, in certain circumstances the Fund might be required to liquidate portfolio investments to make sufficient distributions to avoid excise tax liability. However, the Board of Trustees and the Manager might determine in a particular year that it would be in the best interests of shareholders for the Fund not to make such distributions at the required levels and to pay the excise tax on the undistributed amounts. That would reduce the amount of income or capital gains available for distribution to shareholders.

Taxation of Fund Distributions. The Fund anticipates distributing substantially all of its investment company taxable income for each taxable year. Those distributions will be taxable to shareholders as ordinary income and treated as dividends for federal income tax purposes.

Special provisions of the Internal Revenue Code govern the eligibility of the Fund's dividends for the dividends-received deduction for corporate shareholders. Long-term capital gains distributions are not eligible for the deduction. The amount of dividends paid by the Fund that may qualify for the deduction is limited to the aggregate amount of qualifying dividends that the Fund derives from portfolio investments that the Fund has held for a minimum period, usually 46 days. A corporate shareholder will not be eligible for the deduction on dividends paid on Fund shares held for 45 days or less. To the extent the Fund's dividends are derived from gross income from option premiums, interest income or short-term gains from the sale of securities or dividends from foreign corporations, those dividends will not qualify for the deduction.

     The Fund may either retain or distribute to shareholders its net capital gain for each taxable year. The Fund currently intends to distribute any such amounts. If net long term capital gains are distributed and designated as a capital gain distribution, it will be taxable to shareholders as a long-term capital gain and will be properly identified in reports sent to shareholders in January of each year. Such treatment will apply no matter how long the shareholder has held his or her shares or whether that gain was recognized by the Fund before the shareholder acquired his or her shares.

     If the Fund elects to retain its net capital gain, the Fund will be subject to tax on it at the 35% corporate tax rate. If the Fund elects to retain its net capital gain, the Fund will provide to shareholders of record on the last day of its taxable year information regarding their pro rata share of the gain and tax paid. As a result, each shareholder will be required to report his or her pro rata share of such gain on their tax return as long-term capital gain, will receive a refundable tax credit for his/her pro rata share of tax paid by the Fund on the gain, and will increase the tax basis for his/her shares by an amount equal to the deemed distribution less the tax credit.

     Investment income that may be received by the Fund from sources within foreign countries may be subject to foreign taxes withheld at the source. The United States has entered into tax treaties with many foreign countries which entitle the Fund to a reduced rate of, or exemption from, taxes on such income. The Fund may be subject to U.S. Federal income tax, and an interest charge, on certain distributions or gains from the sale of shares of a foreign company considered to be a PFIC, even if those amounts are paid out as dividends to shareholders. To avoid imposition of the interest charge, the Fund may elect to "mark to market" all PFIC shares that it holds at the end of each taxable year. In that case, any increase or decrease in the value of those shares would be recognized as ordinary income or as ordinary loss (but only to the extent of previously recognized "mark-to-market" gains).

     Distributions by the Fund that do not constitute ordinary income dividends or capital gain distributions will be treated as a return of capital to the extent of the shareholder's tax basis in their shares. Any excess will be treated as gain from the sale of those shares, as discussed below. Shareholders will be advised annually as to the U.S. federal income tax consequences of distributions made (or deemed made) during the year. 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.

Distributions by the Fund will be treated in the manner described above regardless of whether the distributions are paid in cash or reinvested in additional shares of the Fund (or of another fund). Shareholders receiving a distribution in the form of additional shares will be treated as receiving a distribution in an amount equal to the fair market value of the shares received, determined as of the reinvestment date.

The Fund will be required in certain cases to withhold 28% of ordinary income dividends, capital gains distributions and the proceeds of the redemption of shares, paid to any shareholder (1) who has failed to provide a correct taxpayer identification number or to properly certify that number when required, (2) who is subject to backup withholding for failure to report the receipt of interest or dividend income properly, or (3) who has failed to certify to the Fund that the shareholder is not subject to backup withholding or is an "exempt recipient" (such as a corporation). Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income and any tax withheld is identified in reports mailed to shareholders in January of each year with a copy sent to the IRS.

Tax Effects of Redemptions of Shares. If a shareholder redeems all or a portion of his/her shares, the shareholder will recognize a gain or loss on the redeemed shares in an amount equal to the difference between the proceeds of the redeemed shares and the shareholder's adjusted tax basis in the shares. All or a portion of any loss recognized in that manner may be disallowed if the shareholder purchases other shares of the Fund within 30 days before or after the redemption.

In general, any gain or loss arising from the redemption of shares of the Fund will be considered capital gain or loss, if the shares were held as a capital asset. It will be long-term capital gain or loss if the shares were held for more than one year. However, any capital loss arising from the redemption of shares held for six months or less will be treated as a long-term capital loss to the extent of the amount of capital gain dividends received on those shares. Special holding period rules under the Internal Revenue Code apply in this case to determine the holding period of shares and there are limits on the deductibility of capital losses in any year.

Foreign Shareholders. Under U.S. tax law, taxation of a shareholder who is a foreign person (to include, but not limited to, a nonresident alien individual, a foreign trust, a foreign estate, a foreign corporation, or a foreign partnership) primarily depends on whether the foreign person's income from the Fund is effectively connected with the conduct of a U.S. trade or business. Typically, ordinary income dividends paid from a mutual fund are not considered "effectively connected" income.

Ordinary income dividends that are paid by the Fund (and are deemed not "effectively connected income") to foreign persons will be subject to a U.S. tax withheld by the Fund at a rate of 30%, provided the Fund obtains a properly completed and signed Certificate of Foreign Status. The tax rate may be reduced if the foreign person's country of residence has a tax treaty with the U.S. allowing for a reduced tax rate on ordinary income dividends paid by the Fund. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income and any tax withheld is identified in reports mailed to shareholders in March of each year with a copy sent to the IRS.

If the ordinary income dividends from the Fund are effectively connected with the conduct of a U.S. trade or business, then the foreign person may claim an exemption from the U.S. tax described above provided the Fund obtains a properly completed and signed Certificate of Foreign Status. If the foreign person fails to provide a certification of his/her foreign status, the Fund will be required to withhold U.S. tax at a rate of 28% on ordinary income dividends, capital gains distributions and the proceeds of the redemption of shares, paid to any foreign person. Any tax withheld by the Fund is remitted by the Fund to the U.S. Treasury and all income and any tax withheld is identified in reports mailed to shareholders in January of each year with a copy sent to the IRS.

The tax consequences to foreign persons entitled to claim the benefits of an applicable tax treaty may be different from those described herein. Foreign shareholders are urged to consult their own tax advisors or the U.S. Internal Revenue Service with respect to the particular tax consequences to them of an investment in the Fund, including the applicability of the U.S. withholding taxes described above.

Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to reinvest all dividends and/or capital gains distributions in shares of the same class of any of the other Oppenheimer funds into which you may exchange shares. Reinvestment will be made without sales charge at the net asset value per share in effect at the close of business on the payable date of the dividend or distribution. To elect this option, the shareholder must notify the Transfer Agent or his or her financial intermediary and must have an existing account in the fund selected for reinvestment. Otherwise the shareholder first must obtain a prospectus for that fund and an application from the Distributor to establish an account. Dividends and/or distributions from shares of certain other Oppenheimer funds may be invested in shares of this Fund on the same basis.

The Distributor. The Fund's shares are sold through dealers, brokers and other financial institutions that have a sales agreement with OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts as the Fund's Distributor. The Distributor also distributes shares of the other Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of the Manager.

The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is a division of the Manager. It is responsible for maintaining the Fund's shareholder registry and shareholder accounting records, and for paying dividends and distributions to shareholders. It also handles shareholder servicing and administrative functions. It serves as the Transfer Agent for an annual per account fee. It also acts as shareholder servicing agent for the other Oppenheimer funds. Shareholders should direct inquiries about their accounts to the Transfer Agent at the address and toll-free numbers shown on the back cover.

The Custodian. JPMorgan Chase Bank is the custodian of the Fund's assets. The custodian's responsibilities include safeguarding and controlling the Fund's portfolio securities and handling the delivery of such securities to and from the Fund. It is the practice of the Fund to deal with the custodian in a manner uninfluenced by any banking relationship the custodian may have with the Manager and its affiliates. The Fund's cash balances with the custodian in excess of $100,000 are not protected by federal deposit insurance. Those uninsured balances at times may be substantial.

Independent Registered Public Accounting Firm. At a meeting held on August 20, 2008, the Board of Trustees of the Fund appointed KPMG LLP as the independent registered public accounting firm to the Fund for fiscal year 2009, replacing the firm of Deloitte & Touche LLP, effective at the conclusion of the fiscal 2008 audit. During the two most recent fiscal years the audit reports of Deloitte & Touche LLP contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. Further, there were no disagreements between the Fund and Deloitte & Touche LLP on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of Deloitte & Touche LLP would have caused it to make reference to the disagreements in connection with its reports.

KPMG LLP serves as the independent registered public accounting firm for the Fund. KPMG LLP audits the Fund's financial statements and performs other related audit and tax services. KPMG LLP also acts as the independent registered public accounting firm for the Manager and certain other funds advised by the Manager and its affiliates. Audit and non-audit services provided by KPMG LLP to the Fund must be pre-approved by the Audit Committee.\

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

STATEMENT OF INVESTMENTS September 30, 2008


	Principal
	Amount		Value

Asset-Backed Securities—1.8%
Ace Securities Corp. Home Equity Loan Trust, Asset-Backed Pass-Through Certificates, Series 2005-HE7, Cl. A2B, 3.387%, 11/25/35¹	$	416,438	$	413,723
AmeriCredit Prime Automobile Receivables Trust 2007-1, Automobile Receivables Nts., Series 2007-1, Cl. D, 5.62%, 9/8/14²		3,354,000		2,347,800
Argent Securities Trust 2004-W8, Asset-Backed Pass-Through Certificates, Series 2004-W8, Cl. A2, 3.687%, 5/25/34¹		4,482,726		3,953,183
Argent Securities Trust 2006-M3, Asset-Backed Pass-Through Certificates, Series 2006-M3, Cl. A2B, 3.307%, 9/25/36¹		2,190,000		1,982,161
Argent Securities Trust 2006-W5, Asset-Backed Pass-Through Certificates, Series 2006-W5, Cl. A2B, 3.307%, 5/26/36¹		2,764,473		2,677,992
Capital Auto Receivables Asset Trust 2006-1, Automobile Asset-Backed Securities, Series 2006-1, Cl. A3, 5.03%, 10/15/09		1,154,834		1,155,203
Capital Auto Receivables Asset Trust 2007-1, Automobile Asset-Backed Securities, Series 2007-1, Cl. B, 5.15%, 9/17/12		665,000		582,575
Capital Auto Receivables Asset Trust 2008-2, Automobile Asset-Backed Securities, Series 2008-2, Cl. A2A, 3.78%, 3/15/11		7,480,000		7,426,422
Capital One Auto Finance Trust, Automobile Receivables, Series 2006-C, Cl. A4, 2.518%, 5/15/13¹		3,320,000		2,774,819
Capital One Prime Auto Receivables Trust, Automobile Asset-Backed Certificates, Series 2005-1, Cl. A4, 2.508%, 4/15/11¹		17,888,565		17,810,042
Centex Home Equity Loan Trust 2006-A, Asset-Backed Certificates, Series 2006-A, Cl. AV2, 3.307%, 5/16/36¹		2,481,563		2,431,532
CitiFinancial Mortgage Securities, Inc., Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2004-1, Cl. AF2, 2.645%, 4/25/34		1,331,193		1,285,637
Citigroup Mortgage Loan Trust, Inc. 2006-WFH3, Asset-Backed Pass-Through Certificates, Series 2006-WFH3, Cl. A2, 3.307%, 10/31/36¹		2,620,000		2,515,704
Citigroup Mortgage Loan Trust, Inc. 2006-WFH4, Asset-Backed Pass-Through Certificates, Series 2006-W FH4, Cl. AS, 3.307%, 11/25/36¹		4,777,000		4,478,917
Countrywide Home Loans, Asset-Backed Certificates:
Series 2005-16, Cl. 2AF2, 5.382%, 5/25/36¹		2,010,000		1,834,967
Series 2005-17, Cl. 1AF1, 3.407%, 5/25/36¹		16,407		16,310
Series 2005-17, Cl. 1AF2, 5.363%, 5/25/36¹		1,210,000		1,107,133
CWABS, Inc. Asset-Backed Certificates Trust, Asset-Backed Certificates, Series 2006-25, Cl. 2A2, 3.327%, 12/5/29¹		4,054,000		3,440,774
CWHEQ Revolving Home Equity Loan Trust, Asset-Backed Certificates:
Series 2005-G, Cl.2A, 2.718%, 12/15/35¹		705,542		296,590
Series 2006-H, Cl. 2A1A, 2.638%, 11/15/36¹		257,324		80,547
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates, Series 2008-B, Cl. A2A, 3.81%, 6/8/11		7,480,000		7,414,168
DLJ Ltd., Collateralized Bond Obligations, Series1A, Cl. C2, 11.96%, 4/15/11^2,3,4		15,000,000		150
DVI Receivables Corp., Equipment Asset-Backed Certificates, Series 2001-2, Cl. C, 4.405%, 11/11/09^2,4		3,083,887		61,678

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Asset-Backed Securities Continued
Embarcadero Aircraft Securitization Trust, Airplane Receivable Nts., Series 2000-A, Cl. B, 8/15/25^2,3,4	$	2,730,094	$	2,559
First Franklin Mortgage Loan Trust 2005-FF10, Mtg. Pass-Through Certificates, Series 2005-FF10, Cl. A3, 3.417%, 11/25/35¹		1,812,556		1,803,882
First Franklin Mortgage Loan Trust 2006-FF10, Mtg. Pass-Through Certificates, Series 2006-FF10, Cl. A3, 3.297%, 7/25/36¹		3,790,000		3,609,859
First Franklin Mortgage Loan Trust 2006-FF9, Mtg. Pass-Through Certificates, Series 2006-FF9, Cl. 2A2, 3.317%, 7/7/36¹		1,940,000		1,827,600
First Franklin Mortgage Loan Trust 2006-FFA, Mtg. Pass-Through Certificates, Series 2006-FFA, Cl. A3, 3.327%, 9/25/36¹		2,743,915		847,181
Goldman Sachs Asset Management CBO Ltd., Sub. Collateralized Bond Obligations, Series 1A, Cl. D, 6/13/11^2,3,4		6,523,018		—
Green Tree Financial Corp., Manufactured Housing Contract Sr. Sub. Pass-Through Certificates, Series 1997-5, Cl. M1, 6.95%, 5/15/29		4,814,000		3,530,192
Greenpoint Credit Manufactured Housing Contract Trust, Pass-Through Certificates, Series 2000-3, Cl. IM1, 9.01%, 6/20/31		3,819,237		846,375
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts., Series 2007-3, Cl. A3, 2.838%, 6/15/12¹		20,870,000		20,551,403
Home Equity Mortgage Trust 2005-1, Mtg. Pass-Through Certificates, Series 2005-1, Cl. M6, 5.363%, 6/1/35		2,662,000		1,233,741
Home Equity Mortgage Trust 2006-5, Mtg. Pass-Through Certificates, Series 2006-5, Cl. A1, 5.50%, 1/25/37		1,148,723		275,202
HSBC Home Equity Loan Trust 2005-3, Closed-End Home Equity Loan Asset-Backed Nts., Series 2005-3, Cl. A1, 2.731%, 1/20/35¹		1,542,191		1,305,447
HSBC Home Equity Loan Trust 2006-4, Closed-End Home Equity Loan Asset-Backed Certificates, Series 2006-4, Cl. A2V, 3.298%, 3/20/36¹		1,520,000		1,399,756
Hyundai Auto Receivables Trust 2008-A, Asset-Backed Automobile Securities, Series 2008-A, Cl. A2, 4.16%, 5/16/11		9,775,000		9,694,586
Ice Em CLO, Collateralized Loan Obligations:
Series 2007-1A, Cl. B, 4.795%, 8/15/22^1,2		20,040,000		14,074,092
Series 2007-1A, Cl. C, 6.095%, 8/15/22^1,2		16,980,000		10,390,062
Series 2007-1A, Cl. D, 8.095%, 8/15/22^1,2		16,980,000		9,525,780
Lehman XS Trust, Mtg. Pass-Through Certificates:
Series 2005-2, Cl. 2A1B, 5.18%, 8/25/35¹		691,860		688,300
Series 2005-4, Cl. 2A1B, 5.17%, 10/25/35		750,146		749,186
Madison Avenue CDO Ltd., Collateralized Debt Obligations, Series 2A, Cl. C1, 0.227%, 3/24/14^1,2		3,841,283		153,651
Mastr Asset-Backed Securities Trust 2006-WMC3, Mtg. Pass-Through Certificates, Series 2006-WMC3, Cl. A3, 3.307%, 8/25/36¹		5,580,000		3,082,555
NC Finance Trust, CMO Pass-Through Certificates, Series 1999-I, Cl. ECFD, 6.368%, 1/25/29^1,2		4,475,119		570,578
Option One Mortgage Loan Trust, Asset-Backed Certificates, Series 2006-2, Cl. 2A2, 3.307%, 7/1/36¹		5,945,074		5,618,008


	Principal
	Amount		Value

Asset-Backed Securities Continued
Popular ABS Mortgage Pass-Through Trust 2005-6, Mtg. Pass-Through Certificates, Series 2005-6, Cl. A3, 5.68%, 1/25/36¹	$	1,900,000	$	1,798,724
RAMP Series 2006-RS4 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2006-RS4, Cl. A1, 3.287%, 7/25/36¹		207,528		206,145
RASC Series 2006-KS7 Trust, Home Equity Mtg. Asset-Backed Pass-Through Certificates, Series 2006-KS7, Cl. A2, 3.307%, 9/25/36¹		6,512,004		6,211,990
Securitized Asset-Backed Receivables LLC Trust 2007-BR2, Asset-Backed Securities, Series 2007-BR2, Cl. A2, 3.437%, 2/25/37¹		2,107,558		1,212,910
SLM Student Loan Trust, Student Loan Receivables, Series 2005-B, Cl. B, 3.219%, 6/15/39¹		6,323,000		3,778,028
Specialty Underwriting & Residential Finance Trust, Home Equity Asset-Backed Obligations, Series 2005-BC3, Cl. A2B, 3.457%, 6/25/36¹		784,777		781,620
Start CLO Ltd., Asset-Backed Credit Linked Securities, Series 2006-3A, Cl. F, 19.815%, 6/7/11^1,2		5,430,000		4,394,499
Taganka Car Loan Finance plc, Automobile Asset-Backed Certificates, Series 2006-1A, Cl. C, 5.787%, 11/14/13^1,2		2,715,000		2,596,898
Terwin Mortgage Trust, Home Equity Asset-Backed Securities, Series 2006-4SL, Cl. A1, 4.50%, 5/1/37		570,630		212,777
Wells Fargo Home Equity Asset-Backed Securities 2006-2 Trust, Home Equity Asset-Backed Certificates, Series 2006-2, Cl. A2, 3.307%, 7/25/36¹		3,770,000		3,713,544

Total Asset-Backed Securities (Cost $243,513,798)				182,775,157

Mortgage-Backed Obligations—29.5%
Government Agency—15.0%
FHLMC/FNMA/Sponsored—14.6%
Federal Home Loan Mortgage Corp.:
4.50%, 7/15/19		129,560		127,129
4.50%, 5/15/19⁵		4,695,617		4,623,590
5%, 8/15/33-12/15/34		7,982,478		7,801,927
6%, 4/15/17-3/15/33		21,978,571		22,414,513
6.50%, 4/15/18-8/15/32		11,309,652		11,716,145
7%, 8/15/21-12/1/23		4,074,341		4,289,787
7%, 10/1/31⁵		1,724,999		1,814,021
7.50%, 2/15/32-4/25/36		7,029,080		7,631,216
8.50%, 8/15/31		442,696		491,244
10%, 5/15/20		161,294		186,303
10.50%, 6/14/20		173,277		203,558
11.50%, 11/14/16		80,932		87,208
12%, 6/14/10-6/15/17		368,295		399,826
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates:
Series 1360, Cl. PZ, 7.50%, 9/15/22		6,817,768		7,294,269
Series 151, Cl. F, 9%, 5/15/21		13,647		13,642
Series 1562, Cl. Z, 7%, 7/15/23		341,559		354,395

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

FHLMC/FNMA/Sponsored Continued
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment Conduit Multiclass Pass-Through Certificates: Continued
Series 1590, Cl. IA, 3.55%, 10/15/23¹	$	6,166,400	$	6,135,506
Series 1674, Cl. Z, 6.75%, 2/15/24		305,482		319,990
Series 2002-66, Cl. FG, 4.207%, 9/25/32¹		6,866,726		6,932,339
Series 2002-84, Cl. FB, 4.207%, 12/25/32¹		401,007		398,710
Series 2003-11, Cl. FA, 4.207%, 9/25/32¹		547,219		545,851
Series 2006-11, Cl. PS, 12.808%, 3/25/36¹		2,791,797		2,926,083
Series 2034, Cl. Z, 6.50%, 2/15/28		59,231		61,538
Series 2043, Cl. ZP, 6.50%, 4/15/28		4,178,080		4,317,482
Series 2053, Cl. Z, 6.50%, 4/15/28		58,435		60,508
Series 2055, Cl. ZM, 6.50%, 5/15/28		1,448,347		1,492,335
Series 2080, Cl. Z, 6.50%, 8/15/28		2,427,183		2,513,219
Series 2173, Cl. Z, 6.50%, 7/15/29		10,095,589		10,303,023
Series 2326, Cl. ZP, 6.50%, 6/15/31		967,667		996,992
Series 2344, Cl. FP, 3.438%, 8/15/31¹		2,276,259		2,277,731
Series 2368, Cl. TG, 6%, 10/15/16		1,114,931		1,152,277
Series 2410, Cl. PF, 3.468%, 2/15/32^1,5		10,573,043		10,587,380
Series 2412, Cl. GF, 3.438%, 2/15/32¹		5,086,248		5,092,254
Series 2427, Cl. ZM, 6.50%, 3/15/32		4,558,421		4,702,240
Series 2435, Cl. EQ, 6%, 5/15/31		4,861,249		4,936,024
Series 2451, Cl. FD, 3.488%, 3/15/32¹		1,708,005		1,709,780
Series 2453, Cl. BD, 6%, 5/15/17		141,778		146,524
Series 2461, Cl. PZ, 6.50%, 6/15/32		296,908		310,263
Series 2464, Cl. FI, 3.488%, 2/15/32¹		1,880,377		1,883,911
Series 2470, Cl. AF, 3.488%, 3/15/32¹		2,874,953		2,921,314
Series 2470, Cl. LF, 3.488%, 2/15/32¹		1,924,807		1,925,529
Series 2471, Cl. FD, 3.488%, 3/15/32¹		3,490,327		3,473,708
Series 2475, Cl. FB, 3.488%, 2/15/32¹		2,718,654		2,726,373
Series 2500, Cl. FD, 2.988%, 3/15/32¹		604,187		598,263
Series 2517, Cl. GF, 3.488%, 2/15/32¹		1,572,710		1,565,666
Series 2526, Cl. FE, 2.888%, 6/15/29¹		785,430		777,259
Series 2551, Cl. FD, 2.888%, 1/15/33¹		600,402		593,446
Series 2641, Cl. CE, 3.50%, 9/15/25		2,269,186		2,258,029
Series 2676, Cl. KY, 5%, 9/15/23		2,516,000		2,421,576
Series 2676, Cl. TF, 3.088%, 1/15/32¹		3,589,639		3,544,129
Series 2727, Cl. UA, 3.50%, 10/15/22		711,982		711,539
Series 2736, Cl. DB, 3.30%, 11/15/26		10,690,002		10,591,567
Series 2777, Cl. PJ, 4%, 5/15/24		817,232		817,499
Series 2934, Cl. NA, 5%, 4/15/24		3,079,948		3,093,057
Series 2936, Cl. PE, 5%, 2/1/35		2,807,000		2,613,462
Series 2939, Cl. PE, 5%, 2/15/35		11,489,000		10,696,300
Series 3025, Cl. SJ, 15.629%, 8/15/35¹		3,010,658		3,182,301
Series 3035, Cl. DM, 5.50%, 11/15/25		7,327,599		7,407,518
Series 3057, Cl. LG, 5%, 10/15/35		5,000,000		4,644,343
Series 3094, Cl. HS, 15.263%, 6/15/34¹		1,614,182		1,671,607
Series 3105, Cl. BD, 5.50%, 1/15/26		8,122,000		7,805,698
Series 3138, Cl. PA, 5.50%, 2/15/27		17,375,351		17,690,787


	Principal
	Amount		Value

FHLMC/FNMA/Sponsored Continued
Federal Home Loan Mortgage Corp., Interest-Only Stripped Mtg.-Backed Security:
Series 177, Cl. IO, 11.526%, 7/1/26⁶	$	2,380,561	$	528,256
Series 183, Cl. IO, 7.778%, 4/1/27⁶		941,097		184,588
Series 192, Cl. IO, 11.023%, 2/1/28⁶		428,737		90,029
Series 200, Cl. IO, 10.799%, 1/1/29⁶		526,484		117,989
Series 2003-13, Cl. IO, 11.514%, 3/25/33⁶		4,824,803		1,159,681
Series 2003-26, Cl. DI, 11.752%, 4/25/33⁶		3,153,305		674,153
Series 2003-26, Cl. IK, 15.079%, 4/25/33⁶		552,608		118,144
Series 203, Cl. IO, 1.866%, 6/1/29⁶		1,791,781		412,451
Series 204, Cl. IO, (8.535)%, 5/1/29⁶		149,052		32,842
Series 205, Cl. IO, 8.418%, 9/1/29⁶		2,315,328		584,651
Series 206, Cl. IO, (13.169)%, 12/1/29⁶		744,280		181,603
Series 207, Cl. IO, (18.708)%, 4/1/30⁶		849,192		211,556
Series 2074, Cl. S, 25.837%, 7/17/28⁶		545,861		73,563
Series 2079, Cl. S, 30.446%, 7/17/28⁶		872,320		121,703
Series 208, Cl. IO, (6.412)%, 6/1/30⁶		1,536,348		371,560
Series 212, Cl. IO, 1.558%, 5/1/31⁶		3,465,926		740,322
Series 214, Cl. IO, (11.709)%, 6/1/31⁶		822,466		203,038
Series 216, Cl. IO, 10.831%, 12/1/31⁶		8,363,377		2,144,975
Series 224, Cl. IO, 8.162%, 3/1/33⁶		4,553,503		1,022,569
Series 243, Cl. 6, 8.759%, 12/15/32⁶		2,749,007		625,541
Series 2526, Cl. SE, 22.945%, 6/15/29⁶		1,419,272		109,312
Series 2802, Cl. AS, 65.571%, 4/15/33⁶		4,013,610		302,304
Series 2819, Cl. S, 25.569%, 6/15/34⁶		12,159,683		1,085,302
Series 2920, Cl. S, 38.684%, 1/15/35⁶		7,314,972		617,722
Series 3000, Cl. SE, 65.783%, 7/15/25⁶		9,396,682		623,418
Series 3004, Cl. SB, 99.644%, 7/15/35⁶		13,973,720		970,861
Series 3110, Cl. SL, 86.931%, 2/15/26⁶		2,684,185		178,811
Federal Home Loan Mortgage Corp., Principal-Only Stripped Mtg.-Backed Security, Series 192, Cl. PO, 6.572%, 2/1/28⁷		428,737		350,825
Federal National Mortgage Assn.:
4.50%, 4/25/18-8/1/20		45,088,197		44,376,763
4.50%, 5/25/18⁵		8,273,429		8,169,432
4.50%, 10/1/21⁸		21,130,000		20,595,157
5%, 12/25/17-9/25/35		186,430,096		184,252,717
5%, 3/1/18-9/25/33⁵		53,559,262		52,574,068
5%, 12/1/17-8/25/34⁸		34,852,372		34,229,378
5.296%, 10/1/36		60,122,803		60,897,827
5.50%, 1/25/22-9/1/36		258,925,173		259,051,969
5.50%, 4/25/33-8/25/33⁵		42,796,181		42,810,163
5.50%, 10/1/23-10/1/38⁸		41,300,000		41,342,989
6%, 7/25/24-8/1/34		60,658,655		61,818,537
6%, 11/25/32-10/25/33⁵		34,997,918		35,636,343
6%, 10/1/23-10/1/36⁸		50,688,000		51,468,189
6.50%, 5/25/17-1/1/34		23,708,755		24,568,251
6.50%, 6/25/17⁵		5,986,114		6,224,843
6.50%, 10/1/38⁸		34,808,000		35,694,525

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

FHLMC/FNMA/Sponsored Continued
Federal National Mortgage Assn.: Continued
7%, 11/1/17-9/25/34	$	32,791,836	$	34,541,706
7.50%, 6/25/10-1/1/33		11,674,751		12,645,514
8.50%, 7/1/32		82,253		90,680
9.50%, 4/25/20-4/8/21		94,102		104,829
11%, 11/8/15-2/25/26		315,983		370,665
13%, 6/25/15		74,181		88,009
15%, 5/9/13		202,013		232,634
Federal National Mortgage Assn. Grantor Trust:
Interest-Only Stripped Mtg.-Backed Security, Trust 2001-T10, Cl. IO, 33.369%, 12/25/41⁶		127,197,161		1,191,723
Interest-Only Stripped Mtg.-Backed Security, Trust 2001-T3, Cl. IO, 38.858%, 11/25/40⁶		15,000,582		202,487
Interest-Only Stripped Mtg.-Backed Security, Trust 2001-T4, Cl. IO, 27.009%, 7/25/41⁶		24,085,463		391,280
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1996-35, Cl. Z, 7%, 7/25/26		325,718		339,874
Trust 1997-45, Cl. CD, 8%, 7/18/27		1,793,394		1,896,821
Trust 1998-58, Cl. PC, 6.50%, 10/25/28		2,138,813		2,205,330
Trust 1999-14, Cl. MB, 6.50%, 4/25/29		95,016		98,284
Trust 1999-54, Cl. LH, 6.50%, 11/25/29		3,779,356		3,849,573
Trust 2001-19, Cl. Z, 6%, 5/1/31		2,283,766		2,319,815
Trust 2001-44, Cl. QC, 6%, 9/25/16		303,427		313,100
Trust 2001-51, Cl. OD, 6.50%, 10/25/31		407,032		422,656
Trust 2001-65, Cl. F, 3.807%, 11/25/31¹		3,902,276		3,887,312
Trust 2001-69, Cl. PF, 4.207%, 12/25/31¹		4,248,395		4,261,974
Trust 2001-70, Cl. LR, 6%, 9/25/30		89,619		89,712
Trust 2001-80, Cl. ZB, 6%, 1/25/32		4,529,506		4,620,144
Trust 2001-82, Cl. ZA, 6.50%, 1/25/32		1,787,355		1,849,864
Trust 2002-12, Cl. PG, 6%, 3/25/17		2,929,584		3,023,382
Trust 2002-19, Cl. PE, 6%, 4/25/17		1,651,580		1,704,212
Trust 2002-21, Cl. PE, 6.50%, 4/25/32		4,206,969		4,326,079
Trust 2002-29, Cl. F, 4.207%, 4/25/32¹		2,057,157		2,062,990
Trust 2002-60, Cl. FH, 4.207%, 8/25/32¹		4,038,411		4,047,086
Trust 2002-64, Cl. FJ, 4.207%, 4/25/32¹		631,808		629,381
Trust 2002-68, Cl. FH, 3.248%, 10/18/32¹		1,315,436		1,307,757
Trust 2002-81, Cl. FM, 3.707%, 12/25/32¹		2,414,251		2,396,373
Trust 2002-9, Cl. PC, 6%, 3/25/17		3,274,678		3,379,556
Trust 2003-116, Cl. FA, 3.607%, 11/25/33¹		755,742		746,307
Trust 2003-130, Cl. CS, 7.686%, 12/25/33¹		3,217,145		2,930,968
Trust 2003-17, Cl. EQ, 5.50%, 3/25/23		5,484,000		5,235,965
Trust 2003-23, Cl. EQ, 5.50%, 4/25/23		12,312,000		11,653,008
Trust 2003-28, Cl. KG, 5.50%, 4/25/23		5,556,000		5,358,778
Trust 2003-3, Cl. FM, 3.707%, 4/25/33¹		2,989,952		2,970,200
Trust 2003-81, Cl. NB, 4.50%, 11/25/14		10,264,000		10,280,566
Trust 2003-81, Cl. PW, 4%, 3/25/25		2,366,530		2,360,647
Trust 2003-84, Cl. AJ, 3%, 4/25/13		351,768		351,162
Trust 2003-84, Cl. GC, 4.50%, 5/25/15		12,320,000		12,339,999


	Principal
	Amount		Value

FHLMC/FNMA/Sponsored Continued
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates: Continued
Trust 2004-101, Cl. BG, 5%, 1/25/20	$	4,413,000	$	4,350,862
Trust 2004-52, Cl. JR, 4.50%, 7/25/24		3,845,823		3,847,152
Trust 2004-W9, Cl. 2A2, 7%, 2/25/44		1,705,550		1,817,648
Trust 2005-100, Cl. BQ, 5.50%, 11/25/25		3,800,000		3,617,250
Trust 2005-31, Cl. PB, 5.50%, 4/25/35		2,865,000		2,772,608
Trust 2005-59, Cl. NQ, 8.858%, 5/25/35¹		2,923,532		2,743,846
Trust 2005-71, Cl. DB, 4.50%, 8/25/25		3,510,000		3,280,066
Trust 2006-24, Cl. DB, 5.50%, 4/25/26		960,000		903,373
Trust 2006-29, Cl. PA, 5.50%, 8/25/26		12,779,088		12,918,174
Trust 2006-46, Cl. SW, 12.441%, 6/25/36¹		4,086,301		4,187,915
Trust 2006-50, Cl. KS, 12.441%, 6/25/36¹		3,433,289		3,440,232
Trust 2006-57, Cl. PA, 5.50%, 8/25/27		8,791,411		8,937,295
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 2001-61, Cl. SH, 35.259%, 11/18/31⁶		4,429,373		496,422
Trust 2001-63, Cl. SD, 14.132%, 12/18/31⁶		114,326		12,950
Trust 2001-68, Cl. SC, 11.923%, 11/25/31⁶		78,981		8,684
Trust 2001-81, Cl. S, 23.723%, 1/25/32⁶		1,034,395		111,120
Trust 2002-28, Cl. SA, 24.461%, 4/25/32⁶		734,028		75,722
Trust 2002-38, Cl. IO, 29.217%, 4/25/32⁶		648,332		59,866
Trust 2002-39, Cl. SD, 20.892%, 3/18/32⁶		1,008,705		99,026
Trust 2002-48, Cl. S, 23.29%, 7/25/32⁶		1,174,558		126,703
Trust 2002-52, Cl. SL, 23.262%, 9/25/32⁶		699,766		75,557
Trust 2002-53, Cl. SK, 20.992%, 4/25/32⁶		628,780		64,051
Trust 2002-56, Cl. SN, 25.259%, 7/25/32⁶		1,610,851		173,969
Trust 2002-65, Cl. SC, 33.379%, 6/25/26⁶		1,984,837		216,393
Trust 2002-77, Cl. IS, 25.75%, 12/18/32⁶		1,104,559		113,471
Trust 2002-77, Cl. SH, 26.713%, 12/18/32⁶		1,271,704		145,021
Trust 2002-89, Cl. S, 45.409%, 1/25/33⁶		6,739,072		700,773
Trust 2002-9, Cl. MS, 22.594%, 3/25/32⁶		1,387,526		155,227
Trust 2003-118, Cl. S, 33.709%, 12/25/33⁶		8,266,098		987,391
Trust 2003-23, Cl. ES, 49.37%, 10/25/22⁶		24,227,652		2,007,176
Trust 2003-33, Cl. SP, 39.597%, 5/25/33⁶		4,774,409		583,545
Trust 2003-4, Cl. S, 34.21%, 2/25/33⁶		2,454,033		288,735
Trust 2003-46, Cl. IH, (5.066)%, 6/1/33⁶		976,390		197,494
Trust 2005-105, Cl. S, 67.083%, 12/25/35⁶		11,609,531		992,892
Trust 2005-40, Cl. SA, 38.96%, 5/25/35⁶		10,916,242		896,179
Trust 2005-40, Cl. SB, 48.607%, 5/25/35⁶		4,985,195		427,766
Trust 2005-71, Cl. SA, 50.482%, 8/25/25⁶		5,897,373		474,590
Trust 2005-83, Cl. SL, 61.524%, 10/25/35⁶		13,106,056		1,063,383
Trust 2005-87, Cl. SE, 93.637%, 10/25/35⁶		49,626,435		3,228,066
Trust 2005-87, Cl. SG, 71.435%, 10/25/35⁶		13,442,816		1,183,627
Trust 2006-119, Cl. MS, 64.382%, 12/25/36⁶		12,279,352		1,122,119
Trust 2006-33, Cl. SP, 53.66%, 5/25/36⁶		8,333,392		861,836
Trust 2006-34, Cl. SK, 55.349%, 5/25/36⁶		13,244,842		1,337,394
Trust 2006-42, Cl. CI, 28.061%, 6/25/36⁶		12,527,061		1,110,270
Trust 2006-48, Cl. QA, 30.127%, 6/25/36⁶		8,990,028		806,642

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

FHLMC/FNMA/Sponsored Continued
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security: Continued
Trust 2006-75, Cl. SA, 55.317%, 8/25/36⁶	$	8,061,686	$	699,583
Trust 2006-90, Cl. SX, 76.949%, 9/25/36⁶		10,405,897		969,910
Trust 221, Cl. 2, 15.40%, 5/1/23⁶		938,615		219,870
Trust 240, Cl. 2, 23.839%, 9/1/23⁶		1,561,138		391,474
Trust 247, Cl. 2, 5.19%, 10/1/23⁶		369,732		93,495
Trust 252, Cl. 2, 7.817%, 11/1/23⁶		109,891		27,431
Trust 2682, Cl. TQ, 74.997%, 10/15/33⁶		4,669,121		334,674
Trust 2981, Cl. BS, 82.237%, 5/15/35⁶		8,576,808		752,709
Trust 301, Cl. 2, 5.434%, 4/1/29⁶		1,454,564		320,935
Trust 302, Cl. 2, 2.575%, 6/1/29⁶		2,096,165		452,983
Trust 303, Cl. IO, 15.145%, 11/1/29⁶		813,437		207,927
Trust 313, Cl. 2, (6.399)%, 6/1/31⁶		5,507,449		1,360,783
Trust 319, Cl. 2, 5.748%, 2/1/32⁶		85,250		20,058
Trust 321, Cl. 2, 9.355%, 4/1/32⁶		6,942,009		1,621,562
Trust 322, Cl. 2, 3.686%, 4/1/32⁶		345,085		77,657
Trust 324, Cl. 2, 5.365%, 7/1/32⁶		5,054,486		1,158,052
Trust 328, Cl. 2, 1.93%, 12/1/32⁶		12,316,565		2,746,439
Trust 331, Cl. 5, 9.399%, 2/1/33⁶		5,905,224		1,317,888
Trust 332, Cl. 2, 4.525%, 3/1/33⁶		15,499,409		3,401,429
Trust 333, Cl. 2, 3.891%, 4/1/33⁶		11,011,915		2,416,422
Trust 334, Cl. 12, 5.392%, 2/1/33⁶		7,407,379		1,714,763
Trust 334, Cl. 3, 11.057%, 7/1/33⁶		1,967,520		431,636
Trust 334, Cl. 5, 11.073%, 5/1/33⁶		3,536,030		785,170
Trust 334, Cl. IO, 11.132%, 2/1/33⁶		4,801,836		1,079,613
Trust 338, Cl. 2, 2.812%, 7/1/33⁶		9,792,991		2,152,850
Trust 339, Cl. 7, 8.871%, 7/1/33⁶		17,504,524		3,815,273
Trust 339, Cl. 8, 8.584%, 8/1/33⁶		1,086,715		240,470
Trust 342, Cl. 2, 5.992%, 9/1/33⁶		1,560,861		351,726
Trust 344, Cl. 2, 9.126%, 12/1/33⁶		7,661,196		1,697,881
Trust 345, Cl. 9, 11.203%, 1/1/34⁶		6,163,591		1,225,584
Trust 346, Cl. 2, 2.956%, 12/1/33⁶		10,248,872		2,254,255
Trust 351, Cl. 10, 9.48%, 4/1/34⁶		1,816,814		399,926
Trust 351, Cl. 11, 9.889%, 11/1/34⁶		971,738		198,600
Trust 351, Cl. 8, 8.01%, 4/1/34⁶		2,939,471		590,280
Trust 356, Cl. 10, 9.542%, 6/1/35⁶		2,596,773		614,596
Trust 356, Cl. 12, 7.968%, 2/1/35⁶		1,345,080		318,499
Trust 362, Cl. 12, 5.412%, 8/1/35⁶		159,263		37,219
Trust 362, Cl. 13, 7.985%, 8/1/35⁶		168,263		39,344
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed Security:
Trust 322, Cl. 1, 5.901%, 4/1/32⁷		15,805,220		12,458,215
Trust 324, Cl. 1, 6.054%, 7/1/32⁷		1,262,143		1,018,760
Vendee Mortgage Trust, Interest-Only Stripped Mtg.-Backed Security:
Series 1992-2, Cl. IO, 14.254%, 9/15/22⁶		13,098,948		265,972
Series 1995-2B, Cl. 2IO, 9.734%, 6/15/25⁶		882,053		17,528
Series 1995-3, Cl. 1IO, 7.331%, 9/15/25⁶		30,156,454		275,748

				1,487,244,695


	Principal
	Amount		Value

GNMA/Guaranteed—0.4%
Government National Mortgage Assn.:
5.625%, 8/8/27¹	$	7,728	$	7,823
7%, 1/29/28-2/8/30		2,036,177		2,144,246
8%, 1/29/28-9/29/28		752,515		826,051
11%, 11/8/19		17,315		19,625
12%, 12/9/13-9/1/15		30,282		34,983
12.50%, 12/29/13-11/29/15		971,227		1,100,984
13%, 10/30/15		1,501,991		1,719,220
13.50%, 6/30/15		2,014,438		2,310,865
Government National Mortgage Assn., Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Series 1999-32, Cl. ZB, 8%, 9/16/29		8,063,842		8,816,783
Series 2000-12, Cl. ZA, 8%, 2/16/30		3,493,904		3,826,234
Series 2000-7, Cl. Z, 8%, 1/16/30		4,035,512		4,426,760
Series 2001-62, Cl. KZ, 6.50%, 12/16/31		11,576,722		11,958,730
Government National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Series 1998-19, Cl. SB, 23.961%, 7/16/28⁶		1,763,853		243,168
Series 1998-6, Cl. SA, 35.723%, 3/16/28⁶		1,109,538		132,575
Series 2006-47, Cl. SA, 50.597%, 8/16/36⁶		13,151,999		1,194,565

				38,762,612

Non-Agency—14.5%
Commercial—5.6%
Banc of America Commercial Mortgage, Inc., Commercial Mtg. Pass-Through Certificates:
Series 2006-5, Cl. A2, 5.348%, 10/10/11		1,325,000		1,264,345
Series 2008-1, Cl. A4, 6.346%, 12/1/17¹		9,480,000		8,356,100
Series 2008-1, Cl. AM, 6.389%, 1/1/18¹		2,390,000		1,910,477
Series 2008-1, Cl. AJ, 6.389%, 1/1/18¹		2,380,000		1,617,899
Banc of America Funding Corp., Mtg. Pass-Through Certificates, Series 2004-2, Cl. 2A1, 6.50%, 7/20/32		2,344,723		2,347,414
Banc of America Mortgage Securities, Inc., Mtg. Pass-Through Certificates, Series 2004-8, Cl. 5A1, 6.50%, 5/25/32		2,345,554		2,174,521
Bear Stearns Commercial Mortgage Securities Trust 2006-PW13, Commercial Mtg. Pass-Through Certificates, Series PW13, Cl. A4, 5.54%, 9/1/41		14,790,000		13,209,297
Bear Stearns Commercial Mortgage Securities Trust 2007-PW18, Commercial Mtg. Pass-Through Certificates, Series PW18, Cl. A2, 5.613%, 6/1/50		940,000		866,741
Capital Lease Funding Securitization LP, Interest-Only Corporate-Backed Pass-Through Certificates, Series 1997-CTL1, (5.859)%, 6/22/24⁶		3,145,342		93,122
ChaseFlex Trust 2006-2, Multiclass Mtg. Pass-Through Certificates, Series 2006-2, Cl. A1B, 2.572%, 9/25/36¹		750,823		737,096
CHL Mortgage Pass-Through Trust 2005-17, Mtg. Pass-Through Certificates, Series 2005-17, Cl. 1A8, 5.50%, 9/1/35		9,286,000		7,872,365

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Commercial Continued
CHL Mortgage Pass-Through Trust 2005-HYB8, Mtg. Pass-Through Certificates, Series 2005-HYB8, Cl. 4A1, 5.573%, 12/20/35¹	$	550,923	$	384,401
Citigroup Commercial Mortgage Trust 2006-C4, Commercial Mtg. Pass-Through Certificates, Series 2006-C4, Cl. A3, 5.915%, 3/1/49¹		7,470,000		6,773,600
Citigroup Mortgage Loan Trust, Inc. 2006-WF1, Asset-Backed Pass-Through Certificates, Series 2006-WF1, Cl. A2B, 5.536%, 3/1/36		362,908		357,748
Citigroup/Deutsche Bank 2007-CD4 Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates:
Series 2007-CD4, Cl. A2B, 5.205%, 12/11/49		27,603,000		25,703,221
Series 2007-CD4, Cl. AJ, 5.398%, 12/1/49		6,760,000		4,395,903
CitiMortgage Alternative Loan Trust 2006-A5, Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2006-A5, Cl. 1A13, 3.657%, 10/25/36¹		6,623,358		5,463,683
Credit Suisse Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2007-C3, Cl. A4, 5.913%, 6/1/39¹		3,960,000		3,398,954
CWABS, Inc. Asset-Backed Certificates Trust 2006-8, Asset-Backed Certificates, Series 2006-8, Cl.2A1, 3.237%, 1/25/46¹		1,399,509		1,387,588
CWALT Alternative Loan Trust 2007-8CB, Mtg. Pass-Through Certificates, Series 2007-8CB, Cl. A1, 5.50%, 5/25/37		16,776,221		15,644,481
Deutsche Alt-A Securities Mortgage Loan Trust, Mtg. Pass-Through Certificates:
Series 2007-RS1, Cl. A2, 4.209%, 1/27/37^1,2		4,268,487		2,487,728
Series 2006-AB2, Cl. A7, 5.961%, 6/25/36		1,370,954		1,355,575
Series 2006-AB4, Cl. A1A, 6.005%, 10/25/36		6,060,031		5,928,285
Series 2006-AB3, Cl. A7, 6.36%, 7/1/36		490,498		481,812
DLJ Mortgage Acceptance Corp., Commercial Mtg. Obligations, Series 1997-CF2, Cl. B30C, 6.024%, 10/15/30^1,2		36,400,000		17,108,000
First Horizon Alternative Mortgage Securities Trust 2007-FA2, Mtg. Pass-Through Certificates, Series 2007-FA2, Cl. 1A1, 5.50%, 4/25/37		3,693,939		3,340,924
First Horizon Mortgage Pass-Through Trust 2007-AR3, Mtg. Pass-Through Certificates, Series 2007-AR3, Cl. 1A1, 6.128%, 11/1/37¹		14,948,623		12,176,743
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations, Series 2004-C3, Cl. A2, 4.433%, 7/10/39		4,445,000		4,388,280
GMAC Commercial Mortgage Securities, Inc., Commercial Mtg. Pass-Through Certificates, Series 1998-C1, Cl. F, 7.133%, 5/15/30¹		2,000,000		1,990,226
Greenwich Capital Commercial Funding Corp., Commercial Mtg. Pass-Through Certificates, Series 2007-GG9, Cl. A2, 5.381%, 3/10/39		9,020,000		8,426,989
Greenwich Capital Commercial Mortgage 2007-GG11, Commercial Mtg. Pass-Through Certificates, Series 2007-GG11, Cl. A4, 5.736%, 8/1/17		19,185,000		16,332,120
GS Mortgage Securities Corp. II, Commercial Mtg. Obligations, Series 2006-GG8, Cl. A4, 5.56%, 11/1/39		4,950,000		4,390,799
GSR Mortgage Loan Trust 2006-2F, Mtg. Pass-Through Certificates, Series 2006-2F, Cl. 2A2, 5.75%, 2/1/36		1,623,983		1,321,148


	Principal
	Amount		Value

Commercial Continued
GSR Mortgage Loan Trust 2006-AR1, Mtg. Pass-Through Certificates, Series 2006-AR1, Cl. 3A1, 5.371%, 1/1/36¹	$	2,868,623	$	2,434,814
Indymac Index Mortgage Loan Trust 2005-AR31, Mtg. Pass-Through Certificates, Series 2005-AR31, Cl. 2 A2, 5.328%, 1/1/36¹		1,554,369		990,858
JPMorgan Chase Commercial Mortgage Securities Corp., Commercial Mtg. Pass-Through Certificates:
Series 2007-LDPX, Cl. A2S, 5.305%, 1/15/49		9,220,000		8,577,688
Series 2007-CB18, Cl. A4, 5.44%, 6/1/47		14,355,000		12,011,787
Series 2007-CB18, Cl. AM, 5.466%, 6/1/47		16,086,000		12,346,804
Series 2007-CB15, Cl. AJ, 5.502%, 6/1/47		1,590,000		1,041,644
Series 2007-LD12, Cl. A2, 5.827%, 2/15/51		5,275,000		4,951,199
Series 2007-LD11, Cl. A2, 5.992%, 6/15/49¹		14,520,000		13,688,547
Series 2008-C2, Cl. A4, 6.068%, 2/1/51		21,180,000		18,309,934
Series 2008-C2, Cl. AJ, 6.799%, 2/1/51¹		8,100,000		5,735,011
Series 2008-C2, Cl. AM, 6.799%, 2/1/51		12,600,000		10,346,994
JPMorgan Chase Commercial Mortgage Securities Trust 2007-LDPX, Commercial Mtg. Pass-Through Certificates, Series 2007-LDPX, Cl. A3, 5.42%, 1/15/49		11,190,000		9,326,053
JPMorgan Commercial Mortgage Finance Corp., Mtg. Pass-Through Certificates, Series 2000-C9, Cl. A2, 7.77%, 10/15/32		14,609,326		14,773,095
JPMorgan Mortgage Trust 2006-A2, Mtg. Pass-Through Certificates, Series 2006-A2, Cl. 3A4, 5.675%, 4/1/36¹		7,242,422		5,123,945
JPMorgan Mortgage Trust 2006-A7, Mtg. Pass-Through Certificates, Series 2006-A7, Cl. 2A2, 5.802%, 1/1/37¹		3,545,599		3,215,547
LB Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 1999-C2, Cl. C, 7.47%, 10/15/32		8,115,000		8,213,932
LB-UBS Commercial Mortgage Trust 2000-C3, Commercial Mtg. Pass-Through Certificates, Series 2000-C3, Cl. A2, 7.95%, 5/15/25		9,273,711		9,452,494
LB-UBS Commercial Mortgage Trust 2006-C1, Commercial Mtg. Pass-Through Certificates, Series 2006-C1, Cl. A2, 5.084%, 2/11/31		4,150,000		4,011,558
LB-UBS Commercial Mortgage Trust 2007-C1, Commercial Mtg. Pass-Through Certificates, Series 2007-C1, Cl. A2, 5.318%, 1/15/12		21,030,000		19,683,077
LB-UBS Commercial Mortgage Trust 2008-C1, Commercial Mtg. Pass-Through Certificates, Series 2008-C1, Cl. AM, 6.317%, 4/11/41¹		6,640,000		5,258,486
Lehman Structured Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 2002-GE1, Cl. A, 2.514%, 7/26/24²		417,634		339,328
Mastr Alternative Loan Trust, CMO Pass-Through Certificates, Series 2004-6, Cl. 10A1, 6%, 7/25/34		3,663,471		3,237,265
Mastr Asset Securitization Trust 2006-3, Mtg. Pass-Through Certificates, Series 2006-3, Cl. 2A1, 3.657%, 10/25/36¹		17,435,986		15,297,574
Merrill Lynch Mortgage Investors Trust 2005-A9, Mtg. Asset-Backed Certificates, Series 2005-A9, Cl. 4A1, 5.492%, 12/1/35¹		9,624,778		7,858,688

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Commercial Continued
Merrill Lynch Mortgage Trust 2006-C1, Commercial Mtg. Pass-Through Certificates, Series 2006-C1, Cl. AJ, 5.841%, 5/1/39¹	$	2,980,000	$	2,236,361
Morgan Stanley Capital I Trust, Commercial Mtg. Pass-Through Certificates, Series 2007-IQ16, Cl. A4, 5.809%, 12/1/49		8,700,000		7,433,762
Nomura Asset Securities Corp., Commercial Mtg. Pass-Through Certificates, Series 1998-D6, Cl. A1B, 6.59%, 3/15/30		540,994		540,866
PNC Mortgage Acceptance Corp., Commercial Mtg. Obligations, Series 2001-C1, Cl. A2, 6.36%, 3/12/34		9,627,000		9,646,373
Prudential Mortgage Capital Co. II LLC, Commercial Mtg. Pass-Through Certificates, Series PRU-HTG 2000-C1, Cl. A2, 7.306%, 10/6/15		571,000		581,303
RALI Series 2005-QA4 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2005-QA4, Cl. A32, 5.379%, 4/25/35¹		429,035		298,333
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2007-QS6, Cl. A114, 5.75%, 4/25/37		5,333,830		4,334,044
Residential Asset Securitization Trust 2006-A9CB, Mtg. Pass-Through Certificates, Series 2006-A9CB, Cl. A5, 6%, 9/25/36		4,844,227		4,488,873
Residential Asset Securitization Trust, Mtg. Pass-Through Certificates, Series 2006-A12, Cl. 1A, 6.25%, 11/1/36		3,071,813		2,312,149
STARM Mortgage Loan Trust 2007-1, Mtg. Pass-Through Certificates, Series 2007-1, Cl. 2A1, 5.826%, 2/1/37¹		23,674,066		18,513,027
STARM Mortgage Loan Trust 2007-3, Mtg. Pass-Through Certificates, Series 2007-3, Cl. 1A1, 5.659%, 6/1/37^1,2		8,260,573		6,814,973
Structured Asset Mortgage Investments, Inc., Mtg. Pass-Through Certificates, Series 2002-AR3, Cl. A2, 3.53%, 9/19/32¹		1,728,944		1,089,235
Wachovia Bank Commercial Mortgage Trust 2006-C28, Commercial Mtg. Pass-Through Certificates, Series 2006-C28, Cl. A4, 5.572%, 10/1/48		10,060,000		8,828,742
Wachovia Bank Commercial Mortgage Trust 2006-C29, Commercial Mtg. Pass-Through Certificates, Series 2006-C29, Cl. A2, 5.272%, 11/15/48		2,083,000		1,980,476
Wachovia Bank Commercial Mortgage Trust 2007-C33, Commercial Mtg. Pass-Through Certificates, Series 2007-C33, Cl. A4, 6.10%, 2/1/51¹		14,700,000		12,685,910
Wachovia Bank Commercial Mortgage Trust, Commercial Mtg. Pass- Through Certificates, Series 2007-C34, Cl. AJ, 6.148%, 5/1/46¹		6,690,000		4,484,171
Wachovia Mortgage Loan Trust LLC, Mtg. Pass-Through Certificates, Series 2007-A, Cl. 1A1, 5.982%, 3/1/37¹		10,892,276		10,422,474
WaMu Mortgage Pass-Through Certificates 2006-AR14 Trust, Mtg. Pass-Through Certificates, Series 2006-AR14, Cl. 1A7, 5.647%, 11/1/36¹		4,348,945		2,622,540
WaMu Mortgage Pass-Through Certificates 2006-AR15 Trust, Mtg. Pass-Through Certificates, Series 2006-AR15, Cl. 1A, 3.695%, 11/1/46^1,2		4,043,903		2,375,793
WaMu Mortgage Pass-Through Certificates 2006-AR8 Trust, Mtg. Pass-Through Certificates, Series 2006-AR8, Cl. 1A4, 5.877%, 8/1/46¹		19,581,043		16,270,467
WaMu Mortgage Pass-Through Certificates 2007-HY1 Trust, Mtg. Pass-Through Certificates:
Series 2007-HY1, Cl. 1A2, 5.711%, 2/25/37^1,2		7,186,457		2,874,583
Series 2007-HY1, Cl. 2A4, 5.868%, 2/1/37¹		1,685,208		1,039,043


	Principal
	Amount		Value

Commercial Continued
WaMu Mortgage Pass-Through Certificates 2007-HY3 Trust, Mtg. Pass-Through Certificates, Series 2007-HY3, Cl. 2A2, 5.668%, 3/1/37¹	$	10,109,386	$	6,015,225
WaMu Mortgage Pass-Through Certificates 2007-HY4 Trust, Mtg. Pass-Through Certificates, Series 2007-HY4, Cl. 5A1, 5.584%, 11/1/36¹		1,979,608		1,551,087
WaMu Mortgage Pass-Through Certificates 2007-HY5 Trust, Mtg. Pass-Through Certificates, Series 2007-HY5, Cl. 2A3, 5.658%, 5/1/37¹		2,112,381		1,760,321
WaMu Mortgage Pass-Through Certificates 2007-OA3 Trust, Mtg. Pass-Through Certificates, Series 2007-OA3, Cl. 5A, 4.079%, 4/1/47^1,2		2,777,128		1,582,963
Wells Fargo Mortgage-Backed Securities 2004-EE Trust, Mtg. Pass- Through Certificates, Series 2004-EE, Cl. 3A2, 4.261%, 12/1/34¹		17,177,275		15,925,045
Wells Fargo Mortgage-Backed Securities 2004-U Trust, Mtg. Pass- Through Certificates, Series 2004-U, Cl. A1, 5.673%, 10/1/34¹		3,064,344		2,981,810
Wells Fargo Mortgage-Backed Securities 2004-V Trust, Mtg. Pass-Through Certificates, Series 2004-V, Cl. 1A1, 3.92%, 10/1/34¹		9,927,471		9,730,336
Wells Fargo Mortgage-Backed Securities 2004-W Trust, Mtg. Pass-Through Certificates, Series 2004-W, Cl. B2, 4.546%, 11/1/34¹		3,400,424		2,497,114
Wells Fargo Mortgage-Backed Securities 2005-AR1 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2005-AR1, Cl. 1A1, 4.538%, 2/1/35¹		17,211,354		14,757,768
Wells Fargo Mortgage-Backed Securities 2006-AR8 Trust, Mtg. Pass-Through Certificates, Series 2006-AR8, Cl. 1A3, 5.547%, 4/25/36¹		10,553,533		9,997,622

				568,586,696

Manufactured Housing—0.1%
Wells Fargo Mortgage-Backed Securities 2006-AR12 Trust, Mtg. Pass-Through Certificates, Series 2006-AR12, Cl. 2A1, 6.10%, 9/25/36¹		16,895,373		14,125,785

Multifamily—0.6%
Banc of America Mortgage Securities, Inc., Mtg. Pass-Through Certificates, Series 2003-E, Cl. 2A2, 4.709%, 6/25/33¹		7,338,670		7,319,904
CHL Mortgage Pass-Through Trust 2003-46, Mtg. Pass-Through Certificates, Series 2003-46, Cl. 1A2, 4.411%, 1/19/34¹		12,304,527		12,287,589
CHL Mortgage Pass-Through Trust 2005-6, Mtg. Pass-Through Certificates, Series 2005-6, Cl. 2A1, 5.50%, 4/1/35		1,325,032		1,164,633
CHL Mortgage Pass-Through Trust 2007-HY1, Mtg. Pass-Through Certificates, Series 2007-HY1, Cl. 1A1, 5.696%, 4/25/37¹		14,452,082		11,135,393
Merrill Lynch Mortgage Investors Trust, Mtg. Pass-Through Certificates, Series 2005-A2, Cl. A2, 4.487%, 2/1/35¹		3,940,642		3,197,212
WaMu Mortgage Pass-Through Certificates 2003-AR10 Trust, Mtg. Pass-Through Certificates, Series 2003-AR10, Cl. A7, 4.36%, 10/1/33¹		3,160,000		3,035,731
Wells Fargo Mortgage-Backed Securities 2006-AR5 Trust, Mtg. Pass-Through Certificates, Series 2006-AR5, Cl. 2A1, 5.539%, 4/1/36¹		26,680,750		21,341,419
Wells Fargo Mortgage-Backed Securities 2006-AR6 Trust, Mtg. Pass-Through Certificates, Series 2006-AR6, Cl. 3A1, 5.093%, 3/25/36¹		7,194,714		6,597,477

				66,079,358

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Other—0.1%
JPMorgan Mortgage Trust 2005-S2, Mtg. Pass-Through Certificates, Series 2005-S2, Cl. 3A1, 6.735%, 2/25/32¹	$	5,287,231	$	5,132,557

Residential—8.1%
Banc of America Commercial Mortgage, Inc., Commercial Mtg. Pass-Through Certificates:
Series 2007-4, Cl. A4, 5.936%, 7/1/17¹		13,250,000		11,357,741
Series 2007-4, Cl. AM, 6.003%, 8/1/17¹		16,580,000		12,964,265
Bear Stearns ARM Trust 2004-2, Mtg. Pass-Through Certificates, Series 2004-2, Cl. 12A2, 4.395%, 5/1/34¹		14,939,197		13,519,973
Bear Stearns ARM Trust 2004-9, Mtg. Pass-Through Certificates, Series 2004-9, Cl. 23A1, 5.029%, 11/1/34¹		9,444,203		8,675,514
Chase Mortgage Finance Trust 2006-S3, Multiclass Mtg. Pass-Through Certificates, Series 2006-S3, Cl. 1A2, 6%, 11/1/36		10,650,000		8,063,758
Chase Mortgage Finance Trust 2007-A1, Multiclass Mtg. Pass-Through Certificates, Series 2007-A1, Cl. 9A1, 4.571%, 2/1/37¹		9,939,970		8,898,752
CHL Mortgage Pass-Through Trust 2005-26, Mtg. Pass-Through Certificates, Series 2005-26, Cl. 1A8, 5.50%, 11/1/35		9,470,666		8,513,467
CHL Mortgage Pass-Through Trust 2005-27, Mtg. Pass-Through Certificates, Series 2005-27, Cl. 2A1, 5.50%, 12/1/35		8,483,412		7,625,925
CHL Mortgage Pass-Through Trust 2005-31, Mtg. Pass-Through Certificates, Series 2005-31, Cl. 2A4, 5.476%, 1/1/36^1,2		3,731,174		1,119,352
CHL Mortgage Pass-Through Trust 2005-J4, Mtg. Pass-Through Certificates, Series 2005-J4, Cl. A7, 5.50%, 11/1/35		5,301,000		4,121,046
CHL Mortgage Pass-Through Trust 2007-HY3, Mtg. Pass-Through Certificates, Series 2007-HY3, Cl. 1A1, 5.646%, 6/1/47¹		8,620,326		6,766,956
CHL Mortgage Pass-Through Trust 2007-HY4, Mtg. Pass-Through Certificates:
Series 2007-HY4, Cl. 1A1, 6.092%, 9/1/47¹		29,639,383		23,034,804
Series 2007-HY4, Cl. 1A2, 6.092%, 9/1/47^1,2		10,082,205		4,436,170
Series 2007-HY4, Cl. 2A2, 6.229%, 11/1/37^1,2		2,265,466		996,805
Series 2007-HY4, Cl. 3A2, 6.40%, 11/1/37^1,2		2,355,125		1,036,255
CHL Mortgage Pass-Through Trust 2007-HY5, Mtg. Pass-Through Certificates:
Series 2007-HY5, Cl. 1A2, 5.929%, 9/1/37^1,2		11,060,927		5,641,073
Series 2007-HY5, Cl. 2A2, 6.001%, 9/1/37^1,2		2,782,702		1,363,524
Series 2007-HY5, Cl. 3A2, 6.201%, 9/1/37^1,2		6,988,967		3,354,704
Citigroup Commercial Mortgage Trust 2007-C6, Commercial Mtg. Pass-Through Certificates:
Series 2007-C6, Cl. A2, 5.889%, 8/1/12¹		2,810,000		2,633,559
Series 2007-C6, Cl. A4, 5.889%, 12/1/49¹		15,670,000		13,433,377
Citigroup Commercial Mortgage Trust 2008-C7, Commercial Mtg. Pass-Through Certificates, Series 2008-C7, Cl. A4, 6.299%, 12/1/49¹		9,690,000		8,541,135
Citigroup Mortgage Loan Trust, Inc. 2005-2, Mtg. Pass-Through Certificates, Series 2005-2, Cl. 1A3, 4.952%, 5/1/35¹		10,922,377		9,796,007


	Principal
	Amount		Value

Residential Continued
Citigroup Mortgage Loan Trust, Inc. 2005-3, Mtg. Pass-Through Certificates, Series 2005-3, Cl. 2A4, 5.198%, 8/1/35¹	$	21,270,732	$	17,473,417
Citigroup Mortgage Loan Trust, Inc. 2006-AR1, Asset-Backed Pass-Through Certificates, Series 2006-AR1, Cl. 3A2, 5.50%, 3/1/36^1,2		11,284,916		6,093,855
Citigroup Mortgage Loan Trust, Inc. 2006-AR2, Asset-Backed Pass-Through Certificates:
Series 2006-AR2, Cl. 1A2, 5.523%, 3/1/36¹		23,987,807		20,765,638
Series 2006-AR2, Cl. 1AB, 5.591%, 3/1/36²		10,270,427		5,135,213
Citigroup/Deutsche Bank 2007-CD4 Commercial Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2007-CD4, Cl. AMFX, 5.366%, 12/1/49		14,345,000		10,934,303
CitiMortgage Alternative Loan Trust 2006-A1, Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2006-A1, Cl. 2A1, 5.25%, 3/1/21		6,378,436		5,831,170
CitiMortgage Alternative Loan Trust 2006-A5, Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2006-A5, Cl. 2A1, 5.50%, 10/1/21		8,118,029		7,705,768
CitiMortgage Alternative Loan Trust 2007-A2, Real Estate Mtg. Investment Conduit Pass-Through Certificates, Series 2007-A2, Cl. 1A5, 6%, 2/25/37		14,479,451		12,839,937
COMM 2007-C9 Mortgage Trust, Commercial Mtg. Pass-Through Certificates, Series 2007-C9, Cl. A4, 6.01%, 7/1/17¹		13,180,000		11,374,091
CWALT Alternative Loan Trust 2005-J1, Mtg. Pass-Through Certificates, Series 2005-J1, Cl. 3A1, 6.50%, 8/25/32		6,369,643		5,584,453
CWALT Alternative Loan Trust 2005-J3, Mtg. Pass-Through Certificates, Series 2005-J3, Cl. 3A1, 6.50%, 9/25/34		1,229,855		1,085,642
CWALT Alternative Loan Trust 2006-43CB, Mtg. Pass-Through Certificates, Series 2006-43CB, Cl. 1A10, 6%, 2/1/37²		40,069,814		26,810,713
GSR Mortgage Loan Trust 2004-5, Mtg. Pass-Through Certificates, Series 2004-5, Cl. 2A1, 4.485%, 5/1/34¹		1,139,727		1,059,330
GSR Mortgage Loan Trust 2005-AR6, Mtg. Pass-Through Certificates:
Series 2005-AR6, Cl. 3A1, 4.56%, 9/25/35¹		12,735,546		10,768,181
Series 2005-AR6, Cl. 1A4, 4.626%, 9/1/35¹		28,106,779		26,202,449
GSR Mortgage Loan Trust 2007-AR1, Mtg. Pass-Through Certificates:
Series 2007-AR1, Cl. 4A1, 5.827%, 3/1/37¹		9,691,280		7,656,111
Series 2007-AR1, Cl. 2A1, 5.998%, 3/1/37¹		52,007,379		41,894,476
JPMorgan Mortgage Trust 2006-A2, Mtg. Pass-Through Certificates, Series 2006-A2, Cl. 5A3, 4.334%, 11/1/33¹		1,316,083		1,258,402
JPMorgan Mortgage Trust 2007-A1, Mtg. Pass-Through Certificates, Series 2007-A1, Cl. 7A1, 5.299%, 7/1/35^1,2		16,367,407		14,897,450
JPMorgan Mortgage Trust 2007-A3, Mtg. Pass-Through Certificates, Series 2007-A3, Cl. 3A3, 6.019%, 5/1/37^1,2		4,800,341		2,570,582

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount		Value

Residential Continued
LB-UBS Commercial Mortgage Trust 2007-C7, Commercial Mtg. Pass-Through Certificates:
Series 2007-C7, Cl. A3, 5.866%, 9/11/45	$	4,205,000	$	3,614,183
Series 2007-C7, Cl. AM, 6.374%, 9/11/45¹		12,810,000		10,251,866
Lehman XS Trust, Mtg. Pass-Through Certificates, Series 2005-10, Cl. 2A3B, 5.55%, 1/25/36		1,634,665		1,448,909
Mastr Adjustable Rate Mortgages Trust 2006-2, Mtg. Pass-Through Certificates, Series 2006-2, Cl. 1A1, 4.951%, 4/1/36¹		9,836,978		9,232,998
Merrill Lynch Mortgage Investors Trust 2006-3, Mtg. Pass-Through Certificates, Series 2006-3, Cl. 2A1, 6.073%, 10/25/36¹		16,669,685		15,220,311
Merrill Lynch Mortgage Investors Trust 2007-3, Mtg. Pass-Through Certificates, Series 2007-3, Cl. 1A1, 5.797%, 9/1/37^1,2		6,632,586		6,145,643
RALI Series 2006-QS13 Trust:
Mtg. Asset-Backed Pass-Through Certificates, Series 2006-QS13, Cl. 1A8, 6%, 9/25/36		2,859,207		2,844,972
Mtg. Asset-Backed Pass-Through Certificates, Series 2006-QS13, Cl. 1A5, 6%, 9/25/36		12,282,686		9,269,730
RALI Series 2006-QS5 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2006-QS5, Cl. 2A2, 6%, 5/1/36		1,548,742		1,506,682
RALI Series 2007-QS6 Trust, Mtg. Asset-Backed Pass-Through Certificates, Series 2007-QS6, Cl. A28, 5.75%, 4/25/37		4,871,096		4,355,691
Residential Asset Securitization Trust 2005-A14, Mtg. Pass-Through Certificates, Series 2005-A14, Cl. A1, 5.50%, 12/1/35		9,429,000		6,424,056
Residential Asset Securitization Trust 2005-A6CB, Mtg. Pass-Through Certificates, Series 2005-A6CB, Cl. A7, 6%, 6/1/35		15,812,659		12,070,895
Residential Funding Mortgage Securities I, Inc., Mtg. Pass-Through Certificates, 5.775%, 7/1/37^1,2		8,281,258		3,230,519
Salomon Brothers Mortgage Securities VII, Inc., CMO:
Series 2001-UP2, Cl. AF2, 7.25%, 10/25/31		99,331		99,926
Series 2000-UP1, Cl. A2, 8%, 9/25/30		362,325		365,298
Salomon Smith Barney RV Trust, Recreational Vehicles Mtg. Obligations, Series 2001-1, Cl. B, 6.64%, 4/15/18		2,407,000		2,413,491
WaMu Asset-Backed Certificates 2005-AR12 Trust, Mtg. Asset-Backed Certificates, Series 2007-AR12, Cl. 1A8, 4.833%, 10/1/35¹		9,995,454		9,298,307
WaMu Mortgage Pass-Through Certificates 2003-AR9 Trust, Mtg. Pass-Through Certificates, Series 2003-AR9, Cl. 2A, 4.489%, 9/25/33¹		4,595,068		4,441,058
WaMu Mortgage Pass-Through Certificates 2005-AR14 Trust, Mtg. Pass-Through Certificates, Series 2005-AR14, Cl. 1A1, 5.051%, 12/1/35¹		10,723,564		9,992,318
WaMu Mortgage Pass-Through Certificates 2006-AR10 Trust, Mtg. Pass-Through Certificates, Series 2006-AR10, Cl. 1A2, 5.931%, 9/1/36¹		12,446,926		11,437,129
WaMu Mortgage Pass-Through Certificates 2006-AR14 Trust, Mtg. Pass-Through Certificates, Series 2006-AR14, Cl. 2A4, 5.758%, 11/1/36^1,2		1,313,206		669,735


	Principal
	Amount		Value

Residential Continued
WaMu Mortgage Pass-Through Certificates 2007-HY1 Trust, Mtg. Pass-Through Certificates:
Series 2007-HY1, Cl. 4A1, 5.469%, 2/1/37¹	$	50,035,487	$	42,081,105
Series 2007-HY1, Cl. 5A1, 5.771%, 2/1/37¹		28,832,300		22,264,645
WaMu Mortgage Pass-Through Certificates 2007-HY2 Trust, Mtg. Pass-Through Certificates:
Series 2007-HY2, Cl. 1A1, 5.614%, 12/1/36¹		33,259,335		26,112,738
Series 2007-HY2, Cl. 1A2, 5.614%, 12/1/36^1,2		3,966,977		1,309,102
WaMu Mortgage Pass-Through Certificates 2007-HY3 Trust, Mtg. Pass-Through Certificates, Series 2007-HY3, Cl. 4A1, 5.348%, 3/1/37¹		32,698,416		27,468,003
WaMu Mortgage Pass-Through Certificates 2007-HY4 Trust, Mtg. Pass-Through Certificates, Series 2007-HY4, Cl. 4A1, 5.504%, 9/25/36¹		28,698,144		25,898,115
WaMu Mortgage Pass-Through Certificates 2007-HY6 Trust, Mtg. Pass-Through Certificates, Series 2007-HY6, Cl. 2A1, 5.695%, 6/25/37¹		14,930,576		12,190,838
WaMu Mortgage Pass-Through Certificates 2007-HY7 Trust, Mtg. Pass-Through Certificates, Series 2007-HY7, Cl. 2A1, 5.873%, 7/1/37¹		8,177,931		5,531,084
Wells Fargo Mortgage-Backed Securities 2004-EE Trust, Mtg. Pass-Through Certificates, Series 2004-EE, Cl. 3A1, 4.261%, 12/1/34¹		7,163,089		6,640,896
Wells Fargo Mortgage-Backed Securities 2004-R Trust, Mtg. Pass-Through Certificates, Series 2004-R, Cl. 2A1, 4.369%, 9/1/34¹		1,118,679		944,453
Wells Fargo Mortgage-Backed Securities 2005-AR12 Trust, Mtg. Pass-Through Certificates, Series 2005-AR12, Cl. 2A6, 4.336%, 7/1/35¹		5,797,198		4,913,251
Wells Fargo Mortgage-Backed Securities 2005-AR16 Trust, Mtg. Pass-Through Certificates, Series 2005-AR16, Cl. 2A1, 4.945%, 10/1/35¹		6,715,195		5,849,753
Wells Fargo Mortgage-Backed Securities 2006-12 Trust, Mtg. Pass-Through Certificates, Series 2006-12, Cl. A1, 6%, 10/25/36		5,857,161		5,850,954
Wells Fargo Mortgage-Backed Securities 2006-AR10 Trust, Mtg. Pass-Through Certificates:
Series 2006-AR10, Cl. 3A2, 4.871%, 7/1/36^1,2		2,508,615		1,216,678
Series 2006-AR10, Cl. 4A2, 5.561%, 7/1/36^1,2		9,083,565		4,405,529
Series 2006-AR10, Cl. 5A3, 5.594%, 7/1/36¹		4,496,349		3,799,748
Series 2006-AR10, Cl. 5A6, 5.594%, 7/1/36¹		44,225,285		35,739,377
Series 2006-AR10, Cl. 2A2, 5.636%, 7/1/36^1,2		6,115,562		2,966,048
Wells Fargo Mortgage-Backed Securities 2006-AR13 Trust, Mtg. Pass-Through Certificates:
Series 2006-AR13, Cl. A2, 5.748%, 9/1/36¹		36,577,373		31,210,346
Series 2006-AR13, Cl. A4, 5.748%, 9/1/36¹		29,050,000		22,642,813
Wells Fargo Mortgage-Backed Securities 2006-AR8 Trust, Mtg. Pass-Through Certificates, Series 2006-AR8, Cl. 2A1, 5.24%, 4/1/36¹		6,928,545		5,962,970

				823,167,506

Total Mortgage-Backed Obligations (Cost $3,169,483,469)				3,003,099,209

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

U.S. Government Obligations—3.3%

Federal Home Loan Bank Unsec. Bonds, 3.625%, 10/18/13^9,10	$	16,130,000		$	15,706,152
Federal Home Loan Mortgage Corp. Unsec. Nts.:
3.375%, 4/15/09⁹		26,370,000			26,370,396
3.75%, 6/28/13⁹		23,220,000			23,064,380
4.125%, 9/27/13⁹		48,945,000			49,382,079
5.25%, 5/21/09⁹		49,580,000			50,165,738
Federal National Mortgage Assn. Sr. Unsec. Nts., 4.875%, 5/18/12		20,040,000			20,836,329
Federal National Mortgage Assn. Unsec. Nts.:
3.25%, 4/9/13⁹		47,710,000			46,487,479
3.875%, 7/12/13⁹		29,450,000			29,408,623
4.625%, 10/15/14¹¹		23,490,000			23,903,142
Resolution Funding Corp. Bonds, Residual Funding STRIPS, 6.135%, 1/15/21¹²		53,130,000			29,666,729
U.S. Treasury Bonds, STRIPS, 4.955%, 2/15/16^5,12		23,896,000			18,160,219

Total U.S. Government Obligations (Cost $329,604,504)					333,151,266

Foreign Government Obligations—24.7%

Argentina—0.1%
Argentina (Republic of) Bonds:
3.127%, 8/3/12¹		11,814,501			8,493,880
Series GDP, 0.971%, 12/15/35¹		23,710,000			1,920,510
Series V, 7%, 3/28/11		4,160,000			3,095,156
Series VII, 7%, 9/12/13		1,205,000			818,446

					14,327,992

Australia—0.1%
New South Wales Treasury Corp. Sr. Bonds, Series 12RG, 6%, 5/1/12	2,880,000		AUD		2,276,505
New South Wales Treasury Corp. Sr. Unsec. Bonds, Series 14RG, 5.50%, 8/1/14	4,190,000		AUD		3,220,190

					5,496,695

Austria—0.1%
Austria (Republic of) Unsec. Unsub. Nts., Series E, 4%, 9/15/16	9,716,000		EUR		13,413,860

Belgium—0.1%
Belgium (Kingdom of) Bonds, Series 44, 5%, 3/28/35	9,010,000		EUR		12,790,412

Brazil—2.7%
Banco Nacional de Desenvolvimento Economico e Social Nts., 6.369%, 6/16/18¹³		13,550,000			11,991,750
Brazil (Federal Republic of) Bonds:
6%, 1/17/17		34,465,000			33,344,888
8%, 1/15/18		31,680,000			34,056,000
8.75%, 2/4/25		1,815,000			2,137,163
8.875%, 10/14/19		21,300,000			25,027,500
10.50%, 7/14/14		17,798,000			22,469,975


	Principal
	Amount			Value

Brazil Continued
Brazil (Federal Republic of) Letras Tesouro Nacional Treasury Bills, 0%, 1/1/09¹²	57,340,000		BRR	$	29,130,582
Brazil (Federal Republic of) Nota Do Tesouro Nacional Nts.:
10%, 1/10/10	58,026,000		BRR		29,014,034
10%, 1/1/12	29,874,000		BRR		14,330,854
10%, 1/1/17	140,991,000		BRR		60,887,159
Brazil (Federal Republic of) Nts., 7.875%, 3/7/15		7,950,000			8,514,450

					270,904,355

Bulgaria—0.2%
Bulgaria (Republic of) Bonds:
8.25%, 1/15/15		7,080,000			7,823,400
8.25%, 1/15/15¹³		6,790,000			7,502,950

					15,326,350

Canada—0.3%
Canada (Government of) Bonds:
3.50%, 6/1/13	9,370,000		CAD		8,949,153
5%, 6/1/37	9,860,000		CAD		10,492,319
Canada (Government of) Nts.:
3.75%, 6/1/10	7,035,000		CAD		6,713,145
4.25%, 6/1/18	4,290,000		CAD		4,203,333

					30,357,950

Colombia—0.5%
Bogota Distrio Capital Sr. Bonds, 9.75%, 7/26/28¹³	9,427,000,000		COP		3,609,782
Colombia (Republic of) Bonds:
7.375%, 9/18/37		10,402,000			10,438,407
10.75%, 1/15/13		8,000,000			9,410,000
12%, 10/22/15	14,703,000,000		COP		7,065,540
Colombia (Republic of) Nts.:
8.25%, 12/22/14		4,050,000			4,414,500
11.75%, 3/1/10	5,175,000,000		COP		2,414,417
Colombia (Republic of) Unsec. Bonds, 8.125%, 5/21/24		4,010,000			4,411,000
EEB International Ltd. Sr. Unsec. Bonds, 8.75%, 10/31/14¹³		8,730,000			8,730,000

					50,493,646

Costa Rica—0.1%
Costa Rica (Republic of) Unsec. Bonds, 9.995%, 8/1/20		5,424,000			6,888,480

Denmark—0.1%
Denmark (Kingdom of) Bonds, 5%, 11/15/13	58,430,000		DKK		11,483,479

Ecuador—0.0%
Ecuador (Republic of) Unsec. Bonds, 10%, 8/15/30¹		3,745,000			2,733,850

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Egypt—0.2%
Egypt (The Arab Republic of) Treasury Bills:
Series 182, 11.021%, 1/6/09¹²	29,825,000		EGP	$	5,308,168
Series 364, 8.371%, 1/6/09¹²	24,925,000		EGP		4,405,508
Egypt (The Arab Republic of) Unsec. Unsub. Bonds, 8.75%, 7/15/12¹³	77,705,000		EGP		12,091,396

					21,805,072

El Salvador—0.1%
El Salvador (Republic of) Bonds:
7.625%, 9/21/34¹³		4,802,000			4,777,990
7.65%, 6/15/35¹³		10,425,000			10,268,625

					15,046,615

France—1.8%
France (Government of) Obligations Assimilables du Tresor Bonds:
3.25%, 4/25/16	39,390,000		EUR		52,133,677
4%, 10/25/38	29,595,000		EUR		36,715,540
France (Government of) Treasury Nts.:
3.75%, 1/12/13	47,450,000		EUR		66,076,495
4.50%, 7/12/12	18,785,000		EUR		26,966,034

					181,891,746

Germany—1.7%
Germany (Federal Republic of) Bonds:
Series 03, 3.75%, 7/4/13	46,175,000		EUR		65,063,502
Series 05, 4%, 1/4/37	28,040,000		EUR		35,752,944
Series 07, 4.25%, 7/4/17	52,310,000		EUR		74,920,251

					175,736,697

Ghana—0.1%
Ghana (Republic of) Bonds, 8.50%, 10/4/17¹³		9,290,000			8,825,500

Greece—0.3%
Greece (Republic of) Bonds, 4.60%, 5/20/13	20,960,000		EUR		29,509,625

Guatemala—0.1%
Guatemala (Republic of) Nts.:
10.25%, 11/8/11¹³		3,052,000			3,402,980
10.25%, 11/8/11		3,208,000			3,576,920

					6,979,900

Hungary—0.2%
Hungary (Republic of) Bonds, Series 12/C, 6%, 10/24/12	4,129,000,000		HUF		21,443,233

Indonesia—0.7%
Indonesia (Republic of) Nts.:
6.75%, 3/10/14¹³		22,015,000			21,189,438
6.90%, 1/17/18¹³		15,300,000			13,973,184
7.25%, 4/20/15¹³		11,655,000			11,334,488


	Principal
	Amount			Value

Indonesia Continued
Indonesia (Republic of) Sr. Unsec. Nts., 7.75%, 1/17/38¹³	$	7,320,000		$	6,624,600
Indonesia (Republic of) Unsec. Nts., 8.50%, 10/12/35¹³		13,940,000			13,626,350

					66,748,060

Israel—0.4%
Israel (State of) Bonds:
5.50%, 2/28/17	60,080,000		ILS		17,301,656
Series 2682, 7.50%, 3/31/14	68,180,000		ILS		21,537,203

					38,838,859

Italy—0.4%
Italy (Republic of) Nts., Certificati di Credito del Tesoro, 4.70%, 7/1/09¹	28,010,000		EUR		39,475,752

Japan—4.8%
Japan (Government of) Bonds:
2 yr., Series 269, 0.90%, 6/15/10	14,591,000,000		JPY		137,591,395
5 yr., Series 72, 1.50%, 6/20/13	16,748,000,000		JPY		160,864,575
10 yr., Series 279, 2%, 3/20/16	2,727,000,000		JPY		27,229,744
10 yr., Series 282, 1.70%, 9/20/16	7,632,000,000		JPY		73,975,611
20 yr., Series 61, 1%, 3/20/23	4,539,000,000		JPY		37,946,134
20 yr., Series 73, 2%, 12/20/24	3,404,000,000		JPY		32,104,116
20 yr., Series 75, 2.10%, 3/20/25	1,891,000,000		JPY		18,050,422

					487,761,997

Malaysia—0.2%
Johor Corp. Malaysia (Government of) Bonds, Series P3, 1%, 7/31/12²	59,778,000		MYR		18,580,235

Mexico—1.3%
Mexican Williams Sr. Nts., 3.578%, 11/15/08^1,2		1,500,000			1,508,280
United Mexican States Bonds:
8.375%, 1/14/11		9,990,000			10,764,225
Series A, 6.375%, 1/16/13		9,990,000			10,294,695
Series M7, 8%, 12/24/08¹	634,570,000		MXN		57,972,363
Series MI10, 8%, 12/19/13	319,920,000		MXN		28,775,199
Series M20, 10%, 12/5/24¹	205,000,000		MXN		21,310,234

					130,624,996

Nigeria—0.9%
Nigeria (Federal Republic of) Nts., Series 3Y2S, 12.50%, 2/24/09	212,600,000		NGN		1,822,957
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10		1,064,890			891,213
Nigeria (Federal Republic of) Treasury Bills:
Series 364, 9.186%, 1/8/09¹²	1,953,600,000		NGN		16,148,365
Series 364, 9.17%, 2/5/09¹²	1,532,400,000		NGN		12,535,153
Series 364, 9.30%, 4/9/09¹²	440,900,000		NGN		3,544,369

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Nigeria Continued
Nigeria (Federal Republic of) Treasury Bonds:
Series 3Y, 9.23%, 5/25/12	1,559,500,000		NGN	$	12,662,692
Series 3Y1S, 15%, 1/27/09	294,000,000		NGN		2,533,427
Series 5 yr., 9.50%, 2/23/12	697,500,000		NGN		5,770,246
Series 5Y, 9.50%, 8/31/12	1,552,000,000		NGN		12,568,805
Series 5Y13, 12.99%, 9/29/11	524,300,000		NGN		4,914,686
Series 7Y16, 11.99%, 12/22/13	857,700,000		NGN		7,292,437
Series 7YR, 12.74%, 10/27/13	341,700,000		NGN		2,999,662
Series 10 yr., 9.35%, 8/31/17	1,487,100,000		NGN		10,620,788

					94,304,800

Norway—0.0%
Norway (Kingdom of) Bonds, 6.50%, 5/15/13	22,380,000		NOK		4,153,573

Panama—0.5%
Panama (Republic of) Bonds:
6.70%, 1/26/36		10,705,000			10,169,750
7.25%, 3/15/15		31,618,000			32,961,765
8.875%, 9/30/27		4,925,000			5,774,563
9.375%, 4/1/29		5,500,000			6,847,500

					55,753,578

Peru—1.6%
Peru (Republic of) Bonds:
7.84%, 8/12/20	61,210,000		PEN		19,521,629
8.375%, 5/3/16		3,350,000			3,584,500
9.91%, 5/5/15	70,149,000		PEN		25,401,041
Series 7, 8.60%, 8/12/17	71,402,000		PEN		24,193,966
Series 8-1, 12.25%, 8/10/11	94,570,000		PEN		34,936,203
Peru (Republic of) Certificates of Deposit:
3.925%, 10/20/08¹²	15,425,000		PEN		5,146,003
4.066%, 4/13/09¹²	1,533,000		PEN		492,482
4.163%, 7/9/09¹²	23,137,000		PEN		7,287,321
5.711%, 1/5/09¹²	71,423,000		PEN		23,461,651
5.719%, 11/6/08¹²	28,450,000		PEN		9,457,806
Peru (Republic of) Sr. Nts., 4.54%, 2/28/16¹²		14,031,213			9,242,360

					162,724,962

Philippines—0.2%
Philippines (Republic of the) Bonds:
8%, 1/15/16		17,390,000			18,389,925
8.375%, 2/15/11		5,050,000			5,334,063
Philippines (Republic of the) Unsec. Bonds, 9%, 2/15/13		930,000			1,027,650

					24,751,638


	Principal
	Amount			Value

Poland—0.2%
Poland (Republic of) Bonds:
Series WS0922, 5.75%, 9/23/22	8,880,000		PLZ	$	3,683,913
Series 0413, 5.25%, 4/25/13	35,565,000		PLZ		14,308,771

					17,992,684

Sweden—0.1%
Sweden (Kingdom of) Bonds, Series 1049, 4.50%, 8/12/15	70,000,000		SEK		10,544,737

The Netherlands—0.2%
Netherlands (Kingdom of the) Bonds, 5%, 7/15/11	7,860,000		EUR		11,442,606
Netherlands (Kingdom of the) Nts., 4.50%, 7/15/17	5,255,000		EUR		7,498,471

					18,941,077

Turkey—2.3%
Turkey (Republic of) Bonds:
6.75%, 4/3/18		11,135,000			10,466,900
7%, 9/26/16		20,140,000			20,190,350
7%, 3/11/19		9,950,000			9,414,292
14%, 1/19/11¹	38,490,000		TRY		27,635,790
15.861%, 10/7/09¹²	46,140,000		TRY		30,411,330
16%, 3/7/12¹	99,500,000		TRY		72,949,685
18.139%, 1/13/10¹²	74,380,000		TRY		46,593,108
Series CPI, 12%, 8/14/13	3,745,000		TRY		3,038,480
Turkey (Republic of) Nts., 7.25%, 3/15/15		10,915,000			10,887,713

					231,587,648

Ukraine—0.2%
Bayerische Hypo-und Vereinsbank AG for the City of Kiev, Ukraine, 8.625% Nts., 7/15/11¹³		20,560,000			18,504,000

United Kingdom—0.9%
United Kingdom Gilt Bonds:
4.75%, 6/7/10	10,750,000		GBP		19,342,852
5%, 3/7/12	9,805,000		GBP		17,911,801
United Kingdom Treasury Bonds:
4.75%, 12/7/38	20,965,000		GBP		38,826,883
5%, 3/7/18	10,470,000		GBP		19,403,415

					95,484,951

Uruguay—0.5%
Uruguay (Oriental Republic of) Bonds:
4.25%, 4/5/27	167,100,000		UYU		7,629,737
7.625%, 3/21/36		8,155,000			7,788,025
Uruguay (Oriental Republic of) Unsec. Bonds:
5%, 9/14/18	232,960,000		UYU		12,599,641
8%, 11/18/22		19,500,000			19,597,500

					47,614,903

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Venezuela—0.5%
Venezuela (Republic of) Bonds:
9%, 5/7/23	$	9,715,000		$	6,654,775
9.25%, 9/15/27		27,495,000			20,580,008
Venezuela (Republic of) Nts., 10.75%, 9/19/13		17,150,000			15,820,875
Venezuela (Republic of) Unsec. Bonds, 7.65%, 4/21/25		18,355,000			11,104,775

					54,160,433

Total Foreign Government Obligations (Cost $2,616,779,120)					2,514,004,340


Loan Participations—0.1%
Credit Suisse First Boston International, Export-Import Bank of Ukraine, 8.40% Sec. Nts., 2/9/16² (Cost $15,052,892)		15,660,000			8,456,400

Corporate Bonds and Notes—17.7%
AES Dominicana Energia Finance SA, 11% Sr. Nts., 12/13/15¹³		3,594,000			2,965,050
AES Panama SA, 6.35% Sr. Nts., 12/21/16¹³		4,230,000			4,046,786
AES Red Oak LLC, 8.54% Sr. Sec. Bonds, Series A, 11/30/19		1,681,077			1,681,077
Albertson’s, Inc., 8% Sr. Unsec. Debs., 5/1/31		10,865,000			10,102,527
Allbritton Communications Co., 7.75% Sr. Unsec. Sub. Nts., 12/15/12		3,640,000			3,130,400
Alliant Techsystems, Inc., 6.75% Sr. Sub. Nts., 4/1/16		1,540,000			1,447,600
Allied Waste North America, Inc., 7.375% Sr. Sec. Nts., Series B, 4/15/14		7,475,000			7,306,813
Alrosa Finance SA:
8.875% Nts., 11/17/14		12,160,000			10,488,000
8.875% Nts., 11/17/14¹³		7,235,000			6,240,188
AmBev International Finance Co. Ltd., 9.50% Bonds, 7/24/17¹³	13,860,000		BRR		5,317,042
AMC Entertainment, Inc., 8% Sr. Unsec. Sub. Nts., 3/1/14		2,255,000			1,950,575
America Movil SAB de CV, 8.46% Sr. Unsec. Unsub. Bonds, 12/18/36	33,200,000		MXN		2,676,886
American Media Operations, Inc.:
8.875% Sr. Unsec. Sub. Nts., 1/15/11²		38,178			26,915
8.875% Sr. Unsec. Sub. Nts., 1/15/11		1,020,000			708,900
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05^2,3,4		3,462,000			—
American Tower Corp., 7.50% Sr. Nts., 5/1/12		5,250,000			5,197,500
Atlas Energy Resources LLC, 10.75% Sr. Nts., 2/1/18¹³		7,255,000			6,565,775
Atlas Pipeline Partners LP, 8.125% Sr. Unsec. Nts., 12/15/15		4,835,000			4,472,375
Autopistas del Nordeste Cayman Ltd., 9.39% Nts., 1/15/26¹³		19,044,299			16,616,151
Avis Budget Car Rental LLC, 7.625% Sr. Unsec. Unsub. Nts., 5/15/14		11,525,000			7,347,188
BA Covered Bond Issuer, 4.25% Sec. Nts., 4/5/17	8,565,000		EUR		10,970,406
Banco Bilbao Vizcaya Argentaria SA, 4.25% Sec. Bonds, 7/15/14	6,440,000		EUR		8,669,653
Banco BMG SA, 9.15% Nts., 1/15/16¹³		17,395,000			16,742,688
Banco de Credito del Peru, 6.95% Sub. Nts., 11/7/21^1,13		5,425,000			5,153,750
Banco Hipotecario SA, 9.75% Sr. Unsec. Nts., 4/27/16¹³		4,617,000			2,977,965


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Banco Invex SA, 26.137% Mtg.-Backed Certificates, Series 062U, 3/13/34^1,14	17,204,645		MXN	$	5,906,511
Banco Pine SA, 7.375% Sr. Unsec. Nts., 6/17/10¹³		10,210,000			9,852,650
Bank of Scotland plc:
4.375% Sr. Sec. Nts., 7/13/16	31,985,000		EUR		41,064,970
4.50% Sr. Sec. Nts., 7/13/21	14,900,000		EUR		18,133,896
Barclays Bank plc, 6.278% Perpetual Bonds¹⁵		17,640,000			12,913,891
Bausch & Lomb, Inc., 9.875% Sr. Unsec. Nts., 11/1/15¹³		2,775,000			2,643,188
BE Aerospace, Inc., 8.50% Sr. Unsec. Nts., 7/1/18		2,645,000			2,572,263
Berry Petroleum Co., 8.25% Sr. Sub. Nts., 11/1/16		2,280,000			1,938,000
Berry Plastics Holding Corp., 8.875% Sr. Sec. Nts., 9/15/14		8,180,000			6,421,300
Biomet, Inc., 10% Sr. Unsec. Bonds, 10/15/17		3,020,000			3,095,500
Braskem Finance Ltd., 7.25% Sr. Unsec. Nts., 6/5/18¹³		13,570,000			12,416,550
C10 Capital SPV Ltd., 6.722% Unsec. Perpetual Debs.^13,15		17,200,000			15,970,613
Case New Holland, Inc., 7.125% Sr. Unsec. Nts., 3/1/14		16,105,000			14,736,075
Catalent Pharma Solutions, Inc., 9.50% Sr. Unsec. Nts., 4/15/15¹⁶		5,180,000			4,040,400
CCH I LLC/CCH I Capital Corp., 11% Sr. Sec. Nts., 10/1/15		5,995,000			3,986,675
CCM Merger, Inc., 8% Unsec. Nts., 8/1/13¹³		3,300,000			2,697,750
CellNet Data Systems, Inc., Sr. Unsec. Nts., 10/1/07^2,3,4		21,747,000			—
Centex Corp., 5.80% Sr. Unsec. Nts., 9/15/09²		3,285,000			3,120,750
Chesapeake Energy Corp., 6.875% Sr. Unsec. Nts., 1/15/16		11,185,000			10,262,238
Church & Dwight Co., Inc., 6% Sr. Unsec. Sub. Nts., 12/15/12		515,000			489,250
Cinemark, Inc., 0%/9.75% Sr. Unsec. Nts., 3/15/14^2,17		5,680,000			5,488,300
Citigroup, Inc., 8.40% Perpetual Bonds, Series E¹⁵		6,785,000			4,626,759
Citizens Communications Co., 6.25% Sr. Nts., 1/15/13		14,050,000			13,224,563
Claire’s Stores, Inc., 10.50% Sr. Unsec. Sub. Nts., 6/1/17		15,415,000			5,241,100
Cloverie plc, 7.454% Sec. Nts., Series 2005-93, 12/20/10^1,2		6,700,000			5,584,450
Community Health Systems, Inc., 8.875% Sr. Unsec. Nts., 7/15/15		3,640,000			3,476,200
Constellation Brands, Inc.:
8.125% Sr. Sub. Nts., 1/15/12		2,855,000			2,783,625
8.375% Sr. Nts., 12/15/14²		2,510,000			2,497,450
Copano Energy LLC/Copano Energy Finance Corp., 7.75% Sr. Nts., 6/1/18¹³		8,410,000			7,400,800
Coriolanus Ltd.:
3.359% Pass-Through Sec. Nts., 12/31/17^2,12	61,920,000		BRR		21,671,512
10.62% Sec. Nts., 8/10/10²		9,200,000			3,680,000
Corrections Corp. of America, 7.50% Sr. Nts., 5/1/11		2,270,000			2,272,838
Crown Americas, Inc., 7.75% Sr. Nts., 11/15/15		7,690,000			7,536,200
CSC Holdings, Inc., 7.625% Sr. Unsec. Unsub. Nts., Series B, 4/1/11		3,100,000			2,991,500

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Dali Capital plc/Bank of Moscow, 7.25% Sec. Nts., Series 28, Tranche 1, 11/25/09	136,600,000		RUR	$	5,217,002
Dali Capital SA (ROSBANK), 8% Sec. Nts., Series 23, Tranche 1, 9/30/09	134,000,000		RUR		4,947,983
DaVita, Inc., 6.625% Sr. Unsec. Nts., 3/15/13		9,185,000			8,771,675
Del Monte Corp., 8.625% Sr. Sub. Nts., 12/15/12		3,135,000			3,119,325
Delhaize America, Inc., 9% Unsub. Debs., 4/15/31		8,856,000			9,301,182
Denbury Resources, Inc., 7.50% Sr. Sub. Nts., 12/15/15		6,825,000			6,313,125
Depfa ACS Bank, 3.875% Sec. Nts., 11/14/16	1,640,000		EUR		2,087,108
Dex Media West LLC/Dex Media West Finance Co.:
8.50% Sr. Nts., 8/15/10		489,000			433,988
9.875% Sr. Sub. Nts., 8/15/13		1,360,000			846,600
Dillard’s, Inc., 6.625% Unsec. Nts., 11/15/08²		2,005,000			2,010,013
DJO Finance LLC/DJO Finance Corp., 10.875% Sr. Unsec. Nts., 11/15/14		6,105,000			5,876,063
Dole Food Co., Inc.:
8.625% Sr. Nts., 5/1/09		1,991,000			1,911,360
8.875% Sr. Unsec. Nts., 3/15/11		641,000			541,645
DRS Technologies, Inc., 6.625% Sr. Nts., 2/1/16		5,090,000			5,166,350
EchoStar DBS Corp., 6.375% Sr. Unsec. Nts., 10/1/11		7,055,000			6,508,238
Edison Mission Energy, 7% Sr. Unsec. Nts., 5/15/17		8,420,000			7,620,100
Eirles Two Ltd.:
4.692% Sec. Nts., Series 335, 4/30/12^1,2		16,700,000			9,485,600
6.082% Sec. Nts., Series 324, 4/30/12^1,2		14,300,000			8,980,400
Eletropaulo Metropolitana SA, 19.125% Nts., 6/28/10¹³	8,680,000		BRR		4,561,459
Elizabeth Arden, Inc., 7.75% Sr. Unsec. Sub. Nts., 1/15/14		3,495,000			3,197,925
Enterprise Products Operating LP, 8.375% Jr. Sub. Nts., 8/1/66¹		8,610,000			7,987,841
Exodus Communications, Inc.:
10.75% Sr. Nts., 12/15/09^2,3,4	2,196,653		EUR		—
10.75% Sr. Unsec. Sub. Nts., 12/15/09^2,3,4		6,378,763			—
Exsportfinans ASA, 3.50% Nts., 2/11/11¹	50,480,000		EUR		62,725,236
FairPoint Communications, Inc., 13.125% Sr. Nts., 4/1/18		7,665,000			7,013,475
Ferrellgas Escrow LLC/Ferrellgas Finance Escrow Corp., 6.75% Sr. Unsec. Nts., 5/1/14		395,000			323,900
Ferrellgas Partners LP, 6.75% Sr. Nts., 5/1/14¹³		2,630,000			2,156,600
Fiserv, Inc., 6.125% Sr. Unsec. Unsub. Nts., 11/20/12		5,613,000			5,447,630
Forest Oil Corp., 7.75% Sr. Nts., 5/1/14		4,515,000			4,289,250
Freeport-McMoRan Copper & Gold, Inc., 8.375% Sr. Nts., 4/1/17		12,570,000			12,399,940
Fresenius Medical Care Capital Trust IV, 7.875% Sr. Sub. Nts., 6/15/11		3,125,000			3,171,875
GameStop Corp., 8% Sr. Unsec. Nts., 10/1/12		3,080,000			3,110,800
GAZ Capital SA, 7.51% Sec. Nts., 7/31/13¹³		15,360,000			14,054,400


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Gazprom Capital SA:
7.288% Sr. Unsec. Nts., 8/16/37¹³	$	41,570,000		$	29,348,420
8.146% Sr. Unsec. Bonds, 4/11/18¹³		6,670,000			5,802,900
8.625% Sr. Unsec. Nts., 4/28/34¹³		10,435,000			9,701,733
Gazprom International SA, 7.201% Unsec. Bonds, 2/1/20¹³		4,588,547			4,164,106
General Motors Acceptance Corp., 8% Bonds, 11/1/31		9,760,000			3,683,121
Goldman Sachs Capital, Inc. (The), 6.345% Sub. Bonds, 2/15/34		11,725,000			7,707,921
Goodyear Tire & Rubber Co. (The):
7.857% Nts., 8/15/11		2,800,000			2,737,000
9% Sr. Unsec. Nts., 7/1/15		1,790,000			1,781,050
Graham Packaging Co., Inc., 9.875% Sr. Unsec. Sub. Nts., 10/15/14		6,660,000			5,827,500
Graphic Packaging International Corp., 8.50% Sr. Nts., 8/15/11		8,105,000			7,740,275
Greektown Holdings, Inc., 10.75% Sr. Nts., 12/1/13^4,13		6,360,000			4,420,200
GTL Trade Finance, Inc., 7.25% Sr. Unsec. Nts., 10/20/17¹³		14,220,000			13,647,218
Harrah’s Operating Co., Inc., 10.75% Sr. Unsec. Nts., 2/1/16¹³		9,370,000			4,825,550
HBOS plc, 6.413% Sub. Perpetual Bonds, Series A^13,15		17,300,000			9,761,300
HCA, Inc.:
6.375% Nts., 1/15/15		7,870,000			6,236,975
9.25% Sr. Sec. Nts., 11/15/16		3,635,000			3,544,125
HealthSouth Corp., 10.75% Sr. Unsec. Nts., 6/15/16²		4,420,000			4,486,300
Helix Energy Solutions Group, Inc., 9.50% Sr. Unsec. Nts., 1/15/16¹³		5,430,000			5,104,200
Hertz Corp.:
8.875% Sr. Unsec. Nts., 1/1/14		1,110,000			962,925
10.50% Sr. Unsec. Sub. Nts., 1/1/16		4,375,000			3,675,000
HSBC Bank plc:
10.221% Sr. Unsec. Nts., 7/8/09¹²		17,190,000			17,740,080
12.989% Sr. Unsec. Nts., 3/9/09¹²		17,190,000			16,846,200
12.045% Sr. Unsec. Nts., 1/12/10¹²		22,570,000			19,681,040
HSBC Finance Capital Trust IX, 5.911% Nts., 11/30/35¹		14,800,000			11,125,752
HSBK Europe BV:
7.25% Unsec. Unsub. Nts., 5/3/17¹³		3,440,000			2,081,200
9.25% Sr. Nts., 10/16/13¹³		40,440,000			30,936,600
ICICI Bank Ltd.:
6.375% Bonds, 4/30/22^1,13		18,530,000			12,801,265
6.625% Nts., 10/3/12¹³		17,600,000			16,997,728
Idearc, Inc., 8% Sr. Unsec. Nts., 11/15/16		7,030,000			1,950,825
IIRSA Norte Finance Ltd., 8.75% Sr. Nts., 5/30/24¹³		18,943,665			20,080,285
Inter-American Development Bank:
6.26% Nts., 12/8/09¹	7,510,000		BRR		3,899,249
11.108% Nts., 1/25/12¹	4,698,500,094		COP		1,916,803
Iron Mountain, Inc., 8.625% Sr. Unsec. Sub. Nts., 4/1/13		4,455,000			4,410,450

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
ISA Capital do Brasil SA:
7.875% Sr. Nts., 1/30/12¹³	$	4,195,000		$	4,037,688
8.80% Sr. Nts., 1/30/17¹³		5,240,000			5,043,500
Isle of Capri Casinos, Inc., 7% Sr. Unsec. Sub. Nts., 3/1/14		14,315,000			9,662,625
Ispat Inland ULC, 9.75% Sr. Sec. Nts., 4/1/14		2,715,000			2,870,189
Israel Electric Corp. Ltd., 7.25% Nts., 1/15/19¹³		20,225,000			20,279,810
iStar Financial, Inc., 3.369% Sr. Unsec. Nts., 3/16/09¹		3,320,000			2,764,056
Jarden Corp., 7.50% Sr. Unsec. Sub. Nts., 5/1/17		5,890,000			4,932,875
JPMorgan Chase & Co., 7.90% Perpetual Bonds, Series 1¹⁵		6,360,000			5,368,673
JPMorgan Hipotecaria su Casita:
6.47% Sec. Nts., 8/26/35²	21,284,360		MXN		1,628,971
24.62% Mtg.-Backed Certificates, Series 06U, 9/25/35¹	12,268,023		MXN		3,281,456
JPMorgan Securities Ltd., Red Square Capital Ltd., 9% Collateralized Debt Obligation Nts., 11/20/08¹³	217,000,000		RUR		8,224,198
JSC Astana Finance, 9.16% Nts., 3/14/12²		26,000,000			17,995,652
K. Hovnanian Enterprises, Inc.:
7.75% Sr. Unsec. Sub. Nts., 5/15/13		1,030,000			587,100
8.875% Sr. Sub. Nts., 4/1/12		2,405,000			1,539,200
Kansas City Southern Railway Co. (The), 7.50% Sr. Nts., 6/15/09		2,225,000			2,236,125
Kazmunaigaz Finance Sub BV, 9.125% Nts., 7/2/18¹³		37,770,000			32,293,350
KB Home, 8.625% Sr. Sub. Nts., 12/15/08		2,724,000			2,737,620
Key Energy Services, Inc., 8.375% Sr. Nts., 12/1/14¹³		5,300,000			5,114,500
Kinder Morgan Energy Partners LP, 7.30% Sr. Unsec. Nts., 8/15/33		8,519,000			7,780,565
Koppers Industry, Inc., 9.875% Sr. Sec. Nts., 10/15/13²		1,340,000			1,386,900
Kuznetski Capital SA/Bank of Moscow, 7.375% Nts., 11/26/10¹³		6,585,000			5,926,500
L-3 Communications Corp.:
5.875% Sr. Sub. Nts., 1/15/15		6,915,000			6,292,650
6.375% Sr. Unsec. Sub. Nts., Series B, 10/15/15		2,695,000			2,492,875
Lamar Media Corp.:
6.625% Sr. Unsec. Sub. Nts., 8/15/15		3,337,000			2,778,053
7.25% Sr. Unsec. Sub. Nts., 1/1/13		4,990,000			4,540,900
Lear Corp., 8.75% Sr. Unsec. Nts., Series B, 12/1/16		16,595,000			11,616,500
Lehman Brothers Holdings, Inc., 7.50% Sub. Nts., 5/11/38⁴		11,978,000			59,890
Leslie’s Poolmart, Inc., 7.75% Sr. Unsec. Nts., 2/1/13		2,970,000			2,524,500
Levi Strauss & Co., 9.75% Sr. Unsec. Unsub. Nts., 1/15/15		8,830,000			7,417,200
Lin Television Corp., 6.50% Sr. Sub. Nts., 5/15/13		6,103,000			4,790,855
Majapahit Holding BV:
7.25% Nts., 10/17/11¹³		7,460,000			7,105,650
7.75% Nts., 10/17/16¹³		10,065,000			8,605,575
Marquee Holdings, Inc., 9.505% Sr. Nts., 8/15/14¹		5,070,000			3,764,475


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Mashantucket Pequot Tribe, 8.50% Bonds, Series A, 11/15/15¹³	$	6,670,000		$	4,368,850
MediaNews Group, Inc.:
6.375% Sr. Sub. Nts., 4/1/14		2,445,000			745,725
6.875% Sr. Unsec. Sub. Nts., 10/1/13		8,285,000			2,526,925
MGM Mirage, Inc.:
6.625% Sr. Unsec. Nts., 7/15/15		4,650,000			3,255,000
8.375% Sr. Unsec. Sub. Nts., 2/1/11		6,160,000			5,066,600
MHP SA, 10.25% Sr. Sec. Sub. Bonds, 11/30/11¹³		5,365,000			4,560,250
Mohegan Tribal Gaming Authority:
6.125% Sr. Unsec. Sub. Nts., 2/15/13		4,470,000			3,732,450
8% Sr. Sub. Nts., 4/1/12		9,710,000			8,302,050
Momentive Performance Materials, Inc.:
9.75% Sr. Unsec. Nts., 12/1/14¹³		4,455,000			3,541,725
11.50% Sr. Unsec. Sub. Nts., 12/1/16		5,420,000			3,712,700
Morgan Stanley, 5.95% Sr. Unsec. Nts., Series F, 12/28/17		7,950,000			4,987,981
Mosaic Co. (The), 7.375% Sr. Nts., 12/1/14¹³		475,000			492,114
National Gas Co., 6.05% Nts., 1/15/36¹³		8,590,000			7,496,424
National Power Corp.:
5.875% Unsec. Unsub. Bonds, 12/19/16	421,000,000		PHP		7,624,529
6.875% Nts., 11/2/16¹³		5,440,000			5,018,400
9.625% Unsec. Bonds, 5/15/28		12,365,000			13,879,713
Newfield Exploration Co., 6.625% Sr. Unsec. Sub. Nts., 9/1/14		5,485,000			4,963,925
NewPage Corp., 10% Sr. Sec. Nts., 5/1/12		5,360,000			4,824,000
Nextel Communications, Inc., 7.375% Sr. Nts., Series D, 8/1/15		7,950,000			5,249,973
Nielsen Finance LLC/Nielsen Finance Co.:
0%/12.50% Sr. Unsec. Sub. Nts., 8/1/16¹⁷		5,645,000			3,697,475
10% Sr. Unsec. Nts., 8/1/14		7,605,000			7,262,775
Nortek, Inc., 8.50% Sr. Unsec. Unsub. Nts., 9/1/14		3,840,000			2,208,000
NorthPoint Communications Group, Inc., 12.875% Nts., 2/15/10^2,3,4		2,121,834			—
Novelis, Inc., 7.25% Sr. Unsec. Nts., 2/15/15¹		5,560,000			4,865,000
NTK Holdings, Inc., 0%/10.75% Sr. Unsec. Nts., 3/1/14¹⁷		9,575,000			4,165,125
NTL Cable plc, 9.125% Sr. Nts., 8/15/16		6,810,000			5,737,425
Ongko International Finance Co. BV, 10.50% Sec. Nts., 3/29/10^2,3,4		5,010,000			—
Orion Network Systems, Inc., 12.50% Sr. Unsub. Nts., 1/15/07^2,3,4		12,879,000			129
Panama Canal Railway Co., 7% Sr. Sec. Nts., 11/1/26¹³		9,240,000			7,807,800
Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 3/15/10		13,340,000			10,438,550
Peabody Energy Corp., 6.875% Sr. Unsec. Nts., Series B, 3/15/13		3,460,000			3,356,200
Pemex Project Funding Master Trust, 6.625% Nts., 6/15/38¹³		16,930,000			15,428,309
Petrobras International Finance Co., 5.785% Sr. Unsec. Nts., 3/1/18		25,590,000			23,369,965
Petroleum Export Ltd. Cayman SPV, 5.265% Sr. Nts., Cl. A3, 6/15/11¹³		20,439,970			20,252,862
Pinnacle Entertainment, Inc., 8.25% Sr. Unsec. Sub. Nts., 3/15/12		8,310,000			8,071,088

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp., 10.625% Sr. Sub. Nts., 4/1/17	$	7,651,000		$	5,776,505
Pokagon Gaming Authority, 10.375% Sr. Nts., 6/15/14¹³		2,925,000			2,976,188
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08^2,3,4		10,850,000			—
Pride International, Inc., 7.375% Sr. Unsec. Nts., 7/15/14		3,230,000			3,100,800
PSINet, Inc., 10.50% Sr. Unsec. Nts., 12/1/06^2,3,4	6,650,000		EUR		—
Quicksilver Resources, Inc.:
7.125% Sr. Sub. Nts., 4/1/16		4,720,000			3,870,400
8.25% Sr. Unsec. Nts., 8/1/15		2,665,000			2,451,800
Qwest Corp., 8.875% Unsec. Unsub. Nts., 3/15/12		12,995,000			12,800,075
R.H. Donnelley Corp.:
6.875% Sr. Nts., 1/15/13		4,685,000			1,850,575
6.875% Sr. Nts., Series A-2, 1/15/13		10,645,000			4,204,775
Rabobank Nederland, 3% Nts., 3/11/11^1,2		39,030,000			35,797,848
Radio One, Inc., 8.875% Sr. Unsec. Sub. Nts., Series B, 7/1/11		3,292,000			2,707,670
Rainbow National Services LLC, 8.75% Sr. Nts., 9/1/12¹³		1,785,000			1,793,925
Real Time Data Co., 11% Nts., 5/31/09^2,3,4,16		8,836,185			—
Reynolds American, Inc., 7.25% Sr. Sec. Nts., 6/1/13		8,170,000			8,403,752
RSHB Capital SA/OJSC Russian Agricultural Bank:
7.175% Nts., 5/16/13¹³		6,180,000			5,254,236
7.75% Nts., 5/29/18¹³		5,090,000			3,889,778
Sabine Pass LNG LP:
7.25% Sr. Sec. Nts., 11/30/13		3,590,000			2,854,050
7.50% Sr. Sec. Nts., 11/30/16		5,200,000			4,082,000
Salisbury International Investments Ltd., 6.936% Sec. Nts., Series 2006-003, Tranche E, 7/20/11^1,2		5,000,000			3,791,500
Sally Holdings LLC:
9.25% Sr. Unsec. Nts., 11/15/14		4,440,000			4,206,900
10.50% Sr. Unsec. Sub. Nts., 11/15/16		3,385,000			3,232,675
Select Medical Corp., 7.625% Sr. Unsec. Sub. Nts., 2/1/15		5,770,000			4,702,550
Service Corp. International, 6.75% Sr. Unsec. Nts., 4/1/15		5,035,000			4,418,213
Sinclair Broadcast Group, Inc., 8% Sr. Unsec. Sub. Nts., 3/15/12		8,005,000			7,744,838
SLM Corp., 4.50% Nts., Series A, 7/26/10		11,865,000			9,022,383
Smithfield Foods, Inc.:
7% Sr. Nts., 8/1/11		3,070,000			2,686,250
8% Sr. Nts., Series B, 10/15/09		3,980,000			3,880,500
Sprint Capital Corp., 8.75% Nts., 3/15/32		10,080,000			7,878,931
Station Casinos, Inc., 6.50% Sr. Unsec. Sub. Nts., 2/1/14		18,920,000			5,676,000
Steel Capital SA for OAO Severstal, 9.75% Sec. Nts., 7/29/13²		13,630,000			13,664,075
Steel Dynamics, Inc., 7.375% Sr. Unsec. Unsub. Nts., 11/1/12		5,335,000			4,908,200
Telefonica del Peru SA, 8% Sr. Unsec. Bonds, 4/11/16¹³	21,925,200		PEN		7,319,966


	Principal
	Amount			Value

Corporate Bonds and Notes Continued
Teligent, Inc., 11.50% Sr. Nts., 12/1/08^2,3,4	$	5,135,000		$	—
Tengizchevroil LLP, 6.124% Nts., 11/15/14¹³		17,065,550			13,737,768
Tesoro Corp., 6.625% Sr. Unsec. Nts., 11/1/15		6,120,000			5,018,400
TGI International Ltd., 9.50% Nts., 10/3/17¹³		16,200,000			16,200,000
Tiers-BSP, 0%/8.60% Collateralized Trust, Cl. A, 6/15/97¹⁷		14,710,000			7,405,014
Toll Corp., 8.25% Sr. Sub. Nts., 12/1/11		2,530,000			2,441,450
Travelport LLC, 11.875% Sr. Unsec. Sub. Nts., 9/1/16		2,520,000			1,820,700
Trump Entertainment Resorts, Inc., 8.50% Sec. Nts., 6/1/15		3,135,000			1,301,025
United Rentals, Inc., 7% Sr. Sub. Nts., 2/15/14		10,040,000			7,078,200
Universal Hospital Services, Inc., 8.50% Sr. Sec. Nts., 6/1/15¹⁶		5,050,000			4,734,375
US Oncology Holdings, Inc., 8.334% Sr. Unsec. Nts., 3/15/12^1,16		3,331,454			2,565,220
US Oncology, Inc., 9% Sr. Unsec. Nts., 8/15/12		4,905,000			4,929,525
Vanguard Health Holding Co. I LLC, 0%/11.25% Sr. Nts., 10/1/15¹⁷		7,025,000			6,111,750
Vedanta Resources plc, 9.50% Sr. Unsec. Nts., 7/18/18¹³		24,020,000			20,510,678
Videotron Ltd., 9.125% Sr. Nts., 4/15/18¹³		2,380,000			2,415,700
VIP Finance Ireland Ltd., 9.125% Bonds, 4/30/18¹³		16,800,000			13,052,592
Virgin Media Finance plc, 8.75% Sr. Unsec. Nts., 4/15/14		3,810,000			3,219,450
VTB Capital SA:
6.25% Sr. Nts., 6/30/35¹³		6,690,000			4,699,725
6.875% Sr. Sec. Nts., 5/29/18¹³		17,550,000			13,579,313
6.315% Sub. Unsec. Nts., 2/4/15		39,855,000			36,068,775
Warner Music Group Corp., 7.375% Sr. Sub. Bonds, 4/15/14		2,300,000			1,719,250
William Lyon Homes, Inc.:
7.50% Sr. Unsec. Nts., 2/15/14		410,000			161,950
10.75% Sr. Nts., 4/1/13²		3,535,000			1,537,725
Williams Cos., Inc. (The):
7.625% Nts., 7/15/19		4,815,000			4,746,579
8.125% Sr. Unsec. Nts., 3/15/12		4,865,000			4,918,418
Williams Holdings of Delaware, Inc., 6.50% Nts., 12/1/08²		1,100,000			1,098,592
Windstream Corp.:
8.125% Sr. Unsec. Unsub. Nts., 8/1/13		7,680,000			7,334,400
8.625% Sr. Unsec. Unsub. Nts., 8/1/16		5,060,000			4,693,150
WM Covered Bond Program:
3.875% Sec. Nts., Series 1, 9/27/11	27,340,000		EUR		34,384,285
4% Sec. Mtg. Nts., Series 2, 9/27/16	37,780,000		EUR		43,666,155
WMG Holdings Corp., 0%/9.50% Sr. Nts., 12/15/14¹⁷		9,658,000			5,360,190
Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp., 6.625% Nts., 12/1/14		11,805,000			10,122,788

Total Corporate Bonds and Notes (Cost $2,131,911,842)					1,809,014,574

STATEMENT OF INVESTMENTS Continued


	Shares		Value

Preferred Stocks—0.0%
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.^2,3,4,16		338,141	$	—
Eagle-Picher Holdings, Inc., 11.75% Cum. Exchangeable, Series B, Non-Vtg.^2,3		44,000		—
Fannie Mae, 8.25% Non-Cum. Sub., Series S, Non-Vtg.		373,405		814,023
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.^2,3,16		5,816		—
Sovereign Real Estate Investment Trust, 12% Non-Cum., Series A²		3,414		2,603,175

Total Preferred Stocks (Cost $28,117,252)				3,417,198


Common Stocks—0.4%
Arco Capital Corp. Ltd.^2,3,18		2,383,674		29,795,925
AT&T, Inc.		213,267		5,954,415
Global Aero Logistics, Inc.^2,3		32,791		32,791
National Maintenance Group, Inc.³		799,833		28,794
Revlon, Inc., Cl A³		339,394		5,040,001
Southern Pacific Funding Corp., Liquidating Trust^2,3		7,998,920		—

Total Common Stocks (Cost $48,989,870)				40,851,926

	Units

Rights, Warrants and Certificates—0.0%
Global Aero Logistics, Inc. Wts., Strike Price $10, Exp. 2/28/11^2,3		4,020		40
MHP SA, GDR Wts., Strike Price 0.01 UAH, Exp. 5/8/09³		235,715		2,592,865

Total Rights, Warrants and Certificates (Cost $30,592)				2,592,905


	Principal
	Amount

Structured Securities—10.3%
Barclays Bank plc:
Custom Basket of African Currencies Cv. Unsec. Unsub. Nts., 10.25%, 5/15/09¹³	$	7,640,000		7,763,004
Custom Basket of African Currencies Cv. Unsec. Unsub. Nts., 10.25%, 5/7/09¹³		7,640,000		7,788,980
Citibank NA New York:
Dominican Republic Credit Linked Nts., 12%, 2/22/11¹³	56,180,000		DOP	1,401,110
Dominican Republic Credit Linked Nts., 14.218%, 5/11/09¹²	154,730,000		DOP	4,008,334
Citigroup Funding, Inc., Custom Basket of African Currencies Credit Linked Nts., 0%, 4/29/09¹²		15,280,000		15,518,215
Citigroup Global Markets Holdings, Inc.:
Brazil (Federal Republic of) Credit Linked Nts., 9.762%, 1/3/17²	26,180,000		BRR	11,045,447
Brazil (Federal Republic of) Unsec. Credit Linked Nts., 15.407%, 1/5/10¹²	19,079,551		BRR	8,445,657
Colombia (Republic of) Credit Linked Nts., 12.509%, 2/26/15¹³	5,641,000,000		COP	4,769,407
Colombia (Republic of) Credit Linked Nts., Series 01, 7%, 2/26/15¹³	2,091,000,000		COP	1,767,919
Colombia (Republic of) Credit Linked Nts., Series 02, 7%, 2/26/15¹³	3,187,000,000		COP	2,694,576
Colombia (Republic of) Credit Linked Nts., Series II, 15%, 4/27/12	4,498,269,508		COP	2,212,492


	Principal
	Amount			Value

Structured Securities Continued
Citigroup Global Markets Holdings, Inc.: Continued
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12¹³	10,490,000,000		COP	$	5,159,549
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12	8,514,000,000		COP		4,187,645
Colombia (Republic of) Unsec. Credit Linked Nts., 15%, 4/27/12	7,206,900,000		COP		3,544,711
Dominican Republic Credit Linked Bonds, 9.85%, 11/10/08¹²	76,560,000		DOP		2,152,176
Dominican Republic Credit Linked Nts., 22%, 10/3/11	104,800,000		DOP		3,252,905
Dominican Republic Unsec. Credit Linked Nts., 12.047%, 2/23/09¹²	121,200,000		DOP		3,250,826
Dominican Republic Unsec. Credit Linked Nts., 13.182%, 2/23/09¹²	229,100,000		DOP		6,144,920
Dominican Republic Unsec. Credit Linked Nts., 15%, 3/12/12	174,700,000		DOP		4,382,120
Egypt (The Arab Republic of) Credit Linked Nts., 5.765%, 2/5/09¹²	45,450,000		EGP		7,936,797
Egypt (The Arab Republic of) Credit Linked Nts., 6.089%, 3/5/09¹²	32,610,000		EGP		5,636,859
Egypt (The Arab Republic of) Credit Linked Nts., 6.267%, 3/26/09¹²	44,450,000		EGP		7,625,464
Egypt (The Arab Republic of) Credit Linked Nts., 6.641%, 2/19/09¹²	45,040,000		EGP		7,825,128
Egypt (The Arab Republic of) Credit Linked Nts., 7.01%, 10/30/08¹²	34,080,000		EGP		6,172,582
Egypt (The Arab Republic of) Credit Linked Nts., 7.812%, 4/16/09¹²	18,040,000		EGP		3,071,605
Egypt (The Arab Republic of) Credit Linked Nts., 7.981%, 4/2/09¹²	20,590,000		EGP		3,523,387
Egypt (The Arab Republic of) Credit Linked Nts., 8%, 4/2/09¹²	36,010,000		EGP		6,162,077
Egypt (The Arab Republic of) Unsec. Credit Linked Nts., 6.529%, 3/26/09¹²	44,560,000		EGP		7,644,334
Ghana (Republic of) Credit Linked Nts., 13.50%, 4/2/10	10,330,000		GHS		8,294,291
Nigeria (Federal Republic of) Credit Linked Nts., 11.647%, 10/15/08¹²	898,000,000		NGN		7,602,250
Nigeria (Federal Republic of) Credit Linked Nts., 14.50%, 3/1/11^1,13	1,846,000,000		NGN		17,078,031
Nigeria (Federal Republic of) Credit Linked Nts., Series II, 14.50%, 4/4/11¹³	1,342,000,000		NGN		12,456,416
Nigeria (Federal Republic of) Unsec. Credit Linked Nts., 6.211%, 12/10/08¹²	426,000,000		NGN		3,532,886
Renins Nonlife Ltd. Credit Linked Nts., 12.50%, 5/30/12²		16,049,767			14,605,288
Russian Federation Credit Linked Nts., 7.65%, 12/4/08^1,2	78,340,000		RUR		2,991,947
Russian Federation Credit Linked Nts., Series 2, 7.50%, 12/4/08^1,2	195,600,000		RUR		7,470,319
Ukraine Hryvnia Unsec. Credit Linked Nts., 11.94%, 1/2/10	6,780,000		UAH		1,328,867
Zambia (Republic of) Credit Linked Nts., 11.399%, 6/11/09¹²	5,500,000,000		ZMK		1,408,600
Zimbabwe (Republic of) Credit Linked Nts., 10.076%, 11/26/08¹²	4,570,000,000		ZMK		1,258,137
Zimbabwe (Republic of) Credit Linked Nts., 10.717%, 3/4/09¹²	9,715,000,000		ZMK		2,581,391
Zimbabwe (Republic of) Credit Linked Nts., 10.793%, 2/25/09¹²	9,715,000,000		ZMK		2,575,195
Credit Suisse First Boston International:
Boryspil Airport Total Return Linked Nts., 10%, 4/19/10¹	16,740,000		UAH		2,528,614
Federal Grid Co. of Unified Energy System Total Return Linked Nts., 7.10%, 12/12/08^1,2	136,800,000		RUR		5,024,718
Gazprom Total Return Linked Nts., 6.79%, 10/29/09	271,550,000		RUR		10,617,351
Gazprom Total Return Linked Nts., Series 002, 6.95%, 8/6/09	266,360,000		RUR		10,227,580
Indonesia (Republic of) Total Return Linked Nts., 12%, 9/16/11	71,300,000,000		IDR		7,368,040
Lukoil Credit Linked Nts., Series Fbi 105, 7.25%, 11/19/09^1,2	242,139,000		RUR		9,153,363
Moitk Total Return Linked Nts., 8.966%, 3/26/11^1,2	208,910,000		RUR		7,734,407
Moscow (City of) Credit Linked Nts., Series Fbi 101, 10%, 12/31/10²	220,335,000		RUR		8,350,593
Moscow (City of) Credit Linked Nts., Series Fbi 98, 11%, 4/23/09¹³	230,200,000		RUR		9,115,525
NAK Naftogaz of Ukraine Credit Linked Nts., 5%, 1/20/09		14,720,000			14,344,640
Oreniz Total Return Linked Nts., 9.24%, 2/21/12^1,2	417,305,000		RUR		13,823,458

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Structured Securities Continued
Credit Suisse First Boston International: Continued
Pemex Project Funding Master Trust Total Credit Linked Nts., 4.046%, 5/12/11	$	50,000,000		$	49,221,375
RuRail Total Return Linked Nts., 6.67%, 1/22/09^1,2	189,120,000		RUR		7,149,133
Ukraine (Republic of) Credit Linked Nts., Series EMG 13, 11.94%, 12/30/09²	16,568,000		UAH		2,927,917
Vietnam Shipping Industry Group Total Return Linked Nts., 10.50%, 1/19/17²	53,361,000,000		VND		2,073,364
Credit Suisse First Boston, Inc. (Nassau Branch):
Russian Specialized Construction and Installation Administration Credit Linked Nts., 13%, 5/20/10^1,2	320,000,000		RUR		12,221,380
Ukraine (Republic of) Credit Linked Nts., 11.94%, 12/30/09¹³	200,000		UAH		35,344
Ukraine (Republic of) Credit Linked Nts., Series EMG 11, 11.94%, 12/30/09²	4,995,000		UAH		882,722
Ukraine (Republic of) Credit Linked Nts., Series NPC 12, 11.94%, 12/30/09¹³	32,180,000		UAH		5,686,888
Credit Suisse Group, Russian Moscoblgaz Finance Total Return Linked Nts., 9.25%, 6/24/12²	368,300,000		RUR		12,917,796
Credit Suisse International, Federal Grid Co. of Unified Energy System Total Return Linked Nts., 8.25%, 6/22/10^1,2	208,505,000		RUR		7,881,927
Deutsche Bank AG:
Argentina (Republic of) Credit Linked Nts., 12.479%, 12/21/11²	20,050,000		ARP		17,468,167
Arrendadora Capita Corp. SA de CV/Capita Corp. (The) de Mexico SA de CV Credit Linked Nts., 9.09%, 1/5/11²	47,233,107		MXN		4,254,068
Arrendadora Capita Corp. SA de CV/Capita Corp. (The) de Mexico SA de CV Credit Linked Nts., 9.65%, 1/5/11²	31,023,171		MXN		2,794,114
Brazil Real Credit Linked Nts., 14.389%, 3/3/10¹²	35,170,920		BRR		16,501,178
Brazil Real Total Return Linked Nts., 6%, 8/18/10	11,400,000		BRR		10,081,712
Colombia (Republic of) Credit Linked Nts., 13.50%, 9/16/14	8,909,000,000		COP		4,300,641
European Investment Bank, Russian Federation Credit Linked Nts., 5.702%, 1/19/10^2,12		5,820,000			5,288,634
Federal Grid Co. of Unified Energy System Total Return Linked Nts., Series FSK3, 7.10%, 12/16/08¹	194,210,000		RUR		7,721,490
Grupo TMM SA Credit Linked Nts., 6%, 9/7/12²		9,200,212			8,878,205
Halyk Bank of Kazakhstan Total Return Linked Nts., Series I, 7.25%, 3/24/09	1,409,410,000		KZT		11,589,266
Indonesia (Republic of) Credit Linked Nts., 9.50%, 6/22/15		6,360,000			5,545,666
Indonesia (Republic of) Credit Linked Nts., Series 02, 12.80%, 6/22/21	76,200,000,000		IDR		7,112,479
Indonesia (Republic of) Credit Linked Nts., Series III, 14.25%, 6/22/13		6,494,933			7,076,035
Moscow (City of) Total Return Linked Nts., Series II, 9%, 4/22/11	199,715,000		RUR		7,702,974
Nigeria (Federal Republic of) Credit Linked Nts., 12.50%, 2/24/09	369,400,000		NGN		3,202,943
Nigeria (Federal Republic of) Credit Linked Nts., 15%, 1/27/09	496,600,000		NGN		4,390,296
Opic Reforma I Credit Linked Nts., Cl. 1A, 10.65%, 8/4/14^1,2	36,680,000		MXN		3,353,907
Opic Reforma I Credit Linked Nts., Cl. 1B, 10.65%, 8/4/14^1,2	7,336,000		MXN		670,781
Opic Reforma I Credit Linked Nts., Cl. 1C, 10.65%, 9/24/14^1,2	12,226,667		MXN		1,117,969
Opic Reforma I Credit Linked Nts., Cl. 2A, 12.15%, 5/22/15^1,2	3,500,072		MXN		320,036
Opic Reforma I Credit Linked Nts., Cl. 2B, 12.15%, 5/22/15^1,2	6,123,460		MXN		559,910


	Principal
	Amount			Value

Structured Securities Continued
Deutsche Bank AG: Continued
Opic Reforma I Credit Linked Nts., Cl. 2C, 12.15%, 5/22/15^1,2	92,326,918		MXN	$	8,442,090
Opic Reforma I Credit Linked Nts., Cl. 2D, 12.15%, 8/4/14^1,2	6,728,659		MXN		615,248
Opic Reforma I Credit Linked Nts., Cl. 2E, 12.15%, 5/20/15^1,2	4,888,497		MXN		446,989
Opic Reforma I Credit Linked Nts., Cl. 2F, 12.15%, 5/22/12^1,2	3,122,038		MXN		285,470
Opic Reforma I Credit Linked Nts., Cl. 2G, 12.15%, 5/22/15^1,2	574,952		MXN		52,572
Peru (Republic of) Credit Linked Nts., 4.416%, 2/20/11¹		8,015,000			7,984,261
Rosselkhozbank Total Return Linked Nts., 7.919%, 3/20/09¹²	116,100,000		RUR		4,249,105
Rosselkhozbank Total Return Linked Nts., 7.949%, 1/15/09¹²	218,560,000		RUR		8,184,773
Rosselkhozbank Total Return Linked Nts., Series 2, 7.948%, 1/16/09¹²	228,940,000		RUR		8,576,702
RuRail Total Return Linked Nts., 0%, 12/4/09¹²	162,122,000		RUR		6,425,060
RuRail Total Return Linked Nts., 6.67%, 1/26/09¹	272,550,000		RUR		10,727,827
Sberbank Total Return Linked Nts., 7.375%, 5/7/09¹²	369,230,000		RUR		13,431,163
Sberbank Total Return Linked Nts., 7.406%, 6/9/09¹²	147,700,000		RUR		5,320,491
Ukraine (Republic of) 5 yr. Credit Linked Nts., 4.05%, 8/25/10		5,690,000			4,988,252
Ukraine (Republic of) 5.5 yr. Credit Linked Nts., 4.05%, 3/1/11		5,740,000			4,865,913
Ukraine (Republic of) 6 yr. Credit Linked Nts., 4.05%, 8/29/11		5,740,000			4,724,594
Ukraine (Republic of) 6.5 yr. Credit Linked Nts., 4.05%, 2/29/12		5,740,000			4,591,541
Ukraine (Republic of) 7 yr. Credit Linked Nts., 4.05%, 8/30/12		5,740,000			4,472,378
Ukraine (Republic of) Credit Linked Nts., 10.208%, 7/3/09	6,969,200		UAH		1,378,734
United Mexican States Credit Linked Nts., 9.52%, 1/5/11²	30,981,245		MXN		2,790,338
Videocon International Ltd. Credit Linked Nts., 6.26%, 12/29/09		16,060,000			16,830,719
Deutsche Bank AG Singapore, Vietnam Shipping Industry Group Total Return Linked Nts., 9%, 4/20/17	128,300,000,000		VND		4,027,554
Dresdner Bank AG, Lukoil Credit Linked Nts., Series 3, 7.04%, 12/12/11^1,13	134,130,000		RUR		4,883,251
Goldman Sachs & Co., Turkey (Republic of) Credit Linked Nts., 14.802%, 3/29/17^12,13	77,520,000		TRY		10,179,271
Goldman Sachs Capital Markets LP, Colombia (Republic of) Credit Linked Nts., 10.48%, 2/8/37^12,13	237,059,200,000		COP		389,855
Goldman Sachs International, Rosselkhozbank Total Return Linked Nts., 8%, 5/13/09¹	374,900,000		RUR		14,030,307
Hallertau SPC, Philippines (Republic of) Credit Linked Nts., Series 2007-01, 5.244%, 12/20/17^1,2		16,640,000			13,728,000
Hallertau SPC Segregated Portfolio, Brazil (Federal Republic of) Credit Linked Nts., Series 2008-01, 9.888%, 8/2/10^2,4,12	36,418,983		BRR		4,237,302
ING Bank NV, Ukraine (Republic of) Credit Linked Nts., Series 725, 11.89%, 12/30/09²	38,336,000		UAH		7,508,576
JPMorgan Chase Bank NA:
Brazil (Federal Republic of) Credit Linked Nts., 10.291%, 5/16/45¹³	7,895,000		BRR		6,200,226
Brazil (Federal Republic of) Credit Linked Nts., 14.35%, 2/20/12²	21,280,000		BRR		8,676,836
Brazil (Federal Republic of) Credit Linked Nts., 15.582%, 1/2/15¹²	70,845,010		BRR		16,198,675
Colombia (Republic of) Credit Linked Bonds, 10.244%, 10/31/16^2,12	52,420,000,000		COP		8,663,830
Colombia (Republic of) Credit Linked Bonds, 10.266%, 1/5/16^12,13	121,000,000,000		COP		22,419,588
Colombia (Republic of) Credit Linked Bonds, Series A, 10.244%, 10/31/16^2,12	52,197,000,000		COP		8,626,973

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Structured Securities Continued
JPMorgan Chase Bank NA: Continued
Peru (Republic of) Credit Linked Nts., 8.193%, 9/2/15^12,13	25,410,000		PEN	$	4,575,930
Swaziland (Kingdom of) Credit Linked Nts., 7.25%, 6/20/10¹³		9,185,000			9,870,201
JPMorgan Chase Bank NA London Branch, Indonesia (Republic of) Credit Linked Nts., 12.80%, 6/17/21¹³	65,480,000,000		IDR		6,662,418
Lehman Brothers Treasury Co. BV:
Brazil (Federal Republic of) Credit Linked Nts., 6.357%, 4/20/11^12,13	33,443,666		BRR		14,997,487
Microvest Capital Management LLC Credit Linked Nts., 7.55%, 5/24/12²		24,017,949			23,249,374
Merrill Lynch:
Colombia (Republic of) Credit Linked Nts., 10%, 11/17/16²	7,680,000,000		COP		2,991,237
Renaissance Capital International Services Ltd. Total Return Linked Nts., 10.50%, 10/7/08²	277,000,000		RUR		9,715,529
Morgan Stanley:
Credit Linked Nts., 6.25%, 3/23/17²	15,216,000		PEN		3,280,432
Russian Federation Total Return Linked Bonds, Series 007, Cl. VR, 5%, 8/22/34	307,228,445		RUR		9,734,267
Morgan Stanley & Co. International Ltd./Red Arrow International Leasing plc Total Return Linked Nts., Series A, 8.375%, 7/9/12²	119,847,408		RUR		4,203,542
Morgan Stanley Capital Services, Inc.:
Brazil (Federal Republic of) Credit Linked Nts., 12.563%, 1/5/22^12,13	109,310,000		BRR		2,240,312
Brazil (Federal Republic of) Credit Linked Nts., 14.40%, 8/4/16²	38,023,494		BRR		15,757,700
Eurokommerz Total Return Linked Nts., Series 1, 12.43%, 10/19/09¹	845,000,000		RUR		32,930,696
Russian Federation Total Return Linked Nts., 12.43%, 10/19/09¹	400,000,000		RUR		15,588,495
Ukraine (Republic of) Credit Linked Nts., 4.511%, 10/15/17^1,13		21,300,000			12,354,000
Ukraine (Republic of) Credit Linked Nts., Series 2, 5.728%, 10/15/17^1,2		5,400,000			3,240,000
United Mexican States Credit Linked Nts., 5.64%, 11/20/15¹³		300,000			299,430
WTI Trading Ltd. Total Return Linked Nts., Series A, 15%, 3/8/12²		16,856,750			16,182,480
WTI Trading Ltd. Total Return Linked Nts., Series C, 15%, 3/8/12²		25,304,211			24,292,042
UBS AG:
Egypt (The Arab Republic of) Credit Linked Nts., 7.298%, 4/29/09^12,13	35,340,000		EGP		6,038,692
Egypt (The Arab Republic of) Credit Linked Nts., 7.449%, 11/26/08^12,13	35,110,000		EGP		6,292,483
Egypt (The Arab Republic of) Credit Linked Nts., 7.808%, 4/15/09^12,13	18,000,000		EGP		3,087,597
Egypt (The Arab Republic of) Credit Linked Nts., Series 2, 7.54%, 4/22/09^12,13	17,840,000		EGP		3,056,886
Ghana (Republic of) Credit Linked Nts., 14.47%, 12/28/11²	4,650,997		GHS		3,469,696

Total Structured Securities (Cost $1,130,560,863)					1,050,753,840


Event-Linked Bonds—1.4%
Aiolos Ltd. Catastrophe Linked Nts., 9.709%, 4/8/09^1,13	5,100,000		EUR		7,115,144
Akibare Ltd. Catastrophe Linked Nts., Cl. A, 5.762%, 5/22/12^1,13		4,862,000			4,909,161
Calabash Re Ltd. Catastrophe Linked Nts., Cl. A-1, 11.311%, 6/1/09^1,13		6,500,000			6,752,850
Cascadia Ltd. Catastrophe Linked Nts., 6.811%, 8/31/09^1,13		3,950,000			3,981,600
Cat-Mex Ltd. Catastrophe Linked Nts., Cl. A, 5.153%, 5/19/09^1,13		7,450,000			7,359,855
Champlain Ltd. Catastrophe Linked Nts., Series A, 15.541%, 1/7/09^1,13		5,260,000			5,295,768


	Principal
	Amount		Value

Event-Linked Bonds Continued
Eurus Ltd. Catastrophe Linked Nts., 9.043%, 4/8/09^1,13	$	5,790,000	$	5,740,206
Fhu-Jin Ltd. Catastrophe Linked Nts., Cl. B, 6.691%, 8/10/11^1,13		7,010,000		7,134,077
Foundation Re II Ltd. Catastrophe Linked Nts., 12.607%, 1/8/09^1,13		3,706,000		3,641,516
Foundation Re Ltd. Catastrophe Linked Nts., 6.907%, 11/24/08^1,13		5,250,000		5,200,125
Fusion 2007 Ltd. Catastrophe Linked Nts., 8.809%, 5/19/09^1,13		8,300,000		8,392,960
GlobeCat Ltd. Catastrophe Linked Nts., 4.883%, 12/30/08¹		5,250,000		5,244,750
Lakeside Re Ltd. Catastrophe Linked Nts., 10.262%, 12/31/09^1,13		10,580,000		10,895,284
Medquake Ltd. Catastrophe Linked Nts., 7.904%, 5/31/10^1,13		4,000,000		4,001,600
Midori Ltd. Catastrophe Linked Nts., 5.541%, 10/24/12^1,13		4,300,000		4,329,670
Muteki Ltd. Catastrophe Linked Nts., 7.204%, 5/24/11^1,13		5,200,000		5,176,600
Nelson Re Ltd. Catastrophe Linked Nts., Series 2007-I, Cl. A, 14.704%, 6/21/10^1,13		8,580,000		8,634,054
Osiris Capital plc Catastrophe Linked Combined Mortality Index Nts., Series D, 7.791%, 1/15/10^1,13		3,230,000		3,247,119
Redwood Capital X Ltd. Catastrophe Linked Nts., Series C, 7.541%, 1/9/09^1,2		890,000		889,911
Residential Reinsurance 2007 Ltd. Catastrophe Linked Nts.:
Series CL2, 14.311%, 6/6/11^1,13		6,680,000		6,768,844
Series CL3, 15.061%, 6/7/10^1,13		3,000,000		3,084,300
VASCO Re 2006 Ltd. Catastrophe Linked Nts., 11.314%, 6/5/09^1,13		9,030,000		9,244,914
Vega Capital Ltd. Catastrophe Linked Nts., Series D, 0%, 6/24/11^2,12		10,693,000		10,607,456
Willow Re Ltd. Catastrophe Linked Nts., 7.924%, 6/16/10^1,13		8,150,000		6,438,500
Total Event-Linked Bonds (Cost $143,770,511)				144,086,264


	Expiration		Strike
	Dates		Price		Contracts

Options Purchased—0.0%
Brazilian Real (BRR) Call³		10/6/08	1.6635	BRR		111,575,000	67,068
Brazilian Real (BRR) Call³		10/9/08	1.7185	BRR		117,240,000	26,391
Brazilian Real (BRR) Call³		12/9/08	1.7142	BRR		58,595,000	142,403
Japanese Yen (JPY) Call³		10/9/08	104.20	JPY		6,980,000,000	532,574

Total Options Purchased (Cost $1,521,606)							768,436

Exercise

Notional

Date

Amount

Swaptions Purchased—0.0%

J Aron & Co., Swap Counterparty, Interest Rate Swap call option; Swap Terms-Receive fixed rate of 9.32% and pay floating rate based on 28 day MXN TIIE BANXICO; terminating 5/31/22^3,19 (Cost $847,363)

6/11/09

298,955,000

MXN

1,183,074

STATEMENT OF INVESTMENTS Continued


	Principal
	Amount			Value

Short-Term Notes—4.1%
Federal Home Loan Mortgage Corp., 2.74%, 2/26/09^9,20	$	123,000,000		$	121,520,925
Federal National Mortgage Assn.:
2.76%, 2/23/09^5,9		172,070,000			170,042,843
2.71%, 2/25/09⁹		123,000,000			121,530,888


Total Short-Term Notes (Cost $413,488,111)					413,094,656

	Shares

Investment Companies—10.4%
Oppenheimer Institutional Money Market Fund, Cl. E, 3.15%^18,21		715,917,178			715,917,178
Oppenheimer Master Event-Linked Bond Fund, LLC^3,18		3,110,084			30,789,656
Oppenheimer Master Loan Fund, LLC^3,18		34,077,174			318,518,445


Total Investment Companies (Cost $1,101,118,384)					1,065,225,279

Total Investments, at Value (excluding Investments Purchased with Cash Collateral from Securities Loaned) (Cost $11,374,790,177)					10,572,474,524


Investments Purchased with Cash Collateral from Securities Loaned—4.7%²²
OFI Liquid Assets Fund, LLC, 3.40%^18,21 (Cost $481,294,160)		481,294,160			481,294,160

Total Investments, at Value (Cost $11,856,084,337)		108.4	%		11,053,768,684
Liabilities in Excess of Other Assets		(8.4	)		(856,982,223	)


Net Assets		100.0	%	$	10,196,786,461

Industry classifications are unaudited.

Footnotes to Statement of Investments

Principal/notional amount and strike price are reported in U.S. Dollars, except for those denoted in the following currencies:


ARP		Argentine Peso
AUD		Australian Dollar
BRR		Brazilian Real
CAD		Canadian Dollar
COP		Colombian Peso
DKK		Danish Krone
DOP		Dominican Republic Peso
EGP		Egyptian Pounds
EUR		Euro
GBP		British Pound Sterling
GHS		Ghana Cedi
HUF		Hungarian Forint
IDR		Indonesia Rupiah
ILS		Israeli Shekel
JPY		Japanese Yen
KZT		Kazakhstan Tenge
MXN		Mexican Nuevo Peso
MYR		Malaysian Ringgit
NGN		Nigeria Naira
NOK		Norwegian Krone
PEN		Peruvian New Sol
PHP		Philippines Peso
PLZ		Polish Zloty
RUR		Russian Ruble
SEK		Swedish Krona
TRY		New Turkish Lira
UAH		Ukraine Hryvnia
UYU		Uruguay Peso
VND		Vietnam Dong
ZMK		Zambian Kwacha

Swaption Purchased abbreviation is as follows:

MXN-TIIE-BANXICO Mexican Nuevo Peso—Interbank Equilibrium Interest Rate—Banco de Mexico


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

2.		Illiquid or restricted security. The aggregate value of illiquid or restricted securities as of September 30, 2008 was $728,923,186, which represents 7.15% of the Fund’s net assets, of which $15,864,972 is considered restricted. See Note 9 of accompanying Notes. Information concerning restricted securities is as follows:


	Acquisition						Unrealized
Security	Date		Cost		Value		Depreciation

Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 1A, 10.65%, 8/4/14		12/28/07	$	3,371,014	$	3,353,907	$	17,107
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 1B, 10.65%, 8/4/14		6/13/08		707,255		670,781		36,474
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 1C, 10.65%, 9/24/14		8/13/08		1,203,116		1,117,969		85,147
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2A, 12.15%, 5/22/15		5/22/08		337,462		320,036		17,426
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2B, 12.15%, 5/22/15		6/13/08		590,355		559,910		30,445
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2C, 12.15%, 5/22/15		6/19/08		8,957,126		8,442,090		515,036
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2D, 12.15%, 8/4/14		7/9/08		652,302		615,248		37,054
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2E, 12.15%, 5/20/15		7/16/08		474,704		446,989		27,715
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2F, 12.15%, 5/22/12		8/11/08		307,336		285,470		21,866
Deutsche Bank AG, Opic Reforma I Credit Linked Nts.,
Cl. 2G, 12.15%, 5/22/15		8/25/08		56,708		52,572		4,136

			$	16,657,378	$	15,864,972	$	792,406


3.		Non-income producing security.

4.		Issue is in default. See Note 1 of accompanying Notes.

5.		All or a portion of the security is held in collateralized accounts to cover initial margin requirements on open futures contracts. The aggregate market value of such securities is $80,079,092. See Note 6 of accompanying Notes.

6.		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. These securities amount to $74,238,138 or 0.73% of the Fund’s net assets as of September 30, 2008.

7.		Principal-Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. The value of these 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. Interest rates disclosed represent current yields based upon the current cost basis and estimated timing of future cash flows. These securities amount to $13,827,800 or 0.14% of the Fund’s net assets as of September 30, 2008.

8.		When-issued security or delayed delivery to be delivered and settled after September 30, 2008. See Note 1 of accompanying Notes.

9.		Partial or fully-loaned security. See Note 10 of accompanying Notes.

10.		A sufficient amount of liquid assets has been designated to cover outstanding written call options. See Note 7 of accompanying Notes.

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued



11.		A sufficient amount of securities has been designated to cover outstanding foreign currency exchange contracts. See Note 5 of accompanying Notes.

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

13.		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 $1,052,141,040 or 10.32% of the Fund’s net assets as of September 30, 2008.

14.		Denotes an inflation-indexed security: coupon and principal are indexed to the consumer price index.

15.		This bond has no contractual maturity date, is not redeemable and contractually pays an indefinite stream of interest. Rate reported represents the current interest rate for this variable rate security.

16.		Interest or dividend is paid-in-kind, when applicable.

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

18.		Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended September 30, 2008, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:


	Shares		Gross		Gross		Shares
	September 30, 2007		Additions		Reductions		September 30, 2008

Arco Capital Corp. Ltd.		2,383,674		—		—		2,383,674
OFI Liquid Asset Fund, LLC		—		728,361,320		247,067,160		481,294,160
Oppenheimer Institutional Money Market Fund, Cl. E		808,046,388		9,146,652,719		9,238,781,929		715,917,178
Oppenheimer Master Event-Linked Bond Fund, LLC		—		3,140,371		30,287		3,110,084
Oppenheimer Master Loan Fund, LLC		—		36,200,028		2,122,854		34,077,174


						Realized
	Value		Income			Gain (Loss)

Arco Capital Corp. Ltd.	$	29,795,925	$	—		$	—
OFI Liquid Asset Fund, LLC		481,294,160		196,868	^a		—
Oppenheimer Institutional Money Market Fund, Cl. E		715,917,178		29,036,529			—
Oppenheimer Master Event-Linked Bond Fund, LLC		30,789,656		336,980	^b		2,173	^b
Oppenheimer Master Loan Fund, LLC		318,518,445		22,505,025	^c		(6,797,802	)^c

	$	1,576,315,364	$	52,075,402		$	(6,795,629	)


a.		Net of compensation to counterparties.

b.		Represents the amount allocated to the Fund from Oppenheimer Event-Linked Bond Fund, LLC.

c.		Represents the amount allocated to the Fund from Oppenheimer Master Loan Fund, LLC.

19.		Swap contract terms if the option was exercised on exercise date.

20.		A sufficient amount of liquid assets has been designated to cover outstanding written put options. See Note 7 of accompanying Notes.

21.		Rate shown is the 7-day yield as of September 30, 2008.

22.		The security/securities have been segregated to satisfy the forward commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 10 of accompanying Notes.

Foreign Currency Exchange Contracts as of September 30, 2008 are as follows:


		Contract
		Amount			Expiration				Unrealized		Unrealized
Contract Description	Buy/Sell	(000s)			Date		Value		Appreciation		Depreciation

Australian Dollar (AUD)	Sell		112,284	AUD		10/8/08-11/3/08	$	88,665,338	$	1,577,116	$	—
Australian Dollar (AUD)	Buy		26,675	AUD		10/8/08		21,075,386		—		378,516
Brazilian Real (BRR)	Sell		63,600	BRR		11/4/08		33,173,406		603,076		85,756
Brazilian Real (BRR)	Buy		369,451	BRR		11/4/08-1/5/10		189,141,191		19,869,707		9,828,367
British Pound Sterling (GBP)	Sell		64,055	GBP		10/1/08-2/5/09		114,020,268		6,036,317		93,023
British Pound Sterling (GBP)	Buy		3,085	GBP		10/1/08-10/2/08		5,484,639		—		212,203
Canadian Dollar (CAD)	Sell		225,610	CAD		10/6/08-10/31/08		212,146,329		1,112,780		242,048
Canadian Dollar (CAD)	Buy		915	CAD		10/10/08		860,292		—		10,888
Chilean Peso (CLP)	Buy		16,365,000	CLP		10/22/08-11/12/08		29,558,940		—		975,832
Chinese Renminbi (Yuan) (CNY)	Buy		435,475	CNY		5/13/09-9/2/09		62,777,760		—		3,134,887
Colombian Peso (COP)	Sell		88,578,000	COP		11/4/08		40,217,778		686,655		—
Czech Koruna (CZK)	Sell		7,943	CZK		12/31/09		459,628		24,478		—
Euro (EUR)	Sell		525,750	EUR		10/1/08-2/5/09		741,470,148		47,564,042		—
Euro (EUR)	Buy		328,130	EUR		10/1/08-1/16/09		462,662,250		—		25,405,838
Hungarian Forint (HUF)	Sell		3,734,267	HUF		11/12/08-12/31/09		21,632,424		7,582		233,256
Hungarian Forint (HUF)	Buy		8,054,000	HUF		12/2/08		46,636,292		—		162,081
Indian Rupee (INR)	Sell		1,801,300	INR		10/20/08-11/3/08		38,357,502		197,603		268,170
Indonesia Rupiah (IDR)	Buy		667,485,000	IDR		10/14/08-12/19/08		69,014,354		76,430		1,298,628
Israeli Shekel (ILS)	Sell		93,900	ILS		10/3/08-10/30/08		27,030,505		—		771,186
Japanese Yen (JPY)	Sell		11,637,000	JPY		10/1/08-2/5/09		110,541,202		64,491		1,293,331
Japanese Yen (JPY)	Buy		35,133,000	JPY		10/1/08-3/10/09		332,331,122		16,953		6,448,495
Kuwaiti Dinar (KWD)	Buy		1,655	KWD		1/29/09		6,159,263		—		11,505
Malaysian Ringgit (MYR)	Sell		165,120	MYR		10/14/08-10/15/08		48,039,118		—		421,435
Malaysian Ringgit (MYR)	Buy		27,940	MYR		10/10/08		8,124,867		—		689,013
Mexican Nuevo Peso (MXN)	Sell		320,429	MXN		10/6/08-10/30/08		29,248,303		697,820		—
Mexican Nuevo Peso (MXN)	Buy		709,215	MXN		11/24/08		64,388,119		—		4,787,059
New Taiwan Dollar (TWD)	Sell		1,930,000	TWD		10/31/08-12/2/08		59,915,773		811,650		37,989
New Turkish Lira (TRY)	Sell		46,465	TRY		10/20/08		36,362,166		726,755		—
New Zealand Dollar (NZD)	Sell		40,435	NZD		10/10/08-10/22/08		26,989,422		1,180,175		—
New Zealand Dollar (NZD)	Buy		103,415	NZD		10/31/08-1/16/09		68,437,241		—		5,962,856
Norwegian Krone (NOK)	Sell		49,165	NOK		10/10/08		8,362,872		38,529		—
Norwegian Krone (NOK)	Buy		603,465	NOK		10/6/08-1/16/09		102,340,722		—		6,695,099
Peruvian New Sol (PEN)	Sell		60,810	PEN		1/7/09		20,231,159		26,631		54,728
Peruvian New Sol (PEN)	Buy		36,437	PEN		11/5/08		12,186,097		—		751,803
Philippines Peso (PHP)	Sell		357,000	PHP		10/17/08		7,588,541		—		181,902
Philippines Peso (PHP)	Buy		1,015,000	PHP		10/17/08		21,575,263		330,194		78,154
Polish Zloty (PLZ)	Sell		280,096	PLZ		10/2/08-12/31/09		116,037,925		1,417,291		743,748
Polish Zloty (PLZ)	Buy		213,743	PLZ		10/2/08-10/17/08		88,599,239		165,087		5,094,073
Qatari Riyal (QAR)	Buy		21,650	QAR		1/29/09		5,967,343		—		204,264
Russian Ruble (RUR)	Sell		2,093,730	RUR		10/15/08-9/21/09		79,249,312		196,980		234,099
Russian Ruble (RUR)	Buy		936,780	RUR		11/19/08		36,263,343		—		2,007,722
Saudi Riyal (SAR)	Buy		22,790	SAR		1/29/09		6,072,926		—		99,044
Singapore Dollar (SGD)	Buy		85,130	SGD		10/10/08-10/31/08		59,314,039		—		476,130
South African Rand (ZAR)	Sell		257,780	ZAR		10/20/08		30,971,112		1,570,615		—
South African Rand (ZAR)	Buy		9,932	ZAR		12/31/09		1,107,459		—		110,423
South Korean Won (KRW)	Sell		16,086,000	KRW		10/31/08		13,389,198		254,667		66,621
Swedish Krona (SEK)	Sell		221,090	SEK		1/16/09		31,940,508		4,034,247		—

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Foreign Currency Exchange Contracts Continued


		Contract
		Amount			Expiration				Unrealized		Unrealized
Contract Description	Buy/Sell	(000s)			Date		Value		Appreciation		Depreciation

Swedish Krona (SEK)	Buy		18,130	SEK		10/10/08	$	2,619,327	$	—	$	388,304
Swiss Franc (CHF)	Sell		2,861	CHF		10/8/08		2,547,448		31,424		—
Swiss Franc (CHF)	Buy		133,860	CHF		10/10/08-10/31/08		119,285,910		—		5,967,052
Ukraine Hryvnia (UAH)	Buy		108,680	UAH		10/17/08-1/28/09		21,118,942		—		903,643
United Arab Emirates Dirham (AED)	Buy		22,060	AED		1/29/09		6,007,675		—		162,954
Vietnam Dong (VND)	Buy		98,080,000	VND		1/30/09		5,601,741		—		570,695

Total unrealized appreciation and depreciation									$	89,319,295	$	87,542,820

Futures Contracts as of September 30, 2008 are as follows:


								Unrealized
		Number of		Expiration				Appreciation
Contract Description	Buy/Sell	Contracts		Date		Value		(Depreciation)

Amsterdam Exchange Index	Buy		82		10/17/08	$	7,650,163	$	(831,322	)
CAC40 10 Euro Index	Sell		317		10/17/08		18,053,912		336,431
Canadian Bond, 10 yr.	Buy		621		12/18/08		68,369,810		(897,922	)
Cotton No. 2	Sell		183		12/8/08		5,238,375		1,604,242
Crude Oil	Buy		54		10/21/08		5,434,560		(116,444	)
DAX Index	Sell		274		12/19/08		56,780,370		1,247,831
Euro-Bundesobligation, 5 yr.	Buy		60		12/8/08		9,267,383		58,718
Euro-Bundesobligation, 10 yr.	Buy		4,542		12/8/08		735,781,876		2,475,933
Euro-Bundesobligation, 10 yr.	Sell		1,235		12/8/08		200,063,984		(794,472	)
Euro-Schatz	Buy		2,315		12/8/08		340,179,494		2,611,917
FTSE 100 Index	Sell		421		12/19/08		37,221,466		858,477
Hang Seng China Enterprises Index	Sell		141		10/30/08		8,292,195		603,456
IBEX 35 Index	Buy		58		10/17/08		8,942,956		211,189
Japan (Government of) Bonds, 10 yr.	Buy		131		12/10/08		16,914,033		(76,637	)
Japan (Government of) Bonds, 10 yr.	Sell		109		12/11/08		140,960,557		(23,636	)
London Metals Exchange Aluminum High Grade	Buy		86		11/17/08		5,169,138		(601	)
London Metals Exchange Copper	Buy		32		11/17/08		5,094,400		(456,333	)
London Metals Exchange Lead	Sell		114		11/17/08		5,192,700		53,580
London Metals Exchange Nickel	Buy		53		11/17/08		5,008,500		(993	)
London Metals Exchange Zinc	Buy		123		11/17/08		5,141,400		(424,810	)
Mexican Bolsa Index	Sell		395		12/19/08		9,093,686		(324,023	)
NASDAQ 100 E-Mini Index	Sell		994		12/19/08		31,693,690		2,539,521
Nikkei 225 Index	Buy		64		12/11/08		3,411,969		(184,365	)
Nikkei 225 Index	Sell		411		12/11/08		43,745,193		3,220,930
OMXS30 Index	Sell		1,834		10/17/08		20,535,089		758,890
SGX CNX Nifty Index	Sell		1,228		10/29/08		9,656,992		417,210
Soybean	Sell		95		11/14/08		4,963,750		(6,021	)
Standard & Poor’s 500 E-Mini Index	Buy		396		12/19/08		23,114,520		(573,210	)
Standard & Poor’s 500 E-Mini Index	Sell		2,076		12/19/08		121,176,120		3,002,658
Standard & Poor’s 500 Index	Sell		20		12/18/08		5,837,000		396,214

Futures Contracts Continued


								Unrealized
		Number of		Expiration				Appreciation
Contract Description	Buy/Sell	Contracts		Date		Value		(Depreciation)

Standard & Poor’s/MIB Index, 10 yr.	Buy		47		12/19/08	$	8,497,755	$	(273,118	)
Standard & Poor’s/Toronto Stock Exchange 60 Index	Buy		172		12/18/08		22,888,081		(1,872,062	)
Sugar #11	Sell		335		2/27/09		5,125,232		(7,819	)
U.S. Long Bonds, 20 yr.	Buy		6,866		12/19/08		804,502,094		(3,757,025	)
U.S. Long Bonds, 20 yr.	Sell		410		12/19/08		48,040,469		265,034
U.S. Treasury Nts., 2 yr.	Sell		5,671		12/31/08		1,210,404,063		(6,300,411	)
U.S. Treasury Nts., 5 yr.	Buy		1,384		12/31/08		155,332,375		532,407
U.S. Treasury Nts., 5 yr.	Sell		2,447		12/31/08		274,637,516		(351,385	)
U.S. Treasury Nts., 10 yr.	Buy		8,773		12/19/08		1,005,605,125		(22,885,658	)
U.S. Treasury Nts., 10 yr.	Sell		2,543		12/19/08		291,491,375		2,213,537
United Kingdom Long Gilt	Sell		23		12/29/08		4,585,852		14,153
Wheat	Sell		155		12/12/08		5,270,000		858,383

								$	(15,877,556	)

Written Options as of September 30, 2008 are as follows:


		Number of		Exercise		Expiration		Premiums
Description	Type	Contracts		Price		Date		Received		Value

British Pound Sterling (GBP)	Put		1,865,000		1.858		10/2/08	$	27,697	$	(155,544	)
British Pound Sterling (GBP)	Put		1,845,000		1.810		10/7/08		33,144		(33,144	)
British Pound Sterling (GBP)	Put		1,780,000		1.807		10/6/08		30,164		(29,720	)
British Pound Sterling (GBP)	Put		1,745,000		1.856		10/1/08		23,724		(137,322	)
British Pound Sterling (GBP)	Put		1,670,000		1.841		10/3/08		27,138		(109,605	)
British Pound Sterling (GBP)	Call		1,865,000		1.858		10/2/08		27,697		—
British Pound Sterling (GBP)	Call		1,845,000		1.810		10/7/08		33,144		(33,144	)
British Pound Sterling (GBP)	Call		1,780,000		1.807		10/6/08		30,164		(29,751	)
British Pound Sterling (GBP)	Call		1,745,000		1.856		10/1/08		23,724		—
British Pound Sterling (GBP)	Call		1,670,000		1.841		10/3/08		27,138		(338	)
Euro (EUR)	Put		7,815,000		1.469		10/2/08		101,198		(494,913	)
Euro (EUR)	Put		7,685,000		1.472		10/1/08		93,564		(516,068	)
Euro (EUR)	Put		7,450,000		1.438		10/6/08		109,343		(118,096	)
Euro (EUR)	Put		7,390,000		1.433		10/7/08		116,840		(116,839	)
Euro (EUR)	Put		6,425,000		1.464		10/3/08		93,479		(377,377	)
Euro (EUR)	Call		7,815,000		1.469		10/2/08		101,198		—
Euro (EUR)	Call		7,685,000		1.472		10/1/08		93,564		—
Euro (EUR)	Call		7,450,000		1.438		10/6/08		109,343		(117,991	)
Euro (EUR)	Call		7,390,000		1.433		10/7/08		116,840		(116,839	)
Euro (EUR)	Call		6,425,000		1.464		10/3/08		93,479		(3,669	)
Japanese Yen (JPY)	Put		799,000,000		105.850		10/6/08		77,183		(103,790	)
Japanese Yen (JPY)	Put		785,000,000		105.900		10/2/08		72,644		(70,572	)
Japanese Yen (JPY)	Put		776,000,000		105.050		10/7/08		85,548		(85,546	)
Japanese Yen (JPY)	Put		736,000,000		105.000		10/3/08		80,399		(113,491	)
Japanese Yen (JPY)	Put		677,000,000		105.750		10/1/08		60,018		(56,665	)
Japanese Yen (JPY)	Call		799,000,000		105.850		10/6/08		77,183		(63,441	)
Japanese Yen (JPY)	Call		785,000,000		105.900		10/2/08		72,644		(32,578	)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Written Options Continued


		Number of		Exercise		Expiration		Premiums
Description	Type	Contracts		Price		Date		Received		Value

Japanese Yen (JPY)	Call		776,000,000		105.050		10/7/08	$	85,548	$	(85,546	)
Japanese Yen (JPY)	Call		736,000,000		105.000		10/3/08		80,399		(29,587	)
Japanese Yen (JPY)	Call		677,000,000		105.750		10/1/08		60,018		(12,321	)

								$	2,064,166	$	(3,043,897	)

Credit Default Swap Contracts as of September 30, 2008 are as follows:


					Pay/					Upfront
		Buy/Sell	Notional		Receive					Payment
Swap		Credit	Amount		Fixed			Termination		Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date		(Paid)			Value

Barclays Bank plc:
	ABX.HE.AA.06-2 Index	Sell	$	4,120		0.170	%		5/25/46	$	3,187,305		$	(3,185,850	)
	CDX.NA.IG.10 Index	Sell		32,945		1.550			6/20/13		(665,084	)		(338,197	)
	CDX.NA.IG.10 Index	Sell		9,885		1.550			6/20/13		(56,605	)		(101,475	)
	CDX.NA.IG.10 Index	Sell		13,180		1.550			6/20/13		(293,416	)		(135,299	)
	CMBX.NA.AJ.5 Index	Sell		3,540		0.980			2/15/51		827,431			(909,178	)
	Nalco Co.	Sell		1,440		4.500			9/20/13		—			32,653
	R.H. Donnelley Corp.	Sell		1,375		5.000			9/20/10		247,500			(242,256	)
	Station Casinos, Inc.	Sell		1,265		5.000			6/20/13		227,700			(531,416	)

											3,474,831			(5,411,018	)
Citibank NA, New York:
	Ambac Assurance Corp.	Sell		16,425		8.400			12/20/08		—			(504,270	)
	Cablevision Systems Corp.	Sell		265		3.100			12/20/10		—			(5,143	)
	Capmark Financial Group, Inc.	Sell		6,155		7.125			12/20/12		—			(1,928,163	)
	Capmark Financial Group, Inc.	Sell		3,500		9.750			12/20/12		—			(911,510	)
	Capmark Financial Group, Inc.	Sell		4,180		9.700			12/20/12		—			(1,092,810	)
	Ford Motor Credit Co.	Sell		7,670		2.320			3/20/12		—			(2,996,275	)
	Intelsat Ltd.	Sell		1,030		4.300			12/20/08		—			4,559
	Intelsat Ltd.	Sell		1,085		5.000			3/20/09		—			11,283
	Morgan Stanley	Sell		4,835		7.800			12/20/13		—			(444,909	)
	Nalco Co.	Sell		1,385		4.170			9/20/13		—			13,336
	Nalco Co.	Sell		1,610		3.600			9/20/12		—			8,966
	Owens-Illinois, Inc.	Sell		1,320		2.500			6/20/13		—			(5,319	)
	Pakistan	Sell		4,860		5.100			3/20/13		—			(1,051,427	)
	Reliant Energy, Inc.	Sell		3,800		2.600			9/20/11		—			(255,345	)
	Reliant Energy, Inc.	Sell		1,580		2.450			9/20/11		—			(112,172	)
	Republic of Hungary	Buy		13,835		0.400			12/20/15		—			1,076,737
	Smurfit-Stone Container Enterprises, Inc.	Sell		680		8.000			12/20/13		—			552
	Tribune Co.	Sell		1,085		5.000			3/20/10		347,200			(290,812	)
	Tribune Co.	Sell		1,145		5.000			3/20/10		374,988			(306,894	)
	Tribune Co.	Sell		1,300		5.000			3/20/10		429,000			(348,439	)
	Tribune Co.	Sell		1,185		5.000			3/20/10		414,750			(317,615	)

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)			Value

Citibank NA, New York: Continued
	Ukraine	Buy	$	12,740		4.180	%	8/20/13	$	—		$	1,051,496
	Ukraine	Buy		11,000		6.650		10/20/13		—			(885	)
	Univision Communications, Inc.	Sell		4,940		5.000		12/20/09		345,800			(334,532	)

										1,911,738			(8,739,591	)
Credit Suisse International:
	Aramark Corp.	Sell		1,745		6.000		3/20/13		—			95,759
	Aramark Corp.	Sell		1,395		4.750		12/20/13		—			(71	)
	Capmark Financial Group, Inc.	Sell		1,040		6.250		12/20/12		—			(344,115	)
	Capmark Financial Group, Inc.	Sell		2,010		5.200		12/20/12		—			(707,549	)
	CDX.NA.HY.10 Index	Sell		21,010		5.000		6/20/13		1,127,828			(1,850,119	)
	CDX.NA.HY.8 Index	Sell		7,900		2.750		6/20/12		397,836			(862,077	)
	Charter Communications Holdings LLC	Buy		755		5.000		9/20/10		(48,131	)		114,044
	Charter Communications Holdings LLC	Sell		755		5.000		9/20/17		151,000			(433,686	)
	Charter Communications Holdings LLC	Buy		635		7.000		9/20/10		—			76,315
	Charter Communications Holdings LLC	Sell		635		5.000		9/20/17		127,000			(364,756	)
	Development Bank of Kazakhstan	Sell		20,660		3.750		2/20/13		—			(2,220,993	)
	Dow Jones CDX.NA.HY.7 Index	Sell		4,732		3.250		12/20/11		(169,471	)		(216,369	)
	Eastman Kodak Co.	Buy		2,810		3.700		12/20/18		—			3,996
	Eastman Kodak Co.	Sell		2,810		3.650		12/20/13		—			(1,175	)
	El Paso Corp.	Sell		1,100		2.800		3/20/18		—			(35,563	)
	Ford Motor Credit Co.	Sell		3,390		2.550		3/20/12		—			(1,310,162	)
	Ford Motor Credit Co.	Sell		10,620		2.385		3/20/12		—			(4,136,172	)
	GMAC LLC	Sell		6,195		1.390		3/20/17		—			(3,648,714	)
	Harrah’s Operating Co., Inc.	Sell		3,285		5.000		3/20/10		209,419			(403,702	)
	Intelsat Ltd.	Sell		1,050		4.400		3/20/09		—			7,854
	Intelsat Ltd.	Sell		110		5.750		3/20/09		—			1,545
	iStar Financial, Inc.	Sell		225		4.000		12/20/12		—			(85,778	)
	iStar Financial, Inc.	Sell		870		12.000		3/20/09		—			(80,787	)
	iStar Financial, Inc.	Sell		1,800		4.150		12/20/12		—			(680,858	)
	Joint Stock Co. “Halyk Bank of Kazakhstan”	Sell		4,040		4.950		3/20/13		—			(679,039	)
	Massey Energy Co.	Sell		1,295		5.000		3/20/13		—			48,515
	Massey Energy Co.	Sell		615		5.000		3/20/13		—			23,040
	MGM Mirage	Sell		1,380		8.400		12/20/13		—			(44,119	)
	NJSC Naftogaz	Sell		8,905		3.250		4/20/11		—			(1,428,007	)
	Owens-Illinois, Inc.	Sell		775		2.500		6/20/13		—			(3,123	)
	Reliant Energy, Inc.	Sell		1,175		5.750		12/20/13		—			337

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)			Value

Credit Suisse International: Continued
	Rite Aid Corp.	Sell	$	285		7.500	%	3/20/09	$	—		$	(13,127	)
	Tenet Healthcare Corp.	Sell		3,475		4.050		12/20/08		—			11,356
	Tribune Co.	Sell		850		6.350		12/20/08		—			(24,462	)
	Tribune Co.	Sell		190		5.000		12/20/09		41,800			(45,378	)
	Tribune Co.	Sell		840		5.000		12/20/09		193,200			(201,081	)
	TXU Corp.	Sell		3,050		1.530		6/20/11		—			(411,195	)
	TXU Corp.	Sell		1,560		1.610		6/20/11		—			(207,521	)
	Univision Communications, Inc.	Sell		355		14.600		3/20/09		—			13,100

										2,030,481			(20,043,837	)
Deutsche Bank AG:
	ABX.HE.AA.06-2 Index	Sell		1,980		0.170		5/25/46		237,581			(1,531,064	)
	ABX.HE.AAA.06-2 Index	Sell		4,760		0.110		5/25/46		237,971			(1,478,577	)
	ABX.HE.AAA.06-2 Index	Sell		4,760		0.110		5/25/46		237,927			(1,478,577	)
	CDX.NA.HY.10 Index	Sell		30,380		5.000		6/20/13		974,692			(2,675,232	)
	CDX.NA.HY.10 Index	Sell		24,300		5.000		6/20/13		1,419,187			(2,139,833	)
	CDX.NA.HY.10 Index	Sell		21,570		5.000		6/20/13		1,433,506			(1,899,432	)
	CDX.NA.HY.10 Index	Sell		13,870		5.000		6/20/13		1,240,594			(1,209,719	)
	CDX.NA.HY.10 Index	Sell		20,840		5.000		6/20/13		1,939,278			(2,410,852	)
	CDX.NA.HY.9 Index	Sell		20,077		3.750		12/20/12		(40,138	)		(2,621,023	)
	Countrywide Home Loans, Inc.	Sell		7,590		9.000		12/20/08		—			116,431
	Countrywide Home Loans, Inc.	Sell		2,075		8.500		12/20/08		—			29,301
	Countrywide Home Loans, Inc.	Sell		7,600		9.750		12/20/08		—			130,484
	CVRD Inco Ltd.	Buy		3,245		0.630		3/20/17		—			140,054
	Dow Jones CDX.NA.HY.7 Index	Sell		13,281		3.250		12/20/11		(475,222	)		(607,237	)
	Ford Motor Co.	Sell		7,775		6.000		12/20/16		—			(3,090,031	)
	Ford Motor Co.	Sell		9,450		5.800		12/20/16		—			(3,798,253	)
	Ford Motor Co.	Sell		11,810		5.850		12/20/16		—			(4,733,525	)
	Ford Motor Credit Co.	Sell		12,095		2.390		3/20/12		—			(4,709,544	)
	Ford Motor Credit Co.	Sell		4,740		2.340		3/20/12		—			(1,849,956	)
	General Motors Corp.	Sell		6,220		4.750		12/20/16		—			(3,339,991	)
	General Motors Corp.	Sell		7,555		4.680		12/20/16		—			(4,061,529	)
	GMAC LLC	Sell		6,465		1.370		3/20/17		—			(3,812,612	)
	Intelsat Ltd.	Sell		425		4.400		3/20/09		—			3,179
	Intelsat Ltd.	Sell		1,070		4.750		3/20/09		—			9,826
	Intelsat Ltd.	Sell		650		5.000		3/20/09		—			6,759
	iStar Financial, Inc.	Sell		3,165		3.000		12/20/08		—			(212,206	)
	iStar Financial, Inc.	Sell		4,375		5.850		12/20/08		—			(264,498	)
	iStar Financial, Inc.	Sell		1,410		4.320		12/20/12		—			(528,574	)
	iStar Financial, Inc.	Sell		1,930		4.500		12/20/12		—			(716,604	)

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)			Value

Deutsche Bank AG: Continued
	iStar Financial, Inc.	Sell	$	2,100		12.000	%	3/20/09	$	—		$	(195,003	)
	iStar Financial, Inc.	Sell		2,220		4.000		12/20/12		—			(846,344	)
	iStar Financial, Inc.	Sell		5,435		2.925		12/20/08		—			(365,346	)
	Lehman Brothers Holdings, Inc.	Sell		2,680		2.070		3/20/09		—			(2,359,343	)
	Owens-Illinois, Inc.	Sell		375		2.500		6/20/13		—			(1,511	)
	Republic of Peru	Buy		7,440		1.710		12/20/16		—			149,418
	Vale Overseas Ltd.	Sell		3,245		1.050		3/20/17		—			(237,467	)
	Washington Mutual, Inc.	Sell		1,055		4.500		12/20/08		—			(379,913	)

										7,205,376			(52,968,344	)
Goldman Sachs Capital Markets LP:
	ABX.HE.AA.06-2 Index	Sell		725		0.170		5/25/46		59,734			(560,617	)
	General Motors Corp.	Sell		6,220		4.950		12/20/16		—			(3,328,995	)
	GMAC LLC	Sell		3,825		1.390		3/20/17		—			(2,252,838	)
	GMAC LLC	Sell		3,210		1.390		3/20/17		—			(1,890,617	)
	GMAC LLC	Sell		5,330		1.370		3/20/17		—			(3,143,267	)
	GMAC LLC	Sell		6,625		1.390		3/20/17		—			(3,901,973	)
	Lennar Corp.	Sell		1,465		2.900		12/20/08		—			(11,935	)
	MGM Mirage	Sell		2,280		8.400		12/20/13		—			(72,892	)
	Nalco Co.	Sell		1,380		4.250		9/20/13		—			17,653
	Nalco Co.	Sell		1,735		3.700		9/20/12		—			15,514
	Rite Aid Corp.	Sell		585		8.060		3/20/09		—			(25,442	)
	Univision Communications, Inc.	Sell		520		5.000		6/20/09		52,000			(35,072	)
	Univision Communications, Inc.	Sell		145		5.000		6/20/09		15,950			(9,780	)

										127,684			(15,200,261	)
Goldman Sachs International:
	ABX.HE.AA.06-2 Index	Sell		2,050		0.170		5/25/46		809,702			(1,585,192	)
	ABX.HE.AAA.06-2 Index	Sell		1,700		0.110		5/25/46		188,031			(528,063	)
	Bolivarian Republic of Venezuela	Sell		1,445		6.350		5/20/13		—			(100,669	)
	CDX.NA.HY.10 Index	Sell		30,200		5.000		6/20/13		878,736			(2,659,381	)
	CMBX.NA.AJ.3 Index	Sell		4,100		1.470		12/13/49		504,074			(851,544	)
	CMBX.NA.AJ.4 Index	Sell		4,100		0.960		2/17/51		707,141			(1,005,849	)
	Dole Food Co., Inc.	Sell		1,220		5.000		6/20/13		161,650			(167,230	)
	Dole Food Co., Inc.	Buy		1,220		5.000		6/20/09		(39,650	)		(6,739	)
	Dole Food Co., Inc.	Buy		1,700		5.000		6/20/09		(63,750	)		(9,390	)
	Dole Food Co., Inc.	Sell		1,700		5.000		6/20/13		225,250			(233,026	)
	Dole Food Co., Inc.	Buy		2,430		5.000		6/20/09		(78,975	)		(13,422	)
	Dole Food Co., Inc.	Sell		2,430		5.000		6/20/13		321,975			(333,090	)
	Dole Food Co., Inc.	Buy		1,210		5.000		6/20/09		(39,325	)		(6,683	)
	Dole Food Co., Inc.	Sell		1,210		5.000		6/20/13		160,325			(165,860	)
	Idearc, Inc.	Sell		5,240		5.000		9/20/09		550,200			(539,325	)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)		Value

Goldman Sachs International: Continued
	iStar Financial, Inc.	Sell	$	4,855		3.950	%	12/20/12	$	—	$	(1,855,727	)
	JSC VTB Bank	Buy		8,340		7.400		5/28/13		—		1,168
	Nalco Co.	Sell		2,735		4.700		9/20/13		—		83,645
	Nalco Co.	Sell		1,515		4.700		9/20/13		—		46,333
	R.H. Donnelley Corp.	Sell		1,930		5.000		9/20/10		424,600		(340,040	)
	Rite Aid Corp.	Sell		5,805		5.000		12/20/09		413,606		(364,359	)
	Station Casinos, Inc.	Sell		750		5.000		6/20/13		132,188		(312,256	)
	Ukraine	Buy		27,320		4.220		8/20/13		—		2,215,461
	Univision Communications, Inc.	Sell		30		5.000		6/20/09		1,800		(2,023	)

										5,257,578		(8,733,261	)
JPMorgan Chase Bank NA, NY Branch:
	CDX.NA.HY.10 Index	Sell		30,380		5.000		6/20/13		1,012,667		(2,675,232	)
	CDX.NA.HY.10 Index	Sell		8,545		5.000		6/20/13		764,303		(745,281	)
	CDX.NA.HY.10 Index	Sell		10,405		5.000		6/20/13		968,243		(1,203,691	)
	CDX.NA.HY.8 Index	Sell		9,479		2.750		6/20/12		477,354		(1,034,385	)
	CDX.NA.HY.9 Index	Sell		16,682		3.750		12/20/12		17,552		(2,177,724	)
	CMBX.NA.AJ.3 Index	Sell		12,600		1.470		12/13/49		2,786,785		(2,616,940	)
	CMBX.NA.AJ.3 Index	Sell		2,100		1.470		12/13/49		251,761		(436,157	)
	CMBX.NA.AJ.4 Index	Sell		2,100		0.960		2/17/51		355,655		(515,191	)
	Constellation Brands, Inc.	Sell		1,340		3.970		9/20/13		—		39,089
	Dean Foods Co.	Sell		1,560		1.050		6/20/11		—		(96,445	)
	Dean Foods Co.	Sell		715		1.080		6/20/11		—		(43,680	)
	Dean Foods Co.	Sell		3,040		1.030		6/20/11		—		(189,427	)
	Dean Foods Co.	Sell		3,035		1.060		6/20/11		—		(186,893	)
	Ford Motor Co.	Sell		7,775		6.000		12/20/16		—		(3,090,031	)
	General Motors Corp.	Sell		9,450		4.750		12/20/16		—		(5,074,424	)
	Idearc, Inc.	Sell		820		5.000		9/20/09		106,600		(84,399	)
	Morgan Stanley	Sell		5,690		7.800		12/20/13		—		(523,585	)
	Nalco Co.	Sell		1,520		4.650		9/20/13		—		43,483
	Republic of Turkey	Sell		6,635		2.680		9/20/13		—		(68,735	)
	Republic of Turkey	Sell		8,250		2.640		8/20/13		—		(63,913	)
	Univision Communications, Inc.	Sell		355		5.000		6/20/09		46,150		(23,943	)

										6,787,070		(20,767,504	)
Merrill Lynch International:
	El Paso Corp.	Sell		1,165		2.900		3/20/18		—		(30,310	)
	El Paso Corp.	Sell		2,975		2.890		3/20/18		—		(79,278	)
	Ford Motor Co.	Sell		6,480		5.300		12/20/12		—		(2,156,661	)
	General Motors Corp.	Sell		4,315		4.050		12/20/12		—		(2,146,530	)
	Reliant Energy, Inc.	Sell		1,805		2.050		9/20/11		—		(146,432	)

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)			Value

Merrill Lynch International: Continued
	Smurfit-Stone Container Enterprises, Inc.	Sell	$	1,645		6.800	%	6/20/13	$	—		$	(75,289	)
	Smurfit-Stone Container Enterprises, Inc.	Sell		1,305		6.700		6/20/13		—			(63,989	)
	Smurfit-Stone Container Enterprises, Inc.	Sell		1,705		7.950		12/20/13		—			(1,594	)
	TXU Corp.	Sell		3,060		1.580		6/20/11		—			(409,116	)
	TXU Corp.	Sell		3,060		1.590		6/20/11		—			(408,431	)
	TXU Corp.	Sell		3,850		1.620		6/20/11		—			(511,288	)
	TXU Corp.	Sell		4,450		2.060		6/20/11		—			(547,109	)
	TXU Corp.	Sell		3,050		1.530		6/20/11		—			(411,195	)
	Ukraine	Buy		27,320		4.300		8/20/13		—			2,136,670

										—			(4,850,552	)
Morgan Stanley Capital Services, Inc.:
	ABX.HE.AA.06-2 Index	Sell		625		0.170		5/25/46		49,932			(483,290	)
	ABX.HE.AA.06-2 Index	Sell		1,320		0.170		5/25/46		131,994			(1,020,709	)
	ABX.HE.AAA.06-2 Index	Sell		3,130		0.110		5/25/46		970,137			(972,258	)
	Aramark Corp.	Sell		1,895		5.920		3/20/13		—			98,568
	Capmark Financial Group, Inc.	Sell		1,135		7.400		12/20/12		—			(349,276	)
	Capmark Financial Group, Inc.	Sell		1,045		7.150		12/20/12		—			(326,839	)
	CDX North America Investment Grade Index	Sell		26,555		3.000		3/23/13		—			(1,707,361	)
	CDX.NA.HY.10 Index	Sell		30,260		5.000		6/20/13		1,042,289			(2,664,665	)
	CDX.NA.HY.9 Index	Sell		15,345		3.750		12/20/12		82,344			(2,003,247	)
	CDX.NA.IG.10 Index	Sell		9,885		1.550		6/20/13		(142,163	)		(101,475	)
	CDX.NA.IG.10 Index	Sell		19,765		1.550		6/20/13		(363,028	)		(202,898	)
	CDX.NA.IG.10 Index	Sell		32,950		1.550		6/20/13		(689,567	)		550,627
	CMBX.NA.AJ.3 Index	Sell		5,300		1.470		12/13/49		696,234			(1,106,374	)
	CMBX.NA.AJ.3 Index	Sell		8,390		1.470		12/13/49		1,399,132			(1,742,550	)
	CMBX.NA.AJ.4 Index	Sell		8,390		0.960		2/17/51		1,725,673			(2,058,311	)
	CMBX.NA.AJ.4 Index	Sell		5,300		0.960		2/17/51		900,531			(1,309,826	)
	CMBX.NA.AJ.5 Index	Sell		3,560		0.980		2/15/51		823,056			(914,314	)
	CMBX.NA.AJ.5 Index	Sell		3,330		0.980		2/15/51		2,148,340			(855,243	)
	Ford Motor Co.	Sell		2,705		5.900		12/20/16		—			(1,081,139	)
	Ford Motor Co.	Sell		7,775		6.150		12/20/16		—			(3,063,791	)
	Frangosul SA Agro Avicola	Sell		50,090		6.000		8/29/13		—			210,829
	General Motors Corp.	Sell		2,175		4.620		12/20/16		—			(1,170,423	)
	General Motors Corp.	Sell		6,220		4.900		12/20/16		—			(3,331,743	)
	Istanbul Bond Co. SA for Finansbank	Sell		25,090		1.300		3/24/13		—			(2,203,251	)
	iStar Financial, Inc.	Sell		2,870		4.860		12/20/12		—			(1,045,086	)
	Joint Stock Co. “Halyk Bank of Kazakhstan”	Sell		8,080		4.880		3/20/13		—			(1,374,505	)
	Joint Stock Co. “Halyk Bank of Kazakhstan”	Sell		8,090		4.780		3/20/13		—			(1,399,701	)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Credit Default Swap Contracts Continued


					Pay/				Upfront
		Buy/Sell	Notional		Receive				Payment
Swap		Credit	Amount		Fixed			Termination	Received/
Counterparty	Reference Entity	Protection	(000s)		Rate			Date	(Paid)		Value

Morgan Stanley Capital Services, Inc.: Continued
	Lennar Corp.	Sell	$	1,090		2.900	%	12/20/08	$	—	$	(8,880	)
	R.H. Donnelley Corp.	Sell		835		5.000		9/20/10		150,300		(147,116	)
	Republic of Turkey	Buy		8,330		2.670		9/20/13		—		89,697
	Yasar	Sell		3,390		8.500		10/20/09		—		103,978
	Yasar	Sell		3,390		8.750		6/20/10		—		92,889

										8,925,204		(31,497,683	)
UBS AG:
	ABX.HE.AAA.06-2 Index	Sell		2,770		0.110		5/25/46		865,481		(860,432	)
	CDX.NA.HY.10 Index	Sell		30,370		5.000		6/20/13		989,134		(2,674,351	)
	CDX.NA.HY.10 Index	Sell		8,545		5.000		6/20/13		764,303		(745,281	)
	CDX.NA.HY.10 Index	Sell		6,935		5.000		6/20/13		645,340		(802,268	)
	iStar Financial, Inc.	Sell		1,035		4.560		12/20/12		—		(383,058	)
	Massey Energy Co.	Sell		960		5.050		9/20/12		—		45,855
	Massey Energy Co.	Sell		1,610		5.100		9/20/12		—		79,602
	Republic of The Philippines	Sell		9,895		1.450		6/20/17		—		(1,158,302	)
	Ukraine	Buy		3,670		4.180		8/20/13		—		302,903
	Univision Communications, Inc.	Sell		280		5.000		6/20/09		25,200		(18,885	)
										3,289,458		(6,214,217	)

									$	39,009,420	$	(174,426,268	)

Interest Rate Swap Contracts as of September 30, 2008 are as follows:


Swap	Notional			Paid by	Received by			Termination
Counterparty	Amount			the Fund	the Fund			Date		Value

Banco Santander Central Hispano SA		18,790,000	BRR	BZDI		14.000	%		1/3/12	$	211,964
Banco Santander SA, Inc.:
		81,010,000	MXN	MXN TIIE BANXICO		8.570			5/3/18		(215,419	)
		71,200,000	MXN	MXN TIIE BANXICO		8.645			5/17/18		(157,667	)
		19,010,000	BRR	BZDI		13.550			1/2/17		(144,785	)

											(517,871	)
Barclays Bank plc:
		3,677,000,000	HUF	Six-Month HUF BUBOR Reuters		7.820			9/19/13		3,612
		24,700,000	EUR	Six-Month EUR EURIBOR		4.688			9/17/18		(79,594	)

Interest Rate Swap Contracts Continued


Swap	Notional			Paid by			Received by			Termination
Counterparty	Amount			the Fund			the Fund			Date		Value

Barclays Bank plc: Continued
		24,700,000	EUR	Six-Month EUR EURIBOR				4.703	%		9/17/18	$	(38,667	)
		34,000,000			4.228	%	Three-Month USD BBA LIBOR				9/17/18		197,778
		34,000,000			4.225		Three-Month USD BBA LIBOR				9/17/18		204,646
		24,580,000	EUR	Six-Month EUR EURIBOR				4.670			9/18/18		(128,483	)
		34,020,000			4.035		Three-Month USD BBA LIBOR				9/18/18		735,546
		82,350,000	MXN	MXN TIIE				9.270			7/17/26		174,210

													1,069,048
Citibank NA, New York		750,000,000	CZK	Six-Month CZK PRIBOR PRBO				3.560			9/27/10		75,384
Credit Suisse International		84,250,000	MXN	MXN TIIE				8.300			12/17/26		(574,377	)
Deutsche Bank AG:
		80,180,000	NZD	Three-Month NZD BBR FRA				6.910			9/10/18		(1,052,203	)
		24,640,000	EUR	Six-Month EUR EURIBOR				4.669			9/18/18		(131,503	)
		34,010,000			3.980		Three-Month USD BBA LIBOR				9/18/18		768,150
		153,800,000	SEK	Three-Month SEK STIBOR SIDE				5.110			7/16/18		872,314

													456,758
Goldman Sachs Capital Markets LP		154,850,000	MXN	MXN TIIE				8.140			1/10/18		(68,233	)
Goldman Sachs International:
		66,200,000	CNY		4.000		CNY CFXSREPOFIX01				2/16/17		(179,581	)
		153,800,000	SEK	Three-Month SEK STIBOR SIDE				5.080			7/17/18		609,553
		61,770,000	PLZ	Six-Month PLZ WIBOR WIBO				6.140			8/26/10		(25,340	)
		6,810,000	BRR	BZDI				14.100			1/2/17		1,335
		115,200,000	SEK	Three-Month SEK STIBOR SIDE				4.840			8/21/18		281,103
		43,920,000	BRR	BZDI				13.900			1/2/17		(589,685	)

													97,385

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Interest Rate Swap Contracts Continued


Swap	Notional			Paid by			Received by			Termination
Counterparty	Amount			the Fund			the Fund			Date		Value

J Aron & Co.:
		94,770,000	MXN	MXN TIIE				9.150	%		8/27/26	$	183,466
				One-Month MXN
		40,600,000	MXN	TIIE BANXICO				9.330			9/16/26		143,207
		34,060,000	BRR	BZDI				12.920			1/2/14		(606,794	)
		16,960,000	BRR	BZDI				12.870			1/2/14		(318,754	)
		33,770,000	BRR	BZDI				12.710			1/4/10		(95,210	)
		66,840,000	BRR	BZDI				12.610			1/4/10		(235,551	)
		73,600,000	BRR	BZDI				12.390			1/2/12		(988,837	)
		19,925,000	BRR	BZDI				14.160			1/2/17		11,706
		92,950,000	BRR	BZDI				14.890			1/4/10		1,852,015
		130,000	BRR	BZDI				12.260			1/2/15		(3,640	)
		60,000	BRR	BZDI				12.290			1/2/15		(1,643	)
		18,790,000	BRR	BZDI				14.050			1/2/12		214,097
		19,160,000	BRR	BZDI				13.670			1/2/17		(145,908	)
		26,190,000	BRR	BZDI				13.100			1/2/17		(422,255	)
		29,700,000	BRR	BZDI				14.300			1/2/17		81,410

													(332,691	)

JPMorgan Chase Bank NA:
				MXN
		68,760,000	MXN	TIIE BANXICO				9.320			6/1/18		138,243
				Six-Month HUF
		1,947,000,000	HUF	BUBOR Reuters				7.880			8/12/13		7,074
				One-Month MXN
		537,550,000	MXN	TIIE BANXICO				8.369			4/23/18		(1,955,465	)
				Six-Month CZK
		616,000,000	CZK	PRIBOR PRBO				3.560			9/12/10		52,686
				Six-Month HUF
		1,711,000,000	HUF	BUBOR Reuters				7.890			9/12/13		1,920
		44,120,000	BRR	BZDI				13.900			1/2/17		(591,860	)
		73,600,000	BRR	BZDI				12.380			1/2/12		(998,854	)
				Six-Month CZK
		756,100,000	CZK	PRIBOR PRBO				3.470			9/18/10		(6,120	)
				Six-Month HUF
		2,903,000,000	HUF	BUBOR Reuters				8.480			6/6/13		265,655
		37,410,000	BRR	BZDI				13.910			1/2/12		423,642
							Three-Month
		1,735,740,000	TWD		2.685	%	TWD Telerate				9/8/18		(37,258	)
							Three-Month
		199,000,000	ZAR		9.705		ZAR JIBAR SAFEX				8/4/18		(374,124	)
				Six-Month PLZ
		40,860,000	PLZ	WIBOR WIBO				6.040			8/8/13		227,565

													(2,846,896	)

Interest Rate Swap Contracts Continued


Swap	Notional			Paid by			Received by			Termination
Counterparty	Amount			the Fund			the Fund			Date		Value

Merrill Lynch				MXN TIIE
Capital Services, Inc.		92,040,000	MXN	BANXICO				8.570	%		5/11/18	$	(244,750	)
Morgan Stanley:
		19,370,000	BRR	BZDI				14.880			1/2/17		144,209
		19,370,000	BRR	BZDI				14.860			1/2/17		135,190

													279,399

Morgan Stanley Capital Services, Inc.:							Six-Month
		38,630,000	EUR		4.713	%	EURIBOR				8/22/17		(350,119	)
							Six-Month
		416,200,000	NOK		4.985		NOK NIBOR NIBR				1/18/11		13,602
				Three-Month
		165,730,000	SEK	SEK STIBOR SIDE				4.260			1/18/11		227,825
				Six-Month
		17,590,000	EUR	EUR EURIBOR				3.996			1/18/11		22,980
				Six-Month
		28,450,000	CHF	CHF BBA LIBOR				2.660			1/18/11		277,996
		15,700,000	BRR	BZDI				13.930			1/2/17		(119,732	)

													72,552

UBS AG:							Three-Month
		175,600,000	ILS		5.010		ILS TELBOR01				8/28/10		70,796
				Three-Month
		39,350,000	ILS	ILS TELBOR01				5.880			8/28/10		44,160
							Three-Month
		179,600,000	ILS		5.020		ILS TELBOR01				9/4/10		79,753
				Three-Month
		40,150,000	ILS	ILS TELBOR01				5.850			9/4/18		55,985
							Three-Month
		201,000,000	ZAR		9.740		ZAR JIBAR SAFEX				8/1/18		(836,762	)
		20,800,000	BRR	BZDI				14.340			1/2/17		57,222

													(528,846	)

												$	(2,851,174	)

Notional amount is reported in U.S. Dollars (USD), except for those denoted in the following currencies:


BRR		Brazilian Real
CHF		Swiss Franc
CNY		Chinese Renminbi (Yuan)
CZK		Czech Koruna
EUR		Euro
HUF		Hungarian Forint
ILS		Israeli Shekel
MXN		Mexican Nuevo Peso
NOK		Norwegian Krone
NZD		New Zealand Dollar
PLZ		Polish Zloty
SEK		Swedish Krona
TWD		New Taiwan Dollar
ZAR		South African Rand

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Index abbreviations are as follows:


BANIXCO		Banco de Mexico
BBA LIBOR		British Bankers’ Association London-Interbank Offered Rate
BBR FRA		Bank Bill Rate Forward Rate Agreement
BUBOR Reuters		Budapest Interbank Offered Rate
BZDI		Brazil Interbank Deposit Rate
CFXSREPOFIX01		7 Days Repurchase Fixing Rates
EURIBOR		Euro Interbank Offered Rate
JIBAR		South Africa Johannesburg Interbank Agreed Rate
NIBOR NIBR		Norwegian Interbank Offered Rate
PRIBOR PRBO		Prague Interbank Offering Rate
SAFEX		South African Futures Exchange
STIBOR SIDE		Stockholm Interbank Offered Rate
TELBOR01		Tel Aviv Interbank Offered Rate 1 Month
TIIE		Interbank Equilibrium Interest Rate
WIBOR WIBO		Poland Warsaw Interbank Offer Bid Rate

Total Return Swap Contracts as of September 30, 2008 are as follows:

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Citibank NA:

39,800,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index widen, pays the spread change*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index narrow, receives the spread change*

2/1/09

(1,107,535

)

19,900,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index widen, pays the spread change plus 15 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index narrow, receives the spread change*

2/1/09

(557,077

)

(1,664,612

)

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Citibank NA,

New York:

3,540,366,549

JPY

One-Month JPYBBA LIBOR plus 40 basis points and if negative, the absolute value of the Total Return of a custom basket of securities

If positive, the Total Return of a custom basket of securities

4/14/09

(3,787,211

)

17,825,578

GBP

One-Month GBP BBA LIBOR plus 35 basis points and if negative, the absolute value of the Total Return of a custom basket of securities

If positive, the Total Return of a custom basket of securities

5/8/09

(5,338,216

)

(9,125,427

)

Deutsche Bank AG:

13,250,000

Six-Month
USD BBA
LIBOR

5.46% times UDI

5/13/15

3,726,330

7,260,000

Six-Month
USD LIBOR

5.25% times UDI

6/23/15

1,760,455

5,486,785

Deutsche Bank
AG, London

26,866,931

One-Month USD BBA LIBOR plus 20 basis points and if negative, the absolute value of the Total Return of a custom equity basket

If positive, the Total Return of a custom equity basket

10/5/09

(2,128,572

)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Goldman Sachs

Group, Inc. (The):

7,490,000

Six-Month
USD BBA
LIBOR

5.10% times UDI

1/14/15

2,123,231

7,490,000

Six-Month
BBA LIBOR

5.08% times UDI

1/20/15

2,146,707

22,600,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

3/1/09

(1,237,781

)

5,100,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change plus 50 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

3/1/09

(275,432

)

31,800,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change plus 250 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

3/1/09

(1,723,943

)

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Goldman Sachs

Group, Inc. (The): Continued

13,860,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change plus 200 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

3/1/09

(754,589

)

35,000,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 50 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

12/1/08

(1,920,084

)

17,540,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

1/1/09

(957,698

)

6,195,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

11/1/08

(333,355

)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Goldman Sachs
Group, Inc. (The):
Continued

66,920,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

2/1/09

(3,652,020

)

128,070,000

If credit spreads as represented by the Banc of America Securities LLC AAA 10 yr CMBS Daily Index widen, pays the spread change minus 660 basis points*

If credit spreads as represented by the Banc of America Securities LLC AAA 10 yr CMBS Daily Index narrow, receives the spread change*

3/31/09

(3,915,255

)

(10,500,219

)

Goldman Sachs
International:

16,686,375

BRR

If negative, the absolute value of the Total Return of the BOVESPA 10/08 Index

If positive, the Total Return of the BOVESPA 10/08 Index

10/16/08

(1,421,240

)

108,598,260

One-Month USD BBA LIBOR plus 30 basis points and if negative, the absolute value of the Total Return of a custom equity basket

If positive, the Total Return of a custom equity basket

6/8/09

(11,901,060

)

Total Return Swap Contracts Continued


	Notional		Paid by	Received by	Termination
Swap Counterparty	Amount		the Fund	the Fund	Date	Value

Goldman Sachs International: Continued
	$	1,808,147	One-Month USD BBA LIBOR and if negative, the absolute value of the MSCI Daily Total Return New Belgium USD Market Index	If positive, the Total Return of the MSCI Daily Total Return New Belgium USD Market Index	10/8/08	$	(358,402	)
		9,103,713	One-Month USD BBA LIBOR and if negative, the absolute value of the MSCI Daily Total Return New Belgium USD Market Index	If positive, the Total Return of the MSCI Daily Total Return New Belgium USD Market Index	10/8/08		(1,553,710	)
		2,536,807	One-Month USD BBA LIBOR and if negative, the absolute value of the MSCI Daily Net Belgium USD Market Index	If positive, the Total Return of the MSCI Daily Net Belgium USD Market Index	10/8/08		(608,139	)

							(15,842,551	)
JPMorgan Chase		16,730,000	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 130 basis points*	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	2/1/09		(905,204	)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Total Return Swap Contracts Continued


	Notional		Paid by			Received by	Termination
Swap Counterparty	Amount		the Fund			the Fund	Date	Value

Merrill Lynch Capital Services, Inc.:
	$	43,500,000		0.053	%	The Constant Maturity Option Price divided by 10,000%	8/13/17	$	(708,470	)
		177,060,000		0.047		The Constant Maturity Option Price divided by 10,000	6/11/17		5,840,383

									5,131,913
Morgan Stanley:
		71,400,000	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index widen, pays the spread change*			If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA Index narrow, receives the spread change*	3/1/09		(1,992,664	)
		21,750,000	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change plus 250 basis points*			If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	3/1/09		(1,170,376	)
		12,860,000	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change plus 250 basis points*			If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	3/1/09		(700,857	)

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Morgan Stanley:
Continued

40,850,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 50 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

12/1/08

(2,221,445

)

10,430,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 65 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

12/1/08

(567,756

)

13,270,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 95 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

2/1/09

(714,064

)

13,270,000

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 95 basis points*

If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*

2/1/09

(721,760

)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Total Return Swap Contracts Continued


	Notional			Paid by	Received by	Termination
Swap Counterparty	Amount			the Fund	the Fund	Date	Value

Morgan Stanley: Continued
	$	32,190,000		If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change*	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	1/1/09	$	(1,752,541	)
		22,200,000		If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 70 basis points*	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	2/1/09		(1,213,046	)
		30,990,000		If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index widen, pays the spread change minus 50 basis points*	If credit spreads as represented by the Lehman Brothers U.S. CMBS AAA 8.5+ Index narrow, receives the spread change*	2/1/09		(1,680,031	)
	14,808,800		EUR	One-Month EUR BBA LIBOR plus 25 basis points and if negative, the absolute value of the Total Return of a custom basket of securities	If positive, the Total Return of a custom basket of securities	3/6/09		(3,193,732	)

								(15,928,272	)

Total Return Swap Contracts Continued

Notional

Paid by

Received by

Termination

Swap Counterparty

Amount

the Fund

Date

Value

Morgan Stanley Capital Services, Inc.

936,780,000

RUR

Three-Month
USD BBA LIBOR

7.75% from debt obligations of JSC Rushydro and OJSC Saratovskaya HPP

12/26/13

(4,848,540

)

Morgan Stanley
International

14,783,700

EUR

One-Month EUR BBA LIBOR plus 30 basis points and if negative, the absolute value of the Total Return of a custom basket of securities

If positive, the Total Return of a custom basket of securities

10/7/08

(1,513,215

)

(6,361,755

)

(51,837,914

)


*		The CMBS Indexes are representative indexes of segments of the commercial mortgage backed securities market. These indexes are measured by movements in the credit spreads of the underlying holdings. As the credit market perceives an improvement in the credit quality of an Index’s underlying holdings and reduced probability of default, the spread of an index narrows. As the credit market perceives a decrease in credit quality and an increased probability of default on an Index’s underlying holdings, the spread widens.

Notional amount is reported in U.S. Dollars (USD), except for those denoted in the following currencies:


BRR		Brazilian Real
EUR		Euro
GBP		British Pound Sterling
JPY		Japanese Yen
RUR		Russian Ruble

Abbreviations are as follows:

BBA LIBOR		British Bankers’ Association London-Interbank Offered Rate
BOVESPA		Bovespa Index that trades on the Sao Paulo Stock Exchange
CMBS		Commercial Mortgage Backed Securities
LIBOR		London Interbank Offered Rate
MSCI		Morgan Stanley Capital International
UDI		Unidad de Inversion (Unit of Investment)

STATEMENT OF INVESTMENTS Continued

Footnotes to Statement of Investments Continued

Currency Swaps as of September 30, 2008 are as follows:

Swap

Notional

Paid by

Received by

Termination

Counterparty

Amount (000s)

the Fund

Date

Value

Credit Suisse International:

11,360,000 TRY

Three Month
USD BBA LIBOR

16.75

2/26/12

1,256,193

4,575,000 TRY

Three-Month
USD BBA LIBOR

17.25

2/7/12

611,688

6,900,000 TRY

Three-Month
USD BBA LIBOR

17.30

2/9/12

914,297

2,782,178

Merrill Lynch International

7,160,000 TRY

Three-Month
BBA LIBOR

17.10

2/6/12

1,195,897

3,978,075

Notional amount is reported in U.S. Dollars (USD), except for those denoted in the following currency:

TRY New Turkish Lira

Index abbreviation is as follows:

BBA LIBOR British Bankers’ Association London-Interbank Offered Rate

STATEMENT OF ASSETS AND LIABILITIES September 30, 2008


Assets
Investments, at value—see accompanying statement of investments:
Unaffiliated companies (cost $10,237,916,683)	$	9,477,453,320
Affiliated companies (cost $1,618,167,654)		1,576,315,364

		11,053,768,684
Cash		27,735,138
Cash—foreign currencies (cost $4,774,799)		4,784,827
Unrealized appreciation on foreign currency exchange contracts		89,319,295
Swaps, at value (upfront payment received $15,652,824)		23,625,199
Unrealized appreciation on unfunded purchase commitments		454,174
Receivables and other assets:
Interest, dividends and principal paydowns		115,670,607
Investments sold (including $44,058,279 sold on a when-issued or delayed delivery basis)		57,377,813
Closed foreign currency contracts		43,451,855
Shares of beneficial interest sold		26,395,465
Other		518,906

Total assets		11,443,101,963

Liabilities
Options written, at value (premiums received $2,064,166)— see accompanying statement of investments		3,043,897
Return of collateral for securities loaned		481,294,160
Unrealized depreciation on foreign currency exchange contracts		87,542,820
Swaps, at value (upfront payment received $23,356,596)		248,762,480
Payables and other liabilities:
Investments purchased (including $167,733,860 purchased on a when-issued or delayed delivery basis)		188,681,711
Closed foreign currency contracts		86,873,008
Payable for terminated investment contracts		48,844,528
Shares of beneficial interest redeemed		40,700,019
Futures margins		30,184,228
Due to custodian		12,962,908
Dividends		8,647,888
Distribution and service plan fees		6,490,807
Transfer and shareholder servicing agent fees		1,126,276
Shareholder communications		610,534
Trustees’ compensation		106,336
Other		443,902

Total liabilities		1,246,315,502

Net Assets	$	10,196,786,461

STATEMENT OF ASSETS AND LIABILITIES Continued


Composition of Net Assets
Par value of shares of beneficial interest	$	2,572,414
Additional paid-in capital		11,726,376,205
Accumulated net investment income		138,138,414
Accumulated net realized loss on investments and foreign currency transactions		(664,663,924	)
Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign currencies		(1,005,636,648	)

Net Assets	$	10,196,786,461


Net Asset Value Per Share

Class A Shares:
Net asset value and redemption price per share (based on net assets of $7,719,383,456 and 1,947,132,045 shares of beneficial interest outstanding)	$	3.96
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price)	$	4.16

Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $483,485,270 and 121,555,179 shares of beneficial interest outstanding)	$	3.98

Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $1,493,804,376 and 377,560,053 shares of beneficial interest outstanding)	$	3.96

Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $186,353,113 and 46,974,925 shares of beneficial interest outstanding)	$	3.97

Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of $313,760,246 and 79,191,913 shares of beneficial interest outstanding)	$	3.96

STATEMENT OF OPERATIONS For the Year Ended September 30, 2008


Allocation of Income and Expenses from Master Funds¹
Net investment income allocated from Oppenheimer Master Event-Linked Bond Fund, LLC:
Dividends	$	6,107
Interest		375,741
Expenses²		(44,868	)

Net investment income from Oppenheimer Master Event-Linked Bond Fund, LLC		336,980
Net investment income allocated from Oppenheimer Master Loan Fund, LLC:
Dividends		2,080,991
Interest		21,539,423
Expenses³		(1,115,389	)

Net investment income from Oppenheimer Master Loan Fund, LLC		22,505,025

Investment Income
Interest (net of foreign withholding taxes of $469,268)		567,111,279
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $27,495)		2,507,773
Affiliated companies		29,036,529
Fee income		2,100,913
Income from investment of securities lending cash collateral, net:
Unaffiliated companies		391,085
Affiliated companies		196,868
Other income		71,655

Total investment income		601,416,102

Expenses
Management fees		50,268,336
Distribution and service plan fees:
Class A		18,622,941
Class B		5,406,763
Class C		13,796,316
Class N		876,323
Transfer and shareholder servicing agent fees:
Class A		8,554,342
Class B		926,966
Class C		1,630,802
Class N		495,078
Class Y		277,123


1.		The Fund invests in certain affiliated mutual funds that expect to be treated as partnerships for tax purposes. See Note 1 of accompanying Notes.

2.		Net of expense waivers and/or reimbursements of $221.

3.		Net of expense waivers and/or reimbursements of $46,874.

STATEMENT OF OPERATIONS Continued


Expenses Continued
Shareholder communications:
Class A	$	1,133,396
Class B		155,966
Class C		208,333
Class N		18,854
Class Y		12,426
Custodian fees and expenses		609,106
Trustees’ compensation		136,344
Other		420,953

Total expenses		103,550,368
Less reduction to custodian expenses		(30,646	)
Less waivers and reimbursements of expenses		(1,721,861	)

Net expenses		101,797,861

Net Investment Income		522,460,246

Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments from unaffiliated companies (including premiums on options exercised)		(35,397,546	)
Closing and expiration of option contracts written		15,840,377
Closing and expiration of futures contracts		109,834,008
Foreign currency transactions		152,811,785
Short positions		892,241
Swap contracts		(85,449,130	)
Allocated from Oppenheimer Master Event-Linked Bond Fund, LLC		2,173
Allocated from Oppenheimer Master Loan Fund, LLC		(6,797,802	)

Net realized gain		151,736,106
Net change in unrealized appreciation (depreciation) on:
Investments		(667,717,540	)
Translation of assets and liabilities denominated in foreign currencies		(254,223,966	)
Futures contracts		(7,880,949	)
Option contracts written		(910,743	)
Short positions		(49,242	)
Swap contracts		(208,970,813	)
Unfunded loan commitments		454,174
Allocated from Oppenheimer Master Event-Linked Bond Fund, LLC		(479,025	)
Allocated from Oppenheimer Master Loan Fund, LLC		(35,414,080	)

Net change in unrealized depreciation		(1,175,192,184	)

Net Decrease in Net Assets Resulting from Operations	$	(500,995,832	)

STATEMENTS OF CHANGES IN NET ASSETS


Year Ended September 30,	2008			2007

Operations
Net investment income	$	522,460,246		$	388,873,931
Net realized gain		151,736,106			228,599,247
Net change in unrealized appreciation (depreciation)		(1,175,192,184	)		155,720,385

Net increase (decrease) in net assets resulting from operations		(500,995,832	)		773,193,563

Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A		(494,418,504	)		(296,916,438	)
Class B		(31,451,076	)		(28,156,208	)
Class C		(78,943,422	)		(43,047,658	)
Class N		(10,729,833	)		(6,142,076	)
Class Y		(13,912,150	)		(14,610,638	)

		(629,454,985	)		(388,873,018	)

Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest transactions:
Class A		2,145,982,862			1,070,926,051
Class B		(32,104,276	)		(183,763,262	)
Class C		572,201,995			180,462,840
Class N		61,007,867			30,962,123
Class Y		(456,356	)		156,078,981

		2,746,632,092			1,254,666,733

Net Assets
Total increase		1,616,181,275			1,638,987,278
Beginning of period		8,580,605,186			6,941,617,908


End of period (including accumulated net investment income of $138,138,414 and $92,702,994, respectively)	$	10,196,786,461		$	8,580,605,186

FINANCIAL HIGHLIGHTS


Class A Year Ended September 30,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	4.41		$	4.18		$	4.34		$	4.23		$	4.08

Income (loss) from investment operations:
Net investment income		.24	¹		.23	¹		.21	¹		.21	¹		.20
Net realized and unrealized gain (loss)		(.40	)		.23			(.05	)		.19			.15

Total from investment operations		(.16	)		.46			.16			.40			.35

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.29	)		(.23	)		(.32	)		(.29	)		(.20	)


Net asset value, end of period	$	3.96		$	4.41		$	4.18		$	4.34		$	4.23


Total Return, at Net Asset Value²		(4.01)	%		11.14	%		3.77	%		9.77	%		8.73	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	7,719,384		$	6,430,790		$	5,077,400		$	4,766,576		$	4,117,666

Average net assets (in thousands)	$	7,560,427		$	5,655,265		$	4,888,392		$	4,392,321		$	4,025,554

Ratios to average net assets:³
Net investment income		5.44	%		5.25	%		5.03	%		4.82	%		4.69	%
Total expenses		0.91	%⁴		0.90	% ⁴		0.93	%		0.94	%		0.95	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.89	%		0.89	%		0.92	%		0.94	%		0.95	%

Portfolio turnover rate⁵		71	%		72	%		96	%		103	%		90	%


1.		Per share amounts calculated based on the average shares outstanding during the period.

2.		Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

3.		Annualized for periods less than one full year.

4.		Total expenses including indirect expenses from affiliated funds, excluding investments in Master Funds, were as follows:


Year Ended September 30, 2008	0.92	%
Year Ended September 30, 2007	0.91	%


5.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2008	$	1,979,370,856	$	1,852,400,340
Year Ended September 30, 2007	$	3,319,818,108	$	3,509,387,791
Year Ended September 30, 2006	$	4,097,005,267	$	4,231,030,059
Year Ended September 30, 2005	$	4,436,804,790	$	4,469,108,355
Year Ended September 30, 2004	$	5,593,936,243	$	5,563,251,032


Class B Year Ended September 30,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	4.42		$	4.20		$	4.35		$	4.24		$	4.10

Income (loss) from investment operations:
Net investment income		.20	¹		.19	¹		.18	¹		.17	¹		.16
Net realized and unrealized gain (loss)		(.39	)		.22			(.05	)		.20			.15

Total from investment operations		(.19	)		.41			.13			.37			.31

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.25	)		(.19	)		(.28	)		(.26	)		(.17	)


Net asset value, end of period	$	3.98		$	4.42		$	4.20		$	4.35		$	4.24


Total Return, at Net Asset Value²		(4.54)	%		9.99	%		3.23	%		8.94	%		7.66	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	483,485		$	569,523		$	718,742		$	918,651		$	1,163,555

Average net assets (in thousands)	$	540,865		$	635,237		$	802,936		$	1,021,022		$	1,424,322

Ratios to average net assets:³
Net investment income		4.61	%		4.43	%		4.25	%		4.05	%		4.16	%
Total expenses		1.73	%⁴		1.71	%⁴		1.71	%		1.70	%		1.69	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.71	%		1.70	%		1.71	%		1.69	%		1.69	%

Portfolio turnover rate⁵		71	%		72	%		96	%		103	%		90	%


1.		Per share amounts calculated based on the average shares outstanding during the period.

2.		Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

3.		Annualized for periods less than one full year.

4.		Total expenses including indirect expenses from affiliated funds, excluding investments in Master Funds, were as follows:


Year Ended September 30, 2008	1.74	%
Year Ended September 30, 2007	1.72	%


5.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions
Year Ended September 30, 2008	$	1,979,370,856	$	1,852,400,340
Year Ended September 30, 2007	$	3,319,818,108	$	3,509,387,791
Year Ended September 30, 2006	$	4,097,005,267	$	4,231,030,059
Year Ended September 30, 2005	$	4,436,804,790	$	4,469,108,355
Year Ended September 30, 2004	$	5,593,936,243	$	5,563,251,032

FINANCIAL HIGHLIGHTS Continued


Class C Year Ended September 30,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	4.40		$	4.18		$	4.33		$	4.22		$	4.07

Income (loss) from investment operations:
Net investment income		.20	¹		.19	¹		.18	¹		.17	¹		.17
Net realized and unrealized gain (loss)		(.38	)		.22			(.05	)		.20			.15

Total from investment operations		(.18	)		.41			.13			.37			.32

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.26	)		(.19	)		(.28	)		(.26	)		(.17	)


Net asset value, end of period	$	3.96		$	4.40		$	4.18		$	4.33		$	4.22


Total Return, at Net Asset Value²		(4.52)	%		10.06	%		3.22	%		8.96	%		7.95	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	1,493,804		$	1,086,918		$	857,843		$	788,217		$	710,085

Average net assets (in thousands)	$	1,381,340		$	959,439		$	814,425		$	748,199		$	716,206

Ratios to average net assets:³
Net investment income		4.68	%		4.49	%		4.27	%		4.07	%		4.06	%
Total expenses		1.66	%⁴		1.66	%⁴		1.68	%		1.69	%		1.69	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.64	%		1.65	%		1.68	%		1.69	%		1.69	%

Portfolio turnover rate⁵		71	%		72	%		96	%		103	%		90	%


1.		Per share amounts calculated based on the average shares outstanding during the period.

2.		Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

3.		Annualized for periods less than one full year.

4.		Total expenses including indirect expenses from affiliated funds, excluding investments in Master Funds, were as follows:


Year Ended September 30, 2008	1.67	%
Year Ended September 30, 2007	1.67	%


5.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2008	$	1,979,370,856	$	1,852,400,340
Year Ended September 30, 2007	$	3,319,818,108	$	3,509,387,791
Year Ended September 30, 2006	$	4,097,005,267	$	4,231,030,059
Year Ended September 30, 2005	$	4,436,804,790	$	4,469,108,355
Year Ended September 30, 2004	$	5,593,936,243	$	5,563,251,032


Class N Year Ended September 30,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	4.41		$	4.19		$	4.34		$	4.23		$	4.08

Income (loss) from investment operations:
Net investment income		.22	¹		.21	¹		.19	¹		.19	¹		.17
Net realized and unrealized gain (loss)		(.39	)		.22			(.04	)		.19			.16

Total from investment operations		(.17	)		.43			.15			.38			.33

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.27	)		(.21	)		(.30	)		(.27	)		(.18	)


Net asset value, end of period	$	3.97		$	4.41		$	4.19		$	4.34		$	4.23


Total Return, at Net Asset Value²		(4.17)	%		10.42	%		3.60	%		9.27	%		8.28	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	186,353		$	145,685		$	108,324		$	83,287		$	52,969

Average net assets (in thousands)	$	175,884		$	126,935		$	94,281		$	69,480		$	40,043

Ratios to average net assets:³
Net investment income		5.03	%		4.84	%		4.62	%		4.37	%		4.19	%
Total expenses		1.32	%⁴		1.32	%⁴		1.33	%		1.40	%		1.38	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		1.30	%		1.31	%		1.33	%		1.40	%		1.38	%

Portfolio turnover rate⁵		71	%		72	%		96	%		103	%		90	%


1.		Per share amounts calculated based on the average shares outstanding during the period.

2.		Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

3.		Annualized for periods less than one full year.

4.		Total expenses including indirect expenses from affiliated funds, excluding investments in Master Funds, were as follows:


Year Ended September 30, 2008	1.33	%
Year Ended September 30, 2007	1.33	%


5.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2008	$	1,979,370,856	$	1,852,400,340
Year Ended September 30, 2007	$	3,319,818,108	$	3,509,387,791
Year Ended September 30, 2006	$	4,097,005,267	$	4,231,030,059
Year Ended September 30, 2005	$	4,436,804,790	$	4,469,108,355
Year Ended September 30, 2004	$	5,593,936,243	$	5,563,251,032

FINANCIAL HIGHLIGHTS Continued


Class Y Year Ended September 30,	2008			2007			2006			2005			2004

Per Share Operating Data

Net asset value, beginning of period	$	4.39		$	4.17		$	4.32		$	4.22		$	4.07

Income (loss) from investment operations:
Net investment income		.25	¹		.24	¹		.22	¹		.21	¹		.21
Net realized and unrealized gain (loss)		(.38	)		.22			(.04	)		.19			.14

Total from investment operations		(.13	)		.46			.18			.40			.35

Dividends and/or distributions to shareholders:
Dividends from net investment income		(.30	)		(.24	)		(.33	)		(.30	)		(.20	)


Net asset value, end of period	$	3.96		$	4.39		$	4.17		$	4.32		$	4.22


Total Return, at Net Asset Value²		(3.33)	%		11.28	%		4.35	%		9.73	%		8.80	%

Ratios/Supplemental Data

Net assets, end of period (in thousands)	$	313,760		$	347,689		$	179,309		$	62,824		$	150,699

Average net assets (in thousands)	$	220,416		$	260,589		$	118,239		$	68,656		$	213,632

Ratios to average net assets:³
Net investment income		5.68	%		5.61	%		5.38	%		4.84	%		4.80	%
Total expenses		0.66	%⁴		0.56	%⁴		0.58	%		1.16	%		1.29	%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses		0.64	%		0.55	%		0.58	%		0.80	%		0.90	%

Portfolio turnover rate⁵		71	%		72	%		96	%		103	%		90	%


1.		Per share amounts calculated based on the average shares outstanding during the period.

2.		Assumes an investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns. Total returns are not annualized for periods less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.

3.		Annualized for periods less than one full year.

4.		Total expenses including indirect expenses from affiliated funds, excluding investments in Master Funds, were as follows:


Year Ended September 30, 2008	0.67	%
Year Ended September 30, 2007	0.57	%


5.		The portfolio turnover rate excludes purchase and sale transactions of To Be Announced (TBA) mortgage-related securities as follows:


	Purchase Transactions		Sale Transactions

Year Ended September 30, 2008	$	1,979,370,856	$	1,852,400,340
Year Ended September 30, 2007	$	3,319,818,108	$	3,509,387,791
Year Ended September 30, 2006	$	4,097,005,267	$	4,231,030,059
Year Ended September 30, 2005	$	4,436,804,790	$	4,469,108,355
Year Ended September 30, 2004	$	5,593,936,243	$	5,563,251,032

NOTES TO FINANCIAL STATEMENTS

1. Significant Accounting Policies

Oppenheimer Strategic Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s investment objective is to seek high current income by investing mainly in debt securities. The Fund’s investment adviser is OppenheimerFunds, Inc. (the “Manager”).

The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (“CDSC”). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class A, B, C and N have separate distribution and/or service plans. No such plan has been adopted for Class Y shares. Class B shares will automatically convert to Class A shares 72 months after the date of purchase.

The following is a summary of significant accounting policies consistently followed by the Fund.

Securities Valuation. The Fund calculates the net asset value of its shares as of the close of the New York Stock Exchange (the “Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities traded on a registered U.S. securities exchange are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund’s assets are valued. Securities whose principal exchange is NASDAQ^® are valued based on the closing price reported by NASDAQ prior to the time when the Fund’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 traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service, prior to the time when the Fund’s assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities, collateralized mortgage obligations and other asset-backed securities will be valued at the mean between the “bid” and “asked” prices. Securities for which market quotations are not readily available are valued at their fair value. Securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund’s assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Shares of a registered investment company that are not traded on an exchange are valued at the acquired investment company’s net asset value per share. “Money market-type” debt instruments with remaining maturities of sixty days or less are valued at cost adjusted by the amortization of discount or premium to maturity (amortized cost), which approximates market value.

Structured Securities. The Fund invests in structured securities whose market values, interest rates and/or redemption prices are linked to the performance of underlying foreign currencies, interest rate spreads, stock market indices, prices of individual securities, commodities or other financial instruments or the occurrence of other specific events. The structured securities are often leveraged, increasing the volatility of each note’s market value relative to the change in the underlying linked financial element or event. Fluctuations in value of these securities are recorded as unrealized gains and losses in the accompanying Statement of Operations. The Fund records a realized gain or loss when a structured security is sold or matures.

Event-Linked Bonds. The Fund invests in “event-linked” bonds. Event-linked bonds, which are sometimes referred to as “catastrophe” bonds, are fixed income securities for which the return of principal and payment of interest is contingent on the non-occurrence of a specific trigger event, such as a hurricane, earthquake, or other occurrence that leads to physical or economic loss. If the trigger event occurs prior to maturity, the Fund may lose all or a portion of its principal in addition to interest otherwise due from the security. Event-linked bonds may expose the Fund to certain other risks, including issuer default, adverse regulatory or jurisdictional interpretations, liquidity risk and adverse tax consequences. The Fund records the net change in market value of event-linked bonds on the Statement of Operations as a change in unrealized appreciation or depreciation on investments. The Fund records a realized gain or loss on the Statement of Operations upon the sale or maturity of such securities.

Securities on a When-Issued or Delayed Delivery Basis. The Fund may purchase securities on a “when-issued” basis, and may purchase or sell 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. Delivery and payment for securities that have been purchased by the Fund on a when-issued basis normally takes place within six months and possibly as long as two years or more after the 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 purchase of securities on a when-issued basis may increase the volatility of the Fund’s net asset value to the extent the Fund executes such transactions while remaining substantially fully invested. When the Fund engages in when-issued or delayed delivery transactions, it relies on the buyer or seller, as the case may be, to complete the transaction. Their failure to do so may cause the Fund to lose the opportunity to obtain or dispose of the security at a price and yield it considers advantageous. The Fund maintains internally designated assets with a market value equal to or greater than the amount of its purchase commitments. The Fund may also sell securities that it purchased on a when-issued basis or forward commitment prior to settlement of the original purchase.

As of September 30, 2008, the Fund had purchased securities issued on a when-issued or delayed delivery basis and sold securities issued on a delayed delivery basis as follows:


	When-Issued or Delayed
	Delivery Basis Transactions

Purchased securities	$	167,733,860
Sold securities		44,058,279

The Fund may enter into “forward roll” transactions with respect to mortgage-related securities. In this type of transaction, the Fund sells a mortgage-related security to a buyer and simultaneously agrees to repurchase a similar security (same type, coupon and maturity) at a later date at a set price. During the period between the sale and the repurchase, the Fund will not be entitled to receive interest and principal payments on the securities that have been sold. The Fund records the incremental difference between the forward purchase and sale of each forward roll as realized gain (loss) on investments or as fee income in the case of such transactions that have an associated fee in lieu of a difference in the forward purchase and sale price.

Risks of entering into forward roll transactions include the potential inability of the counterparty to meet the terms of the agreement; the potential of the Fund to receive inferior securities at redelivery as compared to the securities sold to the counterparty; counterparty credit risk. To assure its future payment of the purchase price, the Fund maintains internally designated assets with a market value equal to or greater than the payment obligation under the roll.

Securities Sold Short. The Fund may short sell when-issued securities for future settlement. The value of the open short position is recorded as a liability, and the Fund records an unrealized gain or loss for the change in value of the open short position. The Fund records a realized gain or loss when the short position is closed out.

As of September 30, 2008, the Fund had no securities sold short.

Credit Risk. The Fund invests in high-yield, non-investment-grade bonds, which may be subject to a greater degree of credit risk. Credit risk relates to the ability of the issuer to meet interest or principal payments or both as they become due. The Fund may acquire securities in default, and is not obligated to dispose of securities whose issuers subsequently default. As of September 30, 2008, securities with an aggregate market value of $8,781,908, representing 0.09% of the Fund’s net assets, were in default.

Foreign Currency Translation. The Fund’s accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of the Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Trustees.

Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies arise from changes in the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates.

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

Investment in Oppenheimer Institutional Money Market Fund. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund (“IMMF”) to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. The Fund’s investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF’s Class E expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in IMMF.

Investments in Oppenheimer Master Funds. The Fund is permitted to invest in entities sponsored and/or advised by the Manager or an affiliate. Certain of these entities in which the Fund invests are mutual funds registered under the Investment Company Act of 1940 that expect to be treated as partnerships for tax purposes, specifically Oppenheimer Master Loan Fund, LLC and Oppenheimer Master Event-Linked Bond Fund, LLC (the “master funds”). Each master fund has its own investment risks, and those risks can affect the value of the Fund’s investments and therefore the value of the Fund’s shares. To the extent that the Fund invests more of its assets in one master fund than in another, the Fund will have greater exposure to the risks of that master fund.

The investment objective of Oppenheimer Master Loan Fund, LLC is to seek as high a level of current income and preservation of capital as is consistent with investing primarily in loans and other debt securities. The investment objective of Oppenheimer Master Event-Linked Bond Fund, LLC is to seek a high level of current income principally derived from interest on debt securities. The Fund’s investments in the master funds are included in the Statement of Investments. The Fund recognizes income and gain/(loss) on its investments in each master fund according to its allocated pro-rata share, based on its relative proportion of total outstanding master fund shares held, of the total net income earned and the net gain/(loss) realized on investments sold by the master funds. As a shareholder, the Fund is subject to its proportional share of master funds’s expenses, including its management fee. The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investment in the master funds.

Investments in OFI Liquid Assets Fund, LLC. The Fund is permitted to invest cash collateral received in connection with its securities lending activities. Pursuant to the Fund’s Securities Lending Procedures, the Fund may invest cash collateral in, among other investments, an affiliated money market fund. OFI Liquid Assets Fund, LLC (“LAF”) is a limited liability company whose investment objective is to seek current income and stability of principal. The Manager is also the investment adviser of LAF. LAF is not registered under the Investment Company Act of 1940. However, LAF does comply with the investment restrictions applicable to registered money market funds set forth in Rule 2a-7 adopted under the Investment Company Act. The Fund’s investment in LAF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of LAF’s expenses, including its management fee of 0.08%.

Investments With Off-Balance Sheet Market Risk. The Fund enters into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Fund’s Statement of Assets and Liabilities.

Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to each class of shares based upon the relative proportion of net assets represented by such class. Operating expenses directly attributable to a specific class are charged against the operations of that class.

Federal Taxes. The Fund intends to comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income, including any net realized gain on investments not offset by capital loss carryforwards, if any, to shareholders. Therefore, no federal income or excise tax provision is required. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund’s tax return filings generally remain open for the three preceding fiscal reporting period ends.

The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.

Net Unrealized

Depreciation

Based on Cost of

Securities and

Undistributed

Accumulated

Other Investments

Net Investment

Long-Term

Loss

for Federal Income

Income

Gain

Carryforward^{1,2,3,4,5,6,7}

Tax Purposes

$ —

—

685,159,324

817,821,398


1.		As of September 30, 2008, the Fund had $673, 576,102 of net capital loss carryforwards available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. As of September 30, 2008, details of the capital loss carryforwards were as follows:


Expiring

2009	$	56,817,462
2010		195,082,729
2011		298,761,186
2012		122,914,725

Total	$	673,576,102


2.		As of September 30, 2008, the Fund had $9,247,907 of post-October losses available to offset future realized capital gains, if any. Such losses, if unutilized, will expire in 2017.

3.		The Fund had $832,870 of post-October passive foreign investment company losses which were deferred.

4.		The Fund had $1,502,445 of straddle losses which were deferred.

5.		During the fiscal year ended September 30, 2008, the Fund utilized $27,107,866 of capital loss carryforward to offset capital gains realized in that fiscal year.

6.		During the fiscal year ended September 30, 2007, the Fund utilized $73,657,199 of capital loss carryforward to offset capital gains realized in that fiscal year.

7.		During the fiscal year ended September 30, 2008, $208,198,241 of unused capital loss carryforward expired.

Net investment income (loss) and net realized gain (loss) may differ for financial statement and 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 net realized gain was recorded by the Fund.

Accordingly, the following amounts have been reclassified for September 30, 2008. Net assets of the Fund were unaffected by the reclassifications.


	Reduction		Reduction
	to Accumulated		to Accumulated
Reduction to	Net Investment		Net Realized Loss
Paid-in Capital	Loss		on Investments
$237,219,998	$	152,430,159	$	84,789,839

The tax character of distributions paid during the years ended September 30, 2008 and September 30, 2007 was as follows:


	Year Ended		Year Ended
	September 30, 2008		September 30, 2007
Distributions paid from:
Ordinary income	$	629,454,985	$	388,873,018

The aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of September 30, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss.


Federal tax cost of securities	$	11,862,679,693
Federal tax cost of other investments		377,976,556

Total federal tax cost	$	12,240,656,249


Gross unrealized appreciation	$	212,789,896
Gross unrealized depreciation		(1,030,611,294	)

Net unrealized depreciation	$	(817,821,398	)

Trustees’ Compensation. The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of “Other” within the asset section of the Statement of Assets and Liabilities. Deferral of trustees’ fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund’s assets, liabilities or net investment income per share. Amounts will be deferred until distributed in accordance to the compensation deferral plan.

Dividends and Distributions to Shareholders. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income distributions, if any, are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually.

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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily.

Custodian Fees. “Custodian fees and expenses” in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The “Reduction to custodian expenses” line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings.

Security Transactions. Security transactions are recorded on the trade date. Realized gains and losses on securities sold are determined on the basis of identified cost.

Indemnifications. The Fund’s organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Other. 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

2. Shares of Beneficial Interest

The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:


	Year Ended September 30, 2008						Year Ended September 30, 2007
	Shares			Amount			Shares			Amount

Class A
Sold		811,998,259		$	3,547,497,776			374,243,875		$	1,621,225,351
Dividends and/or distributions reinvested		90,115,039			391,099,372			52,588,260			227,757,694
Acquisition-Note 13		—			—			59,159,381			260,892,868
Redeemed		(414,282,055	)		(1,792,614,286	)		(240,334,556	)		(1,038,949,862	)

Net increase		487,831,243		$	2,145,982,862			245,656,960		$	1,070,926,051


Class B
Sold		44,735,111		$	196,102,890			24,227,240		$	105,145,550
Dividends and/or distributions reinvested		5,601,817			24,423,440			4,782,734			20,771,577
Redeemed		(57,591,324	)		(252,630,606	)		(71,427,424	)		(309,680,389	)

Net decrease		(7,254,396	)	$	(32,104,276	)		(42,417,450	)	$	(183,763,262	)


Class C
Sold		182,971,353		$	798,051,215			72,545,647		$	313,480,785
Dividends and/or distributions reinvested		13,833,361			59,900,893			7,574,819			32,747,903
Redeemed		(66,390,652	)		(285,750,113	)		(38,441,106	)		(165,765,848	)

Net increase		130,414,062		$	572,201,995			41,679,360		$	180,462,840


Class N
Sold		23,832,269		$	104,021,888			13,299,138		$	57,565,717
Dividends and/or distributions reinvested		2,007,889			8,716,192			1,188,326			5,153,772
Redeemed		(11,902,534	)		(51,730,213	)		(7,326,966	)		(31,757,366	)

Net increase		13,937,624		$	61,007,867			7,160,498		$	30,962,123


Class Y
Sold		85,589,372		$	372,176,959			36,588,605		$	157,983,527
Dividends and/or distributions reinvested		2,700,353			11,630,892			3,321,638			14,364,136
Redeemed		(88,220,405	)		(384,264,207	)		(3,767,180	)		(16,268,682	)

Net increase (decrease)		69,320		$	(456,356	)		36,143,063		$	156,078,981

3. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the year ended September 30, 2008, were as follows:


	Purchases		Sales

Investment securities	$	5,316,528,977	$	4,234,250,187
U.S. government and government agency obligations		653,639,593		700,305,709
To Be Announced (TBA) mortgage-related securities		1,979,370,856		1,852,400,340

4. Fees and Other Transactions with Affiliates

Management Fees. Under the investment advisory agreement, the Fund pays the Manager a management fee based on the daily net assets of the Fund at an annual rate as shown in the following table:


Fee Schedule

Up to $200 million	0.75	%
Next $200 million	0.72
Next $200 million	0.69
Next $200 million	0.66
Next $200 million	0.60
Next $4 billion	0.50
Over $5 billion	0.48

Transfer Agent Fees. OppenheimerFunds Services (“OFS”), a division of the Manager, acts as the transfer and shareholder servicing agent for the Fund. The Fund pays OFS a per account fee. For the year ended September 30, 2008, the Fund paid $11,659,492 to OFS for services to the Fund.

Additionally, Class Y shares are subject to minimum fees of $10,000 annually for assets of $10 million or more. The Class Y shares are subject to the minimum fees in the event that the per account fee does not equal or exceed the applicable minimum fees. OFS may voluntarily waive the minimum fees.

Distribution and Service Plan (12b-1) Fees. Under its General Distributor’s Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the “Distributor”) acts as the Fund’s principal underwriter in the continuous public offering of the Fund’s classes of shares.

Service Plan for Class A Shares. The Fund has adopted a Service Plan (the “Plan”) for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically at an annual rate of up to 0.25% of the average annual net assets of Class A shares of the Fund. The Distributor currently uses all of those fees to pay dealers, brokers, banks and other financial institutions periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations.

Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those shares and servicing accounts. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N shares. The Distributor also receives a service fee of 0.25% per year under each plan. If either the

Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor’s aggregate uncompensated expenses under the Plans at September 30, 2008 for Class B, Class C and Class N shares were $111,088,342, $39,198,933 and $2,701,980, respectively. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.

Sales Charges. Front-end sales charges and contingent deferred sales charges (“CDSC”) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.

Class A

Class B

Class C

Class N

Class A

Contingent

Front-End

Deferred

Sales Charges

Retained by

Year Ended

Distributor

September 30, 2008

3,145,243

43,456

862,138

289,591

9,779

Waivers and Reimbursements of Expenses. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time.

The Manager will waive fees and/or reimburse Fund expenses in an amount equal to the indirect management fees incurred through the Fund’s investments in IMMF and Master Funds. During the year ended September 30, 2008, the Manager waived $1,721,861 for management fees.

5. Foreign Currency Exchange Contracts

The Fund may enter into foreign currency exchange contracts (“forward contracts”) for the purchase or sale of a foreign currency at a negotiated rate at a future date.

Forward contracts are reported on a schedule following the Statement of Investments. Forward contracts will be valued daily based upon the closing prices of the forward currency rates determined at the close of the Exchange as provided by a bank, dealer or pricing service. The resulting unrealized appreciation (depreciation) is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations within the change in unrealized appreciation (depreciation). At contract close, the difference between the original cost of the contract and the value at the close date is recorded as a realized gain (loss) in the Statement of Operations.

Risks to the Fund include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. 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 payments that the Fund has not yet received.

6. Futures Contracts

A futures contract is a commitment to buy or sell a specific amount of a financial instrument at a negotiated price on a stipulated future date. The Fund may buy and sell futures contracts and may also buy or write put or call options on these futures contracts.

Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund’s assets are valued.

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

Futures contracts are reported on a schedule following the Statement of Investments. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. Cash held by the broker to cover initial margin requirements on open futures contracts and the receivable and/or payable for the daily mark to market for the variation margin are noted in the Statement of Assets and Liabilities. The net change in unrealized appreciation and depreciation is reported in the Statement of Operations. Realized gains (losses) are reported in the Statement of Operations at the closing or expiration of futures contracts.

Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market where the Fund is unable to liquidate the contract or enter into an offsetting position and, if used for hedging purposes, the risk that the price of the contract will correlate imperfectly with the prices of the Fund’s securities.

7. Option Activity

The Fund may buy and sell put and call options, or write put and covered call options. When an option is written, the Fund receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price, upon exercise of the option.

Options are valued daily based upon the last sale price on the principal exchange on which the option is traded. The difference between the premium received or paid, and market value of the option, is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported in the Statement of Operations. When an option is exercised, the cost of the security purchased or the proceeds of the security sale are adjusted by the amount of premium received or paid.

Upon the expiration or closing of the option transaction, a gain or loss is reported in the Statement of Operations.

Securities designated to cover outstanding call or put options are noted in the Statement of Investments where applicable. Options written are reported in a schedule following the Statement of Investments and as a liability in the Statement of Assets and Liabilities.

The risk in writing a call option is that the Fund 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 Fund 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 Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk that there may be an illiquid market where the Fund is unable to close the contract.

Written option activity for the year ended September 30, 2008 was as follows:


	Call Options						Put Options
	Number of			Amount of			Number of			Amount of
	Contracts			Premiums			Contracts			Premiums

Options outstanding as of September 30, 2007		16,070,000		$	101,920			16,070,000		$	102,047
Options written		65,920,365,000			16,315,035			59,017,500,000			15,903,847
Options closed or expired		(34,510,050,000	)		(8,369,207	)		(28,699,205,000	)		(7,902,851	)
Options exercised		(27,607,715,000	)		(7,015,665	)		(26,515,695,000	)		(7,070,960	)

Options outstanding as of September 30, 2008		3,818,670,000		$	1,032,083			3,818,670,000		$	1,032,083

8. Swap Contracts

The Fund may enter into privately negotiated agreements with a counterparty to exchange or “swap” payments at specified future intervals based on the return of an asset (such as a stock, bond or currency) or non-asset reference (such as an interest rate or index). The swap agreement will specify the “notional” amount of the asset or non-asset reference to which the contract relates. As derivative contracts, swaps typically do not have an associated cost at contract inception. At initiation, contract terms are typically set at market value such that the value of the swap is $0. If a counterparty specifies terms that would result in the contract having a value other than $0 at initiation, one counterparty will pay the other an upfront payment to equalize the contract. Subsequent changes in market value are calculated based upon changes in the performance of the asset or non-asset reference multiplied by the notional value of the contract. Contract types may include credit default, interest rate, total return, and currency swaps.

Swaps are marked to market daily using quotations primarily from pricing services, counterparties or brokers. Swap contracts are reported on a schedule following the Statement of Investments. The value of the contracts is separately disclosed on the Statement of Assets and Liabilities. The unrealized appreciation (depreciation) is comprised of the change in the valuation of the swap combined with the accrued interest due to (owed by) the Fund at termination or settlement. The net change in this amount during the period is included on the Statement of Operations. Any payment received or paid to initiate a contract is recorded as a cost of the swap in the Statement of Assets and Liabilities and as a component of unrealized gain or loss on the Statement of Operations until contract termination; upon contract termination, this amount is recorded as realized gain or loss on the Statement of Operations. Excluding amounts paid at contract initiation as described above, the Fund also records any periodic payments received from (paid to) the counterparty, including at termination, as realized gain (loss) on the Statement of Operations.

Risks of entering into swap contracts include credit, market and liquidity risk. Credit risk arises from the possibility that the counterparty fails to make a payment when due or otherwise defaults under the terms of the contract. If the counterparty defaults, the Fund’s loss will consist of the net amount of contractual payments that the Fund has not yet received. Market risk is the risk that the value of the contract will depreciate due to unfavorable changes in the performance of the asset or non-asset reference. Liquidity risk is the risk that the Fund may be unable to close the contract prior to its termination.

Credit Default Swap Contracts. A credit default swap is a bilateral contract that enables an investor to buy or sell protection on a debt security against a defined-issuer credit event, such as the issuer’s failure to make timely payments of interest or principal on the debt security, bankruptcy or restructuring. The Fund may enter into credit default swaps either by buying or selling protection on a single security or a basket of securities (the “reference asset”).

The buyer of protection pays a periodic fee, similar to an insurance premium, to the seller of protection based on the notional amount of debt securities underlying the swap contract. The seller of protection agrees to compensate the buyer of protection for future potential losses as a result of a credit event on the reference asset. The contract effectively transfers the credit event risk of the reference asset from the buyer of protection to the seller of protection.

The ongoing value of the contract will fluctuate throughout the term of the contract based primarily on the credit risk of the reference asset. If the credit quality of the reference asset improves relative to the credit quality at contract initiation, the buyer of protection may have an unrealized loss greater than the anticipated periodic fee owed. This unrealized loss would be the result of current credit protection being cheaper than the cost of credit protection at contract initiation. If the buyer elects to terminate the contract prior to its maturity, and there has been no credit event, this unrealized loss will become realized. If the contract is held to maturity, and there has been no credit event, the realized loss will be equal to the periodic fee paid over the life of the contract.

If there is a credit event, the buyer of protection can exercise its rights under the contract and receive a payment from the seller of protection equal to the notional amount of the reference asset less the market value of the reference asset. Upon exercise of the contract the difference between the value of the underlying reference asset and the notional amount is recorded as realized gain (loss) and is included on the Statement of Operations.

Risks of credit default swaps include credit, market and liquidity risk. Additional risks include but are not limited to: the cost of paying for credit protection if there are no credit events or the cost of selling protection when a credit event occurs (paying the notional amount to the protection buyer); and pricing transparency when assessing the value of a credit default swap.

Interest Rate Swap Contracts. An interest rate swap is an agreement between counterparties to exchange periodic payments based on interest rates. One cash flow stream will typically be a floating rate payment based upon a specified interest rate while the other is typically a fixed interest rate.

Risks of interest rate swaps include credit, market and liquidity risk. Additional risks include but are not limited to, interest rate risk. There is a risk, based on future movements of interest rates that the payments made by the Fund under a swap agreement will be greater than the payments it received.

Total Return Swap Contracts. A total return swap is an agreement between counterparties to exchange periodic payments based on asset or non-asset references. One cash flow is typically based on a non-asset reference (such as an interest rate or index) and the other on the total return of a reference asset (such as a security or a basket of securities). The total return of the reference asset typically includes appreciation or depreciation on the reference asset, plus any interest or dividend payments.

Risks of total return swaps include credit, market and liquidity risk.

Currency Swaps. A currency swap is an agreement between counterparties to exchange different currencies equivalent to the notional value at contract inception and reverse the exchange of the same notional values of those currencies at contract termination. The contract may also include periodic exchanges of cash flows based on a specified index or interest rate.

Risks of currency swaps include credit, market and liquidity risk. Additional risks of currency swaps include, but are not limited to, exchange rate risk. Due to the exchange of currency at contract termination, changes in currency exchange rates may result in the Fund paying an amount greater than the amount received. There is also a risk, based on movements of interest rates or indexes that periodic payments made by the Fund will be greater than the payments received.

Swaption Transactions. The Fund may enter into a swaption contract which grants the purchaser the right, but not the obligation, to enter into an interest rate swap at a preset rate within a specified period of time. The purchaser pays a premium to the swaption writer who bears the risk of unfavorable changes in the preset rate on the underlying interest rate swap.

Swaptions are marked to market daily using primarily quotations from counterparties and brokers. Written swaptions are reported on a schedule following the Statement of Investments. Written swaptions are reported as a liability in the Statement of Assets and Liabilities. The difference between the premium received or paid, and market value of the swaption, is recorded as unrealized appreciation or depreciation. The net change in unrealized appreciation or depreciation is reported in the Statement of Operations. When a swaption is exercised, the cost of the swap is adjusted by the amount of premium paid or received. Upon the expiration or closing of an unexercised swaption contract, a gain or loss is reported in the Statement of Operations for the amount of the premium paid or received.

Swaption contracts written by the Fund do not give rise to counterparty credit risk as they obligate the Fund, not its counterparty, to perform. The Fund generally will incur a greater risk when it writes a swaption than when it purchases a swaption. When the Fund writes a swaption it will become obligated, upon exercise of the option, according to the terms of the underlying agreement. When the Fund purchases a swaption it only risks losing the amount of the premium it paid if the option expires unexercised. However, when the Fund purchases a swaption there is a risk that the counterparty will fail to perform or otherwise default on its obligations under the swaption contract.

9. Illiquid or Restricted Securities

As of September 30, 2008, investments in securities included issues that are illiquid or restricted. Investments may be illiquid because they do not have an active trading market, making it difficult to value them or dispose of them promptly at an acceptable price. A restricted security may have a contractual restriction on its resale and is valued under methods approved by the Board of Trustees as reflecting fair value. The Fund will not invest more than 15% of its net assets (determined at the time of purchase and reviewed periodically) in illiquid and restricted securities. Certain restricted securities, eligible for resale to qualified institutional purchasers, may not be subject to that limitation. Securities that are illiquid or restricted are marked with an applicable footnote on the Statement of Investments. Restricted securities are reported on a schedule following the Statement of Investments.

10. Securities Lending

The Fund lends portfolio securities from time to time in order to earn additional income in the form of fees or interest on securities received as collateral or the investment of any cash received as collateral. The loans are secured by collateral (either securities, letters of credit, or cash) in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund could experience delays and cost in recovering the securities loaned or in gaining access to the collateral. The Fund continues to receive the economic benefit of interest or dividends paid on the securities loaned in the form of a substitute payment received from the borrower and recognizes the gain or loss in the fair value of the securities loaned that may occur during the term of the loan. The Fund has the right under the lending agreement to recover the securities from the borrower on demand. As of September 30, 2008, the Fund had on loan securities valued at $469,476,276. Collateral of $481,294,160 was received for the loans, all of which was received in cash and subsequently invested in approved instruments.

11. Unfunded Purchase Commitments

Pursuant to the terms of certain indenture agreements, the Fund has unfunded purchase commitments of $51,373,723 at September 30, 2008. The Fund generally will maintain with its custodian, liquid investments having an aggregate value at least equal to the amount of unfunded purchase loan commitments. The following commitments are subject to funding based on the borrower’s discretion. The Fund is obligated to fund these commitments at the time of the request by the borrower. These commitments have been excluded from the Statement of Investments.

As of September 30, 2008, the Fund had unfunded purchase commitments as follows:


	Commitment
	Termination		Unfunded
	Date		Amount

Deutsche Bank AG, Opic Reforma I Credit Linked Nts.		10/23/13	$	20,883,723

Commitment

Interest

Termination

Unfunded

Unrealized

Rate

Date

Amount

Appreciation

Deutsche Bank AG; An unfunded commitment that Oppenheimer receives 0.125% quarterly; and will pay out, upon request, up to 30,490,000 USD to a Peruvian Trust through Deutsche Bank’s Global Note Program. Upon funding requests, the unfunded portion decreases and new structured securities will be created and held by the Fund to maintain a consistent exposure level.

0.50

9/20/10

30,490,000

454,174

12. Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of September 30, 2008, the Manager does not believe the adoption of SFAS No. 157 will materially impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period.

In March 2008, FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund’s financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund’s financial statements and related disclosures.

13. Acquisition of Atlas Strategic Income Fund

On May 10, 2007, the Fund acquired all of the net assets of Atlas Strategic Income Fund, pursuant to an Agreement and Plan of Reorganization approved by the Atlas Strategic Income Fund shareholders on March 23, 2007. The Fund issued (at an exchange ratio of 1.049645 for Class A to one share of Atlas Strategic Income Fund) 59,159,381, shares of beneficial interest for Class A valued at $260,892,868 in exchange for the net assets, resulting in combined Class A net assets of $5,988,114,190 on May 10, 2007. The net assets acquired included net unrealized appreciation of $12,016,003. The exchange qualifiedas a tax-free reorganization for federal income tax purposes.

14. Change In Independent Registered Public Accounting Firm (Unaudited)

At a meeting held on August 20, 2008, the Board of Trustees of the Fund appointed KPMG LLP as the independent registered public accounting firm to the Fund for fiscal year 2009, replacing the firm of Deloitte & Touche LLP, effective at the conclusion of the fiscal 2008 audit. During the two most recent fiscal years the audit reports of Deloitte & Touche LLP contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. Further, there were no disagreements between the Fund and Deloitte & Touche LLP on accounting principles, financial statement disclosure or audit scope, which if not resolved to the satisfaction of Deloitte & Touche LLP would have caused it to make reference to the disagreements in connection with its reports.

Below are summaries of the rating definitions used by the Nationally Recognized Statistical Rating Organizations ("NRSROs") listed below. Those ratings represent the opinion of the NRSRO as to the credit quality of issues that they rate. The summaries below are based upon publicly available information provided by the NRSROs.

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

C: Bonds and preferred stock 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.

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.

These ratings are opinions of the ability of issuers to honor senior financial obligations and contracts. Such obligations generally have an original maturity not exceeding one year, unless explicitly noted.

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.

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

Issue credit ratings are based in varying degrees, on the following considerations:

The issue ratings definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above.

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

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

A: An obligation rated "A" is 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: An obligation rated "BBB" 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.

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: An obligation rated "BB" is 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: An obligation rated "B" is more vulnerable to nonpayment than obligations 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: An obligation rated "CCC" is 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.

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: An obligation 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.

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.

c: The "c" subscript is used to provide additional information to investors that the bank may terminate its obligation to purchase tendered bonds if the long-term credit rating of the issuer is below an investment-grade level and/or the issuer's bonds are deemed taxable.

p: The letter "p" indicates that the rating is provisional. A provisional rating assumes the successful completion of the project financed by the debt being rated and indicates that payment of debt service requirements is largely or entirely dependent upon the successful, timely completion of the project. This rating, however, while addressing credit quality subsequent to completion of the project, makes no comment on the likelihood of or the risk of default upon failure of such completion. The investor should exercise his own judgment with respect to such likelihood and risk.

Continuance of the ratings is contingent upon Standard & Poor's receipt of an executed copy of the escrow agreement or closing documentation confirming investments and cash flows.

r: The "r" highlights derivative, hybrid, and certain other obligations that Standard & Poor's believes may experience high volatility or high variability in expected returns as a result of noncredit risks. Examples of such obligations are securities with principal or interest return indexed to equities, commodities, or currencies; certain swaps and options; and interest-only and principal-only mortgage securities. The absence of an "r" symbol should not be taken as an indication that an obligation will exhibit no volatility or variability in total return.

N.R. Not rated.

Debt obligations of issuers outside the United States and its territories are rated on the same basis as domestic corporate and municipal issues. The ratings measure the creditworthiness of the obligor but do not take into account currency exchange and related uncertainties.

Under present commercial bank regulations issued by the Comptroller of the Currency, bonds rated in the top four categories ("AAA," "AA," "A," "BBB," commonly known as investment-grade ratings) generally are regarded as eligible for bank investment. Also, the laws of various states governing legal investments impose certain rating or other standards for obligations eligible for investment by savings banks, trust companies, insurance companies, and fiduciaries in general

Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days-including commercial paper.

A-1: A short-term obligation 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 obligation 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 obligation 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 obligation 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 obligation 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 obligation 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.

Notes:
A Standard & Poor's note rating reflects the liquidity factors and market access risks unique to notes. Notes due in three years or less will likely receive a note rating. Notes maturing beyond three years will most likely receive a long-term debt rating. The following criteria will be used in making that assessment:

SP-1: Strong capacity to pay principal and interest. An issue with a very strong capacity to pay debt service is given a (+) designation.

SP-2: Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

International credit ratings assess the capacity to meet foreign currency or local currency commitments. Both "foreign currency" and "local currency" ratings are internationally comparable assessments. The local currency rating measures the probability of payment within the relevant sovereign state's currency and jurisdiction and therefore, unlike the foreign currency rating, does not take account of the possibility of foreign exchange controls limiting transfer into foreign currency.

The following ratings scale applies to foreign currency and local currency ratings.

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.

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).

The following ratings scale applies to foreign currency and local currency ratings. A short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.

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.

Appendix B

OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A shares² of the Oppenheimer funds or the contingent deferred sales charge that may apply to Class A, Class B or Class C shares may be waived.³ That is because of the economies of sales efforts realized by OppenheimerFunds Distributor, Inc., (referred to in this document as the "Distributor"), or by dealers or other financial institutions that offer those shares to certain classes of investors. Not all waivers apply to all funds.

For the purposes of some of the waivers described below and in the Prospectus and Statement of Additional Information of the applicable Oppenheimer funds, the term "Retirement Plan" refers to the following types of plans:

1) plans created or qualified under Sections 401(a) or 401(k) of the Internal Revenue Code,

6) Individual Retirement Accounts ("IRAs"), including traditional IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special arrangement or waiver in a particular case is in the sole discretion of the Distributor or the transfer agent (referred to in this document as the "Transfer Agent") of the particular Oppenheimer fund. These waivers and special arrangements may be amended or terminated at any time by a particular fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the shareholder and/or dealer in the redemption request.

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge (unless a waiver applies).

There is no initial sales charge on purchases of Class A shares of any of the Oppenheimer funds in the cases listed below. However, these purchases may be subject to the Class A contingent deferred sales charge if redeemed within 18 months (24 months in the case of shares of Oppenheimer Rochester National Municipals and Rochester Fund Municipals purchased prior to October 22, 2007) of the beginning of the calendar month of their purchase, as described in the Prospectus (unless a waiver described elsewhere in this Appendix applies to the redemption). Additionally, on shares purchased under these waivers that are subject to the Class A contingent deferred sales charge, the Distributor will pay the applicable concession described in the Prospectus under "Class A Contingent Deferred Sales Charge."⁶ This waiver provision applies to:

1) through a broker, dealer, bank or registered investment adviser that has made special arrangements with the Distributor for those purchases, or

2) by a direct rollover of a distribution from a qualified Retirement Plan if the administrator of that Plan has made special arrangements with the Distributor for those purchases.

1) The record keeping is performed by Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the Retirement Plan. On the date the plan sponsor signs the record-keeping service agreement with Merrill Lynch, the Plan must have $3 million or more of its assets invested in (a) mutual funds, other than those advised or managed by Merrill Lynch Investment Management, L.P. ("MLIM"), that are made available under a Service Agreement between Merrill Lynch and the mutual fund's principal underwriter or distributor, and (b) funds advised or managed by MLIM (the funds described in (a) and (b) are referred to as "Applicable Investments").

2) The record keeping for the Retirement Plan is performed on a daily valuation basis by a record keeper whose services are provided under a contract or arrangement between the Retirement Plan and Merrill Lynch. On the date the plan sponsor signs the record keeping service agreement with Merrill Lynch, the Plan must have $5 million or more of its assets (excluding assets invested in money market funds) invested in Applicable Investments.

3) The record keeping for a Retirement Plan is handled under a service agreement with Merrill Lynch and on the date the plan sponsor signs that agreement, the Plan has 500 or more eligible employees (as determined by the Merrill Lynch plan conversion manager).

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain Purchasers.

Class A shares purchased by the following investors are not subject to any Class A sales charges (and no concessions are paid by the Distributor on such purchases):

B. Waivers of the Class A Initial and Contingent Deferred Sales Charges in Certain Transactions.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain Redemptions.

The Class A contingent deferred sales charge is also waived if shares that would otherwise be subject to the contingent deferred sales charge are redeemed in the following cases:

1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant's account was established.

5) Under a Qualified Domestic Relations Order, as defined in the Internal Revenue Code, or, in the case of an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.

7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.

10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager) if the plan has made special arrangements with the Distributor.

11) Plan termination or "in-service distributions," if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.

The Class B, Class C and Class N contingent deferred sales charges will not be applied to shares purchased in certain types of transactions or redeemed in certain circumstances described below.

The Class B, Class C and Class N contingent deferred sales charges will be waived for redemptions of shares in the following cases:

1) Following the death or disability (as defined in the Internal Revenue Code) of the participant or beneficiary. The death or disability must occur after the participant's account was established in an Oppenheimer fund.

5) To make distributions required under a Qualified Domestic Relations Order or, in the case of an IRA, a divorce or separation agreement described in Section 71(b) of the Internal Revenue Code.

7) To make "substantially equal periodic payments" as described in Section 72(t) of the Internal Revenue Code.

10) Participant-directed redemptions to purchase shares of a mutual fund (other than a fund managed by the Manager or a subsidiary of the Manager) offered as an investment option in a Retirement Plan if the plan has made special arrangements with the Distributor.

11) Distributions made on account of a plan termination or "in-service" distributions, if the redemption proceeds are rolled over directly to an OppenheimerFunds-sponsored IRA.

12) For distributions from a participant's account under an Automatic Withdrawal Plan after the participant reaches age 59½, as long as the aggregate value of the distributions does not exceed 10% of the account's value, adjusted annually.

13) Redemptions of Class B shares under an Automatic Withdrawal Plan for an account other than a Retirement Plan, if the aggregate value of the redeemed shares does not exceed 10% of the account's value, adjusted annually.

14) For distributions from 401(k) plans sponsored by broker-dealers that have entered into a special arrangement with the Distributor allowing this waiver.

The contingent deferred sales charge is also waived on Class B and Class C shares sold or issued in the following cases:

The initial and contingent deferred sales charge rates and waivers for Class A, Class B and Class C shares described in the Prospectus or Statement of Additional Information of the Oppenheimer funds are modified as described below for certain persons who were shareholders of the former Quest for Value Funds. To be eligible, those persons must have been shareholders on November 24, 1995, when OppenheimerFunds, Inc. became the investment adviser to those former Quest for Value Funds. Those funds include:

Oppenheimer Rising Dividends Fund, Inc. Oppenheimer Small- & Mid- Cap Value Fund

Oppenheimer Quest Balanced Fund Oppenheimer Quest International Value Fund, Inc.

These arrangements also apply to shareholders of the following funds when they merged (were reorganized) into various Oppenheimer funds on November 24, 1995:

Quest for Value U.S. Government Income Fund Quest for Value New York Tax-Exempt Fund

Quest for Value Investment Quality Income Fund Quest for Value National Tax-Exempt Fund

All of the funds listed above are referred to in this Appendix as the "Former Quest for Value Funds." The waivers of initial and contingent deferred sales charges described in this Appendix apply to shares of an Oppenheimer fund that are either:

Purchases by Groups and Associations. The following table sets forth the initial sales charge rates for Class A shares purchased by members of "Associations" formed for any purpose other than the purchase of securities. The rates in the table apply if that Association purchased shares of any of the Former Quest for Value Funds or received a proposal to purchase such shares from OCC Distributors prior to November 24, 1995.

For purchases by Associations having 50 or more eligible employees or members, there is no initial sales charge on purchases of Class A shares, but those shares are subject to the Class A contingent deferred sales charge described in the applicable fund's Prospectus.

Purchases made under this arrangement qualify for the lower of either the sales charge rate in the table based on the number of members of an Association, or the sales charge rate that applies under the Right of Accumulation described in the applicable fund's Prospectus and Statement of Additional Information. Individuals who qualify under this arrangement for reduced sales charge rates as members of Associations also may purchase shares for their individual or custodial accounts at these reduced sales charge rates, upon request to the Distributor.

Investors who purchased Class A shares from a dealer that is or was not permitted to receive a sales load or redemption fee imposed on a shareholder with whom that dealer has a fiduciary relationship, under the Employee Retirement Income Security Act of 1974 and regulations adopted under that law.

A shareholder's account will be credited with the amount of any contingent deferred sales charge paid on the redemption of any Class A, Class B or Class C shares of the Oppenheimer fund described in this section if the proceeds are invested in the same Class of shares in that fund or another Oppenheimer fund within 90 days after redemption.

The initial and contingent deferred sales charge rates and waivers for Class A and Class B shares described in the respective Prospectus (or this Appendix) of the following Oppenheimer funds (each is referred to as a "Fund" in this section):

Oppenheimer U. S. Government Trust,
Oppenheimer Core Bond Fund,
Oppenheimer Value Fund and

are modified as described below for those Fund shareholders who were shareholders of the following funds (referred to as the "Former Connecticut Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the investment adviser to the Former Connecticut Mutual Funds:

Connecticut Mutual Government Securities Account CMIA LifeSpan Capital Appreciation Account

Connecticut Mutual Income Account CMIA LifeSpan Balanced Account
Connecticut Mutual Growth Account CMIA Diversified Income Account

1) persons whose purchases of Class A shares of a Fund and other Former Connecticut Mutual Funds were $500,000 prior to March 18, 1996, as a result of direct purchases or purchases pursuant to the Fund's policies on Combined Purchases or Rights of Accumulation, who still hold those shares in that Fund or other Former Connecticut Mutual Funds, and

2) persons whose intended purchases under a Statement of Intention entered into prior to March 18, 1996, with the former general distributor of the Former Connecticut Mutual Funds to purchase shares valued at $500,000 or more over a 13-month period entitled those persons to purchase shares at net asset value without being subject to the Class A initial sales charge

Any of the Class A shares of a Fund and the other Former Connecticut Mutual Funds that were purchased at net asset value prior to March 18, 1996, remain subject to the prior Class A CDSC, or if any additional shares are purchased by those shareholders at net asset value pursuant to this arrangement they will be subject to the prior Class A CDSC.

1) any purchaser, provided the total initial amount invested in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more, including investments made pursuant to the Combined Purchases, Statement of Intention and Rights of Accumulation features available at the time of the initial purchase and such investment is still held in one or more of the Former Connecticut Mutual Funds or a Fund into which such Fund merged;

2) any participant in a qualified plan, provided that the total initial amount invested by the plan in the Fund or any one or more of the Former Connecticut Mutual Funds totaled $500,000 or more;

3) Directors of the Fund or any one or more of the Former Connecticut Mutual Funds and members of their immediate families;

4) employee benefit plans sponsored by Connecticut Mutual Financial Services, L.L.C. ("CMFS"), the prior distributor of the Former Connecticut Mutual Funds, and its affiliated companies;

5) one or more members of a group of at least 1,000 persons (and persons who are retirees from such group) engaged in a common business, profession, civic or charitable endeavor or other activity, and the spouses and minor dependent children of such persons, pursuant to a marketing program between CMFS and such group; and

6) an institution acting as a fiduciary on behalf of an individual or individuals, if such institution was directly compensated by the individual(s) for recommending the purchase of the shares of the Fund or any one or more of the Former Connecticut Mutual Funds, provided the institution had an agreement with CMFS.

Purchases of Class A shares made pursuant to (1) and (2) above may be subject to the Class A CDSC of the Former Connecticut Mutual Funds described above.

Additionally, Class A shares of a Fund may be purchased without a sales charge by any holder of a variable annuity contract issued in New York State by Connecticut Mutual Life Insurance Company through the Panorama Separate Account which is beyond the applicable surrender charge period and which was used to fund a qualified plan, if that holder exchanges the variable annuity contract proceeds to buy Class A shares of the Fund.

In addition to the waivers set forth in the Prospectus and in this Appendix, above, the contingent deferred sales charge will be waived for redemptions of Class A and Class B shares of a Fund and exchanges of Class A or Class B shares of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund provided that the Class A or Class B shares of the Fund to be redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund must have been purchased prior to March 18, 1996:

2) upon the disability of a shareholder, as defined in Section 72(m)(7) of the Internal Revenue Code;

3) for retirement distributions (or loans) to participants or beneficiaries from retirement plans qualified under Sections 401(a) or 403(b)(7)of the Code, or from IRAs, deferred compensation plans created under Section 457 of the Code, or other employee benefit plans;

5) in whole or in part, in connection with shares sold to any state, county, or city, or any instrumentality, department, authority, or agency thereof, that is prohibited by applicable investment laws from paying a sales charge or concession in connection with the purchase of shares of any registered investment management company;

6) in connection with the redemption of shares of the Fund due to a combination with another investment company by virtue of a merger, acquisition or similar reorganization transaction;

7) in connection with the Fund's right to involuntarily redeem or liquidate the Fund;

8) in connection with automatic redemptions of Class A shares and Class B shares in certain retirement plan accounts pursuant to an Automatic Withdrawal Plan but limited to no more than 12% of the original value annually; or

9) as involuntary redemptions of shares by operation of law, or under procedures set forth in the Fund's Articles of Incorporation, or as adopted by the Board of Directors of the Fund.

Shareholders of Oppenheimer AMT-Free Municipals, Oppenheimer U.S. Government Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund who acquired (and still hold) shares of those funds as a result of the reorganization of series of Advance America Funds, Inc. into those Oppenheimer funds on October 18, 1991, and who held shares of Advance America Funds, Inc. on March 30, 1990, may purchase Class A shares of those four Oppenheimer funds at a maximum sales charge rate of 4.50%.

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this section) may sell Class M shares at net asset value without any initial sales charge to the classes of current Class M shareholders, listed below who, prior to March 11, 1996, owned shares of the Fund's then-existing Class A and were permitted to purchase those shares at net asset value without a sales charge:

1 In accordance with Rule 12b-1 of the Investment Company Act, the term "Independent Trustees" in this Statement of Additional Information refers to those Trustees who are not "interested persons" of the Fund and who do not have any direct or indirect financial interest in the operation of the distribution plan or any agreement under the plan.

2 Certain waivers also apply to Class M shares of Oppenheimer Convertible Securities Fund.

3 In the case of Oppenheimer Senior Floating Rate Fund, a continuously-offered closed-end fund, references to contingent deferred sales charges mean the Fund's Early Withdrawal Charges and references to "redemptions" mean "repurchases" of shares.

4 An "employee benefit plan" means any plan or arrangement, whether or not it is "qualified" under the Internal Revenue Code, under which Class N shares of an Oppenheimer fund or funds are purchased by a fiduciary or other administrator for the account of participants who are employees of a single employer or of affiliated employers. These may include, for example, medical savings accounts, payroll deduction plans or similar plans. The fund accounts must be registered in the name of the fiduciary or administrator purchasing the shares for the benefit of participants in the plan.

5 The term "Group Retirement Plan" means any qualified or non-qualified retirement plan for employees of a corporation or sole proprietorship, members and employees of a partnership or association or other organized group of persons (the members of which may include other groups), if the group has made special arrangements with the Distributor and all members of the group participating in (or who are eligible to participate in) the plan purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution designated by the group. Such plans include 457 plans, SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than plans for public school employees. The term "Group Retirement Plan" also includes qualified retirement plans and non-qualified deferred compensation plans and IRAs that purchase shares of an Oppenheimer fund or funds through a single investment dealer, broker or other financial institution that has made special arrangements with the Distributor.

6 However, that concession will not be paid on purchases of shares in amounts of $1 million or more (including any right of accumulation) by a Retirement Plan that pays for the purchase with the redemption proceeds of Class C shares of one or more Oppenheimer funds held by the Plan for more than one year.

8 This provision only applies to qualified retirement plans and 403(b)(7) custodial plans after your separation from service in or after the year you reached age 55.

9 The distribution must be requested prior to Plan termination or the elimination of the Oppenheimer funds as an investment option under the Plan.

11 This provision does not apply to loans from 403(b)(7) custodial plans and loans from the OppenheimerFunds-sponsored Single K retirement plan.

12 This provision does not apply to 403(b)(7) custodial plans if the participant is less than age 55, nor to IRAs.

Two World Financial Center
225 Liberty Street, 11^th Floor
New York, New York 10281-1008

OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1.800.CALL OPP (225.5677)

	Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks
The Fund's Investment Policies
Other Investment Techniques and Strategies
Investment Restrictions
Disclosure of Portfolio Holdings
How the Fund is Managed
Organization and History
Trustees and Officers of the Fund
The Manager
Brokerage Policies of the Fund
Distribution and Service Plans
Payments to Fund Intermediaries
Performance of the Fund

About Your Account
How To Buy Shares
How To Sell Shares
How To Exchange Shares
Dividends, Capital Gains and Taxes
Additional Information About the Fund

Financial Information About the Fund
Report of the Independent Registered Public Accounting Firm
Financial Statements

Appendix A: Ratings Definitions
Appendix B: Special Sales Charge Arrangements and Waivers

ABG Securities	Fixed Income Securities	Nomura Securities
ABN AMRO	Fortis Securities	Oppenheimer & Co.
AG Edwards	Fox-Pitt, Kelton	Oscar Gruss
Allen & Co	Friedman, Billing, Ramsey	OTA
American Technology Research	Gabelli	Pacific Crest Securities
Auerbach Grayson	Garp Research	Piper Jaffray Inc.
Avondale	Gartner	Portales Partners
Banc of America Securities	George K Baum & Co.	Punk Ziegel & Co
Barra	Goldman Sachs	Raymond James
BB&T	Howard Weil	RBC
Bear Stearns	HSBC	Reuters
Belle Haven	ISI Group	RiskMetrics/ISS
Bloomberg	ITG	Robert W. Baird
BMO Capital Markets	Janco	Roosevelt & Cross
BNP Paribas	Janney Montgomery	Russell
Brean Murray	Jefferies	Sandler O'Neill
Brown Brothers	JMP Securities	Sanford C. Bernstein
Buckingham Research Group	JNK Securities	Scotia Capital Markets
Canaccord Adams	Johnson Rice & Co	Sidoti
Caris & Co.	JP Morgan Securities	Simmons
CIBC World Markets	Kaufman Brothers	Sanders Morris Harris
Citigroup Global Markets	Keefe, Bruyette & Woods	Societe Generale
CJS Securities	Keijser Securities	Soleil Securities Group
Cleveland Research	Kempen & Co. USA Inc.	Standard & Poors
Cogent	Kepler Equities/Julius Baer Sec	Stanford Group
Collins Stewart	KeyBanc Capital Markets	State Street Bank
Cowen & Company	Lazard Freres & Co	Stephens, Inc.
Craig-Hallum Capital Group LLC	Leerink Swann	Stifel Nicolaus
Credit Agricole Cheuvreux N.A. Inc.	Lehman Brothers	Stone & Youngberg
Credit Suisse	Loop Capital Markets	Strategas Research
Data Communique	Louise Yamada Tech Research	Sungard
Daiwa Securities	MainFirst Bank AG	Suntrust Robinson Humphrey
Davy	Makinson Cowell US Ltd	SWS Group
Deutsche Bank Securities	McAdams Wright	Think Equity Partners
Dougherty Markets	Merrill Lynch	Thomas Weisel Partners
Dowling	Miller Tabak	Thomson Financial
Empirical Research	Mizuho Securities	UBS
Enskilda Securities	Moodys Research	Virtusa Corporation
Exane BNP Paribas	Morgan Stanley	Wachovia Securities
Factset	Natixis Bleichroeder	Wedbush
Fidelity Capital Markets	Ned Davis Research Group	Weeden
First Albany	Needham & Co	William Blair

Oppenheimer Capital Income Fund	Oppenheimer Principal Protected Trust
Oppenheimer Cash Reserves	Oppenheimer Principal Protected Trust II
Oppenheimer Champion Income Fund	Oppenheimer Principal Protected Trust III
Oppenheimer Commodity Strategy Total Return Fund	Oppenheimer Senior Floating Rate Fund
Oppenheimer Equity Fund, Inc.	Oppenheimer Strategic Income Fund
Oppenheimer Integrity Funds	Oppenheimer Variable Account Funds
Oppenheimer International Bond Fund	Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund
Oppenheimer Main Street Funds, Inc.
Oppenheimer Main Street Opportunity Fund	Centennial California Tax Exempt Trust
Oppenheimer Main Street Small Cap Fund	Centennial Government Trust
Oppenheimer Master Event-Linked Bond Fund, LLC	Centennial Money Market Trust
Oppenheimer Master Loan Fund, LLC	Centennial New York Tax Exempt Trust
Oppenheimer Municipal Fund	Centennial Tax Exempt Trust
Oppenheimer Portfolio Series Fixed Income Active Allocation Fund

Independent Trustees
Name, Position(s) Held with the Fund, Length of Service, Age	Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen	Dollar Range of Shares Beneficially Owned in the Fund		Aggregate Dollar Range of Shares Beneficially Owned in All Supervised Funds
		As of December 31, 2008
William L. Armstrong, Chairman of the Board of Trustees since 2003, Trustee since 1999 Age: 71	President, Colorado Christian University (since 2006); Chairman, Cherry Creek Mortgage Company (since 1991), Chairman, Centennial State Mortgage Company (since 1994), Chairman, The El Paso Mortgage Company (since 1993); Chairman, Ambassador Media Corporation (since 1984); Chairman, Broadway Ventures (since 1984); Director of Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992), Campus Crusade for Christ (non-profit) (since 1991); Former Director, The Lynde and Harry Bradley Foundation, Inc. (non-profit organization) (2002-2006); former Chairman of: Transland Financial Services, Inc. (private mortgage banking company) (1997-2003), Great Frontier Insurance (1995-2000), Frontier Real Estate, Inc. (residential real estate brokerage) (1994-2000) and Frontier Title (title insurance agency) (1995-2000); former Director of the following: UNUMProvident (insurance company) (1991-2004), Storage Technology Corporation (computer equipment company) (1991-2003) and International Family Entertainment (television channel) (1992-1997); U.S. Senator (January 1979-January 1991). Oversees 41 portfolios in the OppenheimerFunds complex.	None	Over $100,000
George C. Bowen, Trustee since 1999 Age: 72	Assistant Secretary and Director of Centennial Asset Management Corporation (December 1991-April 1999); President, Treasurer and Director of Centennial Capital Corporation (June 1989-April 1999); Chief Executive Officer and Director of MultiSource Services, Inc. (March 1996-April 1999); Mr. Bowen held several positions with the Manager and with subsidiary or affiliated companies of the Manager (September 1987-April 1999). Oversees 41 portfolios in the OppenheimerFunds complex.	$10,001-$50,000	Over $100,000
Edward L. Cameron, Trustee since 1999 Age: 70	Member of The Life Guard of Mount Vernon (George Washington historical site) (June 2000 – June 2006); Partner of PricewaterhouseCoopers LLP (accounting firm) (July 1974-June 1999); Chairman of Price Waterhouse LLP Global Investment Management Industry Services Group (accounting firm) (July 1994-June 1998). Oversees 41 portfolios in the OppenheimerFunds complex.	None	Over $100,000
Jon S. Fossel, Trustee since 1990 Age: 66	Director of UNUMProvident (insurance company) (since June 2002); Director of Northwestern Energy Corp. (public utility corporation) (since November 2004); Director of P.R. Pharmaceuticals (October 1999-October 2003); Director of Rocky Mountain Elk Foundation (non-profit organization) (February 1998-February 2003 and February 2005-February 2007); Chairman and Director (until October 1996) and President and Chief Executive Officer (until October 1995) of the Manager; President, Chief Executive Officer and Director of the following: Oppenheimer Acquisition Corp. ("OAC") (parent holding company of the Manager), Shareholders Services, Inc. and Shareholder Financial Services, Inc. (until October 1995). Oversees 41 portfolios in the OppenheimerFunds complex.	None	Over $100,000
Sam Freedman, Trustee since 1996 Age: 68	Director of Colorado UpLIFT (charitable organization) (since September 1984). Mr. Freedman held several positions with the Manager and with subsidiary or affiliated companies of the Manager (until October 1994). Oversees 41 portfolios in the OppenheimerFunds complex.	Over $100,000	Over $100,000
Beverly L. Hamilton, Trustee since 2002 Age: 62	Studies (educational organization) (since February 2000); Board Member of Middlebury College (educational organization) (since December 2005); Director of The California Endowment (philanthropic organization) (since April 2002); Director (February 2002-2005) and Chairman of Trustees (2006-2007) of the Community Hospital of Monterey Peninsula; Director (October 1991-2005) and Vice Chairman (since 2006) of American Funds' Emerging Markets Growth Fund, Inc. (mutual fund); President of ARCO Investment Management Company (February 1991-April 2000); Member of the investment committees of The Rockefeller Foundation (2001-2006) and The University of Michigan (since 2000); Advisor at Credit Suisse First Boston's Sprout venture capital unit (venture capital fund) (1994-January 2005); Trustee of MassMutual Institutional Funds (investment company) (1996-June 2004); Trustee of MML Series Investment Fund (investment company) (April 1989-June 2004); Member of the investment committee of Hartford Hospital (2000-2003); and Advisor to Unilever (Holland) pension fund (2000-2003). Oversees 41 portfolios in the OppenheimerFunds complex.	None	Over $100,000
Robert J. Malone, Trustee since 2002 Age: 64	Board of Directors of Opera Colorado Foundation (non-profit organization) (since March 2008); Director of Jones Knowledge, Inc. (since 2006); Director of Jones International University (educational organization) (since August 2005); Chairman, Chief Executive Officer and Director of Steele Street Bank & Trust (commercial banking) (since August 2003); Director of Colorado UpLIFT (charitable organization) (since 1986); Trustee of the Gallagher Family Foundation (non-profit organization) (since 2000); Former Chairman of U.S. Bank-Colorado (subsidiary of U.S. Bancorp and formerly Colorado National Bank) (July 1996-April 1999); Director of Commercial Assets, Inc. (real estate investment trust) (1993-2000); Director of Jones Knowledge, Inc. (2001-July 2004); and Director of U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees 41 portfolios in the OppenheimerFunds complex.	Over $100,000	Over $100,000
F. William Marshall, Jr., Trustee since 2000 Age: 66	Trustee of MassMutual Select Funds (formerly MassMutual Institutional Funds) (investment company) (since 1996) and MML Series Investment Fund (investment company) (since 1996); Trustee of Worcester Polytech Institute (since 1985); Chairman (since 1994) of the Investment Committee of the Worcester Polytech Institute (private university); President and Treasurer of the SIS Funds (private charitable fund) (since January 1999); Chairman of SIS & Family Bank, F.S.B. (formerly SIS Bank) (commercial bank) (January 1999-July 1999); and Executive Vice President of Peoples Heritage Financial Group, Inc. (commercial bank) (January 1999-July 1999). Oversees 43 portfolios in the OppenheimerFunds complex.*	None	Over $100,000

Interested Trustee and Officer
Name, Position(s) Held with the Fund, Length of Service, Age	Principal Occupation(s) During the Past 5 Years; Other Trusteeships/Directorships Held; Number of Portfolios in the Fund Complex Currently Overseen	Dollar Range of Shares Beneficially Owned in the Fund		Aggregate Dollar Range Of Shares Beneficially Owned in All Supervised Funds
		As of December 31, 2008
John V. Murphy, Trustee, President and Principal Executive Officer since 2001 Age: 59	Chairman and Director of the Manager (since June 2001); Chief Executive Officer of the Manager (June 2001-December 2008); President of the Manager (September 2000-February 2007); President and director or trustee of other Oppenheimer funds; President and Director of Oppenheimer Acquisition Corp. ( "OAC") (the Manager's parent holding company) and of Oppenheimer Partnership Holdings, Inc. (holding company subsidiary of the Manager) (since July 2001); Director of OppenheimerFunds Distributor, Inc. (subsidiary of the Manager) (November 2001-December 2006); Chairman and Director of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer agent subsidiaries of the Manager) (since July 2001); President and Director of OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since July 2001); Director of the following investment advisory subsidiaries of the Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management Corporation, Trinity Investment Management Corporation and Tremont Capital Management, Inc. (since November 2001), HarbourView Asset Management Corporation and OFI Private Investments, Inc. (since July 2001); President (since November 2001) and Director (since July 2001) of Oppenheimer Real Asset Management, Inc.; Executive Vice President of Massachusetts Mutual Life Insurance Company (OAC's parent company) (since February 1997); Director of DLB Acquisition Corporation (holding company parent of Babson Capital Management LLC) (since June 1995); Chairman (since October 2007) and Member of the Investment Company Institute's Board of Governors (since October 2003). Oversees 105 portfolios in the OppenheimerFunds complex.	$10,001-$50,000	Over $100,000

Other Officers of the Fund
Name, Position(s) Held with the Fund, Length of Service, Age	Principal Occupation(s) During Past 5 Years
Arthur P. Steinmetz, Vice President and Portfolio Manager since 1989 Age: 50	Senior Vice President of the Manager (since March 1993) and of HarbourView Asset Management Corporation (since March 2000). An officer of 5 portfolios in the OppenheimerFunds complex.
Krishna Memani Vice President and Portfolio Manager since 2009 Age: 49	Senior Vice President and Head of the Investment Grade Fixed Income Team of the Manager (since March 2009). Mr. Memani was a Managing Director and Head of the U.S. and European Credit Analyst Team at Deutsche Bank Securities (June 2006-January 2009). He was the Chief Credit Strategist at Credit Suisse Securities (August 2002-March 2006). He was a Managing Director and Senior Portfolio Manager at Putnam Investments (September 1998-June 2002). An officer of other portfolios in the OppenheimerFunds complex.
Joseph Welsh, Vice President and Portfolio Manager since 2009 Age: 35	Head of the Manager's High Yield Corporate Debt Team since April 2009, Vice President of the Manager since December 2000 and a CFA. He was an Assistant Vice President of the Manager (December 1996-November 2000) and a high yield bond analyst of the Manager (January 1995-December 1996). An officer of other portfolios in the OppenheimerFunds complex.
Caleb Wong, Vice President and Portfolio Manager since 2009 Age: 43	Vice President of the Manager since June 1999; employed in fixed-income quantitative research and risk management for the Manager (since July 1996). An officer of other portfolios in the OppenheimerFunds complex.
Mark S. Vandehey, Vice President and Chief Compliance Officer since 2004 Age: 58	Senior Vice President and Chief Compliance Officer of the Manager (since March 2004); Chief Compliance Officer of OppenheimerFunds Distributor, Inc., Centennial Asset Management and Shareholder Services, Inc. (since March 2004); Vice President of OppenheimerFunds Distributor, Inc., Centennial Asset Management Corporation and Shareholder Services, Inc. (since June 1983); Former Vice President and Director of Internal Audit of the Manager (1997-February 2004). An officer of 105 portfolios in the OppenheimerFunds complex.
Brian W. Wixted, Treasurer and Principal Financial & Accounting Officer since 1999 Age: 49	Senior Vice President and Treasurer of the Manager (since March 1999); Treasurer of the following: HarbourView Asset Management Corporation, Shareholder Financial Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management, Inc. and Oppenheimer Partnership Holdings, Inc. (since March 1999), OFI Private Investments, Inc. (since March 2000), OppenheimerFunds International Ltd. and OppenheimerFunds plc (since May 2000), OFI Institutional Asset Management, Inc. (since November 2000), and OppenheimerFunds Legacy Program (charitable trust program established by the Manager) (since June 2003); Treasurer and Chief Financial Officer of OFI Trust Company (trust company subsidiary of the Manager) (since May 2000); Assistant Treasurer of the following: OAC (since March 1999), Centennial Asset Management Corporation (March 1999-October 2003) and OppenheimerFunds Legacy Program (April 2000-June 2003). An officer of 105 portfolios in the OppenheimerFunds complex.
Brian S. Petersen, Assistant Treasurer since 2004 Age: 38	Vice President of the Manager (since February 2007); Assistant Vice President of the Manager (August 2002-February 2007); Manager/Financial Product Accounting of the Manager (November 1998-July 2002). An officer of 105 portfolios in the OppenheimerFunds complex
Stephanie Bullington, Assistant Treasurer since 2008 Age: 31	Assistant Vice President of the Manager (since October 2005); Assistant Vice President of ButterField Fund Services (Bermuda) Limited, part of The Bank of N.T. Butterfield & Son Limited (Butterfield) (February 2004-June 2005; Fund Accounting Officer of Butterfield Fund Services (Bermuda) Limited (September 2003-February 2004. An officer of 105 portfolios in the OppenheimerFunds complex.
Robert G. Zack, Vice President and Secretary since 2001 Age: 60	Executive Vice President (since January 2004) and General Counsel (since March 2002) of the Manager; General Counsel and Director of the Distributor (since December 2001); General Counsel of Centennial Asset Management Corporation (since December 2001); Senior Vice President and General Counsel of HarbourView Asset Management Corporation (since December 2001); Secretary and General Counsel of OAC (since November 2001); Assistant Secretary (since September 1997) and Director (since November 2001) of OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President and Director of Oppenheimer Partnership Holdings, Inc. (since December 2002); Director of Oppenheimer Real Asset Management, Inc. (since November 2001); Senior Vice President, General Counsel and Director of Shareholder Financial Services, Inc. and Shareholder Services, Inc. (since December 2001); Senior Vice President, General Counsel and Director of OFI Private Investments, Inc. and OFI Trust Company (since November 2001); Vice President of OppenheimerFunds Legacy Program (since June 2003); Senior Vice President and General Counsel of OFI Institutional Asset Management, Inc. (since November 2001); Director of OppenheimerFunds International Distributor Limited (since December 2003); Senior Vice President (May 1985-December 2003). An officer of 105 portfolios in the OppenheimerFunds complex.
Lisa I. Bloomberg, Assistant Secretary since 2004 Age: 40	Vice President (since 2004) and Deputy General Counsel (since May 2008); of the Manager; Associate Counsel of the Manager (May 2004-May 2008); First Vice President (April 2001-April 2004), Associate General Counsel (December 2000-April 2004) of UBS Financial Services, Inc. An officer of 105 portfolios in the OppenheimerFunds complex.
Kathleen T. Ives, Assistant Secretary since 2001 Age: 43	Vice President (since June 1998), Deputy General Counsel (since May 2008) and Assistant Secretary (since October 2003) of the Manager; Vice President (since 1999) and Assistant Secretary (since October 2003) of the Distributor; Assistant Secretary of Centennial Asset Management Corporation (since October 2003); Vice President and Assistant Secretary of Shareholder Services, Inc. (since 1999); Assistant Secretary of OppenheimerFunds Legacy Program and Shareholder Financial Services, Inc. (since December 2001); Senior Counsel of the Manager (October 2003-May 2008). An officer of 105 portfolios in the OppenheimerFunds complex.
Taylor V. Edwards, Assistant Secretary since 2008 Age : 41	Vice President and Assistant Counsel of the Manager (since February 2007); Assistant Vice President and Assistant Counsel of the Manager (January 2006-January 2007); Formerly an Associate at Dechert LLP (September 2000-December 2005). An officer of 105 portfolios in the OppenheimerFunds complex.
Randy G. Legg, Assistant Secretary since 2008 Age : 43	Vice President (since June 2005) and Associate Counsel (since January 2007) of the Manager; Assistant Vice President (February 2004-June 2005 and Assistant Counsel (February 2004-January 2007) of the Manager. An officer of 105 portfolios in the OppenheimerFunds complex.
Adrienne M. Ruffle, Assistant Secretary since 2008 Age : 31	Vice President (since February 2007) and Assistant Counsel (since February 2005) of the Manager; Assistant Vice President of the Manager (February 2005-February 2007); Associate (September 2002-February 2005) at Sidley Austin LLP. An officer of 105 portfolios in the OppenheimerFunds complex.

Name of Trustee and Other Fund Position(s) (as applicable)	Aggregate Compensation From the Fund ⁽¹⁾ Fiscal year ended September 30, 2008	Total Compensation From the Fund and Fund Complex⁽²⁾ Year ended December 31, 200 8
William L. Armstrong Chairman of the Board and Governance Committee Member	$22,788	$261,000
George C. Bowen Audit Committee Member	$17,523	$208,800
Edward L. Cameron Audit Committee Chairman	$15,900	$174,000
Jon S. Fossel Review Committee Member	$15,192	$174,000
Sam Freedman Review Committee Chairman	$17,471	$200,100
Beverly Hamilton Review Committee Member and Governance Committee Member	$15,192⁽³⁾	$165,300
Robert J. Malone Governance Committee Chairman and Audit Committee Member	$17,471	$200,100
F. William Marshall, Jr. Audit Committee Member and Governance Committee Member	$15,192	$174,000⁽⁴⁾

Fiscal Year ended 9/30:	Management Fees Paid to OppenheimerFunds, Inc.
2006	$35,160,731
2007	$39,478,329
2008	$50,268,336

Portfolio Managers	Registered Investment Companies Managed	Total Assets in Registered Investment Companies Managed¹	Other Pooled Investment Vehicles Managed	Total Assets in Other Pooled Investment Vehicles Managed¹	Other Accounts Managed	Total Assets in Other Accounts Managed^1,2
Art Steinmetz	9	$17,809	N/A	N/A	N/A	N/A
Krishna Memani³	N/A	N/A	N/A	N/A	N/A	N/A
Joseph Welsh³	N/A	N/A	N/A	N/A	N/A	N/A
Caleb Wong³	N/A	N/A	N/A	N/A	N/A	N/A

Portfolio Manager	Range of Shares Beneficially Owned in the Fund
Arthur Steinmetz	$100,001-$500,000
Krishna Memani	N/A
Joseph Welsh	N/A
Caleb Wong	N/A

Fiscal Year Ended 9/30:	Total Brokerage Commissions Paid by the Fund*
2006	$585,342
2007	$3,772,455
2008	$1,365,775

Fiscal Year Ended 9/30:	Aggregate Front-End Sales Charges on Class A Shares	Class A Front-End Sales Charges Retained by Distributor*
2006	$8,273,871	$2,199,785
2007	$8,209,684	$2,315,213
2008	$12,416,615	$3,145,243

Fiscal Year Ended 9/30:	Concessions on Class A Shares Advanced by Distributor*	Concessions on Class B Shares Advanced by Distributor*	Concessions on Class C Shares Advanced by Distributor*	Concessions on Class N Shares Advanced by Distributor*
2006	$542,407	$2,261,892	$1,622,013	$115,660
2007	$538,634	$1,945,831	$1,477,442	$72,094
2008	$985,655	$3,264,014	$3,652,344	$108,189

Fiscal Year Ended 9/30:	Class A Contingent Deferred Sales Charges Retained by Distributor	Class B Contingent Deferred Sales Charges Retained by Distributor	Class C Contingent Deferred Sales Charges Retained by Distributor	Class N Contingent Deferred Sales Charges Retained by Distributor
2006	$43,415	$1,701,540	$113,735	$28,600
2007	$45,817	$1,005,718	$103,452	$4,011
2008	$43,456	$862,138	$289,591	$9,779

Distribution and Service Fees Paid to the Distributor for the Fiscal Year Ended 9/30/08
Class:	Total Payments Under Plan	Amount Retained by Distributor	Distributor's Aggregate Unreimbursed Expenses Under Plan	Distributor's Unreimbursed Expenses as % of Net Assets of Class
Class B Plan	$5,406,763¹	$4,236,230	$111,088,342	22.98%
Class C Plan	$13,796,316²	$3,612,195	$39,198,933	2.62%
Class N Plan	$876,323³	$273,270	$2,701,980	1.45%

1st Global Capital Company	Legend Equities Corporation
Advantage Capital Corporation	Lincoln Benefit National Life
Aegon USA	Lincoln Financial Advisors Corporation
Aetna Life Insurance & Annuity Company	Lincoln Investment Planning, Inc.
AG Edwards & Sons, Inc.	Linsco Private Ledger Financial
AIG Financial Advisors	Massachusetts Mutual Life Insurance Company
AIG Life Variable Annuity	McDonald Investments, Inc.
Allianz Life Insurance Company	Merrill Lynch Pierce Fenner & Smith, Inc.
Allmerica Financial Life Insurance & Annuity Company	Merrill Lynch Insurance Group
Allstate Life Insurance Company	MetLife Investors Insurance Company
American Enterprise Life Insurance	MetLife Securities, Inc.
American General Annuity Insurance	Minnesota Life Insurance Company
American Portfolios Financial Services, Inc.	MML Investor Services, Inc.
Ameriprise Financial Services, Inc.	Mony Life Insurance Company
Ameritas Life Insurance Company	Morgan Stanley & Company, Inc.
Annuity Investors Life Insurance Company	Multi-Financial Securities Corporation
Associated Securities Corporation	Mutual Service Corporation
AXA Advisors LLC	NFP Securities, Inc.
AXA Equitable Life Insurance Company	Nathan & Lewis Securities, Inc.
Banc One Securities Corporation	National Planning Corporation
Cadaret Grant & Company, Inc.	Nationwide Financial Services, Inc.
CCO Investment Services Corporation	New England Securities Corporation
Charles Schwab & Company, Inc.	New York Life Insurance & Annuity Company
Chase Investment Services Corporation	Oppenheimer & Company
Citicorp Investment Services, Inc.	PFS Investments, Inc.
Citigroup Global Markets Inc.	Park Avenue Securities LLC
CitiStreet Advisors LLC	Phoenix Life Insurance Company
Citizen's Bank of Rhode Island	Plan Member Securities
Columbus Life Insurance Company	Prime Capital Services, Inc.
Commonwealth Financial Network	Primevest Financial Services, Inc.
Compass Group Investment Advisors	Protective Life Insurance Company
CUNA Brokerage Services, Inc.	Prudential Investment Management Services LLC
CUSO Financial Services, LLP	Raymond James & Associates, Inc.
E*TRADE Clearing LLC	Raymond James Financial Services, Inc.
Edward Jones	RBC Dain Rauscher Inc.
Essex National Securities, Inc.	Royal Alliance Associates, Inc.
Federal Kemper Life Assurance Company	Securities America, Inc.
Financial Network	Security Benefit Life Insurance Company
Financial Services Corporation	Security First-Metlife Investors Insurance Company
GE Financial Assurance	SII Investments, Inc.
GE Life & Annuity	Signator Investors, Inc.
Genworth Financial, Inc.	Sorrento Pacific Financial LLC
GlenBrook Life & Annuity Company	Sun Life Assurance Company of Canada
Great West Life & Annuity Company	Sun Life Insurance & Annuity Company of New York
GWFS Equities, Inc.	Sun Life Annuity Company Ltd.
Hartford Life Insurance Company	SunTrust Bank
HD Vest Investment Services, Inc.	SunTrust Securities, Inc.
Hewitt Associates LLC	Thrivent Financial Services, Inc.
IFMG Securities, Inc.	Towers Square Securities, Inc.
ING Financial Advisers LLC	Travelers Life & Annuity Company
ING Financial Partners, Inc.	UBS Financial Services, Inc.
Invest Financial Corporation	Union Central Life Insurance Company
Investment Centers of America, Inc.	United Planners Financial Services of America
Jefferson Pilot Life Insurance Company	Wachovia Securities, Inc.
Jefferson Pilot Securities Corporation	Walnut Street Securities, Inc.
John Hancock Life Insurance Company	Waterstone Financial Group
JP Morgan Securities, Inc.	Wells Fargo Investments
Kemper Investors Life Insurance Company	Wescom Financial Services

1st Global Capital Co.	Lincoln Investment Planning, Inc.
AG Edwards	Lincoln National Life Insurance Co.
ACS HR Solutions	Linsco Private Ledger Financial
ADP	Massachusetts Mutual Life Insurance Company
AETNA Life Ins & Annuity Co.	Matrix Settlement & Clearance Services
Alliance Benefit Group	McDonald Investments, Inc.
American Enterprise Investments	Mercer HR Services
American Express Retirement Service	Merrill Lynch
American United Life Insurance Co.	Mesirow Financial, Inc.
Ameriprise Financial Services, Inc.	MetLife
Ameritrade, Inc.	MFS Investment Management
AMG (Administrative Management Group)	Mid Atlantic Capital Co.
AST (American Stock & Transfer)	Milliman USA
AXA Advisors	Morgan Keegan & Co, Inc.
Bear Stearns Securities Co.	Morgan Stanley Dean Witter
Benefit Administration Company, LLC	Mutual of Omaha Life Insurance Co.
Benefit Administration, Inc.	Nathan & Lewis Securities, Inc.
Benefit Consultants Group	National City Bank
Benefit Plans Administration	National Deferred Comp
Benetech, Inc.	National Financial
Bisys	National Investor Services Co.
Boston Financial Data Services	Nationwide Life Insurance Company
Charles Schwab & Co, Inc.	Newport Retirement Services, Inc.
Citigroup Global Markets Inc.	Northwest Plan Services, Inc.
CitiStreet	NY Life Benefits
City National Bank	Oppenheimer & Co, Inc.
Clark Consulting	Peoples Securities, Inc.
CPI Qualified Plan Consultants, Inc.	Pershing LLC
DA Davidson & Co.	PFPC
DailyAccess Corporation	Piper Jaffray & Co.
Davenport & Co, LLC	Plan Administrators, Inc.
David Lerner Associates, Inc.	Plan Member Securities
Digital Retirement Solutions, Inc.	Primevest Financial Services, Inc.
DR, Inc.	Principal Life Insurance Co.
Dyatech, LLC	Prudential Investment Management Services LLC
E*Trade Clearing LLC	PSMI Group, Inc.
Edward D Jones & Co.	Quads Trust Company
Equitable Life / AXA	Raymond James & Associates, Inc.
ERISA Administrative Svcs, Inc.	Reliance Trust Co.
ExpertPlan, Inc.	Reliastar Life Insurance Company
FASCore LLC	Robert W Baird & Co.
Ferris Baker Watts, Inc.	RSM McGladrey
Fidelity	Scott & Stringfellow, Inc.
First Clearing LLC	Scottrade, Inc.
First Southwest Co.	Southwest Securities, Inc.
First Trust – Datalynx	Standard Insurance Co
First Trust Corp	Stanley, Hunt, Dupree & Rhine
Franklin Templeton	Stanton Group, Inc.
Geller Group	Sterne Agee & Leach, Inc.
Great West Life	Stifel Nicolaus & Co, Inc.
H&R Block Financial Advisors, Inc.	Sun Trust Securities, Inc.
Hartford Life Insurance Co.	Symetra Financial Corp.
HD Vest Investment Services	T. Rowe Price
Hewitt Associates LLC	The 401k Company
HSBC Brokerage USA, Inc.	The Princeton Retirement Group Inc.
ICMA - RC Services	The Retirement Plan Company, LLC
Independent Plan Coordinators	TruSource Union Bank of CA
Ingham Group	UBS Financial Services, Inc.
Interactive Retirement Systems	Unified Fund Services (UFS)
Invesmart (Standard Retirement Services, Inc.)	US Clearing Co.
Janney Montgomery Scott, Inc.	USAA Investment Management Co.
JJB Hillard W L Lyons, Inc.	USI Consulting Group
John Hancock	VALIC Retirement Services
JP Morgan	Vanguard Group
July Business Services	Wachovia
Kaufman & Goble	Web401K.com
Legend Equities Co.	Wedbush Morgan Securities
Legg Mason Wood Walker	Wells Fargo Bank
Lehman Brothers, Inc.	Wilmington Trust
Liberty Funds Distributor, Inc./Columbia Management

The Fund's Yields for the 30-Day Periods Ended 9/30/08
Class of Shares	Standardized Yield		Dividend Yield
Class of Shares	Without Sales Charge	After Sales Charge	Without Sales Charge	After Sales Charge
Class A	5.79%	5.51%	5.84%	5.56%
Class B	4.88%	N/A	4.94%	N/A
Class C	4.99%	N/A	5.05%	N/A
Class N	5.37%	N/A	5.41%	N/A
Class Y	6.02%	N/A	6.11%	N/A

ATV_D ^l/n	- 1	= Average Annual Total Return (After Taxes on Distributions)
P

ATV_DR ^l/n	- 1	= Average Annual Total Return (After Taxes on Distributions and Redemptions)
P

The Fund's Total Returns for the Periods Ended 9/30/08
Class of Shares	Cumulative Total Returns (10 years or life-of-class)		Average Annual Total Returns
			1-Year		5-Years		10-Years (or life of class if less)
	After Sales Charge	Without Sales Charge	After Sales Charge	Without Sales Charge	After Sales Charge	Without Sales Charge	After Sales Charge	Without Sales Charge
Class A¹	72.22%	80.81%	-8.57%	-4.01%	4.71%	5.73%	5.59%	6.10%
Class B²	72.89%	72.89%	-9.04%	-4.54%	4.59%	4.92%	5.63%	5.63%
Class C³	67.94%	67.94%	-5.42%	-4.52%	4.99%	4.99%	5.32%	5.32%
Class N⁴	56.85%	56.85%	-5.07%	-4.17%	5.34%	5.34%	6.12%	6.12%
Class Y⁵	85.06%	85.06%	-3.33%	-3.33%	6.03%	6.03%	6.35%	6.35%

Average Annual Total Returns for Class A¹ Shares (After Sales Charge) For the Periods Ended 9/30/08
	1-Year	5-Years	10-Years (or life of class if less)
After Taxes on Distributions	-10.67%	2.49%	2.87%
After Taxes on Distributions and Redemption of Fund Shares	-5.48%	2.75%	3.07%

Oppenheimer AMT-Free Municipals	Oppenheimer Pennsylvania Municipal Fund
Oppenheimer AMT-Free New York Municipals	Oppenheimer Portfolio Series:
Oppenheimer Balanced Fund	Active Allocation Fund
Oppenheimer Baring China Fund	Equity Investor Fund
Oppenheimer Baring Japan Fund	Conservative Investor Fund
Oppenheimer Baring SMA International Fund	Moderate Investor Fund
Oppenheimer Core Bond Fund	Oppenheimer Portfolio Series Fixed Income Active Allocation Fund
Oppenheimer California Municipal Fund	Oppenheimer Principal Protected Main Street Fund
Oppenheimer Capital Appreciation Fund	Oppenheimer Principal Protected Main Street Fund II
Oppenheimer Capital Income Fund	Oppenheimer Principal Protected Main Street Fund III
Oppenheimer Champion Income Fund	Oppenheimer Quest Balanced Fund
Oppenheimer Commodity Strategy Total Return Fund	Oppenheimer Quest International Value Fund, Inc.
Oppenheimer Convertible Securities Fund	Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund	Oppenheimer Real Estate Fund
Oppenheimer Discovery Fund	Oppenheimer Rising Dividends Fund, Inc.
Oppenheimer Emerging Growth Fund	Oppenheimer Rochester Arizona Municipal Fund
Oppenheimer Equity Fund, Inc.	Oppenheimer Rochester Maryland Municipal Fund
Oppenheimer Equity Income Fund, Inc.	Oppenheimer Rochester Massachusetts Municipal Fund
Oppenheimer Global Fund	Oppenheimer Rochester Michigan Municipal Fund
Oppenheimer Global Opportunities Fund	Oppenheimer Rochester Minnesota Municipal Fund
Oppenheimer Global Value Fund	Oppenheimer Rochester National Municipals
Oppenheimer Gold & Special Minerals Fund	Oppenheimer Rochester North Carolina Municipal Fund
Oppenheimer International Bond Fund	Oppenheimer Rochester Ohio Municipal Fund
Oppenheimer International Diversified Fund	Oppenheimer Rochester Virginia Municipal Fund
Oppenheimer International Growth Fund	Oppenheimer Select Value Fund
Oppenheimer International Small Company Fund	Oppenheimer Senior Floating Rate Fund
Oppenheimer Limited Term California Municipal Fund	Oppenheimer Small- & Mid- Cap Value Fund
Oppenheimer Limited-Term Government Fund	Oppenheimer SMA Core Bond Fund
Oppenheimer Limited Term Municipal Fund	Oppenheimer SMA International Bond Fund
Oppenheimer Main Street Fund	Oppenheimer Strategic Income Fund
Oppenheimer Main Street Opportunity Fund	Oppenheimer U.S. Government Trust
Oppenheimer Main Street Small Cap Fund	Oppenheimer Value Fund
Oppenheimer MidCap Fund	Limited-Term New York Municipal Fund
Oppenheimer New Jersey Municipal Fund	Rochester Fund Municipals

LifeCycle Funds
Oppenheimer Transition 2010 Fund
Oppenheimer Transition 2015 Fund
Oppenheimer Transition 2020 Fund
Oppenheimer Transition 2025 Fund
Oppenheimer Transition 2030 Fund
Oppenheimer Transition 2040 Fund
Oppenheimer Transition 2050 Fund

And the following money market funds:
Oppenheimer Cash Reserves	Centennial Government Trust
Oppenheimer Institutional Money Market Fund	Centennial Money Market Trust
Oppenheimer Money Market Fund, Inc.	Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust	Centennial Tax Exempt Trust

Number of Eligible Employees or Members	Initial Sales Charge as a % of Offering Price	Initial Sales Charge as a % of Net Amount Invested	Concession as % of Offering Price
9 or Fewer	2.50%	2.56%	2.00%
At least 10 but not more than 49	2.00%	2.04%	1.60%