[COVER PAGE]
OPPENHEIMER INTERNATIONAL GROWTH FUND
Semiannual Report MAY 31, 1996
[LOGO]OPPENHEIMERFUNDS/R/
<PAGE>
This Fund is for people who want to take advantage of GROWTH opportunities the
world over.
- ------------------------
How Your Fund Is Managed
- ------------------------
By employing a disciplined "theme" approach to investing. Oppenheimer
International Growth Fund seeks to capitalize on long-term global trends. One of
the Fund's goals is to lessen risk by investing in a wide range of stocks across
a broad spectrum of industries and countries. Because of its international
focus, searching foreign markets for outstanding performance, the Fund offers
impressive growth potential.
- -----------
Performance
- -----------
Cumulative total return at net asset value since inception on 3/25/96 for the
period ended 5/31/96 was 4.50% for Class A shares, 4.20% for Class B shares and
4.20% for Class C shares.(1)
Your Fund's cumulative total returns at maximum offering price since inception
of the Fund on 3/25/96 for the period ended 5/31/96 were (1.51)% for Class A
shares, (0.80)% for Class B shares, and 3.20% for Class C shares.(2)
- -------
Outlook
- -------
"From our perspective the outlook is excellent. Over the past five years, the
U.S. market has performed unusually well relative to international markets.
But, we expect that gap to close again as international markets improve. While
we believe international investing generally offers great opportunities, they
are especially compelling at this time."
George Evans, Portfolio Manager
May 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Total returns show results of hypothetical investments on 3/25/96 (inception
of fund), after deducting either (i) the maximum sales charge of 5.75% for Class
A shares, (ii) the 5% contingent deferred sales charge for Class B shares, or
(iii) the 1% contingent deferred sales charge for Class C shares. An explanation
of the different returns is in the Fund's prospectus.
2 Oppenheimer International Growth Fund
<PAGE>
BRIDGET A. MACASKILL
President
Oppenheimer
International
Growth Fund
DEAR SHAREHOLDER,
For the past few years, the U.S. stock market was among the best
performing markets in the world. But in 1996, many foreign markets have
begun to outperform the Dow Jones Industrial Average.
These reinvigorated stock markets can be found among the major nations
of Europe as well as the emerging countries of Latin America and the Far
East. Even Japan is finally doing better after a five year recession.
In countries such as France, Germany and Switzerland, corporations are
cutting costs and improving productivity--just like their counterparts in
the United States. Since this renaissance began in the U.S. some ten years
ago, the Dow has essentially tripled. Also, corporate restructuring is
having a strongly positive impact on European stock prices, as corporate
managements increasingly respond to competitive pressures.
In many emerging market countries, such as Poland, Chile and Malaysia,
capitalism is being increasingly embraced. These countries are benefiting
from free trade and the enormous consumer demand of their growing middle
class. Yet, despite this booming growth, inflation in these countries is
generally moderate.
In Japan, corporate profits and the country's stock market are finally
beginning to recover. Because Japan represents about 40 percent of the
international stock market, its rebound is an important element in
international investing.
Whether it is a retailer in Japan offering discount prices to
recession-weary consumers, a private hospital in Germany competing with the
inefficient state-owned counterpart, a French financial company operating in
a country that is just now addressing its financial problems, or a recently
privatized cellular telephone company in Latin America, the world of
international investing offers a wealth of opportunities.
But investing abroad also involves substantial costs and risks--such
as fluctuations in foreign currency. It is very possible to invest in a
company overseas, watch the stock go up sharply, only to lose those gains
when the local currency is translated back into dollars.
Professional management--a combination of in-depth research, access to
sophisticated communications technology and experience in dealing with the
complexity of overseas markets--can reduce the additional risks inherent to
foreign investing.
Even though foreign markets can be quite volatile, keep in mind that
foreign investment as part of a diversified portfolio can actually reduce
the overall volatility of your portfolio. That's because overseas stocks
often move in different cycles than domestic securities.
On the following pages, your portfolio managers discuss the outlook for
your Fund in light of these broad issues. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment
goals.
/s/Bridget A. Macaskill
Bridget A. Macaskill
June 21, 1996
3 Oppenheimer International Growth Fund
<PAGE>
GEORGE EVANS
Portfolio Manager
Q + A
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW HAS THE FUND PERFORMED DURING ITS FIRST MONTHS OF OPERATIONS?
The Fund has done very well. It's ahead of its benchmark, the EAFE Index, by
3.59% since March 31, 1996 through the end of the period. One of the reasons for
its success was the portfolio's concentration in about 50 stocks, though it
remained fully diversified.1 Our strategy was to pick stocks we had great
confidence in, and maintain relatively large positions in those selected stocks.
As the Fund grows, we plan to follow this strategy as closely as possible.
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
When we invest, we're looking for faster-than-average growth. As a result, our
strategy is much more than allocating assets in a certain country or region.
Instead, we look for strong companies throughout the world that are
well-positioned to address one of eight "themes" we've identified as being
instrumental to future global economic growth. Of course, foreign investments
involve greater expenses and risks, such as adverse currency fluctuation. Some
of our best-performing investments over the period were companies within the
emerging consumer markets theme. Luxury goods producers were very profitable
recently as consumer buying picked up. This trend has affected our holdings
there, which did well. We were pleased with the performance of several of the
companies providing cellular telephone services to developing markets. Their
business appealed to us within both our consumer and telecommunications themes.
DID ANY INVESTMENTS NOT PERFORM AS YOU EXPECTED?
Of our eight major themes, healthcare companies lagged the performance of our
other equity investments. Over the long term, however, we believe the healthcare
industry holds tremendous potential.
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We will continue to search for companies that address one of our global growth
themes, while conducting intensive research into prospective companies, their
management teams, and their competitive positions. In particular, we look for
companies we think will be able to deliver substantial appreciation over the
next several years.
WHAT IS YOUR OUTLOOK FOR THE FUND?
From our perspective the outlook is excellent. Over the past five years, the
U.S. market has performed unusually well relative to international markets. But,
we expect that gap to close again as international markets improve. While we
believe international investing generally offers great opportunities, it's
especially compelling at this time. First, the Japanese market is recovering
after a five year recession. Second, emerging markets continue to grow at rates
that are three to four times greater than those in the developed world. And
finally, just as the U.S. did several years ago, European companies are shifting
their focus to efficiency, profitability, and cost-cutting, with shareholder
value driving business decisions. We think our disciplined investment approach
will help us do well in an overall good market.//
1. Foreign stocks are represented by the unmanaged EAFE (European, Australia,
Far East) Index. The Fund's portfolio is subject to change.
4 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
STATEMENT OF INVESTMENTS MAY 31, 1996 (UNAUDITED)
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
===============================================================================================================================
COMMON STOCKS - 95.3%
- -------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS - 3.1%
- -------------------------------------------------------------------------------------------------------------------------------
CHEMICALS - 1.7%
--------------------------------------------------------------------------------------------------------------------
Hoechst AG 500 $ 167,013
- -------------------------------------------------------------------------------------------------------------------------------
GOLD - 0.4%
--------------------------------------------------------------------------------------------------------------------
Anglo American Corp. of South Africa Ltd., ADR 650 41,925
- -------------------------------------------------------------------------------------------------------------------------------
METALS - 1.0%
--------------------------------------------------------------------------------------------------------------------
Boehler-Uddeholm AG 1,000 80,480
--------------------------------------------------------------------------------------------------------------------
Compania de Minas Buenaventura SA, Sponsored ADR(1) 1,000 19,500
------------
99,980
- -------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 13.1%
- -------------------------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING - 3.0%
--------------------------------------------------------------------------------------------------------------------
Autobacs Seven Co. Ltd. 2,000 194,264
--------------------------------------------------------------------------------------------------------------------
Sun Hung Kai Properties Ltd. 10,000 102,100
------------
296,364
- -------------------------------------------------------------------------------------------------------------------------------
MEDIA - 0.8%
--------------------------------------------------------------------------------------------------------------------
News Corp. Ltd. 14,015 78,668
- -------------------------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL - 1.4%
--------------------------------------------------------------------------------------------------------------------
Bulgari SpA 9,000 144,351
- -------------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY - 7.9%
--------------------------------------------------------------------------------------------------------------------
adidas AG 5,500 412,654
--------------------------------------------------------------------------------------------------------------------
Giordano International Ltd. 60,000 53,893
--------------------------------------------------------------------------------------------------------------------
Wella AG 600 323,877
------------
790,424
- -------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 13.0%
- -------------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 2.5%
--------------------------------------------------------------------------------------------------------------------
Hellenic Bottling Co., SA 2,000 69,084
--------------------------------------------------------------------------------------------------------------------
Serm Suk Co. Ltd. 2,000 47,395
--------------------------------------------------------------------------------------------------------------------
Serm Suk Public Co. Ltd. 4,200 129,389
------------
245,868
- -------------------------------------------------------------------------------------------------------------------------------
FOOD - 0.4%
--------------------------------------------------------------------------------------------------------------------
Nestle SA 40 45,040
- -------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS - 5.9%
--------------------------------------------------------------------------------------------------------------------
Astra AB Free, Series A 1,000 45,692
--------------------------------------------------------------------------------------------------------------------
Biocompatibles International PLC 19,833 144,576
--------------------------------------------------------------------------------------------------------------------
Ciba-Geigy AG 70 76,975
--------------------------------------------------------------------------------------------------------------------
Sanofi SA 1,200 92,216
--------------------------------------------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 10,000 226,642
------------
586,101
- -------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 4.2%
--------------------------------------------------------------------------------------------------------------------
Nichii Gakkan Co. 2,100 111,119
--------------------------------------------------------------------------------------------------------------------
Nycomed ASA, A Shares 3,000 60,626
--------------------------------------------------------------------------------------------------------------------
Rhoen Klinikum AG, Preference, Non-vtg.(1) 2,000 244,856
------------
416,601
- -------------------------------------------------------------------------------------------------------------------------------
ENERGY - 4.0%
- -------------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED - 4.0%
--------------------------------------------------------------------------------------------------------------------
British Petroleum Co. PLC 12,000 103,296
--------------------------------------------------------------------------------------------------------------------
Expro International Group PLC 23,000 119,504
--------------------------------------------------------------------------------------------------------------------
Forasol-Foramer NV 5,600 69,300
--------------------------------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd.(1) 21,300 107,195
------------
399,295
</TABLE>
5 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
FINANCIAL - 18.6%
- -------------------------------------------------------------------------------------------------------------------------------
BANKS - 4.5%
--------------------------------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA, ADR 4,500 $ 126,563
--------------------------------------------------------------------------------------------------------------------
HSBC Holdings PLC 10,800 163,308
--------------------------------------------------------------------------------------------------------------------
Standard Chartered Bank PLC(1) 16,300 162,305
------------
452,176
- -------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL - 5.6%
--------------------------------------------------------------------------------------------------------------------
ABN Amro Holding NV 2,000 110,062
--------------------------------------------------------------------------------------------------------------------
Compagnie Bancaire SA 1,000 109,340
--------------------------------------------------------------------------------------------------------------------
Development Bank of Singapore Ltd. 6,000 71,079
--------------------------------------------------------------------------------------------------------------------
Societe Generale de Paris 2,500 265,622
------------
556,103
- -------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 8.5%
--------------------------------------------------------------------------------------------------------------------
Marschollek, Lautenschlaeger und Partner AG(1) 200 202,301
--------------------------------------------------------------------------------------------------------------------
Mediolanum SpA 30,000 233,766
--------------------------------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 120,000 337,267
--------------------------------------------------------------------------------------------------------------------
Skandia Forsakrings AB 3,000 76,451
------------
849,785
- -------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL - 24.0%
- -------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - 2.5%
--------------------------------------------------------------------------------------------------------------------
Yokogawa Electric Corp. 25,000 254,394
- -------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES - 8.2%
--------------------------------------------------------------------------------------------------------------------
Boskalis Westminster 9,400 155,407
--------------------------------------------------------------------------------------------------------------------
Cordiant PLC(1) 200,000 378,441
--------------------------------------------------------------------------------------------------------------------
MRC Allied Industries, Inc. 1,700,000 292,095
------------
825,943
- -------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 10.1%
--------------------------------------------------------------------------------------------------------------------
Chargeurs SA 1,500 427,411
--------------------------------------------------------------------------------------------------------------------
Commercial del Plata SA 30,000 89,521
--------------------------------------------------------------------------------------------------------------------
Hoganas AB, Cl. B 1,500 57,282
--------------------------------------------------------------------------------------------------------------------
Powerscreen International PLC 25,000 182,823
--------------------------------------------------------------------------------------------------------------------
Toolex Alpha NV 10,000 252,500
------------
1,009,537
- -------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.2%
--------------------------------------------------------------------------------------------------------------------
East Japan Railway Co. 30 165,125
--------------------------------------------------------------------------------------------------------------------
Kvaerner AS, Series B 4,000 155,545
------------
320,670
- -------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 14.7%
- -------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 2.0%
--------------------------------------------------------------------------------------------------------------------
Canon, Inc. 10,000 196,115
- -------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 8.0%
--------------------------------------------------------------------------------------------------------------------
Ines Corp. 7,000 132,747
--------------------------------------------------------------------------------------------------------------------
Misys PLC 28,300 369,579
--------------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 4,000 294,542
------------
796,868
- -------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 2.8%
--------------------------------------------------------------------------------------------------------------------
Keyence Corp. 1,200 157,632
--------------------------------------------------------------------------------------------------------------------
Rohm Co. 2,000 125,069
------------
282,701
</TABLE>
6 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY - 1.9%
--------------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA(1) 4,000 $ 192,500
- -------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 4.8%
- -------------------------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES - 4.8%
--------------------------------------------------------------------------------------------------------------------
OTE SA 3,000 49,919
--------------------------------------------------------------------------------------------------------------------
Portugal Telecom SA 7,000 168,694
--------------------------------------------------------------------------------------------------------------------
Telecom Italia Mobile SpA 100,000 214,286
--------------------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, ADR 800 51,500
------------
484,399
------------
Total Common Stocks (Cost $9,287,121) 9,532,821
UNITS
===============================================================================================================================
RIGHTS, WARRANTS AND CERTIFICATES - 0.0%
- -------------------------------------------------------------------------------------------------------------------------------
Biocompatibles International PLC Wts., Exp. 2/97
(Cost $1,493) 2,833 2,197
--------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $9,288,614) 95.3% 9,535,018
--------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 4.7 474,873
------ ------------
NET ASSETS 100.0% $10,009,891
====== ============
</TABLE>
1. Non-income producing security.
See accompanying Notes to Financial Statements.
7 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1996 (UNAUDITED)
<S> <C> <C>
============================================================================================================================
ASSETS Investments, at value (cost $9,288,614) - see accompanying statement $ 9,535,018
----------------------------------------------------------------------------------------------------
Cash 383,955
----------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts - Note 5 905
----------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 268,817
Dividends 23,163
----------------------------------------------------------------------------------------------------
Deferred organization costs - Note 1 14,885
----------------------------------------------------------------------------------------------------
Other 488
------------
Total assets 10,227,231
============================================================================================================================
LIABILITIES Unrealized depreciation on forward foreign currency
exchange contracts - Note 5 125
----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 191,173
Organization costs 15,000
Distribution and service plan fees 2,813
Transfer and shareholder servicing agent fees 1,390
Shares of beneficial interest redeemed 1,000
Other 5,839
------------
Total liabilities 217,340
============================================================================================================================
NET ASSETS $10,009,891
============
============================================================================================================================
COMPOSITION OF Paid-in capital $ 9,749,651
NET ASSETS ----------------------------------------------------------------------------------------------------
Accumulated net investment income 26,478
---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (12,066)
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 245,828
------------
Net assets $10,009,891
============
============================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on
net assets of $6,985,920 and 668,664 shares of beneficial interest outstanding) $10.45
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $11.09
----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $2,421,017 and 232,388 shares of beneficial interest outstanding) $10.42
----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $602,954 and 57,853 shares of beneficial interest outstanding) $10.42
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================
STATEMENT OF OPERATIONS FOR THE PERIOD FROM MARCH 25, 1996 (COMMENCEMENT OF OPERATIONS)
TO MAY 31, 1996 (UNAUDITED)
<S> <C> <C>
============================================================================================================================
INVESTMENT INCOME Dividends (net of foreign withholding taxes of $3,123) $ 37,781
Interest 10,817
------------
Total income 48,598
============================================================================================================================
EXPENSES Management fees - Note 4 9,000
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 2,158
Class B 2,100
Class C 519
----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 2,539
Class B 853
Class C 219
----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 4 1,963
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 1,154
----------------------------------------------------------------------------------------------------
Shareholder reports 577
----------------------------------------------------------------------------------------------------
Legal and auditing fees 346
----------------------------------------------------------------------------------------------------
Trustees' fees and expenses - Note 1 346
----------------------------------------------------------------------------------------------------
Other 346
------------
Total expenses 22,120
============================================================================================================================
NET INVESTMENT INCOME 26,478
============================================================================================================================
REALIZED AND Net realized gain (loss) on:
UNREALIZED GAIN (LOSS) Investments 1,209
Foreign currency transactions (13,275)
------------
Net realized loss (12,066)
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation on:
Investments 263,999
Translation of assets and liabilities denominated in foreign currencies (18,171)
------------
Net change 245,828
------------
Net realized and unrealized gain 233,762
============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 260,240
============
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED
MAY 31, 1996(1)
(UNAUDITED)
<S> <C> <C>
============================================================================================================================
OPERATIONS Net investment income $ 26,478
----------------------------------------------------------------------------------------------------
Net realized loss (12,066)
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 245,828
------------
Net increase in net assets resulting from operations 260,240
============================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2:
Class A 6,782,716
Class B 2,375,429
Class C 591,506
============================================================================================================================
NET ASSETS Total increase 10,009,891
----------------------------------------------------------------------------------------------------
Beginning of period --
------------
End of period (including undistributed net investment
income of $26,478) $10,009,891
============
</TABLE>
1. For the period from March 25, 1996 (commencement of
operations) to May 31, 1996.
See accompanying Notes to Financial Statements.
10 Oppenheimer International Growth Fund
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
--------------- --------------- ---------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED
MAY 31, 1996(1) MAY 31, 1996(1) MAY 31, 1996(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.00 $10.00 $10.00
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .03 .02 .01
Net realized and unrealized gain .42 .40 .41
- ------------------------------------------------------------------------------------------------------------------
Total income from investment operations .45 .42 .42
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.45 $10.42 $10.42
=====================================================================
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 4.50% 4.20% 4.20%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $6,986 $2,421 $603
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $4,819 $1,181 $292
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets(3):
Net investment income 2.47% 1.77% 1.57%
Expenses 1.73% 2.56% 2.57%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 6.5% 6.5% 6.5%
Average brokerage commission rate(5) $0.0154 $0.0154 $0.0154
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to
May 31, 1996.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended May 31, 1996 were $9,577,541 and $290,264, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
11 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer International Growth Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is capital
appreciation. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares
may be subject to a contingent deferred sales charge. All three classes of
shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution and/or service plan,
expenses directly attributable to a particular class and exclusive voting
rights with respect to matters affecting a single class. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted securities
for which such information is regularly reported are valued at the last
sale price of the day or, in the absence of sales, at values based on the
closing bid or asked price or the last sale price on the prior trading day.
Long-term and short-term "non-money market" debt securities are valued by a
portfolio pricing service approved by the Board of Trustees. Such
securities which cannot be valued by the approved portfolio pricing service
are valued using dealer-supplied valuations provided the Manager is
satisfied that the firm rendering the quotes is reliable and that the
quotes reflect current market value, or are valued under consistently
applied procedures established by the Board of Trustees to determine fair
value in good faith. Short- term "money market type" debt securities having
a remaining maturity of 60 days or less are valued at cost (or last
determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the
London foreign exchange markets on a daily basis as provided by a reliable
bank or dealer.
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange. Amounts related to the purchase and sale of securities and
investment income are translated at the rates of exchange prevailing on the
respective dates of such transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from 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.
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession,
to have legally segregated in the Federal Reserve Book Entry System or to
have segregated within the custodian's vault, all securities held as
collateral for repurchase agreements. The market value of the underlying
securities is required to be at least 102% of the resale price at the time
of purchase. If the seller of the agreement defaults and the value of the
collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and losses
are allocated daily to each class of shares based upon the relative
proportion of net assets represented by such class. Operating expenses
directly attributable to a specific class are charged against the
operations of that class.
FEDERAL TAXES. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
12 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded retirement
plan for the Fund's independent trustees. Benefits are based on years of
service and fees paid to each trustee during the years of service.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
ORGANIZATION COSTS. The Manager advanced $15,000 for organization and
start-up costs of the fund. Such expenses are being amortized over a
five-year period from the date operations commenced.
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement and
tax purposes primarily because of the recognition of certain foreign
currency gains (losses) as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income is
recorded on the ex-dividend date. Realized gains and losses on investments
and unrealized appreciation and depreciation are determined on an
identified cost basis, which is the same basis used for federal income tax
purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1996 (1)
SHARES AMOUNT
----------------------------
Class A:
<S> <C> <C>
Sold 678,486 $6,884,215
Redeemed (9,822) (101,499)
-------- -----------
Net increase 688,664 $6,782,716
======== ===========
Class B:
Sold 234,542 $2,397,781
Redeemed (2,154) (22,352)
-------- -----------
Net increase 232,388 $2,375,429
======== ===========
Class C:
Sold 57,853 $ 591,506
Redeemed -- --
-------- -----------
Net increase 57,853 $ 591,506
======== ===========
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to
May 31, 1996.
13 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At May 31, 1996, net unrealized appreciation on investments of $246,404 was
composed of gross appreciation of $431,337, and gross depreciation of
$184,933.
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.80% on the
first $250 million of average annual net assets, 0.77% on the next $250
million, 0.75% of the next $500 million, 0.69% of the next $1 billion, and
0.67% on net assets in excess of $2 billion. The Manager has agreed to
reimburse the Fund if aggregate expenses (with specified exceptions) exceed
the most stringent applicable regulatory limit on Fund expenses.
For the six months ended May 31, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $25,125, of which $9,038 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B
and Class C shares totaled $23,380 and $2,763 of which $1,195 was paid to
an affiliated broker/dealer for Class B shares .
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are
allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service
and maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions
quarterly for providing personal service and maintenance of accounts of
their customers that hold Class A shares.
The Fund has adopted compensation type Distribution and Service Plans for
Class B and Class C shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the
Plans, the Fund pays OFDI an annual asset-based sales charge of 0.75% per
year on Class B shares that are outstanding for 6 years or less and on
Class C shares, as compensation for sales commissions paid from its own
resources at the time of sale and associated financing costs. If the Plans
are terminated by the Fund, the Board of Trustees may allow the Fund to
continue payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plans were terminated. OFDI also receives a
service fee of 0.25% per year as compensation for costs incurred in
connection with the personal service and maintenance of accounts that hold
shares of the Fund, including amounts paid to brokers, dealers, banks and
other financial institutions. Both fees are computed on the average annual
net assets of Class B and Class C shares, determined as of the close of
each regular business day. During the six months ended May 31, 1996, OFDI
retained $2,100 and $519, respectively, as compensation for Class B and
Class C sales commissions and service fee advances, as well as financing
costs.
14 Oppenheimer International Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is a
commitment to purchase or sell a foreign currency at a future date, at a
negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks.
They may also be used to tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund
may enter into such contracts as a hedge against changes in foreign
currency exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a daily
basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where
applicable. Gains and losses on outstanding contracts (unrealized
appreciation or depreciation on forward contracts) are reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported
with all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms
of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At May 31, 1996, outstanding forward contracts to purchase foreign
currencies were as follows:
<TABLE>
<CAPTION>
CONTRACT
EXPIRATION AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACTS TO PURCHASE DATE (000S) MAY 31, 1996 APPRECIATION DEPRECIATION
--------------------- ------------- ----------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Canadian Dollar (CAD) 6/3/96-6/4/96 8,858 CAD $ 6,461 $ -- $ 8
British Pound Sterling (GBP) 6/3/96-6/6/96 54,770 GBP 84,939 902 --
Netherlands Guilder (NLG) 6/4/96 34,939 NLG 20,411 3 --
Philippines Peso (PHP) 6/3/96-6/4/96 827,331 PHP 31,591 -- 109
Thailand Baht (THB) 6/5/96 787,800 THB 31,106 -- 8
--------- ----- -----
$174,507 $905 $125
========= ===== =====
</TABLE>
15 Oppenheimer International Growth Fund
<PAGE>
OPPENHEIMER INTERNATIONAL GROWTH FUND
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
George Evans, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISOR OppenheimerFunds, Inc.
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER
SERVICING AGENT
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records
of the Fund without examination by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer International
Growth Fund. This report must be preceded or accompanied by a Prospectus of
Oppenheimer International Growth Fund. For material information concerning
the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, and are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of the
principal amount invested.
16 Oppenheimer International Growth
