================================================================================
------------------------------
SEMIANNUAL REPORT MAY 31, 1997
------------------------------
O P P E N H E I M E R
INTERNATIONAL
GROWTH FUND
[ARTWORK--GLASS GLOBE]
[LOGO]
OPPENHEIMER FUNDS[SM]
THE RIGHT WAY TO INVEST
================================================================================
<PAGE>
|
| REPORT HIGHLIGHTS
| ----------------------------------------------------
|
| o #3 RANKING--Oppenheimer International Growth
| Fund's Class A shares were ranked #3 out of 368
| international funds for the one-year period ended
| June 30, 1997 according to Lipper Analytical
| Services.(1)
|
| o BANKING AND INSURANCE ------------------
| holdings drove the Fund's Total Returns
| strong performance over the ------------------
| past six months. For the Period
| Ended 5/31/97(2)
| o ACROSS EUROPE, a wave of
| corporate restructuring has CLASS A
CONTENTS | presented some very exciting 6 months 1 year
| opportunities, as these ------------------
| companies strive to emulate 18.23% 32.82%
3 President's Letter | the successful ------------------
| reorganizations which
| occurred in the United CLASS B
4 Fund Performance | States ten years ago. 6 months 1 year
| ------------------
| o WE BELIEVE that by 17.77% 31.67%
6 An Interview | diversifying ------------------
With the Fund's | internationally, investors
Managers | will be able to take CLASS C
| advantage of equity markets 6 months 1 year
| that are well poised to ------------------
11 Statement of | outperform those in the 17.75% 31.77%
Investments | United States. ------------------
|
|
16 Statement of | Total returns include change in share price and
Assets & | reinvestment of dividends and capital gains
Liabilities | distributions in a hypothetical investment for the
| periods shown. IN REVIEWING PERFORMANCE AND
| RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE DOES
18 Statement of | NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND
Operations | 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
19 Statements of | ORIGINAL COST.
Changes in |
Net Assets | (1) Source: Lipper Analytical Services, June 30,
| 1997. Oppenheimer International Growth Fund's Class
| A shares were ranked 3rd out of 368 funds in its
20 Financial Highlights | category for the 1-year period ended 6/30/97.
| Oppenheimer International Growth Fund is categorized
| by Lipper as an international portfolio fund. Lipper
21 Notes to Financial | rankings are based on total return and do not take
Statements | sales charges into account.
|
| (2) Includes change in net asset value per share
27 Officers & Trustees | without deducting any sales charges. Such
| performance would have been lower if sales charges
| were taken into account. Total returns for the
28 Information & | six-month period are cumulative and are not
Services | annualized.
|
|
| 2 Oppenheimer International Growth Fund
|
<PAGE>
DEAR SHAREHOLDER,
--------------------------------------------------------
------------------ I'd like to welcome you to the premier issue of our
| | newly redesigned shareholder reports. As you can see,
| | we've changed the format to allow easier access to the
| | information you need to monitor your investments. Some
| | notable additions are "at-a-glance" report highlights
| | and charts that let you quickly assess how your Fund
| [PHOTO] | has performed. On the following pages, your portfolio
| | team discuss their current investment thinking, your
| | Fund's strategies, and performance. Before these
| | commentaries, I'd like to share a few global
| | observations.
------------------
BRIDGET A. MACASKILL As we consider the world's financial markets over
President the past six months, some global trends emerge. For
Oppenheimer example, inflation has hit its lowest level in three
International decades worldwide, which has helped spur many bullish
Growth Fund financial markets. The United States has been a
beneficiary of this low-inflation environment, as well
as of a strong dollar, robust corporate earnings and a
healthy economy. However, many financial analysts are
now concerned that the United States has reached a
point in the business cycle where earnings could
decline because companies are unable to further reduce
costs.
On the other hand, a wave of corporate
restructuring throughout Europe has resulted in some
exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years
ago, European companies have been able to enjoy the
benefit of hindsight by following our footsteps. Latin
America, too, has begun to shift its economies more
toward the U.S. capitalist model and has reported
positive earnings growth along the way.
With major changes occurring in today's economies
around the globe, it's more important than ever to
maintain a diversified portfolio across different
countries and market sectors. Now is the time to speak
to your financial adviser to ensure that your assets
are allocated properly, so you have the opportunity to
benefit from investments in both domestic and
international funds. It's important to remember that
investing abroad can involve greater risk and
expenses--including political and economic
uncertainties--and should be undertaken with a
long-term approach in mind.
To keep in touch with our views on the markets,
visit our website, WWW.OPPENHEIMERFUNDS.COM, where you
can access your account information and fund
performance data, 24 hours a day. The site also
features prospectuses, timely market updates and
insightful commentaries. Our new shareholder reports
and presence on the Internet are just two examples of
our commitment to keeping you well informed.
Thank you for your confidence in OppenheimerFunds,
The Right Way to Invest. We look forward to helping you
reach your investment goals in the future.
Sincerely,
/s/ BRIDGET A. MACASKILL
-------------------------
Bridget A. Macaskill June 20, 1997
3 Oppenheimer International Growth Fund
<PAGE>
PERFORMANCE UPDATE
--------------------------------------------------
Oppenheimer ------------------------
International Growth Avg Annual Total Returns
Fund performed well ------------------------
over the past six For the Period
months. In addition, Ended 6/30/97(2)
the Fund's Class A
shares ranked 3rd CLASS A
out of 368 1 Year Since Inception
international funds ------------------------
according to Lipper 28.77% 27.34%
Analytical Services ------------------------
for the 1-year
period ended June CLASS B
30, 1997.(1) 1 Year Since Inception
------------------------
30.52% 29.25%
------------------------
CLASS C
1 Year Since Inception
------------------------
34.59% 32.34%
------------------------
(1) Source: Lipper Analytical Services June 30,
1997. Oppenheimer International Growth Fund's
Class A shares were ranked 3rd out of 368 funds in
its category for the 1-year period ended 6/30/97.
Oppenheimer International Growth Fund is
categorized by Lipper as an international
portfolio fund. Lipper rankings are based on total
return and do not take sales charges into account.
(2) Total returns include change in share price
and reinvestment of dividends and capital gains
distributions in a hypothetical investment for the
periods shown. IN REVIEWING PERFORMANCE AND
RANKINGS, PLEASE REMEMBER THAT 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. Class A, B and C shares were first
publicly offered on 3/25/96. Class A returns
include the current maximum initial sales charge
of 5.75%. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year)
and 4% (since inception). Class C returns include
the contingent deferred sales charge of 1% for the
1-year result. An explanation of the different
performance calculations is in the Fund's
prospectus. Class B and C shares are subject to an
annual 0.75% asset-based sales charge.
4 Oppenheimer International Growth Fund
<PAGE>
PORTFOLIO REVIEW
------------------------------------------------
Oppenheimer International Growth Fund is for
people looking for long-term growth from foreign
equity securities.
ASSET ALLOCATION(3) WHAT WE LOOK FOR:
as of 5/31/97
o Businesses within any of eight worldwide
- -------------------------- growth sectors.
o Businesses with strong competitive positions
and high demand for their products or services.
[PIE CHART] o Companies that we believe will achieve
substantial growth over the next three to five
years.
o Companies with accelerating earnings and cash
- -------------------------- flow.
[ ] Foreign Stocks 92.4% o Diversification that may help reduce the risks
of foreign investing, such as currency
[ ] Cash Equivalents 6.7% fluctuations.
[ ] U.S. Stocks 0.9%
<TABLE>
<CAPTION>
TOP TEN STOCK HOLDINGS(4)
....................................................................
<S> <C> <C> <C>
Skandia Forsakrings AB 4.3% Wella AG 2.5%
....................................................................
Altana AG 4.2 Nichii Gakkan Co. 2.4
....................................................................
Telecomunicacoes
Brasileiras SA,
Sponsored ADR 4.2 Novus Petroleum Ltd. 2.2
....................................................................
Nintendo Co. Ltd. 4.0 BAU Holdings AF, Preference 2.2
....................................................................
Credit Suisse Group 2.5 Boskalis Westminster 2.1
....................................................................
</TABLE>
(3) Holdings are subject to change. The pie chart
is based on total investments at market value.
(4) Holdings are subject to change. Percentages
are based on total market value of stock holdings.
5 Oppenheimer International Growth Fund
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
----------------------------------------------------------
HOW HAS THE FUND PERFORMED?
Oppenheimer International Growth Fund performed well. The
Fund's Class A shares had a cumulative total return,
before sales charges, for the 6-month period ended May 31,
1997 of 18.23%.(1) The performance can be attributed to
several factors, the first being good stock selection. We
try to focus on buying good companies in good businesses
at good prices. In terms of good businesses, we
concentrate on eight international themes which we believe
will sustain growth well above the global average. Within
these themes, we believe that we have identified
well-positioned companies, many of which have performed
above expectations during the first quarter of 1997.
- -------------------
"We focus | A second factor that helped performance is that we
| try to focus the Fund's holdings in areas in which we have
on buying | the strongest conviction. The Fund's top 15 positions
| accounted for over 35% of its net assets.
GOOD COMPANIES |
| Lastly, our discipline led us to avoid exposure to
in good | markets that have been underperforming, such as Thailand,
| Korea and Singapore.
businesses |
| WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO
at good prices." | PERFORMANCE?
Within our largest theme, which is Capital Market
Development, our success primarily stemmed from the
banking and insurance industries. For example, two of our
holdings, which are the largest banks in the Baltic
republic Estonia and Hong Kong, reported exceptional
returns. Another strong performer was a German specialty
insurance company that caters to the personal and
professional financial needs of affluent professionals
with complete financial service programs.
Our second largest theme, which is Efficiency
Enhancing Technology, produced positive results from a
(1) Includes change in net asset value per share without
deducting any sales charges. Such performance is not
annualized and would have been lower if sales charges
were taken into account.
6 Oppenheimer International Growth Fund
<PAGE>
- ---------------------------------------- U.K.-based financial services
| | software company, as well as a
| | medium-sized Dutch computer
| | services company. Within the
| | Fund's third largest theme,
| [PHOTO] | Infrastructure, our holdings in a
| | Chinese utility company performed
| | well, as did our investment in a
| | U.K.-based machinery construction
| | company.
- ----------------------------------------
PORTFOLIO MANAGEMENT Other strong performers for the Fund were a
TEAM (l to r) U.K.-based medical technology firm and several retailers
Frank Jennings that benefited from the increased worldwide demand for
Bill Wilby luxury goods.
George Evans (Fund
Manager) ARE WE INVESTING IN ANY STOCKS THAT WOULD BENEFIT
FROM THE "MILLENNIUM PROBLEM"?
Yes. Our holdings affected by this issue typically fall
into the computer software and hardware industries, and
are tied to our Efficiency Enhancing theme. Because the
year 2000 problem involves reprogramming items that are
scheduled to operate from a pre-set time or date--which
encompasses everything from bank statements to street
lamps--we believe companies involved in this process are
well-positioned to boost their earnings over the next
three years. In Europe, the millennium problem will be
further compounded should the European Monetary Union
become effective. That's because banks will have increased
responsibilities in recording numerous currency exchanges
from various time zones. To that end, we are keeping a
watchful eye for computer companies who are the
forerunners in addressing this problem.
1. Includes change in net asset value per share without
deducting any sales charges. Such performance is not
annualized and would have been lower if sales charges were
taken into account.
7 Oppenheimer International Growth Fund
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
---------------------------------------------------------
Did any investments not perform as expected?
Overall, we've had outstanding performance from the
majority of the Fund's holdings; however, a few have been
disappointing. One example was a Norwegian firm that is
one of the leaders in digital television-broadcasting
- -------------------- equipment. While we believe they have strong growth
"We've had | potential, their products are not scheduled to achieve
| wider distribution for a few more years. With so many
OUTSTANDING | other stocks doing so well, we chose to sell our position
| there. Another weak performer was an Italian sports shoe
PERFORMANCE | and apparel company. The sports footwear and apparel
| industry as a whole has taken a downturn over the past
from the majority | several months, and, unfortunately, this holding got
| caught in the trend. Although we have trimmed our
of the Fund's | position, we still believe the company has strong
| fundamentals and the stock is worth keeping at this time.
holdings." |
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We are looking for more computer-service companies that
will benefit from the year 2000 problem, because we
believe the full implications of this massive undertaking
are only partially realized. Within the Capital Market
Development theme, we'll continue to focus on emerging
market banks, an area that we believe has the potential
for high asset growth and large profit margins. Along
those same lines, we're also closely monitoring the
French banking system for positive opportunities as they
arise.
8 Oppenheimer International Growth Fund
<PAGE>
- -------------------- What is your outlook for the Fund?
"We continue |
| Our outlook is very positive. In spite of a strong U.S.
to look for | dollar, we remain optimistic that the international
| markets are still well-poised to outperform the U.S. in
COMPUTER-SERVICE | the coming year. All across Europe, the wave of
| restructuring and rebuilding continues to create an
companies poised | economic climate with boundless possibilities. Within
| that environment, we are confident that we will be able
to benefit from | to find "good companies in good businesses at good
| prices" that are representative of our global themes.
the year 2000 |
|
problem." |
9 Oppenheimer International Growth Fund
<PAGE>
FINANCIALS
----------------------------------------------------------
10 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
COMMON STOCKS--89.3%
- --------------------------------------------------------------------------------
BASIC MATERIALS--0.7%
- --------------------------------------------------------------------------------
METALS--0.7%
Industrias Penoles SA 175,000 $ 817,962
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS--10.3%
- --------------------------------------------------------------------------------
AUTOS & HOUSING--2.2%
IRSA Inversiones y Representaciones SA 400,000 1,560,763
- --------------------------------------------------------------------------------
Porsche AG, Preference 700 857,782
-----------
2,418,545
- --------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--5.8%
Lusomundo SGPS SA 167,700 1,573,311
- --------------------------------------------------------------------------------
Nintendo Co. Ltd. 50,000 3,904,574
- --------------------------------------------------------------------------------
Ryanair Holdings Ltd. plc, ADR(1) 40,000 990,000
-----------
6,467,885
- --------------------------------------------------------------------------------
RETAIL: GENERAL--1.3%
adidas AG 6,000 633,222
- --------------------------------------------------------------------------------
Fila Holding SpA, Sponsored ADR 20,000 852,500
-----------
1,485,722
- --------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.0%
Vendex International NV 20,000 1,123,639
- --------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--17.4%
- --------------------------------------------------------------------------------
HEALTHCARE/DRUGS--10.3%
Altana AG 4,500 4,171,352
- --------------------------------------------------------------------------------
Ares-Serono Group, Cl. B 1,500 2,041,113
- --------------------------------------------------------------------------------
Biocompatibles International plc(1) 50,018 1,071,007
- --------------------------------------------------------------------------------
Glaxo Wellcome plc 75,000 1,503,793
- --------------------------------------------------------------------------------
Oxford Molecular Group plc 114,285 697,570
- --------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 75,400 1,876,426
-----------
11,361,261
- --------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--4.9%
Medical Invest Svenska AB, Cl. A 13,700 524,729
- --------------------------------------------------------------------------------
Medical Invest Svenska AB, Cl. B(1) 47,000 1,812,329
- --------------------------------------------------------------------------------
Nichii Gakkan Co. 45,000 2,394,233
- --------------------------------------------------------------------------------
Novogen Ltd. 500,000 654,674
-----------
5,385,965
- --------------------------------------------------------------------------------
HOUSEHOLD GOODS--2.2%
Wella AG 4,000 2,439,079
11 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
ENERGY--6.8%
- --------------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS--2.5%
Cie Generale de Geophysique SA(1) 25,000 $ 2,069,777
- --------------------------------------------------------------------------------
Smedvig AS, Series B 30,000 729,573
-----------
2,799,350
- --------------------------------------------------------------------------------
OIL-INTEGRATED--4.3%
Expro International Group plc 185,000 1,367,483
- --------------------------------------------------------------------------------
Novus Petroleum Ltd. 600,000 2,206,101
- --------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 4,795,000 1,141,272
-----------
4,714,856
- --------------------------------------------------------------------------------
FINANCIAL--15.2%
- --------------------------------------------------------------------------------
BANKS--9.7%
ABN Amro Holding NV 20,172 373,212
- --------------------------------------------------------------------------------
Banco de Galicia y Buenos Aires SA de CV,
Sponsored ADR(1) 61,700 1,619,625
- --------------------------------------------------------------------------------
Credit Suisse Group 20,000 2,512,955
- --------------------------------------------------------------------------------
Hansabank Ltd. 60,000 572,021
- --------------------------------------------------------------------------------
HSBC Holdings plc 41,102 1,246,555
- --------------------------------------------------------------------------------
Merita Ltd., Cl. A 500,000 1,712,173
- --------------------------------------------------------------------------------
Societe Generale 10,000 1,112,559
- --------------------------------------------------------------------------------
Uniao de Bancos Brasileiros SA, Preference 30,000,000 1,035,975
- --------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA,
Sponsored GDR Representing 500 Units of
one Preferred Share of Unibanco and one
Preferred Share of Unibanco Holdings SA(1) 15,000 517,500
-----------
10,702,575
- --------------------------------------------------------------------------------
INSURANCE--5.5%
Ockham Holdings plc 500,000 713,748
- --------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 351,228 1,109,594
- --------------------------------------------------------------------------------
Skandia Forsakrings AB 120,000 4,246,797
-----------
6,070,139
- --------------------------------------------------------------------------------
INDUSTRIAL--17.4%
- --------------------------------------------------------------------------------
INDUSTRIAL SERVICES--12.2%
Axime 14,800 1,690,257
- --------------------------------------------------------------------------------
BAU Holdings AF, Preference(1) 40,000 2,132,584
- --------------------------------------------------------------------------------
Boskalis Westminster 100,037 2,106,300
- --------------------------------------------------------------------------------
Fugro NV 75,000 1,762,853
12 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
INDUSTRIAL SERVICES (CONTINUED)
ICTS International NV(1) 165,000 $ 1,258,125
- --------------------------------------------------------------------------------
MRC Allied Industries, Inc.(1) 10,000,000 1,175,355
- --------------------------------------------------------------------------------
Ordina Beheer NV 26,000 1,953,965
- --------------------------------------------------------------------------------
Swisslog Holding AG, Registered(1) 4,000 1,413,758
-----------
13,493,197
- --------------------------------------------------------------------------------
MANUFACTURING--3.3%
Chargeurs International SA 35,000 1,871,043
- --------------------------------------------------------------------------------
Powerscreen International plc 40,000 409,215
- --------------------------------------------------------------------------------
Stork NV 30,394 1,346,434
-----------
3,626,692
- --------------------------------------------------------------------------------
TRANSPORTATION--1.9%
Frontline AB(1) 200,000 709,093
- --------------------------------------------------------------------------------
MIF Ltd.(1)(2) 83,333 1,347,150
-----------
2,056,243
- --------------------------------------------------------------------------------
TECHNOLOGY--13.1%
- --------------------------------------------------------------------------------
AEROSPACE/DEFENSE--0.4%
Rolls-Royce plc 100,754 413,293
- --------------------------------------------------------------------------------
COMPUTER HARDWARE--4.0%
Canon, Inc. 30,000 759,461
- --------------------------------------------------------------------------------
Eidos plc(1) 65,000 895,877
- --------------------------------------------------------------------------------
Imagineer Co. Ltd. 50,000 1,540,376
- --------------------------------------------------------------------------------
PT Multipolar Corp. 1,500,000 1,187,050
-----------
4,382,764
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE--4.1%
JBA Holdings PLC 100,000 1,566,963
- --------------------------------------------------------------------------------
Misys plc 55,471 1,246,930
- --------------------------------------------------------------------------------
SAP AG, Preference 8,000 1,458,757
- --------------------------------------------------------------------------------
Versant Object Technology Corp.(1) 40,000 295,000
-----------
4,567,650
- --------------------------------------------------------------------------------
ELECTRONICS--1.6%
Austria Mikro Systeme International AG 20,000 1,552,788
- --------------------------------------------------------------------------------
Keyence Corp. 1,320 190,303
-----------
1,743,091
13 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--3.0%
Intracom SA(1) 35,000 $ 1,705,688
- --------------------------------------------------------------------------------
Millicom International Cellular SA(1) 115,000 680,625
- --------------------------------------------------------------------------------
Tandberg Television ASA(1) 100,000 913,723
------------
3,300,036
- --------------------------------------------------------------------------------
UTILITIES--8.4%
- --------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.9%
Capex SA, Cl. A 100,000 960,470
- --------------------------------------------------------------------------------
TELEPHONE UTILITIES--7.5%
Telecomunicacoes Brasileiras SA, Sponsored ADR 30,000 4,121,250
- --------------------------------------------------------------------------------
Telecomunicacoes de Sao Paulo SA, Preference 5,100,000 1,775,438
- --------------------------------------------------------------------------------
Telecomunicacoes do Rio de Janeiro SA, Preference 7,500,000 1,154,973
- --------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(1) 60,000 1,236,000
------------
8,287,661
------------
Total Common Stocks (Cost $86,502,241) 98,618,075
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.5%
- --------------------------------------------------------------------------------
Marschollek, Lautenschlaeger und Partner AG, Non-Vtg
Preferred Stock (Cost $222,411) 2,200 534,018
Units
- --------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- --------------------------------------------------------------------------------
Telecomunicacoes de Sao Paulo SA, Non-Vtg. Rts.,
Exp. 6/97 222,246 7,467
- --------------------------------------------------------------------------------
Telecomunicacoes do Rio de Janeiro SA Rts.,
Preference, Exp. 6/97 889,194 --
------------
Total Rights, Warrants and Certificates (Cost $0) 7,467
Face
Amount
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--6.4%
- --------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 5.51%,
dated 5/30/97, to be repurchased at $7,103,260 on
6/2/97, collateralized by U.S. Treasury Nts.,
5.50%-7.75%, 1/15/98-1/31/00, with a value of
$7,262,195 (Cost $7,100,000) $7,100,000 7,100,000
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $93,824,652) 96.2% 106,259,560
- --------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 3.8 4,227,283
---------- ------------
NET ASSETS 100.0% $110,486,843
========== ============
14 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
Country Market Value Percent
- --------------------------------------------------------------------------------
Japan $ 10,665,372 10.0%
- --------------------------------------------------------------------------------
Germany 10,094,209 9.5
- --------------------------------------------------------------------------------
The Netherlands 9,924,528 9.3
- --------------------------------------------------------------------------------
Great Britain 9,885,879 9.3
- --------------------------------------------------------------------------------
Brazil 9,753,876 9.2
- --------------------------------------------------------------------------------
United States 8,075,625 7.6
- --------------------------------------------------------------------------------
Sweden 7,292,948 6.9
- --------------------------------------------------------------------------------
France 6,743,636 6.4
- --------------------------------------------------------------------------------
Switzerland 5,967,827 5.6
- --------------------------------------------------------------------------------
Argentina 4,140,858 3.9
- --------------------------------------------------------------------------------
Australia 3,970,369 3.7
- --------------------------------------------------------------------------------
Austria 3,685,372 3.5
- --------------------------------------------------------------------------------
Norway 2,990,446 2.8
- --------------------------------------------------------------------------------
Finland 2,284,194 2.1
- --------------------------------------------------------------------------------
Greece 1,705,688 1.6
- --------------------------------------------------------------------------------
Portugal 1,573,311 1.5
- --------------------------------------------------------------------------------
Hong Kong 1,246,555 1.2
- --------------------------------------------------------------------------------
India 1,236,000 1.2
- --------------------------------------------------------------------------------
Indonesia 1,187,050 1.1
- --------------------------------------------------------------------------------
Philippines 1,175,355 1.1
- --------------------------------------------------------------------------------
Ireland 990,000 0.9
- --------------------------------------------------------------------------------
Italy 852,500 0.8
- --------------------------------------------------------------------------------
Mexico 817,962 0.8
------------ ------
Total $106,259,560 100.0%
============ ======
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $93,824,652)
- --see accompanying statement $106,259,560
- --------------------------------------------------------------------------------
Cash 56,853
- --------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 3,387
- --------------------------------------------------------------------------------
Receivables:
Investments sold 3,652,895
Shares of beneficial interest sold 2,243,667
Interest and dividends 401,667
- --------------------------------------------------------------------------------
Deferred organization costs--Note 1 11,534
- --------------------------------------------------------------------------------
Other 3,740
------------
Total assets 112,633,303
- --------------------------------------------------------------------------------
LIABILITIES
Unrealized depreciation on forward foreign currency
exchange contracts--Note 5 232
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,668,881
Shares of beneficial interest redeemed 354,984
Distribution and service plan fees 33,048
Trustees' fees--Note 1 25,811
Other 63,504
------------
Total liabilities 2,146,460
- --------------------------------------------------------------------------------
NET ASSETS $110,486,843
============
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
Paid-in capital $ 96,919,855
- --------------------------------------------------------------------------------
Accumulated net investment income 163,877
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 968,497
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 12,434,614
------------
Net assets $110,486,843
============
16 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $61,671,175 and 4,443,773 shares of beneficial
interest outstanding) $13.88
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $14.73
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $39,758,143 and 2,897,786 shares of
beneficial interest outstanding) $13.72
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $9,057,525 and 659,465 shares of
beneficial interest outstanding) $13.73
See accompanying Notes to Financial Statements.
17 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Six Months Ended May 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $29,156) $ 673,752
- --------------------------------------------------------------------------------
Interest 101,657
-----------
Total income 775,409
- --------------------------------------------------------------------------------
EXPENSES
Management fees--Note 4 229,971
- --------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 37,729
Class B 100,115
Class C 23,079
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 80,671
- --------------------------------------------------------------------------------
Shareholder reports 32,521
- --------------------------------------------------------------------------------
Custodian fees and expenses 30,075
- --------------------------------------------------------------------------------
Registration and filing fees:
Class A 11,676
Class B 8,245
Class C 1,729
- --------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 18,629
- --------------------------------------------------------------------------------
Legal and auditing fees 13,655
- --------------------------------------------------------------------------------
Other 7,484
-----------
Total expenses 595,579
Less expenses paid indirectly (5,560)
-----------
Total net expenses 590,019
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 185,390
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 1,492,188
Foreign currency transactions (520,115)
-----------
Net realized gain 972,073
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 11,267,381
Translation of assets and liabilities denominated
in foreign currencies (1,382,256)
-----------
Net change 9,885,125
-----------
Net realized and unrealized gain 10,857,198
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $11,042,588
===========
See accompanying Notes to Financial Statements.
18 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Six Months Ended Period Ended
May 31, 1997 November 30,
(Unaudited) 1996(1)
- --------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) $ 185,390 $ (61,280)
- --------------------------------------------------------------------------------
Net realized gain (loss) 972,073 (21,004)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation 9,885,125 2,549,489
------------ -----------
Net increase in net assets resulting
from operations 11,042,588 2,467,205
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 38,383,244 15,320,568
Class B 27,259,525 7,990,083
Class C 6,061,526 1,962,104
- --------------------------------------------------------------------------------
NET ASSETS
Total increase 82,746,883 27,739,960
- --------------------------------------------------------------------------------
Beginning of period 27,739,960 --
------------ -----------
End of period [including accumulated net
investment income (loss) of $163,877 and
$(21,513), respectively] $110,486,843 $27,739,960
============ ===========
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
See accompanying Notes to Financial Statements.
19 Oppenheimer International Growth Fund
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------
Class A Class B Class C
-------------------- -------------------- ---------------------
Six Six Six
Months Months Months
Ended Period Ended Period Ended Period
May 31, Ended May 31, Ended May 31, Ended
1997 Nov. 30, 1997 Nov. 30, 1997 Nov. 30,
(Unaudited) 1996(1) (Unaudited) 1996(1) (Unaudited) 1996(1)
- -----------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.74 $10.00 $11.65 $10.00 $11.66 $10.00
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .03 (.01) .03 (.10) 0.03 (.09)
Net realized and unrealized gain 2.11 1.7 52.04 1.75 2.04 1.75
------ ------ ------ ------ ------ ------
Total income from investment
operations 2.14 1.74 2.07 1.65 2.07 1.66
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.88 $11.74 $13.72 $11.65 $13.73 $11.66
====== ====== ====== ====== ====== ======
TOTAL RETURN, AT NET ASSET VALUE(2) 18.23% 17.40% 17.77% 16.50% 17.75% 16.60%
- -----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $61,671 $16,918 $39,758 $8,673 $9,058 $2,149
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $33,198 $ 8,992 $20,252 $3,628 $4,665 $ 938
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0.94% (0.26)% 0.26% (1.46)% 0.15% (1.48)%
Expenses(4) 1.70% 1.88% 2.48% 2.84% 2.47% 2.82%
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 32.6% 42.6% 32.6% 42.6% 32.6% 42.6%
Average brokerage commission
rate(6) $0.0045 $0.0137 $0.0045 $0.0137 $0.0045 $0.0137
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or commencement of operations), 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 expense ratio reflects the effect of expenses paid indirectly by the
Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended May 31, 1997 were $79,420,265 and $18,622,996, respectively.
6. 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.
20 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, primarily through investments in common
stocks of foreign companies. The Fund's investment adviser 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 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
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.
21 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
- --------------------------------------------------------------------------------
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. During the six months
ended May 31, 1997, a provision of $15,074 was made for the Fund's projected
benefit obligations and payments of $1,509 were made to retired trustees,
resulting in an accumulated liability of $23,023 at May 31, 1997.
- --------------------------------------------------------------------------------
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. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
22 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 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:
Six Months Ended Period Ended
May 31, 1997 November 30, 1996(1)
------------------------- ---------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------
Class A:
Sold 3,593,716 $45,979,181 1,689,570 $17,975,411
Redeemed (590,713) (7,595,937) (248,800) (2,654,843)
--------- ----------- --------- -----------
Net increase 3,003,003 $38,383,244 1,440,770 $15,320,568
========= =========== ========= ===========
- --------------------------------------------------------------------------------
Class B:
Sold 2,319,092 $29,381,283 784,237$ 8,424,204
Redeemed (165,551) (2,121,758) (39,992) (434,121)
--------- ----------- --------- -----------
Net increase 2,153,541 $27,259,525 744,245$ 7,990,083
========= =========== ========= ===========
- --------------------------------------------------------------------------------
Class C:
Sold 819,115 $10,544,068 206,770 $ 2,202,270
Redeemed (343,923) (4,482,542) (22,497) (240,166)
--------- ----------- --------- -----------
Net increase 475,192 $ 6,061,526 184,273 $ 1,962,104
========= =========== ========= ===========
- --------------------------------------------------------------------------------
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
23 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At May 31, 1997, net unrealized appreciation on investments of $12,434,908 was
composed of gross appreciation of $14,018,209, and gross depreciation of
$1,583,301.
- --------------------------------------------------------------------------------
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% of the first
$250 million of average annual net assets, 0.77% of the next $250 million, 0.75%
of the next $500 million, 0.69% of the next $1 billion, and 0.67% of average
annual net assets in excess of $2 billion.
For the six months ended May 31, 1997, commissions (sales charges paid
by investors) on sales of Class A shares totaled $381,854, of which $138,207 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 $698,798 and $42,962, respectively, of which $40,137 was
paid to an affiliated broker/dealer for Class B shares. During the six months
ended May 31, 1997, OFDI received contingent deferred sales charges of $13,215
and $4,055, respectively, upon redemption of Class B and Class C shares, as
reimbursement for sales commissions advanced by OFDI at the time of sale of such
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.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
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. During the six months ended May 31, 1997, OFDI paid $2,059 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
24 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 and Class C shares, as compensation for sales commissions paid from its own
resources at the time of sale and associated financing costs. 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, 1997, OFDI retained $87,165 and $16,057,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as 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. As of May 31, 1997, OFDI had incurred unreimbursed
expenses of $664,410 for Class B and $45,746 for Class C.
- --------------------------------------------------------------------------------
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.
25 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS (CONTINUED)
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, 1997, outstanding forward contracts to purchase and sell foreign
currencies were as follows:
<TABLE>
<CAPTION>
Contract
Expiration Amount Valuation as of Unrealized Unrealized
Contracts to Purchase Date (000S) May 31, 1997 Appreciation Depreciation
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Japanese Yen (JPY) 6/2/97 26,210 JPY $ 224,920 $ -- $232
Contracts to Sell
- -------------------------------------------------------------------------------------------------------------
French Franc (FRF) 6/30/97 19,320 FRF $3,356,968 $3,387 $ --
========== ------ ----
Total Unrealized Appreciation and Depreciation $3,387 $232
====== ====
</TABLE>
- --------------------------------------------------------------------------------
6. ILLIQUID AND RESTRICTED SECURITIES
At May 31, 1997, investments in securities included issues that are illiquid or
restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed from time
to time) in illiquid or restricted securities. Certain restricted securities,
eligible for resale to qualified institutional investors, are not subject to
that limit. The aggregate value of illiquid or restricted securities subject to
this limitation at May 31, 1997 was $1,347,150, which represents 1.22% of the
Fund's net assets. Information concerning restricted securities is as follows:
Valuation Per Unit
Security Acquisition Dates Cost Per Unit As of May 31, 1997
- --------------------------------------------------------------------------------
MIF Ltd. 12/20/96-4/11/97 $14.40 $16.17
26 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
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 ADVISER 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,
are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the
principal amount invested.
27 Oppenheimer International Growth Fund
<PAGE>
INFORMATION AND SERVICES
-----------------------------------------------
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24-hr access to account some special privileges. Whether it's automatic
information investment plans, informative newsletters and
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- ------------------------
And when you need help, our Customer
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- ------------------------
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RS0825.001.0597 July 30, 1997
