------------------------------
Semiannual Report May 31, 1998
------------------------------
OPPENHEIMER
International
Growth Fund
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview
with the Fund's
Manager
10 Statement of
Investments
16 Statement of
Assets and
Liabilities
18 Statement of
Operations
19 Statements of
Changes in
Net Assets
20 Financial Highlights
22 Notes to Financial
Statements
29 Officers and
Trustees
32 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o 1st Quartile Performance: The Fund's Class A shares were ranked 35 of 479
among international funds for the one-year period ended 6/30/98, as measured by
Lipper Analytical Services, Inc.(1)
o Stocks of European companies that stand to benefit from the European Monetary
Union presented us with the most compelling investment opportunities this
period.
o We remain very cautious with regard to Japan and the rest of Asia because we
believe that the region's economic problems are likely to persist.
- -------------------------------
Cumulative Total Returns
- -------------------------------
For the 6-Month Period
Ended 5/31/98
Class A
Without With
Sales Chg.(2) Sales Chg.(3)
- -------------------------------
22.82% 15.76%
- -------------------------------
Class B
Without With
Sales Chg.(2) Sales Chg.(3)
- -------------------------------
22.39% 17.39%
- -------------------------------
Class C
Without With
Sales Chg.(2) Sales Chg.(3)
- -------------------------------
22.36% 21.36%
- -------------------------------
Total returns include changes 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.
1. Source: Lipper Analytical Services, Inc., 6/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested.
2. Includes changes in net asset value per share without deducting any sales
charges. This performance is not annualized.
3. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the applicable contingent deferred sales charge of 1%.
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.
2 Oppenheimer International Growth Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
International
Growth Fund
As we move further into 1998, we remain impressed by the remarkable resilience
of the financial markets. Recent efforts by the United States to help support
the Japanese yen have inspired hope that the fallout of the Asian economic
crisis can be contained. In general, the U.S. and world markets have continued
to build wealth for investors at a virtually unprecedented pace.
At OppenheimerFunds, we are pleased to help our fund shareholders
participate in the potential rewards of today's markets, but we also recognize
that this rate of growth cannot last forever. Because no one can predict exactly
when the next correction or bear market might occur, we think it is prudent to
continually identify, evaluate and manage the risks that may affect our fund
shareholders.
We believe that one of the leading risks facing investors today is that
stock valuations are at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these facts, we believe it is
unlikely that stocks will sustain the growth rate of the past three years. Stock
prices could continue trading near current levels until earnings "catch up," or
there could be a market correction. However, we believe that either scenario
would be only a temporary pause on the way to potentially greater long-term
gains.
We are also examining the potential economic effects of the "millennium
problem" that may render many computer systems unable to recognize the year 2000
when it arrives. Solving this problem has required companies to divert
substantial human and financial resources from their core businesses, possibly
constraining global economic growth during 1999 and 2000.
For our part, we can report that OppenheimerFunds has made solid progress
toward ensuring that our shareholder accounting systems are fully "year 2000
compliant," and that all shareholder accounts will make a seamless transition
into the 21st century.
We encourage you to meet with your financial advisor to discuss how a
possible market correction or the millennium problem may affect your
investments. Together, you can prepare your investment portfolio for the
challenges and opportunities of the new century.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
June 19, 1998
3 Oppenheimer International Growth Fund
<PAGE>
- ----------------------------
Avg Annual Total Returns
- ----------------------------
For the Periods Ended 6/30/98(1)
Class A
Since
1 year Inception
- ----------------------------
14.38% 24.66%
- ----------------------------
Class B
Since
1 year Inception
- ----------------------------
15.49% 25.90%
- ----------------------------
Class C
Since
1 year Inception
- ----------------------------
19.46% 26.95%
- ----------------------------
- ----------------------------
Cumulative Total Return
- ----------------------------
For the Period Ended 6/30/98(1)
Class A
1 year
- ----------------------------
19.84% $16,471(3)
- ----------------------------
Performance update
- --------------------------------------------------------------------------------
Oppenheimer International Growth Fund performed well over the past six months,
primarily because of its substantial allocation of assets to European markets,
which generally outperformed the rest of the world. Another important factor was
stock selection within the various international markets. The Fund's Class A
shares provided a cumulative total return of 22.82% without sales charges, for
the six-month period ended May 31, 1998.(2)
Growth of $10,000
(without sales charges)(3)
[The following table was originally a mountain graph in the printed materials.]
Oppenheimer International Morgan Stanley
Growth Fund Capital International
Class A Shares EAFE Index
-------------- ----------
3/96 10000 10000
6/96 10550.6 10119.4
9/96 11101.1 10066.2
12/96 11921.9 10185.7
3/97 13123.1 9986.69
6/97 14304.3 11240
9/97 14965 11120.9
12/97 14647.5 10210
3/98 16609.3 11669.5
6/98 17476.0 11750.0
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. 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 3% (since inception). Class C returns include the applicable 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.
2. Includes changes 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.
3. Results of a hypothetical $10,000 investment in Class A shares on March 31,
1996. The Morgan Stanley Capital International EAFE Index is an unmanaged index
of the performance of 20 of the principal stock markets in Europe, Australia and
the Far East, and cannot be purchased directly by investors.
4 Oppenheimer International Growth Fund
<PAGE>
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer International Growth Fund is for people looking for long-term growth
from foreign equity securities.
What We Look For
o Businesses with strong competitive positions and high demand for their
products or services.
o Companies with accelerating earnings and cash flow.
o Diversification that may help reduce the risks of foreign investing, such as
currency fluctuations and stock market volatility.
Regional Allocation(4)
[PIE CHART OMITTED]
o Europe 85.5%
o Asia 6.8
o Latin America 6.7
o United States/
Canada 1.0
Top 10 Country Holdings(4)
- --------------------------------------------------------------
Great Britain 23.2% Sweden 6.1%
- --------------------------------------------------------------
France 15.9 Italy 4.9
- --------------------------------------------------------------
Switzerland 9.1 Japan 4.6
- --------------------------------------------------------------
Germany 7.6 Brazil 4.1
- --------------------------------------------------------------
Netherlands 7.6 Portugal 3.9
- --------------------------------------------------------------
Top 10 Stock Holdings(5)
- --------------------------------------------------------------
Misys plc 3.6% Banque Paribas 2.1%
- --------------------------------------------------------------
Altran Technologies SA 3.1 Cadbury Schweppes plc 2.0
- --------------------------------------------------------------
Credit Suisse Group 3.1 Granada Group plc 2.0
- --------------------------------------------------------------
Kinnevik Investments
AB Free 2.7 Coflexip Sponsored ADR 2.0
- --------------------------------------------------------------
Wella AG 2.1 Credito Italiano SpA 1.9
- --------------------------------------------------------------
4. Portfolio is subject to change. Percentages are as of May 31, 1998, and are
based on total market value of investments.
5. Portfolio is subject to change. Percentages are as of May 31, 1998, and are
based on total market value of stock holdings.
5 Oppenheimer International Growth Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
"Europe's markets performed extremely well, and contributed substantially to the
Fund's performance."
How has Oppenheimer International Growth Fund performed over the past six
months?
The Fund's Class A shares provided a cumulative total return of 22.82% without
sales charges, for the six-month period ended May 31, 1998.(1)
Which region contributed the most to the Fund's performance?
As of May 31, 1998, about 85% of the Fund's assets were invested in Europe. As
we expected, Europe's markets performed extremely well, and contributed
substantially to the Fund's performance.
Why were European markets so strong over the past six months?
European companies are benefiting from preparations for the European Monetary
Union (EMU), which is scheduled to debut on January 1, 1999. The elimination of
trade and currency barriers may create a pan- European market expected to be
larger even than the U.S. marketplace. Companies that have traditionally
dominated their national markets are now attempting to succeed in the larger
market.
In addition, European corporate executives have sharpened their focus on
shareholder value. Managers in Europe have seen the benefits of a similar focus
in the United States, and they are restructuring their operations in an attempt
to reduce costs and boost productivity.
Finally, Europe is experiencing a massive inflow of funds to stocks from
bonds and cash equivalents. Just as investors in the United States significantly
increased their stock market participation over the past decade, European
retirement plans, pension funds and individuals are doing the same. Greater
demand for stocks is underpinning good equity market performance.
6 Oppenheimer International Growth Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Frank Jennings
William Wilby
George Evans
(Portfolio Manager)
Conversely, why were Asian markets so weak over the past six months?
Southeast Asia is suffering the aftereffects of last year's financial crisis. A
combination of economic forces, including ill-advised economic policies and a
weak banking system, led to a massive devaluation of many Asian nations'
currencies. In effect, the wealth of Asian governments and businesses dropped to
a fraction of its former value. Economic difficulties, corporate bankruptcies
and steep market declines followed.
In what types of companies did you find the most attractive opportunities?
The financial sector represented our single largest concentration of assets.
That's because asset managers and other financial services providers should
benefit greatly from the trend toward private savings. For example, we've added
the stocks of financial companies in Southern Europe, approximately doubling our
positions in Italian and Portuguese financial companies over the past six
months.
In addition, we expect the introduction of digital television, scheduled
for later this year, to create higher earnings for many European media
companies. We have established positions in digital broadcasters and content
developers, such as Granada Group in the United Kingdom.
1. Includes changes 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 manager
- --------------------------------------------------------------------------------
"The elimination of trade and currency barriers may create a pan-European market
expected to be larger even than the U.S. marketplace."
We're also optimistic regarding certain "outsourcing" companies. Many
European corporations are attempting to focus on their core businesses. As a
result, they are outsourcing non-core activities ranging from computer
networking to office maintenance. An example of this type of holding is Altran
Technologies, a French company that provides research-and-development services
to a number of industries.
What companies contributed most to the Fund's performance over the past six
months?(2)
Cadbury Schweppes, the U.K. candy and beverage company, has been a real winner.
A new management team there has improved operations. Each business unit is
expected to improve its return-on-capital, and the compensation for managers is
now closely linked to performance.
Lusomundo is another good example. The leading media company in Portugal,
it has businesses in newspapers, movie distribution, videos, cinemas and radio.
In our view, Lusomundo was undervalued when we purchased it because of its
relatively small size and presence in a minor market.
Its valuation has since expanded dramatically.
Credit Suisse also contributed to the Fund's performance. A financial
services giant that is growing its asset management business and restructuring
its investment banking business, Credit Suisse has also been cutting costs, and
investors appear to have responded positively to the potential for higher
earnings.
2. The Fund's portfolio is subject to change. Although not all the companies
discussed are within the Fund's top 10 holdings, they were within the Fund's top
15 holdings as of May 31, 1998.
8 Oppenheimer International Growth Fund
<PAGE>
"We believe that many Latin American markets are now undervalued, and prices
there could rise..."
What is your outlook for the international stock markets over the foreseeable
future?
Our outlook ranges from very positive to very negative, depending on which
region of the world we're considering. As explained earlier, we believe that the
European Monetary Union will have long-lasting, positive benefits for many
European companies.
We are also optimistic about Latin America. These emerging markets
declined sharply last year in the aftermath of the Asian crisis. In our opinion,
that sell-off was unwarranted. We believe that many Latin American markets are
now undervalued, and stock prices there could rise when investors realize that
Latin America does not share Asia's economic problems.
We are less optimistic about Japan and the rest of Asia over the short
term. In our view, fundamental economic change will be required to solve the
region's problems. We expect such change to take years to achieve.
No matter what the future brings to the international markets, we will
continue to strive to help our shareholders participate in the best-performing
regions, while avoiding those that we believe may perform poorly. In our view,
this disciplined approach to international investing is The Right Way to Invest.
9 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments May 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
===========================================================================================
<S> <C> <C>
Common Stocks--99.4%
- -------------------------------------------------------------------------------------------
Consumer Cyclicals--12.0%
- -------------------------------------------------------------------------------------------
Autos & Housing--0.8%
IRSA Inversiones y Representaciones SA(1) 866,666 $ 3,086,847
- -------------------------------------------------------------------------------------------
Leisure & Entertainment--4.1%
Granada Group plc 400,000 7,494,704
- -------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 65,500 6,121,494
- -------------------------------------------------------------------------------------------
Thomson Travel Group plc(1) 600,000 1,756,266
-----------
15,372,464
- -------------------------------------------------------------------------------------------
Media--6.4%
Canal Plus(1) 15,000 2,722,820
- -------------------------------------------------------------------------------------------
Carlton Communications plc 500,000 4,052,293
- -------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1)(2) 90,000 3,515,625
- -------------------------------------------------------------------------------------------
Lusomundo SGPS SA(1)(3) 477,000 7,189,639
- -------------------------------------------------------------------------------------------
Prosieben Media AG, Preferred(1) 61,000 3,028,115
- -------------------------------------------------------------------------------------------
Roto Smeets de Boer 75,000 3,572,540
-----------
24,081,032
- -------------------------------------------------------------------------------------------
Retail: General--0.7%
SkyePharma plc(1) 2,000,000 2,674,351
- -------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--12.2%
- -------------------------------------------------------------------------------------------
Beverages--2.0%
Cadbury Schweppes plc 500,000 7,635,760
- -------------------------------------------------------------------------------------------
Healthcare/Drugs--4.4%
Biocompatibles International plc(1) 1,026,868 2,302,458
- -------------------------------------------------------------------------------------------
Glaxo Wellcome plc 127,649 3,430,434
- -------------------------------------------------------------------------------------------
Novartis AG 3,750 6,360,626
- -------------------------------------------------------------------------------------------
Oxford Molecular Group plc(1) 690,000 2,351,635
- -------------------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 101,000 1,887,850
-----------
16,333,003
- -------------------------------------------------------------------------------------------
Healthcare/Supplies & Services--3.7%
Genset Sponsored ADR(1) 96,500 3,570,500
- -------------------------------------------------------------------------------------------
Nichii Gakkan Co. 75,000 2,489,806
- -------------------------------------------------------------------------------------------
Novogen Ltd.(1) 961,828 1,778,537
- -------------------------------------------------------------------------------------------
Ortivus AB, Cl. A(1) 27,400 402,379
- -------------------------------------------------------------------------------------------
Ortivus AB, Cl. B(1) 365,100 5,687,983
-----------
13,929,205
- -------------------------------------------------------------------------------------------
Household Goods--2.1%
Wella AG, Preference(1) 8,000 7,695,794
</TABLE>
10 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Energy--6.7%
- -------------------------------------------------------------------------------------------
Energy Services & Producers--5.7%
Cie Generale de Geophysique SA(1) 35,000 $ 5,873,535
- -------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR(1) 100,000 7,412,500
- -------------------------------------------------------------------------------------------
Expro International Group plc 625,000 5,911,293
- -------------------------------------------------------------------------------------------
Transocean Offshore, Inc. 44,600 2,199,337
-----------
21,396,665
- -------------------------------------------------------------------------------------------
Oil-Integrated--1.0%
KBC Advanced Technologies plc 103,500 666,672
- -------------------------------------------------------------------------------------------
Petroleo Brasileiro SA, Preference 15,295,000 2,992,032
-----------
3,658,704
- -------------------------------------------------------------------------------------------
Financial--32.7%
- -------------------------------------------------------------------------------------------
Banks--26.4%
Banco de Galicia y Buenos Aires SA de CV, Sponsored ADR 142,997 2,931,438
- -------------------------------------------------------------------------------------------
Banco Espirito Santo e Comercial de Lisboa SA 120,000 4,228,445
- -------------------------------------------------------------------------------------------
Banco Totta & Acores, B Shares 90,000 3,334,611
- -------------------------------------------------------------------------------------------
Bank Austria AG(1) 75,000 6,761,735
- -------------------------------------------------------------------------------------------
Bayerische Vereinsbank AG 50,000 4,192,862
- -------------------------------------------------------------------------------------------
BHF-Bank AG(1) 65,000 2,672,493
- -------------------------------------------------------------------------------------------
Corporacion Bancaria de Espana SA 50,000 4,265,935
- -------------------------------------------------------------------------------------------
Credit Suisse Group(1) 53,000 11,685,157
- -------------------------------------------------------------------------------------------
Credito Italiano SpA 1,300,000 7,255,521
- -------------------------------------------------------------------------------------------
Julius Baer Holding AG, Cl. B 2,325 6,714,163
- -------------------------------------------------------------------------------------------
Liechtenstein Global Trust AG 5,000 5,106,085
- -------------------------------------------------------------------------------------------
National Bank of Greece SA 32,400 4,665,279
- -------------------------------------------------------------------------------------------
National Westminster Bank plc 305,169 5,573,563
- -------------------------------------------------------------------------------------------
Paribas(1) 75,000 7,646,962
- -------------------------------------------------------------------------------------------
Schweizerischer Bankverein, Cl. B 10,000 3,618,219
- -------------------------------------------------------------------------------------------
Skandinaviska Enskilda Banken Group 400,000 6,665,874
- -------------------------------------------------------------------------------------------
Societe Generale 32,685 6,473,880
- -------------------------------------------------------------------------------------------
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 140,000 4,383,750
- -------------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Units (each unit
consists of one preferred share of Unibanco and one preferred
B share of Unibanco Holdings)(6) 15,000,000 940,288
-----------
99,116,260
- -------------------------------------------------------------------------------------------
Diversified Financial--1.7%
Gewestelijke Investeringmaatschappij voor Vlaanderen NV(1) 30,000 2,759,595
- -------------------------------------------------------------------------------------------
Van der Moolen Holdings NV 50,000 3,621,069
-----------
6,380,664
</TABLE>
11 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments May 31, 1998 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Insurance--4.6%
Istituto Nazionale delle Assicurazioni(1) 2,250,000 $ 7,012,038
- -------------------------------------------------------------------------------------------
Ockham Holdings plc(5) 2,000,000 5,038,868
- -------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 1,909,822 5,291,295
-----------
17,342,201
- -------------------------------------------------------------------------------------------
Industrial--12.2%
- -------------------------------------------------------------------------------------------
Industrial Materials--1.2%
Williams plc 600,000 4,295,268
- -------------------------------------------------------------------------------------------
Industrial Services--5.9%
Aegis Group plc(1) 2,000,000 3,220,636
- -------------------------------------------------------------------------------------------
BAU Holding AG(1) 2,635 161,736
- -------------------------------------------------------------------------------------------
BAU Holdings AF, Preference(1) 51,000 2,459,573
- -------------------------------------------------------------------------------------------
Benckiser NV, Cl. B(1) 30,000 1,705,262
- -------------------------------------------------------------------------------------------
Boskalis Westminster 218,787 3,571,899
- -------------------------------------------------------------------------------------------
Cia de Saneamento Basico do Estado de Sao Paulo 12,050,000 2,006,378
- -------------------------------------------------------------------------------------------
GEA AG(1) 8,000 3,141,140
- -------------------------------------------------------------------------------------------
ICTS International NV(1)(3)(4) 350,000 2,340,625
- -------------------------------------------------------------------------------------------
VBH Holding AG(1) 161,735 3,320,354
-----------
21,927,603
- -------------------------------------------------------------------------------------------
Manufacturing--1.3%
Chargeurs International SA(1) 37,400 3,096,262
- -------------------------------------------------------------------------------------------
Sauer, Inc.(1) 100,000 1,612,500
-----------
4,708,762
- -------------------------------------------------------------------------------------------
Transportation--3.8%
Internatio-Muller NV 127,777 4,610,994
- -------------------------------------------------------------------------------------------
MIF Ltd.(1)(7) 200,000 3,186,257
- -------------------------------------------------------------------------------------------
Smit Internationale NV, CVA 225,000 6,551,522
-----------
14,348,773
- -------------------------------------------------------------------------------------------
Technology--21.2%
- -------------------------------------------------------------------------------------------
Aerospace/Defense--0.8%
Sagem SA(1) 4,000 3,074,831
- -------------------------------------------------------------------------------------------
Computer Hardware--1.4%
ARM Holdings plc(1) 70,000 878,948
- -------------------------------------------------------------------------------------------
Canon, Inc. 120,000 2,857,864
- -------------------------------------------------------------------------------------------
Eidos plc(1) 62,700 1,163,037
- -------------------------------------------------------------------------------------------
Imagineer Co. Ltd. 75,000 465,485
-----------
5,365,334
</TABLE>
12 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- -------------------------------------------------------------------------------------------
Computer Software/Services--7.8%
Cap Gemini SA 38,888 $ 5,804,501
- -------------------------------------------------------------------------------------------
JBA Holdings plc 455,000 4,896,997
- -------------------------------------------------------------------------------------------
LHS Group, Inc.(1) 40,000 2,580,222
- -------------------------------------------------------------------------------------------
Misys plc 232,391 13,350,774
- -------------------------------------------------------------------------------------------
Unit 4, Inc.(1) 75,000 2,426,490
-----------
29,058,984
- -------------------------------------------------------------------------------------------
Electronics--1.8%
SAIA-Burgess Electronics AG(1) 2,500 718,572
- -------------------------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(1) 32,500 2,514,688
- -------------------------------------------------------------------------------------------
Sony Corp. 40,000 3,377,475
-----------
6,610,735
- -------------------------------------------------------------------------------------------
Telecommunications-Technology--9.4%
Altran Technologies SA 57,300 11,732,446
- -------------------------------------------------------------------------------------------
British Sky Broadcasting Group plc(1) 500,000 3,536,584
- -------------------------------------------------------------------------------------------
Energis plc(1) 500,000 7,052,784
- -------------------------------------------------------------------------------------------
Kinnevik Investments AB Free, Series B 275,000 10,061,064
- -------------------------------------------------------------------------------------------
Tandberg Television ASA(1) 290,000 2,983,797
-----------
35,366,675
- -------------------------------------------------------------------------------------------
Utilities--2.4%
- -------------------------------------------------------------------------------------------
Electric Utilities--0.5%
Cia Paranaense Energia, Sponsored ADR, Preference B Shares 200,000 1,987,500
- -------------------------------------------------------------------------------------------
Telephone Utilities--1.9%
Telecom Italia SPA, RNC shares(1) 750,000 4,047,131
- -------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Sponsored ADR 30,000 3,198,750
-----------
7,245,881
-----------
Total Common Stocks (Cost $309,589,374) 372,693,296
===========================================================================================
Preferred Stocks--0.5%
- -------------------------------------------------------------------------------------------
Marschollek, Lautenschlaeger und Partner AG, Non-Vtg
Preferred Stock(1) (Cost $1,284,299) 4,000 1,996,868
</TABLE>
13 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments May 31, 1998 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
===========================================================================================
Rights, Warrants and Certificates--0.4%
- -------------------------------------------------------------------------------------------
Banco Espirito Santo e Comercial de Lisboa SA Rts., Exp. 6/98 100,000 $ 99,205
- -------------------------------------------------------------------------------------------
Biocompatibles International plc Rts., Exp. 6/98 256,717 --
- -------------------------------------------------------------------------------------------
Novogen Ltd. Wts., Exp. 12/98 942,472 1,373,072
-------------
Total Rights, Warrants and Certificates (Cost $1,097,242) 1,472,277
- -------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $311,970,915) 100.3% 376,162,441
- -------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.3) (1,118,753)
------- -------------
Net Assets 100.0% $ 375,043,688
======= =============
</TABLE>
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
Country Market Value Percent
- -----------------------------------------------------------------------------
Great Britain $ 87,283,322 23.3%
- -----------------------------------------------------------------------------
France 59,922,926 16.0
- -----------------------------------------------------------------------------
Switzerland 34,202,822 9.1
- -----------------------------------------------------------------------------
Germany 28,627,849 7.6
- -----------------------------------------------------------------------------
The Netherlands 28,400,402 7.6
- -----------------------------------------------------------------------------
Sweden 22,817,300 6.1
- -----------------------------------------------------------------------------
Italy 18,314,689 4.9
- -----------------------------------------------------------------------------
Japan 17,199,974 4.6
- -----------------------------------------------------------------------------
Brazil 15,508,697 4.1
- -----------------------------------------------------------------------------
Portugal 14,851,900 3.9
- -----------------------------------------------------------------------------
Austria 9,383,044 2.5
- -----------------------------------------------------------------------------
Australia 8,442,904 2.2
- -----------------------------------------------------------------------------
Norway 6,170,055 1.6
- -----------------------------------------------------------------------------
Argentina 6,018,285 1.6
- -----------------------------------------------------------------------------
Greece 4,665,279 1.2
- -----------------------------------------------------------------------------
Spain 4,265,935 1.1
- -----------------------------------------------------------------------------
United States 3,811,838 1.0
- -----------------------------------------------------------------------------
Mexico 3,515,625 0.9
- -----------------------------------------------------------------------------
Belgium 2,759,595 0.7
------------ -----
Total $376,162,441 100.0%
============ =====
14 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $3,515,625 or 0.94% of the Fund's net
assets as of May 31, 1998.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended April 30, 1998.
The aggregate fair value of all securities of affiliated companies held by the
Fund as of May 31, 1998 amounts to $9,530,264. Transactions during the period in
which the issuer was an affiliate are as follows:
Shares Shares
November 30, Gross Gross May 31,
1997 Additions Reductions 1998
- --------------------------------------------------------------------------------
ICTS International NV(4) 285,000 65,000 -- 350,000
- --------------------------------------------------------------------------------
Lusomundo SGPS SA 441,000 36,000 -- 477,000
- --------------------------------------------------------------------------------
Ockham Holdings plc(5) 2,700,000 -- 700,000 2,000,000
4. Not an affiliate as of November 30, 1997.
5. No longer an affiliate as of May 31, 1998.
6. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
7. 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, 1998 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $304,808,681) $366,632,177
Affiliated companies (cost $7,162,234) 9,530,264
- --------------------------------------------------------------------------------
Cash 436,555
- --------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 555,910
- --------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 2,622,472
Interest and dividends 1,238,880
- --------------------------------------------------------------------------------
Deferred organization costs--Note 1 11,204
- --------------------------------------------------------------------------------
Other 6,408
------------
Total assets 381,033,870
================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 2,845,897
Shares of beneficial interest redeemed 2,539,926
Transfer and shareholder servicing agent fees 183,936
Distribution and service plan fees 139,061
Trustees' fees--Note 1 71,958
Other 209,404
------------
Total liabilities 5,990,182
================================================================================
Net Assets $375,043,688
============
================================================================================
Composition of Net Assets
Paid-in capital $300,608,281
- --------------------------------------------------------------------------------
Accumulated net investment income 622,981
- --------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 9,059,866
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 64,752,560
------------
Net assets $375,043,688
============
16 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $197,124,929 and 11,343,393 shares of beneficial
interest outstanding) $17.38
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $18.44
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on
net assets of $141,470,649 and 8,297,939 shares of beneficial
interest outstanding) $17.05
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on
net assets of $36,448,110 and 2,135,251 shares of beneficial
interest outstanding) $17.07
See accompanying Notes to Financial Statements.
17 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of OperationsFor the Six Months Ended May 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Dividends (net of foreign withholding taxes of $243,645) $ 2,952,539
- -------------------------------------------------------------------------------
Interest 422,805
------------
Total income 3,375,344
===============================================================================
Expenses
Management fees--Note 4 1,175,528
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 177,271
Class B 551,495
Class C 140,348
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 503,070
- -------------------------------------------------------------------------------
Shareholder reports 59,709
- -------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 33,611
- -------------------------------------------------------------------------------
Custodian fees and expenses 33,072
- -------------------------------------------------------------------------------
Registration and filing fees 20,535
- -------------------------------------------------------------------------------
Legal and auditing fees 10,491
- -------------------------------------------------------------------------------
Other 6,493
------------
Total expenses 2,711,623
===============================================================================
Net Investment Income 663,721
================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on investments:
Unaffiliated companies 9,859,290
Affiliated companies 508,561
Foreign currency transactions (1,062,158)
------------
Net realized gain 9,305,693
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 55,240,980
Translation of assets and liabilities denominated
in foreign currencies (2,578,354)
------------
Net change 52,662,626
------------
Net realized and unrealized gain 61,968,319
===============================================================================
Net Increase in Net Assets Resulting from Operations $ 62,632,040
===========
See accompanying Notes to Financial Statements.
18 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1998 November 30,
(Unaudited) 1997
===========================================================================================
<S> <C> <C>
Operations
Net investment income (loss) $ 663,721 $ (886,021)
- -------------------------------------------------------------------------------------------
Net realized gain 9,305,693 4,336,322
- -------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 52,662,626 9,540,445
------------- -------------
Net increase in net assets resulting from operations 62,632,040 12,990,746
===========================================================================================
Distributions to Shareholders
Distributions from net realized gain:
Class A (1,923,008) --
Class B (1,434,706) --
Class C (354,065) --
===========================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 42,682,343 98,104,269
Class B 29,404,606 77,610,892
Class C 8,843,973 18,746,638
===========================================================================================
Net Assets
Total increase 139,851,183 207,452,545
- -------------------------------------------------------------------------------------------
Beginning of period 235,192,505 27,739,960
------------- -------------
End of period [including accumulated net investment income
(loss) of $622,981 and $(40,740), respectively] $ 375,043,688 $ 235,192,505
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------
Six Months
Ended
May 31, 1998 Year Ended November 30,
(Unaudited) 1997 1996(1)
===============================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $14.37 $11.74 $10.00
- -------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 (.05)(2) (.01)
Net realized and unrealized gain 3.18 2.68(2) 1.75
-------- -------- -------
Total income from investment operations 3.23 2.63 1.74
- -------------------------------------------------------------------------------
Distributions from net realized gain (.22) -- --
-------- -------- -------
Total distributions to shareholders (.22) -- --
- -------------------------------------------------------------------------------
Net asset value, end of period $17.38 $14.37 $11.74
======== ======== =======
===============================================================================
Total Return, at Net Asset Value(3) 22.82% 22.40% 17.40%
===============================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $197,124 $122,720 $16,918
- -------------------------------------------------------------------------------
Average net assets (in thousands) $158,169 $66,156 $8,992
- -------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.81%(4) (0.36)% (0.26)%(4)
Expenses 1.47%(4) 1.78% 1.88%(4)(5)
- -------------------------------------------------------------------------------
Portfolio turnover rate(6) 32.3% 64.2% 42.6%
Average brokerage commission rate(7) $0.0212 $0.0075 $0.0137
</TABLE>
1. For the period from March 25, 1996 (commencement of operations) to November
30, 1996.
2. Based on average shares outstanding for the period.
3. 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.
4. Annualized.
5. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
20 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
----------------------------------- ----------------------------------
Six Months Six Months
Ended Ended
May 31, 1998 Year Ended November 30, May 31,1998 Year Ended November 30,
(Unaudited) 1997 1996(1) (Unaudited) 1997 1996(1)
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $14.15 $11.65 $10.00 $14.17 $11.66 $10.00
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 (.12)(2) (.10) .01(2) (.13)(2) (.09)
Net realized and unrealized gain 3.11 2.62(2) 1.75 3.11(2) 2.64(2) 1.75
-------- ------- ------- ------- ------- -------
Total income from investment operations 3.12 2.50 1.65 3.12 2.51 1.66
- --------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain (.22) -- -- (.22) -- --
-------- ------- ------- ------- ------- -------
Total distributions to shareholders (.22) -- -- (.22) -- --
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.05 $14.15 $11.65 $17.07 $14.17 $11.66
======== ======= ======= ======= ======= =======
==========================================================================================================================
Total Return, at Net Asset Value(3) 22.39% 21.46% 16.50% 22.36% 21.53% 16.60%
==========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $141,471 $90,565 $8,673 $36,448 $21,908 $2,149
- --------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $110,882 $45,553 $3,628 $28,229 $10,864 $938
- --------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.03%(4) (1.14)% (1.46)%(4) 0.07%(4) (1.18)% (1.48)%(4)
Expenses 2.24%(4) 2.56% 2.84%(4)(5) 2.24%(4) 2.55% 2.82%(4)(5)
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 32.3% 64.2% 42.6% 32.3% 64.2% 42.6%
Average brokerage commission rate(7) $0.0212 $0.0075 $0.0137 $0.0212 $0.0075 $0.0137
</TABLE>
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended May 31, 1998 were $199,784,718 and $91,177,504, respectively.
7. 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. Generally, non-U.S. commissions are lower than U.S.
commissions when expressed as cents per share but higher when expressed as a
percentage of transactions because of the lower per-share prices of many
non-U.S. securities.
See accompanying Notes to Financial Statements.
21 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 to seek
capital appreciation, primarily through investments in common stocks of foreign
companies. 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 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 that class and exclusive voting rights with respect to matters
affecting that class. Classes A, B and C have separate distribution and/or
service plans. 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 an
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.
22 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the 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.
- --------------------------------------------------------------------------------
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, 1998, a provision of $25,057 was made for the Fund's projected
benefit obligations and payments of $3,017 were made to retired trustees,
resulting in an accumulated liability of $62,780 at May 31, 1998.
23 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
The Board of Trustees has adopted a Deferred Compensation plan for independent
Trustees that enables a Trustee to elect to defer receipt of all or a portion of
annual fees they are entitled to receive from the Fund. Under the plan, the
compensation deferred is periodically adjusted as though an equivalent amount
had been invested for the Trustee in shares of one or more Oppenheimer funds
selected by the Trustee. The amount paid to the Trustee under the plan will be
determined based upon the performance of the selected funds. Deferral of
Trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net income per
share.
- --------------------------------------------------------------------------------
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, by any holder thereof, 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.
- --------------------------------------------------------------------------------
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 its 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 fiscal year in which 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.
24 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
Six Months Ended Year Ended
May 31, 1998(1) November 30, 1997
---------------------------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------
Class A:
Sold 7,472,176 $116,831,963 9,482,388 $131,799,793
Distributions reinvested 128,665 1,855,336 -- --
Redeemed (4,799,697) (76,004,956) (2,380,909) (33,695,524)
---------- ------------ ---------- ------------
Net increase 2,801,085 $42,681,343 7,101,479 $98,104,269
========== ============ ========== ============
- -----------------------------------------------------------------------------
Class B:
Sold 2,808,100 $43,160,871 6,811,211 $93,996,802
Distributions reinvested 97,693 1,387,415 -- --
Redeemed (1,007,121) (15,143,680) (1,156,189) (16,385,910)
---------- ------------ ---------- ------------
Net increase 1,898,672 $29,404,606 5,655,022 $77,610,892
========== ============ ========== ============
- -----------------------------------------------------------------------------
Class C:
Sold 2,939,480 $44,114,491 2,911,937 $40,604,864
Distributions reinvested 23,894 339,778 -- --
Redeemed (2,374,294) (35,610,296) (1,550,039) (21,858,226)
---------- ------------ ---------- ------------
Net increase 589,080 $8,843,973 1,361,898 $18,746,638
========== ============ ========== ============
================================================================================
3. Unrealized Gains and Losses on Investments
At May 31, 1998, net unrealized appreciation on investments of $64,191,526 was
composed of gross appreciation of $81,068,156, and gross depreciation of
$16,876,630.
================================================================================
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.
25 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
For the six months ended May 31, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $739,965, of which $209,576 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 $1,129,544 and $100,167, respectively, of which $104,624
was paid to an affiliated broker/dealer for Class B shares. During the six
months ended May 31, 1998, OFDI received contingent deferred sales charges of
$89,444 and $9,571, 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.
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 shareholder 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, 1998, OFDI paid $17,836 to an affiliated broker/dealer as
reimbursement for Class A personal service and maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B
and Class C shares to compensate OFDI for its 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
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal service for accounts that hold Class B and C shares. Each fee is
computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the six months
ended May 31, 1998, OFDI paid $3,159 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and retained
$504,358 and $113,369, respectively, as compensation for Class B and Class C
sales commissions and service fee advances, as well as financing costs. If
either Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to OFDI for distributing
shares before the Plan was terminated. At May 31, 1998, OFDI had incurred excess
distribution and servicing costs of $2,812,250 for Class B and $449,588 for
Class C.
26 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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, 1998, outstanding forward contracts were as follows:
Expiration Contract Valuation as of Unrealized
Date Amount (000s) May 31, 1998 Appreciation
- --------------------------------------------------------------------------------
Contracts to Sell
- -----------------
Japanese Yen (JPY) 8/18/98 2,231,600JPY $16,299,075 $555,910
================================================================================
6. Illiquid and Restricted Securities
At May 31, 1998, 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
periodically) 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, 1998 was $3,186,257, which represents
0.85% of the Fund's net assets.
27 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months
ended May 31, 1998.
28 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 Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
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
of 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.
29 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
============================================================================================
Real Asset Funds
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Real Asset Fund Gold & Special Minerals Fund
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Global Stock Funds
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Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth &Income Fund
Company Fund
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Stock Funds
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Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
============================================================================================
Stock & Bond Funds
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Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
============================================================================================
Taxable Bond Funds
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International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
============================================================================================
Municipal Funds
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California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
============================================================================================
Money Market Funds(4)
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Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
30 Oppenheimer International Growth Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
Internet
24-hr access to account
information. Online
transactions now available
- --------------------------
www.oppenheimerfunds.com
- --------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- --------------------------
1-800-525-7048
- --------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- --------------------------
1-800-852-8457
- --------------------------
PhoneLink
24-hr automated information
and automated transactions
- --------------------------
1-800-533-3310
- --------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- --------------------------
1-800-843-4461
- --------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- --------------------------
1-800-835-3104
- --------------------------
[LOGO] OppenheimerFunds(SM)
Distributor, Inc.
RS0825.001.0598 July 30, 1998
