<PAGE>
------------------------------
Semiannual Report May 31, 1999
------------------------------
O P P E N H E I M E R
International
Growth Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
3 President's Letter
5 An Interview
with Your Fund's
Manager
11 Financial
Statements
31 Officers and
Trustees
32 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o The Fund benefited to some degree from investments in the Latin American
markets, which proved surprisingly resilient in the wake of Brazil's January
currency devaluation.
o In our view, global markets continue to offer highly attractive investment
opportunities, especially in Europe and among selected Latin American countries.
Cumulative Total Returns
For the 6-Month Period
Ended 5/31/99
Class A
Without With
Sales Chg.1 Sales Chg.2
- -------------------------
3.27% -2.66%
- -------------------------
Class B
Without With
Sales Chg.1 Sales Chg.2
- -------------------------
2.94% -1.93%
- -------------------------
Class C
Without With
Sales Chg.1 Sales Chg.2
- -------------------------
2.95% 1.97%
- -------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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. Because the stock market can be volatile, the Fund's
performance may be subject to substantial short-term changes. For updates on the
Fund's performance, please contact your financial advisor, call us at
1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. 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 contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer International Growth Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
International
Growth Fund
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities. 1
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified portfolio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most analysts'
expectations and the breadth of the market's positive performance has begun to
widen. This has raised concerns that inflationary pressures may re-emerge. In
fact, the Federal Reserve Board recently indicated its readiness to raise
short-term interest rates as an inflation-fighting measure. Looking outside of
the United States, many foreign economies also appear to be on the mend. The
impact of these changes, as it applies to your fund, is discussed more fully
inside by your portfolio manager,
(over, please)
1. Foreign investing entails higher expenses and risks, such as foreign currency
fluctuations, economic and political instability, and differences in accounting
standards.
3 Oppenheimer International Growth Fund
<PAGE>
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of our Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
June 21, 1999
4 Oppenheimer International Growth Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
[PHOTO]
Portfolio Management
Team (l to r)
Frank Jennings
William Wilby
George Evans
(Portfolio Manager)
How did the Fund perform during the six-month period that ended May 31, 1999?
Oppenheimer International Growth Fund performed reasonably well over a difficult
period, considering our emphasis on Europe, which represented over three
quarters of our portfolio. As a result, the Fund was heavily exposed to the
European markets' weak performance and the loss in value suffered by the euro.
Nevertheless, our careful selection of individual securities enabled us to
provide investors with positive returns.1
What caused the difficulties among European markets?
European economic statistics showed a slowdown in the industrial sector
throughout the recent six-month period, which caused some investors to lose
confidence in the region's potential for growth. We believed, however, that
these statistics were inconclusive, as they failed to reflect income growth in
Europe's robust consumer sector.
The region also faced difficulties with the launch of the euro, which was
established as the European Union's currency for financial transactions. This
was partly due to a lack of confidence in European growth, and partly because of
negative reaction to the left-wing economic policies of the new German
government and its finance minister, Oskar Lafontaine.
1. The Fund's Class A shares provided a cumulative total return of 3.27% for the
six-month period ended May 31, 1999. 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.
5 Oppenheimer International Growth Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
"We see growth potential in international markets, where the stocks of many
profitable, quality companies are selling for relatively low prices..."
However, disagreements over policy led to Lafontaine's resignation in March
1999, which shifted the balance in German politics back toward the center. As a
result, investor confidence began to rebound.
Why did you emphasize European investments?
Despite these difficulties, we continued to view Europe as the most attractive
of international investment arenas during the period. From a macroeconomic
perspective, expanding economic links and shrinking trade barriers among
European nations have facilitated corporate growth. At the same time, Germany's
move back toward the political center and the European central bank's apparent
independence from national politics have improved investor confidence and
created a more favorable market environment.
Additionally, several European companies have established positions of
global leadership in important areas of technology. Others have undergone
U.S.-style corporate restructuring to sharpen their competitive edge. The work
force is very well educated, and the region's relatively wealthy, aging
population has created growing demand in the healthcare and financial sectors.
All these factors have opened a wide range of opportunities for European
companies, especially those benefiting from technology leadership or effective
internal restructuring, as well as those positioned to benefit from the
continent's changing demographics.
6 Oppenheimer International Growth Fund
<PAGE>
Did you find opportunity elsewhere in the world?
Although Asian markets recovered substantially during the period from their
mid-1998 lows, the region continued to face considerable economic difficulties.
Massive debt, low levels of corporate profitability and Japan's lingering
recession led us to keep the Fund's invested assets from representing a larger
percentage of the Fund's portfolio.
On the other hand, Latin America offered a somewhat more hospitable
investment environment during the period. The region's markets performed well,
despite a decline in December and January precipitated by a currency devaluation
in Brazil, the region's largest economy. Although we believe Brazil's economy
must undergo additional fundamental reforms, many Brazilian companies feature
solid management teams and desirable products. In addition, while other Latin
American markets were negatively affected by Brazil's problems, many of the
region's economies remained fundamentally sound. We took advantage of these
opportunities by investing in several high-quality manufacturing, consumer
product and financial companies in Brazil, Argentina and Mexico.
Based on these conditions, what other actions did you take?
Our investment themes reflected the strengths we saw in the European market. In
the technology sector, we took advantage of European leadership in the areas of
cellular telephone and digital media. In addition to our holdings among various
cellular service providers, the Fund benefited from investments in the leading
British and European satellite networks.
7 Oppenheimer International Growth Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
Avg Annual Total Returns
For the Periods Ended 6/30/992
Class A Since
1 year Inception
- -------------------------
- -10.99% 14.50%
- -------------------------
Class B Since
1 year Inception
- -------------------------
- -10.78% 14.95%
- -------------------------
Class C Since
1 year Inception
- -------------------------
- -7.23% 15.66%
- -------------------------
We also invested in several companies that we believe stand to gain from
effective internal restructuring. One such British company, Williams plc, has
refashioned itself from a broadly based conglomerate into a tightly focused,
well-managed provider of high-end security and fire protection services. Since
the company is still perceived as a conglomerate by most fund managers, its
stock has traded at a bargain price compared to those of its competitors.
Another of our largest holdings, Julius Baer Holding AG, is Europe's
largest independent private bank. Since it is focused primarily on private
banking services and asset management for high net worth individuals, in our
opinion the company is exceptionally well-positioned to benefit from the growing
wealth of Europe's aging population.
What is your outlook for the future?
Our view of the world's markets remains largely unchanged: generally negative
with regard to Asia, cautious with regard to Latin America, and positive with
regard to Europe.
2. 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. Class B and C shares are
subject to an annual 0.75% asset-based sales charge. An explanation of the
different performance calculations is in the Fund's prospectus.
3. Portfolio is subject to change. Percentages are as of May 31, 1999, and are
based on total market value of investments.
8 Oppenheimer International Growth Fund
<PAGE>
Regional Allocation/3/
[PIE CHART]
|_| Europe 73.5%
|_| Asia 11.4
|_| Latin America 9.3
|_| Emerging Europe 4.6
|_| United States/Canada 1.2
At the same time, we see growth potential in international markets, where the
stocks of many profitable, quality companies are selling for relatively low
prices compared to their U.S. counterparts.
We will continue to seek solid companies with growing businesses at attractive
prices. That's what makes Oppenheimer International Growth Fund part of The
Right Way to Invest.
Top 10 Country Holdings3
- --------------------------------------------------------------------------------
Great Britain 26.0%
- --------------------------------------------------------------------------------
France 17.6
- --------------------------------------------------------------------------------
The Netherlands 7.9
- --------------------------------------------------------------------------------
Germany 6.6
- --------------------------------------------------------------------------------
Japan 6.3
- --------------------------------------------------------------------------------
Switzerland 5.8
- --------------------------------------------------------------------------------
Brazil 5.8
- --------------------------------------------------------------------------------
Italy 3.5
- --------------------------------------------------------------------------------
Australia 3.4
- --------------------------------------------------------------------------------
Portugal 3.2
- --------------------------------------------------------------------------------
Top 10 Stock Holdings3
- --------------------------------------------------------------------------------
Altran Technologies SA 3.9%
- --------------------------------------------------------------------------------
Canal Plus 3.2
- --------------------------------------------------------------------------------
Julius Baer Holding AG 2.6
- --------------------------------------------------------------------------------
Sidel SA 2.1
- --------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA 2.1
- --------------------------------------------------------------------------------
Grupo Televisa SA 2.1
- --------------------------------------------------------------------------------
STMicroelectronics NV 2.0
- --------------------------------------------------------------------------------
Williams plc 1.9
- --------------------------------------------------------------------------------
Aegis Group plc 1.8
- --------------------------------------------------------------------------------
Granada Group plc 1.8
- --------------------------------------------------------------------------------
9 Oppenheimer International Growth Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--96.7%
- --------------------------------------------------------------------------------
Capital Goods--14.1%
- --------------------------------------------------------------------------------
Electrical Equipment--0.9%
Halma plc 2,032,100 $ 3,093,430
- --------------------------------------------------------------------------------
Industrial Services--7.0%
Aegis Group plc 3,083,600 6,077,636
- --------------------------------------------------------------------------------
Boskalis Westminster 286,287 4,250,704
- --------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 105,000 4,305,000
- --------------------------------------------------------------------------------
ICTS International NV(1)(4) 165,000 938,437
- --------------------------------------------------------------------------------
Securicor plc 575,000 5,159,735
- --------------------------------------------------------------------------------
VBH Holding AG 196,735 3,229,625
-----------
23,961,137
- --------------------------------------------------------------------------------
Manufacturing--6.2%
Chargeurs International SA 61,000 3,268,847
- --------------------------------------------------------------------------------
Internatio-Muller NV 136,777 2,831,712
- --------------------------------------------------------------------------------
Sauer, Inc. 150,000 1,546,875
- --------------------------------------------------------------------------------
Sidel SA 51,000 7,092,391
- --------------------------------------------------------------------------------
Williams plc 1,097,107 6,421,120
-----------
21,160,945
- --------------------------------------------------------------------------------
Communication Services--18.5%
- --------------------------------------------------------------------------------
Telecommunications: Long Distance--11.5%
Altran Technologies SA 58,000 13,166,147
- --------------------------------------------------------------------------------
Ascom Holding AG 2,130 4,078,175
- --------------------------------------------------------------------------------
British Sky Broadcasting Group plc 402,000 3,819,903
- --------------------------------------------------------------------------------
Cable & Wireless Optus Ltd.(1) 1,595,000 3,055,566
- --------------------------------------------------------------------------------
Embratel Participacoes SA, ADR 79,000 1,086,250
- --------------------------------------------------------------------------------
Nippon Telegraph & Telephone Corp. 548 5,352,093
- --------------------------------------------------------------------------------
Sonera Group Oyj 219,100 4,295,508
- --------------------------------------------------------------------------------
Tandberg Television ASA(1) 440,000 4,518,803
-----------
39,372,445
- --------------------------------------------------------------------------------
Telephone Utilities--6.3%
ASM Lithography Holding NV(1) 76,700 3,388,387
- --------------------------------------------------------------------------------
COLT Telcom Group plc(1) 150,000 3,167,949
- --------------------------------------------------------------------------------
Energis plc(1) 89,000 2,147,764
- --------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA, ADR 79,000 1,293,625
- --------------------------------------------------------------------------------
Telecom Italia Mobile SpA 303,000 1,786,869
- --------------------------------------------------------------------------------
Telecom Italia SpA, RNC shares 700,000 3,813,350
- --------------------------------------------------------------------------------
Telefonica Bonus Shares 840 40,385
- --------------------------------------------------------------------------------
Telefonica de Espana 42,000 2,019,246
11 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Telephone Utilities (continued)
Telesp Participacoes SA, ADR 79,000 $ 1,728,125
- --------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(2) 207,100 2,340,230
-----------
21,725,930
- --------------------------------------------------------------------------------
Telecommunications: Wireless--0.7%
Telesp Celular Participacoes SA, ADR 31,600 736,675
- --------------------------------------------------------------------------------
Telesp Celular SA, Cl. B 35,400,000 1,632,256
-----------
2,368,931
- --------------------------------------------------------------------------------
Consumer Cyclicals--11.7%
- --------------------------------------------------------------------------------
Autos & Housing--2.6%
Brazil Realty SA, GDR(3) 121,300 1,440,437
- --------------------------------------------------------------------------------
Ducati Motor Holding SpA(1) 1,141,000 3,459,828
- --------------------------------------------------------------------------------
IRSA-Inversiones y Representaciones SA 1,348,068 3,912,328
-----------
8,812,593
- --------------------------------------------------------------------------------
Leisure & Entertainment--3.1%
Granada Group plc 294,279 6,026,452
- --------------------------------------------------------------------------------
Nintendo Co. Ltd. 25,000 2,938,255
- --------------------------------------------------------------------------------
Sony Music Entertainment (Japan), Inc. 22,000 1,602,383
-----------
10,567,090
- --------------------------------------------------------------------------------
Media--3.2%
Lusomundo SGPS SA(1)(4) 332,000 4,544,108
- --------------------------------------------------------------------------------
Roto Smeets de Boer 82,758 2,764,724
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 262,800 3,595,982
-----------
10,904,814
- --------------------------------------------------------------------------------
Retail: General--0.8%
Sonae Investimentos 81,000 2,891,475
- --------------------------------------------------------------------------------
Retail: Specialty--1.2%
Dixons Group plc 232,882 4,183,243
- --------------------------------------------------------------------------------
Textile/Apparel & Home Furnishings--0.8%
Gucci Group NV 41,000 2,711,125
- --------------------------------------------------------------------------------
Consumer Staples--14.4%
- --------------------------------------------------------------------------------
Beverages--1.0%
Cadbury Schweppes plc 499,822 3,389,877
- --------------------------------------------------------------------------------
Broadcasting--7.4%
Canal Plus 37,000 10,735,829
- --------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1)(2) 165,000 6,899,062
- --------------------------------------------------------------------------------
Prosieben Media AG, Preferred 96,000 4,135,608
- --------------------------------------------------------------------------------
TeleWest Communications plc(1) 833,700 3,583,613
-----------
25,354,112
12 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Entertainment--1.4%
Village Roadshow Ltd., Cl. A Preference 3,130,000 $ 4,706,905
- --------------------------------------------------------------------------------
Food & Drug Retailers--1.4%
SkyePharma plc(1) 5,334,100 4,872,003
- --------------------------------------------------------------------------------
Household Goods--1.7%
Wella AG, Preference 8,000 5,863,796
- --------------------------------------------------------------------------------
Tobacco--1.5%
Cie Financiere Richemont AG, A Units 3,250 5,256,225
- --------------------------------------------------------------------------------
Energy--1.6%
- --------------------------------------------------------------------------------
Energy Services--1.0%
Expro International Group plc 687,500 3,470,203
- --------------------------------------------------------------------------------
Oil: International--0.6%
Petroleo Brasileiro SA, Preference 15,295,000 2,150,970
- --------------------------------------------------------------------------------
Financial--10.6%
- --------------------------------------------------------------------------------
Banks--8.1%
Banco de Galicia y Buenos Aires SA de CV,
Sponsored ADR 57,666 1,207,382
- --------------------------------------------------------------------------------
Banco Espirito Santo e Comercial de Lisboa SA 132,500 3,255,777
- --------------------------------------------------------------------------------
Julius Baer Holding AG, Cl. B 2,835 8,596,960
- --------------------------------------------------------------------------------
National Westminster Bank plc 146,606 3,364,080
- --------------------------------------------------------------------------------
Societe Generale 24,000 4,371,498
- --------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA,
Sponsored GDR 307,300 6,933,456
-----------
27,729,153
- --------------------------------------------------------------------------------
Diversified Financial--1.0%
Singer & Friedlander Group plc 1,666,600 3,445,027
- --------------------------------------------------------------------------------
Insurance--1.5%
AXA SA 29,500 3,408,436
- --------------------------------------------------------------------------------
Ockham Holdings plc 1,460,000 1,754,631
-----------
5,163,067
- --------------------------------------------------------------------------------
Healthcare--9.7%
- --------------------------------------------------------------------------------
Healthcare/Drugs--7.1%
Biocompatibles International plc(1) 2,512,585 4,026,172
- --------------------------------------------------------------------------------
Eisai Co. Ltd. 178,000 3,322,214
- --------------------------------------------------------------------------------
Genset, Sponsored ADR(1) 153,500 2,647,875
- --------------------------------------------------------------------------------
Glaxo Wellcome plc 117,761 3,306,033
- --------------------------------------------------------------------------------
Novartis AG 1,200 1,745,424
- --------------------------------------------------------------------------------
Oxford Molecular Group plc(1) 690,000 558,357
- --------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(2) 291,650 4,724,730
- --------------------------------------------------------------------------------
PowderJect Pharmaceuticals plc(1) 322,000 4,101,990
-----------
24,432,795
13 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--2.6%
Nichii Gakkan Co. 44,250 $ 3,497,661
- --------------------------------------------------------------------------------
Novogen Ltd.(1) 1,404,300 2,497,423
- --------------------------------------------------------------------------------
Ortivus AB, Cl. B(1)(4) 551,400 2,990,683
------------
8,985,767
- --------------------------------------------------------------------------------
Technology--12.7%
- --------------------------------------------------------------------------------
Computer Hardware--1.9%
Imagineer Co. Ltd. 75,000 527,644
- --------------------------------------------------------------------------------
Psion plc 477,900 6,019,094
------------
6,546,738
- --------------------------------------------------------------------------------
Computer Services--2.2%
Cap Gemini SA 25,500 3,682,178
- --------------------------------------------------------------------------------
Equant NV(1) 44,500 3,690,719
------------
7,372,897
- --------------------------------------------------------------------------------
Computer Software--5.5%
Lernout & Hauspie Speech Products NV(1) 78,300 2,750,287
- --------------------------------------------------------------------------------
Misys plc 713,199 5,959,867
- --------------------------------------------------------------------------------
SAP AG, Preference 13,500 5,363,993
- --------------------------------------------------------------------------------
Solution 6 Holdings Ltd.(1) 668,300 1,328,337
- --------------------------------------------------------------------------------
Unit 4(1) 160,000 3,270,677
------------
18,673,161
- --------------------------------------------------------------------------------
Electronics--3.1%
Sony Corp. 42,000 3,949,014
- --------------------------------------------------------------------------------
STMicroelectronics NV, NY Shares 58,300 6,770,088
------------
10,719,102
- --------------------------------------------------------------------------------
Transportation--2.7%
- --------------------------------------------------------------------------------
Shipping--2.7%
MIF Ltd.(3) 204,400 3,524,565
- --------------------------------------------------------------------------------
Smit Internationale NV, CVA 248,250 5,658,699
------------
9,183,264
- --------------------------------------------------------------------------------
Utilities--0.7%
- --------------------------------------------------------------------------------
Electric Utilities--0.7%
Cia de Saneamento Basico do Estado de Sao Paulo 12,050,000 902,870
- --------------------------------------------------------------------------------
Cia Paranaense Energia, Sponsored ADR,
Preference B Shares 200,000 1,500,000
------------
2,402,870
------------
Total Common Stocks (Cost $319,750,399) 331,471,090
14 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
=========================================================================================
<S> <C> <C>
Preferred Stocks--1.7%
- -----------------------------------------------------------------------------------------
Ceres, Inc., Series C, Preferred Callable Stock(1)(3) 600,000 $ 2,400,000
- -----------------------------------------------------------------------------------------
Fresenius Medical Care AG 104,000 3,501,548
------------
Total Preferred Stocks (Cost $6,594,229) 5,901,548
- -----------------------------------------------------------------------------------------
Total Investments, at Value (Cost $326,344,628) 98.4% 337,372,638
- -----------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.6 5,394,462
------- ------------
Net Assets 100.0% $342,767,100
======= ============
</TABLE>
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent
- --------------------------------------------------------------------------------
Great Britain $ 87,948,179 26.0%
- --------------------------------------------------------------------------------
France 59,448,288 17.6
- --------------------------------------------------------------------------------
The Netherlands 26,794,059 7.9
- --------------------------------------------------------------------------------
Germany 22,094,571 6.6
- --------------------------------------------------------------------------------
Japan 21,189,266 6.3
- --------------------------------------------------------------------------------
Switzerland 19,676,783 5.8
- --------------------------------------------------------------------------------
Brazil 19,404,665 5.8
- --------------------------------------------------------------------------------
Italy 11,771,171 3.5
- --------------------------------------------------------------------------------
Australia 11,588,231 3.4
- --------------------------------------------------------------------------------
Portugal 10,691,359 3.2
- --------------------------------------------------------------------------------
Norway 8,043,368 2.4
- --------------------------------------------------------------------------------
Mexico 6,899,063 2.0
- --------------------------------------------------------------------------------
Argentina 5,119,709 1.5
- --------------------------------------------------------------------------------
Croatia 4,724,730 1.4
- --------------------------------------------------------------------------------
Finland 4,295,508 1.3
- --------------------------------------------------------------------------------
United States 3,946,875 1.2
- --------------------------------------------------------------------------------
Singapore 3,595,982 1.1
- --------------------------------------------------------------------------------
Sweden 2,990,683 0.9
- --------------------------------------------------------------------------------
Belgium 2,750,288 0.8
- --------------------------------------------------------------------------------
India 2,340,230 0.7
- --------------------------------------------------------------------------------
Spain 2,059,630 0.6
------------ -----
Total $337,372,638 100.0%
============ =====
15 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $13,964,022 or 4.07% of the Fund's net
assets as of May 31, 1999.
3. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
4. 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 May 31, 1999. The
aggregate fair value of securities of affiliated companies held by the Fund as
of May 31, 1999, amounts to $7,534,791. Transactions during the period in which
the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares Gross Gross Shares
November 30, 1998 Additions Reductions May 31, 1999
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ICTS International NV* 375,000 -- 210,000 165,000
- ----------------------------------------------------------------------------------------------------
Lusomundo SGPS SA 382,000 -- 50,000 332,000
- ----------------------------------------------------------------------------------------------------
Ortivus AB, Cl. B 501,400 50,000 -- 551,400
</TABLE>
*Not an affiliate as of May 31, 1999
See accompanying Notes to Financial Statements.
16 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $315,133,973) $ 329,837,847
Affiliated companies (cost $11,210,655) 7,534,791
- -------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 8,568,109
Dividends 1,586,427
Other 5,306
-------------
Total assets 347,532,480
===============================================================================
Liabilities
Bank overdraft 2,796,760
- -------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 1,495,082
Distribution and service plan fees 126,999
Transfer and shareholder servicing agent fees 106,300
Custodian fees 98,919
Shareholder reports 81,927
Trustees' compensation--Note 1 58,108
Other 1,285
-------------
Total liabilities 4,765,380
===============================================================================
Net Assets $ 342,767,100
=============
===============================================================================
Composition of Net Assets
Paid-in capital $ 330,970,102
- -------------------------------------------------------------------------------
Overdistributed net investment income (532,216)
- -------------------------------------------------------------------------------
Accumulated net realized gain on investments
and foreign currency transactions 1,323,961
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 11,005,253
-------------
Net assets $ 342,767,100
=============
17 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
=====================================================================================
Net Asset Value Per Share
<S> <C>
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $169,498,467 and 11,553,854 shares of beneficial interest outstanding) $14.67
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $15.56
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $136,118,108 and 9,473,966 shares of beneficial interest outstanding) $14.37
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $37,150,525 and 2,582,396 shares of beneficial interest outstanding) $14.39
</TABLE>
See accompanying Notes to Financial Statements.
18 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
=========================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $263,699) $ 2,906,751
- -----------------------------------------------------------------------------------------
Interest 98,666
------------
Total income 3,005,417
=========================================================================================
Expenses
Management fees--Note 4 1,423,294
- -----------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 209,972
Class B 711,897
Class C 188,353
- -----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 624,281
- -----------------------------------------------------------------------------------------
Shareholder reports 133,524
- -----------------------------------------------------------------------------------------
Custodian fees and expenses 118,011
- -----------------------------------------------------------------------------------------
Legal, auditing and other professional fees 12,558
- -----------------------------------------------------------------------------------------
Trustees' compensation--Note 1 6,839
- -----------------------------------------------------------------------------------------
Other 24,345
------------
Total expenses 3,453,074
Less expenses paid indirectly--Note 4 (1,441)
------------
Net expenses 3,451,633
------------
=========================================================================================
Net Investment Loss (446,216)
=========================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on investments:
Unaffiliated companies 6,323,990
Affiliated companies (579,482)
Foreign currency transactions (2,953,686)
------------
Net realized gain 2,790,822
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 26,276,386
Translation of assets and liabilities denominated in foreign currencies (16,317,721)
------------
Net change 9,958,665
------------
Net realized and unrealized gain 12,749,487
=========================================================================================
Net Increase in Net Assets Resulting from Operations $ 12,303,271
============
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1999 November 30,
(Unaudited) 1998
====================================================================================================
<S> <C> <C>
Operations
Net investment income (loss) $ (446,216) $ 232,417
- ----------------------------------------------------------------------------------------------------
Net realized gain 2,790,822 19,125,853
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 9,958,665 (11,043,346)
------------- -------------
Net increase in net assets resulting from operations 12,303,271 8,314,924
====================================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (1,612,602) --
Class B (254,655) --
Class C (67,795) --
- ----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,481,870) (1,923,099)
Class B (7,304,734) (1,435,063)
Class C (1,902,453) (354,072)
====================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions--Note 2:
Class A (13,043,484) 59,959,570
Class B (2,688,842) 51,650,994
Class C 1,058,576 14,355,929
====================================================================================================
Net Assets
Total increase (decrease) (22,994,588) 130,569,183
- ----------------------------------------------------------------------------------------------------
Beginning of period 365,761,688 235,192,505
------------- -------------
End of period [including undistributed (overdistributed) net
investment income of $(532,216) and $1,849,052, respectively] $ 342,767,100 $ 365,761,688
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
20 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------
Six Months
Ended
May 31,
1999 Year Ended November 30,
(Unaudited) 1998 1997 1996(1)
==============================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 15.11 $ 14.37 $ 11.74 $ 10.00
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01 .05 (.05)(2) (.01)
Net realized and unrealized gain .44 .91 2.68(2) 1.75
-------- -------- -------- -------
Total income from
investment operations .45 .96 2.63 1.74
- --------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.13) -- -- --
Distributions from net realized gain (.76) (.22) -- --
-------- -------- -------- -------
Total dividends and distributions
to shareholders (.89) (.22) -- --
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.67 $ 15.11 $ 14.37 $ 11.74
======== ======== ======== =======
==============================================================================================================
Total Return, at Net Asset Value(3) 3.27% 6.78% 22.40% 17.40%
==============================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $169,498 $186,859 $122,720 $16,918
- --------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $180,257 $175,022 $ 66,156 $ 8,992
- --------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.12%(4) 0.44% (0.36)% (0.26)%(4)
Expenses(5) 1.54%(4) 1.40% 1.78% 1.88%(4)
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 34% 82% 64% 43%
</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 $1,000 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 gross expenses paid indirectly by
the Fund.
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, 1999, were $122,663,953 and $151,676,212, respectively.
21 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
---------------------------------------------------------
Six Months
Ended
May 31,
1999 Year Ended November 30,
(Unaudited) 1998 1997 1996(1)
===============================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.76 $ 14.15 $ 11.65 $10.00
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.03) (.12)(2) (.10)
Net realized and unrealized gain .45 .86 2.62(2) 1.75
-------- -------- ------- ------
Total income from
investment operations .40 .83 2.50 1.65
- ---------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.03) -- -- --
Distributions from net realized gain (.76) (.22) -- --
-------- -------- ------- ------
Total dividends and distributionsto shareholders (.79) (.22) -- --
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.37 $ 14.76 $ 14.15 $11.65
======== ======== ======= ======
===============================================================================================================
Total Return, at Net Asset Value(3) 2.94% 5.95% 21.46% 16.50%
===============================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $136,118 $142,127 $90,565 $8,673
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $142,737 $125,772 $45,553 $3,628
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.62)%(4) (0.34)% (1.14)% (1.46)%(4)
Expenses(5) 2.30%(4) 2.18% 2.56% 2.84%(4)
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 34% 82% 64% 43%
</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 $1,000 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 gross expenses paid indirectly by
the Fund.
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, 1999, were $122,663,953 and $151,676,212, respectively.
22 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
--------------------------------------------------------
Six Months
Ended
May 31,
1999 Year Ended November 30,
(Unaudited) 1998 1997 1996(1)
==========================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.78 $ 14.17 $ 11.66 $10.00
- ----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.03) (.13)(2) (.09)
Net realized and unrealized gain .44 .86 2.64(2) 1.75
------- ------- ------- ------
Total income from
investment operations .40 .83 2.51 1.66
- ----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from
net investment income (.03) -- -- --
Distributions from net realized gain (.76) (.22) -- --
------- ------- ------- ------
Total dividends and distributions
to shareholders (.79) (.22) -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 14.39 $ 14.78 $ 14.17 $11.66
======= ======= ======= ======
==========================================================================================================
Total Return, at Net Asset Value(3) 2.95% 5.94% 21.53% 16.60%
==========================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $37,151 $36,776 $21,908 $2,149
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $37,769 $32,460 $10,864 $ 938
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.62)%(4) (0.34)% (1.18)% (1.48)%(4)
Expenses(5) 2.31%(4) 2.17% 2.55% 2.82%(4)
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 34% 82% 64% 43%
</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 $1,000 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 gross expenses paid indirectly by
the Fund.
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, 1999, were $122,663,953 and $151,676,212, respectively.
See accompanying Notes to Financial Statements.
23 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. 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. 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. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
24 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.
25 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Trustees' Compensation. 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, 1999, a provision of $898 was made for the Fund's projected benefit
obligations and payments of $12,207 were made to retired trustees, resulting in
an accumulated liability of $57,303 as of May 31, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual 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.
- --------------------------------------------------------------------------------
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.
26 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:
<TABLE>
<CAPTION>
Six Months Ended May 31, 1999 Year Ended November 30, 1998
----------------------------- -----------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 10,980,884 $ 161,091,867 18,467,865 $ 286,589,304
Dividends and
distributions reinvested 755,136 10,481,289 128,681 1,855,568
Redeemed (12,550,474) (184,616,640) (14,770,487) (228,485,302)
----------- ------------- ----------- -------------
Net increase (decrease) (814,454) $ (13,043,484) 3,826,059 $ 59,959,570
=========== ============= =========== =============
- ---------------------------------------------------------------------------------------------------
Class B:
Sold 2,749,488 $ 39,603,069 6,056,317 $ 93,527,036
Dividends and
distributions reinvested 535,393 7,308,112 97,718 1,387,772
Redeemed (3,437,751) (49,600,023) (2,926,466) (43,263,814)
----------- ------------- ----------- -------------
Net increase (decrease) (152,870) $ (2,688,842) 3,227,569 $ 51,650,994
=========== ============= =========== =============
- ---------------------------------------------------------------------------------------------------
Class C:
Sold 3,928,303 $ 56,575,156 6,214,051 $ 93,630,903
Dividends and
distributions reinvested 137,398 1,876,856 23,895 339,786
Redeemed (3,971,184) (57,393,436) (5,296,238) (79,614,760)
----------- ------------- ----------- -------------
Net increase 94,517 $ 1,058,576 941,708 $ 14,355,929
=========== ============= =========== =============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Investments
As of May 31, 1999, net unrealized appreciation on investments of $11,028,010
was composed of gross appreciation of $49,036,616, and gross depreciation of
$38,008,606.
27 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
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. The Fund's management fee for the six
months ended May 31, 1999 was 0.79% of average annual net assets for each class
of shares.
For the six months ended May 31, 1999, commissions (sales charges
paid by investors) on sales of Class A shares totaled $405,796, of which
$124,164 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 A,
Class B and Class C shares totaled $79,252, $487,784 and $58,240, respectively.
Amounts paid to an affiliated broker/dealer for Class B and Class C shares were
$53,940 and $1,072, respectively. During the six months ended May 31, 1999, OFDI
received contingent deferred sales charges of $14,881, $285,268 and $12,538,
respectively, upon redemption of Class A, 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 Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
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 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, 1999, OFDI paid $21,759
to an affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
28 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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 Class 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,
1999, OFDI paid $7,191 to an affiliated broker/dealer as compensation for Class
B personal service and maintenance expenses and retained $593,191 and $93,520,
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. As of May 31, 1999, OFDI had incurred excess distribution and
servicing costs of $3,947,406 for Class B and $397,308 for Class C.
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuation. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement
of the foreign currency transactions. Realized gains and losses are reported
with all other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
29 Oppenheimer International Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
6. Illiquid and Restricted Securities
As of May 31, 1999, 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 as of May 31, 1999, was $7,365,002, which represents
2.15% of the Fund's net assets, of which $2,400,000 is considered restricted.
Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per
Acquisition Cost Per Unit as of
Security Date Unit May 31, 1999
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stocks and Warrants
- -------------------
Ceres, Inc., Series C, Preferred Callable Stock 1/6/99 $4.00 $4.00
</TABLE>
================================================================================
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, 1999.
30 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
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
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, are not insured by the FDIC or any other agency,
and involve investment risks, including the possible
loss of the principal amount invested.
31 Oppenheimer International Growth Fund
<PAGE>
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RS0825.001.0599 July 30, 1999
