<PAGE> 1
ANNUAL REPORT NOVEMBER 30, 1998
OPPENHEIMER
INTERNATIONAL GROWTH FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
4 An Interview
with Your Fund's
Manager
10 Fund Performance
15 Financial
Statements
35 Independent
Auditors' Report
36 Federal
Income Tax
Information
37 Officers and
Trustees
40 Information and
Services
REPORT HIGHLIGHTS
- ------------------------------------------------------------------------------
- - Stock markets throughout the world experienced extreme volatility during the
third and fourth quarters of 1998.
- - The Fund adhered to its longstanding investment approach in these volatile
markets: seeking good companies in good businesses at good prices.
- - The Fund is finding attractive opportunities in well-run businesses worldwide
that we believe were punished unfairly in the recent sell-off.
AVG ANNUAL TOTAL RETURNS
FOR THE 1-YEAR PERIOD ENDED 11/30/98
CLASS A
Without With
Sales Chg.(1) Sales Chg.(2)
6.78% 0.64%
CLASS B
Without With
Sales Chg.(1) Sales Chg.(2)
5.95% 0.95%
CLASS C
Without With
Sales Chg.(1) Sales Chg.(2)
5.94% 4.94%
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. 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 5.75% maximum initial sales charge.
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> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
International
Growth Fund
DEAR SHAREHOLDER,
- -------------------------------------------------------------------------------
In retrospect, 1998 has been an unsettling year for the financial markets.
Around the world, stock and bond markets experienced considerable instability,
with particular tumult being felt in Southeast Asia, Russia and Latin America.
The U.S. stock market was not immune from the extreme volatility, as it climbed
to record levels through July before correcting sharply in the third quarter
and rebounding to new highs in the fourth quarter. In the bond market, yields
on U.S. Treasury securities declined to record lows before rising modestly late
in the year.
Does the swift recovery of the U.S. stock market and the favorable
economic environment for the bond market mean that domestic stocks and bonds
will continue to prosper? We are optimistic over the long term, but we do
expect that concerns about corporate earnings growth in a slow-growth economy
will contribute to more stock market volatility in 1999. In the bond market,
the Federal Reserve Board's decisions to reduce short-term interest rates
should help create a positive climate for fixed income securities. While lower
interest rates are generally good for bond prices, it will become more
difficult for bond funds to maintain their dividends at current levels if
yields decline further.
As an Oppenheimer fund shareholder, you may wonder how this potential
volatility will affect you. If you maintain a long-term perspective, as we do,
short-term volatility over the coming months should have little bearing on your
ability to achieve your future financial goals. That's why we continue to
suggest that you adhere to your long-term investment plan. In fact, we are very
encouraged that most of our shareholders stayed the course during last summer's
stock market correction, avoiding the temptation of selling into a temporarily
declining market.
Finally, I would like to thank those shareholders who contacted us about
our revised account statement. Response has been very positive, and we are
pleased that many of you find the new format easier to read and more
informative. If you have any questions about the new statement or any other
matter, please don't hesitate to call us at 1-800-525-7048. In the meantime,
thank you for choosing OppenheimerFunds, The Right Way to Invest.
Sincerely,
12
/s/ BRIDGET A. MACASKILL
BRIDGET A. MACASKILL December 21, 1998
3 Oppenheimer International Growth Fund
<PAGE> 4
"IT'S IMPORTANT TO MAINTAIN A LONG-TERM VIEW OF THE INTERNATIONAL MARKETS THAT
IS MEASURED IN YEARS, NOT WEEKS OR FISCAL QUARTERS."
AN INTERVIEW WITH YOUR FUND'S MANAGER
- -------------------------------------------------------------------------------
HOW DID THE FUND PERFORM OVER THE 12-MONTH PERIOD THAT ENDED NOVEMBER 30, 1998?
The Fund's performance was consistent with the extreme volatility experienced
by the international stock markets. Although we attempted to avoid the world's
most troublesome markets--Southeast Asia and Russia--the portfolio was hurt by
last summer's market corrections in Europe and Latin America.
WHY HAVE THE INTERNATIONAL MARKETS BEEN SO VOLATILE?
This past summer's stock market corrections were a response to the spread of
the global financial crisis that began in Asia in late 1997. When Russia
defaulted on their international loan obligations in the third quarter of 1998,
investors shifted their assets away from any investment perceived as risky to
the highest quality most liquid asset--U.S. Treasury Bonds.
This "flight to quality" contributed to a scarcity of capital in many
markets, especially Latin America. In our opinion, investors pulled capital out
of the region without regard to the fundamental soundness of Latin American
businesses. As a result, stock prices there plummeted.
HOW HAVE THE MORE DEVELOPED INTERNATIONAL STOCK MARKETS FARED?
The Japanese stock market has been in decline for several years. Japan's
political and economic leadership has so far been unable to address the
country's persistent structural problems. In our view, the country's capital
and labor need to be deployed more efficiently before Japan can recover. There
have been announcements of a series of measures in attempt to tackle the
problems; however, none seems to have restored confidence.
4 Oppenheimer International Growth Fund
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Frank Jennings
William Wilby
George Evans
(Portfolio Manager)
Although some European companies' stocks declined last summer in response to
the global financial crisis, others have continued to prosper as they
restructure their businesses in anticipation of the formation of the European
Monetary Union (EMU) in 1999, which will create a more competitive European
marketplace. In addition, we recently found particularly good opportunities in
the United Kingdom, where many stocks appear inexpensive. Such companies
generally have a high dividend yield, strong global franchises, relatively low
valuations and high-caliber management teams.
WHAT HAS BEEN YOUR STRATEGY IN THIS INVESTMENT ENVIRONMENT?
We continue to adhere to our longstanding investment philosophy: We seek to
build a diversified portfolio of good companies in good businesses, which we
try to buy at good prices. We found the majority of such investment
opportunities in Europe. Conversely, we found few attractive investments in
Asia. We believe that current prices don't fully account for the region's
financial difficulties, which are likely to be more significant and persistent
than originally expected.
We also shifted assets to those market sectors that we expected to
perform best. For example, within the financial services industry, we sold
stocks of global banks and brokerage firms. The global financial crisis has
increased risks for financial companies with international exposure to
borrowers in distressed markets. In contrast, the more domestic-oriented
financial companies should benefit from the long-term growth in increased
private savings.
5 Oppenheimer International Growth Fund
<PAGE> 6
AN INTERVIEW WITH YOUR FUND'S MANAGER
- -------------------------------------------------------------------------------
WHAT TYPES OF COMPANIES PROVIDED THE MOST APPEALING OPPORTUNITIES?
The media business in Europe was particularly attractive, especially companies
involved in the development of technology and programming for digital
television in Europe. We believe that digital television is going to be
extremely popular because it will bring about the marriage of the telephone,
computer, stereo and television, all in one location. The Fund's largest stock
position, Canal Plus, is a French media company that launched digital
television in France in 1998, and it appears likely to be the leading digital
provider in Italy. It also has market share in Belgium, the Netherlands,
Scandinavia, Italy and Spain. In addition, we have invested in other businesses
involved in digital television, including broadcasters and a retail electronics
chain.
We have added to our holdings in Europe's health care industry because
these companies are not exposed to the economic problems of Asia or Russia. We
found especially attractive values in Europe's biotechnology industry, which
performed poorly in 1996 and 1997. In our view, many biotech companies' stocks
were unfairly punished, and our portfolio of high-quality companies puts us in
a good position to deliver attractive returns when the health care sector
recovers.
6 Oppenheimer International Growth Fund
<PAGE> 7
WHAT TYPES OF COMPANIES WERE MOST DISAPPOINTING OVER THE PAST YEAR?
Our biggest disappointment was not a company or industry, but a nation: Brazil.
The flight to quality among non-Brazilian investors hurt the stock prices of
virtually all Brazilian companies, regardless of their current profitability or
future prospects. Recently, Brazil did devalue its currency. The immediate
reaction of global markets was a sell-off, on concerns of this instability
spreading elsewhere. Although we expect Brazil to experience continued
volatility over the short term, we remain optimistic about our investments in
that market.
Similarly, we were disappointed by the poor performance of the
international small-capitalization market. Like Brazilian stocks, many
small-cap stocks were punished by risk-averse investors regardless of the
strength of their businesses. We expect these companies to rebound as the
threat of a global financial crisis recedes. In the meantime, we have focused
on a few small-cap companies that are attractively valued, have strong
businesses, solid balance sheets, secure dividend payments and experienced
management teams.
7 Oppenheimer International Growth Fund
<PAGE> 8
AVG ANNUAL TOTAL RETURNS
For the Periods Ended 12/31/98(1)
<TABLE>
<CAPTION>
CLASS A
Since
1 year Inception
<S> <C>
0.26% 14.86%
</TABLE>
<TABLE>
<CAPTION>
CLASS B
Since
1 year Inception
<S> <C>
0.59% 15.52%
</TABLE>
<TABLE>
<CAPTION>
CLASS C
Since
1 year Inception
<S> <C>
4.52% 16.39%
</TABLE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- -------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR THE INTERNATIONAL STOCK MARKETS?
We are cautious over the near term and optimistic over the long term. Economic
growth in much of the world is slowing, which has negative implications for
corporate earnings. However, in October, the International Monetary Fund, the
U.S. Federal Reserve Board and other nations' central banks announced measures
designed to alleviate adverse financial conditions. Perhaps most significant,
the Japanese government announced a plan to restructure its ailing banking
system and stimulate its economy, which has been in recession for several
years. With a possible end to the financial crisis in sight, investors became
more comfortable assuming the risks inherent in the international equity
markets.
In the meantime, we are increasingly finding attractive opportunities
in well managed, fundamentally sound companies. In addition, we believe that
valuations in Latin America are extremely low. In our view, any restoration of
investor confidence in the region should have a particularly beneficial effect
on stock prices there.
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. 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. Portfolio is subject to change. Percentages are as of November 30, 1998, and
are based on total market value of investments.
8 Oppenheimer International Growth Fund
<PAGE> 9
REGIONAL ALLOCATION(2)
[PIE CHART]
<TABLE>
<S> <C>
- - EUROPE 76.8%
- - LATIN AMERICA 9.1
- - UNITED STATES/
CANADA 7.2
- - ASIA 5.8
- - EMERGING EUROPE 1.1
</TABLE>
Regardless of the short-term challenges and opportunities international stock
markets provide over the next few months, we will continue to maintain a
long-term view of the markets that is measured in years, not weeks or fiscal
quarters. At OppenheimerFunds, we believe that this approach to investing is an
important part of The Right Way to Invest.
<TABLE>
<CAPTION>
TOP 10 COUNTRY HOLDINGS(2)
...........................................................................
<S> <C>
Great Britain 29.1%
...........................................................................
France 15.4
...........................................................................
Germany 7.2
...........................................................................
United States 7.2
...........................................................................
The Netherlands 6.6
...........................................................................
Brazil 6.2
...........................................................................
Switzerland 4.4
...........................................................................
Portugal 4.3
...........................................................................
Australia 2.5
...........................................................................
Japan 2.5
...........................................................................
</TABLE>
<TABLE>
<CAPTION>
TOP 10 STOCK HOLDINGS(2)
...........................................................................
<S> <C>
Canal Plus 3.8%
...........................................................................
Altran Technologies SA 3.6
...........................................................................
Cadbury Schweppes plc 3.2
...........................................................................
Energis plc 2.8
...........................................................................
Glaxo Wellcome plc 2.4
...........................................................................
Novartis AG 2.3
...........................................................................
British Sky Broadcasting Group plc 2.2
...........................................................................
Julius Baer Holding AG, Cl. B 2.1
...........................................................................
Williams plc 2.0
...........................................................................
Wella AG, Preference 1.9
...........................................................................
</TABLE>
9 Oppenheimer International Growth Fund
<PAGE> 10
FUND PERFORMANCE
- -------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED? Below is a discussion, by the Manager, of the
Fund's performance during its fiscal year ended November 30, 1998, followed by
a graphical comparison of the Fund's performance to an appropriate broad-based
market index.
- MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the fiscal year that
ended November 30, 1998, Oppenheimer International Growth Fund's performance
was largely determined by the widely divergent performance of the world's stock
markets. The industrialized nations of Europe led the world in stock market
performance, and the Fund benefited from its substantial exposure to stocks
there, especially among media companies. However, gains in Europe were offset
by weakness in Latin American stock markets. The Fund's portfolio holdings,
allocations and management strategies are subject to change.
- COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that
follow show the performance of a hypothetical $10,000 investment in Class A,
Class B and Class C shares of the Fund held until November 30, 1998. In each
case, performance is measured since the inception of the Fund on March 25,
1996. The Fund's performance reflects the deduction of the 5.75% maximum
initial sales charge on Class A shares and the applicable contingent deferred
sales charge for Class B and Class C shares. The graphs assume that all
dividends and capital gains distributions were reinvested in additional shares.
10 Oppenheimer International Growth Fund
<PAGE> 11
The Fund's performance is compared to the performance of the Morgan
Stanley Capital International EAFE Index, an unmanaged index of the performance
of 20 of the principal stock markets in Europe, Australia and the Far East, and
is widely recognized as a measure of international stock performance. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the
graphs that follow shows the effect of taxes. The Fund's performance reflects
the effects of Fund business and operating expenses. While index comparisons
may be useful to provide a benchmark for the Fund's performance, it must be
noted that the Fund's investments are not limited to the investments in the
index.
11 Oppenheimer International Growth Fund
<PAGE> 12
FUND PERFORMANCE
- -------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGES IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Growth Fund (Class A) and Morgan Stanley Capital
International EAFE Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer EAFE Index
<S> <C> <C>
3/25/96 9425 10000
11/30/96 11065 10462
11/30/97 13544 10449
11/30/98 14461 12202
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 11/30/98(1)
1 Year 0.64% Life 14.75%
CLASS B SHARES
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer EAFE Index
<S> <C> <C>
3/25/96 10000 10000
11/30/96 11650 10462
11/30/97 14150 10449
11/30/98 14692 12202
</TABLE>
COMPARISON OF CHANGES IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Growth Fund (Class B) and Morgan Stanley Capital
International EAFE Index
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 11/30/98(2)
1 Year 0.95% Life 15.43%
12 Oppenheimer International Growth Fund
<PAGE> 13
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer International Growth Fund (Class C) and Morgan Stanley Capital
International EAFE Index
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Oppenheimer EAFE Index
<S> <C> <C>
3/25/96 10000 10000
11/30/96 11660 10462
11/30/97 14170 10449
11/30/98 15012 12202
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 11/30/98(3)
1 Year 4.94% lIFE 16.36%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains
distributions. The performance information for the Morgan Stanley Capital
International EAFE Index in each graph begins on 3/29/96.
1. The inception date of the Fund (Class A shares) was 3/25/96. The average
annual total returns are shown net of the applicable 5.75% maximum initial
sales charge.
2. Class B shares of the Fund were first publicly offered on 3/25/96. The
average annual total returns are shown net of the applicable 5% (1-year) and 3%
(since inception) contingent deferred sales charges. The ending account value
in the graph is net of the applicable 3% contingent deferred sales charge.
3. Class C shares of the Fund were first publicly offered on 3/25/96. The
average annual total returns are shown net of the applicable 1% contingent
deferred sales charge for the one-year period. Past performance is not
predictive of future performance.
13 Oppenheimer International Growth Fund
<PAGE> 14
FINANCIALS
- --------------------------------------------------------------------------------
14 Oppenheimer International Growth Fund
<PAGE> 15
STATEMENT OF INVESTMENTS November 30, 1998
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--96.3%
- ----------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--18.9%
- ----------------------------------------------------------------------------------------------------------------
AUTOS & HOUSING--1.1%
Brazil Realty SA, GDR(1) 45,000 $ 550,809
- ----------------------------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones SA 1,201,666 3,341,240
------------
3,892,049
- ----------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--2.7%
Granada Group plc 400,000 6,245,873
- ----------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 40,000 3,712,983
------------
9,958,856
- ----------------------------------------------------------------------------------------------------------------
MEDIA--11.3%
Canal Plus 62,000 14,269,061
- ----------------------------------------------------------------------------------------------------------------
Carlton Communications plc 505,572 4,034,796
- ----------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.(2) 52,300 3,262,212
- ----------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1)(2) 165,000 4,197,187
- ----------------------------------------------------------------------------------------------------------------
Lusomundo SGPS SA(2)(3) 382,000 4,769,353
- ----------------------------------------------------------------------------------------------------------------
Prosieben Media AG, Preferred 101,000 4,849,288
- ----------------------------------------------------------------------------------------------------------------
Roto Smeets de Boer 80,000 3,230,918
- ----------------------------------------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 262,800 2,792,390
------------
41,405,205
- ----------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL--2.7%
SkyePharma plc(2) 4,100,600 5,550,132
- ----------------------------------------------------------------------------------------------------------------
Sonae Investimentos 90,000 4,256,969
------------
9,807,101
- ----------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.1%
Dixons Group plc 340,000 4,141,688
</TABLE>
15 Oppenheimer International Growth Fund
<PAGE> 16
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER NON-CYCLICALS--16.7%
- ----------------------------------------------------------------------------------------------------------------
BEVERAGES--3.2%
Cadbury Schweppes plc 791,528 $ 11,889,121
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--7.7%
Biocompatibles International plc(2) 2,692,585 4,111,054
- ----------------------------------------------------------------------------------------------------------------
Genset, Sponsored ADR(2) 125,000 3,609,375
- ----------------------------------------------------------------------------------------------------------------
Glaxo Wellcome plc 280,761 8,883,845
- ----------------------------------------------------------------------------------------------------------------
Novartis AG 4,650 8,755,338
- ----------------------------------------------------------------------------------------------------------------
Oxford Molecular Group plc(2) 690,000 609,319
- ----------------------------------------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 101,000 2,111,698
------------
28,080,629
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--3.9%
Fresenius Medical Care AG 57,000 3,450,363
- ----------------------------------------------------------------------------------------------------------------
Nichii Gakkan Co. 75,000 2,928,733
- ----------------------------------------------------------------------------------------------------------------
Novogen Ltd.(2) 316,828 477,300
- ----------------------------------------------------------------------------------------------------------------
Ortivus AB, Cl. B(2) 501,400 3,325,220
- ----------------------------------------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(1) 253,400 3,991,050
------------
14,172,666
- ----------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--1.9%
Wella AG, Preference 8,000 7,110,376
- ----------------------------------------------------------------------------------------------------------------
ENERGY--2.2%
- ----------------------------------------------------------------------------------------------------------------
ENERGY SERVICES & PRODUCERS--1.6%
Cie Generale de Geophysique SA(2) 35,000 2,397,429
- ----------------------------------------------------------------------------------------------------------------
Expro International Group plc 625,000 3,301,202
------------
5,698,631
</TABLE>
16 Oppenheimer International Growth Fund
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OIL-INTEGRATED--0.6%
Petroleo Brasileiro SA, Preference 15,295,000 $ 2,177,802
- ----------------------------------------------------------------------------------------------------------------
FINANCIAL--17.4%
- ----------------------------------------------------------------------------------------------------------------
BANKS--12.3%
Banco Bradesco SA, Preference 350,000,000 2,535,478
- ----------------------------------------------------------------------------------------------------------------
Banco de Galicia y Buenos Aires SA de CV, Sponsored ADR 162,997 3,504,435
- ----------------------------------------------------------------------------------------------------------------
Banco Espirito Santo e Comercial de Lisboa SA 132,500 4,120,064
- ----------------------------------------------------------------------------------------------------------------
Banco Pinto & Sotto Mayor SA 158,400 2,896,607
- ----------------------------------------------------------------------------------------------------------------
Bank Austria AG 60,000 3,111,976
- ----------------------------------------------------------------------------------------------------------------
Bayerische Hypo-Und Vereinsbank 50,000 4,503,041
- ----------------------------------------------------------------------------------------------------------------
BHF-Bank AG 77,000 3,046,714
- ----------------------------------------------------------------------------------------------------------------
Julius Baer Holding AG, Cl. B 2,445 7,959,682
- ----------------------------------------------------------------------------------------------------------------
National Westminster Bank plc 365,169 6,714,616
- ----------------------------------------------------------------------------------------------------------------
Societe Generale 12,000 1,893,291
- ----------------------------------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR 225,000 4,696,875
------------
44,982,779
- ----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--0.8%
Singer & Friedlander Group plc 1,566,600 3,077,139
- ----------------------------------------------------------------------------------------------------------------
INSURANCE--4.3%
AXA SA 31,000 4,012,150
- ----------------------------------------------------------------------------------------------------------------
Istituto Nazionale delle Assicurazioni 1,956,300 5,176,602
Ockham Holdings plc 1,650,000 1,879,209
- ----------------------------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 2,060,456 4,656,105
------------
15,724,066
</TABLE>
17 Oppenheimer International Growth Fund
<PAGE> 18
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL--14.2%
- ----------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.0%
Halma plc 1,862,100 $ 3,611,461
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--6.3%
Aegis Group plc 3,181,100 4,686,273
- ----------------------------------------------------------------------------------------------------------------
BAU Holdings AG, Preference 76,000 2,811,034
- ----------------------------------------------------------------------------------------------------------------
Boskalis Westminster 268,787 4,088,382
- ----------------------------------------------------------------------------------------------------------------
Cia de Saneamento Basico do Estado de Sao Paulo 12,050,000 1,324,444
- ----------------------------------------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 115,000 4,197,500
- ----------------------------------------------------------------------------------------------------------------
ICTS International NV(2)(3) 375,000 1,851,563
- ----------------------------------------------------------------------------------------------------------------
VBH Holding AG 196,735 3,950,269
------------
22,909,465
- ----------------------------------------------------------------------------------------------------------------
MANUFACTURING--3.4%
Chargeurs International SA 65,000 3,416,535
- ----------------------------------------------------------------------------------------------------------------
Sauer, Inc. 150,000 1,406,250
- ----------------------------------------------------------------------------------------------------------------
Williams plc 1,213,307 7,520,084
------------
12,342,869
- ----------------------------------------------------------------------------------------------------------------
TRANSPORTATION--3.5%
Internatio-Muller NV 152,777 3,509,759
- ----------------------------------------------------------------------------------------------------------------
MIF Ltd.(6) 204,400 3,724,082
- ----------------------------------------------------------------------------------------------------------------
Smit Internationale NV, CVA 258,250 5,688,985
------------
12,922,826
- ----------------------------------------------------------------------------------------------------------------
TECHNOLOGY--18.1%
- ----------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--1.1%
Imagineer Co. Ltd. 75,000 646,762
- ----------------------------------------------------------------------------------------------------------------
Psion plc 420,900 3,282,637
------------
3,929,399
- ----------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES--4.7%
Cap Gemini SA 27,000 3,955,626
- ----------------------------------------------------------------------------------------------------------------
JBA Holdings plc 455,000 1,426,944
- ----------------------------------------------------------------------------------------------------------------
Lernout & Hauspie Speech Products NV(2) 44,300 1,794,150
- ----------------------------------------------------------------------------------------------------------------
Misys plc 735,710 5,258,194
- ----------------------------------------------------------------------------------------------------------------
Unit 4(2) 175,000 4,791,304
------------
17,226,218
</TABLE>
18 Oppenheimer International Growth Fund
<PAGE> 19
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ELECTRONICS--1.9%
STMicroelectronics NV, NY Shares(2) 102,000 $ 6,846,750
- ----------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS/TECHNOLOGY--10.4%
Altran Technologies SA 58,000 13,491,460
- ----------------------------------------------------------------------------------------------------------------
British Sky Broadcasting Group plc 1,005,000 8,352,329
- ----------------------------------------------------------------------------------------------------------------
Cable & Wireless Optus Ltd.(2) 1,695,000 3,170,611
- ----------------------------------------------------------------------------------------------------------------
Kinnevik Investments AB Free, Series B 140,000 3,971,753
- ----------------------------------------------------------------------------------------------------------------
Societe Europeene de Communication SA, A Shares, Sponsored ADR(2) 5,500 123,063
- ----------------------------------------------------------------------------------------------------------------
Societe Europeene de Communication SA, B Shares, Sponsored ADR(2) 49,500 1,157,063
- ----------------------------------------------------------------------------------------------------------------
Sonera Group Oyj(2) 249,100 3,585,033
- ----------------------------------------------------------------------------------------------------------------
Tandberg Television ASA(2) 440,000 4,214,618
------------
38,065,930
- ----------------------------------------------------------------------------------------------------------------
UTILITIES--8.8%
- ----------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.5%
Cia Paranaense Energia, Sponsored ADR, Preference B Shares 200,000 1,950,000
- ----------------------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--8.3%
ASM Lithography Holding NV(2) 60,000 1,752,878
- ----------------------------------------------------------------------------------------------------------------
COLT Telcom Group plc(2) 330,000 4,343,969
- ----------------------------------------------------------------------------------------------------------------
Embratel Participacoes SA, Sponsored ADR(2) 79,000 1,264,000
- ----------------------------------------------------------------------------------------------------------------
Energis plc(2) 585,000 10,573,336
- ----------------------------------------------------------------------------------------------------------------
Tele Celular Sul Participacoes SA, Sponsored ADR(2) 7,900 179,725
- ----------------------------------------------------------------------------------------------------------------
Tele Centro Oeste Celular Participacoes SA, Sponsored ADR(2) 26,333 125,082
- ----------------------------------------------------------------------------------------------------------------
Tele Centro Sul Participacoes SA, Sponsored ADR(2) 15,800 901,588
- ----------------------------------------------------------------------------------------------------------------
Tele Leste Celular Participacoes SA, Sponsored ADR(2) 1,580 66,064
- ----------------------------------------------------------------------------------------------------------------
Tele Nordeste Celular Participacoes SA, Sponsored ADR(2) 3,950 103,441
- ----------------------------------------------------------------------------------------------------------------
Tele Norte Celular Participacoes SA, Sponsored ADR(2) 1,580 64,681
- ----------------------------------------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA, Sponsored ADR(2) 79,000 1,343,000
- ----------------------------------------------------------------------------------------------------------------
Tele Sudeste Celular Participacoes SA, Sponsored ADR(2) 15,800 426,600
- ----------------------------------------------------------------------------------------------------------------
Telecom Italia Mobile SpA 550,000 3,613,774
- ----------------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Sponsored ADR 79,000 13,578
- ----------------------------------------------------------------------------------------------------------------
Telemig Celular Participacoes SA, Sponsored ADR(2) 3,950 121,956
- ----------------------------------------------------------------------------------------------------------------
Telesp Celular Participacoes SA, Sponsored ADR(2) 31,600 829,500
- ----------------------------------------------------------------------------------------------------------------
Telesp Celular SA, Cl. B(2) 35,400,000 2,490,764
- ----------------------------------------------------------------------------------------------------------------
Telesp Participacoes SA, Sponsored ADR(2) 79,000 2,113,250
------------
30,327,186
------------
Total Common Stocks (Cost $351,228,533) 352,250,212
</TABLE>
19 Oppenheimer International Growth Fund
<PAGE> 20
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS--0.1%
- ----------------------------------------------------------------------------------------------------------------
Fresenius Medical Care AG, Preferred (Cost $253,187) 6,000 $ 251,580
</TABLE>
<TABLE>
<CAPTION>
UNITS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.3%
- ----------------------------------------------------------------------------------------------------------------
Biocompatibles International plc Wts., Exp. 4/99 306,717 20,250
- ----------------------------------------------------------------------------------------------------------------
Novogen Ltd. Wts., Exp. 12/98 1,012,472 1,169,386
------------
Total Rights, Warrants and Certificates (Cost $1,191,963) 1,189,636
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--6.1%
- ----------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 5.30%,
dated 11/30/98, to be repurchased at $22,303,283 on 12/1/98,
collateralized by U.S. Treasury Bonds, 9.875%, 11/15/15, with a
value of $1,091,341, and U.S. Treasury Nts., 5.625%--8.875%,
12/31/98--10/31/01, with a value of $21,696,958 (Cost $22,300,000) $22,300,000 22,300,000
- ----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $374,973,683) 102.8% 375,991,428
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (2.8) (10,229,740)
----------- ------------
NET ASSETS 100.0% $365,761,688
=========== ============
</TABLE>
1. 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 $8,739,046 or 2.39% of the Fund's net
assets as of November 30, 1998.
2. Non-income producing security.
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 November 30, 1998.
The aggregate fair value of all securities of affiliated companies held by the
Fund as of November 30, 1998, amounts to $6,620,916. Transactions during the
period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
SHARES GROSS GROSS SHARES DIVIDEND
NOVEMBER 30, 1997 ADDITIONS REDUCTIONS NOVEMBER 30, 1998 INCOME
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ICTS International NV(4) 285,000 90,000 -- 375,000 --
- ----------------------------------------------------------------------------------------------------------------
Lusomundo SGPS SA 441,000 41,000 100,000 382,000 --
- ----------------------------------------------------------------------------------------------------------------
Ockham Holdings plc(5) 2,700,000 150,000 1,200,000 1,650,000 151,352
--------
$151,352
========
</TABLE>
4. Not an affiliate as of November 30, 1997.
5. No longer an affiliate as of November 30, 1998.
6. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
20 Oppenheimer International Growth Fund
<PAGE> 21
- --------------------------------------------------------------------------------
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
<TABLE>
<CAPTION>
COUNTRY MARKET VALUE PERCENT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Great Britain $109,513,471 29.1%
- ----------------------------------------------------------------------------------------------------------------
France 58,089,177 15.4
- ----------------------------------------------------------------------------------------------------------------
Germany 27,161,631 7.2
- ----------------------------------------------------------------------------------------------------------------
United States 26,968,463 7.2
- ----------------------------------------------------------------------------------------------------------------
The Netherlands 24,913,788 6.6
- ----------------------------------------------------------------------------------------------------------------
Brazil 23,278,634 6.2
- ----------------------------------------------------------------------------------------------------------------
Switzerland 16,715,020 4.4
- ----------------------------------------------------------------------------------------------------------------
Portugal 16,042,994 4.3
- ----------------------------------------------------------------------------------------------------------------
Australia 9,473,402 2.5
- ----------------------------------------------------------------------------------------------------------------
Japan 9,400,177 2.5
- ----------------------------------------------------------------------------------------------------------------
Italy 8,790,376 2.3
- ----------------------------------------------------------------------------------------------------------------
Norway 7,938,700 2.1
- ----------------------------------------------------------------------------------------------------------------
Sweden 7,296,973 1.9
- ----------------------------------------------------------------------------------------------------------------
Argentina 6,845,675 1.8
- ----------------------------------------------------------------------------------------------------------------
Austria 5,923,011 1.6
- ----------------------------------------------------------------------------------------------------------------
Mexico 4,197,188 1.1
- ----------------------------------------------------------------------------------------------------------------
Croatia 3,991,050 1.1
- ----------------------------------------------------------------------------------------------------------------
Finland 3,585,033 1.0
- ----------------------------------------------------------------------------------------------------------------
Singapore 2,792,390 0.8
- ----------------------------------------------------------------------------------------------------------------
Belgium 1,794,150 0.5
- ----------------------------------------------------------------------------------------------------------------
Luxembourg 1,280,125 0.4
------------ -----
Total $375,991,428 100.0%
============ =====
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer International Growth Fund
<PAGE> 22
STATEMENT OF ASSETS AND LIABILITIES November 30, 1998
<TABLE>
<S> <C>
================================================================================================================
ASSETS
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $368,582,670) $369,370,512
Affiliated companies (cost $6,391,013) 6,620,916
- ----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,457,457
Interest and dividends 570,984
Investments sold 725,706
Other 12,376
------------
Total assets 378,757,951
================================================================================================================
LIABILITIES
Bank overdraft 1,029,077
- ----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,444,330
Shares of beneficial interest redeemed 6,102,278
Distribution and service plan fees 125,368
Transfer and shareholder servicing agent fees 110,755
Trustees' fees--Note 1 72,474
Shareholder reports 53,644
Other 58,337
------------
Total liabilities 12,996,263
================================================================================================================
NET ASSETS $365,761,688
============
================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $345,643,852
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,849,052
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 17,222,196
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 1,046,588
------------
Net assets $365,761,688
============
</TABLE>
22 Oppenheimer International Growth Fund
<PAGE> 23
<TABLE>
<S> <C>
================================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$186,858,805 and 12,368,308 shares of beneficial interest outstanding) $15.11
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $16.03
- ----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $142,127,168
and 9,626,836 shares of beneficial interest outstanding) $14.76
- ----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $36,775,715
and 2,487,879 shares of beneficial interest outstanding) $14.78
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer International Growth Fund
<PAGE> 24
STATEMENT OF OPERATIONS For the Year Ended November 30, 1998
<TABLE>
<S> <C>
================================================================================================================
INVESTMENT INCOME
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $427,653) $ 4,914,564
Affiliated companies 151,352
- ----------------------------------------------------------------------------------------------------------------
Interest 1,064,567
------------
Total income 6,130,483
================================================================================================================
EXPENSES
Management fees--Note 4 2,637,912
- ----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 392,931
Class B 1,256,304
Class C 324,164
- ----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 960,226
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 148,612
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 57,721
- ----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 43,741
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees 37,114
- ----------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 18,717
- ----------------------------------------------------------------------------------------------------------------
Other 20,624
------------
Total expenses 5,898,066
================================================================================================================
NET INVESTMENT INCOME 232,417
================================================================================================================
REALIZED AND UNREALIZED GAIN
Net realized gain on:
Investments:
Unaffiliated companies 16,281,666
Affiliated companies 449,711
Foreign currency transactions 2,394,476
------------
Net realized gain 19,125,853
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (15,904,975)
Translation of assets and liabilities denominated in foreign currencies 4,861,629
------------
Net change (11,043,346)
------------
Net realized and unrealized gain 8,082,507
================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,314,924
============
</TABLE>
See accompanying Notes to Financial Statements.
24 Oppenheimer International Growth Fund
<PAGE> 25
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30,
1998 1997
================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income (loss) $ 232,417 $ (886,021)
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 19,125,853 4,336,322
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (11,043,346) 9,540,445
------------ ------------
Net increase in net assets resulting from operations 8,314,924 12,990,746
================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net realized gain:
Class A (1,923,099) --
Class B (1,435,063) --
Class C (354,072) --
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 59,959,570 98,104,269
Class B 51,650,994 77,610,892
Class C 14,355,929 18,746,638
================================================================================================================
NET ASSETS
Total increase 130,569,183 207,452,545
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 235,192,505 27,739,960
------------ ------------
End of period [including undistributed (overdistributed) net
investment income of $1,849,052 and $(40,740), respectively] $365,761,688 $235,192,505
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
25 Oppenheimer International Growth Fund
<PAGE> 26
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------ --------
YEAR ENDED
YEAR ENDED NOV. 30, NOV. 30,
1998 1997 1996(1) 1998
========================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $14.37 $11.74 $10.00 $14.15
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .05 (.05)(2) (.01) (.03)
Net realized and unrealized gain .91 2.68 (2) 1.75 .86
------ ------ ------ ------
Total income from investment
operations .96 2.63 1.74 .83
- --------------------------------------------------------------------------------------------------------
Distributions to shareholders:
Distributions from net realized gain (.22) -- -- (.22)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.11 $14.37 $11.74 $14.76
====== ====== ====== ======
========================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 6.78% 22.40% 17.40% 5.95%
========================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $186,859 $122,720 $16,918 $142,127
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $175,022 $ 66,156 $ 8,992 $125,772
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.44% (0.36)% (0.26)%(4) (0.34)%
Expenses 1.40% 1.78% 1.88%(4)(5) 2.18%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 81.8% 64.2% 42.6% 81.8%
</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.
26 Oppenheimer International Growth Fund
<PAGE> 27
<TABLE>
<CAPTION>
CLASS C
- ------------------------- ----------------------------------------
YEAR ENDED NOV. 30,
1997 1996(1) 1998 1997 1996(1)
===========================================================================
<S> <C> <C> <C> <C>
$11.65 $10.00 $14.17 $11.66 $10.00
- ---------------------------------------------------------------------------
(.12)(2) (.10) (.03) (.13)(2) (.09)
2.62(2) 1.75 .86 2.64(2) 1.75
------ ------ ------ ------ ------
2.50 1.65 .83 2.51 1.66
- ---------------------------------------------------------------------------
-- -- (.22) -- --
- ---------------------------------------------------------------------------
$14.15 $11.65 $14.78 $14.17 $11.66
====== ====== ====== ====== ======
===========================================================================
21.46% 16.50% 5.94% 21.53% 16.60%
===========================================================================
$90,565 $8,673 $36,776 $21,908 $2,149
- ---------------------------------------------------------------------------
$45,553 $3,628 $32,460 $10,864 $ 938
- ---------------------------------------------------------------------------
(1.14)% (1.46)%(4) (0.34)% (1.18)% (1.48)%(4)
2.56% 2.84%(4)(5) 2.17% 2.55% 2.82%(4)(5)
- ---------------------------------------------------------------------------
64.2% 42.6% 81.8% 64.2% 42.6%
</TABLE>
5. The expense ratio reflects the effect of 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 November 30, 1998, were $396,379,087 and $255,705,145, respectively.
See accompanying Notes to Financial Statements.
27 Oppenheimer International Growth Fund
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS
================================================================================
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 invests primarily in common stocks of foreign
companies in countries throughout the world, including emerging markets. 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. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the
London foreign exchange markets on a daily basis as provided by a reliable bank
or dealer.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of 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.
28 Oppenheimer International Growth Fund
<PAGE> 29
===============================================================================
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, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), 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 year ended
November 30, 1998, a provision of $30,889 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 $68,612 as of November 30, 1998.
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.
29 Oppenheimer International Growth Fund
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
The Fund adjusts the classification of distributions to
shareholders to reflect the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, during the year ended November 30, 1998, amounts have been
reclassified to reflect an increase in undistributed net investment income of
$1,657,375. Accumulated net realized gain on investments was decreased by the
same amount.
- --------------------------------------------------------------------------------
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.
30 Oppenheimer International Growth Fund
<PAGE> 31
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>
YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
-------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 18,467,865 $ 286,589,304 9,482,388 $131,799,793
Distributions reinvested 128,681 1,855,568 -- --
Redeemed (14,770,487) (228,485,302) (2,380,909) (33,695,524)
------------ ------------- ----------- ------------
Net increase 3,826,059 $ 59,959,570 7,101,479 $ 98,104,269
============ ============= =========== ============
- ----------------------------------------------------------------------------------------------------------------
Class B:
Sold 6,056,317 $ 93,527,036 6,811,211 $ 93,996,802
Distributions reinvested 97,718 1,387,772 -- --
Redeemed (2,926,466) (43,263,814) (1,156,189) (16,385,910)
----------- ------------- ----------- ------------
Net increase 3,227,569 $ 51,650,994 5,655,022 $ 77,610,892
=========== ============= =========== ============
- ----------------------------------------------------------------------------------------------------------------
Class C:
Sold 6,214,051 $ 93,630,903 2,911,937 $ 40,604,864
Distributions reinvested 23,895 339,786 -- --
Redeemed (5,296,238) (79,614,760) (1,550,039) (21,858,226)
----------- ------------- ----------- ------------
Net increase 941,708 $ 14,355,929 1,361,898 $ 18,746,638
=========== ============= =========== ============
</TABLE>
================================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of November 30, 1998, net unrealized appreciation on investments of
$1,017,745 was composed of gross appreciation of $45,941,115, and gross
depreciation of $44,923,370.
================================================================================
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 year ended November 30, 1998 was 0.79% of average annual net assets for
Class A, Class B and Class C shares.
31 Oppenheimer International Growth Fund
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
For the year ended November 30, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $1,366,674, of which $394,993 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 $119,332, $2,142,928 and $195,286, respectively.
Amounts paid to an affiliated broker/dealer for Class B and Class C shares were
$188,317 and $2,827, respectively. During the year ended November 30, 1998, OFDI
received contingent deferred sales charges of $301,906 and $17,922,
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
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
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 year ended
November 30, 1998, OFDI paid $42,974 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 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 year ended November 30, 1998, OFDI paid $9,902 to an affiliated
broker/dealer as compensation for Class B personal service and maintenance
expenses and retained $1,131,768 and $265,957, 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
November 30, 1998, OFDI had incurred excess distribution and servicing costs of
$4,234,441 for Class B and $379,221 for Class C.
32 Oppenheimer International Growth Fund
<PAGE> 33
===============================================================================
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.
===============================================================================
6. ILLIQUID AND RESTRICTED SECURITIES
As of November 30, 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 as of November 30, 1998, was $3,724,082, which
represents 1.02% of the Fund's net assets.
33 Oppenheimer International Growth Fund
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (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 year
ended November 30, 1998.
34 Oppenheimer International Growth Fund
<PAGE> 35
INDEPENDENT AUDITORS' REPORT
===============================================================================
The Board of Trustees and Shareholders
of Oppenheimer International Growth Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer International Growth Fund as of November 30, 1998,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the two-year
period then ended, and the period from March 25, 1996 (commencement of
operations), to November 30, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of November 30, 1998, by correspondence with the custodian and
brokers; and where confirmations were not received from brokers, we performed
other auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material respects, the
financial position of Oppenheimer International Growth Fund as of November 30,
1998, the results of its operations for the year then ended, the changes in its
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the two-year period then ended,
and the period from March 25, 1996 (commencement of operations), to November
30, 1996, in conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
December 21, 1998
35 Oppenheimer International Growth Fund
<PAGE> 36
FEDERAL INCOME TAX INFORMATION (Unaudited)
===============================================================================
In early 1999 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations
of the U.S. Treasury Department require the Fund to report this information to
the Internal Revenue Service.
A distribution of $0.2230 per share was paid to Class A,
Class B and Class C shareholders on December 5, 1997, of which, for each class
of shares, $0.1107 was designated as a capital gain distribution in the "28%
Rate Group" and $0.0216 was designated as a capital gain distribution in the
"20% Rate Group" for federal income tax purposes. Whether received in stock or
cash, the capital gain distribution should be treated by shareholders as a gain
from the sale of capital assets.
Dividends paid by the Fund during the fiscal year ended
November 30, 1998, which are not designated as capital gain distributions
should be multiplied by 1.15% to arrive at the net amount eligible for the
corporate dividend-received deduction.
The foregoing information is presented to assist
shareholders in reporting distributions received from the Fund to the Internal
Revenue Service. Because of the complexity of the federal regulations which may
affect your individual tax return and the many variations in state and local
tax regulations, we recommend that you consult your tax advisor for specific
guidance.
36 Oppenheimer International Growth Fund
<PAGE> 37
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 LLP
===============================================================================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
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.
37 Oppenheimer International Growth Fund
<PAGE> 38
OPPENHEIMERFUNDS FAMILY
<TABLE>
<S> <C> <C>
===============================================================================================================
REAL ASSET FUNDS
- ---------------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
===============================================================================================================
GLOBAL STOCK FUNDS
- ---------------------------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
===============================================================================================================
STOCK FUNDS
- ---------------------------------------------------------------------------------------------------------------
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
Large Cap Growth Fund
===============================================================================================================
STOCK & BOND FUNDS
- ---------------------------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Disciplined Allocation Fund
Income Fund(1) Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(2) Convertible Securities Fund(3)
Value Fund Equity Income Fund
===============================================================================================================
TAXABLE BOND FUNDS
- ---------------------------------------------------------------------------------------------------------------
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 BOND FUNDS
- ---------------------------------------------------------------------------------------------------------------
California Municipal Fund(4) Municipal Bond Fund Rochester Division:
Florida Municipal Fund(4) Insured Municipal Fund Rochester Fund Municipals
New Jersey Municipal Fund(4) Intermediate Municipal Fund Limited Term New York
New York Municipal Fund(4) Municipal Fund
Pennsylvania Municipal Fund(4)
===============================================================================================================
MONEY MARKET FUNDS(5)
- ---------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 12/22/98, the Fund's name was changed from "Main Street Income & Growth
Fund."
2. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
3. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
4. Available only to investors in certain states.
5. 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 1999 OppenheimerFunds, Inc. All rights reserved.
38 Oppenheimer International Growth Fund
<PAGE> 39
INTERNET
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- -------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
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And when you need help, our Customer Service Representatives are only a
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When you want to make a transaction, you can do it easily by calling our
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For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
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So call us today, or visit us at our website at
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[OPPENHEIMERFUNDS LOGO]
RA0825.001.1198 January 29, 1999
