[GRAPHIC]
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Annual Report November 30, 1999
Oppenheimer
International Growth Fund
[LOGO] OppenheimerFunds (R)
The Right Way to Invest
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<PAGE>
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REPORT HIGHLIGHTS
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CONTENTS
1 President's Letter
3 An Interview with Your Fund's Manager
7 Fund Performance
12 Financial Statements
33 Independent Auditors' Report
34 Federal Income Tax Information
35 Officers and Trustees
After a difficult year in 1998, foreign equity markets as a whole took a
noticeable turn for the better during the past twelve months.
Our investments in new technology companies helped the Fund to deliver a very
competitive return and to outperform its benchmark.
Our research indicates that much of the world outside our borders seems poised
to move forward again, in terms of performance.
- -----------------------
Average Annual
Total Returns
For the 1-Year Period
Ended 11/30/99*
Class A
Without With
Sales Chg. Sales Chg.
- -----------------------
35.31% 27.53%
Class B
Without With
Sales Chg. Sales Chg.
- -----------------------
34.32% 29.32%
Class C
Without With
Sales Chg. Sales Chg.
- -----------------------
34.28% 33.28%
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Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
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* See page 10 for further details.
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INFORMATION AND SERVICES
================================================================================
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
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Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
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General Information
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24 hours a day, timely and insightful messages on the economy and issues that
may affect your investments
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Transfer and Shareholder Servicing Agent
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P.O. Box 5270, Denver, CO 80217-5270
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[LOGO] OppenheimerFunds (R)
Distributor, Inc.
RA0825.001.1199 January 28, 2000
<PAGE>
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PRESIDENT'S LETTER
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[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
International Growth Fund
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Dear shareholder,
Whenever a new year begins--let alone a new decade or century--it makes sense to
pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns, and
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a moderate-growth,
low-inflation course. As recent revisions of 1999's economic statistics
demonstrated, the economy has defied many analysts' forecasts by growing at a
strong rate, which should be positive for the bond market. Similarly, positive
economic forces could help the stock market's performance broaden to include
value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market.
Many foreign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving
1 OPPENHEIMER INTERNATIONAL GROWTH FUND
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PRESIDENT'S LETTER
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companies there the same potential for cost-cutting and productivity
improvements that U.S. companies enjoyed 10 years ago. In Japan and Asia,
economic recovery is expected to gain strength, which could allow stocks to
rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an
infallible crystal ball, we believe that in almost any investment environment,
consistent success stems from an unwavering focus on fundamental investment
principles such as maintaining a long-term perspective, using diversification to
manage risks, and availing oneself of the services of a knowledgeable financial
advisor. Indeed, these principles serve as the foundation for every investment
we offer, helping to make OppenheimerFunds The Right Way to Invest in 2000 and
beyond.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
December 21, 1999
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of any particular fund. Specific
discussion, as it applies to your Fund, is contained in the pages that follow.
2 OPPENHEIMER INTERNATIONAL GROWTH FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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- ---------------------
[PHOTO]
Portfolio Management
Team (l to r)
Frank Jennings
William Wilby
George Evans
(Portfolio Manager)
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Q. How did the Fund perform during the one-year period that ended November 30,
1999?
A. Oppenheimer International Growth Fund performed very well over the past year.
The Fund delivered a substantially stronger total return than in the prior
fiscal year, reflecting the general recovery of the world's equity markets and
the Fund's emphasis on companies providing various types of new technology. In
particular, we attribute the Fund's strong results to a change occurring around
the globe that, in our opinion, could have a quite positive long-term impact.
Can you describe this change?
The most obvious evolution has occurred in Europe, which officially launched its
new currency, the euro, on January 1, 1999. This new currency got off to a rough
start, and that slowed Europe's recovery from the problems that began in
mid-1998. But, the expectation remains that a single currency will likely take
some of the volatility out of the core European markets.
What's more, Europe appears to have a new attitude toward shareholder
value. Many companies are looking to the stock markets to raise cash, so they're
taking the idea of shareholder value more seriously. The major European
governments have become more diligent about curbing inflationary pressures. In
early November of this year, the European Central Bank--with the approval of
France, Germany and the nine other member states--raised interest rates. The
European equity market is now second in size only to that of the United States.
3 OPPENHEIMER INTERNATIONAL GROWTH FUND
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================================================================================
AN INTERVIEW WITH YOUR FUND'S MANAGER
================================================================================
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"We continued to find good long-term opportunities in each of our four
investment themes: mass affluence, new technology, restructuring and aging."
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The economic changes in Asia and Latin America have been less dramatic. To date
Asia's attempts at change have been more talk than action, but Japan is
struggling to make fundamental changes that would set a good example for the
rest of the region. There are still major problems, but Japan at least is
finally focused on the issues that really matter. In our opinion, Latin America
offers the best valuations in the world right now. It's relatively stable
compared to Asia, and if the political election cycle that's just beginning goes
well, we could see even more progress throughout the region.
Have these changes impacted how you invested the Fund?
Not really. We continued to look for companies with "the goods": good business,
good company fundamentals and long-term earnings growth, and good price. In the
first half of the fiscal year, we found more of these opportunities in Latin
America; in the second half, in Europe and Japan. Despite our skepticism about
Asia, we recognized that Japan was rallying and found a few investments that
satisfied our bottom-up criteria.
How do you identify these companies?
We whittle down the field using four broad themes: mass affluence, new
technology, restructuring and aging.
What was the predominant theme during the past year?
New technology. Our largest holding is Altran Technologies SA (France), an
engineering and consulting services enterprise we have owned for some time. We
believe this company is well positioned to benefit as restructuring continues in
Europe.(1)
Another example is Psion plc (UK), which has developed an operating system
for mobile communications. Psion plc is working with leading European companies
to marry cellular technology and e-commerce. It's what we term an "e-nabler," a
company focused on making new technologies work more effectively.
(1) The Fund's portfolio is subject to change.
4 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
- ---------------------------------
Average Annual
Total Returns
For the Periods Ended 12/31/99(2)
Class A Since
1-Year Inception
- ---------------------------------
51.20% 25.51%
Class B Since
1-Year Inception
- ---------------------------------
54.15% 26.03%
Class C Since
1-Year Inception
- ---------------------------------
58.26% 26.49%
- ---------------------------------
The portfolio also has some "g-nablers," companies that are driving the genomics
and biotechnology revolution to the next level. We have been building a position
in Europe's leading provider of consumables for the biotech industry.
What about companies that fall under the other themes?
Companies that fall under our "aging" theme, such as Nichii Gakkan Co. in Japan,
turned in some very impressive numbers as well. Nichii provides hospital
administrative services. It handles home-nursing services and home-helper
training courses as well as medical facilities and hospital management.
Were there any disappointments in the Fund?
The Fund's biggest disappointment came from positions we didn't hold. While the
Japanese markets rallied during 1999, we approached this region more cautiously
than most of our competitors, which constrained the Fund's performance. However,
in our opinion, we still haven't seen enough fundamental change to sustain an
economic turnaround there.
Of the positions that we did hold, one of the largest was a German kidney
dialysis company. They've experienced problems with their product, but they're a
well-run company overall and have strong brand recognition, which we believe
will help them bounce back. Another holding, an Australian reinsurance company,
suffered a setback after Hurricane George caused a higher than average number of
claims.
What is your outlook for international investing in the coming months?
We see strong signs that foreign markets have entered a new phase. After five
years of underperformance, much of the world outside our borders seems poised to
move forward again. Historically, these upswings have lasted for several years.
(2) See page 10 for further details.
5 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
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Regional Allocation(3)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Europe 67.7%
Asia 20.8
Latin America 6.1
Emerging
Europe 3.4
Middle East/
Africa 1.1
United States/
Canada 0.9
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If history repeats itself, we think that foreign investing--and Oppenheimer
International Growth Fund--will be an important part of The Right Way to Invest
for anyone with a long-term financial goal.
Top Ten Country Holdings(3)
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Great Britain 18.4%
France 17.1
Japan 14.4
The Netherlands 9.9
Germany 6.4
Australia 3.9
Sweden 3.8
Brazil 3.5
Italy 3.0
Portugal 2.6
Top Ten Stock Holdings(4)
- --------------------------------------------------------------------------------
Altran Technologies SA 6.0%
Getronics NV 4.3
Psion plc 3.6
Nintendo Co. Ltd. 2.7
Biocompatibles International plc 2.7
SAP AG, Preference 2.5
Nippon Telegraph & Telephone Corp. 2.3
Telefonaktiebolaget LM Ericsson Cl. B, Sponsored ADR 2.0
Nichii Gakkan Co. 2.0
Sonera Corp. 2.0
- --------------------------------------------------------------------------------
(3) Portfolio is subject to change. Percentages are as of November 30, 1999, and
are based on total market value of investments.
(4) Portfolio is subject to change. Percentages are as of November 30, 1999, and
are based on total market value of common stock.
6 OPPENHEIMER INTERNATIONAL GROWTH FUND
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FUND PERFORMANCE
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How has the Fund performed? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended November 30, 1999, 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, 1999, Oppenheimer International Growth Fund performed very well.
The Fund delivered a substantially stronger total return than in the prior
fiscal year, reflecting the general recovery of the world's equity markets and
an emphasis on companies providing various types of new technology. The Japanese
market led the world, as investors responded positively to changes in that
nation's banking and business practices. Early in the twelve-month period, the
Fund had less of a weighting in Japan (relative to its benchmark, the MSCI EAFE
Index) and did not participate as fully as it might have in this rally. As the
year progressed, the allocation to Japanese stocks increased (though it remains
below the benchmark) and benefited the Fund's performance. A growing emphasis on
European stocks as the year progressed also helped contribute to the substantial
year-to-year increase in total return. Markets in the industrialized nations of
Europe gained strength, especially during the final six months. A new European
currency, the euro, and united action against potential inflationary pressures
helped to bring stability on the continent. This, in turn, boosted the current
results and the prospects for companies there, including those focused on three
of the Fund's major investment themes: new technology, restructuring (e.g.,
consumer products, luxury goods) and aging (e.g., banks and other asset
gatherers). The Fund's portfolio holdings, allocations and 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 each class of shares of the
Fund held until November 30, 1999. 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 maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B and Class C shares, and
reinvestments of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International (MSCI) EAFE Index, an unmanaged index of the performance
of securities listed on 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 income but does not
consider the effect of 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.
7 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
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FUND PERFORMANCE
================================================================================
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer International Growth Fund (Class A)
and MSCI EAFE Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International
Date Growth Fund Class A MSCI EAFE Index
03/25/96 9,425 10,000
11/30/96 11,065 10,462
11/30/97 13,544 10,449
11/30/98 14,461 12,202
11/30/99 19,568 14,816
Average Annual Total Return of Class A Shares of the Fund at 11/30/99(1)
1-Year 27.53% Life 20.01%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer International Growth Fund (Class B)
and MSCI EAFE Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International
Date Growth Fund Class B MSCI EAFE Index
03/25/96 10,000 10,000
11/30/96 11,650 10,462
11/30/97 14,150 10,449
11/30/98 14,992 12,202
11/30/99 19,837 14,816
Average Annual Total Return of Class B Shares of the Fund at 11/30/99(1)
1-Year 29.32% Life 20.45%
8 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer International Growth Fund (Class C)
and MSCI EAFE Index
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer International
Date Growth Fund Class C MSCI EAFE Index
03/25/96 10,000 10,000
11/30/96 11,660 10,462
11/30/97 14,170 10,449
11/30/98 15,012 12,202
11/30/99 20,158 14,816
Average Annual Total Return of Class C Shares of the Fund at 11/30/99(1)
1-Year 33.28% Life 20.98%
The performance information for the MSCI EAFE Index in the graphs begins on
3/31/96.
(1) See page 10 for further details.
Past performance is not predictive of future performance.
9 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
NOTES
================================================================================
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 of ongoing
market volatility, 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.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
Class A shares of the Fund were first publicly offered on 3/25/96. Class A
returns include the current maximum initial sales charge of 5.75%.
Class B shares of the Fund were first publicly offered on 3/25/96. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 3% (since inception). The ending account value shown in the graph is net of
the applicable 3% contingent deferred sales charge. Class B shares are subject
to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 3/25/96. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class 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.
10 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
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Financials
11 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENT OF INVESTMENTS November 30, 1999
================================================================================
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
====================================================================================
<S> <C> <C>
Common Stocks--105.1%
- ------------------------------------------------------------------------------------
Capital Goods--8.2%
- ------------------------------------------------------------------------------------
Aerospace/Defense--1.1%
Embraer-Empresa Brasileira de Aeronautica SA, Preference 1,533,000 $ 4,828,032
- ------------------------------------------------------------------------------------
Electrical Equipment--0.8%
Halma plc 2,032,100 3,527,813
- ------------------------------------------------------------------------------------
Industrial Services--4.1%
Aegis Group plc 3,083,600 8,840,250
- ------------------------------------------------------------------------------------
Bellsystem 24, Inc. 1,700 1,946,470
- ------------------------------------------------------------------------------------
Boskalis Westminster 253,103 4,128,560
- ------------------------------------------------------------------------------------
Falck AS 20,000 1,989,767
- ------------------------------------------------------------------------------------
ICTS International NV (1) 165,000 825,000
----------
17,730,047
- ------------------------------------------------------------------------------------
Manufacturing--2.2%
Sauer, Inc. 150,000 1,940,625
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Sidel SA 83,000 7,788,976
----------
9,729,601
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Communication Services--18.2%
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Telecommunications: Long Distance--13.6%
Altran Technologies SA 58,000 27,594,095
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Nippon Telegraph & Telephone Corp. 598 10,709,400
- ------------------------------------------------------------------------------------
Sonera Corp. 219,100 9,047,290
- ------------------------------------------------------------------------------------
Tandberg Television ASA(1) 516,000 6,720,834
- ------------------------------------------------------------------------------------
Tiscali SpA(1) 30,000 4,811,975
----------
58,883,594
- ------------------------------------------------------------------------------------
Telephone Utilities--3.7%
CCT Telecom Holdings Ltd.(1) 5,320,000 2,243,382
- ------------------------------------------------------------------------------------
DDI Corp. 330 4,553,506
- ------------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA, ADR 79,000 1,407,187
- ------------------------------------------------------------------------------------
Telefonica SA 128,520 2,676,132
- ------------------------------------------------------------------------------------
Telefonica SA, Bonus Shares(1) 2,570 53,514
- ------------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(2) 234,000 5,323,500
----------
16,257,221
- ------------------------------------------------------------------------------------
Telecommunications: Wireless--0.9%
Telecom Italia Mobile SpA 303,000 2,379,707
- ------------------------------------------------------------------------------------
Telesp Celular SA, Cl. B, Preference 35,400,000 1,715,822
----------
4,095,529
</TABLE>
12 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Consumer Cyclicals--11.5%
- --------------------------------------------------------------------------------
Autos & Housing--3.7%
Aucnet, Inc. 49,300 $ 4,342,125
- --------------------------------------------------------------------------------
Brazil Realty SA, GDR(3) 121,300 1,235,744
- --------------------------------------------------------------------------------
Ducati Motor Holding SpA(1) 1,141,000 3,090,468
- --------------------------------------------------------------------------------
IRSA Inversiones y Representaciones SA 1,363,718 4,337,057
- --------------------------------------------------------------------------------
Porsche AG, Preference 1,100 2,951,727
----------
15,957,121
- --------------------------------------------------------------------------------
Leisure & Entertainment--1.5%
Granada Group plc 375,549 3,080,405
- --------------------------------------------------------------------------------
Sony Music Entertainment (Japan), Inc. 22,000 3,401,673
----------
6,482,078
- --------------------------------------------------------------------------------
Media--4.6%
Lusomundo SGPS SA(1) 303,579 4,416,985
- --------------------------------------------------------------------------------
Naspers Ltd., N Shares 581,800 5,182,024
- --------------------------------------------------------------------------------
Reed International plc 1,000,000 6,251,348
- --------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 214,000 4,012,500
----------
19,862,857
- --------------------------------------------------------------------------------
Retail: Specialty--0.9%
Dixons Group plc 182,482 3,970,130
- --------------------------------------------------------------------------------
Textile/Apparel & Home Furnishings--0.8%
Gucci Group NV, NY Registered Shares 41,000 3,413,250
- --------------------------------------------------------------------------------
Consumer Staples--15.2%
- --------------------------------------------------------------------------------
Beverages--0.5%
Allied Domecq plc 406,050 2,158,414
- --------------------------------------------------------------------------------
Broadcasting--5.2%
Canal Plus 104,000 8,597,315
- --------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1) 165,000 8,054,062
- --------------------------------------------------------------------------------
ProSieben Media AG, Preference 120,000 5,594,336
- --------------------------------------------------------------------------------
PT MULTIMEDIA--Servicos de Telecomunicacoes
e Multimedia SGPS SA(1) 10,600 417,533
----------
22,663,246
- --------------------------------------------------------------------------------
Entertainment--6.7%
Imagineer Co. Ltd. 75,000 1,570,681
- --------------------------------------------------------------------------------
Infogrames Entertainment SA(1) 66,300 8,411,441
- --------------------------------------------------------------------------------
Nintendo Co. Ltd. 74,500 12,401,478
- --------------------------------------------------------------------------------
Village Roadshow Ltd., Cl. A, Preference 3,615,285 6,802,781
----------
29,186,381
13 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENT OF INVESTMENTS Continued
================================================================================
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------
<S> <C> <C>
Household Goods--1.1%
Wella AG, Preference 208,000 $ 5,005,501
- ----------------------------------------------------------------------------------
Tobacco--1.7%
Cie Financiere Richemont AG, A Units 3,250 7,252,184
- ----------------------------------------------------------------------------------
Energy--0.8%
- ----------------------------------------------------------------------------------
Energy Services--0.8%
Expro International Group plc 605,000 3,276,184
- ----------------------------------------------------------------------------------
Financial--5.5%
- ----------------------------------------------------------------------------------
Banks--4.1%
Banco Espirito Santo SA 132,500 3,308,673
- ----------------------------------------------------------------------------------
Espirito Santo Financial Group, ADR 234,700 3,711,194
- ----------------------------------------------------------------------------------
Julius Baer Holding AG, Cl. B 1,135 3,388,805
- ----------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR 307,300 7,240,756
----------
17,649,428
- ----------------------------------------------------------------------------------
Insurance--1.4%
AXA SA 29,500 3,977,305
- ----------------------------------------------------------------------------------
Ockham Holdings plc 1,460,000 1,999,794
----------
5,977,099
- ----------------------------------------------------------------------------------
Healthcare--14.0%
- ----------------------------------------------------------------------------------
Healthcare/Drugs--8.0%
Biocompatibles International plc(1) 2,512,585 12,359,361
- ----------------------------------------------------------------------------------
Eisai Co. Ltd. 323,000 7,143,710
- ----------------------------------------------------------------------------------
Elan Corp. plc, ADR(1) 157,140 4,301,707
- ----------------------------------------------------------------------------------
Genset, Sponsored ADR(1) 234,300 2,343,000
- ----------------------------------------------------------------------------------
Nicox SA(1) 71,600 1,802,351
- ----------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(2) 291,650 3,521,674
- ----------------------------------------------------------------------------------
QIAGEN NV 48,000(1) 3,286,522
----------
34,758,325
- ----------------------------------------------------------------------------------
Healthcare/Supplies & Services--6.0%
Nichii Gakkan Co. 44,250 9,098,131
- ----------------------------------------------------------------------------------
Novogen Ltd.(1) 2,004,300 3,949,814
- ----------------------------------------------------------------------------------
Ortivus AB, Cl. B(1)(4) 551,400 2,789,107
- ----------------------------------------------------------------------------------
PowderJect Pharmaceuticals plc(1) 331,000 5,234,934
- ----------------------------------------------------------------------------------
SkyePharma plc(1) 5,334,100 4,842,504
----------
25,914,490
</TABLE>
14 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------------------
<S> <C> <C>
Technology--29.6%
- ---------------------------------------------------------------------------------
Computer Services--9.8%
Cap Gemini SA 25,500 $ 4,508,697
- ---------------------------------------------------------------------------------
Computer Services Solutions Holding NV 285,900 5,354,432
- ---------------------------------------------------------------------------------
Equant NV, NY Registered Shares(1) 44,500 4,194,125
- ---------------------------------------------------------------------------------
Getronics NV 318,060 19,455,468
- ---------------------------------------------------------------------------------
Icon Medialab International AB(1) 51,900 5,647,277
- ---------------------------------------------------------------------------------
Unit 4(1) 160,000 3,302,632
-----------
42,462,631
- ---------------------------------------------------------------------------------
Computer Software--10.2%
Lernout & Hauspie Speech Products NV(1) 78,300 2,946,038
- ---------------------------------------------------------------------------------
Misys plc 563,199 6,099,648
- ---------------------------------------------------------------------------------
Psion plc 401,900 16,412,321
- ---------------------------------------------------------------------------------
SAP AG, Preference 28,600 11,492,155
- ---------------------------------------------------------------------------------
Solution 6 Holdings Ltd.(1) 1,026,300 7,241,850
-----------
44,192,012
- ---------------------------------------------------------------------------------
Communications Equipment--2.1%
Telefonaktiebolaget LM Ericsson, Cl. B, Sponsored ADR 193,200 9,309,825
- ---------------------------------------------------------------------------------
Electronics--7.5%
Hoya Corp. 56,000 4,055,390
- ---------------------------------------------------------------------------------
Racal Electronic plc 789,800 6,594,617
- ---------------------------------------------------------------------------------
Sony Corp. 42,000 7,768,263
- ---------------------------------------------------------------------------------
STMicroelectronics NV, NY Registered Shares 50,000 6,243,750
- ---------------------------------------------------------------------------------
Thomson Multimedia(1) 183,400 7,940,615
-----------
32,602,635
- ---------------------------------------------------------------------------------
Transportation--2.1%
- ---------------------------------------------------------------------------------
Shipping--2.1%
MIF Ltd.(1,3) 204,400 3,803,262
- ---------------------------------------------------------------------------------
Smit Internationale NV, CVA 241,315 5,272,668
-----------
9,075,930
-----------
Total Common Stocks (Cost $343,198,471) 456,221,558
</TABLE>
15 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENT OF INVESTMENTS Continued
================================================================================
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
======================================================================================================
<S> <C> <C>
Preferred Stocks--1.6%
Ceres, Inc., Preferred Callable Stocks(3) 600,000 $ 2,400,000
- ------------------------------------------------------------------------------------------------------
Fresenius Medical Care AG, Preferred 112,200 4,744,915
---------
Total Preferred Stocks (Cost $6,937,950) 7,144,915
<CAPTION>
Units
======================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.1%
Biocompatibles International plc Wts., Exp. 12/15/99 (Cost $18,020) 309,827 296,077
- ------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $350,154,441) 106.8% 463,662,550
- ------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (6.8) (29,418,313)
-----------------------
Net Assets 100.0% $ 434,244,237
=======================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent
- --------------------------------------------------------------------------------
Great Britain $ 84,943,797 18.4%
France 79,207,545 17.1
Japan 66,990,825 14.4
The Netherlands 45,819,407 9.9
Germany 29,788,635 6.4
Australia 17,994,444 3.9
Sweden 17,746,209 3.8
Brazil 16,427,542 3.5
Italy 13,695,401 3.0
Portugal 11,854,385 2.6
Switzerland 10,640,989 2.3
Norway 10,524,096 2.3
Finland 9,047,290 2.0
Mexico 8,054,063 1.7
India 5,323,500 1.1
South Africa 5,182,024 1.1
United States 4,340,625 0.9
Argentina 4,337,057 0.9
Ireland 4,301,708 0.9
Singapore 4,012,500 0.9
Croatia 3,521,674 0.8
Belgium 2,946,038 0.6
Spain 2,729,647 0.6
Hong Kong 2,243,382 0.5
Denmark 1,989,767 0.4
-------------------------------
Total $463,662,550 100.0%
===============================
16 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS 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 $8,845,174 or 2.04% of the Fund's net
assets as of November 30, 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 November 30, 1999.
The aggregate fair value of securities of affiliated companies held by the Fund
as of November 30, 1999, amounts to $2,789,107. Transactions during the period
in which the issuer was an affiliate are as follows:
Shares Shares
November 30, Gross Gross November 30,
1998 Additions Reductions 1999
- --------------------------------------------------------------------------------
ICTS International NV* 375,000 -- 210,000 165,000
Lusomundo SGPS SA* 382,000 -- 78,421 303,579
Ortivus AB, Cl. B** 501,400 50,000 -- 551,400
* Not an affiliate as of November 30, 1999
** Not an affiliate as of November 30, 1998
See accompanying Notes to Financial Statements.
17 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES November 30, 1999
================================================================================
================================================================================
Assets
- -------------------------------------------------------------------------------
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $341,868,696) $ 460,873,443
Affiliated companies (cost $8,285,745) 2,789,107
- -------------------------------------------------------------------------------
Cash--foreign currency (cost $344,463) 344,463
- -------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,050,119
Interest and dividends 920,446
Other 7,893
-------------
Total assets 465,985,471
===============================================================================
Liabilities
- -------------------------------------------------------------------------------
Bank overdraft 19,796,969
- -------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 20,006
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 6,205,301
Shares of beneficial interest redeemed 5,194,752
Transfer and shareholder servicing agent fees 143,423
Distribution and service plan fees 142,286
Trustees' compensation 61,419
Other 177,078
-------------
Total liabilities 31,741,234
===============================================================================
Net Assets $ 434,244,237
=============
===============================================================================
Composition of Net Assets
- -------------------------------------------------------------------------------
Paid-in capital $ 316,447,185
- -------------------------------------------------------------------------------
Overdistributed net investment income (59,065)
- -------------------------------------------------------------------------------
Accumulated net realized gain on
investments and foreign currency transactions 4,318,482
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments and
translation of assets and liabilities
denominated in foreign currencies 113,537,635
-------------
Net assets $ 434,244,237
=============
18 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
=======================================================================================
<S> <C>
Net Asset Value Per Share
- --------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $208,980,880 and 10,875,151 shares of beneficial interest outstanding) $19.22
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $20.39
- --------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$176,020,999 and 9,388,170 shares of beneficial interest outstanding) $18.75
- --------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$49,242,358 and 2,623,438 shares of beneficial interest outstanding) $18.77
</TABLE>
See accompanying Notes to Financial Statements.
19 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended November 30, 1999
================================================================================
<TABLE>
<CAPTION>
========================================================================================
<S> <C>
Investment Income
- ----------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $383,610) $4,984,013
- ----------------------------------------------------------------------------------------
Interest 155,484
-----------
Total income 5,139,497
========================================================================================
Expenses
- ----------------------------------------------------------------------------------------
Management fees 2,888,430
- ----------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 426,752
Class B 1,451,083
Class C 396,071
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 1,177,504
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 377,585
- ----------------------------------------------------------------------------------------
Shareholder reports 271,380
- ----------------------------------------------------------------------------------------
Other 95,238
-----------
Total expenses 7,084,043
Less expenses paid indirectly (2,963)
-----------
Net expenses 7,081,080
========================================================================================
Net Investment Loss (1,941,583)
========================================================================================
Realized and Unrealized Gain (Loss)
- ----------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments:
Unaffiliated companies 16,247,738
Affiliated companies (281,649)
Foreign currency transactions (8,212,091)
-----------
Net realized gain 7,753,998
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 122,751,680
Translation of assets and liabilities denominated in foreign currencies (10,260,633)
-----------
Net change 112,491,047
-----------
Net realized and unrealized gain 120,245,045
========================================================================================
Net Increase in Net Assets Resulting from Operations $118,303,462
============
</TABLE>
See accompanying Notes to Financial Statements.
20 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Year Ended November 30, 1999 1998
=================================================================================================
<S> <C> <C>
Operations
- -------------------------------------------------------------------------------------------------
Net investment income (loss) $(1,941,583) $232,417
- -------------------------------------------------------------------------------------------------
Net realized gain 7,753,998 19,125,853
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 112,491,047 (11,043,346)
-----------------------------
Net increase in net assets resulting from operations 118,303,462 8,314,924
=================================================================================================
Dividends and/or Distributions to Shareholders
- -------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (1,612,367) --
Class B (254,658) --
Class C (67,795) --
- -------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,482,138) (1,923,099)
Class B (7,304,835) (1,435,063)
Class C (1,902,453) (354,072)
=================================================================================================
Beneficial Interest Transactions
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A (26,426,483) 59,959,570
Class B (3,877,361) 51,650,994
Class C 1,107,177 14,355,929
=================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------
Total increase 68,482,549 130,569,183
- ------------------------------------------------------------------------------------------------
Beginning of period 365,761,688 235,192,505
-----------------------------
End of period [including undistributed (overdistributed)
net investment income of $(59,065) and $1,849,052, respectively] $434,244,237 $365,761,688
=============================
</TABLE>
See accompanying Notes to Financial Statements.
21 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
<TABLE>
<CAPTION>
Class A Year Ended November 30, 1999 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) (.02) .05 (.05)(2) (.01)
Net realized and unrealized gain 5.02 .91 2.68(2) 1.75
------------------------------------------------------
Total income from
investment operations 5.00 .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 $19.22 $15.11 $14.37 $11.74
======================================================
==========================================================================================================
Total Return, at Net Asset Value(3) 35.31% 6.78% 22.40% 17.40%
- ----------------------------------------------------------------------------------------------------------
==========================================================================================================
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $208,981 $186,859 $122,720 $16,918
- ----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $180,719 $175,022 $66,156 $8,992
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.15)% 0.44% (0.36)% (0.26)%
Expenses 1.55% 1.40%(5) 1.78%(5) 1.88%(5)
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 75% 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 for periods of less than one full year.
(5) 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, 1999, were $277,140,513 and $285,822,706, respectively.
See accompanying Notes to Financial Statements.
22 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
<TABLE>
<CAPTION>
Class B Year Ended November 30, 1999 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) (.14) (.03) (.12)(2) (.10)
Net realized and unrealized gain 4.92 .86 2.62(2) 1.75
-----------------------------------------------------
Total income from
investment operations 4.78 .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 distributions
to shareholders (.79) (.22) -- --
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $18.75 $14.76 $14.15 $11.65
=====================================================
=========================================================================================================
Total Return, at Net Asset Value(3) 34.32% 5.95% 21.46% 16.50%
- ---------------------------------------------------------------------------------------------------------
=========================================================================================================
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $176,021 $142,127 $90,565 $8,673
- ---------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $145,203 $125,772 $45,553 $3,628
- ---------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.91)% (0.34)% (1.14)% (1.46)%
Expenses 2.31% 2.18%(5) 2.56%(5) 2.84%(5)
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 75% 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 for periods of less than one full year.
(5) 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, 1999, were $277,140,513 and $285,822,706, respectively.
See accompanying Notes to Financial Statements.
23 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS Continued
================================================================================
<TABLE>
<CAPTION>
Class C Year Ended November 30, 1999 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) (.13) (.03) (.13)(2) (.09)
Net realized and unrealized gain 4.91 .86 2.64(2) 1.75
---------------------------------------------------------
Total income from
investment operations 4.78 .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 $18.77 $14.78 $14.17 $11.66
=========================================================
============================================================================================================
Total Return, at Net Asset Value(3) 34.28% 5.94% 21.53% 16.60%
- ------------------------------------------------------------------------------------------------------------
============================================================================================================
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $49,242 $36,776 $21,908 $2,149
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $39,641 $32,460 $10,864 $938
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.92)% (0.34)% (1.18)% (1.48)%
Expenses 2.32% 2.17%(5) 2.55%(5) 2.82%(5)
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 75% 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 for periods of less than one full year.
(5) 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, 1999, were $277,140,513 and $285,822,706, respectively.
See accompanying Notes to Financial Statements.
24 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
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's investment advisor is OppenheimerFunds, Inc.
(the Manager).
The Fund offers Class A, Class B and Class C shares. Class A shares are
sold at their offering price, which is normally net asset value plus an initial
sales charge. Class B and Class C shares are sold without an initial sales
charge but 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 expenses directly attributable to that class and
exclusive voting rights with respect to matters affecting that class. Classes A,
B and C have separate distribution and/or service plans. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities 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 Directors. 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 Directors 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.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
- --------------------------------------------------------------------------------
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.
25 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENT Continued
================================================================================
================================================================================
1. Significant Accounting Policies Continued
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, 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' 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 year ended
November 30, 1999, a provision of $2,660 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 $59,065 as of November 30, 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 compensation 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.
26 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
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. The character of 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, 1999, amounts have been reclassified to reflect a
decrease in overdistributed net investment income of $1,968,286. Accumulated net
realized gain on investments was decreased by the same amount.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable 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.
27 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
================================================================================
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, 1999 Year Ended November 30, 1998
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 28,386,105 $443,398,379 18,467,865 $286,589,304
Dividends and/or
distributions reinvested 755,138 10,481,320 128,681 1,855,568
Redeemed (30,634,400) (480,306,182) (14,770,487) (228,485,302)
--------------------------------------------------------------
Net increase (decrease) (1,493,157) $(26,426,483) 3,826,059 $59,959,570
==============================================================
- -------------------------------------------------------------------------------------------
Class B
Sold 5,389,439 $81,564,985 6,056,317 $93,527,036
Dividends and/or
distributions reinvested 535,401 7,308,215 97,718 1,387,772
Redeemed (6,163,506) (92,750,561) (2,926,466) (43,263,814)
--------------------------------------------------------------
Net increase (decrease) (238,666) $(3,877,361) 3,227,569 $51,650,994
==============================================================
- -------------------------------------------------------------------------------------------
Class C
Sold 9,122,829 $139,300,660 6,214,051 $93,630,903
Dividends and/or
distributions reinvested 137,399 1,876,855 23,895 339,786
Redeemed (9,124,669) (140,070,338) (5,296,238) (79,614,760)
--------------------------------------------------------------
Net increase 135,559 $1,107,177 941,708 $14,355,929
==============================================================
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of November 30, 1999, net unrealized appreciation on securities of
$113,508,108 was composed of gross appreciation of $137,573,855, and gross
depreciation of $24,065,747.
28 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. 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 of the Fund, 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, 1999, was 0.79% of average annual
net assets for each class of shares.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
November 30, 1999 $732,494 $208,769 $174,092 $883,662 $120,524
</TABLE>
(1) The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
November 30, 1999 $99,158 $473,644 $23,122
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
29 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
================================================================================
4. Management Fees and Other Transactions with Affiliates Continued
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares. The Distributor makes payments to plan recipients quarterly at an annual
rate not to exceed 0.25% of the average annual net assets consisting of Class A
shares of the Fund. For the fiscal year ended November 30, 1999, payments under
the Class A Plan totaled $426,752, all of which was paid by the Distributor to
recipients. That included $44,002 paid to an affiliate of the Distributor's
parent company. Any unreimbursed expenses the Distributor incurs with respect to
Class A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and from the Fund under the plans. If either the
Class B or the Class C plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended November 30, 1999,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $1,451,083 $1,189,880 $3,686,324 2.09%
Class C Plan 396,071 180,142 425,149 0.86
</TABLE>
30 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuations. 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 cont racts are noted in the Statement of
Investments where applicable.
As of November 30, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract Valuation as of Unrealized
Contract Description Expiration Date Amount (000s) November 30, 1999 Appreciation
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
Euro (EUR) 12/30/99 EUR 5,707 $5,760,805 $20,006
=======
</TABLE>
================================================================================
6. Illiquid and Restricted Securities
As of November 30, 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 also
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 limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of November 30, 1999,
was $7,439,006, which represents 1.71% 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 Unit as of
Security Acquisition Date Cost Per Unit November 30, 1999
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Stocks and Warrants
Ceres, Inc., Preferred Callable Stocks 1/6/99 $ 4.00 $ 4.00
</TABLE>
31 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
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 0.45%. 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 0.08%
per annum.
The Fund had no borrowings outstanding during the year ended November 30,
1999.
32 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
INDEPENDENT AUDITORS' REPORT
================================================================================
================================================================================
To the Board of Trustees and Shareholders of
Oppenheimer International Growth Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer International Growth Fund as of
November 30, 1999, 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 three-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, 1999, 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, 1999, 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 three-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 20, 1999
33 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
================================================================================
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $0.8845, $0.7828 and $0.7834 per share were paid to Class
A, Class B and Class C shareholders, respectively, on December 15, 1998, of
which $0.0473 was designated as a "capital gain distribution" for federal income
tax purposes. Whether received in stock or in cash, the capital gain
distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended November 30, 1999,
which are not designated as capital gain distributions should be multiplied by
1.19% 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.
34 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
Phillip A. Griffiths, 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
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================
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
================================================================================
Legal Counsel Mayer, Brown & Platt
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.
35 OPPENHEIMER INTERNATIONAL GROWTH FUND
<PAGE>
================================================================================
OPPENHEIMERFUNDS FAMILY
================================================================================
================================================================================
Global Equity
- --------------------------------------------------------------------------------
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
================================================================================
Equity
- --------------------------------------------------------------------------------
Stock Stock & Bond
Enterprise Fund(1) Main Street(R)
Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R)Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
================================================================================
Fixed Income
- --------------------------------------------------------------------------------
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California
Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York
Municipal Fund
================================================================================
Money Market(4)
- --------------------------------------------------------------------------------
Money Market Fund Cash Reserves
(1) Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
(2) On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
(3) Available to investors only in certain states.
(4) An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
36 OPPENHEIMER INTERNATIONAL GROWTH FUND
