<PAGE> 1
[PHOTO]
ANNUAL REPORT AUGUST 31, 2000
OPPENHEIMER
DEVELOPING MARKETS FUND
[OPPENHEIMERFUNDS(R) LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
REPORT HIGHLIGHTS
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Manager
8 Fund Performance
14 FINANCIAL
STATEMENTS
33 INDEPENDENT
AUDITORS' REPORT
34 Federal
Income Tax
Information
35 Officers and Trustees
ONGOING RECOVERY IN EMERGING MARKETS IS a reflection of robust economic growth
around the world.
IMPROVING ECONOMIC CONDITIONS IN LATIN AMERICA led us to a number of compelling
opportunities.
THE RAPID GROWTH OF TECHNOLOGY IS allowing many emerging-market countries to
enter the global marketplace.
AVERAGE ANNUAL
TOTAL RETURNS*
For the 1-Year Period
Ended 8/31/00
Class A
Without With
Sales Chg. Sales Chg.
----------------------------
49.12% 40.55%
Class B
Without With
Sales Chg. Sales Chg.
----------------------------
48.20% 43.20%
Class C
Without With
Sales Chg. Sales Chg.
----------------------------
47.93% 46.93%
* SEE NOTES ON PAGE 12 FOR FURTHER DETAILS.
<PAGE> 3
PRESIDENT'S LETTER
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Developing Markets Fund
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace
of global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has
prompted the Treasury to buy back many of its long-term securities. The
resulting supply shortage boosted these securities' returns, causing an
inversion of the yield curve-- an unusual situation in which shorter term
Treasuries yield more than their longer term counterparts. Other bond sectors
are offering many opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in
the stock market. Formerly high-flying Internet stocks have generally come down
to earth, and investors have begun to refocus on companies with strong business
fundamentals and justifiable valuations. Investors have also returned to
long-neglected, value-oriented companies.
1 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 4
PRESIDENT'S LETTER
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor and
to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
September 22, 2000
THESE GENERAL MARKET VIEWS REPRESENT OPINIONS OF OPPENHEIMERFUNDS, INC. AND ARE
NOT INTENDED TO PREDICT OR DEPICT PERFORMANCE OF THE SECURITIES MARKETS OR ANY
PARTICULAR FUND. SPECIFIC DISCUSSION, AS IT APPLIES TO YOUR FUND, IS CONTAINED
IN THE PAGES THAT FOLLOW. STOCKS AND BONDS HAVE DIFFERENT TYPES OF INVESTMENT
RISKS; STOCKS ARE SUBJECT TO MARKET VOLATILITY AND BONDS ARE SUBJECT TO CREDIT
AND INTEREST RATE RISKS.
2 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 5
AN INTERVIEW WITH YOUR FUND'S MANAGER
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Frank Jennings
Rajeev Bhaman
(Portfolio Manager)
Q HOW DID OPPENHEIMER DEVELOPING MARKETS FUND PERFORM DURING THE ONE YEAR THAT
ENDED AUGUST 31, 2000?
The Fund performed exceptionally well during the fiscal year, as economic
recovery in emerging markets continued to gain momentum. In fact, Lipper
Analytical Services ranked the Fund's Class A shares #4 of 188 and #1 of 134
emerging market funds for the one- and three-year periods ended September 30,
2000, respectively.(1) Furthermore, for the three-year period ended September
30, 2000, the Fund's Class A shares received a 3-star (***) rating from
Morningstar, Inc.(2)
No matter how positive the economic backdrop, performance of this caliber
still relies on strong stock selection. Once again, our strategy of identifying
powerful growth trends--such as new technologies, mass affluence and corporate
restructuring--and the companies likely to benefit from these trends, proved
highly successful. By focusing on companies in good businesses with strong
management, then purchasing them when we believed these companies were
temporarily "out of favor," we delivered sizable gains for many shareholders.
WHAT IS BEHIND THE ONGOING RECOVERY IN EMERGING MARKETS?
Basically, it's a reflection of robust economic growth around the world. In the
latter half of 1999, economies in both developed and emerging markets began
growing more vigorously than
1. Lipper rankings are based on the comparisons of changes in net asset values
without considering sales charges, and with dividends and capital gains
distributions reinvested. The Fund's Class A shares were ranked 4 of 188
(one-year) and 1 of 134 (three-year) among emerging markets funds for the
periods ended 9/30/00.
2. Morningstar, Inc. rates mutual funds in broad investment classes, based on
risk adjusted returns after considering sales charges and expenses. Return and
risk are measured as performance above and below 90-day U.S. Treasury bill
returns, respectively. Current star ratings are based on the weighted average of
3-, 5- and 10-year (if applicable) ratings for a fund or class and are subject
to change monthly. The Fund's Class A shares were rated 3 stars (3-year) among
1,175 international equity funds. A fund's Morningstar rating is a relative
ranking of the fund within its peer group and does not necessarily mean that the
fund had high total returns.
3 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 6
AN INTERVIEW WITH YOUR FUND'S MANAGER
"Once again, our strategy of identifying powerful growth trends and the
companies likely to benefit proved highly successful."
most economists and investors had expected. The United States, in particular,
was a primary driver, serving as a profitable export market for companies in
Latin America, Asia and Emerging Europe. As companies in these regions produced
goods and services to satisfy increased demand overseas, local economic
conditions improved dramatically.
WHERE ARE YOU FINDING THE MOST ATTRACTIVE OPPORTUNITIES?
The mix of countries represented in the portfolio is solely an outgrowth of our
company-by-company investment process. At the same time, it's fair to say that
improving economic conditions in Latin America have led us to a number of
compelling opportunities in the region, including several that have been major
contributors to the Fund's strong results.
Brazil, in particular, has rallied nicely from the devaluation of its
currency in early 1999. Typically saddled with high interest rates and high
inflation, Brazil has embarked on an ambitious program to lower both. In
addition, the government has made significant strides in instituting financial
reforms mandated by the International Monetary Fund, setting the stage for
further economic expansion.
Mexico, as well, is an exciting story. By getting its monetary house in
order, Mexico earned an upgrade on its sovereign (i.e., foreign government) debt
to investment grade this past February. The recent election of Vicente Fox
Quesada as Mexico's president, unseating the world's longest ruling political
party, also bodes well for the Mexican economy. We see this event as a sign that
Mexico will continue to open its markets to the world and expand its efforts to
contain inflation. Furthermore, the growth of the Mexican middle class is
fostering increased demand for consumer goods. All of this is contributing to a
rebound in investor confidence, making Mexico a market to watch.
4 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 7
AVERAGE ANNUAL
TOTAL RETURNS(3)
For the Periods Ended 9/30/00(3)
Class A Since
1-Year Inception
----------------------------------
31.99% 13.17%
Class B Since
1-Year Inception
----------------------------------
34.10% 13.51%
Class C Since
1-Year Inception
----------------------------------
37.96% 14.04%
WHAT'S YOUR OPINION ON PROSPECTS FOR ASIA?
Asia, on the whole, is still a work in progress. The area has been slow to
recover from its economic malaise, and recovery has been limited to South Korea
and Malaysia. Although both are benefiting from exports of computers and
semiconductors, we have largely avoided exposure in those markets. Generally
speaking, we find that corporate management in the region is not yet
sufficiently committed to enhancing long-term shareholder value.
That said, we've found a number of interesting opportunities in India.
Previously, direct investment in India was difficult, due to tight government
regulation. However, over the last two years, the government has instituted
reforms that should make foreign investment easier. In this increasingly
business-friendly environment, India's technology industry should begin to
flourish as more businesses are established at home rather than abroad. Given
India's highly educated population and burgeoning use of the Internet, we have
positioned the Fund to capitalize on this early stage of what could be enormous
potential.
WHAT INDIVIDUAL COMPANIES CONTRIBUTED TO THE FUND'S PERFORMANCE?
Several of our top holdings turned in impressive performance. Brazil-based
Empresa Brasileira de Aeronautica SA (Embraer), Preference is one of the world's
leading manufacturers of small jets for the regional airline market. This
business has met with success among large U.S. and European carriers. Grupo
Televisa SA, Sponsored GDR, a Mexican media company, is the parent of Univision,
a U.S. Spanish-speaking television network that has experienced market share
gains. Icici Ltd., Sponsored ADR, an Indian insurance company, continued to
impress investors with its strong management and technology.
3. See PAGE 12 for further details.
5 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 8
AN INTERVIEW WITH YOUR FUND'S MANAGER
<TABLE>
<CAPTION>
REGIONAL
ALLOCATION(4)
<S> <C>
- Latin America 36.4%
- Asia 33.6
- Middle East/
Africa 11.8
- Emerging
Europe 10.9
- United States 5.1
- Europe 2.2
</TABLE>
As for detractors, Bharat Petroleum Corp. Ltd., also India-based, declined
due to uncertainty about the ownership and management of the company.
As always, please keep in mind that investing in foreign securities, and
developing markets in particular, entails additional expenses and risks,
including foreign currency fluctuation.
WHAT IS YOUR OUTLOOK FOR THE NEAR FUTURE?
The emerging markets are transforming into consumer-driven economies at an
incredibly fast rate. The breakdown of autocratic governments and the rapid
proliferation of technology are allowing many of these countries to enter the
global marketplace, creating new opportunities for investors. Of course, with
these opportunities comes greater risk. To help address the hazards of investing
in these markets, we rely on rigorous fundamental research to identify the best
companies, then hold them over the long term as they achieve their potential.
Finding compelling long-term opportunities is what makes Oppenheimer Developing
Markets Fund an important part of The Right Way to Invest.
4. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are based on total market value of investments.
6 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 9
<TABLE>
<CAPTION>
TOP TEN GEOGRAPHIC DIVERSIFICATION HOLDINGS(4)
--------------------------------------------------------------------------------
<S> <C>
Brazil 21.5%
--------------------------------------------------------------------------------
India 17.7
--------------------------------------------------------------------------------
Mexico 13.0
--------------------------------------------------------------------------------
Hong Kong 5.5
--------------------------------------------------------------------------------
Singapore 5.5
--------------------------------------------------------------------------------
Portugal 5.4
--------------------------------------------------------------------------------
United States 5.1
--------------------------------------------------------------------------------
Turkey 3.7
--------------------------------------------------------------------------------
Egypt 3.1
--------------------------------------------------------------------------------
Croatia 2.8
<CAPTION>
TOP TEN COMMON STOCK HOLDINGS(5)
--------------------------------------------------------------------------------
<S> <C>
Empresa Brasileira de Aeronautica SA (Embraer), Preference 7.2%
--------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar) 3.4
--------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR 3.1
--------------------------------------------------------------------------------
ICICI Ltd., Sponsored ADR 3.1
--------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR 2.8
--------------------------------------------------------------------------------
Bharat Petroleum Corp. Ltd. 2.7
--------------------------------------------------------------------------------
Cia Paranaense Energia, Sponsored ADR, Preference, B Shares 2.7
--------------------------------------------------------------------------------
Grupo Financiero Banorte SA de CV 2.3
--------------------------------------------------------------------------------
NIIT Ltd. 2.3
--------------------------------------------------------------------------------
Cheminor Drugs Ltd. 2.2
</TABLE>
4. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are based on total market value of investments.
5. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are based on net assets.
7 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 10
FUND PERFORMANCE
HOW HAS THE FUND PERFORMED?
Below is a discussion, by the Manager, of the Fund's performance during its
fiscal year ended August 31, 2000, followed by a graphical comparison of the
Fund's performance to an appropriate broad-based market index.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the Fund's fiscal year that ended
August 31, 2000, Oppenheimer Developing Markets Fund delivered impressive
performance. Robust economic growth worldwide fueled the ongoing recovery of
emerging markets, particularly those of Latin America. The Fund manager
continued to seek out companies in good businesses with strong management,
focusing on those most likely to benefit from key long-term growth trends. These
trends include new technologies, corporate restructuring, and mass affluence.
The mix of countries represented in the Fund is a result of this
company-by-company evaluation process rather than of any country allocation
target or goal. During the period, the Fund benefited from select investments in
Brazil, Mexico and India. Asian investments were limited, due to continued
economic uncertainty in the region. 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 Class A, Class B and Class C
shares of the Fund held from the commencement date of November 18, 1996, until
August 31, 2000. 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 reinvestment of all dividends and
capital gains distributions.
8 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 11
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International (MSCI) Emerging Markets Free Index, an unmanaged
capitalization-weighted equity index of issuers located in 25 developing
markets. The MSCI Emerging Markets Free Index is widely recognized as a measure
of performance in developing markets.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs shows the effect of taxes. The Fund's performance reflects the
effect 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 securities in the index shown.
9 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 12
FUND PERFORMANCE
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Morgan Stanley Capital
Oppenheimer Developing International (MSCI)
Markets Fund (Class A) Emerging Markets Free Index
<S> <C> <C>
9425 10000
9331 10156
11008 11336
11923 11275
12083 10467
10641 8636
11332 8969
11074 7918
7693 5141
9091 6515
8275 6345
10552 7909
11534 8671
13617 9300
18932 10648
16504 9236
17198 9061
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 8/31/00 (1)
1-Year 40.55% Life 15.40%
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Morgan Stanley Capital
Oppenheimer Developing International (MSCI)
Markets Fund (Class B) Emerging Markets Free Index
<S> <C> <C>
10000 10000
9900 10156
11650 11336
12580 11275
12730 10467
11190 8636
11886 8969
11593 7918
8039 5141
9491 6515
8617 6345
10978 7909
11962 8671
14101 9300
19586 10648
17039 9236
17429 9061
</TABLE>
Average Annual Total Return of Class B Shares of the Fund at 8/31/00 (1)
1-Year 43.20% Life 15.80%
THE PERFORMANCE INFORMATION IN THE GRAPHS FOR MSCI EMERGING MARKETS FREE
INDEX BEGINS ON 11/30/96.
1. See PAGE 12 for further details.
10 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 13
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
[The following table was originally a line graph in the printed materials.]
<TABLE>
<CAPTION>
Morgan Stanley Capital
Oppenheimer Developing International (MSCI)
Markets Fund (Class C) Emerging Markets Free Index
<S> <C> <C>
10000 10000
9900 10156
11660 11336
12590 11275
12740 10467
11190 8636
11895 8969
11602 7918
8042 5141
9497 6515
8622 6345
10985 7909
11980 8671
14109 9300
19582 10648
17031 9236
17723 9061
</TABLE>
Average Annual Total Return of Class C Shares of the Fund at 8/31/00 (1)
1-Year 46.93% Life 16.32%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
11 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 14
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. THE FUND'S RETURNS
AT 9/30/00 INCLUDE RESULTS FOR PERIODS OF EXCEPTIONAL MARKET PERFORMANCE THAT
ARE NOT TYPICAL OF HISTORICAL RESULTS. YOU SHOULD NOT EXPECT THOSE GROWTH RATES
TO CONTINUE. BECAUSE OF ONGOING MARKET VOLATILITY, THE FUND'S PERFORMANCE HAS
BEEN SUBJECT TO SUBSTANTIAL SHORT-TERM FLUCTUATIONS AND CURRENT PERFORMANCE MAY
BE LESS THAN THE RESULTS SHOWN. FOR QUARTERLY UPDATES ON THE FUND'S PERFORMANCE,
PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048 OR VISIT OUR
WEBSITE AT 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. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
CLASS A shares were first publicly offered on 11/18/96. Class A returns include
the current initial sales charge of 5.75%.
CLASS B shares were first publicly offered on 11/18/96. Class B returns include
the applicable contingent deferred sales charge 5% (1-year) and 3% (since
commencement). Class B shares are subject to a 0.75% annual asset-based sales
charge. The ending account value in the graph is net of the applicable 3%
contingent deferred sales charge.
CLASS C shares were first publicly offered on 11/18/96. Class C returns include
the contingent deferred sales charge of 1% for one-year period. Class C shares
are subject to a 0.75% annual asset-based sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
12 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 15
FINANCIALS
13 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 16
STATEMENT OF INVESTMENTS August 31, 2000
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
=====================================================================================================
<S> <C> <C>
COMMON STOCKS--94.9%
-----------------------------------------------------------------------------------------------------
BASIC MATERIALS--4.4%
-----------------------------------------------------------------------------------------------------
METALS--4.4%
Antofagasta plc 553,180 $ 3,565,605
-----------------------------------------------------------------------------------------------------
Caemi Mineracao e Metalurgia SA, Preference 16,300,000 2,329,211
-----------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B(1) 210,000 2,060,625
-----------
7,955,441
-----------------------------------------------------------------------------------------------------
CAPITAL GOODS--10.6%
-----------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--7.2%
Empresa Brasileira de Aeronautica SA (Embraer), Preference 1,900,000 12,917,285
-----------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--2.3%
Cia de Saneamento Basico do Estado de Sao Paulo 25,083,207 2,690,982
-----------------------------------------------------------------------------------------------------
Hyundai Heavy Industries Co. Ltd. 75,000 1,488,162
-----------
4,179,144
-----------------------------------------------------------------------------------------------------
MANUFACTURING--1.1%
Haci Omer Sabanci Holding AS, ADR, Registered S Shares 800,000 1,940,000
-----------------------------------------------------------------------------------------------------
COMMUNICATION SERVICES--8.9%
-----------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: LONG DISTANCE--2.7%
Videsh Sanchar Nigam Ltd. 82,150 1,456,426
-----------------------------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(2) 302,600 3,305,905
-----------
4,762,331
-----------------------------------------------------------------------------------------------------
TELEPHONE UTILITIES--5.0%
Tele Norte Leste Participacoes SA (Telemar) 305,222,897 6,122,911
-----------------------------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar), Preference 35,738,257 907,451
-----------------------------------------------------------------------------------------------------
Telecomunicacoes do Rio de Janeiro SA, Preference(1) 50,018,554 1,528,459
-----------------------------------------------------------------------------------------------------
Telefonica SA, BDR(1) 20,308 381,717
-----------
8,940,538
-----------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: WIRELESS--1.2%
Partner Communications Co. Ltd., Sponsored ADR(1) 180,750 1,717,125
-----------------------------------------------------------------------------------------------------
Telesp Celular Participacoes SA, Preference(1) 32,907,240 486,510
-----------
2,203,635
</TABLE>
14 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
=================================================================================================
<S> <C> <C>
CONSUMER CYCLICALS--14.6%
-------------------------------------------------------------------------------------------------
AUTOS & HOUSING--5.3%
Brazil Realty SA, GDR(3) 63,580 $ 898,068
-------------------------------------------------------------------------------------------------
Corporacion GEO SA de CV, Cl. B(1) 1,543,000 2,916,539
-------------------------------------------------------------------------------------------------
G. Accion SA de CV, Cl. B(1,3) 3,443,000 1,645,668
-------------------------------------------------------------------------------------------------
Madinet Nasr for Housing & Development Co. 220,000 1,528,421
-------------------------------------------------------------------------------------------------
Solidere, GDR(1,2) 360,900 2,445,098
-----------
9,433,794
-------------------------------------------------------------------------------------------------
CONSUMER SERVICES--0.4%
Art Marketing Syndicate SA(1) 52,830 632,298
-------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--2.3%
Danubius Hotel & Spa Rt. 77,300 1,443,631
-------------------------------------------------------------------------------------------------
Hongkong & Shanghai Hotels Ltd. (The) 4,177,000 2,624,248
-----------
4,067,879
-------------------------------------------------------------------------------------------------
MEDIA--5.3%
Hurriyet Gazetecilik ve Matbaacilik AS(1) 90,610,000 996,383
-------------------------------------------------------------------------------------------------
Impresa-Sociedade Gestora de Participacoes SA(1) 145,000 1,415,536
-------------------------------------------------------------------------------------------------
MacMillan India MC 21,500 408,674
-------------------------------------------------------------------------------------------------
Naspers Ltd., N Shares 170,000 1,557,978
-------------------------------------------------------------------------------------------------
Primedia Ltd., N Shares 845,600 727,659
-------------------------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 111,000 1,786,266
-------------------------------------------------------------------------------------------------
Times Publishing Ltd. 1,140,000 2,516,702
-----------
9,409,198
-------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--1.3%
Courts (Singapore) Ltd. 6,815,000 2,355,734
-------------------------------------------------------------------------------------------------
CONSUMER STAPLES--17.2%
-------------------------------------------------------------------------------------------------
BEVERAGES--2.4%
Cia Cervejaria Brahma, Sponsored ADR 169,200 3,510,900
-------------------------------------------------------------------------------------------------
Serm Suk Public Co. Ltd.(3) 300,000 697,248
-----------
4,208,148
-------------------------------------------------------------------------------------------------
BROADCASTING--7.6%
Grupo Radio Centro SA de CV, Sponsored ADR 322,100 2,919,031
-------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1) 85,900 5,562,025
-------------------------------------------------------------------------------------------------
LG Home Shopping, Inc. 20,000 2,020,293
-------------------------------------------------------------------------------------------------
Television Broadcasts Ltd. 333,000 1,882,900
-------------------------------------------------------------------------------------------------
Tiletipos SA 100,000 1,242,792
-----------
13,627,041
</TABLE>
15 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 18
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
=================================================================================================
<S> <C> <C>
ENTERTAINMENT--1.0%
Shaw Brothers (Hong Kong) Ltd. 2,000,000 $ 1,846,320
-------------------------------------------------------------------------------------------------
FOOD & DRUG RETAILERS--2.8%
Dairy Farm International Holdings Ltd. 4,142,100 1,905,366
-------------------------------------------------------------------------------------------------
Jeronimo Martins & Filho SA 160,000 2,284,631
-------------------------------------------------------------------------------------------------
PT Hero Supermarket Tbk(1) 4,916,000 904,568
-----------
5,094,565
-------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--2.5%
Grupo Casa Saba SA de CV, Sponsored ADR(1) 297,000 3,044,250
-------------------------------------------------------------------------------------------------
Hindustan Lever Ltd. 380 1,981
-------------------------------------------------------------------------------------------------
Marico Industries Ltd. 222,000 1,367,796
-----------
4,414,027
-------------------------------------------------------------------------------------------------
TOBACCO--0.9%
Eastern Tobacco Co. 80,000 1,684,438
-------------------------------------------------------------------------------------------------
ENERGY--2.7%
-------------------------------------------------------------------------------------------------
OIL: INTERNATIONAL--2.7%
Bharat Petroleum Corp. Ltd. 1,271,500 4,878,204
-------------------------------------------------------------------------------------------------
FINANCIAL--19.4%
-------------------------------------------------------------------------------------------------
BANKS--7.1%
BBV Banco BHIF, Sponsored ADR 123,600 1,807,650
-------------------------------------------------------------------------------------------------
Commercial International Bank, Sponsored GDR 238,000 2,272,900
-------------------------------------------------------------------------------------------------
Grupo Financiero Banorte SA de CV(1) 3,138,000 4,090,598
-------------------------------------------------------------------------------------------------
Grupo Financiero Inbursa SA de CV(1) 578,770 2,187,952
-------------------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR 68,000 2,312,000
-----------
12,671,100
-------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--7.6%
Administradora de Fondos de Pensiones Provida SA, Sponsored ADR 75,000 1,565,625
-------------------------------------------------------------------------------------------------
Espirito Santo Financial Group, ADR 160,550 3,130,725
-------------------------------------------------------------------------------------------------
Housing Development Finance Corp. Ltd. 272,800 3,140,746
-------------------------------------------------------------------------------------------------
ICICI Ltd., Sponsored ADR 390,375 5,514,047
-------------------------------------------------------------------------------------------------
Kotak Mahindra Finance Ltd.(1) 112,711 187,770
-----------
13,538,913
-------------------------------------------------------------------------------------------------
INSURANCE--4.7%
Adamjee Insurance Co. Ltd. 745,442 862,720
-------------------------------------------------------------------------------------------------
Aksigorta AS 140,298,000 2,678,424
-------------------------------------------------------------------------------------------------
Fubon Insurance Co., GDR 269,677 1,806,836
</TABLE>
16 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 19
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
=================================================================================================
<S> <C> <C>
INSURANCE Continued
Liberty Group Ltd.(1) 76,144 $ 709,840
-------------------------------------------------------------------------------------------------
Sanlam Ltd. 700,000 843,313
-------------------------------------------------------------------------------------------------
Towarzystwo Ubezpieczen i Reasekuracji Warta SA 48,263 1,441,343
-----------
8,342,476
-------------------------------------------------------------------------------------------------
HEALTHCARE--7.1%
-------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--7.1%
Cheminor Drugs Ltd. 420,608 3,979,097
-------------------------------------------------------------------------------------------------
Dr. Reddy's Laboratories Ltd. 61,750 1,788,214
-------------------------------------------------------------------------------------------------
Haw Par Healthcare Ltd. 1,362,000 1,194,806
-------------------------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(2) 473,900 5,035,188
-------------------------------------------------------------------------------------------------
Sun Pharmaceutical Industries Ltd. 55,800 679,426
-----------
12,676,731
-------------------------------------------------------------------------------------------------
TECHNOLOGY--6.7%
-------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--0.3%
GVC Corp., GDR(1) 200,000 588,960
-------------------------------------------------------------------------------------------------
COMPUTER SERVICES--1.7%
CCT Telecom Holdings Ltd.(1) 14,114,000 2,967,825
-------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--4.4%
NIIT Ltd. 97,700 4,024,335
-------------------------------------------------------------------------------------------------
ParaRede-SGPS, SA(1) 600,000 2,880,684
-------------------------------------------------------------------------------------------------
Software Solution Integrated Ltd.(1) 15,000 927,480
-----------
7,832,499
-------------------------------------------------------------------------------------------------
ELECTRONICS--0.3%
DVB (Holdings) Ltd.(1) 1,150,000 479,210
-------------------------------------------------------------------------------------------------
UTILITIES--3.3%
-------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--2.7%
Cia Paranaense Energia, Sponsored ADR, Preference, B Shares 498,300 4,827,281
-------------------------------------------------------------------------------------------------
GAS UTILITIES--0.6%
Aygaz AS 23,684,000 1,030,903
-----------
Total Common Stocks (Cost $152,228,319) 169,505,918
</TABLE>
17 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 20
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
MARKET VALUE
UNITS SEE NOTE 1
=================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.8%
Queenbee Resources Corp./Jollibee Foods Corp. Wts., Exp. 3/24/03 5,337,460 $ 1,419,380
-------------------------------------------------------------------------------------------------
Telesp Celular Participacoes SA Rts., Exp. 10/5/00 3,290,724 1,989
-------------
Total Rights, Warrants and Certificates (Cost $1,495,032) 1,421,369
PRINCIPAL
AMOUNT(5)
=================================================================================================
CORPORATE BONDS AND NOTES--0.5%
Grupo Financiero Banorte SA de CV, 19.02% Nts., 12/5/02(3,4)
[MXN](Cost $892,218) 7,730,000 822,921
=================================================================================================
REPURCHASE AGREEMENTS--3.9%
Repurchase agreement with Banc One Capital Markets, Inc.,
6.57%, dated 8/31/00, to be repurchased at $7,073,291 on
9/1/00, collateralized by U.S. Treasury Bonds, 6.25%-12%,
11/15/03-8/15/23, with a value of $3,027,174, U.S.
Treasury Nts., 4.25%-7.50%, 12/31/00-2/15/07, with a
value of $3,456,779 and U.S. Treasury Bills, 11/30/00,
with a value of $740,302 (Cost $7,072,000) 7,072,000 7,072,000
-------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $161,687,569) 100.1% 178,822,208
-------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (177,433)
----------------------------
NET ASSETS 100.0% $178,644,775
============================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
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 $10,786,191 or 6.04% of the Fund's net
assets as of August 31, 2000.
3. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
4. Represents the current interest rate for a variable or increasing rate
security.
5. Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
MXN--Mexican Nuevo Peso
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 21
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC DIVERSIFICATION, AS A PERCENTAGE OF TOTAL INVESTMENTS
AT VALUE, IS AS FOLLOWS:
GEOGRAPHIC DIVERSIFICATION MARKET VALUE PERCENT
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Brazil $ 38,533,045 21.5%
India 31,660,099 17.7
Mexico 23,188,985 13.0
Hong Kong 9,800,503 5.5
Singapore 9,758,875 5.5
Portugal 9,711,577 5.4
United States 9,132,625 5.1
Turkey 6,645,711 3.7
Egypt 5,485,759 3.1
Croatia 5,035,188 2.8
South Africa 3,838,790 2.1
Great Britain 3,565,605 2.0
Korea, Republic of (South) 3,508,455 2.0
Chile 3,373,275 1.9
Lebanon 2,445,098 1.4
Taiwan 2,395,796 1.3
Poland 2,073,641 1.2
Israel 1,717,125 1.0
Hungary 1,443,631 0.8
Philippines 1,419,380 0.8
Greece 1,242,792 0.7
Indonesia 904,568 0.5
Pakistan 862,720 0.5
Thailand 697,248 0.4
Spain 381,717 0.1
-----------------------------------
Total $178,822,208 100.0%
===================================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 22
STATEMENT OF ASSETS AND LIABILITIES August 31, 2000
<TABLE>
<CAPTION>
==================================================================================================
ASSETS
<S> <C>
Investments, at value (cost $161,687,569)--see accompanying statement $178,822,208
--------------------------------------------------------------------------------------------------
Cash 12,691
--------------------------------------------------------------------------------------------------
Cash--foreign currencies (cost $8,903) 8,689
--------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency contracts 3
--------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 1,826,335
Interest and dividends 491,360
Other 5,829
-----------------
Total assets 181,167,115
==================================================================================================
LIABILITIES
Unrealized depreciation on foreign currency contracts 696
--------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,472,109
Shares of beneficial interest redeemed 631,657
Transfer and shareholder servicing agent fees 122,108
Foreign capital gains taxes 116,787
Distribution and service plan fees 68,120
Trustees' compensation 34,375
Other 76,488
-----------------
Total liabilities 2,522,340
==================================================================================================
NET ASSETS $178,644,775
=================
==================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $155,769,653
--------------------------------------------------------------------------------------------------
Undistributed net investment income 1,180,759
--------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 4,565,686
--------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 17,128,677
-----------------
NET ASSETS $178,644,775
=================
==================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$114,136,507 and 6,775,383 shares of beneficial interest outstanding) $16.85
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $17.88
--------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$48,145,651 and 2,883,276 shares of beneficial interest outstanding) $16.70
--------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$16,362,617 and 981,251 shares of beneficial interest outstanding) $16.68
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 23
STATEMENT OF OPERATIONS For the Year Ended August 31, 2000
<TABLE>
<CAPTION>
==================================================================================================
<S> <C>
INVESTMENT INCOME
Dividends (net of foreign withholding taxes of $174,410) $ 3,889,285
--------------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $11,340) 511,451
-----------------
Total income 4,400,736
==================================================================================================
EXPENSES
Management fees 1,251,751
--------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 180,696
Class B 372,804
Class C 102,045
--------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 470,303
--------------------------------------------------------------------------------------------------
Custodian fees and expenses 155,041
--------------------------------------------------------------------------------------------------
Foreign capital gains taxes 116,787
--------------------------------------------------------------------------------------------------
Shareholder reports 96,947
--------------------------------------------------------------------------------------------------
Trustees' compensation 12,511
--------------------------------------------------------------------------------------------------
Other 60,352
-----------------
Total expenses 2,819,237
Less expenses paid indirectly (6,760)
-----------------
Net expenses 2,812,477
==================================================================================================
NET INVESTMENT INCOME 1,588,259
==================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 14,571,606
Foreign currency transactions (2,455,784)
-----------------
Net realized gain 12,115,822
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 20,067,364
Translation of assets and liabilities denominated in foreign currencies (1,069,826)
-----------------
Net change 18,997,538
-----------------
Net realized and unrealized gain 31,113,360
==================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $32,701,619
=================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 24
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 2000 1999
==================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 1,588,259 $ 401,591
--------------------------------------------------------------------------------------------------
Net realized gain (loss) 12,115,822 (1,959,816)
--------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 18,997,538 20,753,634
--------------- ----------------
Net increase in net assets resulting from operations 32,701,619 19,195,409
==================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (474,878) (299,233)
Class B (72,621) (57,849)
Class C (20,349) (9,462)
--------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (217,044)
Class B -- (123,480)
Class C -- (27,449)
==================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions:
Class A 53,825,278 5,563,014
Class B 17,625,360 2,081,959
Class C 8,922,257 519,729
==================================================================================================
NET ASSETS
Total increase 112,506,666 26,625,594
--------------------------------------------------------------------------------------------------
Beginning of period 66,138,109 39,512,515
--------------- ----------------
End of period (including undistributed net investment
income of $1,180,759 and $272,716, respectively) $ 178,644,775 $ 66,138,109
=============== ================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 25
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A YEAR ENDED AUGUST 31, 2000 1999 1998 1997(1)
=====================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.40 $7.76 $12.82 $10.00
-----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .10 .11 .07
Net realized and unrealized gain (loss) 5.37 3.71 (4.62) 2.75
-------------------------------------------
Total income (loss) from investment operations 5.57 3.81 (4.51) 2.82
-----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12) (.10) (.09) --
Distributions from net realized gain -- (.07) (.46) --
-------------------------------------------
Total dividends and/or distributions
to shareholders (.12) (.17) (.55) --
-----------------------------------------------------------------------------------------------------
Net asset value, end of period $16.85 $11.40 $ 7.76 $12.82
===========================================
=====================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 49.12% 49.92% (36.33)% 28.20%
=====================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $114,137 $40,046 $23,663 $37,613
-----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 77,848 $29,183 $35,864 $17,852
-----------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 1.56% 1.11% 0.87% 1.45%
Expenses 1.96% 2.36% 2.18%(4) 1.94%(4)
-----------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 37% 78% 27%
</TABLE>
1. For the period from November 18, 1996 (commencement of operations) to August
31, 1997.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 26
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
CLASS B YEAR ENDED AUGUST 31, 2000 1999 1998 1997(1)
=======================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $11.30 $ 7.69 $12.73 $ 10.00
-------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .11 .04 .01 .03
Net realized and unrealized gain (loss) 5.33 3.68 (4.57) 2.70
---------------------------------------------
Total income (loss) from investment operations 5.44 3.72 (4.56) 2.73
-------------------------------------------------------------------------------------------------------
Dividends and/or distributions to Shareholders:
Dividends from net investment income (.04) (.04) (.02) --
Distributions from net realized gain -- (.07) (.46) --
---------------------------------------------
Total dividends and/or distributions
to shareholders (.04) (.11) (.48) --
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.70 $11.30 $7.69 $12.73
=============================================
=======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 48.20% 48.81% (36.85)% 27.30%
=======================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $48,146 $21,028 $12,788 $20,470
-------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $37,333 $16,430 $18,673 $ 7,802
-------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 0.78% 0.37% 0.07% 0.87%
Expenses 2.72% 3.10% 2.95%(4) 2.78%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 37% 78% 27%
</TABLE>
1. For the period from November 18, 1996 (commencement of operations) to August
31, 1997.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 27
<TABLE>
<CAPTION>
CLASS C YEAR ENDED AUGUST 31, 2000 1999 1998 1997(1)
======================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $ 11.31 $ 7.68 $12.74 $ 10.00
------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 .04 .02 .04
Net realized and unrealized gain (loss) 5.32 3.69 (4.58) 2.70
--------------------------------------------
Total income (loss) from investment operations 5.41 3.73 (4.56) 2.74
------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.04) (.03) (.04) --
Distributions from net realized gain - (.07) (.46) --
--------------------------------------------
Total dividends and/or distributions
to shareholders (.04) (.10) (.50) --
------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.68 $11.31 $7.68 $12.74
============================================
======================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 47.93% 48.98% (36.88)% 27.40%
======================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $16,363 $5,064 $3,061 $3,713
------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $10,230 $4,022 $4,206 $1,560
------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 0.82% 0.41% 0.24% 0.98%
Expenses 2.71% 3.08% 2.95%(4) 2.77%(4)
------------------------------------------------------------------------------------------------------
Portfolio turnover rate 22% 37% 78% 27%
</TABLE>
1. For the period from November 18, 1996 (commencement of operations) to August
31, 1997.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Developing Markets Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund's investment objective is to aggressively 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 a front-end
sales charge. Class B and Class C shares are sold without a front-end sales
charge but may be subject to a contingent deferred sales charge (CDSC). 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. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments
is separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
26 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 29
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
August 31, 2000, a provision of $6,333 was made for the Fund's projected benefit
obligations and payments of $460 were made to retired trustees, resulting in an
accumulated liability of $32,845 as of August 31, 2000.
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 Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees 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 investment income per share.
--------------------------------------------------------------------------------
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.
27 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES Continued
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of paydown gains and losses and the
recognition of certain foreign currency gains (losses) as ordinary income (loss)
for tax purposes. The character of dividends and distributions made during the
fiscal 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 dividends and 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 August 31, 2000, amounts have been reclassified to reflect an
increase in paid-in capital of $3,357,116, a decrease in undistributed net
investment income of $112,368, and a decrease in accumulated net realized gain
on investments of $3,244,748. This reclassification includes $3,362,892
distributed in connection with Fund share redemptions which increased paid-in
capital and reduced accumulated net realized gain. Net assets of the Fund were
unaffected by the reclassifications.
--------------------------------------------------------------------------------
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. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
28 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 31
================================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 2000 YEAR ENDED AUGUST 31, 1999
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 10,550,933 $ 174,937,404 4,371,002 $ 42,720,089
Dividends and/or
distributions reinvested 31,540 440,912 59,038 498,873
Redeemed (7,319,699) (121,553,038) (3,967,426) (37,655,948)
---------------------------------------------------------------
Net increase 3,262,774 $ 53,825,278 462,614 $ 5,563,014
===============================================================
------------------------------------------------------------------------------------------------
CLASS B
Sold 2,289,199 $ 37,593,902 1,618,428 $ 16,240,189
Dividends and/or
distributions reinvested 4,985 69,291 20,507 172,670
Redeemed (1,271,347) (20,037,833) (1,441,572) (14,330,900)
---------------------------------------------------------------
Net increase 1,022,837 $ 17,625,360 197,363 $ 2,081,959
===============================================================
------------------------------------------------------------------------------------------------
CLASS C
Sold 819,660 $ 13,558,912 392,347 $ 3,833,222
Dividends and/or
distributions reinvested 1,334 18,568 4,083 34,424
Redeemed (287,683) (4,655,223) (346,893) (3,347,917)
---------------------------------------------------------------
Net increase 533,311 $ 8,922,257 49,537 $ 519,729
===============================================================
</TABLE>
================================================================================
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended August 31, 2000, were
$102,209,885 and $26,818,835, respectively.
As of August 31, 2000, unrealized appreciation (depreciation) based on
cost of securities for federal income tax purposes of $163,928,405 was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 32,676,628
Gross unrealized depreciation (17,783,040)
-------------
Net unrealized appreciation $ 14,893,588
=============
</TABLE>
================================================================================
4. 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 an annual fee of
1.00% of the first $250 million of average annual net assets of the Fund, 0.95%
of the next $250 million, 0.90% of the next $500 million, and 0.85% of average
annual net assets over $1 billion. The Fund's management fee for the year ended
August 31, 2000, was an annualized rate of 1.00%, before any waiver by the
Manager if applicable.
29 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer 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>
August 31, 2000 $544,323 $140,127 $101,596 $582,519 $90,600
</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>
August 31, 2000 $1,719 $80,424 $2,363
</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.
--------------------------------------------------------------------------------
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 purchased. 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 year ended August 31, 2000, payments
under the Class A plan totaled $180,696 prior to Manager waivers if applicable,
all of which were paid by the Distributor to recipients, and included $14,119
paid to an affiliate of the Manager. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
30 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 33
--------------------------------------------------------------------------------
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 asset-based sales charges from the Fund
under the plans. If any 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 carryforward 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 August 31, 2000,
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 $372,804 $305,627 $1,011,561 2.10%
Class C Plan 102,045 42,975 149,787 0.92
</TABLE>
================================================================================
5. FOREIGN CURRENCY CONTRACTS
A foreign currency 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 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.
31 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
5. FOREIGN CURRENCY CONTRACTS Continued
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
As of August 31, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
EXPIRATION CONTRACT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATE AMOUNT (000s) AUGUST 31, 2000 APPRECIATION DEPRECIATION
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Euro (EUR) 9/4/00 EUR482 $428,483 $-- $ 684
Indian Rupee (INR) 9/4/00 INR263 5,752 -- 12
Singapore Dollar (SGD) 9/1/00 SGD12 7,054 3 --
---------------------------
Total Unrealized Appreciation and Depreciation $ 3 $696
===========================
</TABLE>
================================================================================
6. ILLIQUID SECURITIES
As of August 31, 2000, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of August
31, 2000, was $4,063,905, which represents 2.27% of the Fund's net assets.
Certain restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limit.
================================================================================
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 August 31,
2000.
32 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 35
INDEPENDENT AUDITORS' REPORT
================================================================================
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER DEVELOPING MARKETS FUND:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Developing Markets Fund as of
August 31, 2000, 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 November 18, 1996
(commencement of operations) to August 31, 1997. 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 auditing standards generally
accepted in the United States of America. 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 August 31, 2000, 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 Developing Markets Fund as of August 31, 2000, 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 November 18, 1996 (commencement of operations) to August 31, 1997,
in conformity with accounting principles generally accepted in the United States
of America.
KPMG LLP
Denver, Colorado
September 22, 2000
33 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 36
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 2000.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Dividends of $0.1242, $0.0391 and $0.0427 per share were paid to Class A,
Class B and Class C shareholders, respectively, on December 7, 1999, all of
which were designated as ordinary income 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).
None of the dividends paid by the Fund during the year ended August 31,
2000, are 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 DEVELOPING MARKETS FUND
<PAGE> 37
OPPENHEIMER DEVELOPING MARKETS 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
Clayton K. Yeutter, Trustee
Rajeev Bhaman, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISOR OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS KPMG LLP
================================================================================
LEGAL COUNSEL Mayer, Brown & Platt
For more complete information about Oppenheimer
Developing Markets Fund, please refer to the
Prospectus. To obtain a copy, call your financial
advisor, or call OppenheimerFunds Distributor, Inc. at
1.800.525.7048, or visit the OppenheimerFunds Internet
web site, at WWW.OPPENHEIMERFUNDS.COM.
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.
OPPENHEIMER FUNDS ARE DISTRIBUTED BY OPPENHEIMERFUNDS
DISTRIBUTOR, INC., TWO WORLD TRADE CENTER, NEW YORK,
NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
35 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 38
OPPENHEIMERFUNDS FAMILY
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
===========================================================================================================
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
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund(2)
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund(2) Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
===========================================================================================================
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R) California Municipal Fund(2,3)
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(2)
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
</TABLE>
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund, subject to shareholder approval.
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.
36 OPPENHEIMER DEVELOPING MARKETS FUND
<PAGE> 39
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.
INTERNET
24-hr access to account information and transactions(1)
WWW.OPPENHEIMERFUNDS.COM
--------------------------------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
--------------------------------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
--------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OPPENHEIMERFUNDS MARKET HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
--------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. BOX 5270, DENVER, CO 80217-5270
--------------------------------------------------------------------------------
TICKER SYMBOLS Class A: ODMAX Class B: ODVBX Class C: ODVCX
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[OPPENHEIMERFUNDS(R) LOGO]
RA0785.001.0800 October 30, 2000
