[photo of satellite dishes]
Semiannual Report February 29, 2000
Oppenheimer
Developing Markets Fund
[Logo]OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
[begin callout]
Contents
1 President's Letter
3 An Interview
with Your Fund's
Manager
9 Financial
Statements
29 Officers and Trustees
[end callout]
The Fund benefited greatly from its holdings in Latin America, where economic
and financial conditions have continued to improve.
We remain optimistic about the future of emerging-markets investment over the
long term, but we are prepared for the effects of market volatility over the
near term.
- -------------------------
Cumulative
Total Returns
For the 6-Month Period
Ended 2/29/00*
Class A
Without With
Sales Chg. Sales Chg.
- -------------------------
64.17% 54.73%
Class B
Without With
Sales Chg. Sales Chg.
- -------------------------
63.74% 58.74%
Class C
Without With
Sales Chg. Sales Chg.
- -------------------------
63.45% 62.45%
- -------------------------
- -------------------------
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
- -------------------------
* See page 7 for further details.
<PAGE>
PRESIDENT'S LETTER
[begin callout]
[photo of Bridget A. Macaskill]
Bridget A. Macaskill
President
Oppenheimer
Developing
Markets Fund
[end callout]
Dear Shareholder,
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher inflation. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting to
slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term market
volatility. In the bond market, higher interest rates usually lead to lower bond
prices. In the stock market, slower economic growth could reduce corporate
earnings and put downward pressure on stock prices. Highly valued stocks may be
particularly vulnerable to a correction. The Securities and Exchange Commission
Chairman, Arthur Levitt, has cautioned investors against the expectation that
the types of returns seen in the recent bull market will last forever. We agree.
1 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
PRESIDENT'S LETTER
Because of the prospect of continued market volatility, we encourage you to
consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many
"old economy" stocks are selling at unusually low prices. In the bond market,
higher interest rates over the short term may reduce inflation concerns, which
should be beneficial over the long term. By buying out-of-favor investments, you
may be able to profit when and if they return to favor in the future. Of course,
there is no assurance that value investing will return to favor in the market,
but it may be a diversification strategy to consider for part of your portfolio.
What specific investments should you consider today so that you are
prepared for tomorrow? The answer depends on your individual investing goals,
risk tolerance and financial circumstances. We urge you to talk with your
financial advisor about ways to diversify your portfolio. This may include
considering global diversification as part of your strategy. While investing
abroad has special risks, such as the effects of foreign currency fluctuation,
it also offers opportunities to participate in global economic growth and to
hedge against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
March 21, 2000
2 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[begin callout]
[photo of Frank Jennings and Rajeev Bhaman]
Portfolio Management
Team (l to r)
Frank Jennings
Rajeev Bhaman
(Portfolio Manager)
[end callout]
Q
How did Oppenheimer Developing Markets Fund perform during the six-month period
that ended February 29, 2000?
A. We are very pleased with the Fund's performance over the past six months. We
are also pleased with the Fund's long-term performance: The Fund's Class A
shares were ranked 10 of 183 (one-year) and 1 of 130 (three-year) emerging
market funds for the periods ended March 31, 2000, by Lipper Analytical
Services.(1)
We attribute the Fund's success to our stock-selection strategy, which led
us to good companies in attractively-priced, good businesses at a time when
emerging markets were recovering strongly. We laid the groundwork for the Fund's
recent performance during 1998, when the global financial crisis caused
virtually all emerging-market stocks to decline, regardless of their fundamental
strengths and weaknesses. By purchasing "out of favor" undervalued growth
companies when their prices were low, and holding them until market conditions
improved, we were able to deliver sizeable gains to our shareholders.
What is behind the emerging markets' strong recovery over the past six months?
The emerging markets have responded positively to favorable economic conditions
worldwide. During 1999, it became apparent that investors' fears of a global
economic slowdown were unwarranted. In fact, the opposite occurred: economies in
both developed and emerging markets grew more robustly than most analysts
expected.
In the United States, economic growth gained momentum as consumers spent
freely and unemployment levels approached record lows. In effect, the U.S.
economy
1. Source: Lipper Analytical Services, Inc., 3/31/00. See page 7 for
further details.
3 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[begin callout]
"Our focus on investment themes--new technologies, corporate restructuring and
mass affluence--has helped us invest in the industries of tomorrow."
[end callout]
served as an engine driving the rest of the world's growth, creating ready
markets for exports from companies in Asia, Latin America and, to a lesser
extent, Eastern Europe. As companies in the emerging markets produced goods and
services to satisfy this demand, local economic conditions improved
dramatically.
Where in the world have you found the most attractive investment opportunities?
Our investment approach assesses individual companies, not regions or nations.
Our goal is to identify those companies that we believe will benefit most from
three global trends: new technologies, corporate restructuring and mass
affluence. The mix of countries represented in the Fund is an outgrowth of that
process.
With that said, we continued to find attractive companies in Brazil,
Argentina and Mexico. Inflation and interest rates in Latin America fell during
the six-month reporting period, creating an environment more conducive to
business growth. In addition, these countries have made good progress
implementing the financial reforms mandated several years ago by the
International Monetary Fund.
We have spent a considerable amount of time in Latin America recently,
visiting the individual companies in which we have invested as well as companies
that we are considering. We are pleased that many of the corporate executives
with whom we spoke appear to be managing their capital well, and that their
businesses are sound. We were particularly impressed with several companies that
we believe will become dominant in their local markets.
What about emerging markets other than Latin America?
We have continued to invest in Asia, Eastern Europe and the Pacific Rim.
Recently, we have identified a number of attractive opportunities in India. A
new, business-friendly government has announced reforms to India's financial
systems that should make investing there easier. In addition, India has a highly
4 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
[begin callout]
Average Annual
Total Returns
For the Periods Ended 3/31/00(2)
Class A Since
1-Year Inception
- ---------------------------
87.12% 20.57%
Class B Since
1-Year Inception
- ---------------------------
92.33% 21.22%
Class C Since
1-Year Inception
- ---------------------------
96.06% 21.76%
[end callout]
educated population that has just begun to enjoy the benefits of eCommerce. We
are carefully evaluating a number of opportunities that we believe will enable
us to participate in the very early stages of India's efforts to harness the
power of the Internet.
What individual companies contributed most to the Fund's performance?
One of the Fund's top holdings over the past six months was Grupo Televisa SA, a
Mexican media company. Grupo Televisa is owner of Univision, a U.S.
Spanish-speaking television network that has gained market share dramatically,
especially in areas with large Hispanic populations.
The Fund also benefited from the good performance of a number of financial
companies. Banks and insurance companies in the emerging markets have benefited
from improving economic conditions and greater demand for their products and
services from a growing middle-class population.
Finally, Latin American telecommunications stocks are benefiting from
rising demand for telephone service. Unlike U.S. telephone companies, which
employ both land lines and wireless technology, many Latin American
telecommunications providers have moved directly to wireless technology, saving
themselves the high costs of hard-wiring their local markets.
As always, please keep in mind that investing in foreign securities entails
additional expenses and risks including foreign currency fluctuations.
What is your outlook for the foreseeable future?
We intend to continue our efforts to identify the best companies in developing
markets through intensive fundamental research, and to hold those stocks over
the long term as they achieve their potential. Despite the short-term volatility
that has characterized these relatively small, fast-growing markets, we continue
to believe that emerging-markets investments
2. See page 7 for further details.
5 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
[begin callout]
- ------------------------
Regional Allocation (3)
[pie chart]
o Asia 37.6%
o Latin America 29.3
o Emerging Europe 16.7
o United States/
Canada 8.6
o Middle East/
Africa 6.4
o Europe 1.4
- ------------------------
[end callout]
deserve a place in most investors' diversified portfolios. Providing such
investments is what makes Oppenheimer Developing Markets Fund an important part
of The Right Way to Invest.
Top Ten Country Holdings(3)
- -----------------------------------------------------------
India 19.3%
- -----------------------------------------------------------
Brazil 14.3
- -----------------------------------------------------------
Mexico 13.0
- -----------------------------------------------------------
Portugal 10.9
- -----------------------------------------------------------
United States 8.6
- -----------------------------------------------------------
Turkey 5.5
- -----------------------------------------------------------
Singapore 4.5
- -----------------------------------------------------------
South Africa 3.8
- -----------------------------------------------------------
Hong Kong 3.7
- -----------------------------------------------------------
Croatia 2.3
- -----------------------------------------------------------
Top Ten Stock Holdings(4)
- -----------------------------------------------------------
ICICI Ltd., Sponsored ADR 6.0%
- -----------------------------------------------------------
Lusomundo SGPS SA 5.6
- -----------------------------------------------------------
Embraer-Empresa Brasileira de Aeronautica SA,
Preference 4.8
- -----------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR 3.4
- -----------------------------------------------------------
Grupo Televisa SA, Sponsored GDR 3.2
- -----------------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar) 2.7
- -----------------------------------------------------------
ParaRede, SGPS 2.5
- -----------------------------------------------------------
Cheminor Drugs Ltd. 2.4
- -----------------------------------------------------------
Pliva d.d., Sponsored GDR 2.4
- -----------------------------------------------------------
Naspers Ltd., N Shares 2.1
3. Portfolio is subject to change. Percentages are as of February 29, 2000,
and are based on total market value of investments.
4. Portfolio is subject to change. Percentages are as of February 29, 2000,
and are based on net assets.
6 | OPPENHEIMER DEVELOPING MARKETS FUND
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<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 at
www.oppenheimerfunds.com. When looking at Fund performance results, please note
that the recent growth rate in the stock market has helped produce short-term
returns that are not typical and may not continue in the future.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. 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 maximum 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
inception). Class B shares are subject to a 0.75% annual asset-based 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.
Lipper Ranking. Based on the comparisons between changes in net asset value
without considering sales charges, with dividends and capital gains
distributions of the Fund's Class A shares reinvested. The Fund's Class A shares
were ranked 10 of 183 (1-year) and 1 of 130 (3-year) among emerging market funds
for the periods ended 3/31/00, as measured by Lipper Analytical Services, Inc.
An explanation of the different performance calculations is in the Fund's
prospectus.
7 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
Financials
8 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
STATEMENT OF INVESTMENTS February 29, 2000 / Unaudited
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
========================================================================================
<S> <C> <C>
Common Stocks--91.7%
- ----------------------------------------------------------------------------------------
Basic Materials--0.9%
- ----------------------------------------------------------------------------------------
Metals--0.9%
Caemi Mineracao e Metalurgia SA, Preference(1) 15,300,000 $ 1,513,139
- ----------------------------------------------------------------------------------------
Capital Goods--5.1%
- ----------------------------------------------------------------------------------------
Aerospace/Defense--4.8%
Embraer-Empresa Brasileira de Aeronautica SA, Preference 1,700,000 7,589,715
- ----------------------------------------------------------------------------------------
Industrial Services--0.3%
MacMillan India MC 21,500 443,692
- ----------------------------------------------------------------------------------------
Communication Services--9.4%
- ----------------------------------------------------------------------------------------
Telecommunications: Long Distance--0.8%
Partner Communications Co. Ltd., Sponsored ADR(1) 75,000 1,275,000
- ----------------------------------------------------------------------------------------
Telephone Utilities--8.0%
CCT Telecom Holdings Ltd.(1) 4,650,000 1,896,972
- ----------------------------------------------------------------------------------------
Tele Norte Leste Participacoes SA (Telemar)(1) 262,777,000 4,366,004
- ----------------------------------------------------------------------------------------
Telecomunicacoes do Rio de Janeiro SA, Preference(1) 17,018,554 490,504
- ----------------------------------------------------------------------------------------
Telesp Tele de Sao Paulo 25,950,000 510,348
- ----------------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd., GDR(1,2) 149,600 5,423,000
----------------
12,686,828
- ----------------------------------------------------------------------------------------
Telecommunications: Wireless--0.6%
Tele Sudeste Celular Participacoes SA(1) 18,200,000 101,928
- ----------------------------------------------------------------------------------------
Telesp Celular Participacoes SA 18,201,207 205,721
- ----------------------------------------------------------------------------------------
Telesp Celular Participacoes SA, Preference(1) 32,907,240 708,542
----------------
1,016,191
- ----------------------------------------------------------------------------------------
Consumer Cyclicals--18.5%
- ----------------------------------------------------------------------------------------
Autos & Housing--5.6%
Brazil Realty SA, GDR(1,3) 57,800 592,450
- ----------------------------------------------------------------------------------------
Corporacion GEO, SA de CV, Series B(1) 906,000 2,214,710
- ----------------------------------------------------------------------------------------
Courts (Singapore) Ltd.(4) 5,675,000 2,057,710
- ----------------------------------------------------------------------------------------
Ellerine Holdings Ltd. 125,000 531,940
- ----------------------------------------------------------------------------------------
Grupo Accion SA de CV, Series B(1,3) 3,443,000 2,197,816
- ----------------------------------------------------------------------------------------
Solidere, GDR(1,2) 160,900 1,403,852
----------------
8,998,478
- ----------------------------------------------------------------------------------------
Consumer Services--0.7%
Art Marketing Syndicate SA(1) 52,830 1,050,258
- ----------------------------------------------------------------------------------------
Leisure & Entertainment--1.4%
Danubius Hotel & Spa Rt.(1) 39,200 837,607
- ----------------------------------------------------------------------------------------
Hongkong & Shanghai Hotels Ltd. (The) 3,167,000 1,393,711
----------------
2,231,318
9 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------
Media--10.8%
Hurriyet Gazetecilik ve Matbaacilik AS(1) 53,300,000 $ 1,275,009
- ----------------------------------------------------------------------------------------
Lusomundo SGPS SA(1) 163,300 8,961,839
- ----------------------------------------------------------------------------------------
Naspers Ltd., N Shares(1) 238,500 3,394,416
- ----------------------------------------------------------------------------------------
Primedia Ltd., N Shares 845,600 1,052,885
- ----------------------------------------------------------------------------------------
Singapore Press Holdings Ltd. 29,700 568,602
- ----------------------------------------------------------------------------------------
Times Publishing Ltd. 916,000 1,870,581
----------------
17,123,332
- ----------------------------------------------------------------------------------------
Consumer Staples--15.6%
- ----------------------------------------------------------------------------------------
Beverages--1.4%
Cia Cervejaria Brahma, Sponsored ADR 97,200 1,251,450
- ----------------------------------------------------------------------------------------
Serm Suk Public Co. Ltd.(1) 231,300 970,956
----------------
2,222,406
- ----------------------------------------------------------------------------------------
Broadcasting--7.8%
Grupo Radio Centro SA de CV, Sponsored ADR 349,600 3,037,150
- ----------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored GDR(1) 65,900 5,061,944
- ----------------------------------------------------------------------------------------
Teletypos SA(1) 66,000 1,567,508
- ----------------------------------------------------------------------------------------
Television Broadcasts Ltd. 333,000 2,738,346
----------------
12,404,948
- ----------------------------------------------------------------------------------------
Food--0.7%
Cresud SA 600,720 504,655
- ----------------------------------------------------------------------------------------
Parry's Confectionary Ltd.(1) 149,150 241,109
- ----------------------------------------------------------------------------------------
Rolimpex SA(1) 350,000 386,555
----------------
1,132,319
- ----------------------------------------------------------------------------------------
Food & Drug Retailers--2.1%
Dairy Farm International Holdings Ltd.(1) 4,142,100 2,340,287
- ----------------------------------------------------------------------------------------
PT Hero Supermarket(1) 3,976,500 1,044,333
----------------
3,384,620
- ----------------------------------------------------------------------------------------
Household Goods--3.2%
Antofagasta plc 353,180 2,241,412
- ----------------------------------------------------------------------------------------
Grupo Casa Autrey SA de CV, Sponsored ADR(1) 297,000 2,561,625
- ----------------------------------------------------------------------------------------
Hindustan Lever Ltd. 56 3,724
- ----------------------------------------------------------------------------------------
Marico Industries Ltd. 45,900 299,957
----------------
5,106,718
10 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------
Tobacco--0.4%
Eastern Tobacco Co. 26,500 $ 599,440
- ----------------------------------------------------------------------------------------
Kothari Products Ltd.(1) 28,200 73,683
----------------
673,123
- ----------------------------------------------------------------------------------------
Energy--1.7%
- ----------------------------------------------------------------------------------------
Oil: International--1.7%
Bharat Petroleum Corp. Ltd.(1) 411,651 2,666,071
- ----------------------------------------------------------------------------------------
Financial--24.5%
- ----------------------------------------------------------------------------------------
Banks--8.3%
Banco Pinto & Sotto Mayor SA(1) 79,000 1,773,747
- ----------------------------------------------------------------------------------------
BBC Banco BHIF, Sponsored ADR(1) 73,500 1,350,563
- ----------------------------------------------------------------------------------------
Commercial International Bank, Sponsored GDR(1) 78,750 874,125
- ----------------------------------------------------------------------------------------
Espirito Santo Financial Group, ADR(1) 160,550 2,889,900
- ----------------------------------------------------------------------------------------
Grupo Financiero Banorte SA de CV(1) 2,550,000 2,771,029
- ----------------------------------------------------------------------------------------
Grupo Financiero Inbursa SA de CV(1) 509,770 2,356,217
- ----------------------------------------------------------------------------------------
Unibanco-Uniao de Bancos Brasileiros SA, Sponsored GDR 40,000 1,165,000
----------------
13,180,581
- ----------------------------------------------------------------------------------------
Diversified Financial--10.1%
Administradora de Fondos de Pensiones Provida SA,
Sponsored ADR 63,300 1,313,475
- ----------------------------------------------------------------------------------------
Haci Omer Sabanci Holding AS, ADR(1) 247,800 2,874,480
- ----------------------------------------------------------------------------------------
Housing Development Finance Corp. Ltd. 272,800 2,452,687
- ----------------------------------------------------------------------------------------
ICICI Ltd.(1) 6,200 23,137
- ----------------------------------------------------------------------------------------
ICICI Ltd., Sponsored ADR(1) 248,125 9,490,781
----------------
16,154,560
- ----------------------------------------------------------------------------------------
Insurance--6.1%
Adamjee Insurance Co. Ltd. 989,975 2,287,272
- ----------------------------------------------------------------------------------------
Aksigorta AS(1) 140,298,000 3,295,099
- ----------------------------------------------------------------------------------------
Fubon Insurance Co., GDR(1) 116,350 1,247,854
- ----------------------------------------------------------------------------------------
Liberty Life Assn. Africa Ltd. 50,144 478,939
- ----------------------------------------------------------------------------------------
Sanlam Ltd. 500,000 630,447
- ----------------------------------------------------------------------------------------
Towarzystwo Ubezpieczen i Reasekuracji Warta SA(1) 48,263 1,796,102
----------------
9,735,713
11 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------
Real Estate Investment Trusts--0.0%
Unit Trust of India-Masterplus 91(1) 10,100 $ 5,848
- ----------------------------------------------------------------------------------------
Healthcare--6.6%
- ----------------------------------------------------------------------------------------
Healthcare/Drugs--6.6%
Cheminor Drugs Ltd. 370,000 3,817,818
- ----------------------------------------------------------------------------------------
Dr. Reddy's Laboratories Ltd.(1) 36,750 1,306,099
- ----------------------------------------------------------------------------------------
Haw Par Healthcare Ltd.(1) 622,000 497,975
- ----------------------------------------------------------------------------------------
Pliva d.d., Sponsored GDR(1,2) 255,900 3,748,935
- ----------------------------------------------------------------------------------------
Sun Pharmaceutical Industries Ltd. 18,600 1,132,749
-----------------
10,503,576
- ----------------------------------------------------------------------------------------
Technology--5.6%
- ----------------------------------------------------------------------------------------
Computer Hardware--0.7%
GVC Corp., GDR(1) 200,000 1,057,640
- ----------------------------------------------------------------------------------------
Computer Software--4.9%
NIIT Ltd. 35,600 1,821,987
- ----------------------------------------------------------------------------------------
ParaRede, SGPS(1) 100,000 3,990,806
- ----------------------------------------------------------------------------------------
Software Solution Integrated Ltd.(1) 15,000 1,946,399
-----------------
7,759,192
- ----------------------------------------------------------------------------------------
Utilities--3.8%
- ----------------------------------------------------------------------------------------
Electric Utilities--2.9%
Cia de Saneamento Basico do Estado de Sao Paulo(1) 14,476,269 1,435,764
- ----------------------------------------------------------------------------------------
Cia Paranaense Energia, Sponsored ADR, Preference,
B Shares(1) 314,800 2,931,575
- ----------------------------------------------------------------------------------------
Cia Paranaense de Energia-Copel(1) 31,025,000 178,839
-----------------
4,546,178
- ----------------------------------------------------------------------------------------
Gas Utilities--0.9%
Aygaz AS(1) 11,842,000 1,400,933
-----------------
Total Common Stocks (Cost $102,286,782) 145,862,377
12 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
Market Value
Shares See Note 1
========================================================================================
Rights, Warrants and Certificates--0.5%
- ----------------------------------------------------------------------------------------
Queenbee Resources Corp./Jollibee Foods Corp.
Wts., Exp. 3/24/03 (Cost $989,215) 3,252,000 $ 892,752
Principal
Amount(5)
========================================================================================
Corporate Bonds and Notes--0.5%
- ----------------------------------------------------------------------------------------
Grupo Financiero Banorte SA de CV, 20.09%
Nts., 12/5/02 (3,6) [MXN]
(Cost $891,226) 7,730,000 818,961
========================================================================================
Repurchase Agreements--8.7%
- ----------------------------------------------------------------------------------------
Repurchase agreement with Banc One Capital
Markets, Inc., 5.75%, dated 2/29/00, to be
repurchased at $13,802,204 on 3/1/00,
collateralized by U.S. Treasury Nts.,
5.25%-7.875%, 5/31/00-5/15/08, with a value
of $12,907,381 and U.S. Treasury Bonds,
6.125%-11.875%, 11/15/03-8/15/29, with a
value of $1,182,822 (Cost $13,800,000) 13,800,000 13,800,000
- ----------------------------------------------------------------------------------------
Total Investments, at Value (Cost $117,967,223) 101.4% 161,374,090
- ----------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.4) (2,287,286)
------------------------------
Net Assets 100.0% $159,086,804
==============================
</TABLE>
13 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
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
- ------------------------------------------------------------------------
India $ 31,148,740 19.3%
Brazil 23,040,979 14.3
Mexico 21,019,451 13.0
Portugal 17,616,292 10.9
United States 13,800,000 8.6
Turkey 8,845,520 5.5
Singapore 7,335,155 4.5
South Africa 6,088,628 3.8
Hong Kong 6,029,029 3.7
Croatia 3,748,935 2.3
Poland 3,232,915 2.0
Chile 2,664,038 1.7
Taiwan 2,305,494 1.4
Pakistan 2,287,272 1.4
Great Britain 2,241,412 1.4
Greece 1,567,508 1.0
Egypt 1,473,565 0.9
Lebanon 1,403,853 0.9
Israel 1,275,000 0.8
Indonesia 1,044,333 0.6
Thailand 970,956 0.6
Philippines 892,753 0.6
Hungary 837,607 0.5
Argentina 504,655 0.3
--------------------------------
Total $161,374,090 100.0%
================================
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 $10,575,787 or 6.65% of the Fund's net
assets as of February 29, 2000.
3. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
4. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
5. Principal amount is reported in U.S. Dollars, except for those denoted in
the following currency:
MXN Mexican Nuevo Peso
6. Represents the current interest rate for a variable or increasing rate
security.
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER DEVELOPING MARKETS FUND
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Unaudited
February 29, 2000
<TABLE>
=====================================================================================
<S> <C>
Assets
Investments, at value (cost $117,967,223) -- see accompanying
statements $ 161,374,090
- -------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 2,223,643
Investments sold 2,077,787
Interest and dividends 160,125
Other 3,716
---------------
Total assets 165,839,361
=====================================================================================
Liabilities
Bank overdraft 33,705
- -------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 12,063
- -------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 6,293,420
Shares of beneficial interest redeemed 202,832
Distribution and service plan fees 48,863
Trustees' compensation 29,696
Transfer and shareholder servicing agent fees 18,679
Other 113,299
---------------
Total liabilities 6,752,557
=====================================================================================
Net Assets $ 159,086,804
===============
=====================================================================================
Composition of Net Assets
Paid-in capital $ 118,150,748
- -------------------------------------------------------------------------------------
Overdistributed net investment income (149,346)
- -------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency
transactions (2,322,582)
- -------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 43,407,984
---------------
Net assets $ 159,086,804
===============
=====================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based
on net assets of $99,981,945 and 5,391,066 shares of
beneficial interest outstanding) $18.55
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering price) $19.68
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $47,051,278
and 2,550,031 shares of beneficial interest outstanding) $18.45
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per share
(based on net assets of $12,053,581 and 654,039 shares of
beneficial interest outstanding) $18.43
</TABLE>
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended February 29, 2000
<TABLE>
=====================================================================================
<S> <C>
Investment Income
Dividends (net of foreign withholding taxes of $24,992) $ 928,816
- -------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $4,720) 187,403
-------------
Total income 1,116,219
=====================================================================================
Expenses
Management fees 457,658
- -------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 65,038
Class B 138,711
Class C 34,972
- -------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 149,377
- -------------------------------------------------------------------------------------
Shareholder reports 52,322
- -------------------------------------------------------------------------------------
Custodian fees and expenses 47,150
- -------------------------------------------------------------------------------------
Trustees' compensation 6,872
- -------------------------------------------------------------------------------------
Other 22,145
-------------
Total expenses 974,245
Less expenses paid indirectly (3,707)
-------------
Net expenses 970,538
=====================================================================================
Net Investment Income 145,681
=====================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 3,195,094
Foreign currency transactions (1,212,288)
-------------
Net realized gain 1,982,806
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 44,763,901
Translation of assets and liabilities denominated in foreign currencies 512,944
-------------
Net change 45,276,845
-------------
Net realized and unrealized gain 47,259,651
=====================================================================================
Net Increase in Net Assets Resulting from Operations $47,405,332
=============
</TABLE>
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
February 29, 2000 August 31,
(Unaudited) 1999
=====================================================================================
<S> <C> <C>
Operations
Net investment income $ 145,681 $ 401,591
- -------------------------------------------------------------------------------------
Net realized gain (loss) 1,982,806 (1,959,816)
- -------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 45,276,845 20,753,634
-----------------------------
Net increase in net assets resulting from operations 47,405,332 19,195,409
=====================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (474,880) (299,233)
Class B (72,516) (57,849)
Class C (20,347) (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 30,822,692 5,563,014
Class B 11,898,535 2,081,959
Class C 3,389,879 519,729
=====================================================================================
Net Assets
Total increase 92,948,695 26,625,594
- -------------------------------------------------------------------------------------
Beginning of period 66,138,109 39,512,515
-----------------------------
End of period [including undistributed
(overdistributed) net investment
income of $(149,346) and $272,716, respectively] $159,086,804 $66,138,109
=============================
</TABLE>
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class A (Unaudited) 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 (loss) .04 .10 .11 .07
Net realized and unrealized gain (loss) 7.23 3.71 (4.62) 2.75
-------------------------------------------------------
Total income (loss) from investment
operations 7.27 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 $18.55 $11.40 $7.76 $12.82
=======================================================
================================================================================================================
Total Return, at Net Asset Value(2) 64.17% 49.92% (36.33)% 28.20%
================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $99,982 $40,046 $23,663 $37,613
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $57,344 $29,183 $35,864 $17,852
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0.61% 1.11% 0.87% 1.45%
Expenses 1.83% 2.36% 2.18%(4) 1.94%(4)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 8% 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.
5. 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 February 29, 2000, were $42,544,353 and $6,869,220, respectively.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class B (Unaudited) 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 (loss) -- .04 .01 .03
Net realized and unrealized gain (loss) 7.19 3.68 (4.57) 2.70
-------------------------------------------------------
Total income (loss) from investment
operations 7.19 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 $18.45 $11.30 $ 7.69 $12.73
=======================================================
================================================================================================================
Total Return, at Net Asset Value(2) 63.74% 48.81% (36.85)% 27.30%
================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $47,051 $21,028 $12,788 $20,470
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $27,995 $16,430 $18,673 $ 7,802
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.15)% 0.37% 0.07% 0.87%
Expenses 2.60% 3.10% 2.95%(4) 2.78%(4)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 8% 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.
5. 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 February 29, 2000, were $42,544,353 and $6,869,220, respectively.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class C (Unaudited) 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 (loss) (.01) .04 .02 .04
Net realized and unrealized gain (loss) 7.17 3.69 (4.58) 2.70
----------------------------------------------------
Total income (loss) from investment
operations 7.16 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 $18.43 $11.31 $7.68 $12.74
====================================================
=============================================================================================================
Total Return, at Net Asset Value(2) 63.45% 48.98% (36.88)% 27.40%
=============================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $12,054 $5,064 $3,061 $3,713
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 7,060 $4,022 $4,206 $1,560
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.17)% 0.41% 0.24% 0.98%
Expenses 2.60% 3.08% 2.95%(4) 2.77%(4)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 8% 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.
5. 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 February 29, 2000, were $42,544,353 and $6,869,220, respectively.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited
================================================================================
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 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 (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 shares 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 for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, 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. Foreign currency contracts are valued
based on the closing prices of the forward currency contract rates in the
London foreign exchange markets on a daily basis as provided by a reliable
bank, dealer or pricing service. Short-term "money market type" debt securities
with remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
- --------------------------------------------------------------------------------
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.
21 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
1. Significant Accounting Policies Continued
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. As of August 31, 1999, the
Fund had available for federal tax purposes an unused capital loss carryover of
approximately $3,578,000, expiring in 2007.
- --------------------------------------------------------------------------------
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
six months ended February 29, 2000, a provision of $2,730 was made for the
Fund's projected benefit obligations and payments of $460 were made to retired
trustees, resulting in an accumulated liability of $29,242 as of February 29,
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.
22 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of paydown gains and losses and the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for 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.
- --------------------------------------------------------------------------------
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.
23 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / 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>
Six Months Ended February 29, 2000 Year Ended August 31, 1999
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 4,035,554 $ 63,321,914 4,371,002 $ 42,720,089
Dividends and/or
distributions
reinvested 31,524 440,684 59,038 498,873
Redeemed (2,188,621) (32,939,906) (3,967,426) (37,655,948)
------------------------------------------------------
Net increase 1,878,457 $ 30,822,692 462,614 $ 5,563,014
======================================================
- -----------------------------------------------------------------------------------
Class B
Sold 1,206,795 $ 19,054,904 1,618,428 $ 16,240,189
Dividends and/or
distributions
reinvested 4,973 69,185 20,507 172,670
Redeemed (522,176) (7,225,554) (1,441,572) (14,330,900)
------------------------------------------------------
Net increase 689,592 $ 11,898,535 197,363 $ 2,081,959
======================================================
- -----------------------------------------------------------------------------------
Class C
Sold 289,819 $ 4,537,374 392,347 $ 3,833,222
Dividends and/or
distributions
reinvested 1,334 18,567 4,083 34,424
Redeemed (85,054) (1,166,062) (346,893) (3,347,917)
------------------------------------------------------
Net increase 206,099 $ 3,389,879 49,537 $ 519,729
======================================================
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of February 29, 2000, net unrealized appreciation on securities of
$43,406,867 was composed of gross appreciation of $53,421,601, and gross
depreciation of $10,014,734.
================================================================================
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
six months ended February 29, 2000 was 1.00% of average net assets for each
class of shares, annualized for periods of less than one full year.
24 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
- --------------------------------------------------------------------------------
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
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
February 29, 2000 $181,088 $55,640 $38,824 $204,297 $23,804
</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
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
February 29, 2000 $-- $33,792 $--
</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 six months ended
February 29, 2000, payments under the Class A plan totaled $65,038, all of
which was paid by the Distributor to recipients. That included $4,908 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.
25 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
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 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 six months ended February 29,
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 $138,711 $111,013 $661,575 1.41%
Class C Plan 34,972 11,138 65,971 0.55
</TABLE>
26 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
================================================================================
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.
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 February 29, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract Valuation as of Unrealized
Contract Description Expiration Date Amount (000s) Feb. 29, 2000 Depreciation
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
British Pound Sterling (GBP) 3/2/00 400 GBP $631,480 $ 8,642
Hong Kong Dollar (HKD) 3/1/00 4,114 HKD 528,634 54
Indian Rupee (INR) 3/1/00 5,381 INR 123,383 230
Philippine Peso (PHP) 3/1/00 2,112 PHP 51,526 354
Singapore Dollar (SGD) 3/3/00 910 SGD 527,913 2,783
-------
$12,063
=======
</TABLE>
27 | OPPENHEIMER DEVELOPING MARKETS FUND
|
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<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
6. Illiquid or Restricted Securities
As of February 29, 2000, 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 15% 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 February 29, 2000 was
$3,609,227, which represents 2.27% of the Fund's net assets.
================================================================================
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 six months ended
February 29, 2000.
28 | OPPENHEIMER DEVELOPING MARKETS FUND
|
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<PAGE>
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 OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
================================================================================
Legal Counsel Mayer, Brown & Platt
The financial statements included herein have been
taken from the records of the Fund without examination
of those records by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Developing Markets Fund. This report must
be preceded or accompanied by a Prospectus of
Oppenheimer Developing Markets 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.
29 | OPPENHEIMER DEVELOPING MARKETS FUND
|
|
<PAGE>
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
www.oppenheimerfunds.com
------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-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 8:30am-7pm ET
1.800.843.4461
------------------------------------------------------
OppenheimerFunds Information 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
- --------------------------------------------------------------------------------
[Logo]OppenheimerFunds(R)
Distributor, Inc.
RS0785.001.0200 April 28, 2000
