[Photo: Picture of Wheat]
================================================================================
Annual Report August 31, 1999
--------------------------------
Oppenheimer
Real Asset Fund(SM)
[OppenheimerFunds Logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Contents
3 President's Letter
5 An Interview
with Your Fund's
Managers
9 Fund Performance
14 Financial
Statements
36 Independent
Auditors' Report
37 Federal
Income Tax
Information
38 Officers and Trustees
39 OppenheimerFunds
Family
40 Information and
Services
The commodities markets began to recover in 1999 from the sharp declines of 1997
and 1998.
Energy prices led the commodities markets higher in 1999, boosted by increased
demand from emerging markets and reduced supply from oil producers.
We are optimistic that improving economies worldwide will lead to firmer
commodities prices.
- ----------------------------------------------
Average Annual
Total Returns
For the 1-Year Period
Ended 8/31/99*
Class A
Without With
Sales Chg. Sales Chg.
- ----------------------------------------------
6.50% 0.38%
Class B
Without With
Sales Chg. Sales Chg.
- ----------------------------------------------
5.75% 0.75%
Class C
Without With
Sales Chg. Sales Chg.
- ----------------------------------------------
5.68% 4.69%
Class Y
Without With
Sales Chg. Sales Chg.
- ----------------------------------------------
6.77% 6.77%
- ----------------------------------------------
- -------------------------------
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
- -------------------------------
*See page 12 for further details.
2 OPPENHEIMER REAL ASSET FUND
<PAGE>
PRESIDENT'S LETTER
Dear shareholder,
In many ways, the 1999 investment environment has, so far,
unfolded as many expected it would, producing both attractive opportunities and
formidable challenges for investors.
[Photo James C. Swain] [Photo: Bridget A. Macaskill]
James C. Swain Bridget A. Macaskill
Chairman President
Oppenheimer Oppenheimer
Real Asset Fund Real Asset Fund
On the economic front, early worries about the effects of global weakness
in the wake of last year's credit and currency crises have abated. Instead, as
many economies around the world begin to strengthen, concerns now center around
whether the U.S. economy may be growing too quickly. Throughout the year,
consumers in the United States have continued to spend and borrow heavily, more
than offsetting any temporary slowdown in the industrial and export sectors.
The economy's strength has not gone unnoticed by the nation's monetary
policymakers. In an effort to ward off emerging inflationary pressures, the
Federal Reserve Board increased short-term interest rates this past summer.
Market reaction to robust economic growth has been mixed. The U.S. bond
market has generally declined, as fixed income investors became increasingly
concerned about the effects of rising interest rates.
In the stock market, the performance of large-capitalization growth
stocks, which has driven the market's advance over the past few years, has begun
to moderate, and many previously out-of-favor value-oriented, mid-cap and
small-cap stocks have rallied. At the same time, a healthy percentage of
actively managed diversified portfolios have once again begun to outperform
unmanaged stock indices such as Standard & Poor's 500.
3 OPPENHEIMER REAL ASSET FUND
<PAGE>
PRESIDENT'S LETTER
At OppenheimerFunds, we applaud the Fed's pre-emptive strike against inflation.
In our view, history has repeatedly demonstrated that most financial assets do
best in a low-inflation environment. What's more, we believe that the move to
higher interest rates should be temporary.
One recent development is quite troublesome to us however: the increasing
popularity of "day trading" among individuals seeking to make fast money in a
volatile stock market. In our opinion, day trading is not investing, it is
gambling. Experience proves that without extensive research and analysis,
attempting to time short-term price swings is a fool's errand. Instead, we
continue to encourage investors to maintain a long-term perspective that is
measured in years, not days.
Finally, while we remain alert to the potential impact of the Y2K issue,
we are encouraged by the progress made in addressing the matter. At
OppenheimerFunds, our shareholder accounting systems are already Y2K compliant,
and we have successfully participated in all required industrywide
tests. We intend to continue retesting our systems in order to help further
protect against any potential problems. After all, whether in our computer
accounting systems or the financial markets, managing risk is an
important part of what makes OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
September 22, 1999
4 OPPENHEIMER REAL ASSET FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Q How did Oppenheimer Real Asset Fund perform during the one-year period that
ended August 31, 1999?
A. We are pleased with the Fund's performance over the fiscal year. That's
because, as it was designed to do, the Fund performed effectively as a portfolio
diversification tool. When prices of many stocks and bonds fell over the first
eight months of 1999, commodity prices rose. Of course, the opposite was also
true: when stocks and bonds generally rose during the last four months of 1998,
commodities prices fell.
[Photo: Portfolio Management Team (l to r)]
Russell Read
John Kowalik
Kevin Baum
What sectors of the commodities markets have improved?
Of the five major commodities classes tracked by the Fund's benchmark, the
Goldman Sachs Commodity Index (GSCI),(1) energy, industrial metals and livestock
produced positive returns during the first eight months of 1999. The rally began
in the energy markets, where crude oil rose from a low of about $10.00 per
barrel at the beginning of the year to more than $20.00 in August. Because
energy comprises about 50% of the Fund's exposure to the commodities markets,
this dramatic increase had a substantially positive influence on performance.
(1). While the Fund seeks to maintain a 90% or greater correlation with the
GSCI, this projected correlation is a portfolio management technique and not a
formal investment policy of the Fund. The correlation strategy can be changed by
the Manager at any time and the Fund's performance may vary from its benchmark.
Because the Fund's commodity-linked investments may be allocated to different
commodity sectors in amounts that vary from the proportional weightings of the
GSCI, the Fund is not an "index" fund.
5 OPPENHEIMER REAL ASSET FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Prices of industrial metals such as aluminum and copper have recovered
substantially. In 1998, many major mining companies simply curtailed production
when prices declined to the point that they could no longer operate profitably.
This reduced the available supply of many industrial metals, leading to higher
prices in 1999.
[Begin: Sidebar Text]
- ---------------------------
"We have seen
dramatic
improvements
in the fundamental
condition
of commodities,
both in terms of
strengthening
demand and
stable supplies,
from energy
to agricultural
products
to livestock
to industrial metals."
- ---------------------------
[End: Sidebar Text]
Prices of agricultural commodities--such as corn, soybeans and wheat--and prices
of livestock--including cattle and hogs--began to rise toward the end of the
reporting period, in part due to expectations of reduced yields caused by
regional drought conditions. In our view, however, agricultural and livestock
prices remain depressed relative to historical norms, leaving room for
improvement.
The precious metals sector also declined precipitously over the past year.
That's because the price of gold has continued to fall in response to massive
selling of reserves by central banks. In our opinion, the role of gold in the
global economy is changing. Increasingly, gold is no longer regarded as a stable
store of monetary value or hedge against political uncertainty, but rather as a
luxury item. Because precious metals represented approximately 3% of the Fund,
gold's decline did not have a very substantial effect on performance.
Did economic changes lead to the rally in commodities prices?
Economic conditions in the emerging markets were key factors in commodities'
recovery, just as they were previously a major factor in the markets' 1997 and
1998 declines. That's because the emerging markets are major consumers of
commodities. When economies in Southeast Asia, Latin America and Eastern Europe
are thriving, industrial metals are needed for construction and manufacturing;
energy is needed to fuel that activity; and livestock and agricultural products
are required to feed a more affluent population.
6 OPPENHEIMER REAL ASSET FUND
<PAGE>
At the start of 1999, economic conditions in the emerging markets began to
improve. As a result, demand for commodities increased. Yet, the supply of
certain commodities had been reduced by producers. For example, the
oil-producing nations of the Middle East agreed to cut production and exports of
crude oil, and industrial metals producers curtailed mining operations when
their profit margins eroded.
[Begin: Sidebar Text]
- --------------------------------------
Average Annual
Total Returns
For the Periods Ended 9/30/99(2)
Class A Since
1-Year Inception
- --------------------------------------
- -6.34% -16.97%
Class B Since
1-Year Inception
- --------------------------------------
- -5.92% -16.56%
Class C Since
1-Year Inception
- --------------------------------------
- -2.08% -15.65%
Class Y Since
1-Year Inception
- --------------------------------------
- -0.31% -14.83%
- --------------------------------------
[End: Sidebar Text]
How was the Fund managed in this environment?
Because the Fund is designed to track the GSCI index, there was no change in the
portfolio's composition. We strive to maintain a correlation between the Fund
and the GSCI of 90% or better. Over the past year, that correlation has exceeded
95%.(1)
Nonetheless, we have increased efforts to improve returns incrementally by
more actively managing the Fund's holdings of U.S. government securities. Our
strategy has been to capture the higher yields that securities of U.S.
government agencies often provide relative to U.S. Treasury securities.
In addition, we have tried to take advantage of short-term imbalances
within individual market sectors. For example, the Fund increased exposure to
petroleum relative to the GSCI by analyzing and investing in the most
attractively priced petroleum markets worldwide.
(1). See footnote on page 5.
(2). See page 12 for further details.
7 OPPENHEIMER REAL ASSET FUND
<PAGE>
An Interview With Your Fund's Managers
What is your outlook for real assets over the coming months?
We are increasingly optimistic. In our view, commodities' steep declines over
the past several years were the result of unusual market forces. Prices fell
sharply because poor economic conditions in emerging markets reduced demand.
Yet, commodities producers in those markets continued to produce basic materials
at any price, in order to survive in a recession. This vicious cycle was broken
this year when economic conditions began to show signs of improvement.
We believe that firmer prices will continue to prevail for every major
commodity except gold as long as producers do not increase production beyond
their customers' needs. By keeping supply relatively tight as demand rises,
commodities producers should ultimately benefit. Of course, we will continue to
closely monitor developments in the commodities markets. In-depth analysis
combined with a disciplined investment strategy is what makes Oppenheimer Real
Asset Fund an important part of The Right Way to Invest.
[Begin: Sidebar Text]
[Begin: Tabular Representation of Pie Chart]
- ------------------------------------------
Portfolio Composition(3)
o U.S. Government,
Agencies &
Mortgages 30.5%
o Commodity-
Linked Notes 29.6
o Cash Equivalents 32.6
o U.S. Corporate
Securities 7.3
- ------------------------------------------
[End: Sidebar Text]
[End: Tabular Representation of Pie Chart]
Sector Weights
Percentage of Commodity-Linked Notes(4)
- ----------------------------------------------------------
Petroleum 50.7%
- ----------------------------------------------------------
Agriculture 20.3
- ----------------------------------------------------------
Livestock 10.3
- ----------------------------------------------------------
Industrial Metals 8.3
- ----------------------------------------------------------
Natural Gas 7.9
- ----------------------------------------------------------
Precious Metals 2.5
(3). Portfolio is subject to change. Percentages are as of August 31, 1999, and
are dollar-weighted based on total investments.
(4). Portfolio is subject to change. Percentages are as of August 31, 1999, and
are dollar-weighted based on commodity-linked notes. The Fund's allocation of
its investments within each sector of the GSCI may differ (at times,
significantly) from the sector weightings within the GSCI.
8 OPPENHEIMER REAL ASSET FUND
<PAGE>
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, 1999, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
Management's discussion of performance. During the Fund's fiscal year that ended
August 31, 1999, Oppenheimer Real Asset Fund provided mixed performance. Returns
were generally poor during the last four months of 1998, principally because of
economic weakness in key overseas markets, which adversely affected commodity
prices. In contrast, returns were attractive during the first eight months of
1999, when improved economic conditions worldwide helped increase demand for
most commodities. Recently, the portfolio managers have begun efforts to improve
returns incrementally by more actively managing the Fund's holdings of U.S.
government securities. This strategy seeks to capture the higher yields that
securities of U.S. government agencies often provide relative to U.S. Treasury
securities. During the period, pricing inefficiencies in the energy sector also
provided an opportunity for the Fund to benefit from rising oil prices. The
Fund's portfolio holdings, allocations and strategies are subject to change.
Comparing the Fund's performance to the market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until August 31, 1999. The graphs assume that all dividends and
capital gains distributions were reinvested in additional shares. Class A, B, C
and Y shares were first publicly offered on March 31, 1997. The graphs reflect
the deduction of the current maximum initial sales charge on Class A shares and
the applicable contingent deferred sales charge for Class B and Class C shares.
Class Y shares are available principally to certain institutional investors.
The Fund's performance is compared to the performance of the Goldman Sachs
Commodity Index (GSCI). The GSCI is a composite index of commodity sector
returns representing an unleveraged, long-term investment in commodity futures
that is broadly diversified across the spectrum of commodities and includes
reinvestment of income (to represent real assets).
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
effects of Fund 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.
9 OPPENHEIMER REAL ASSET FUND
<PAGE>
FUND PERFORMANCE
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Real Asset Fund (Class A)
and Goldman Sachs Commodity Index (GSCI)
[Begin: Tabular Representation of Line Chart]
Oppenheimer Real Asset Goldman Sachs Commodity
Fund Class A Index (GSCI)
3.31.97 9425 10000
8.31.97 9717 10403
8.31.98 5594 6527
8.31.99 5958 7702
[End: Tabular Representation of Line Chart]
Average Annual Total Return of Class A Shares of the Fund at 8/31/99(1)
1-Year 0.38% Life -19.29%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Real Asset Fund (Class B)
and Goldman Sachs Commodity Index (GSCI)
[Begin: Tabular Representation of Line Chart]
Oppenheimer Real Asset Goldman Sachs Commodity
Fund Class B Index (GSCI)
3.31.97 10000 10000
8.31.97 10270 10403
8.31.98 5865 6527
8.31.99 6030 7702
[End: Tabular Representation of Line Chart]
Average Annual Total Return of Class B Shares of the Fund at 8/31/99(1)
1-Year 0.75% Life -18.89%
The performance information for GSCI in the graphs begins on 3/31/97.
10 OPPENHEIMER REAL ASSET FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Real Asset Fund (Class C)
and Goldman Sachs Commodity Index (GSCI)
[Begin: Tabular Representation of Line Chart]
Oppenheimer Real Asset Goldman Sachs Commodity
Fund Class C Index (GSCI)
3.31.97 10000 10000
8.31.97 10260 10403
8.31.98 5862 6527
8.31.99 6195 7702
[End: Tabular Representation of Line Chart]
Average Annual Total Return of Class C Shares of the Fund at 8/31/99(1)
1-Year 4.69% Life -17.98%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Real Asset Fund (Class Y)
and Goldman Sachs Commodity Index (GSCI)
[Begin: Tabular Representation of Line Chart]
Oppenheimer Real Asset Goldman Sachs Commodity
Fund Class Y Index (GSCI)
3.31.97 10000 10000
8.31.97 10310 10403
8.31.98 5941 6527
8.31.99 6343 7702
[End: Tabular Representation of Line Chart]
Average Annual Total Return of Class Y Shares of the Fund at 8/31/99(1)
1-Year 6.77% Life -17.17%
(1). See page 12 for further details.
Past performance is not predictive of future performance.
11 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1.800.525.7048 or visit our website,
www.oppenheimerfunds.com.
It is important to note that Oppenheimer Real Asset Fund has a limited operating
history, having been first offered 3/31/97, is non-diversified and invests a
substantial portion of its assets in derivative instruments that entail
potentially higher volatility and risk of loss than traditional equity or debt
securities. The Fund is not intended as a complete investment program and is
intended for investors with long-term investment goals who are willing to accept
this greater risk.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
Class A. The inception date of the Fund was 3/31/97. Class A returns include the
current maximum initial sales charge of 5.75%.
Class B shares of the Fund were first publicly offered on 3/31/97. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 3% (since inception). Class B shares are subject to an annual 0.75%
asset-based sales charge. The ending account value shown in the graph is net of
the applicable 3% contingent deferred sales charge.
Class C shares of the Fund were first publicly offered on 3/31/97. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 3/31/97. Class Y
shares are offered principally to certain institutional investors under special
agreement with the Distributor.
An explanation of the different performance calculations is in the Fund's
prospectus.
12 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
Financials
13 OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF INVESTMENTS August 31, 1999
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
=====================================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--25.8%
- -----------------------------------------------------------------------------------------------------
Government Agency--16.9%
- -----------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--11.9%
Federal Home Loan Mortgage Corp., Collateralized Mtg.
Obligations, Gtd. Multiclass Mtg. Participation Certificates,
Series 1451, Cl. G, 7%, 9/15/06 $ 7,378,941 $ 7,406,613
- -----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 2178, Cl. Pl, 10.057%, 8/15/29(1) 15,800,000 4,038,875
- -----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg.
Obligations, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates, Trust 1992-188, Cl. PG, 6.65%, 1/25/17 1,262,924 1,260,550
- -----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Securities,
Trust 1997-89, Cl. Pl, 8.877%, 5/18/12(1,2) 13,119,692 2,525,541
- -----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 1993-23, Cl. PN, 21.295%, 4/25/22(1) 3,624,240 1,073,681
Trust 1997-3, 14.728%, 3/18/26(1) 3,424,713 757,718
-------------
17,062,978
- -----------------------------------------------------------------------------------------------------
GNMA/Guaranteed--5.0%
Government National Mortgage Assn.:
Collateralized Mtg. Obligations, Series 1998-1, Cl. PA, 6.25%, 9/20/21(3) 7,000,000 6,991,250
Interest-Only Stripped Mtg.-Backed Security,
Series 1997-5, Cl. PJ, 20.514%, 5/20/22(1) 2,208,810 226,403
-------------
7,217,653
- -----------------------------------------------------------------------------------------------------
Private--8.9%
- -----------------------------------------------------------------------------------------------------
Commercial--7.8%
Ameriquest Technology, Inc., Series I, 9.75%, 3/25/29(2) 3,500,000 3,471,562
- -----------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations,
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28(2) 3,512,463 3,435,629
- -----------------------------------------------------------------------------------------------------
Northwest Asset Securities Corp., Collateralized Mtg. Obligations,
Series 1996-5, Cl. A17, 8%, 11/25/26 3,500,000 3,549,219
- -----------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1994-C2, Cl. G, 8%, 4/25/25 864,549 830,102
-------------
11,286,512
- -----------------------------------------------------------------------------------------------------
Residential--1.1%
Salomon Brothers Mortgage Securities VII, Series 1998-2,
Cl. 1, 5%, 11/25/27(2) 1,698,340 1,615,547
-------------
Total Mortgage-Backed Obligations (Cost $37,357,189) 37,182,690
</TABLE>
14 OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
=====================================================================================================
<S> <C> <C>
U.S. Government Obligations--5.1%
- -----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
6.52%, 1/2/02 $ 4,870,000 $ 4,898,056
Unsec. Medium-Term Nts., 5.08%, 9/24/99(4) 2,500,000 2,499,225
-------------
Total U.S. Government Obligations (Cost $7,502,291) 7,397,281
=====================================================================================================
Corporate Bonds and Notes--6.9%
- -----------------------------------------------------------------------------------------------------
Detroit Edison Co., 6.40% Sec. Nts., Series A-1, 7/15/00 5,000,000 4,973,870
- -----------------------------------------------------------------------------------------------------
Tyco International Group Ltd., 6.102% Nts., 9/5/00(5,6) 5,000,000 4,993,750
-------------
Total Corporate Bonds and Notes (Cost $10,025,769) 9,967,620
=====================================================================================================
Structured Instruments--30.1%
- -----------------------------------------------------------------------------------------------------
AIG International, Inc., Commodity Index Excess
Return Linked Nts., 4.81%, 1/6/00(7,8) 5,000,000 7,113,150
- -----------------------------------------------------------------------------------------------------
Bank of America NT & SA (London Branch), Goldman Sachs
Commodity Index Excess Return Linked Nts., 4.60%, 12/23/99(8,9) 6,500,000 9,369,750
- -----------------------------------------------------------------------------------------------------
Business Development Bank (Canada), Goldman Sachs Commodity
Index Excess Return Linked Nts., 5.09%, 6/5/00(8,9) 4,000,000 5,853,560
- -----------------------------------------------------------------------------------------------------
Cargill Financial Services Corp., Goldman Sachs Commodity
Index Total Return Linked Nts., 4.75%, 12/20/99(8,9) 4,000,000 7,166,521
- -----------------------------------------------------------------------------------------------------
Cargill Financial Services Corp., Goldman Sachs Commodity Index
Total Return Linked Nts., 5.86%, 9/14/00(8,9) 10,000,000 10,000,000
- -----------------------------------------------------------------------------------------------------
Chase Manhattan Bank USA National Assn., Chase Physical
Commodity Index Linked Deposit Nts., 4.70%, 12/15/99(8,10) 2,500,000 3,839,750
-------------
Total Structured Instruments (Cost $32,000,000) 43,342,731
<CAPTION>
Date Strike Contracts
<S> <C> <C> <C> <C>
=====================================================================================================
Options Purchased--0.6%
- -----------------------------------------------------------------------------------------------------
Crude Oil Futures, 10/99
Call Opt. (Cost $136,000) 9/99 $18 200 822,000
<CAPTION>
Face
Amount
=====================================================================================================
<S> <C> <C>
Short-Term Notes--9.6%(11)
- -----------------------------------------------------------------------------------------------------
Columbus Southern Power, 6.15%, 2/17/00 $ 5,000,000 4,855,646
- -----------------------------------------------------------------------------------------------------
Conoco, Inc., 5.86%, 1/31/00(5) 4,000,000 3,901,031
- -----------------------------------------------------------------------------------------------------
FINOVA Capital Corp., 6.84%, 8/8/00 5,000,000 5,025,500
-------------
Total Short-Term Notes (Cost $13,782,177) 13,782,177
</TABLE>
15 OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
======================================================================================================
<S> <C> <C>
Repurchase Agreements--23.6%
- ------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 5.41%,
dated 8/31/99, to be repurchased at $16,902,540 on 9/1/99,
collateralized by U.S. Treasury Nts., 4%-6.375%, 11/30/99-2/28/03,
with a value of $16,750,569, and U.S. Treasury Bills, 9/15/99,
with a value of $500,437 $16,900,000 $ 16,900,000
- ------------------------------------------------------------------------------------------------------
Repurchase agreement with Zion First National Bank, 5.40%,
dated 8/31/99, to be repurchased at $17,002,550 on 9/1/99,
collateralized by U.S. Treasury Bonds, 8%, 11/15/21,
with a value of $1,018,801, and U.S. Treasury Nts., 5.875%-7%,
2/15/00-2/15/07, with a value of $16,325,679 17,000,000 17,000,000
--------------
Total Repurchase Agreements (Cost $33,900,000) 33,900,000
- ------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $134,703,426) 101.7% 146,394,499
- ------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.7) (2,410,621)
----------------------------
Net Assets 100.0% $143,983,878
============================
</TABLE>
16 OPPENHEIMER REAL ASSET FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
(1). Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
(2). Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
(3). Securities with an aggregate market value of $2,846,437 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
(4). A sufficient amount of liquid assets has been designated to cover
outstanding written options, as follows:
<TABLE>
<CAPTION>
Contracts Expiration Exercise Premium Market Value
Subject to Call/Put Date Price Received See Note 1
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Crude Oil Call Opt. 200 9/16/99 $21 $ 32,000 $ 264,000
Crude Oil Put Opt. 200 9/16/99 15 87,000 2,000
Crude Oil Put Opt. 100 11/16/99 20 100,000 59,000
----------------------------------
$219,000 $325,000
==================================
</TABLE>
(5). Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $8,894,781 or 6.18% of the Fund's net
assets as of August 31, 1999.
(6). Represents the current interest rate for a variable rate security.
(7). Security is linked to a "Commodity Option Basket." The basket is composed
of options of seventeen different commodities in five main commodity groups
(energy, agriculture, livestock, industrial metals and precious metals).
(8). Security is leveraged, which increases the Fund's exposure to commodities
and increases the notes' volatility relative to the face value of the security
by a weighted average leverage factor of 3.00.
(9). Security is linked to the Goldman Sachs Commodity Index, the Goldman Sachs
Commodity Excess Return Index or the Goldman Sachs Commodity Index Total Return
Index. The indexes currently contain twenty-six commodities from the sectors of
energy, metals and agricultural products. Individual components qualify for the
inclusion in the index based on liquidity and are weighted by their respective
world production quantities.
(10). Security is linked to the Chase Physical Commodity Index. The index
currently contains nineteen commodities from the sectors of energy, metals,
livestock, grain and fiber. The index offers a balanced cross-section of
physical commodities and, in order to optimally reflect real market conditions,
the weight of the different commodities may be adjusted annually in keeping with
prevailing world supply, demand and inventory conditions.
(11). Short-term notes are generally traded on a discount basis; the interest
rate is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
17 OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES August 31, 1999
<TABLE>
========================================================================================
<S> <C>
Assets
- ----------------------------------------------------------------------------------------
Investments, at value (including repurchase agreements of $33,900,000)
(cost $134,703,426)--see accompanying statement $ 146,394,499
- ----------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 6,630,822
Interest and principal paydowns 1,070,014
Shares of beneficial interest sold 885,244
Daily variation on futures contracts--Note 5 454,440
Other 1,344
---------------
Total assets 155,436,363
========================================================================================
Liabilities
- ----------------------------------------------------------------------------------------
Bank overdraft 228,653
- ----------------------------------------------------------------------------------------
Options written, at value (premiums received $219,000)--
see accompanying statement--Note 6 325,000
- ----------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 10,000,000
Daily variation on futures contracts--Note 5 558,392
Shares of beneficial interest redeemed 151,760
Shareholder reports 55,486
Distribution and service plan fees 46,975
Transfer and shareholder servicing agent fees 36,448
Other 49,771
---------------
Total liabilities 11,452,485
========================================================================================
Net Assets $ 143,983,878
===============
========================================================================================
Composition of Net Assets
- ----------------------------------------------------------------------------------------
Paid-in capital $ 194,479,745
- ----------------------------------------------------------------------------------------
Undistributed net investment income 883,405
- ----------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (63,909,334)
- ----------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Notes 3 and 5 12,530,062
---------------
Net assets $ 143,983,878
===============
</TABLE>
18 OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<S> <C>
============================================================================================
Net Asset Value Per Share
- --------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$109,328,379 and 19,042,998 shares of beneficial interest outstanding) $5.74
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $6.09
- --------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $18,690,317
and 3,249,613 shares of beneficial interest outstanding) $5.75
- --------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $15,964,610
and 2,786,261 shares of beneficial interest outstanding) $5.73
- --------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $572 and 100 shares of beneficial interest outstanding) $5.72
</TABLE>
See accompanying Notes to Financial Statements.
19 OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended August 31, 1999
<TABLE>
<S> <C>
========================================================================================
Investment Income
- ----------------------------------------------------------------------------------------
Interest $ 5,102,784
========================================================================================
Expenses
- ----------------------------------------------------------------------------------------
Management fees--Note 4 918,924
- --------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 157,557
Class B 154,504
Class C 104,616
- ----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 272,047
- ----------------------------------------------------------------------------------------
Shareholder reports 126,005
- ----------------------------------------------------------------------------------------
Legal, auditing and other professional fees 36,593
- ----------------------------------------------------------------------------------------
Deferred organization expenses 26,993
- ----------------------------------------------------------------------------------------
Registration and filing fees 26,727
- ----------------------------------------------------------------------------------------
Custodian fees and expenses 24,827
- ----------------------------------------------------------------------------------------
Trustees' compensation 5,671
- ----------------------------------------------------------------------------------------
Insurance expenses 2,919
- ----------------------------------------------------------------------------------------
Other 14,926
---------------
Total expenses 1,872,309
Less expenses paid indirectly--Note 1 (3,022)
---------------
Net expenses 1,869,287
========================================================================================
Net Investment Income 3,233,497
========================================================================================
Realized and Unrealized Gain (Loss)
- ----------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (17,165,581)
Closing of futures contracts 1,445,418
Closing and expiration of option contracts written--Note 6 (138,785)
- ----------------------------------------------------------------------------------------
Net realized loss (15,858,948)
Net change in unrealized appreciation or depreciation on investments 21,857,973
---------------
Net realized and unrealized gain 5,999,025
========================================================================================
Net Increase in Net Assets Resulting from Operations $ 9,232,522
===============
</TABLE>
See accompanying Notes to Financial Statements.
20 OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended August 31, 1999 1998
===================================================================================================================
<S> <C> <C>
Operations
- -------------------------------------------------------------------------------------------------------------------
Net investment income $ 3,233,497 $ 4,066,912
- -------------------------------------------------------------------------------------------------------------------
Net realized loss (15,858,948) (47,729,016)
- -------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 21,857,973 (10,943,262)
--------------------------------
Net increase (decrease) in net assets resulting from operations 9,232,522 (54,605,366)
===================================================================================================================
Dividends and/or Distributions to Shareholders
- -------------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (3,917,119) (1,102,914)
Class B (778,666) (441,240)
Class C (524,527) (236,846)
Class Y (39) (21)
===================================================================================================================
Beneficial Interest Transactions
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 43,162,353 61,012,518
Class B 1,213,947 14,242,312
Class C 5,427,691 6,523,710
Class Y -- --
===================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------
Total increase 53,816,162 25,392,153
- -------------------------------------------------------------------------------------------------------------------
Beginning of period 90,167,716 64,775,563
--------------------------------
End of period (including undistributed net investment
income of $883,405 and $2,823,015, respectively) $ 143,983,878 $ 90,167,716
================================
</TABLE>
See accompanying Notes to Financial Statements.
21 OPPENHEIMER REAL ASSET FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended August 31, 1999 1998 1997(1)
===================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $5.81 $10.31 $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .29 .09
Net realized and unrealized gain (loss) .09 (4.59) .22
--------------------------------------
Total income (loss) from investment operations .29 (4.30) .31
- ---------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (.36) (.20) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $5.74 $ 5.81 $10.31
======================================
===================================================================================================
Total Return, at Net Asset Value(2) 6.50% (42.43)% 3.10%
- ---------------------------------------------------------------------------------------------------
===================================================================================================
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $109,328 $62,568 $37,687
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 66,106 $59,251 $18,361
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.73% 4.59% 4.27%
Expenses 1.82% 1.66%(4) 1.74%(4)
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 86% 105% 39%
</TABLE>
(1). For the period from March 31, 1997 (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 reflects the effect of expenses paid indirectly by the Fund.
(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 August 31, 1999 were $86,192,390 and $68,386,159, respectively.
22 OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Class B Year Ended August 31, 1999 1998 1997(1)
===================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $5.76 $10.27 $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .16 .28 .07
Net realized and unrealized gain (loss) .10 (4.62) .20
--------------------------------------
Total income (loss) from investment operations .26 (4.34) .27
- ---------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (.27) (.17) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $5.75 $ 5.76 $10.27
======================================
===================================================================================================
Total Return, at Net Asset Value(2) 5.75% (42.89)% 2.70%
- ---------------------------------------------------------------------------------------------------
===================================================================================================
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $18,690 $17,357 $16,471
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $15,454 $22,659 $ 7,388
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 2.95% 3.87% 3.35%
Expenses 2.58% 2.39%(4) 2.56%(4)
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 86% 105% 39%
</TABLE>
(1). For the period from March 31, 1997 (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 reflects the effect of expenses paid indirectly by the Fund.
(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 August 31, 1999 were $86,192,390 and $68,386,159, respectively.
23 OPPENHEIMER REAL ASSET FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class C Year Ended August 31, 1999 1998 1997(1)
===================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $5.76 $10.26 $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .15 .26 .08
Net realized and unrealized gain (loss) .11 (4.60) .18
--------------------------------------
Total income (loss) from investment operations .26 (4.34) .26
- ---------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (.29) (.16) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $5.73 $ 5.76 $10.26
======================================
===================================================================================================
Total Return, at Net Asset Value(2) 5.68% (42.87)% 2.60%
- ---------------------------------------------------------------------------------------------------
===================================================================================================
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $15,965 $10,243 $10,616
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $10,477 $12,060 $ 5,599
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 2.96% 3.87% 3.34%
Expenses 2.58% 2.38%(4) 2.56%(4)
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 86% 105% 39%
</TABLE>
(1). For the period from March 31, 1997 (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 reflects the effect of expenses paid indirectly by the Fund.
(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 August 31, 1999 were $86,192,390 and $68,386,159, respectively.
24 OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Class Y Year Ended August 31, 1999 1998 1997(1)
===================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $5.81 $10.31 $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .20 .42 .20
Net realized and unrealized gain (loss) .10 (4.71) .11
--------------------------------------
Total income (loss) from investment operations .30 (4.29) .31
- ---------------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (.39) (.21) --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $5.72 $ 5.81 $10.31
======================================
===================================================================================================
Total Return, at Net Asset Value(2) 6.77% (42.38)% 3.10%
- ---------------------------------------------------------------------------------------------------
===================================================================================================
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1 $1 $1
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1 $1 $1
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 3.88% 4.84% 4.75%
Expenses 1.68% 1.40%(4) 1.57%(4)
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 86% 105% 39%
</TABLE>
(1). For the period from March 31, 1997 (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 reflects the effect of expenses paid indirectly by the Fund.
(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 August 31, 1999 were $86,192,390 and $68,386,159, respectively.
See accompanying Notes to Financial Statements.
25 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Significant Accounting Policies
Oppenheimer Real Asset Fund (the Fund) is a non-diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund's investment objective is to seek total return. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Advisor). The
Sub-Advisor is Oppenheimer Real Asset Management, Inc. (the Manager), a wholly
owned subsidiary of the Advisor. The Fund offers Class A, Class B, Class C and
Class Y shares. Class A shares are sold with a front-end sales charge on
investments up to $1 million. Class B and Class C shares may be subject to a
contingent deferred sales charge (CDSC). Class Y shares are sold to certain
institutional investors without either a front-end sales charge or a 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.
No such plan has been adopted for Class Y shares. 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.
- --------------------------------------------------------------------------------
Structured Notes. The Fund invests in commodity-linked structured notes whose
market value and redemption price are linked to commodity indices. The
structured notes are leveraged, which increases the Fund's exposure to changes
in prices of the overall commodities' markets and increases the notes'
volatility relative to the face value of the securities. Fluctuations in value
of these securities related to the commodity exposure are recorded as
unrealized gains and losses in the accompanying financial statements. As of
August 31, 1999, the market value of these securities comprised 30% of the
Fund's net assets, and resulted in realized and unrealized losses of
$5,324,747. The Fund also hedges a portion of the commodity exposure generated
by these securities, as discussed in Note 5.
26 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is
reliable and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost
(or last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on
the closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
- --------------------------------------------------------------------------------
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.
27 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
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 income tax purposes an unused capital loss
carryover of approximately $48,108,000, which expires between 2005 and 2006.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes 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.
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, 1999, amounts have been reclassified to reflect an
increase in undistributed net investment income of $47,244. Accumulated net
realized loss on investments was increased by the same amount.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Discount on securities purchased is
amortized over the life of the respective securities, in accordance with
federal income tax requirements. Realized gains and losses on investments and
options written and unrealized appreciation and depreciation are determined on
an identified cost basis, which is the same basis used for federal income tax
purposes. Dividends-in-kind are recognized as income on the ex-dividend date,
at the current market value of the underlying security. Interest on
payment-in-kind debt instruments is accrued as income at the coupon rate and a
market adjustment is made periodically.
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 REAL ASSET FUND
<PAGE>
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Year Ended August 31, 1999 Year Ended August 31, 1998
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 17,245,314 $ 90,733,511 11,980,392 $101,952,769
Dividends and/or
distributions reinvested 766,779 3,577,976 111,164 1,045,978
Redeemed (9,734,453) (51,149,134) (4,981,608) (41,986,229)
---------------------------------------------------------------
Net increase 8,277,640 $ 43,162,353 7,109,948 $ 61,012,518
===============================================================
- ---------------------------------------------------------------------------------------------------
Class B
Sold 1,423,730 $ 7,465,056 2,490,310 $ 22,171,281
Dividends and/or
distributions reinvested 147,282 686,669 42,367 397,911
Redeemed (1,333,586) (6,937,778) (1,124,288) (8,326,880)
---------------------------------------------------------------
Net increase 237,426 $ 1,213,947 1,408,389 $ 14,242,312
===============================================================
- ---------------------------------------------------------------------------------------------------
Class C
Sold 1,685,707 $ 8,942,433 1,579,842 $ 13,009,004
Dividends and/or
distributions reinvested 105,553 492,150 24,009 227,456
Redeemed (783,692) (4,006,892) (860,150) (6,712,750)
---------------------------------------------------------------
Net increase 1,007,568 $ 5,427,691 743,701 $ 6,523,710
===============================================================
- ---------------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Dividends and/or
distributions reinvested -- -- -- --
Redeemed -- -- -- --
---------------------------------------------------------------
Net increase -- $ -- -- $ --
===============================================================
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of August 31, 1999, net unrealized appreciation on securities and options
written of $11,585,073 was composed of gross appreciation of $12,250,152, and
gross depreciation of $665,079.
29 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Advisor were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
1.0% of the first $200 million of average net assets, 0.90% of the next $200
million, 0.85% of the next $200 million, 0.80% of the next $200 million, and
0.75% of net assets in excess of $800 million. Under the Sub-Advisory
Agreement, the Advisor pays the Sub-Advisor the following annual fees: 0.50% of
the first $200 million of average net assets, 0.45% of the next $200 million,
0.425% of the next $200 million, 0.40% of the next $200 million, and 0.375% of
the net assets in excess of $800 million. The Fund's management fee for the
year ended August 31, 1999, was 1.00% of average net assets for each class of
shares.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and 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
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
August 31, 1999 $227,646 $68,523 $18,386 $139,618 $53,055
</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, 1999 $-- $121,732 $9,877
</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.
30 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the fiscal year ended August 31, 1999,
payments under the Class A Plan totaled $157,557, all of which was paid by the
Distributor to recipients. That included $2,936 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended August 31, 1999,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $154,504 $129,772 $1,404,518 7.51%
Class C Plan 104,616 76,899 82,751 0.52
- ----------------------------------------------------------------------------------------------
</TABLE>
31 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
5. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may buy and
sell futures contracts, primarily to hedge the various commodities exposures
inherent in its holdings of structured notes that are linked to commodities
indices. The Fund may also buy or write put or call options on these futures
contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates or decreases in commodity prices and the resulting negative
effect on the value of fixed rate portfolio securities. The Fund may also
purchase futures contracts without owning the underlying fixed income security
as an efficient or cost effective means to gain exposure to changes in interest
rates or commodity prices. The Fund will then either purchase the underlying
fixed income security or close out the futures contract.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include
the possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value of
the underlying securities.
32 OPPENHEIMER REAL ASSET FUND
<PAGE>
As of August 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Date Contracts August 31, 1999 (Depreciation)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
Commodities
Agriculture
Corn 12/1/99 175 $1,918,438 $ (43,025)
Cotton 12/1/99 23 583,510 (44,040)
Wheat 12/1/99 199 2,808,388 (55,763)
Energy
Brent Crude Oil 10/1/99 10 209,900 17,700
Crude Oil 9/1/99 428 9,463,080 269,210
Crude Oil 10/1/99 164 3,619,480 14,040
Crude Oil 11/1/99 165 3,615,150 180,350
Gas Oil 10/1/99 105 1,890,000 99,150
Gasoline Unleaded 9/1/99 88 2,404,248 (3,948)
Heating Oil 9/1/99 142 3,481,783 103,320
Natural Gas 9/1/99 12 339,000 (23,620)
Natural Gas 11/1/99 50 1,477,500 (58,000)
Natural Gas 1/1/00 56 1,732,080 344,480
Livestock
Lean Hogs 10/1/99 28 512,960 (200)
Live Cattle 10/1/99 125 3,327,500 51,330
Precious Metals
Platinum 10/1/99 5 87,600 (275)
Softs
Coffee 12/1/99 12 404,325 5,288
Orange Juice 11/1/99 85 1,171,088 105,188
Sugar 9/1/99 17 129,853 2,285
Indices
Goldman Sachs Commodities Index 9/1/99 157 7,110,138 55,975
------------
1,019,445
------------
Contracts to Sell
Commodities
Agriculture
Soybean 11/1/99 38 917,700 (13,050)
Industrial Metals
Copper 11/1/99 50 2,135,625 (39,375)
Copper 12/1/99 30 594,000 (16,750)
Precious Metals
Gold 12/1/99 22 566,060 (880)
Silver 12/1/99 15 391,500 (4,500)
Softs
Cocoa 12/1/99 5 47,550 100
------------
(74,455)
------------
$ 944,990
============
</TABLE>
33 OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options
to hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put
or call option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Gains and losses are reported in the
Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may
incur a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market
does not exist.
Written option activity for the year ended August 31, 1999, was as follows:
<TABLE>
<CAPTION>
Call Options Put Options
-----------------------------------------------------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding as of
August 31, 1998 -- $ -- 100 $ 95,750
Options written 435 178,825 1,650 1,190,750
Options closed or expired (235) (146,825) (1,450) (1,099,500)
-----------------------------------------------------------------
Options outstanding as of
August 31, 1999 200 $ 32,000 300 $ 187,000
=================================================================
</TABLE>
34 OPPENHEIMER REAL ASSET FUND
<PAGE>
================================================================================
7. Illiquid or Restricted Securities
As of August 31, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 10% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of August 31, 1999, was
$11,048,279, which represents 7.67% of the Fund's net assets.
================================================================================
8. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended August 31,
1999.
35 OPPENHEIMER REAL ASSET FUND
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
To the Board of Trustees and Shareholders of
Oppenheimer Real Asset Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Real Asset Fund as of August 31,
1999, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended August 31, 1999, and
1998 and the financial highlights for the period March 31, 1997, to August 31,
1999. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1999, by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Real
Asset Fund as of August 31, 1999, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Denver, Colorado
September 22, 1999
36 OPPENHEIMER REAL ASSET FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2000, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
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.
37 OPPENHEIMER REAL ASSET FUND
<PAGE>
OPPENHEIMER REAL ASSET FUND
================================================================================
Officers and Trustees James C. Swain, Trustee and Chairman of the Board
Bridget A. Macaskill, Trustee and President
William L. Armstrong, Trustee
Robert G. Avis, Trustee
William A. Baker, Trustee
George C. Bowen, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Russell Read, Vice President
John S. Kowalik, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Sub-Advisor Oppenheimer Real Asset Management, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
================================================================================
Special Counsel Kramer, Levin, Naftalis & Frankel
This is a copy of a report to shareholders
of Oppenheimer Real Asset Fund. This report
must be preceded or accompanied by a
Prospectus of Oppenheimer Real Asset 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.
38 OPPENHEIMER REAL ASSET FUND
<PAGE>
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
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Specialty
Real Asset Fund
Gold & Special Minerals Fund
=============================================================================================
Fixed Income
- ---------------------------------------------------------------------------------------------
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Florida Municipal Fund(3)
High Yield Fund New Jersey Municipal Fund(3)
Champion Income Fund New York Municipal Fund(3)
Strategic Income Fund Pennsylvania Municipal Fund(3)
Bond Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
=============================================================================================
Money Market(4)
- ---------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
(1). Effective July 1, 1999, this fund is closed to new investors. See
prospectus for details.
(2). On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
(3). Available to investors only in certain states.
(4). An investment in money market funds is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although these funds may seek to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
39 OPPENHEIMER REAL ASSET 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
- --------------------------------------------------------------------------------
[OppenheimerFunds Logo] OppenheimerFunds(R)
Distributor, Inc.
RA0735.001.0899 October 29, 1999
