<PAGE>
[PHOTO]
Semiannual Report February 29, 2000
Oppenheimer
Real Asset Fund
[LOGO OF OPPENHEIMER FUNDS(R)]
<PAGE>
- --------------------------------------------------------------------------------
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
CONTENTS
- ---
1 President's Letter
3 An Interview with Your Fund's Managers
9 Financial Statements
28 Officers and Trustees
29 OppenheimerFunds Family
- ---
Oil prices rose sharply over the past
six months, driving the GSCI Index and the Fund's share price higher.
Non-energy commodities provided mixed results, with industrial metals and
agricultural products showing signs of strength while the price of gold has
continued to languish.
We are optimistic that global economic growth should continue to support
commodities prices.
Cumulative Total Returns
For the 6-Month Period Ended 2/29/00*
Class A
Without With
Sales Chg. Sales Chg.
- ----------------------------
22.44% 15.40%
Class B
Without With
Sales Chg. Sales Chg.
- ----------------------------
22.06% 17.06%
Class C
Without With
Sales Chg. Sales Chg.
- ----------------------------
21.97% 20.97%
Class Y
Without With
Sales Chg. Sales Chg.
- ----------------------------
22.52% 22.52%
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
*See page 7 for further details.
<PAGE>
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
Dear shareholder,
[PHOTO] [PHOTO]
James C. Swain
Chairman
Oppenheimer
Real Asset Fund
Bridget A. Macaskill
President
Oppenheimer
Real Asset Fund
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher inflation. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting to
slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term market
volatility. In the bond market, higher interest rates usually lead to lower bond
prices. In the stock market, slower economic growth could reduce corporate
earnings and put downward pressure on stock prices. Highly valued stocks may be
particularly vulnerable to a correction. The Securities and Exchange Commission
Chairman, Arthur Levitt, has cautioned investors against the expectation that
the types of returns seen in the recent bull market will last forever. We agree.
1 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
Because of the prospect of continued market volatility, we encourage you to
consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many
"old economy" stocks are selling at unusually low prices. In the bond market,
higher interest rates over the short term may reduce inflation concerns, which
should be beneficial over the long term. By buying out-of-favor investments, you
may be able to profit when and if they return to favor in the future. Of course,
there is no assurance that value investing will return to favor in the market,
but it may be a diversification strategy to consider for part of your portfolio.
What specific investments should you consider today so that you are
prepared for tomorrow? The answer depends on your individual investing goals,
risk tolerance and financial circumstances. We urge you to talk with your
financial advisor about ways to diversify your portfolio. This may include
considering global diversification as part of your strategy. While investing
abroad has special risks, such as the effects of foreign currency fluctuation,
it also offers opportunities to participate in global economic growth and to
hedge against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
March 21, 2000
2 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
[PHOTO]
Portfolio Management
Team (l to r)
Russell Read
John Kowalik
Kevin Baum
Q How did Oppenheimer Real Asset Fund perform during the six-month period that
ended February 29, 2000?
A. The Fund provided very attractive returns during the reporting period. Our
positive results were primarily the result of a steady and dramatic rise in the
price of oil, which is a major component of the Goldman Sachs Commodities Index
(GSCI),1 and therefore has a strong influence on the return of the Fund.
Perhaps most important, the Fund did a good job of providing portfolio
diversification for its shareholders: the Fund's net asset value rose while bond
prices fell sharply and stocks experienced high levels of volatility. We are
pleased that shareholders who allocated a portion of their assets to the Fund
enjoyed the risk-reducing benefits of diversification during the period.
Why did the price of oil rise so sharply?
Over the period, the price of oil rose from about $20 per barrel to more than
$30 per barrel. The effects of this increase were definitely felt by consumers.
Gasoline and home heating oil prices rose steadily, primarily the result of
reduced supply and stronger demand. The organization of oil producing and
exporting nations, known as OPEC, placed limits on the amount of oil each of its
members could produce. At the same time, cold weather in the United States
caused the demand for oil to rise sharply. When demand for a commodity increases
and its supply remains constant, its price tends to rise.
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.
3 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
"The Fund has continued to demonstrate its effectiveness as a diversification
tool, helping to reduce risks and enhance returns as a portion of a broad
investment portfolio."
Did the prices of other commodities also rise?
Prices of industrial metals--such as copper and aluminum--rose during the
reporting period. After suffering the adverse effects of 1998's global financial
crisis, many of the world's emerging economies recovered during the second half
of 1999, while growth remained strong in developed markets such as the United
States and Europe. As a result, industries in recovering markets used more raw
materials, and rising demand for industrial metals caused their prices to
appreciate.
Toward the end of the reporting period, we began to see an improvement in
the prices of certain agricultural commodities. Importers worldwide have
recently increased their grain orders, putting pressure on prices. In the
live-stock market, the price of hogs has rallied from depressed levels reached
early in 1999, while cattle prices have remained relatively unchanged.
In the precious metals sector, the price of gold declined during the
period. Central banks around the world have continued to sell gold reserves as
they view gold as an under-performing asset. The metal has lost some of its
prestige as a stable store of monetary value or as a hedge against political
uncertainty. However, the price of platinum rose sharply, primarily because of a
lack of exports from Russia, one of the world's leading platinum producers.
Demand for platinum remained strong, especially for use in catalytic converters
by car manufacturers.
How did the Fund fare as a portfolio diversification tool during the six-month
period?
Because bond and commodities prices generally move in opposite directions when
confronted by the same economic influences, they are considered negatively
correlated. It is this inverse relationship that provides the benefits of
diversification: when bond prices fall, commodities prices generally tend to
rise.
4 OPPENHEIMER REAL ASSET FUND
<PAGE>
Average Annual
Total Returns
For the Periods Ended 3/31/00/2/
Class A
Since
1-Year Inception
- -------------------------------
31.60% -10.40%
Class B
Since
1-Year Inception
- -------------------------------
33.62% -10.17%
Class C
Since
1-Year Inception
- -------------------------------
37.54% -9.35%
Class Y
Since
1-Year Inception
- -------------------------------
39.98% -8.46%
As we mentioned previously, we are very pleased with the Fund's diversification
benefits during the period. The negative correlation of the Fund's returns with
those in the bond markets was especially important for fixed-income investors,
who encountered particularly difficult market conditions over the past six
months. The economic growth in the United States and abroad continued to be
higher than many analysts anticipated, giving rise to inflation fears. To help
forestall a reacceleration of inflation, the Federal Reserve Board increased
short-term interest rates four times between late June (before the reporting
period began) and again early February. When interest rates rise, bond prices
tend to fall.
These same economic conditions were good for commodities prices, however.
Stronger economic growth tends to support consumer and business demand for a
variety of products, many of which use commodities in the manufacturing process.
Although the stock market ended the period higher than its level six months
earlier, many stocks were highly volatile. The recent movement of stock prices
appeared to have no relationship to the rise of commodity prices, making the two
asset classes non-correlated over the reporting period.
What is your outlook for real assets over the next six months?
We are optimistic. In our view, oil prices should stabilize near current levels.
We expect the prices of other commodities, especially those that have not yet
rallied, to strengthen if the global economy continues to grow. However, we do
not believe that rising commodities prices are necessarily a harbinger of higher
inflation. If commodity prices rise too much, consumers and businesses may cut
back on other purchases, which could help reduce the rate of economic growth and
reduce inflationary pressures.
2. See page 7 for further details.
5 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGERS N
- --------------------------------------------------------------------------------
Portfolio Allocation3
[PIE CHART
. U.S. Government, Agencies & Mortgages 33.8%
. Commodity Linked Notes 33.7
. U.S. Corporate Securities 20.3
. Cash Equivalents 12.2
Although oil prices may not rise significantly in the future, we expect the
price structure of oil to persist throughout 2000.
Regardless of near-term economic developments, we believe that Oppenheimer Real
Asset Fund will continue to serve as an effective diversification tool. In fact,
diversification is a fundamental part of what makes OppenheimerFunds The Right
Way to Invest.
Sector Allocation4
Petroleum 55.8%
- --------------------------------------------------------------------------------
Agriculture 17.0
- --------------------------------------------------------------------------------
Livestock 9.5
- --------------------------------------------------------------------------------
Industrial Metals 8.7
- --------------------------------------------------------------------------------
Natural Gas 6.4
- --------------------------------------------------------------------------------
Precious Metals 2.6
3. Portfolio is subject to change. Percentages are as of February 29, 2000, and
are dollar-weighted based on total market value of investments.
4. Portfolio is subject to change. Percentages are as of February 29, 2000, and
are dollar-weighted based on percentage of 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.
6 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 at www.oppenheimerfunds.com.
Please 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 include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A. 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.
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.
7 OPPENHEIMER REAL ASSET FUND
<PAGE>
Financials
8 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS February 29, 2000 / Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
==========================================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--28.5%
- ----------------------------------------------------------------------------------------------------------
Government Agency--12.9%
- ----------------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--12.1%
Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation Certificates, Series 1451, Cl. G,
7%, 9/15/06 $ 5,328,677 $ 5,323,669
- ----------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 2039, Cl. PI, 10.065%, 2/15/121 14,509,139 2,289,723
Series 2178, Cl. PI, 10.379%, 8/15/291 15,800,000 3,732,750
- ----------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Trust 1993-138, Cl. JE, 8.908%, 8/25/231 14,057,142 7,871,999
Trust 1993-23, Cl. PN, 21.981%, 4/25/221 3,624,240 1,053,295
------------
20,271,436
- ----------------------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.8%
Government National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security:
Series 1997-5, Cl. PJ, 22.547%, 5/20/221 1,923,597 204,983
Series 1999-33, Cl. PI, 13.102%, 4/16/271 4,298,093 929,463
----------
1,134,446
- ----------------------------------------------------------------------------------------------------------
Private--15.6%
- ----------------------------------------------------------------------------------------------------------
Commercial--14.8%
Ameriquest Finance Trust, Collateralized Mtg. Obligations:
Series 1999-1, CL D, 9.75%, 3/25/292 2,325,249 2,294,004
Series 2000-1, 8.50%, 8/17/01 10,000,000 9,906,250
- ----------------------------------------------------------------------------------------------------------
Amortizing Residential Collateral Trust, Collateralized Mtg. Obligations,
Trust 2000-BC1, Cl. B, 8.146%, 1/25/303 2,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 12/25/282 2,786,702 2,693,522
- ----------------------------------------------------------------------------------------------------------
Northwest Asset Securities Corp., Collateralized Mtg. Obligations,
Series 1996-5, Cl. A17, 8%, 11/25/26 3,500,000 3,452,969
- ----------------------------------------------------------------------------------------------------------
Ocwen Capital Trust I, Collateralized Mtg. Obligations,
Series 1999-OCA, Cl. 1, 9.50%, 4/1/292 1,901,556 1,854,612
- ----------------------------------------------------------------------------------------------------------
Option One Mortgage Trust, Collateralized Mtg. Obligations,
Series 1999-3, Cl. BB, 10.80%, 12/15/29 1,803,356 1,779,688
- ----------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1994-C2, Cl. G, 8%, 4/25/25 845,129 804,589
----------
24,785,634
</TABLE>
9 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS Unaudited/Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Residential--0.8%
Salomon Brothers Mortgage Securities VII, Series 1998-2,
Cl. 1, 5%, 11/25/27/2/ $1,496,908 $ 1,416,917
-----------
Total Mortgage-Backed Obligations (Cost $47,794,835) 47,608,433
========================================================================================================
U.S. Government Obligations--4.7%
Freddie Mac Debs., 6.52%, 1/2/02/4/ 4,870,000 4,844,457
- --------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.125%, 12/31/01/4/ 3,000,000 2,978,439
-----------
Total U.S. Government Obligations (Cost $7,994,899) 7,822,896
========================================================================================================
Corporate Bonds and Notes--20.0%
- --------------------------------------------------------------------------------------------------------
Capital Goods--3.0%
- --------------------------------------------------------------------------------------------------------
Manufacturing--3.0%
Tyco International Group Ltd. SA, 6.721% Nts., 9/5/00/3,5/ 5,000,000 4,999,440
- --------------------------------------------------------------------------------------------------------
Financial--6.9%
- --------------------------------------------------------------------------------------------------------
Diversified Financial--3.3%
Heller Financial, Inc., 6.33% Nts., Series G, 7/28/00/4/ 5,500,000 5,487,845
- --------------------------------------------------------------------------------------------------------
Insurance--3.6%
Conseco, Inc., 7.875% Unsec. Nts., 12/15/00 6,000,000 5,997,654
- --------------------------------------------------------------------------------------------------------
Technology--7.1%
- --------------------------------------------------------------------------------------------------------
Computer Services--7.1%
Comdisco, Inc.:
5.75% Sr. Nts., 2/15/01 7,000,000 6,894,153
6.04% Sr. Nts., Series G, 6/29/00 5,000,000 4,978,985
-----------
11,873,138
- --------------------------------------------------------------------------------------------------------
Utilities--3.0%
- --------------------------------------------------------------------------------------------------------
Electric Utilities--3.0%
Detroit Edison Co., 6.40% Sec. Nts., Series A-1, 7/15/00/4/ 5,000,000 4,976,000
-----------
Total Corporate Bonds and Notes (Cost $33,438,691) 33,334,077
Date Strike Contracts
========================================================================================================
Options Purchased--0.0%
Crude Oil Futures, 4/19/00 Put (Cost $81,375) 3/13/00 $27 75 46,500
</TABLE>
10 OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
<S> <C> <C>
========================================================================================================
Structured Instruments--33.2%
AIG Goldman Sachs Commodity Index Total Return Linked Nts.,
6.40%, 1/26/016 $ 6,000,000 $ 8,545,032
- --------------------------------------------------------------------------------------------------------
Bank of America Corp., Goldman Sachs Commodity Index
Total Return Linked Nts., 5.73%, 7/20/00/6/ 8,000,000 10,804,000
- --------------------------------------------------------------------------------------------------------
Business Development Bank (Canada), Goldman Sachs Commodity
Index Excess Return Linked Nts., 5.09%, 6/5/00/6/ 4,000,000 8,578,800
- --------------------------------------------------------------------------------------------------------
Cargill Financial Services Corp., Goldman Sachs Commodity
Index Total Return Linked Nts.:
5.86%, 9/14/00/6/ 10,000,000 16,069,538
6.11%, 12/15/00/6/ 3,000,000 4,448,271
6.20%, 3/30/01/6/ 5,000,000 6,965,578
------------
Total Structured Instruments (Cost $36,000,000) 55,411,219
========================================================================================================
Short-Term Notes--6.0%
FINOVA Capital Corp., 6.84%, 8/8/00 5,000,000 5,001,865
- --------------------------------------------------------------------------------------------------------
Sierra Pacific Residental, 6.26%, 3/10/00 5,000,000 4,992,175
------------
Total Short-Term Notes (Cost $10,017,675) 9,994,040
========================================================================================================
Repurchase Agreements--6.0%
Repurchase agreement with Banc One Capital Markets, Inc.,
5.75%, dated 2/29/00, to be repurchased at $10,101,613 on 3/1/00,
collateralized by U.S. Treasury Nts., 5.25%-7.875%, 5/31/00-5/15/08,
with a value of $9,446,707 and U.S. Treasury Bonds, 6.125%-11.875%,
11/15/03-8/15/29, with a value of $865,689 (Cost $10,100,000) 10,100,000 10,100,000
- --------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $145,427,475) 98.4% 164,317,165
- --------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.6 2,707,322
------------------------
Net Assets 100.0% $167,024,487
========================
</TABLE>
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. Represents the current interest rate for a variable or increasing rate
security.
4. Securities with an aggregate market value of $18,286,741 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.
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 $4,999,440 or 2.99% of the Fund's net
assets as of February 29, 2000.
6. 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 indices 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.
See accompanying Notes to Financial Statements.
11 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
February 29, 2000
- ------------------------------------------------------------------------------------------
Assets
- ------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (cost $145,427,475)--see accompanying statement $164,317,165
- ------------------------------------------------------------------------------------------
Cash 151,512
- ------------------------------------------------------------------------------------------
Receivables and other assets:
Interest and principal paydowns 1,634,837
Shares of beneficial interest sold 1,471,851
Daily variation on futures contracts 349,062
Other 3,619
------------
Total assets 167,928,046
- ------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 734,496
Distribution and service plan fees 55,776
Shareholder reports 50,115
Transfer and shareholder servicing agent fees 42,448
Other 20,724
------------
Total liabilities 903,559
- ------------------------------------------------------------------------------------------
Net Assets $167,024,487
============
- ------------------------------------------------------------------------------------------
Composition of Net Assets
- ------------------------------------------------------------------------------------------
Paid-in capital $190,413,324
- ------------------------------------------------------------------------------------------
Undistributed net investment income 1,395,505
- ------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (44,372,047)
- ------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 19,587,705
------------
Net assets $167,024,487
============
- ------------------------------------------------------------------------------------------
Net Asset Value Per Share
- ------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redempton price per share (based on net assets of
$127,693,822 and 18,532,377 shares of beneficial interest outstanding) $6.89
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $7.31
- ------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $22,055,741 and
3,193,513 shares of beneficial interest outstanding) $6.91
- ------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $17,274,238 and 2,510,886 shares of beneficial interest outstanding) $6.88
- ------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $686 and 100 shares of beneficial interest outstanding) $6.86
</TABLE>
See accompanying Notes to Financial Statements.
12 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS Unaudited
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months Ended February 29, 2000
- ------------------------------------------------------------------------------------------
<S> <C>
Investment Income
- ------------------------------------------------------------------------------------------
Interest $ 4,466,603
- ------------------------------------------------------------------------------------------
Expenses
- ------------------------------------------------------------------------------------------
Management fees 742,596
- ------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 124,452
Class B 99,140
Class C 77,703
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fee 131,128
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 5,231
- ------------------------------------------------------------------------------------------
Trustees' compensation 732
- ------------------------------------------------------------------------------------------
Other 59,321
-----------
Total expenses 1,240,303
Less expenses paid indirectly (5,177)
-----------
Net expenses 1,235,126
- ------------------------------------------------------------------------------------------
Net Investment Income 3,231,477
- ------------------------------------------------------------------------------------------
Realized and Unrealized Gain
- ------------------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised) 12,440,514
Closing of futures contracts 6,750,173
Closing and expiration of option contracts written 346,600
-----------
Net realized gain 19,537,287
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investment 7,057,643
-----------
Net realized and unrealized gain 26,594,930
- ------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $29,826,407
===========
</TABLE>
See accompanying Notes to Financial Statements.
13 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
(Unaudited) 1999
<S> <C> <C>
- --------------------------------------------------------------------------------------
Operations
- --------------------------------------------------------------------------------------
Net investment income $ 3,231,477 $ 3,233,497
- --------------------------------------------------------------------------------------
Net realized gain (loss) 19,537,287 (15,858,948)
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 7,057,643 21,857,973
-----------------------------
Net increase in net assets resulting from operations 29,826,407 9,232,522
- --------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
- --------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (2,172,198) (3,917,119)
Class B (303,008) (778,666)
Class C (244,158) (524,527)
Class Y (13) (39)
- --------------------------------------------------------------------------------------
Beneficial Interest Transactions
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A (2,419,827) 43,162,353
Class B (280,139) 1,213,947
Class C (1,366,455) 5,427,691
- --------------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------------
Total increase 23,040,609 53,816,162
- --------------------------------------------------------------------------------------
Beginning of period 143,983,878 90,167,716
-----------------------------
End of period (including undistributed net investment
income of $1,395,505 and $883,405, respectively) $167,024,487 $143,983,878
=============================
</TABLE>
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class A (Unaudited) 1999 1998 1997/1/
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.74 $ 5.81 $ 10.31 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .14 .20 .29 .09
Net realized and unrealized gain (loss) 1.13 .09 (4.59) .22
--------------------------------------------------------
Total income (loss) from investment operations 1.27 .29 (4.30) .31
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12) (.36) (.20) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.89 $ 5.74 $ 5.81 $ 10.31
========================================================
- --------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value2 22.44% 6.50% (42.43)% 3.10%
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $127,694 $109,328 $62,568 $37,687
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $113,675 $ 66,106 $59,251 $18,361
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income 4.54% 3.73% 4.59% 4.27%
Expenses 1.49% 1.82% 1.66%4 1.74%4
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate5 56% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended February 29, 2000, were $64,996,317 and $55,303,255, respectively.
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class B (Unaudited) 1999 1998 19971
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
- -----------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $5.75 $5.76 $10.27 $10.00
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 .16 .28 .07
Net realized and unrealized gain (loss) 1.13 .10 (4.62) .20
-----------------------------------------------------
Total income (loss) from investment operations 1.25 .26 (4.34) .27
- -----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.09) (.27) (.17) --
- -----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.91 $5.75 $5.76 $10.27
=====================================================
- -----------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value2 22.06% 5.75% (42.89)% 2.70%
- -----------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $22,056 $18,690 $17,357 $16,471
- -----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $19,920 $15,454 $22,659 $ 7,388
- -----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income 3.76% 2.95% 3.87% 3.35%
Expenses 2.27% 2.58% 2.39%4 2.56%4
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate5 56% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended February 29, 2000, were $64,996,317 and $55,303,255, respectively.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class C (Unaudited) 1999 1998 19971
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.73 $ 5.76 $ 10.26 $ 10.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 .15 .26 .08
Net realized and unrealized gain (loss) 1.12 .11 (4.60) .18
-------------------------------------------------------------
Total income (loss) from investment operations 1.24 .26 (4.34) .26
- --------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.09) (.29) (.16) --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.88 $ 5.73 $ 5.76 $ 10.26
=============================================================
- --------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value2 21.97% 5.68% (42.87)% 2.60%
- --------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- --------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 17,274 $ 15,965 $ 10,243 $ 10,616
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 15,605 $ 10,477 $ 12,060 $ 5,599
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income 3.75% 2.96% 3.87% 3.34%
Expenses 2.27% 2.58% 2.38%4 2.56%4
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate5 56% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended February 29, 2000, were $64,996,317 and $55,303,255, respectively.
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
Feb. 29, 2000 Aug. 31,
Class Y (Unaudited) 1999 1998 19971
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 5.72 $ 5.81 $ 10.31 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .15 .20 .42 .20
Net realized and unrealized gain (loss) 1.12 .10 (4.71) .11
----------------------------------------------------------
Total income (loss) from investment operations 1.27 .30 (4.29) .31
- ---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.13) (.39) (.21) --
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 6.86 $ 5.72 $ 5.81 $ 10.31
==========================================================
- ---------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value2 22.52% 6.77% (42.38)% 3.10%
- ---------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 1 $ 1 $ 1 $ 1
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1 $ 1 $ 1 $ 1
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income 4.67% 3.88% 4.84% 4.75%
Expenses 1.20% 1.68% 1.40%4 1.57%4
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate5 56% 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 has not been grossed up to reflect the effect of expenses paid
indirectly.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended February 29, 2000, were $64,996,317 and $55,303,255, respectively.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS UNAUDITED
- --------------------------------------------------------------------------------
================================================================================
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 at their offering price, which is normally net asset value plus
an initial sales charge. Class B and Class C shares are sold without an initial
sales charge but may be subject to a contingent deferred sales charge (CDSC).
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 shares 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 potential for
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
February 29, 2000, the market value of these securities comprised 33.18% of the
Fund's net assets, and resulted in realized and unrealized losses of
$32,283,230. The Fund also hedges a portion of the commodity exposure generated
by these securities, as discussed in Note 5.
- --------------------------------------------------------------------------------
Securities Valuation. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid and
asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Foreign currency contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank, dealer
or pricing service. Short-term "money market type" debt securities with
remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
19 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies Continued
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. As of August 31, 1999, the
Fund had available for federal income tax purposes and 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.
- --------------------------------------------------------------------------------
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.
20 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
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.
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended February 29, 2000 Year Ended August 31, 1999
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 8,368,911 $ 51,624,232 17,245,314 $ 90,733,511
Dividends and/or distributions reinvested 336,236 2,010,634 766,779 3,577,976
Redeemed (9,215,768) (56,054,693) (9,734,453) (51,149,134)
----------------------------------------------------------
Net increase (decrease) (510,621) $ (2,419,827) 8,277,640 $ 43,162,353
==========================================================
- ---------------------------------------------------------------------------------------------------------
Class B
Sold 776,169 $ 4,752,859 1,423,730 $ 7,465,056
Dividends and/or distributions reinvested 45,298 272,221 147,282 686,669
Redeemed (877,567) (5,305,219) (1,333,586) (6,937,778)
----------------------------------------------------------
Net increase (decrease) (56,100) $ (280,139) 237,426 $ 1,213,947
==========================================================
- ---------------------------------------------------------------------------------------------------------
Class C
Sold 651,932 $ 3,981,589 1,685,707 $ 8,942,433
Dividends and/or distributions reinvested 38,797 231,933 105,553 492,150
Redeemed (966,104) (5,579,977) (783,692) (4,006,892)
----------------------------------------------------------
Net increase (decrease) (275,375) $ (1,366,455) 1,007,568 $ 5,427,691
==========================================================
- ---------------------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Dividends and/or distributions reinvested -- -- -- --
Redeemed -- -- -- --
----------------------------------------------------------
Net increase -- $ -- -- $ --
==========================================================
</TABLE>
21 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Securities
As of February 29, 2000, net unrealized appreciation on securities of
$18,889,690 was composed of gross appreciation of $19,627,752, and gross
depreciation of $738,062.
================================================================================
4. 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 six months ended February 29,
2000 was 1.00% of average net assets for each class of shares, annualized for
periods of less than one full year.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End On Class A On Class B On Class C
Sales Charges Sales Charges Shares Shares Shares
On Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor1 Distributor1 Distributor1
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
February 29, 2000 $108,443 $28,125 $11,948 $96,981 $31,337
</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 Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
February 29, 2000 $ -- $68,440 $4,893
</TABLE>
22 OPPENHEIMER REAL ASSET FUND
<PAGE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
- --------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the six months ended February 29, 2000,
payments under the Class A plan totaled $124,452, all of which was paid by the
Distributor to recipients. That included $1,991 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
23 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
- --------------------------------------------------------------------------------
================================================================================
4. Fees and Other Transactions with Affiliates Continued
Distribution fees paid to the Distributor for the six months ended February 29,
2000, were as follows:
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
- -------------------------------------------------------------------------------
Class B Plan $99,140 $81,663 $1,348,153 6.11%
Class C Plan 77,703 35,316 102,786 0.60
================================================================================
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.
24 OPPENHEIMER REAL ASSET FUND
<PAGE>
As of February 29, 2000, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Date Contracts February 29, 2000 (Depreciation)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
COMMODITIES
Agriculture
Corn 5/12/00 145 $1,676,225 $ (52,225)
Cotton No. 2 5/8/00 27 784,005 6,150
Soybean 5/12/00 29 748,463 (7,513)
Wheat 5/19/00 145 2,003,450 (125,700)
Energy
Brent Crude Oil 4/13/00 150 3,789,290 205,210
Crude Oil 3/21/00 309 9,103,050 299,820
Crude Oil 4/19/00 200 5,725,700 44,300
Gas Oil 4/12/00 43 919,125 39,775
Heating Oil 3/31/00 75 2,230,011 178,164
Natural Gas 3/29/00 78 1,981,000 172,580
Unleaded Gasoline 3/31/00 50 1,760,997 213,003
Livestock
Lean Hogs 4/14/00 48 1,108,640 6,400
Live Cattle 6/30/00 74 2,031,340 700
Industrial Metals
Copper 5/26/00 32 676,475 (38,075)
London Metal Exchange Aluminum 4/18/00 64 2,670,975 (134,975)
London Metal Exchange Zinc 8/15/00 31 935,763 (79,775)
London Metal Exchange Zinc 6/20/00 20 552,500 (4,750)
Precious Metals
Gold (100 oz.) 4/26/00 24 685,920 20,160
Platinum 4/25/00 5 101,750 16,175
Silver 5/26/00 11 294,660 (13,720)
Softs
Coffee, Cl. C 5/18/00 13 547,800 (58,350)
Orange Juice 5/10/00 21 260,565 (533)
Sugar #11 4/28/00 17 107,957 (12,946)
INDICES
Goldman Sachs Commodities Index 3/15/00 129 6,816,038 148,350
------------
822,225
------------
Contracts to Sell
Energy
Unleaded Gasoline 4/28/00 200 7,344,225 (123,375)
------------
$698,850
============
</TABLE>
25 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Unaudited / 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 February 29, 2000, was as follows:
Call Options Put Options
---------------------------------------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
- --------------------------------------------------------------------------------
Options outstanding as of
August 31, 1999 200 $ 32,000 300 $ 187,000
Options written 325 104,725 200 137,000
Options closed or expired (325) (104,725) (500) (324,000)
Options exercised (200) (32,000) -- --
---------------------------------------------------
Options outstanding as of
February 29, 2000 -- $ -- -- $ --
===================================================
26 OPPENHEIMER REAL ASSET FUND
<PAGE>
================================================================================
7. Illiquid or Restricted Securities
As of February 29, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 15% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of February 29, 2000, was $8,259,055,
which represents 4.94% 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 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the six months ended February
29, 2000.
27 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 H. Armstrong, Trustee
Robert G. Avis, Trustee
William A. Baker, Trustee
George C. Bowen, Trustee
Edward L. Cameron, 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 J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
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
The financial statements included herein have been
taken from the records of the Fund without examination
of those records by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer 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.
28 OPPENHEIMER REAL ASSET FUND
<PAGE>
- --------------------------------------------------------------------------------
OPPENHEIMER FUNDS FAMILY
- --------------------------------------------------------------------------------
================================================================================
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
================================================================================
Equity
Stock Stock & Bond
Enterprise Fund1 Main Street(R) Growth &
Discovery Fund Income Fund
Main Street(R) Small Cap Fund Quest Opportunity Value Fund
Quest Small Cap Value Fund Total Return Fund
MidCap Fund Quest Balanced Value Fund
Capital Appreciation Fund Capital Income Fund2
Growth Fund Multiple Strategies Fund
Disciplined Value Fund Disciplined Allocation Fund
Quest Value Fund Convertible Securities Fund
Trinity Growth Fund
Trinity Core Fund Specialty
Trinity Value Fund Real Asset Fund
Gold & Special Minerals Fund
================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund3
World Bond Fund Main Street(R)California
High Yield Fund Municipal Fund3
Champion Income Fund Florida Municipal Fund3
Strategic Income Fund New Jersey Municipal Fund3
Bond Fund New York Municipal Fund3
Senior Floating Rate Fund Pennsylvania Municipal Fund3
U.S. Government Trust Municipal Bond Fund
Limited-Term Government Fund Insured Municipal Fund
Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York
Municipal Fund
================================================================================
Money Market4
Money Market Fund Cash Reserves
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
29 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
[LOGO OF OPPENHEIMER FUNDS(R) DISTRIBUTOR, INC.]
