[photo of wheat]
Annual Report August 31, 2000
Oppenheimer
Real Asset Fund(R)
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Driven by a strong global economy, robust demand boosted energy prices and the
Fund's share price.
We took advantage of pricing imbalances within certain sectors to seek superior
return.
We believe that the Fund has continued to perform effectively as a portfolio
diversification tool.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Managers
7 Fund Performance
12 Financial
Statements
33 Independent
Auditors' Report
34 Federal
Income Tax
Information
35 Officers and Trustees
Average Annual
Total Returns*
For the 1-Year Period
Ended 8/31/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
48.55% 40.01%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
47.44% 42.44%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
47.43% 46.43%
Class Y
------------------------
49.20%
* See Notes on page 10 for further details.
<PAGE>
PRESIDENT'S LETTER
[photos]
James C. Swain
Chairman
Oppenheimer
Real Asset Fund
Bridget A. Macaskill
President
Oppenheimer
Real Asset Fund
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial markets--
especially when times are good. Right now, times appear particularly good. The
U.S. economy is in its tenth year of expansion. In the bond market, U.S.
Treasury issues have been performing favorably over the past year. In addition,
despite volatility in the second quarter, the stock market has been providing
attractive returns from a wide spectrum of industry sectors, capitalization
ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace of
global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has prompted
the Treasury to buy back many of its long-term securities. The resulting supply
shortage boosted these securities' returns, causing an inversion of the yield
curve--an unusual situation in which shorter term Treasuries yield more than
their longer term counterparts. Other bond sectors are offering many
opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in the
stock market. Formerly high-flying Internet stocks have generally come down to
earth, and investors have
1 | OPPENHEIMER REAL ASSET FUND
<PAGE>
PRESIDENT'S LETTER
begun to refocus on companies with strong business fundamentals and justifiable
valuations. Investors have also returned to long-neglected, value-oriented
companies.
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor and
to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
September 22, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of the securities markets or any
particular fund. Specific discussion, as it applies to your Fund, is contained
in the pages that follow. Stocks and bonds have different types of investment
risks; stocks are subject to market volatility and bonds are subject to credit
and interest rate risks.
2 | OPPENHEIMER 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(R) perform during the one-year period that
ended August 31, 2000?
A. The Fund performed very well during the fiscal year, reflecting continued
strength in commodity prices. Spurred by a strong global economy, healthy gains
in the energy and industrial metals sectors contributed to a strong total
return. While pleased with this showing, we are also pleased that the Fund
proved successful as a vehicle for portfolio diversification.
What do you mean when you call the Fund a "vehicle for portfolio
diversification"?
Basically, we mean that the Fund typically does not move lockstep with the broad
U.S. stock or bond market. In fact, historically, commodity prices have tended
to move in the opposite direction of other financial assets, such as stocks and
bonds. During the reporting period, for example, stocks experienced considerable
volatility while overall growth remained flat, and bonds (10-year Treasury note)
increased through January 2000 then declined. Commodities, on the other hand,
exhibited a steady climb throughout the period. For this reason, commodities can
potentially act as a powerful diversifier when combined with stocks and bonds,
and may actually reduce overall portfolio risk.
How was the performance of the various sectors in which the Fund invests?
Similar to the Goldman Sachs Commodity Index (GSCI)(1), the Fund has nearly 60%
of its holdings in energy-related investments, which worked to the Fund's
benefit.
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
As economic activity picked up worldwide, resulting in increased production
of goods and services, we saw a corresponding increase in the demand for energy.
Because of this, oil, gasoline and natural gas prices climbed significantly
during the period.
Also benefiting from increased economic activity was the industrial metals
sector. Industrial production was strong for much of the past 12 months. As a
result, price growth in aluminum, copper, zinc and nickel--primary materials for
most durable goods--proved a major contributor to Fund performance. Precious
metals, on the other hand, added little to the Fund's returns. Despite dramatic
gains in the price of platinum, weakness in gold and silver offset much of that
rise.
Agricultural products and livestock are another commodity sector in which the
Fund traditionally invests. This sector did not contribute to the Fund's good
performance during the period. The primary reason for poor performance here was
favorable weather patterns in the Midwest, which led to oversupply, and kept
prices low. Even with high demand overseas, robust U.S. export sales for corn,
wheat and soybeans failed to generate the type of price growth enjoyed by energy
and industrial metals.
Did you shift your investment allocation among these five major commodities
sectors?
Only minimally. Except in unusual circumstances, we typically maintain levels
that are roughly similar to those of the GSCI index. At the same time, it's
important to note that Oppenheimer Real Asset Fund is not an index fund. True,
we manage the Fund to obtain a return pattern that mirrors the index (i.e.,
returns that generally rise and fall in synchronization
[callout]
"While pleased with the Fund's performance, we are equally pleased with its
success as a vehicle for portfolio diversification."
4 | OPPENHEIMER REAL ASSET FUND
<PAGE>
with the index). And we attempt to achieve the same balance--dollar-for-dollar
exposure to commodities, plus current income as the index. However, rather than
invest directly in commodities, we allocate approximately one third of the
portfolio to commodity-linked securities leveraged three times.(2) The balance
is in high quality, short duration fixed income securities.
Why invest only one third of the portfolio in commodity-related securities?
Leveraged debt securities such as those the Fund invests in can enable us to
enhance returns without actually increasing our investment. By investing about
one third of the portfolio in securities leveraged three times, effectively we
have virtually 100% exposure to commodities. At the same time, we are able to
supplement returns with income from relatively low risk investments. We believe
this structure provides the upside potential and diversification potential of
commodities, but with less risk than replicating the index might involve. Where
we aim to add value is by exploiting perceived price inefficiencies found within
each of the five major commodities sectors.
How do price inefficiencies occur and how do you seek to capitalize on them?
Essentially, we identify what we believe are pricing imbalances within a
particular market. Assuming these imbalances don't go unrecognized for long, we
position the Fund to take advantage of eventual shifts in pricing. For example,
if we see that the price of North Sea crude oil is high relative to the price
for West Texas crude, we may reduce our exposure to North Sea crude and increase
by the same amount in West Texas crude. Assuming this price relationship returns
to normal, we can reverse the position at a profit less expenses.
Average Annual
Total Returns
For the Periods Ended 9/30/00(3)
Class A Since
1-Year Inception
------------------------
31.45% -3.69%
Class B Since
1-Year Inception
------------------------
33.39% -3.55%
Class C Since
1-Year Inception
------------------------
37.32% -2.83%
Class Y Since
1-Year Inception
------------------------
40.13% -1.80%
2. The commodity-linked securities in which the Fund invests have substantial
risks, including risk of loss of a significant portion of their principal value.
3. See page 10 for further details.
5 | OPPENHEIMER REAL ASSET FUND
<PAGE>
What is your outlook for the commodities markets and the Fund over the coming
months?
Based on current economic data, we anticipate healthy commodity markets for the
remainder of 2000. However, with the Organization of the Petroleum Exporting
Countries (OPEC) leaning toward increased production and price targets between
$22 and $28 per barrel, returns for oil may not continue to be as robust as they
have been of late. Generally, though, we see energy markets stabilizing. This
should help dampen inflationary pressures and, if so, could decrease the
magnitude of further interest rate hikes.
However, at the same time, we are not convinced that the Federal Reserve has
completed its course of monetary tightening. The recent announcement of 5.8%
annualized GDP growth suggests that the U.S. economy may still be growing too
quickly. If this proves to be the case, an additional rate hike will probably
not significantly affect the Fund's fixed income holdings, because these
holdings have relatively limited interest-rate risk.
Short-term economic developments aside, we believe real assets can broaden
the diversification of an investment portfolio. In fact, diversification is what
makes Oppenheimer Real Asset Fund an important part of The Right Way to Invest.
Portfolio Allocation(4)
[pie chart]
Commodity-
Linked Notes 35.3%
Cash
Equivalents 29.1
Mortgage-
Backed
Obligations 25.8
Corporate
Securities 9.8
Sector Allocation(5)
-----------------------------------------------------------
Petroleum 57.9%
-----------------------------------------------------------
Agriculture 15.9
-----------------------------------------------------------
Natural Gas 9.9
-----------------------------------------------------------
Livestock 7.9
-----------------------------------------------------------
Industrial Metals 6.5
-----------------------------------------------------------
Precious Metals 1.9
4. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are dollar-weighted based on total market value of investments.
5. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are dollar-weighted based on percentages 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 of the GSCI.
6 | 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, 2000, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
Management's discussion of performance. During the Fund's fiscal year that ended
August 31, 2000, Oppenheimer Real Asset Fund delivered impressive performance.
Volatility in U.S. stock and bond markets, combined with strong economic growth
overseas, supported a positive environment for commodity prices, particularly in
the energy and industrial metals sectors. In contrast, precious metals fell
victim to languishing gold and silver prices, while abundant agricultural and
livestock supplies contributed to lower prices in those sectors. Against this
backdrop, the portfolio managers successfully applied the Fund's investment
methodology, providing core exposure to the commodity markets through leveraged
commodity-linked securities, and supplementing returns with high quality, short
duration fixed income securities. Seeking to enhance returns, the portfolio
managers also sought to capitalize on short-term pricing inefficiencies within
each of the five major sectors. 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, 2000. 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 and
are not subject to a sales charge.
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.
Index performance reflects the reinvestment of income but does not consider
the effect of capital gains or transaction cost, 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 investments in the index.
7 | OPPENHEIMER REAL ASSET FUND
<PAGE>
FUND PERFORMANCE
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[line chart]
<TABLE>
<CAPTION>
Oppenheimer Real Asset Fund (Class A) Goldman Sachs Commodity Index (GSCI)
<S> <C> <C>
3/31/97 9425 10000
9679 10305
8/31/97 9717 10403
9161 9879
02/28/98 7750 8451
7058 7805
08/31/98 5592 6527
4872 6025
2/28/99 4464 5672
5028 6526
8/31/99 5958 7702
6160 8003
2/29/00 7295 9503
7803 10349
8/31/00 8850 11812
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 8/31/00(1)
1-Year 40.01% Life -3.51%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[line chart]
<TABLE>
<CAPTION>
Oppenheimer Real Asset Fund (Class B) Goldman Sachs Commodity Index (GSCI)
<S> <C> <C>
3/31/97 10000 10000
10250 10305
8/31/97 10270 10403
9670 9879
02/28/98 8156 8451
7413 7805
08/31/98 5865 6527
5101 6025
2/28/99 4662 5672
5246 6526
8/31/99 6202 7702
6402 8003
2/29/00 7570 9503
8081 10349
8/31/00 8898 11812
</TABLE>
Average Annual Total Return of Class B Shares of the Fund at 8/31/00(1)
1-Year 42.44% Life -3.36%
1. See page 10 for further details.
8 | OPPENHEIMER REAL ASSET FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[line chart]
<TABLE>
<CAPTION>
Oppenheimer Real Asset Fund (Class C) Goldman Sachs Commodity Index (GSCI)
<S> <C> <C>
3/31/97 10000 10000
10240 10305
8/31/97 10260 10403
9650 9879
02/28/98 8141 8451
7408 7805
08/31/98 5862 6527
5088 6025
2/28/99 4660 5672
5237 6526
8/31/99 6195 7702
6397 8003
2/29/00 7556 9503
8069 10349
8/31/00 9133 11812
</TABLE>
Average Annual Total Return of Class C Shares of the Fund at 8/31/00(1)
1-Year 46.43% Life -2.62%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[line chart]
<TABLE>
<CAPTION>
Oppenheimer Real Asset Fund (Class Y) Goldman Sachs Commodity Index (GSCI)
<S> <C> <C>
3/31/97 10000 10000
10270 10305
8/31/97 10310 10403
9730 9879
02/28/98 8221 8451
7495 7805
08/31/98 5941 6527
5174 6025
2/28/99 4743 5672
5359 6526
8/31/99 6343 7702
6563 8003
2/29/00 7772 9503
8323 10349
8/31/00 9464 11812
</TABLE>
Average Annual Total Return of Class Y Shares of the Fund at 8/31/00(1)
1-Year 49.20% Life -1.60%
The performance information for GSCI in the graphs begins on 3/31/97.
Past performance is not predictive of future performance.
9 | 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 quarterly updates on the Fund's performance, please
contact your financial advisor, call us at 1.800.525.7048 or visit our website
at www.oppenheimerfunds.com.
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 and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A. The commencement 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 commencement). 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 and are not subject to a sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 | OPPENHEIMER REAL ASSET FUND
<PAGE>
Financials
11 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF INVESTMENTS August 31, 2000
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
=============================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--25.7%
---------------------------------------------------------------------------------------------
Government Agency--10.7%
---------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--10.2%
Federal Home Loan Mortgage Corp., Collateralized
Mtg. Obligations, Gtd. Multiclass Mtg. Participation
Certificates, Series 1451, Cl. G, 7%, 9/15/06(1) $ 3,651,385 $ 3,643,389
---------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Interest-Only Stripped Mtg.-Backed Security:
Series 303, Cl. IO, 14.794%, 11/1/29(2) 21,838,092 6,534,367
Series 2007, Cl. PI, 11.219%, 11/15/27(2) 11,406,667 2,545,113
---------------------------------------------------------------------------------------------
Federal National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed Security:
Trust 1993-23, Cl. PN, 26.368%, 4/25/22(2,3) 3,624,240 970,617
Trust 1993-138, Cl. JE, 8.908%, 8/25/23(2,4) 14,057,142 7,687,499
-----------
21,380,985
---------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.5%
Government National Mortgage Assn.,
Interest-Only Stripped Mtg.-Backed Security:
Series 1997-5, Cl. PJ, 10.165%, 5/20/22(2) 1,590,548 135,197
Series 1999-33, Cl. PI, 11.287%, 4/16/27(2) 4,298,093 796,490
-----------
931,687
---------------------------------------------------------------------------------------------
Private--15.0%
---------------------------------------------------------------------------------------------
Commercial--0.4%
Resolution Trust Corp., Commercial Mtg.
Pass-Through Certificates,
Series 1994-C2, Cl. G, 8%, 4/25/25 822,907 786,905
---------------------------------------------------------------------------------------------
Multi-Family--0.8%
Ocwen Capital Trust I, Collateralized Mtg. Obligations,
Series 1999-OAC, Cl. 1, 9.50%, 4/27/29(3) 1,738,376 1,694,374
---------------------------------------------------------------------------------------------
Residential--13.8%
Ameriquest Finance Trust, Collateralized Mtg. Obligations:
Series 1999-1, Cl. D, 9.75%, 3/25/29(3) 1,753,729 1,683,580
Series 2000-1, 8.50%, 8/17/01 6,781,823 6,671,619
Series 2000-1, Cl. D, 8.50%, 5/15/30(3) 6,779,663 6,567,799
---------------------------------------------------------------------------------------------
Amortizing Residential Collateral Trust, Collateralized
Mtg. Obligations, Trust 2000-BC1, Cl. B, 8.901%, 1/25/30(3,5) 2,000,000 1,998,125
---------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations,
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 2,454,717 2,295,160
---------------------------------------------------------------------------------------------
Northwest Asset Securities Corp., Collateralized
Mtg. Obligations, Series 1996-5, Cl. A17, 8%, 11/25/26 3,500,000 3,510,920
---------------------------------------------------------------------------------------------
Option One Mortgage Trust, Collateralized Mtg. Obligations:
Series 1999-3, Cl. BB, 10.80%, 12/15/29 1,449,640 1,431,973
Series 2000-2, Cl. CTFS, 10.81%, 5/26/30 4,723,967 4,735,777
-----------
28,894,953
-----------
Total Mortgage-Backed Obligations (Cost $54,264,648) 53,688,904
12 | OPPENHEIMER REAL ASSET FUND
<PAGE>
Principal Market Value
Amount See Note 1
==============================================================================================
Corporate Bonds and Notes--9.7%
Comdisco, Inc., 5.75% Sr. Nts., 2/15/01 $ 7,000,000 $ 6,888,847
----------------------------------------------------------------------------------------------
Conseco, Inc., 7.875% Unsec. Nts., 12/15/00 6,000,000 5,550,000
----------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
5.40% Nts., 2/26/01 1,000,000 993,506
7.125% Nts., 5/1/01 1,900,000 1,901,879
----------------------------------------------------------------------------------------------
Tyco International Group Ltd. SA, 7.469% Nts., 9/5/00(5,6) 5,000,000 5,000,000
------------
Total Corporate Bonds and Notes (Cost $20,864,283) 20,334,232
==============================================================================================
Structured Instruments--35.2%
AIG Goldman Sachs Commodity Index
Total Return Linked Nts., 6.40%, 1/26/01(7) 6,000,000 12,941,073
----------------------------------------------------------------------------------------------
Bank of America Corp., Goldman Sachs Commodity Index
Total Return Linked Nts., 6.84%, 7/27/01(7) 9,000,000 11,127,600
----------------------------------------------------------------------------------------------
Business Development Bank (Canada), Goldman Sachs
Commodity Index Excess Return Linked Nts., 7.10%, 6/18/01(7) 6,000,000 8,091,000
----------------------------------------------------------------------------------------------
Cargill Financial Services Corp., Goldman Sachs
Commodity Index Total Return Linked Nts.:
5.86%, 9/14/00(7) 10,000,000 24,026,616
6.11%, 12/15/00(7) 3,000,000 6,706,933
6.20%, 3/30/01(7) 5,000,000 10,620,589
------------
Total Structured Instruments (Cost $39,000,000) 73,513,811
==============================================================================================
Short-Term Notes--11.8%
Asset Backed Capital Finance, Inc., 6.55%, 10/4/00 5,000,000 4,969,979
----------------------------------------------------------------------------------------------
Block Financial Corp., 6.56%, 10/20/00 5,000,000 4,955,356
----------------------------------------------------------------------------------------------
Lexington Parker Capital Co. LLC, 6.67%, 9/1/00 5,000,000 5,000,000
----------------------------------------------------------------------------------------------
TRW, Inc., 6.77%, 1/19/01 5,000,000 4,868,361
----------------------------------------------------------------------------------------------
Washington Mutual Finance Corp., 6.75%, 1/17/01 5,000,000 4,870,625
------------
Total Short-Term Notes (Cost $24,664,321) 24,664,321
==============================================================================================
Repurchase Agreements--17.2%
Repurchase agreement with Banc One Capital Markets,
Inc., 6.57%, dated 8/31/00, to be repurchased at
$35,885,548 on 9/1/00, collateralized by U.S.
Treasury Bonds, 6.25%-12%, 11/15/03-8/15/23, with a
value of $15,358,030, U.S. Treasury Nts.,
4.25%-7.50%, 12/31/00-2/15/07, with a value of
$17,537,582 and U.S. Treasury Bills, 11/30/00, with a
value of $3,755,839 (Cost $35,879,000) 35,879,000 35,879,000
----------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $174,672,252) 99.6% 208,080,268
----------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.4 879,702
---------------------------
Net Assets 100.0% $208,959,970
===========================
</TABLE>
13 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
Footnotes to Statement of Investments
1. 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 50 10/17/00 $30 $ 32,200 $148,500
Crude Oil, Call 50 9/15/00 30 32,000 163,500
Crude Oil, Put 50 10/17/00 20 25,300 500
Crude Oil, Put 50 9/15/00 20 20,000 500
-----------------------
$109,500 $313,000
=======================
</TABLE>
2. 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.
3. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
4. Securities with an aggregate market value of $4,921,875 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 the current interest rate for a variable or increasing rate
security.
6. 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 $5,000,000 or 2.39% of the Fund's net
assets as of August 31, 2000.
7. Security is linked to the Goldman Sachs Commodity Index. The index currently
contains multiple 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.
14 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES August 31, 2000
<TABLE>
=============================================================================
<S> <C>
Assets
Investments, at value (including repurchase agreements of
$35,879,000)(cost $174,672,252)--see accompanying statement $208,080,268
-----------------------------------------------------------------------------
Cash 33,136
-----------------------------------------------------------------------------
Receivables and other assets:
Interest and principal paydowns 1,281,486
Shares of beneficial interest sold 582,919
Daily variation on futures contracts 181,411
Other 2,774
------------
Total assets 210,161,994
=============================================================================
Liabilities
Options written, at value (premiums received $109,500)
--see accompanying statement 313,000
-----------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 420,422
Daily variation on futures contracts 218,059
Transfer and shareholder servicing agent fees 98,273
Distribution and service plan fees 66,837
Shareholder reports 47,408
Trustees' compensation 535
Other 37,490
------------
Total liabilities 1,202,024
=============================================================================
Net Assets $208,959,970
============
=============================================================================
Composition of Net Assets
Paid-in capital $201,264,269
-----------------------------------------------------------------------------
Undistributed net investment income 2,018,568
-----------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (30,843,864)
-----------------------------------------------------------------------------
Net unrealized appreciation on investments 36,520,997
------------
Net Assets $208,959,970
============
</TABLE>
15 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
===============================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$161,547,214 and 19,741,644 shares of beneficial interest outstanding) $8.18
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $8.68
-----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $27,156,389
and 3,310,426 shares of beneficial interest outstanding) $8.20
-----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $20,255,551
and 2,478,556 shares of beneficial interest outstanding) $8.17
-----------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $816 and 100 shares of beneficial interest outstanding) $8.16
</TABLE>
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended August 31, 2000
<TABLE>
==================================================================================
<S> <C>
Investment Income
Interest $10,330,647
==================================================================================
Expenses
Management fees 1,640,298
----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 287,510
Class B 214,106
Class C 165,383
----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 226,083
Class B 38,353
Class C 29,599
----------------------------------------------------------------------------------
Custodian fees and expenses 17,091
----------------------------------------------------------------------------------
Trustees' compensation 1,737
----------------------------------------------------------------------------------
Other 128,951
-----------
Total expenses 2,749,111
Less expenses paid indirectly (13,107)
-----------
Net expenses 2,736,004
==================================================================================
Net Investment Income 7,594,643
==================================================================================
Realized and Unrealized Gain
Net realized gain on:
Investments (including premiums on options exercised) 23,931,321
Closing of futures contracts 8,634,249
Closing and expiration of option contracts written 500,468
-----------
Net realized gain 33,066,038
----------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 23,990,935
-----------
Net realized and unrealized gain 57,056,973
==================================================================================
Net Increase in Net Assets Resulting from Operations $64,651,616
===========
</TABLE>
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER REAL ASSET FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended August 31, 2000 1999
=============================================================================================
<S> <C> <C>
Operations
Net investment income $ 7,594,643 $ 3,233,497
---------------------------------------------------------------------------------------------
Net realized gain (loss) 33,066,038 (15,858,948)
---------------------------------------------------------------------------------------------
Net change in unrealized appreciation 23,990,935 21,857,973
--------------------------
Net increase in net assets resulting from operations 64,651,616 9,232,522
=============================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (5,210,659) (3,917,119)
Class B (705,643) (778,666)
Class C (546,384) (524,527)
Class Y (30) (39)
=============================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A 7,426,376 43,162,353
Class B 760,344 1,213,947
Class C (1,399,528) 5,427,691
=============================================================================================
Net Assets
Total increase 64,976,092 53,816,162
---------------------------------------------------------------------------------------------
Beginning of period 143,983,878 90,167,716
--------------------------
End of period (including undistributed net investment
income of $2,018,568 and $883,405, respectively) $208,959,970 $143,983,878
==========================
</TABLE>
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER REAL ASSET FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended August 31, 2000 1999 1998 1997(1)
======================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $5.74 $5.81 $10.31 $10.00
----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .32 .20 .29 .09
Net realized and unrealized gain (loss) 2.40 .09 (4.59) .22
------------------------------------------------------------
Total income (loss) from investment operations 2.72 .29 (4.30) .31
----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) (.36) (.20) --
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.18 $5.74 $ 5.81 $10.31
============================================================
======================================================================================================================
Total Return, at Net Asset Value(2) 48.55% 6.50% (42.43)% 3.10%
======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $161,547 $109,328 $62,568 $37,687
----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $126,143 $66,106 $59,251 $18,361
----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.81% 3.73% 4.59% 4.27%
Expenses 1.50% 1.82% 1.66%(4) 1.74%(4)
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 93% 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.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER REAL ASSET FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class B Year Ended August 31, 2000 1999 1998 1997(1)
======================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $5.75 $5.76 $10.27 $10.00
----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 .16 .28 .07
Net realized and unrealized gain (loss) 2.40 .10 (4.62) .20
---------------------------------------------------------
Total income (loss) from investment operations 2.67 .26 (4.34) .27
----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) (.27) (.17) --
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.20 $5.75 $ 5.76 $10.27
=========================================================
======================================================================================================================
Total Return, at Net Asset Value(2) 47.44% 5.75% (42.89)% 2.70%
======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $27,156 $18,690 $17,357 $16,471
----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $21,416 $15,454 $22,659 $ 7,388
----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.03% 2.95% 3.87% 3.35%
Expenses 2.27% 2.58% 2.39%(4) 2.56%(4)
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 93% 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.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Class C Year Ended August 31, 2000 1999 1998 1997(1)
======================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $5.73 $5.76 $10.26 $10.00
----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .27 .15 .26 .08
Net realized and unrealized gain (loss) 2.39 .11 (4.60) .18
---------------------------------------------------------
Total income (loss) from investment operations 2.66 .26 (4.34) .26
----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.22) (.29) (.16) --
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.17 $5.73 $ 5.76 $10.26
=========================================================
======================================================================================================================
Total Return, at Net Asset Value(2) 47.43% 5.68% (42.87)% 2.60%
======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $20,256 $15,965 $10,243 $10,616
----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $16,536 $10,477 $12,060 $ 5,599
----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 4.03% 2.96% 3.87% 3.34%
Expenses 2.27% 2.58% 2.38%(4) 2.56%(4)
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 93% 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.
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER REAL ASSET FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class Y Year Ended August 31, 2000 1999 1998 1997(1)
======================================================================================================================
<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 .36 .20 .42 .20
Net realized and unrealized gain (loss) 2.38 .10 (4.71) .11
---------------------------------------------------------
Total income (loss) from investment operations 2.74 .30 (4.29) .31
----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.30) (.39) (.21) --
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.16 $5.72 $ 5.81 $10.31
=========================================================
======================================================================================================================
Total Return, at Net Asset Value(2) 49.20% 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 5.28% 3.88% 4.84% 4.75%
Expenses 1.09% 1.68% 1.40%(4) 1.57%(4)
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 93% 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.
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Significant Accounting Policies
Oppenheimer Real Asset Fund (the Fund) is an 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 a
front-end sales charge. Class B and Class C shares are sold without a front-end
sales charge but may be subject to a contingent deferred sales charge (CDSC).
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 potential for
the notes' volatility relative to the principal 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, 2000, the market value of these securities
comprised 35.2% of the Fund's net assets, and resulted in unrealized gains at
August 31, 2000, of $34,513,811. The Fund also hedges a portion of the commodity
exposure generated by these securities, as discussed in Note 5.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
23 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
Non-Diversification Risk. The Fund is "non-diversified" and can invest in the
securities of a single issuer. To the extent the Fund invests a relatively high
percentage of its assets in the obligations of a single issuer or a limited
number of issuers, the Fund is subject to additional risk of loss if those
obligations lose market value or the borrower or issuer of those obligations
defaults.
--------------------------------------------------------------------------------
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, 2000, the Fund had available for federal income tax purposes an
unused capital loss carryover as follows:
Expiring
--------------------------------------
2006 $7,316,667
--------------------------------------------------------------------------------
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 Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of paydown gains and losses and the
recognition of certain foreign currency gains (losses) as ordinary income (loss)
for tax purposes. The character of dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from its
ultimate characterization for federal income tax purposes. Also, due to timing
of dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
24 | OPPENHEIMER REAL ASSET FUND
<PAGE>
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended August 31, 2000, amounts have been reclassified to reflect a decrease
in paid-in capital of $2,668, an increase in undistributed net investment income
of $3,236, and an increase in accumulated net realized loss on investments of
$568. Net assets of the Fund were unaffected by the reclassifications.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Discount on securities purchased is
accreted 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.
25 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended August 31, 2000 Year Ended August 31, 1999
Shares Amount Shares Amount
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 19,035,222 $ 129,097,589 17,245,314 $ 90,733,511
Dividends and/or
distributions reinvested 719,045 4,755,772 766,779 3,577,976
Redeemed (19,055,621) (126,426,985) (9,734,453) (51,149,134)
--------------------------------------------------------------------
Net increase 698,646 $ 7,426,376 8,277,640 $ 43,162,353
====================================================================
---------------------------------------------------------------------------------------------------
Class B
Sold 1,604,800 $ 10,848,818 1,423,730 $ 7,465,056
Dividends and/or
distributions reinvested 92,937 614,759 147,282 686,669
Redeemed (1,636,924) (10,703,233) (1,333,586) (6,937,778)
--------------------------------------------------------------------
Net increase 60,813 $ 760,344 237,426 $ 1,213,947
====================================================================
---------------------------------------------------------------------------------------------------
Class C
Sold 1,306,673 $ 8,829,199 1,685,707 $ 8,942,433
Dividends and/or
distributions reinvested 75,088 491,412 105,553 492,150
Redeemed (1,689,466) (10,720,139) (783,692) (4,006,892)
--------------------------------------------------------------------
Net increase (decrease) (307,705) $ (1,399,528) 1,007,568 $ 5,427,691
====================================================================
---------------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Dividends and/or
distributions reinvested -- -- -- --
Redeemed -- -- -- --
--------------------------------------------------------------------
Net increase -- $ -- -- $ --
====================================================================
</TABLE>
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended August 31, 2000, were
$108,487,384 and $102,673,467, respectively.
As of August 31, 2000, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $198,199,448 was:
Gross unrealized appreciation $36,125,432
Gross unrealized depreciation (23,131,631)
-----------
Net unrealized appreciation $12,993,801
===========
26 | OPPENHEIMER REAL ASSET FUND
<PAGE>
================================================================================
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 year ended August 31, 2000,
was an annualized rate of 1.00%, before any waiver by the Manager if applicable.
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer funds.
--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
August 31, 2000 $252,235 $60,398 $43,335 $229,087 $50,682
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
August 31, 2000 $1,781 $118,600 $17,888
</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.
27 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the year ended August 31, 2000, payments
under the Class A plan totaled $287,510, all of which were paid by the
Distributor to recipients, and included $4,674 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.
Distribution fees paid to the Distributor for the year ended August 31, 2000,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $214,106 $176,334 $1,420,390 5.23%
Class C Plan 165,383 70,541 99,957 0.49
</TABLE>
28 | OPPENHEIMER REAL ASSET FUND
<PAGE>
================================================================================
5. Futures and Forwards Contracts
A futures or forward contract is a commitment to buy or sell a specific amount
of a commodity or financial instrument at a particular price on a stipulated
future date at a negotiated price. Futures contracts are traded on a commodity
exchange and forward contracts trade over-the-counter. The Fund may buy and sell
futures and forward contracts that relate to broadly-based securities indices
"financial futures", debt securities "interest rate futures" and various
commodities "commodity index futures" inherent in the Fund's holdings of
structured notes. The Fund may also buy or write put or call options on these
contracts.
The Fund generally sells these contracts to hedge against increases in
interest rates, decreases in market value of portfolio securities or decreases
in commodity prices and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase 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 the 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 futures contract
closes 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.
Forward contracts settle in cash upon close of the contract or on contract
expiration date. Forward contracts held until expiration must be settled by
delivery of the commodity. Generally, the Fund will enter into a swap with a
counterparty, whereby each agrees to sell each other a commodity, but delivery
is not required upon expiration of the contract.
Risks of entering into these 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.
29 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
5. Futures and Forwards Contracts Continued
As of August 31, 2000, the Fund had outstanding futures and forward contracts as
follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Date Contracts August 31, 2000 (Depreciation)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Futures Contracts to Purchase
Commodities
Agriculture
Corn 12/14/00 90 $ 884,250 $ 30,937
Cotton 12/6/00 17 555,475 36,975
Soybean 11/14/00 65 1,641,250 7,125
Wheat 12/14/00 126 1,689,975 68,950
Energy
Brent Crude Oil 10/16/00 126 3,934,980 292,580
Crude Oil 9/20/00 328 10,863,360 592,440
Gas Oil 11/10/00 30 891,750 67,500
Gasoline Unleaded 9/29/00 46 1,826,899 213,259
Heating Oil 12/29/00 325 12,987,975 1,047,375
Natural Gas 9/27/00 59 2,821,380 216,020
Livestock
Lean Hogs 10/16/00 87 1,841,790 (138,150)
Live Cattle 10/31/00 19 509,010 (19,150)
Industrial Metals
Copper 12/27/00 20 447,500 9,250
London Metal Exchange Aluminum 1/16/01 20 797,750 22,250
London Metal Exchange Zinc 11/14/00 20 590,250 (2,250)
Precious Metals
Platinum 10/26/00 5 146,675 15,300
Silver 12/27/00 3 75,675 (1,725)
Softs
Coffee 12/18/00 7 209,213 (13,913)
Orange Juice 11/8/00 12 131,220 (4,500)
Sugar 9/29/00 68 804,250 (18,390)
Indices
Goldman Sachs Commodities Index 10/17/00 50 3,021,250 96,250
Goldman Sachs Commodities Index 9/18/00 377 23,029,988 1,515,488
----------
4,033,621
----------
Futures Contracts to Sell
Energy
Brent Crude Oil 11/15/00 10 307,200 (24,100)
Heating Oil 10/31/00 84 3,448,620 (132,300)
Heating Oil 9/29/00 140 5,803,560 (544,740)
----------
(701,140)
----------
$3,332,481
==========
</TABLE>
30 | OPPENHEIMER REAL ASSET FUND
<PAGE>
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Date Contracts August 31, 2000 (Depreciation)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Forward Contracts to Purchase
Crude Oil 11/8/00 400 $12,632,000 $ 1,652,000
-----------
Forward Contracts to Sell
Brent Crude Oil 11/8/00 400 12,288,000 (1,668,000)
-----------
$ (16,000)
===========
</TABLE>
================================================================================
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. Realized 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.
31 | OPPENHEIMER REAL ASSET FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
6. Option Activity Continued
Written option activity for the year ended August 31, 2000, 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, 1999 200 $ 32,000 300 $ 187,000
Options written 831 435,138 1,150 370,920
Options closed or expired (406) (123,713) (1,350) (512,620)
Options exercised (525) (279,225) -- --
-----------------------------------------------------
Options outstanding as of
August 31, 2000 100 $ 64,200 100 $ 45,300
=====================================================
</TABLE>
================================================================================
7. Illiquid or Restricted Securities
As of August 31, 2000, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of August
31, 2000, was $12,914,495, which represents 6.18% of the Fund's net assets.
Certain restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limit.
================================================================================
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 year ended August 31, 2000.
32 | OPPENHEIMER REAL ASSET FUND
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Real Asset Fund:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Real Asset Fund, including the statement of investments, as of
August 31, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years in
the period then ended and the period from March 31, 1997 (commencement of
operations) to August 31, 1997. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2000, by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Oppenheimer Real Asset Fund as of August 31, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the three
years in the period then ended and the period from March 31, 1997 (commencement
of operations) to August 31, 1997, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
Denver, Colorado
September 22, 2000
33 | OPPENHEIMER REAL ASSET FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
34 | OPPENHEIMER 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
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
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
For more complete information about Oppenheimer Real
Asset Fund, please refer to the Prospectus. To obtain
a copy, call your financial advisor, or call
OppenheimerFunds Distributor, Inc. at 1.800.525.7048,
or visit the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York,
NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights
reserved.
35 | OPPENHEIMER 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
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund(2)
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund(2) Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
=========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund(2)
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
=========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund subject to shareholder approval.
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
36 | OPPENHEIMER 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(1)
www.oppenheimerfunds.com
--------------------------------------------------------------------------------
General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
--------------------------------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
--------------------------------------------------------------------------------
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Mon-Fri 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OppenheimerFunds Market Hotline
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
--------------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
--------------------------------------------------------------------------------
Ticker Symbols Class A: QRAAX Class B: QRABX Class C: QRACX
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[logo]OppenheimerFunds(R)
RA0735.001.0800 October 30, 2000 Distributor, Inc.
