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Previous: SANDLER ONEILL ASSET MANAGEMENT LLC, SC 13D, 2000-07-07 |
Next: PPA TECHNOLOGIES INC, RW, 2000-07-07 |
Oppenheimer
MidCap Fund
Oppenheimer logo
OppenheimerFunds®
The Right Way to Invest
During the six-month period, the U.S. economy continued an expansion of historically unprecedented length; however, fears of rising inflation and interest rates fueled widespread uncertainty and market volatility. Technology contributed most powerfully to the Fund’s performance, particularly in the areas of photonics and optical networking.
We reduced positions in consumer sector companies and in other sectors that failed to maintain our standard for high rates of revenue growth.
CONTENTS
3 An Interview with Your Fund’s Manager
Cumulative Total Returns* For the 6-Month Period Ended 4/30/00 Class A Without With Sales Chg. Sales Chg. ------------------------ 46.93% 38.48% Class B Without With Sales Chg. Sales Chg. ------------------------ 46.43% 41.43% Class C Without With Sales Chg. Sales Chg. ------------------------ 46.48% 45.48% Class Y Without With Sales Chg. Sales Chg. ------------------------ 47.29% 47.29%
* See Notes on page 8 for further details.
Bridget A. Macaskill
President
Oppenheimer
MidCap 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 have assumed too much risk by concentrating their investments in just a handful of stocks or sectors or by “chasing performance.”
Several months ago, Alan Greenspan, the Chairman of the Federal Reserve Board, stated his view that the spectacular returns some sectors of the market were then experiencing may have been partly responsible for pushing our economy to growth rates that could lead to higher inflation. Today it is clear that the dramatic rise in the prices of a narrow segment of the market created enormous wealth for some investors. The result of this newfound wealth has been a substantial increase in spending that the Federal Reserve Board believes could 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 has been 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 of the Fed’s resolve are clear: investors must continue to 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 often reduces corporate earnings and puts downward pressure on stock prices. Highly valued stocks can be particularly vulnerable to a correction. The Securities and Exchange Commission Chairman, Arthur Levitt, has been cautioning investors against the expectation that the types of returns seen in the recent bull market will last forever.
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 some “new economy” stocks have risen over the last year, many so-called “old economy” stocks are selling at 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.
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 fluctuations, it also offers opportunities to participate in global economic growth and to hedge against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
May 19, 2000
Q How would you characterize the Fund’s performance during the six-month period that ended April 30, 2000?
A. We are pleased with Oppenheimer MidCap Fund’s performance over the past six months. Despite a volatile environment for many of the stocks in which we invest, the Fund not only showed significant growth in net asset value, it also outperformed its benchmark indices for the one-year period that ended April 30, 2000.The average annual total return for the Fund’s Class A shares at maximum offering price was 77.50% for the one-year period ended April 30, 2000. In addition, the Fund’s Class A shares generated a 88.33% average annual total return, without sales charge, while the S&P MidCap 400 Index produced a 23.52% return, and the Lipper Mid-Cap Growth Fund Index produced a 59.59% return, for the same one-year period.1 In addition, the Fund’s Class A shares were ranked in the top half among mid-cap growth funds as measured by Lipper for the one-year period ending March 31, 2000.2
1. S&P Mid-Cap 400 is an unmanaged index of 400 domestic stocks chosen for market size, liquidity and industry group representation. The Lipper Mid-Cap Growth Index includes funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year basis) of less than 300% of the dollar-weighted median market capitalization of the S&P Mid-Cap 400 Index. Index performance reflects the reinvestment of dividends but does not consider the effect of capital gains, transaction costs or taxes.
2. Source: Lipper Analytical Services, Inc., 3/31/00. Lipper rankings are based on the comparisons between changes in net asset value without considering sales charges, with dividends and capital gains distributions reinvested. The Fund’s Class A shares were ranked 58 of 224 (one-year), among mid-cap growth funds for the periods ended 3/31/00. The Fund’s returns at 4/30/00 include results for periods of exceptional market performance that is not typical of historical results. You should not expect those growth rates to continue.
The recent reporting period marked the longest peacetime economic expansion in U.S. history. Equity markets were supported by continued strength in the U.S. economy, low rates of inflation, growing evidence of global economic recovery. These factors drove most broad market indices sharply higher during the last two months of 1999. Mid-cap growth stocks, the market’s best-performing segment during the first 10 months of 1999, continued to perform exceptionally well throughout the reporting period.
“Mid-cap growth
stocks, the market’s
best-performing
segment during the
first 10 months
of 1999, continued
to perform
exceptionally well
throughout the
reporting period.”
As the new year began, the threat of rising inflation remained the most serious factor facing the markets. Although measurable inflation remained low, high levels of consumer spending fueled a rate of economic growth that many observers considered unsustainable. The Federal Reserve Board raised interest rates in an effort to slow the pace of economic growth and thereby head off inflation. The uncertainties associated with these issues culminated in a series of sharp declines and recoveries in late March and April 2000 that affected virtually all segments of the equities market.
We never wavered in our long-term approach to mid-cap growth investing. Our mid-cap strategy focuses on companies with expected internal revenue growth in excess of 10% annually and a high rate of sustainable earnings growth. We believe the stocks of such companies are likely to perform exceptionally well over the long term, regardless of intermediate market fluctuations.
Accordingly, we continued to invest in mid-cap companies exhibiting particularly strong growth characteristics, such as increasing revenue streams. We found the greatest number of such companies in the technology sector. During the recent period, our technology exposure increased from approximately 50% to approximately 60% of the Fund’s portfolio. Technology-related communications services companies accounted for an additional 14% of the Fund’s assets at the end of the period.
We found many of our most compelling growth opportunities in the areas of photonics and optical networking. For example, the Fund’s top holding during the period was JDS Uniphase Corp., a leading provider of the components essential to today’s rapidly evolving digital communications systems and the expansion of the Internet. Although JDS Uniphase was hurt by the market’s correction in April 2000, as were our other photonics-related holdings, the stock nevertheless contributed to our positive performance during the six-month period ended April 30, 2000. We also participated in a select group of private placements in the photonics field, investing in attractive companies that had not yet gone public. The Fund benefited when some of these companies were acquired by the industry’s major players.
Average Annual Total Returns For the Periods Ended 3/31/00(3) Class A Since 1-Year Inception ------------------------ 105.75% 62.55% Class B Since 1-Year Inception ------------------------ 111.66% 64.91% Class C Since 1-Year Inception ------------------------ 115.73% 65.55% Class Y Since 1-Year Inception ------------------------ 119.37% 67.55%
The Fund’s returns at 3/31/00
include results for periods
of exceptional market
performance that are not typical
of historical results. You should
not expect those growth
rates to continue. Because
of ongoing market volatility,
the Fund’s performance since
3/31/00 has been subject
to substantial short-term
fluctuations and current
performance may be less
than the results shown.
3. See Notes on page 8 for further details.
In other areas of technology, we benefited from owning companies that provide semiconductors to the communications industry, such as PMC-Sierra, Inc. We also invested in promising companies developing hardware and software for the next generation of wireless personal productivity devices. Such devices are leading the way toward the convergence of the Internet and wireless communications.
We found relatively few attractive growth opportunities outside of technology. While we invested in a few companies well positioned to benefit from strong consumer spending, such as Tiffany & Co., we sold positions in various other consumer-sector companies that were beginning to exhibit slower revenue growth. Although a company may temporarily compensate for lower revenues by curbing spending or increasing productivity, over the long term we believe that a decline in a company’s rate of revenue growth indicates a likelihood of slower earnings growth and a lower stock price.
We remain comfortable with the Fund’s relatively high level of exposure to technology. Technology has been a driving force behind the nation’s ongoing economic expansion, creating fast-growing new industries while rapidly increasing the productivity of existing businesses. We believe technology is likely to continue to power global economic development for years to come.
We also remain enthusiastic about the potential for the mid-cap companies in which we invest. Many of today’s largest and most successful companies were mid-cap enterprises just a few years ago. We believe that such exceptional growth opportunities continue to exist. Our goal is to identify tomorrow’s business giants today, and to enable our investors to share in the financial success that long-term investments in great companies can produce. That’s what makes Oppenheimer MidCap Fund an important part of The Right Way to Invest.
Sector Allocation(4) o Technology 60.9% o Communication Services 13.1 o Consumer Cyclicals 9.4 o Capital Goods 6.0 o Consumer Staples 5.1 o Utility 3.2 o Healthcare 2.3
Top Ten Stock Holdings(4) ----------------------------------------------------------- JDS Uniphase Corp. 7.0% ----------------------------------------------------------- Aether Systems, Inc. 4.2 ----------------------------------------------------------- SDL, Inc. 4.2 ----------------------------------------------------------- E-Tek Dynamics, Inc. 3.9 ----------------------------------------------------------- Tiffany & Co. 3.6 ----------------------------------------------------------- Mercury Interactive Corp. 3.6 ----------------------------------------------------------- Newport Corp. 3.4 ----------------------------------------------------------- PMC-Sierra, Inc. 3.4 ----------------------------------------------------------- Calpine Corp. 3.2 ----------------------------------------------------------- Copper Mountain Networks, Inc. 3.0
Top Five Industries(4) ----------------------------------------------------------- Electronics 24.0% ----------------------------------------------------------- Computer Software 14.8 ----------------------------------------------------------- Communications Equipment 14.7 ----------------------------------------------------------- Telecommunications: Long Distance 8.4 ----------------------------------------------------------- Retail: Specialty 7.3
4. Portfolio is subject to change. Percentages are as of April 30, 2000, and are based on total market value of common stock.
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. For quarterly updates on the Fund’s performance, please contact your financial advisor, call us at 1.800.525.7048 or visit our website at www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. Cumulative total returns are not annualized. The Fund’s total returns shown do not show the effects of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.
Class A shares of the Fund were first publicly offered on 12/1/97. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%.
Class B shares of the Fund were first publicly offered on 12/1/97. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (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 12/1/97. Unless otherwise noted, 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 12/1/97. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor.
An explanation of the calculation of performance is in the Fund’s Statement of Additional Information.
Market Value
Shares See Note 1
==================================================================================
Common Stocks--71.7%
----------------------------------------------------------------------------------
Capital Goods--4.3%
----------------------------------------------------------------------------------
Electrical Equipment--4.3%
C-Cube Microsystems, Inc.(1) 65,000 $ 4,176,250
----------------------------------------------------------------------------------
E-Tek Dynamics, Inc.(1) 213,300 43,673,175
----------------------------------------------------------------------------------
Jabil Circuit, Inc.(1) 500,000 20,468,750
-----------
68,318,175
----------------------------------------------------------------------------------
Communication Services--9.4%
----------------------------------------------------------------------------------
Telecommunications: Long Distance--6.0%
Broadcom Corp., Cl. A(1) 30,000 5,171,250
----------------------------------------------------------------------------------
Brocade Communications Systems, Inc.(1) 95,600 11,854,400
----------------------------------------------------------------------------------
Clarent Corp.(1) 150,000 10,200,000
----------------------------------------------------------------------------------
Copper Mountain Networks, Inc.(1) 407,200 33,950,300
----------------------------------------------------------------------------------
Efficient Networks, Inc.(1) 280,000 18,410,000
----------------------------------------------------------------------------------
Exodus Communications, Inc.(1) 166,000 14,680,625
-----------
94,266,575
----------------------------------------------------------------------------------
Telecommunications: Wireless--3.4%
Aether Systems, Inc.(1) 287,400 47,847,609
----------------------------------------------------------------------------------
GoAmerica, Inc.(1) 98,200 975,862
----------------------------------------------------------------------------------
Nextel Partners, Inc., Cl. A(1) 198,500 4,354,594
-----------
53,178,065
----------------------------------------------------------------------------------
Consumer Cyclicals--6.7%
----------------------------------------------------------------------------------
Consumer Services--1.5%
Young & Rubicam, Inc. 421,800 23,488,987
----------------------------------------------------------------------------------
Retail: Specialty--5.2%
Best Buy Co., Inc.(1) 39,700 3,205,775
----------------------------------------------------------------------------------
BJ's Wholesale Club, Inc.(1) 510,000 18,073,125
----------------------------------------------------------------------------------
Circuit City Stores-Circuit City Group 180,000 10,586,250
----------------------------------------------------------------------------------
Tandy Corp. 175,000 9,975,000
----------------------------------------------------------------------------------
Tiffany & Co. 560,600 40,748,612
-----------
82,588,762
----------------------------------------------------------------------------------
Consumer Staples--3.7%
----------------------------------------------------------------------------------
Broadcasting--3.2%
Charter Communications, Inc., Cl. A(1) 232,300 3,411,906
----------------------------------------------------------------------------------
Hispanic Broadcasting Corp.(1) 325,000 32,845,312
----------------------------------------------------------------------------------
Univision Communications, Inc., Cl. A(1) 124,800 13,634,400
-----------
49,891,618
----------------------------------------------------------------------------------
Entertainment--0.5%
Royal Caribbean Cruises Ltd. 352,000 7,326,000
Market Value
Shares See Note 1
----------------------------------------------------------------------------------
Healthcare--1.6%
----------------------------------------------------------------------------------
Healthcare/Drugs--1.6%
Abgenix, Inc.(1) 53,600 $ 4,800,550
----------------------------------------------------------------------------------
Biogen, Inc.(1) 44,000 2,587,750
----------------------------------------------------------------------------------
Genentech, Inc.(1) 11,200 1,310,400
----------------------------------------------------------------------------------
ImClone Systems, Inc.(1) 100,000 9,100,000
----------------------------------------------------------------------------------
Medarex, Inc.(1) 146,100 7,743,300
------------
25,542,000
----------------------------------------------------------------------------------
Technology--43.7%
----------------------------------------------------------------------------------
Computer Hardware--1.2%
Digital Lightwave, Inc.(1) 100,000 6,850,000
----------------------------------------------------------------------------------
Juniper Networks, Inc.(1) 17,100 3,636,956
----------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(1) 72,000 8,496,000
------------
18,982,956
----------------------------------------------------------------------------------
Computer Services--4.1%
Ancor Communications, Inc.(1) 150,000 4,528,125
----------------------------------------------------------------------------------
Applied Micro Circuits Corp.(1) 188,400 24,280,050
----------------------------------------------------------------------------------
Finisar Corp.(1) 717,000 26,753,062
----------------------------------------------------------------------------------
Foundry Networks, Inc.(1) 71,400 6,497,400
----------------------------------------------------------------------------------
JNI Corp.(1) 50,000 1,996,875
------------
64,055,512
----------------------------------------------------------------------------------
Computer Software--10.6%
Akamai Technologies, Inc.(1) 3,400 336,175
----------------------------------------------------------------------------------
Alteon Websystems, Inc.(1) 12,400 843,200
----------------------------------------------------------------------------------
Citrix Systems, Inc.(1) 338,000 20,639,125
----------------------------------------------------------------------------------
Gemstar International Group Ltd.(1) 150,000 6,937,500
----------------------------------------------------------------------------------
Intertrust Technologies Corp.(1) 94,100 2,164,300
----------------------------------------------------------------------------------
Interwoven, Inc.(1) 38,500 2,666,125
----------------------------------------------------------------------------------
J.D. Edwards & Co.(1) 100,000 1,825,000
----------------------------------------------------------------------------------
Mercury Interactive Corp.(1) 447,000 40,230,000
----------------------------------------------------------------------------------
Micromuse, Inc.(1) 180,000 17,662,500
----------------------------------------------------------------------------------
OTG Software, Inc.(1) 21,400 470,800
----------------------------------------------------------------------------------
Portal Software, Inc.(1) 200,000 9,175,000
----------------------------------------------------------------------------------
Rational Software Corp.(1) 160,000 13,620,000
----------------------------------------------------------------------------------
RealNetworks, Inc.(1) 150,000 7,143,750
----------------------------------------------------------------------------------
Research in Motion Ltd.(1) 450,000 19,125,000
----------------------------------------------------------------------------------
Sapient Corp.(1) 59,000 4,672,063
----------------------------------------------------------------------------------
Veritas Software Corp.(1) 184,500 19,790,508
------------
167,301,046
Market Value
Shares See Note 1
----------------------------------------------------------------------------------
Communications Equipment--10.6%
Antec Corp.(1) 162,200 $ 8,718,250
----------------------------------------------------------------------------------
Aspect Communications Corp.(1) 70,000 2,485,000
----------------------------------------------------------------------------------
Audiocodes Ltd.(1) 186,200 13,965,000
----------------------------------------------------------------------------------
Bookham Technology plc, ADR(1) 451,100 23,457,200
----------------------------------------------------------------------------------
Bookham Technology plc, ADR(1,2) 315,855 11,497,122
----------------------------------------------------------------------------------
CIENA Corp.(1) 90,000 11,126,250
----------------------------------------------------------------------------------
Harmonic, Inc.(1) 405,000 29,894,063
----------------------------------------------------------------------------------
Newport Corp. 316,600 38,407,538
----------------------------------------------------------------------------------
Scientific-Atlanta, Inc. 385,000 25,049,063
----------------------------------------------------------------------------------
UTStarcom, Inc.(1) 36,800 1,748,000
-------------
166,347,486
----------------------------------------------------------------------------------
Electronics--17.2%
Celestica, Inc.(1) 245,000 13,367,813
----------------------------------------------------------------------------------
JDS Uniphase Corp.(1) 763,184 79,132,641
----------------------------------------------------------------------------------
LSI Logic Corp.(1) 498,600 31,162,500
----------------------------------------------------------------------------------
PMC-Sierra, Inc. 200,000 38,375,000
----------------------------------------------------------------------------------
QLogic Corp.(1) 226,000 22,670,625
----------------------------------------------------------------------------------
RF Micro Devices, Inc.(1) 90,000 9,365,625
----------------------------------------------------------------------------------
SDL, Inc.(1) 244,000 47,580,000
----------------------------------------------------------------------------------
TranSwitch Corp.(1) 47,000 4,138,938
----------------------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 285,000 19,397,813
----------------------------------------------------------------------------------
Waters Corp.(1) 57,500 5,448,125
--------------
270,639,080
----------------------------------------------------------------------------------
Utilities--2.3%
----------------------------------------------------------------------------------
Electric Utilities--2.3%
Calpine Corp.(1) 396,200 36,252,300
--------------
Total Common Stocks (Cost $882,160,514) 1,128,178,562
==================================================================================
Preferred Stocks--0.7%
----------------------------------------------------------------------------------
Corvis Corp., Cv., Series H(1,2) 74,506 5,999,968
----------------------------------------------------------------------------------
ITF Optical Technologies, Inc., Cv., Series A(1,2) 200,000 5,000,000
--------------
Total Preferred Stocks (Cost $10,999,968) 10,999,968
Principal Market Value
Amount See Note 1
----------------------------------------------------------------------------------
Repurchase Agreements--27.0%
Repurchase agreement with Deutsche Bank Securities
Inc., 5.70%, dated 4/28/00, to be repurchased at
$425,401,970 on 5/1/00, collateralized by U.S.
Treasury Bonds, 5.25%-11.625%, 11/15/02-2/15/29,
with a value of $434,910,539 (Cost $425,200,000) $425,200,000 $ 425,200,000
----------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,318,360,482) 99.4% 1,564,378,530
----------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.6 9,236,065
----------------------------------------------------------------------------------
Net Assets 100.0% $1,573,614,595
============================
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
April 30, 2000
==================================================================================
Assets
Investments, at value (including repurchase
agreements of $425,200,000)
(cost $1,318,360,482)--see accompanying statement $1,564,378,530
----------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 10,668,380
Investments sold 7,665,642
Interest and dividends 201,970
Other 7,490
--------------
Total assets 1,582,922,012
==================================================================================
Liabilities
Bank overdraft 1,142,541
----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 5,239,569
Shares of beneficial interest redeemed 2,050,090
Distribution and service plan fees 294,028
Transfer and shareholder servicing agent fees 170,588
Trustees' compensation 34,829
Other 375,772
--------------
Total liabilities 9,307,417
==================================================================================
Net Assets $1,573,614,595
==============
==================================================================================
Composition of Net Assets
Paid-in capital $1,387,096,283
----------------------------------------------------------------------------------
Accumulated net investment loss (271,343)
----------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (59,228,393)
----------------------------------------------------------------------------------
Net unrealized appreciation on investments 246,018,048
--------------
Net Assets $1,573,614,595
==============
==================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$767,748,867 and 26,284,295 shares of beneficial interest outstanding) $29.21
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $30.99
----------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $635,565,451 and 22,124,463 shares of beneficial
interest outstanding) $28.73
----------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $170,297,321 and 5,930,842 shares of beneficial
interest outstanding) $28.71
----------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $2,956 and 100 shares of beneficial
interest outstanding) $29.56
See accompanying Notes to Financial Statements.
For the Six Months Ended April 30, 2000
==================================================================================
Investment Income
Interest $ 6,992,078
----------------------------------------------------------------------------------
Dividends 222,848
------------
Total income 7,214,926
==================================================================================
Expenses
Management fees 3,237,328
----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 588,312
Class B 1,896,297
Class C 499,071
----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 788,041
----------------------------------------------------------------------------------
Shareholder reports 93,473
----------------------------------------------------------------------------------
Trustees' compensation 35,869
----------------------------------------------------------------------------------
Custodian fees and expenses 20,420
----------------------------------------------------------------------------------
Other 339,608
------------
Total expenses 7,498,419
Less expenses paid indirectly (18,958)
------------
Net expenses 7,479,461
==================================================================================
Net Investment Loss (264,535)
==================================================================================
Realized and Unrealized Gain (Loss)
Net realized loss on investments (52,781,404)
----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 180,220,660
------------
Net realized and unrealized gain 127,439,256
==================================================================================
Net Increase in Net Assets Resulting from Operations $127,174,721
============
See accompanying Notes to Financial Statements.
Six Months Year
Ended Ended
April 30, 2000 October 31,
(Unaudited) 1999
==================================================================================
Operations
Net investment loss $ (264,535) $ (914,919)
----------------------------------------------------------------------------------
Net realized loss (52,781,404) (3,595,944)
----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 180,220,660 65,603,264
---------------------------
Net increase in net assets resulting from operations 127,174,721 61,092,401
==================================================================================
Dividends and/or Distributions to Shareholders
Distributions in excess of net realized gain:
Class A -- (23,126)
Class B -- (13,593)
Class C -- (4,026)
Class Y -- --
==================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions:
Class A 529,128,204 119,533,021
Class B 470,154,534 88,747,417
Class C 134,183,554 18,791,983
Class Y -- --
==================================================================================
Net Assets
Total increase 1,260,641,013 288,124,077
----------------------------------------------------------------------------------
Beginning of period 312,973,582 24,849,505
-----------------------------
End of period (including accumulated net investment
losses of $271,343 and $6,808, respectively) $1,573,614,595 $312,973,582
=============================
See accompanying Notes to Financial Statements.
Six Months Year
Ended Ended
April 30, 2000 Oct. 31,
Class A (Unaudited) 1999 1998(1)
=====================================================================================
Per Share Operating Data
Net asset value, beginning of period $19.88 $10.83 $10.00
-------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment gain (loss) .01 (.04) (.02)
Net realized and unrealized gain 9.32 9.11 .85
--------------------------
Total income from investment operations 9.33 9.07 .83
-------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Total distributions in excess of net realized gain -- (.02) --
-------------------------------------------------------------------------------------
Net asset value, end of period $29.21 $19.88 $10.83
==========================
=====================================================================================
Total Return, at Net Asset Value(2) 46.93% 83.79% 8.30%
=====================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $767,749 $167,879 $14,607
-------------------------------------------------------------------------------------
Average net assets (in thousands) $482,417 $ 60,644 $ 7,185
-------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment gain (loss) 0.31% (0.49)% (0.33)%
Expenses 1.19% 1.40% 1.59%(4)
-------------------------------------------------------------------------------------
Portfolio turnover rate(5) 14% 61% 117%
1. For the period from December 1, 1997 (commencement of operations) to October 31, 1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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 April 30, 2000, were $867,254,710 and $101,258,770, respectively.
See accompanying Notes to Financial Statements.
Six Months Year
Ended Ended
April 30, 2000 Oct. 31,
Class B (Unaudited) 1999 1998(1)
=====================================================================================
Per Share Operating Data
Net asset value, beginning of period $19.62 $10.77 $10.00
-------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.02) (.07) (.05)
Net realized and unrealized gain 9.13 8.94 .82
--------------------------
Total income from investment operations 9.11 8.87 .77
-------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Total distributions in excess of net realized gain -- (.02) --
-------------------------------------------------------------------------------------
Net asset value, end of period $28.73 $19.62 $10.77
==========================
=====================================================================================
Total Return, at Net Asset Value(2) 46.43% 82.40% 7.70%
=====================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $635,565 $118,611 $7,654
-------------------------------------------------------------------------------------
Average net assets (in thousands) $384,020 $ 40,455 $3,521
-------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss (0.43)% (1.25)% (1.06)%
Expenses 1.93% 2.16% 2.35%(4)
-------------------------------------------------------------------------------------
Portfolio turnover rate(5) 14% 61% 117%
1. For the period from December 1, 1997 (commencement of operations) to October 31, 1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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 April 30, 2000, were $867,254,710 and $101,258,770, respectively.
See accompanying Notes to Financial Statements.
Six Months Year
Ended Ended
April 30, 2000 Oct. 31,
Class C (Unaudited) 1999 1998(1)
=====================================================================================
Per Share Operating Data
Net asset value, beginning of period $19.60 $10.76 $10.00
-------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment loss (.01) (.06) (.05)
Net realized and unrealized gain 9.12 8.92 .81
--------------------------
Total income from investment operations 9.11 8.86 .76
-------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Total distributions in excess of net realized gain -- (.02) --
-------------------------------------------------------------------------------------
Net asset value, end of period $28.71 $19.60 $10.76
==========================
=====================================================================================
Total Return, at Net Asset Value(2) 46.48% 82.38% 7.60%
=====================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $170,297 $26,482 $2,587
-------------------------------------------------------------------------------------
Average net assets (in thousands) $101,117 $ 9,066 $1,271
-------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment loss (0.42)% (1.26)% (1.07)%
Expenses 1.93% 2.16% 2.35%(4)
-------------------------------------------------------------------------------------
Portfolio turnover rate(5) 14% 61% 117%
1. For the period from December 1, 1997 (commencement of operations) to October 31, 1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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 April 30, 2000, were $867,254,710 and $101,258,770, respectively.
See accompanying Notes to Financial Statements.
Six Months Year
Ended Ended
April 30, 2000 Oct. 31,
Class Y (Unaudited) 1999 1998(1)
=====================================================================================
Per Share Operating Data
Net asset value, beginning of period $20.07 $10.88 $10.00
-------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income gain (loss) .10 (.01) .01
Net realized and unrealized gain 9.39 9.22 .87
--------------------------
Total income from investment operations 9.49 9.21 .88
-------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Total distributions in excess of net realized gain -- (.02) --
-------------------------------------------------------------------------------------
Net asset value, end of period $29.56 $20.07 $10.88
==========================
=====================================================================================
Total Return, at Net Asset Value(2) 47.29% 84.69% 8.80%
=====================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $3 $2 $1
-------------------------------------------------------------------------------------
Average net assets (in thousands) $3 $2 $1
-------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0.66% (0.06)% 0.05%
Expenses 0.79% 1.03% 1.09%(4)
-------------------------------------------------------------------------------------
Portfolio turnover rate(5) 14% 61% 117%
1. For the period from December 1, 1997 (commencement of operations) to October 31, 1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before the first day of the fiscal period (or inception of offering), 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 April 30, 2000, were $867,254,710 and $101,258,770, respectively.
See accompanying Notes to Financial Statements.
Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund’s investment objective is to seek capital appreciation. The Fund’s investment advisor is OppenheimerFunds, Inc. (the Manager).
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.
1. Significant Accounting Policies Continued
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.
The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of annual compensation they are entitled to receive from the Fund. Under the plan, the compensation deferred is periodically adjusted as though an equivalent amount had been invested for the Board of Trustees in shares of one or more Oppenheimer funds selected by the trustee. The amount paid to the Board of Trustees under the plan will be determined based upon the performance of the selected funds. Deferral of trustees’ fees under the plan will not affect the net assets of the Fund, and will not materially affect the Fund’s assets, liabilities or net investment income per share.
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.
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:
Six Months Ended April 30, 2000 Year Ended October 31, 1999
Shares Amount Shares Amount
----------------------------------------------------------------------------------
Class A
Sold 20,728,525 $613,476,322 8,300,323 $138,625,655
Dividends and/or
distributions reinvested -- -- 1,765 21,575
Redeemed (2,889,233) (84,348,118) (1,206,313) (19,114,209)
------------------------------------------------------
Net increase 17,839,292 $529,128,204 7,095,775 $119,533,021
======================================================
----------------------------------------------------------------------------------
Class B
Sold 17,935,909 $524,177,311 6,071,612 $100,987,612
Dividends and/or
distributions reinvested -- -- 1,088 13,216
Redeemed (1,857,323) (54,022,777) (737,801) (12,253,411)
------------------------------------------------------
Net increase 16,078,586 $470,154,534 5,334,899 $ 88,747,417
======================================================
----------------------------------------------------------------------------------
Class C
Sold 6,029,750 $174,932,971 1,337,614 $ 22,505,897
Dividends and/or
distributions reinvested -- -- 315 3,822
Redeemed (1,450,025) (40,749,417) (227,345) (3,717,736)
------------------------------------------------------
Net increase 4,579,725 $134,183,554 1,110,584 $ 18,791,983
======================================================
----------------------------------------------------------------------------------
Class Y
Sold -- $ -- -- $ --
Dividends and/or
distributions reinvested -- -- -- --
Redeemed -- -- -- --
------------------------------------------------------
Net increase -- $ -- -- $ --
======================================================
As of April 30, 2000, net unrealized appreciation on securities of $246,018,048 was composed of gross appreciation of $354,235,612, and gross depreciation of $108,217,564.
Management Fees. Management fees paid to the Manager were in accordance with the investment advisory agreement with the Fund, which provides for an annual fee of 0.75% of the first $200 million of average annual net assets of the Fund, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of average annual net assets in excess of $800 million. The Fund’s management fee for the six months ended April 30, 2000 was 0.67% of the average annual net assets for each class of shares, annualized for periods of less than one full year.
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.
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
--------------------------------------------------------------------------------------------
April 30, 2000 $4,178,790 $1,140,583 $375,061 $7,638,210 $630,534
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.
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
---------------------------------------------------------------------------------------------
April 30, 2000 $-- $271,153 12,297
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 April 30, 2000, payments under the Class A plan totaled $588,312, all of which was paid by the Distributor to recipients. That included $40,620 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 carryforward of distribution expenses, to be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended April 30, 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 $1,896,297 $1,651,503 $10,236,285 1.61%
Class C Plan 499,071 293,394 1,267,775 0.74
As of April 30, 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. Aggregate value of illiquid or restricted securities subject to this limitation as of April 30, 2000, was $22,497,090, which represents 1.43% of the Fund’s net assets, all of which is considered restricted. Information concerning restricted securities is as follows:
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit April 30, 2000
---------------------------------------------------------------------------------------------
Stocks and Warrants
Bookham Technology plc, ADR 2/24/00 $15.83 $36.40
---------------------------------------------------------------------------------------------
Corvis Corp., Cv., Series H 12/16/99 80.53 80.53
---------------------------------------------------------------------------------------------
ITF Optical Technologies, Inc., Cv., Series A 4/7/00 25.00 25.00
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 that 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 April 30, 2000.
Officers and Trustees
Bridget A. Macaskill, President and Chairman of the Board of Trustees
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Robert G. Galli, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
Bruce L. Bartlett, Vice President
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
Investment Advisor
OppenheimerFunds, Inc.
Distributor
OppenheimerFunds Distributor, Inc.
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
Custodian of Portfolio Securities
The Bank of New York
Independent Auditors
KPMG LLP
Legal Counsel
Mayer, Brown & Platt
The financial statements included herein have been taken from the records of the Fund without examination of those records by the independent auditors.
This is a copy of a report to shareholders of Oppenheimer MidCap Fund. This report must be preceded or accompanied by a Prospectus of Oppenheimer MidCap 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.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. Two World Trade Center, New York, NY10048-0203
©Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
=======================================================================================================
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
=======================================================================================================
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
=======================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund 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
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
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.
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 transactions1
www.oppenheimerfunds.com
Ticker Symbols Class A: OMDAX Class B: OMDBX Class C: OMDCX Class Y: OMDYX
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OppenheimerFunds®
Distributor, Inc.
RS0745.001.0400 June 29, 2000
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