<PAGE>
-----------------------------------
Semiannual Report February 28, 1999
-----------------------------------
OPPENHEIMER
International Small
Company Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's Manager
8 Financial
Statements
24 Officers and
Trustees
28 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o The broad market pullback of September and October 1998 hurt the Fund's
performance, but losses were lessened due to limited exposure to emerging
markets and our holdings of stocks yielding high dividends.
o We see continuing investment opportunities in the countries of the European
Monetary Union (EMU) as well as Great Britain.
Cumulative Total Returns
For the 6-Month Period
Ended 2/28/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- -----------------------------
16.47% 9.77%
- -----------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- -----------------------------
15.92% 10.92%
- -----------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- -----------------------------
15.92% 14.92%
- -----------------------------
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. 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 the stock market can be volatile, the Fund's
performance may be subject to substantial short-term changes. For updates on the
Fund's performance, please contact your financial advisor, call us at
1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer International Small Company Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
International Small
Company Fund
Dear shareholder,
- --------------------------------------------------------------------------------
Contrary to what many analysts had expected, the U.S. economy appears to have
picked up steam over the past few months. The fourth quarter of 1998 posted the
fastest rate of economic growth in two years, and early indications suggest that
the first quarter of 1999 may follow suit.
With respect to the U.S. bond market, stronger-than-expected economic
growth has triggered concerns that the Federal Reserve may raise key interest
rates to forestall an acceleration of inflation. As a result, yields of
longer-term taxable bonds have risen from their October 1998 lows, when
investors had bid up prices during the global "flight to quality." At the same
time, tax exempt bond prices and yields have remained relatively stable.
In the U.S. stock market, it might appear at first glance that prices are
rising as rapidly as the economy is growing. However, a closer look reveals
that, with the exception of large-cap growth companies and the technology
industry, most stock prices remained relatively flat. What's more, the disparity
in valuations between large companies, which have led the market's advance, and
smaller ones, which have lagged, has become historically wide.
What do these observations mean for your investments? In our view,
actively managed portfolios that are closely monitored by expert money managers
are likely to provide better returns than passive index investing in 1999.
That's because selectivity is expected to be more critical to performance than
it has been over the past few years. In a potentially overvalued stock market
and rising interest-rate environment, the ability to identify the most promising
securities could become paramount.
Even though many equity investors may be tempted to jump aboard the
technology bandwagon, we suggest a more prudent course: broad diversification
beyond any single asset class, industry, capitalization range or geographic
region. We believe that the risks of this investment environment require
consideration of a broad range of investments and markets, including bonds. That
way, if one market experiences setbacks, one or more of the others may help
cushion the effects on your overall portfolio.
No matter what the financial markets have in store, we resolve to continue
working with your financial advisor to keep you apprised of potential risks and
opportunities. Providing you with the market information, professionally managed
investments and other resources you need to achieve your financial goals is an
important part of our enduring commitment to you as The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
March 19, 1999
3 Oppenheimer International Small Company Fund
<PAGE>
"Some of our holdings rose in value so quickly that they reached our 12-month
target prices in just a few months' time."
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How did Oppenheimer International Small Company Fund perform during the
six-month period that ended February 28, 1999?
The Fund performed well during an exceptionally challenging and volatile period
in the global equity markets. Although we are more concerned with returns for
our investors than with relative performance, it is notable that the Fund's
Class A shares were ranked 11 out of 60 international small company funds during
the one-year period that ended March 31, 1999 as measured by Lipper Analytical
Services.1 We attribute this to our focus on selecting stocks with above-average
growth, above-average yield, and below-average valuation.
What made this such a challenging period?
During the second half of 1998, economic difficulties in emerging markets
throughout the world sparked fears of a global economic slowdown. As a result,
most equities suffered. Especially hard hit were the stocks of companies in the
troubled regions of Eastern Europe, Asia and South America, as well as companies
elsewhere in the world that derive significant revenues from these regions. In
particular, the British market fell sharply as a result of Great Britain's close
economic ties to Hong Kong. The stocks of small companies around the world also
suffered disproportionately as investors sought refuge in large companies.
1. Source: Lipper Analytical Services, Inc., 3/31/99. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested.
4 Oppenheimer International Small Company Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Bill Wilby
Nicholas Horsley
(Portfolio Manager)
George Evans
However, fears of a global slowdown eased in October as developed economies, led
by the United States, showed continuing economic strength. As a result, most
stock markets worldwide rebounded remarkably swiftly. Although Latin American
markets suffered a setback because of monetary weakness in Brazil, the markets
of Europe, Asia and the United States rose sharply through the rest of 1998 and
into the beginning of 1999.
How did you manage the Fund in light of these events?
We recognized the problems in Asia and South America relatively early, as well
as the likely impact of Hong Kong's problems on the British market. By
September, we held minimal positions in Asia and Brazil.
The Fund also benefited from its value aspect of our investment strategy.
Specifically, we maintained holdings of stocks paying strong dividends. These
investments helped cushion the Fund, to some degree, against the market's
volatility.
We took advantage of favorable buying opportunities in September and
October, staking out new positions in quality European companies such as Singer
& Friedlander Group plc, a British merchant bank. This company offered a high
dividend yield while selling at a very attractive price. Other European
companies offered exceptional growth opportunities at reasonable prices. Some of
these holdings rose in value so quickly that they reached our 12-month target
prices before the end of 1998. In those instances, we sold our holdings and
looked for new opportunities.
5 Oppenheimer International Small Company Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 3/31/99(2)
Class A
Since
1 year Inception
- ---------------------------
7.47% 20.80%
- ---------------------------
Class B
Since
1 year Inception
- ---------------------------
8.02% 22.40%
- ---------------------------
Class C
Since
1 year Inception
- ---------------------------
12.02% 25.09%
- ---------------------------
An interview with your Fund's manager
- --------------------------------------------------------------------------------
What is your outlook for the future?
We remain optimistic about Europe. On January 1, 1999, 11 European countries
joined together to form the European Monetary Union (EMU), tying their economic
systems to a single interest rate and a common currency. We believe the EMU will
increase the comparability of company performance from country to country,
forcing less competitive businesses to restructure. At the same time, strict
limits on government borrowing have made these economies more fiscally
responsible and attractive to investment.
Although Great Britain is not currently part of the EMU, we also see
opportunities there. Several attractive British companies that yield high
dividend rates are available at relatively low prices. We believe the country's
prolonged expansion is likely to continue at a rate that will meet or exceed
analysts' expectations, and that the risks of the market's Asian exposure are
already factored into stock prices.
At the same time, we continue to be wary of Asia. Although our caution
caused us to miss the Asian markets' sharp upswing in late 1998, we do not
believe the rise in stock prices is backed by solid fundamentals. As a result,
we have limited our Asian investments to a small number of selected Japanese
companies.
2. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A, B and C shares were first publicly offered on 11/17/97. Class A
returns include the maximum initial sales charge of 5.75%. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 4%
(since inception.) Class C returns include the contingent deferred sales charge
of 1% for the 1-year period. Class B and C shares are subject to an annual 0.75%
asset-based sales charge. An explanation of the different performance
calculations is in the Fund's prospectus.
6 Oppenheimer International Small Company Fund
<PAGE>
Regional Allocation/3/
[GRAPHIC]
Europe 64.3%
Asia 16.6
United States 12.7
Latin America 3.6
Emerging Europe 2.8
We will continue to employ our disciplined stock-picking strategy to seek
foreign companies with a history of strong profitability and farsighted
management in industries with good growth trends. That's what makes Oppenheimer
International Small Company Fund part of The Right Way to Invest.
Top 10 Country Holdings/3/
- --------------------------------------------------------------------------------
Great Britain 31.7%
- --------------------------------------------------------------------------------
United States 12.7
- --------------------------------------------------------------------------------
France 11.6
- --------------------------------------------------------------------------------
Netherlands 8.1
- --------------------------------------------------------------------------------
Singapore 5.4
- --------------------------------------------------------------------------------
Australia 4.2
- --------------------------------------------------------------------------------
Switzerland 3.9
- --------------------------------------------------------------------------------
Japan 3.8
- --------------------------------------------------------------------------------
Portugal 2.8
- --------------------------------------------------------------------------------
Spain 2.6
- --------------------------------------------------------------------------------
Top 10 Stock Holdings/3/
- --------------------------------------------------------------------------------
Johnson Matthey plc 7.5%
- --------------------------------------------------------------------------------
Rosebys plc 4.2
- --------------------------------------------------------------------------------
Cable & Wireless Optus Ltd. 4.2
- --------------------------------------------------------------------------------
Gretag Imaging Group 4.0
- --------------------------------------------------------------------------------
Uni-Invest NV 3.8
- --------------------------------------------------------------------------------
Leon de Bruxelles SA 3.1
- --------------------------------------------------------------------------------
Rothmans Industries Ltd. 2.9
- --------------------------------------------------------------------------------
Singer & Friedlander Group plc 2.7
- --------------------------------------------------------------------------------
SPIR Communication SA 2.6
- --------------------------------------------------------------------------------
Imagineer Co. Ltd. 2.4
- --------------------------------------------------------------------------------
3. Portfolio is subject to change. Percentages are as of February 28, 1999, and
are based on total market value of investments.
7 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
=================================================================================================
<S> <C> <C>
Common Stocks--94.5%
- -------------------------------------------------------------------------------------------------
Basic Materials--8.0%
- -------------------------------------------------------------------------------------------------
Metals--8.0%
Johnson Matthey plc 185,000 $1,355,153
- -------------------------------------------------------------------------------------------------
Capital Goods--5.9%
- -------------------------------------------------------------------------------------------------
Electrical Equipment--1.4%
Halma plc 115,600 235,193
- -------------------------------------------------------------------------------------------------
Industrial Services--0.3%
BAU Holdings AF, Preference/(1)/ 2,085 53,785
- -------------------------------------------------------------------------------------------------
Manufacturing--4.2%
Gretag Imaging Group/(1)/ 8,170 716,042
- -------------------------------------------------------------------------------------------------
Consumer Cyclicals--27.7%
- -------------------------------------------------------------------------------------------------
Autos & Housing--9.1%
Alfred McAlpine Group plc/(1)/ 150,000 382,077
- -------------------------------------------------------------------------------------------------
Courts (Singapore) Ltd. 845,000 252,710
- -------------------------------------------------------------------------------------------------
George Wimpey plc 169,500 358,432
- -------------------------------------------------------------------------------------------------
Grupo Accion SA de CV, Series B/(1)/ 592,000 214,084
- -------------------------------------------------------------------------------------------------
Persimmon plc 76,600 265,674
- -------------------------------------------------------------------------------------------------
Pininfarina SpA/(1)/ 3,500 67,235
----------
1,540,212
- -------------------------------------------------------------------------------------------------
Media--14.2%
Lusomundo SGPS SA 33,200 382,662
- -------------------------------------------------------------------------------------------------
NRJ SA/(1)/ 1,600 351,268
- -------------------------------------------------------------------------------------------------
Prosieben Media AG, Preferred/(1)/ 5,875 298,269
- -------------------------------------------------------------------------------------------------
Publicis SA/(1)/ 955 160,392
- -------------------------------------------------------------------------------------------------
SPIR Communication SA/(1)/ 7,850 465,320
- -------------------------------------------------------------------------------------------------
Times Publishing Ltd. 85,000 126,362
- -------------------------------------------------------------------------------------------------
TV 4 AB/(1)/ 21,520 267,297
- -------------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A/(1)/ 6,500 299,000
- -------------------------------------------------------------------------------------------------
United Pan-Europe Communications NV/(1)/ 1,750 65,218
----------
2,415,788
- -------------------------------------------------------------------------------------------------
Retail: Specialty--4.4%
Rosebys plc 480,000 753,582
</TABLE>
8 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Staples--7.3%
- -------------------------------------------------------------------------------------------------
Entertainment--3.2%
Leon de Bruxelles SA 12,800 $ 549,383
- -------------------------------------------------------------------------------------------------
Food & Drug Retailers--1.1%
Makro Atacadista SA 36,300 186,037
- -------------------------------------------------------------------------------------------------
Tobacco--3.0%
Rothmans Industries Ltd. 88,000 516,134
- -------------------------------------------------------------------------------------------------
Financial--15.2%
- -------------------------------------------------------------------------------------------------
Banks--1.6%
Banco International do Funchal SA/(1)/ 12,252 115,394
- -------------------------------------------------------------------------------------------------
Banco Latinoamericano de Exportaciones SA, Cl. E 7,000 158,812
- -------------------------------------------------------------------------------------------------
IFCT Finance & Securities Public Company Ltd. plc/(1)(2)/ 140,000 --
----------
274,206
- -------------------------------------------------------------------------------------------------
Diversified Financial--6.3%
ICICI Ltd., GDR/(1)(3)/ 12,100 74,717
- -------------------------------------------------------------------------------------------------
Metrovacesa SA 7,280 187,397
- -------------------------------------------------------------------------------------------------
Ruam Pattana Fund II/(1)/ 625,000 82,060
- -------------------------------------------------------------------------------------------------
Shohkoh Fund & Co. 600 251,833
- -------------------------------------------------------------------------------------------------
Singer & Friedlander Group plc/(1)/ 238,000 476,596
----------
1,072,603
- -------------------------------------------------------------------------------------------------
Insurance--3.3%
Mapfre Vida Seguros 7,600 279,895
- -------------------------------------------------------------------------------------------------
National Mutual Asia Ltd. 400,000 283,953
----------
563,848
- -------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--4.0%
UNI-INVEST NV/(1)/ 42,000 682,338
- -------------------------------------------------------------------------------------------------
Healthcare--2.2%
- -------------------------------------------------------------------------------------------------
Healthcare/Drugs--2.2%
Biocompatibles International plc/(1)/ 120,000 128,801
- -------------------------------------------------------------------------------------------------
Haw Par Healthcare Ltd. 158,000 82,577
- -------------------------------------------------------------------------------------------------
Oxford Molecular Group plc/(1)/ 280,000 161,482
----------
372,860
</TABLE>
9 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology--20.7%
- -------------------------------------------------------------------------------------------------
Computer Hardware--4.1%
Eidos plc/(1)/ 11,500 $ 275,424
- -------------------------------------------------------------------------------------------------
Imagineer Co. Ltd./(1)/ 41,900 427,299
----------
702,723
- -------------------------------------------------------------------------------------------------
Computer Software/Services--15.4%
Autonomy Corp. plc/(1)/ 26,900 241,293
- -------------------------------------------------------------------------------------------------
Cegid SA/(1)/ 980 161,902
- -------------------------------------------------------------------------------------------------
Computacenter plc/(1)/ 47,200 391,683
- -------------------------------------------------------------------------------------------------
Devote BV/(1)/ 19,800 330,367
- -------------------------------------------------------------------------------------------------
Dialog Corp. plc/(1)/ 83,000 86,428
- -------------------------------------------------------------------------------------------------
ICT Automatisering NV/(1)/ 20,000 379,808
- -------------------------------------------------------------------------------------------------
Industrial & Financial Systems Ltd. IFS AB, B Shares/(1)/ 20,000 169,265
- -------------------------------------------------------------------------------------------------
Software AG Systems, Inc./(1)/ 7,500 83,906
- -------------------------------------------------------------------------------------------------
Synstar plc/(1)/ 150,000 379,674
- -------------------------------------------------------------------------------------------------
Transiciel SA/(1)/ 3,003 391,286
----------
2,615,612
- -------------------------------------------------------------------------------------------------
Photography--1.2%
Photobition Group plc 50,000 202,453
- -------------------------------------------------------------------------------------------------
Telecommunications--6.9%
- -------------------------------------------------------------------------------------------------
Telecommunications/Technology--6.9%
Cable & Wireless Optus Ltd./(1)/ 340,900 749,330
- -------------------------------------------------------------------------------------------------
Esat Telecom Group plc, ADR/(1)/ 6,500 305,500
- -------------------------------------------------------------------------------------------------
Tandberg Television ASA/(1)/ 15,200 124,802
----------
1,179,632
- -------------------------------------------------------------------------------------------------
Utilities--0.6%
- -------------------------------------------------------------------------------------------------
Electric Utilities--0.6%
Cia de Eletricidade do Estado da Bahia, Preference 5,600,000 98,505
----------
Total Common Stocks (Cost $15,445,466) 16,086,089
<CAPTION>
Units
=================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.0%
- -------------------------------------------------------------------------------------------------
Biocompatibles International plc Wts., Exp. 4/99 21,625 433
- -------------------------------------------------------------------------------------------------
Milano Assicurazioni Wts., Exp. 6/02 9,880 --
- -------------------------------------------------------------------------------------------------
PT Pan Indonesia Bank Wts., Exp. 6/00 78,032 795
----------
Total Rights, Warrants and Certificates (Cost $1,733) 1,228
</TABLE>
10 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
=================================================================================================
<S> <C> <C>
Repurchase Agreements--11.2%
- -------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.73%
dated 2/26/99, to be repurchased at $1,900,749 on 3/1/99,
collateralized by U.S. Treasury Nts., 5.375%-7.875%,
6/30/99-2/15/07, with a value of $1,950,357
(Cost $1,900, 000) $ 1,900,000 $ 1,900,000
- -------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $17,347,199) 105.7% 17,987,317
- -------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (5.7) (968,800)
------------ ------------
Net Assets 100.0% $ 17,018,517
============ ============
</TABLE>
1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
3. 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 $74,717 or 0.44% of the Fund's net assets
as of February 28, 1999.
Distribution of investments by country of issue, as a percentage of total
investments at value, is as follows:
Country Market Value Percent
- -------------------------------------------------------------------------------
Great Britain $ 5,694,378 31.7%
- -------------------------------------------------------------------------------
United States 2,282,906 12.7
- -------------------------------------------------------------------------------
France 2,079,550 11.6
- -------------------------------------------------------------------------------
The Netherlands 1,457,731 8.1
- -------------------------------------------------------------------------------
Singapore 977,783 5.4
- -------------------------------------------------------------------------------
Australia 749,330 4.2
- -------------------------------------------------------------------------------
Switzerland 716,042 3.9
- -------------------------------------------------------------------------------
Japan 679,132 3.8
- -------------------------------------------------------------------------------
Portugal 498,056 2.8
- -------------------------------------------------------------------------------
Spain 467,291 2.6
- -------------------------------------------------------------------------------
Sweden 436,562 2.4
- -------------------------------------------------------------------------------
Ireland 305,500 1.7
- -------------------------------------------------------------------------------
Germany 298,269 1.6
- -------------------------------------------------------------------------------
Brazil 284,542 1.6
- -------------------------------------------------------------------------------
China 283,953 1.6
- -------------------------------------------------------------------------------
Mexico 214,084 1.1
- -------------------------------------------------------------------------------
Panama 158,813 0.9
- -------------------------------------------------------------------------------
Norway 124,802 0.7
- -------------------------------------------------------------------------------
Other 278,593 1.6
----------- -----------
Total $17,987,317 100.0%
=========== ===========
See accompanying Notes to Financial Statements.
11 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Assets
Investments, at value (including repurchase agreement
of $1,900,000) (cost $17,347,199)--see accompanying statement $ 17,987,317
- -------------------------------------------------------------------------------
Cash 80,872
- -------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 14,585
- -------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 121,811
Interest and dividends 15,467
Other 15,976
------------
Total assets 18,236,028
===============================================================================
Liabilities
Unrealized depreciation on forward foreign currency
exchange contracts--Note 5 1,749
- -------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,149,181
Shares of beneficial interest redeemed 35,113
Trustees' compensation--Note 1 19,208
Other 12,260
------------
Total liabilities 1,217,511
===============================================================================
Net Assets $ 17,018,517
============
===============================================================================
Composition of Net Assets
Paid-in capital $ 16,049,161
- -------------------------------------------------------------------------------
Overdistributed net investment income (79,279)
- -------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 395,388
- -------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 653,247
------------
Net Assets $ 17,018,517
============
12 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $11,903,509 and 957,210
shares of beneficial interest outstanding) $12.44
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $13.20
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net assets
of $4,172,019 and 338,168 shares of beneficial
interest outstanding) $12.34
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes
applicable contingent deferred sales charge)
and offering price per share (based on net assets
of $942,989 and 76,432 shares of beneficial
interest outstanding) $12.34
See accompanying Notes to Financial Statements.
13 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Dividends (net of foreign withholding taxes of $15,089) $ 66,717
- -------------------------------------------------------------------------------
Interest 28,152
----------
Total income 94,869
===============================================================================
Expenses
Management fees--Note 4 54,373
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 7,027
Class B 15,485
Class C 3,399
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 23,209
- -------------------------------------------------------------------------------
Trustees' compensation--Note 1 20,577
- -------------------------------------------------------------------------------
Shareholder reports 13,753
- -------------------------------------------------------------------------------
Legal, auditing and other professional fees 8,464
- -------------------------------------------------------------------------------
Custodian fees and expenses 3,767
- -------------------------------------------------------------------------------
Registration and filing fees 874
- -------------------------------------------------------------------------------
Other 6,521
----------
Total expenses 157,449
Less expenses paid indirectly--Note 4 (2,334)
----------
Net expenses 155,115
===============================================================================
Net Investment Loss (60,246)
===============================================================================
Realized and Unrealized Gain
Net realized gain on:
Investments 128,078
Foreign currency transactions 354,219
----------
Net realized gain 482,297
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 1,986,796
Translation of assets and liabilities denominated
in foreign currencies (373,995)
----------
Net change 1,612,801
----------
Net realized and unrealized gain 2,095,098
===============================================================================
Net Increase in Net Assets Resulting from Operations $2,034,852
==========
See accompanying Notes to Financial Statements.
14 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Period Ended
February 28, August 31,
1999 (Unaudited) 1998(1)
========================================================================================================
<S> <C> <C>
Operations
Net investment income (loss) $ (60,246) $ 19,038
- --------------------------------------------------------------------------------------------------------
Net realized gain 482,297 838,299
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,612,801 (959,554)
------------ ------------
Net increase (decrease) in net assets resulting from operations 2,034,852 (102,217)
========================================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (39,378) --
- --------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (653,224) --
Class B (222,713) --
Class C (49,271) --
========================================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 1,532,057 9,607,137
Class B 1,296,353 2,782,183
Class C 275,189 557,549
========================================================================================================
Net Assets
Total increase 4,173,865 12,844,652
- --------------------------------------------------------------------------------------------------------
Beginning of period 12,844,652 --
------------ ------------
End of period [including undistributed (overdistributed)
net investment income of $(79,279) and $20,345, respectively] $ 17,018,517 $ 12,844,652
============ ============
</TABLE>
1. For the period from November 17, 1997 (commencement of operations) to August
31, 1998.
See accompanying Notes to Financial Statements
15 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------
Six Months Period
Ended Ended
February 28, August 31,
1999 (Unaudited) 1998/(1)/
================================================================================
<S> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 11.52 $10.00
- --------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (.05) .03
Net realized and unrealized gain 1.85 1.49
------- ------
Total income from investment operations 1.80 1.52
- --------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.04) --
Distributions from net realized gain (.84) --
------- ------
Total dividends and distributions to shareholders (.88) --
- --------------------------------------------------------------------------------
Net asset value, end of period $ 12.44 $11.52
======= ======
================================================================================
Total Return, at Net Asset Value/(2)/ 16.47% 15.20%
================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $11,904 $9,605
- --------------------------------------------------------------------------------
Average net assets (in thousands) $ 9,911 $6,482
- --------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (0.70)%/(3)/ 0.44%/(3)/
Expenses/(4)/ 2.30%/(3)/ 1.77%/(3)/
- --------------------------------------------------------------------------------
Portfolio turnover rate/(5)/ 129% 239%
</TABLE>
1. For the period from November 17, 1997 (commencement of operations) to August
31, 1998.
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.
16 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B Class C
- --------------------------------- -----------------------------
Six Months Period Six Months Period
Ended Ended Ended Ended
February 28, August 31, February 28, August 31,
1999 (Unaudited) 1998/(1)/ 1999 (Unaudited) 1998/(1)/
===========================================================================
$11.45 $10.00 $11.45 $10.00
- ---------------------------------------------------------------------------
(.05) (.01) (.04) (.04)
1.78 1.46 1.77 1.49
- ------ ------ ------ ------
1.73 1.45 1.73 1.45
- ---------------------------------------------------------------------------
-- -- -- --
(.84) -- (.84) --
- ------ ------ ------ ------
(.84) -- (.84) --
- ---------------------------------------------------------------------------
$12.34 $11.45 $12.34 $11.45
====== ====== ====== ======
===========================================================================
15.92% 14.50% 15.92% 14.50%
===========================================================================
$4,172 $2,631 $ 943 $ 609
- ---------------------------------------------------------------------------
$3,131 $1,187 $ 687 $ 454
- ---------------------------------------------------------------------------
(1.55)%/(3)/ (0.38)%/(3)/ (1.56)%/(3)/ (0.66)%/(3)/
3.15%/(3)/ 2.67%/(3)/ 3.15%/(3)/ 2.58%/(3)/
- ---------------------------------------------------------------------------
129% 239% 129% 239%
4. The expense ratio reflects the effect of expenses paid indirectly by the
Fund.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended February 28, 1999, were $19,134,456 and $16,341,179, respectively.
See accompanying Notes to Financial Statements.
17 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer International Small Company Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek
long-term capital appreciation to make your investment grow. It emphasizes
investments in common stocks and other equity securities of "small-cap"
companies outside the United States. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge, except for
purchases greater than $1 million. Class A, Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. 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.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from fluctuations arising from changes in
market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
18 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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.
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded retirement plan for the
Fund's independent trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the six months ended
February 28, 1999, a provision of $14,760 was made for the Fund's projected
benefit obligations and payments of $7 were made to retired trustees, resulting
in an accumulated liability of $17,611 as of February 28, 1999.
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 fees 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 Trustee in shares of one or more Oppenheimer
funds selected by the Trustee. The amount paid to the Trustee 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 income per
share.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
19 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Realized gains and losses on investments and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest for each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended February 28, 1999 Period Ended August 31, 1998(1)
---------------------------------- ----------------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 443,969 $ 5,276,961 1,018,740 $ 11,907,503
Dividends and
distributions reinvested 57,034 639,347 -- --
Redeemed (377,159) (4,384,251) (185,374) (2,300,366)
-------- ------------ --------- ------------
Net increase 123,844 $ 1,532,057 833,366 $ 9,607,137
======== ============ ========= ============
- ---------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 165,502 $ 1,955,870 308,085 $ 3,685,253
Dividends and
distributions reinvested 19,511 217,543 -- --
Redeemed (76,587) (877,060) (78,343) (903,070)
-------- ------------ --------- ------------
Net increase 108,426 $ 1,296,353 229,742 $ 2,782,183
======== ============ ========= ============
- ---------------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 32,179 $ 374,900 93,920 $ 1,083,570
Dividends and
distributions reinvested 4,411 49,186 -- --
Redeemed (13,313) (148,897) (40,765) (526,021)
-------- ------------ --------- ------------
Net increase 23,277 $ 275,189 53,155 $ 557,549
======== ============ ========= ============
</TABLE>
1. For the period from November 17, 1997 (commencement of operations) to August
31, 1998.
20 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
As of February 28, 1999, net unrealized appreciation on investments of $640,118
was composed of gross appreciation of $1,713,555, and gross depreciation of
$1,073,437.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.80% of the first
$250 million of average annual net assets of the Fund, 0.77% of the next $250
million, 0.75% of the next $500 million, 0.69% of the next $1 billion, and 0.67%
of average annual net assets in excess of $2 billion. The Fund's management fee
for the six months ended February 28, 1999, was 0.80% of average annual net
assets of each class of shares.
For the six months ended February 28, 1999, commissions (sales
charges paid by investors) on sales of Class A shares totaled $34,941, of which
$10,594 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class A,
Class B and Class C shares totaled $2,930, $32,226 and $2,221, respectively. The
amount paid to an affiliated broker/dealer for Class B shares was $2,911. During
the six months ended February 28, 1999, OFDI received contingent deferred sales
charges of $4,044 upon redemption of Class B shares, as reimbursement for sales
commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the personal service
and maintenance of shareholder accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers that
hold Class A shares.
21 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
service for accounts that hold Class B and Class C shares. Each fee is computed
on the average annual net assets of Class B or Class C shares, determined as of
the close of each regular business day. During the six months ended February 28,
1999, OFDI retained $13,931 and $3,158, respectively, as compensation for Class
B and Class C sales commissions and service fee advances, as well as financing
costs. If either Plan is terminated by the Fund, the Board of Trustees may allow
the Fund to continue payments of the asset-based sales charge to OFDI for
distributing shares before the Plan was terminated. As of February 28, 1999,
OFDI had incurred excess distribution and servicing costs of $88,668 for Class B
and $8,350 for Class C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes in foreign currency
exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized gains and losses
are reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
22 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
As of February 28, 1999, outstanding forward contracts were as follows:
<TABLE>
<CAPTION>
Contract
Expiration Amount Valuation as of Unrealized Unrealized
Contract Description Dates (000s) February 28, 1999 Appreciation Depreciation
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Purchase
British Pound
Sterling (GBP) 3/2/99-3/3/99 48GBP $ 76,626 $ -- $ 102
Euro (EUR) 3/31/99 335EUR 368,819 -- 1,647
------- ------
-- 1,749
------- ------
Contracts to Sell
Japanese Yen (JPY) 4/13/99 27,903JPY 236,404 14,585 --
------- ------
Total Unrealized Appreciation
and Depreciation $14,585 $1,749
======= ======
</TABLE>
================================================================================
6. Illiquid and Restricted Securities
As of February 28, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit.
================================================================================
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended
February 28, 1999.
23 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer International Small Company Fund
- --------------------------------------------------------------------------------
================================================================================
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board
of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Nicholas Horsley, Vice President
George C. Bowen, 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 OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein
have been taken from the records of the Fund
without examination of the independent
auditors.
This is a copy of a report to shareholders
of Oppenheimer International Small Company
Fund. This report must be preceded or
accompanied by a Prospectus of Oppenheimer
International Small Company 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.
24 Oppenheimer International Small Company Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
=============================================================================================
<S> <C> <C>
Real Asset Funds
- ---------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
=============================================================================================
Global Stock Funds
- ---------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
=============================================================================================
Stock Funds
- ---------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
=============================================================================================
Stock & Bond Funds
- ---------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Multiple Strategies Fund
Income Fund/1/ Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund2
=============================================================================================
Taxable Bond Funds
- ---------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
=============================================================================================
Municipal Bond Funds
- ---------------------------------------------------------------------------------------------
California Municipal Fund/3/ Pennsylvania Municipal Fund3 Rochester Division:
Florida Municipal Fund/3/ Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund/3/ Insured Municipal Fund Limited Term New York
New York Municipal Fund/3/ Intermediate Municipal Fund Municipal Fund
=============================================================================================
Money Market Funds/4/
- ---------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 12/22/98, the Fund's name was changed from "Main Street Income & Growth
Fund."
2. On 4/1/99, the Fund's name was changed from "Equity Income Fund."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
25 Oppenheimer International Small Company Fund
<PAGE>
This page is intentionally left blank
<PAGE>
<PAGE>
Internet
24-hr access to account
information. Online
transactions now available
www.oppenheimerfunds.com
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1-800-835-3104
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
APRIL 29, 1999
RS0815.001.0299 [LOGO] OppenheimerFunds(R)
Distributor, Inc.
