[photo of satellite dishes]
Semiannual Report February 29, 2000
Oppenheimer
Europe Fund
[Logo]OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
During the past six months, the equity markets in Europe made a strong recovery
from the late-1998 financial crisis that impacted markets worldwide.
The Fund was bolstered by investments in Europe's strongest markets and two
high-performing sectors--technology and telecommunications.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Manager
10 Financial
Statements
29 Officers and Trustees
- ----------------------
Cumulative
Total Returns
For the 6-Month Period
Ended 2/29/00*
Class A
Without With
Sales Chg. Sales Chg.
- ----------------------
24.42% 17.27%
Class B
Without With
Sales Chg. Sales Chg.
- ----------------------
23.87% 18.87%
Class C
Without With
Sales Chg. Sales Chg.
- ----------------------
23.99% 22.99%
Class Y
Without With
Sales Chg. Sales Chg.
- ----------------------
24.56% 24.56%
- ----------------------
- -----------------------
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
- -----------------------
*See page 8 for further details.
<PAGE>
PRESIDENT'S LETTER
[begin callout]
[photo of Bridget A. Macaskill]
Bridget A. Macaskill
President
Oppenheimer
Europe Fund
[end callout]
Dear Shareholder,
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher inflation. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting to
slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term market
volatility. In the bond market, higher interest rates usually lead to lower bond
prices. In the stock market, slower economic growth could reduce corporate
earnings and put downward pressure on stock prices. Highly valued stocks may be
particularly vulnerable to a correction. The Securities and Exchange Commission
Chairman, Arthur Levitt, has cautioned investors against the expectation that
the types of returns seen in the recent bull market will last forever. We agree.
1 | OPPENHEIMER EUROPE FUND
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<PAGE>
PRESIDENT'S LETTER
Because of the prospect of continued market volatility, we encourage you to
consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many
"old economy" stocks are selling at unusually low prices. In the bond market,
higher interest rates over the short term may reduce inflation concerns, which
should be beneficial over the long term. By buying out-of-favor investments, you
may be able to profit when and if they return to favor in the future. Of course,
there is no assurance that value investing will return to favor in the market,
but it may be a diversification strategy to consider for part of your portfolio.
What specific investments should you consider today so that you are
prepared for tomorrow? The answer depends on your individual investing goals,
risk tolerance and financial circumstances. We urge you to talk with your
financial advisor about ways to diversify your portfolio. This may include
considering global diversification as part of your strategy. While investing
abroad has special risks, such as the effects of foreign currency fluctuation,
it also offers opportunities to participate in global economic growth and to
hedge against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
March 21, 2000
2 | OPPENHEIMER EUROPE FUND
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<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[begin callout]
[photo of Shanquan Li and Bill Wilby]
Portfolio Management Team (l to r)
Shanquan Li(1)
Bill Wilby
[end callout]
Q
How did the Fund perform?
A. Oppenheimer Europe Fund performed very well during the six-month period that
ended February 29, 2000. This was a volatile period for many of Europe's
markets, which suffered declines during the summer and early fall of 1999, then
rebounded rapidly as 1999 drew to an end. The strong results for Europe's equity
markets and the Fund can be attributed to major changes in Europe's economic and
investing "landscape."
What are these "major changes?"
Early in 1999, the 11 European countries that form the European Monetary Union
(EMU) introduced a single currency, the euro. Combined with the abolition of
trade barriers during the past few years and the formation of a pan-European
central bank, the euro helped to create the second largest marketplace in the
world (after the United States). These adjustments also paved the way for
changes in how Europe does business. Cross-border mergers and acquisitions are
now easier to effect and potentially more worthwhile.
In fact, mergers-and-acquisitions activity in Europe reached an all-time
high in 1999 and involved a large number of hostile transactions, including the
first hostile takeover of a major German corporation. In February 2000, U.K.'s
Vodaphone completed a forced merger with Germany's Mannesmann, creating the
world's largest telecommunications firm.
1. Effective March 1, 2000, Shanquan Li became the sole portfolio manager of the
Fund.
3 | OPPENHEIMER EUROPE FUND
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<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[begin callout]
"Europe's growth,
both past and future,
is the by-product of a
new infrastructure
and a new attitude
toward investing."
[end callout]
Why is this mergers-and-acquisitions activity so significant?
A merger of this nature would have been inconceivable in Europe even as recently
as five years ago. Its occurrence reflects the new infrastructure of Europe, as
well as a new attitude toward investing. Europe is now embracing the emphasis on
shareholder value that has driven U.S. markets to record levels since 1992. The
most significant result of the Vodaphone-Mannesmann merger may be that it set a
new precedent; Mannesmann was pressured to accept the bid from Vodaphone because
it furthered shareholders' interests.
Europeans have begun to invest heavily in their own markets, spurred by
this new awareness of shareholder expectations and by a movement toward lower
capital gains taxes. Germany slashed its capital-gain tax rate by 50%, and
France began discussions about the same topic. Both contributed to the European
markets' strong performance in the final quarter of 1999.
Which countries or companies benefited most from these changes?
The countries that make up the EMU showed the strongest growth. But just as in
the United States, the real winners were the technology companies and, by
association, countries with markets dominated by technology stocks. Finland's
market, driven largely by the telecommunications company, Nokia Corp., was the
strongest market in Europe. More recently, the technology-heavy market in Sweden
has been a strong performer.
4 | OPPENHEIMER EUROPE FUND
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<PAGE>
[begin callout]
Average Annual
Total Returns
For the Periods Ended 3/31/00(2)
Class A Since
1-Year Inception
- -------------------------
22.06% 20.20%
Class B Since
1-Year Inception
- -------------------------
23.31% 22.13%
Class C Since
1-Year Inception
- -------------------------
27.69% 26.22%
Class Y Since
1-Year Inception
- -------------------------
29.65% 27.08%
[end callout]
To a lesser extent, we saw strong performance among certain exporters, due to
the decline of the euro. After a strong early start, the currency has steadily
lost value through the end of 1999 and, by January 2000, broke parity with the
dollar. The weak euro meant that an item's cost, when translated into a stronger
currency such as the U.S. dollar, was relatively inexpensive and therefore
attractive to buyers outside Europe.
How did you invest the Fund's assets while all of this change was taking place?
As always, we relied on a quantitative model that analyzes thousands of stocks
before selecting roughly 100 that meet our criteria: strong earning growth,
relative strength and an attractive "dynamic price-earnings ratio." The last is
an assessment of how sensitive a stock is to changes based on analysts' earnings
projections. Overlaying these quantitative results with qualitative fundamental
research led us to invest a fair amount of assets in the United Kingdom, one of
Europe's strongest markets, and in companies that stand to benefit from the
shareholder-value movement, restructuring and the trend toward new technologies.
Which stocks contributed the most to the Fund's performance?(3)
The drivers of performance were technology and telecommunications. One of our
largest holdings, IONA Technologies plc (Ireland), was also the Fund's
top-performing stock. IONA is a leading vendor of standards-based platform
middleware--products and services that help companies integrate various hardware
platforms, network protocols, programming languages and operating systems.
2. See page 8 for further details.
3. The Fund's portfolio is subject to change.
5 | OPPENHEIMER EUROPE FUND
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<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
Our fourth largest holding, Vodaphone Group plc, was one of several strong
telecom stocks in the portfolio. Europe leads the world in wireless mobile
communications. In contrast to the United States, it has a single standard for
mobile phone technology, and many Europeans expect to access the Internet via
their hand-held cellular phones rather than desktop PCs. The result is a
telecommunications market with more innovation, strategic alliances and merger
activity.
On the flip side, financial stocks were the major detractors from
performance, due to the euro's weakness, uncertainty regarding the direction of
interest rates and concerns about how the Internet may impact traditional
banking.
As always, please keep in mind that investing in foreign securities entails
additional expenses and risks, including foreign currency fluctuations.
What is your outlook for European markets in the coming months?
We're very positive on Europe's prospects. Much like the United States in 1989,
Europe has entered an era of restructuring that should bode well for investors.
As a condition of membership, the EMU countries must keep their inflation rates
at 3% or less, and the central bank is committed to helping them do so. Europe's
population is relatively wealthy, aging, and for the first time, must look to
its own investments to help fund retirement. The speculation that initially
drove up the value of the euro has abated and a more stable currency should
emerge. For all these reasons, we believe Europe and Oppenheimer Europe Fund
will remain an important part of The Right Way to Invest.
6 | OPPENHEIMER EUROPE FUND
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<PAGE>
[begin callout]
- -----------------------
Regional Allocation(4)
o Europe 93.4%
o Emerging
Europe 3.7
o United States/
Canada 2.9
- -----------------------
[end callout]
Top 10 Country Holdings(4)
- ----------------------------------------------------------------
Great Britain 33.4%
- ----------------------------------------------------------------
Germany 19.9
- ----------------------------------------------------------------
France 8.0
- ----------------------------------------------------------------
Belgium 7.8
- ----------------------------------------------------------------
The Netherlands 6.3
- ----------------------------------------------------------------
Switzerland 5.4
- ----------------------------------------------------------------
Sweden 4.1
- ----------------------------------------------------------------
United States 2.9
- ----------------------------------------------------------------
Finland 2.5
- ----------------------------------------------------------------
Greece 2.5
Top 10 Stock Holdings(5)
- ----------------------------------------------------------------
Ares-Serono Group, Cl. B 3.0%
- ----------------------------------------------------------------
ASM Lithography Holding NV 3.0
- ----------------------------------------------------------------
Ubizen 2.8
- ----------------------------------------------------------------
Vodafone Group plc, Sponsored ADR 2.8
- ----------------------------------------------------------------
IONA Technologies plc, ADR 2.7
- ----------------------------------------------------------------
Singular Software SA 2.5
- ----------------------------------------------------------------
Elan Corp. plc, ADR 2.2
- ----------------------------------------------------------------
IXOS Software AG 2.1
- ----------------------------------------------------------------
EM.TV & Merchandising AG 2.0
- ----------------------------------------------------------------
Business Objects SA, Sponsored ADR 2.0
4. Portfolio is subject to change. Percentages are as of February 29, 2000,
and are based on total market value of investments.
5. Portfolio is subject to change. Percentages are as of February 29, 2000,
and are based on net assets.
7 | OPPENHEIMER EUROPE FUND
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<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1.800.525.7048 or visit our website at
www.oppenheimerfunds.com.
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. These total returns cover a short
period of time, and may not be representative of performance of a fund, such as
Oppenheimer Europe Fund, that seeks capital appreciation for long-term
investors. 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 were first publicly offered on 3/1/99. Class A returns include
the current maximum initial sales charge of 5.75% except where noted.
Class B shares were first publicly offered on 3/1/99. Class B returns include
the applicable contingent deferred sales charge 5% (1-year) and 4% (since
inception). Class B shares are subject to an annual 0.75% asset-based sales
charge.
Class C shares were first publicly offered on 3/1/99. Class C returns include
the contingent deferred sales charge of 1% for the one-year period. Class C
shares are subject to an annual 0.75% asset-based sales charge.
Class Y shares were first publicly offered on 3/1/99. Class Y shares are offered
only to certain institutional investors under special agreements with the
Distributor.
An explanation of the different performance calculations is in the Fund's
prospectus.
8 | OPPENHEIMER EUROPE FUND
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<PAGE>
Financials
9 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENT OF INVESTMENTS February 29, 2000 / Unaudited
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
======================================================================================
<S> <C> <C>
Common Stocks--103.2%
- --------------------------------------------------------------------------------------
Basic Materials--1.7%
- --------------------------------------------------------------------------------------
Chemicals--0.8%
Imperial Chemical Industries plc 15,000 $ 115,206
- --------------------------------------------------------------------------------------
Metals--0.9%
- --------------------------------------------------------------------------------------
Eramet SA(1) 2,500 136,958
- --------------------------------------------------------------------------------------
Capital Goods--6.6%
- --------------------------------------------------------------------------------------
Industrial Services--3.7%
ACG AG(1) 800 223,008
- --------------------------------------------------------------------------------------
Adecco SA(1) 120 94,941
- --------------------------------------------------------------------------------------
Matalan plc 25,000 226,938
-------------
544,887
- --------------------------------------------------------------------------------------
Manufacturing--2.9%
ESEC Holding AG(1) 100 239,151
- --------------------------------------------------------------------------------------
JOT Automation Group Oyj(1) 16,700 187,318
-------------
426,469
- --------------------------------------------------------------------------------------
Communication Services--8.2%
- --------------------------------------------------------------------------------------
Telecommunications: Long Distance--7.0%
NetCom Systems AB, B Shares(1) 3,000 285,731
- --------------------------------------------------------------------------------------
Orange plc, ADR(1) 1,100 230,334
- --------------------------------------------------------------------------------------
Telegate AG(1) 2,000 296,542
- --------------------------------------------------------------------------------------
Teles AG(1) 7,000 236,560
-------------
1,049,167
- --------------------------------------------------------------------------------------
Telephone Utilities--1.2%
Matav RT, Sponsored ADR(1) 4,000 183,750
- --------------------------------------------------------------------------------------
Consumer Cyclicals--11.7%
- --------------------------------------------------------------------------------------
Autos & Housing--1.1%
Taylor Woodrow plc(2) 79,400 169,848
- --------------------------------------------------------------------------------------
Consumer Services--1.7%
Randstad Holding NV(1) 5,900 254,771
- --------------------------------------------------------------------------------------
Leisure & Entertainment--1.4%
Kinowelt Medien AG(1) 4,020 213,843
- --------------------------------------------------------------------------------------
Media--2.8%
Future Network plc (The)(1) 7,500 108,338
- --------------------------------------------------------------------------------------
Informa Group plc 11,300 142,714
- --------------------------------------------------------------------------------------
Modern Times Group MTG AB, Sponsored ADR(1) 600 164,400
-------------
415,452
10 | OPPENHEIMER EUROPE FUND
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<PAGE>
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------------
Retail: Specialty--4.7%
Cortefiel SA 4,100 $ 87,634
- --------------------------------------------------------------------------------------
Fitness First plc(1) 10,700 229,732
- --------------------------------------------------------------------------------------
JJB Sports plc 23,600 201,190
- --------------------------------------------------------------------------------------
Marionnaud Parfumeries SA(1) 2,500 189,311
-----------
707,867
- --------------------------------------------------------------------------------------
Consumer Staples--7.3%
- --------------------------------------------------------------------------------------
Broadcasting--3.2%
EM.TV & Merchandising AG 3,000 298,949
- --------------------------------------------------------------------------------------
Intertainment AG(1) 1,900 174,974
-----------
473,923
- --------------------------------------------------------------------------------------
Entertainment--2.0%
Edel Music AG(1) 3,000 105,427
- --------------------------------------------------------------------------------------
Northern Leisure plc(1) 91,700 195,435
-----------
300,862
- --------------------------------------------------------------------------------------
Food--1.6%
Compass Group plc 19,700 235,274
- --------------------------------------------------------------------------------------
Food & Drug Retailers--0.5%
Superdiplo SA(1) 4,600 74,361
- --------------------------------------------------------------------------------------
Energy--2.5%
- --------------------------------------------------------------------------------------
Oil: Domestic--0.6%
Enterprise Oil plc 17,000 85,210
- --------------------------------------------------------------------------------------
Oil: International--1.9%
BP Amoco plc, ADR 1,600 75,200
- --------------------------------------------------------------------------------------
Royal Dutch Petroleum Co., NY Shares 1,500 78,750
- --------------------------------------------------------------------------------------
Total SA, B Shares(1) 1,000 132,385
-----------
286,335
- --------------------------------------------------------------------------------------
Financial--8.0%
- --------------------------------------------------------------------------------------
Banks--5.3%
Barclays plc 4,900 118,046
- --------------------------------------------------------------------------------------
Cammell Laird Holdings plc 123,400 204,552
- --------------------------------------------------------------------------------------
HSBC Holdings plc 7,000 81,500
- --------------------------------------------------------------------------------------
Lloyds TSB Group plc 11,000 101,242
- --------------------------------------------------------------------------------------
Royal Bank of Scotland Group plc (The) 17,200 226,190
- --------------------------------------------------------------------------------------
UniCredito Italiano SpA(1) 14,000 51,625
-----------
783,155
11 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------------
Diversified Financial--2.0%
Cattles plc 18,200 $ 63,498
- --------------------------------------------------------------------------------------
Gold-Zack AG(1) 2,300 241,374
-------------
304,872
- --------------------------------------------------------------------------------------
Insurance--0.7%
Sun Life & Provincial Holdings plc(1) 10,400 57,054
- --------------------------------------------------------------------------------------
Zurich Allied AG(1) 100 42,376
-------------
99,430
- --------------------------------------------------------------------------------------
Healthcare--11.2%
- --------------------------------------------------------------------------------------
Healthcare/Drugs--11.2%
Ares-Serono Group, Cl. B(1) 140 453,129
- --------------------------------------------------------------------------------------
Celltech Chiroscience plc(1) 11,700 246,770
- --------------------------------------------------------------------------------------
Elan Corp. plc, ADR(1) 7,800 320,775
- --------------------------------------------------------------------------------------
Ontex(1) 3,600 239,160
- --------------------------------------------------------------------------------------
Shire Pharmaceuticals Group plc, ADR(1) 4,200 201,600
- --------------------------------------------------------------------------------------
SmithKline Beecham plc 8,054 90,212
- --------------------------------------------------------------------------------------
Zeneca Group plc 3,800 123,521
-------------
1,675,167
- --------------------------------------------------------------------------------------
Healthcare/Supplies & Services--0.0%
Ion Beam Applications SA1,(3) 300 3
- --------------------------------------------------------------------------------------
Technology--44.6%
- --------------------------------------------------------------------------------------
Computer Services--7.6%
Connecta AB(1) 3,500 184,042
- --------------------------------------------------------------------------------------
Debitel AG(1) 5,300 213,656
- --------------------------------------------------------------------------------------
Systematics AG(1) 3,000 150,197
- --------------------------------------------------------------------------------------
Ubizen(1) 2,500 421,225
- --------------------------------------------------------------------------------------
Unit 4(1) 2,500 156,455
-------------
1,125,575
12 | OPPENHEIMER EUROPE FUND
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<PAGE>
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------------
Computer Software--22.8%
Business Objects SA, Sponsored ADR(1) 2,600 $ 298,675
- --------------------------------------------------------------------------------------
Eidos plc, Sponsored ADR(1) 19,500 226,687
- --------------------------------------------------------------------------------------
Infomatec Integrated Information Systems AG(1) 4,800 202,881
- --------------------------------------------------------------------------------------
IONA Technologies plc, ADR(1) 4,700 398,325
- --------------------------------------------------------------------------------------
IXOS Software AG(1) 4,500 316,280
- --------------------------------------------------------------------------------------
Lernout & Hauspie Speech Products NV(1) 2,800 296,625
- --------------------------------------------------------------------------------------
MERANT plc, Sponsored ADR(1) 5,200 152,425
- --------------------------------------------------------------------------------------
Nemetschek AG(1) 3,000 183,413
- --------------------------------------------------------------------------------------
Real Software Group NV(1) 3,000 246,958
- --------------------------------------------------------------------------------------
Sage Group plc (The) 18,600 234,176
- --------------------------------------------------------------------------------------
SER Systeme AG(1) 4,600 195,314
- --------------------------------------------------------------------------------------
Singular Software SA 7,900 379,239
- --------------------------------------------------------------------------------------
Titus Interactive(1) 3,600 261,516
-------------
3,392,514
- --------------------------------------------------------------------------------------
Communications Equipment--5.4%
Datasave AG(1) 115 2,519
- --------------------------------------------------------------------------------------
Nokia Corp., A Shares, Sponsored ADR(1) 1,000 198,313
- --------------------------------------------------------------------------------------
Pace Micro Technology plc 10,500 184,412
- --------------------------------------------------------------------------------------
Vodafone Group plc, Sponsored ADR 7,200 415,350
-------------
800,594
- --------------------------------------------------------------------------------------
Electronics--8.8%
A Novo SA(1) 1,000 206,617
- --------------------------------------------------------------------------------------
ASM International NV(1) 6,100 199,013
- --------------------------------------------------------------------------------------
ASM Lithography Holding NV(1) 3,500 448,438
- --------------------------------------------------------------------------------------
Austria Technologie & Systemtechnik AG(1) 2,200 169,453
- --------------------------------------------------------------------------------------
Koninklijke (Royal) Philips Electronics NV, NY Registered
Shares(1) 1,500 287,250
-------------
1,310,771
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<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------------
Transportation--1.4%
- --------------------------------------------------------------------------------------
Shipping--1.4%
D/S 1912, B Shares(1) 20 $ 207,947
- --------------------------------------------------------------------------------------
Total Investments, at Value (Cost $13,408,025) 103.2% 15,374,211
- --------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (3.2) (483,046)
-------------------------
Net Assets 100.0% $14,891,165
=========================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income-producing security.
2. A sufficient amount of securities has been designated to cover outstanding
foreign currency contracts. See Note 5 of Notes to Financial Statements.
3. Identifies issues considered to be illiquid or restricted--see Note 6 of
Notes to Financial Statements.
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
<TABLE>
<CAPTION>
Geographic Diversification Market Value Percent
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Great Britain $ 5,140,981 33.4%
Germany 3,054,937 19.9
France 1,225,461 8.0
Belgium 1,203,971 7.8
The Netherlands 976,239 6.3
Switzerland 829,597 5.4
Sweden 634,173 4.1
United States 448,438 2.9
Finland 385,630 2.5
Greece 379,239 2.5
Ireland 320,775 2.1
Denmark 207,947 1.4
Hungary 183,750 1.2
Austria 169,453 1.1
Spain 161,995 1.1
Italy 51,625 0.3
--------------------------------
Total $15,374,211 100.0%
================================
</TABLE>
See accompanying Notes to Financial Statements.
14 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Unaudited
February 29, 2000
<TABLE>
<S> <C>
=======================================================================================
Assets
Investments, at value (cost $13,408,025)--see accompanying statement $15,374,211
- ---------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 128,357
Investments sold 88,067
Dividends 16,362
Other 1,554
---------------
Total assets 15,608,551
=======================================================================================
Liabilities
Bank overdraft 269,146
- ---------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 1,869
- ---------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 423,483
Distribution and service plan fees 3,705
Transfer and shareholder servicing agent fees 989
Shares of beneficial interest redeemed 367
Trustees' compensation 203
Other 17,624
--------------
Total liabilities 717,386
======================================================================================
Net Assets $14,891,165
==============
======================================================================================
Composition of Net Assets
Paid-in capital $12,802,435
- --------------------------------------------------------------------------------------
Overdistributed net investment income (52,931)
- --------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 180,713
- --------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 1,960,948
--------------
Net assets $14,891,165
==============
</TABLE>
See accompanying Notes to Financial Statements.
15 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Unaudited/Cont'd
<TABLE>
<S> <C>
=======================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $9,393,136 and 736,205 shares of beneficial interest outstanding) $12.76
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $13.54
- ---------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $4,534,131 and 358,095 shares of beneficial interest
outstanding) $12.66
- ---------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $962,621 and 75,726 shares of beneficial interest outstanding) $12.71
- ---------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $1,277 and 100 shares of beneficial interest
outstanding) $12.77
</TABLE>
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENT OF OPERATIONS Unaudited
For the Six Months Ended February 29, 2000
<TABLE>
<S> <C>
=======================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $661) $ 31,931
- ---------------------------------------------------------------------------------------
Interest 8,394
--------------
Total income 40,325
=======================================================================================
Expenses
Management fees 33,547
- ---------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 4,605
Class B 11,304
Class C 1,718
- ---------------------------------------------------------------------------------------
Shareholder reports 16,124
- ---------------------------------------------------------------------------------------
Legal, auditing and other professional fees 13,524
- ---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 9,545
- ---------------------------------------------------------------------------------------
Custodian fees and expenses 1,277
- ---------------------------------------------------------------------------------------
Trustees' compensation 190
- ---------------------------------------------------------------------------------------
Other 2,546
--------------
Total expenses 94,380
Less expenses paid indirectly (1,126)
--------------
Net expenses 93,254
=======================================================================================
Net Investment Loss (52,929)
=======================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 486,985
Foreign currency transactions (121,540)
--------------
Net realized gain 365,445
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 2,247,532
Translation of assets and liabilities denominated in
foreign currencies (395,044)
--------------
Net change 1,852,488
--------------
Net realized and unrealized gain 2,217,933
=======================================================================================
Net Increase in Net Assets Resulting from Operations $2,165,004
==============
</TABLE>
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EUROPE FUND
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<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Period
Ended Ended
February 29, 2000 August 31,
(Unaudited) 1999(1)
=======================================================================================
<S> <C> <C>
Operations
Net investment income (loss) $ (52,929) $ 7,430
- ---------------------------------------------------------------------------------------
Net realized gain 365,445 188,990
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,852,488 108,460
------------------------------
Net increase in net assets resulting from operations 2,165,004 304,880
=======================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (8,674) --
Class Y (2) --
- ---------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (265,300) --
Class B (99,659) --
Class C (8,709) --
Class Y (54) --
=======================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial
interest transactions:
Class A 3,886,135 4,078,125
Class B 3,152,681 819,920
Class C 737,108 128,710
Class Y -- 1,000
=======================================================================================
Net Assets
Total increase 9,558,530 5,332,635
- ---------------------------------------------------------------------------------------
Beginning of period 5,332,635 --
------------------------------
End of period [including accumulated net investment
income (loss) of $(52,931) and $8,674, respectively] $14,891,165 $5,332,635
==============================
</TABLE>
1. For the period from March 1, 1999 (commencement of operations)
to August 31, 1999.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EUROPE FUND
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<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Class B
Six Months Six Months
Ended Period Ended Period
Feb. 29, Ended Feb. 29, Ended
2000 Aug. 31, 2000 Aug. 31,
(Unaudited) 1999(1) (Unaudited) 1999(1)
<S> <C> <C> <C> <C>
========================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $10.78 $10.00 $10.73 $10.00
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.02) .02 (.06) (.03)
Net realized and unrealized gain 2.56 .76 2.53 .76
----------------------------------------------------------
Total income from investment operations 2.54 .78 2.47 .73
- ------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) -- -- --
Distributions from net realized gain (.54) -- (.54) --
----------------------------------------------------------
Total dividends and/or distributions
to shareholders (.56) -- (.54) --
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.76 $10.78 $12.66 $10.73
==========================================================
========================================================================================================================
Total Return, at Net Asset Value(2) 24.42% 7.80% 23.87% 7.30%
========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $9,393 $4,347 $4,534 $851
- ------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $5,831 $3,473 $2,290 $401
- ------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:3
Net investment income (loss) (1.00)% 0.54% (1.82)% (0.87)%
Expenses 1.98% 1.61% 2.81% 2.60%
Expenses, net of indirect expenses 1.95% N/A 2.78% N/A
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate4 108% 83% 108% 83%
</TABLE>
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
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. Total returns
are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended February 29, 2000, were $17,128,066 and $9,272,173,
respectively.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER EUROPE FUND
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<PAGE>
FINANCIALS HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class C Class Y
Six Months Six Months
Ended Period Ended Period
Feb. 29, Ended Feb. 29, Ended
2000 Aug. 31, 2000 Aug. 31,
(Unaudited) 1999(1) (Unaudited) 1999(1)
<S> <C> <C> <C> <C>
=======================================================================================================================
Per Share Operating Data
Net asset value, beginning of period $10.76 $10.00 $10.78 $10.00
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.04) (.02) -- .04
Net realized and unrealized gain 2.53 .78 2.55 .74
---------------------------------------------------------
Total income from investment operations 2.49 .76 2.55 .78
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.02) --
Distributions from net realized gain (.54) -- (.54) --
---------------------------------------------------------
Total dividends and/or distributions
to shareholders (.54) -- (.56) --
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.71 $10.76 $12.77 $10.78
=========================================================
=======================================================================================================================
Total Return, at Net Asset Value(2) 23.99% 7.60% 24.56% 7.80%
=======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $963 $133 $1 $1
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $350 $ 52 $1 $1
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (1.84)% (0.82)% (0.83)% 0.65%
Expenses 2.77% 2.57% 1.80% 1.52%
Expenses, net of indirect expenses 2.74% N/A 1.77% N/A
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 108% 83% 108% 83%
</TABLE>
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
2. Assumes a $1,000 hypothetical initial investment on the business day before
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. Total returns
are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended February 29, 2000, were $17,128,066 and $9,272,173,
respectively.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER EUROPE FUND
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<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited
================================================================================
1. Significant Accounting Policies
Oppenheimer Europe 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.
- --------------------------------------------------------------------------------
Securities Valuation. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid and
asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Foreign currency contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank, dealer
or pricing service. Short-term "money market type" debt securities with
remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
21 | OPPENHEIMER EUROPE FUND
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<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
1. Significant Accounting Policies Continued
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 the 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.
- --------------------------------------------------------------------------------
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 an unfunded retirement plan for the
Fund's independent Board of 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 29, 2000, a provision of $203 was made for the Fund's projected
benefit obligations resulting in an accumulated liability of $203 as of February
29, 2000.
22 | OPPENHEIMER EUROPE FUND
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<PAGE>
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.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of distributions made during the year from net investment income or
net realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in which
the income or realized gain was recorded by the Fund.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to 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.
23 | OPPENHEIMER EUROPE FUND
|
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<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
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 29, 2000 Period Ended August 31, 1999(1)
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 443,938 $ 5,146,555 481,772 $4,876,962
Dividends and/or
distributions reinvested 13,787 150,971 -- --
Redeemed (124,785) (1,411,391) (78,507) (798,837)
------------------------------------------------------------
Net increase 332,940 $ 3,886,135 403,265 $4,078,125
============================================================
- -------------------------------------------------------------------------------------------
Class B
Sold 302,420 $ 3,433,922 81,470 $ 842,190
Dividends and/or
distributions reinvested 8,944 97,403 -- --
Redeemed (32,648) (378,644) (2,091) (22,270)
------------------------------------------------------------
Net increase 278,716 $ 3,152,681 79,379 $ 819,920
============================================================
- -------------------------------------------------------------------------------------------
Class C
Sold 76,790 $ 890,134 18,532 $ 190,808
Dividends and/or
distributions reinvested 792 8,654 -- --
Redeemed (14,235) (161,680) (6,153) (62,098)
------------------------------------------------------------
Net increase 63,347 $ 737,108 12,379 $ 128,710
============================================================
- -------------------------------------------------------------------------------------------
Class Y
Sold -- $ -- 100 $ 1,000
Dividends and/or
distributions reinvested -- -- -- --
Redeemed -- -- -- --
------------------------------------------------------------
Net increase -- $ -- 100 $ 1,000
============================================================
</TABLE>
1. For the period from March 1, 1999 (commencement of operations) to August 31,
1999.
24 | OPPENHEIMER EUROPE FUND
|
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<PAGE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of February 29, 2000, net unrealized appreciation on securities of
$1,966,186 was composed of gross appreciation of $2,703,311, and gross
depreciation of $737,125.
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. 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 over $2 billion. The Fund's
management fee for the six months ended February 29, 2000 was 0.80% of average
net assets for each class of shares, annualized for periods of less than one
full year.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and for
other Oppenheimer funds. OFS's total costs of providing such services are
allocated ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
February 29, 2000 $25,468 $9,961 $1,959 $46,586 $4,377
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
February 29, 2000 $-- $-- $--
</TABLE>
25 | OPPENHEIMER EUROPE FUND
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<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
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 C shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the six months ended
February 29, 2000, payments under the Class A plan totaled $4,605, all of which
was paid by the Distributor to recipients. Any unreimbursed expenses the
Distributor incurs with respect to Class A shares in any fiscal year cannot be
recovered in subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
26 | OPPENHEIMER EUROPE FUND
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<PAGE>
Distribution fees paid to the Distributor for the six months ended February 29,
2000, were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $11,304 $9,535 $66,074 1.46%
Class C Plan 1,718 1,097 3,940 0.41
</TABLE>
================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency contracts for operational purposes and to seek to protect
against adverse exchange rate fluctuations. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided
by a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of
Investments where applicable.
As of February 29, 2000, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract Valuation as of Unrealized
Contract Description Expiration Date Amount (000s) Feb. 29, 2000 Depreciation
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
Swiss Franc (CHF) 3/2/00 CHF 391 $234,377 $1,869
</TABLE>
27 | OPPENHEIMER EUROPE FUND
|
|
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
6. Illiquid or Restricted Securities
As of February 29, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 10% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of February 29, 2000,
was $3.
================================================================================
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 0.45%. 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 period ended February
29, 2000.
28 | OPPENHEIMER EUROPE FUND
|
|
<PAGE>
OPPENHEIMER EUROPE 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
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Shanquan Li, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
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 Europe Fund. This report must be preceded
or accompanied by a Prospectus of Oppenheimer Europe
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.
29 | OPPENHEIMER EUROPE FUND
|
|
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit
from special services designed to make investing
simple. Whether it's automatic investment plans, timely
market updates, or immediate account access, you can
count on us whenever you need assistance. So call us
today, or visit our website--we're here to help.
- --------------------------------------------------------------------------------
Internet 24-hr access to account information and
transactions
www.oppenheimerfunds.com
------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
------------------------------------------------------
Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
------------------------------------------------------
OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
- -------------------------------------------------------------------------------
[Logo]OppenheimerFunds(R)
Distributor, Inc.
RS0261.001.0200 April 28, 2000
