[picture of streaking lights]
Annual Report October 31, 2000
Oppenheimer
Emerging Technologies Fund
[logo]OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Upon the Fund's launch in April 2000, we took advantage of a slump in technology
stock prices to establish positions in "new" technology leaders with compelling
strategic advantages and proven business plans.
We focused on bandwidth-related businesses, particularly in the fast-growing
areas of photonics and optical networking.
We believe the Fund is ideally suited to capitalize on emerging investment
opportunities in an increasingly bandwidth-centric world.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Manager
8 Fund Performance
14 Financial
Statements
28 Independent
Auditors' Report
29 Federal
Income Tax
Information
30 Officers and
Trustees
Cumulative
Total Returns*
For the Period 4/25/00
to 10/31/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
12.40% 5.94%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
12.00% 7.00%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
12.00% 11.00%
Class Y
------------------------
12.60%
*See Notes on page 12 for further details.
<PAGE>
PRESIDENT'S LETTER
[photo]
Bridget A Macaskill
President
Oppenheimer
Emerging
Technologies Fund
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace of
global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has prompted
the Treasury to buy back many of its long-term securities. The resulting supply
shortage boosted these securities' returns, causing an inversion of the yield
curve--an unusual situation in which shorter term Treasuries yield more than
their longer term counterparts. Other bond sectors are offering many
opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in the
stock market. Formerly high-flying Internet stocks have generally come down to
earth, and investors have begun to refocus on companies with strong business
fundamentals and justifiable valuations. Investors have also returned to
long-neglected, value-oriented companies.
1 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
PRESIDENT'S LETTER
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial
advisor and to stay on track with your long-term financial plan. For our part,
we will continue to monitor the opportunities and risks ever present in the
financial markets. Thank you for your confidence in OppenheimerFunds, The Right
Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 21, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of the securities markets or any
particular fund. Specific discussion, as it applies to your Fund, is contained
in the pages that follow. Stocks and bonds have different types of investment
risks; stocks are subject to market volatility and bonds are subject to credit
and interest rate risks.
2 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[photo]
Portfolio Management
Team (l to r)
Julie Ryan
Ian Horowitz
Bruce Bartlett
(Portfolio Manager)
Jin Chon
Q How would you characterize the Fund's performance since its inception on April
25, 2000?
A. We are very pleased that Oppenheimer Emerging Technologies Fund got off to a
strong start despite a volatile environment for many of the stocks in which we
invest. We attribute our success to two primary factors. The first is our unique
investment strategy of targeting technology firms that we believe to have the
highest growth potential--a strategy designed to capture some of the most
attractive investment opportunities available in today's new economy. The second
factor is our disciplined stock selection approach, which focuses on a company's
true internal revenue growth.
What made this such a volatile period?
When we launched the Fund, concerns over rising interest rates and high
valuations had caused most technology stocks to decline sharply from their highs
of early 2000. Throughout the remainder of the period, investors struggled to
weigh the positive impact of encouraging economic data against the negative
impact of rising interest rates and energy prices. Prices for most equities rose
and fell sharply in response to the positive or negative economic news of the
moment. Companies that failed to fully deliver on earnings expectations were
severely punished, as were those giving indications of slowing growth. Success
in growth-oriented technology stocks was concentrated among companies that
exceeded earnings expectations and showed signs of continued growth
acceleration.
3 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
How did you manage the Fund in light of these conditions?
Our investment strategy looks beyond short-term market volatility to focus on
compelling, long-term growth opportunities related to the information technology
revolution that is transforming today's economy. With traffic on the Internet
multiplying several times each year, advances in the collection, digitization
and processing of data are generating new products and services, new ways of
doing business, and new opportunities for investment. Oppenheimer Emerging
Technologies Fund was created to capture the most attractive investment
opportunities available in this new economy.
When the fund was launched, we took advantage of the slump in technology
stock prices to establish positions in a variety of small, mid-sized and large
companies, both public and private, with proven business plans for capitalizing
on and speeding the Internet's development. In particular, we found attractive
investment opportunities among companies working to increase Internet
bandwidth--the rate at which information travels across a network. Limited
bandwidth is the most serious problem hindering the deployment of new
applications on the Web.
One promising solution is photonics: the transmission of data through packets
of light rather than electrical impulses. Strategically positioned photonics and
fiber optic companies have developed and are installing data-communication
systems that are thousands of times faster and more efficient than traditional
copper cable. We invested in several companies supplying the building blocks for
these systems. For example, Ciena Corp. is the leading provider of wavelength
division multiplexing components, a technology that enables many light signals
to be sent simultaneously through a single strand of optical fiber. Newport
Corp. is a leading provider of automation and productivity enhancements for
optical component manufacturers. And Corning, Inc., the world's leading provider
of optical cable, is also a leading optical systems maker.
[callout]
"It is still early in the product development cycle for companies at the
forefront of the Information Age, which is why we are such enthusiastic
proponents of broadband-related investment opportunities."
4 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
Why is this area of technology so attractive for investment right now?
We have concentrated primarily on bandwidth-related technologies because that is
where we see today's most compelling investment opportunities. While computer
science was the focus of most technological innovation during the 1980s and
1990s, we believe the focus of innovation has shifted to the world of bandwidth.
Today, expanding optical networking capabilities are rapidly increasing the
speed limits and carrying capacity of the information highway. As bandwidth
increases, new software applications are emerging, such as streaming audio and
video. Such applications are creating new markets for related appliances and
devices, ranging from digital music players to wireless personal digital
assistants (PDAs). As these products reach the marketplace, users are seeking
access technologies that provide faster, more mobile ways of connecting to the
network. Their needs, in turn, are driving demand for added bandwidth through
more sophisticated optical networking systems. The result is a self-reinforcing
cycle of regular innovation in which the price/performance capability of optical
networking systems is doubling at the astonishing rate of once every nine
months.
Within the world of bandwidth-related technologies, we have invested in many
pockets of opportunity. In addition to the previously mentioned fiber optic
component and networking companies, we have found attractive investments among
providers of applications, appliances, devices and access technologies. For
example, businesses today must manage rapidly growing amounts of data flowing
through the Internet, intranets, email and other modes of electronic
communication. Veritas Software Corp., one of our largest holdings during the
recent period, is a leading provider of systems for data storage and management.
1. See Notes on page 12 for further details.
Cumulative
Total Returns
For the Period Ended 9/30/00(1)
Since
Inception
------------------------
Class A 19.23%
------------------------
Class B 21.20
------------------------
Class C 25.20
------------------------
Class Y 26.70
5 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
What is your outlook for the future?
We believe it is still early in the product development cycle for the companies
at the forefront of the Information Age, which is why we are such enthusiastic
proponents of broadband-related investment opportunities. Although technology
stocks have experienced substantial volatility in the past, and will no doubt do
so in the future, we are confident that bandwidth-related technologies will
continue to evolve and grow rapidly for many years to come, providing
extraordinary opportunities for long-term investment. In addition, as
developments in new technologies occur, the Fund will be able to invest in these
companies regardless of technology sector. We are equally confident that
well-managed companies with proven business plans for succeeding in a
bandwidth-centric environment offer the most compelling vehicles for such
investments.
Tomorrow's technology is already taking shape today. Individuals can carry
the Internet with them wherever they go through a variety of different PDAs,
customizing the news and entertainment they receive to suit personal
preferences. Businesses are enjoying improved productivity and new growth
opportunities. We believe the Fund is ideally designed to find the best
investment opportunities among public and private companies of all sizes in this
rapidly emerging new environment. That's what makes Oppenheimer Emerging
Technologies Fund part of The Right Way to Invest.
6 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
Top Ten Common Stock Holdings(3)
-----------------------------------------------------------
Juniper Networks, Inc. 3.6%
-----------------------------------------------------------
CIENA Corp. 3.2
-----------------------------------------------------------
Veritas Software Corp. 3.2
-----------------------------------------------------------
Research in Motion Ltd. 2.6
-----------------------------------------------------------
Micromuse, Inc. 2.6
-----------------------------------------------------------
Newport Corp. 2.6
-----------------------------------------------------------
C-MAC Industries, Inc. 2.6
-----------------------------------------------------------
Corning, Inc. 2.4
-----------------------------------------------------------
Broadcom Corp., Cl. A 2.3
-----------------------------------------------------------
JDS Uniphase Corp. 2.3
Top Five Common Stock Industries(3)
-----------------------------------------------------------
Computer Software 16.2%
-----------------------------------------------------------
Communications Equipment 14.0
-----------------------------------------------------------
Computer Hardware 10.6
-----------------------------------------------------------
Telecommunications: Long Distance 6.8
-----------------------------------------------------------
Manufacturing 6.2
Sector Allocation(2)
Technology 75.2%
Computer
Software 24.8
Communications
Equipment 21.5
Computer
Hardware 16.2
Electronics 7.2
Computer
Services 5.5
Communication
Services 14.8
Capital Goods 10.0
2. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on total market value of common stock.
3. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on net assets.
7 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
FUND PERFORMANCE
How Has the Fund Performed?
Below is a discussion by OppenheimerFunds, Inc. of the Fund's performance during
its fiscal year ended October 31, 2000, followed by a graphical comparison of
the Fund's performance to two appropriate broad-based market indices.
Management's discussion of performance. During the fiscal year that began with
the Fund's launch on April 25, 2000, and ended October 31, 2000, the U.S.
economy enjoyed robust growth, but rising interest rates led to high levels of
stock market volatility. Nevertheless, the Fund performed strongly, as a result
of our disciplined strategy of investing in well-managed companies in the
fast-growing area of bandwidth-related technologies. Within this area, we
invested in a wide range of companies, including both public and private
enterprises, as well as small, mid-sized and large companies. We found
attractive investments among fiber optic component and networking companies and
providers of a wide range of Internet related applications, appliances, devices
and access technologies. The Fund's portfolio holdings, allocations and
strategies are subject to change as developments in technology occur.
Comparing the Fund's performance to the market. The graphs that follow show the
performance of a hypothetical $10,000 investment in each Class of shares of the
Fund held until October 31, 2000. Performance is measured from the inception of
all the classes on April 25, 2000. The Fund's performance reflects the deduction
of the maximum initial sales charge on Class A shares, the applicable contingent
deferred sales charge on Class B and Class C shares, and reinvestments of all
dividends and capital gains distributions.
8 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
The Fund's performance is compared to that of the Lipper Science & Technology
Index and the Standard & Poor's (S&P) 500 Index. The Lipper Science & Technology
Index includes the top 30 market-weighted funds within the Lipper Science &
Technology Classification. The index includes funds that invest 65% of their
equity portfolio in science and technology stocks, without considering sales
charges. The S&P 500 Index is a broad-based index of equity securities widely
regarded as a general measure of the performance of the U.S. equity securities
market. Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs shows the effect of taxes. The Fund's performance reflects the
effects of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the securities in the index.
9 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
FUND PERFORMANCE
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Emerging Technologies Fund (Class A) S&P 500 Index Lipper Science & Technology Index
<S> <C> <C> <C>
04/25/00 9425 10000 10000
07/31/00 11263 9591 9879
10/31/00 10594 8826 9897
</TABLE>
Cumulative Total Return of Class A Shares of the Fund at 10/31/00(1)
Life 5.94%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Emerging Technologies Fund (Class B) S&P 500 Index Lipper Science & Technology Index
<S> <C> <C> <C>
04/25/00 10000 10000 10000
07/31/00 11930 9591 9879
10/31/00 10700 8826 9897
</TABLE>
Cumulative Total Return of Class B Shares of the Fund at 10/31/00(1)
Life 7.00%
1. See page 12 for further details.
10 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Emerging Technologies Fund (Class C) S&P 500 Index Lipper Science & Technology Index
<S> <C> <C> <C>
04/25/00 10000 10000 10000
07/31/00 11930 9591 9879
10/31/00 11100 8826 9897
</TABLE>
Cumulative Total Return of Class C Shares of the Fund at 10/31/00(1)
Life 11.00%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
<TABLE>
<CAPTION>
Oppenheimer Emerging Technologies Fund (Class Y) S&P 500 Index Lipper Science & Technology Index
<S> <C> <C> <C>
04/25/00 10000 10000 10000
07/31/00 11960 9591 9879
10/31/00 11260 8826 9897
</TABLE>
Cumulative Total Return of Class Y Shares of the Fund at 10/31/00(1)
Life 12.60%
The performance information for both indices in the graphs begins on 4/30/00.
Past performance is not predictive of future performance.
11 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. The Fund's returns
at 10/31/00 include results for periods of exceptional market performance that
are not typical of historical results. You should not expect those growth rates
to continue. Because of ongoing market volatility, the Fund's performance has
been subject to substantial short-term fluctuations and current performance may
be less than the results shown. For quarterly updates on the Fund's performance,
please contact your financial advisor, call us at 1.800.525.7048 or visit our
website at www.oppenheimerfunds.com.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A shares of the Fund were first publicly offered on 4/25/00. Unless
otherwise noted, Class A returns include the current maximum initial sales
charge of 5.75%.
Class B shares of the Fund were first publicly offered on 4/25/00. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (since inception). Class B shares are subject to an annual
0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 4/25/00. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the period ended 10/31/00. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 4/25/00. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
12 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
Financials
13 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
STATEMENT OF INVESTMENTS October 31, 2000
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
==================================================================================
<S> <C> <C>
Common Stocks--65.4%
----------------------------------------------------------------------------------
Capital Goods--6.6%
----------------------------------------------------------------------------------
Aerospace/Defense--0.4%
Teledyne Technologies, Inc.(1) 75,000 $ 1,879,687
----------------------------------------------------------------------------------
Manufacturing--6.2%
----------------------------------------------------------------------------------
C-MAC Industries, Inc.(1) 235,000 13,042,500
----------------------------------------------------------------------------------
Corning, Inc. 161,880 12,383,820
----------------------------------------------------------------------------------
Jabil Circuit, Inc.(1) 107,000 6,105,687
-----------
31,532,007
----------------------------------------------------------------------------------
Communication Services--9.7%
----------------------------------------------------------------------------------
Telecommunications: Long Distance--6.8%
Broadcom Corp., Cl. A(1) 53,000 11,785,875
----------------------------------------------------------------------------------
Brocade Communications Systems, Inc.(1) 41,750 9,492,906
----------------------------------------------------------------------------------
Copper Mountain Networks, Inc.(1) 76,350 873,253
----------------------------------------------------------------------------------
Corvis Corp.(1) 88,700 5,820,937
----------------------------------------------------------------------------------
Cosine Communications, Inc.(1) 65,000 2,149,062
----------------------------------------------------------------------------------
Exfo Electro-Optical Engineering, Inc.(1) 14,300 545,187
----------------------------------------------------------------------------------
Exodus Communications, Inc.(1) 117,900 3,957,019
-----------
34,624,239
----------------------------------------------------------------------------------
Telecommunications: Wireless--2.9%
Aether Systems, Inc.(1) 48,200 3,886,125
----------------------------------------------------------------------------------
Ceragon Networks Ltd.(1) 5,000 62,500
----------------------------------------------------------------------------------
TyCom Ltd.(1) 320,000 10,720,000
-----------
14,668,625
----------------------------------------------------------------------------------
Technology--49.1%
----------------------------------------------------------------------------------
Computer Hardware--10.6%
EMC Corp.(1) 56,950 5,072,109
----------------------------------------------------------------------------------
Handspring, Inc.(1) 58,000 4,194,125
----------------------------------------------------------------------------------
Juniper Networks, Inc.(1) 95,000 18,525,000
----------------------------------------------------------------------------------
Network Appliance, Inc.(1) 90,000 10,710,000
----------------------------------------------------------------------------------
Redback Networks, Inc.(1) 54,000 5,747,625
----------------------------------------------------------------------------------
SanDisk Corp.(1) 28,000 1,504,563
----------------------------------------------------------------------------------
Sun Microsystems, Inc.(1) 74,725 8,285,134
-----------
54,038,556
</TABLE>
14 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
----------------------------------------------------------------------------------
<S> <C> <C>
Computer Services--3.6%
Applied Micro Circuits Corp.(1) 99,400 $ 7,597,888
----------------------------------------------------------------------------------
Blue Martini Software, Inc.(1) 16,000 602,000
----------------------------------------------------------------------------------
Finisar Corp.(1) 203,200 5,854,700
----------------------------------------------------------------------------------
Foundry Networks, Inc.(1) 48,100 3,195,644
----------------------------------------------------------------------------------
Sonus Networks, Inc.(1) 35,700 1,231,650
------------
18,481,882
----------------------------------------------------------------------------------
Computer Software--16.2%
Avistar Communications Corp.(1) 74,800 289,850
----------------------------------------------------------------------------------
Mercury Interactive Corp.(1) 79,900 8,868,900
----------------------------------------------------------------------------------
Micromuse, Inc.(1) 79,000 13,405,313
----------------------------------------------------------------------------------
Portal Software, Inc.(1) 188,000 6,615,250
----------------------------------------------------------------------------------
Rational Software Corp.(1) 187,000 11,161,563
----------------------------------------------------------------------------------
Research in Motion Ltd.(1) 135,000 13,500,000
----------------------------------------------------------------------------------
StorageNetworks, Inc.(1) 11,500 729,531
----------------------------------------------------------------------------------
Tricord Systems, Inc.(1) 76,600 1,263,900
----------------------------------------------------------------------------------
VeriSign, Inc.(1) 80,000 10,560,000
----------------------------------------------------------------------------------
Veritas Software Corp.(1) 115,625 16,304,932
------------
82,699,239
----------------------------------------------------------------------------------
Communications Equipment--14.0%
ADC Telecommunications, Inc.(1) 100,000 2,137,500
----------------------------------------------------------------------------------
Audiocodes Ltd.(1) 72,800 2,880,150
----------------------------------------------------------------------------------
Avanex Corp.(1) 40,500 4,113,281
----------------------------------------------------------------------------------
Bookham Technology plc, ADR(1) 186,000 6,265,875
----------------------------------------------------------------------------------
CIENA Corp.(1) 155,400 16,336,425
----------------------------------------------------------------------------------
Cisco Systems, Inc.(1) 110,000 5,926,250
----------------------------------------------------------------------------------
New Focus, Inc.(1) 22,500 1,428,750
----------------------------------------------------------------------------------
Newport Corp. 116,025 13,250,418
----------------------------------------------------------------------------------
Nortel Networks Corp. 203,380 9,253,790
----------------------------------------------------------------------------------
ONI Systems Corp.(1) 46,000 3,728,875
----------------------------------------------------------------------------------
Scientific-Atlanta, Inc. 92,600 6,337,313
------------
71,658,627
----------------------------------------------------------------------------------
Electronics--4.7%
JDS Uniphase Corp.(1) 143,080 11,652,078
----------------------------------------------------------------------------------
PMC-Sierra, Inc.(1) 17,900 3,034,050
----------------------------------------------------------------------------------
SDL, Inc.(1) 28,425 7,369,181
----------------------------------------------------------------------------------
Virata Corp.(1) 50,000 968,750
----------------------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 14,800 1,035,075
------------
24,059,134
------------
Total Common Stocks (Cost $358,416,549) 333,641,996
</TABLE>
15 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
=================================================================================================
<S> <C> <C>
Preferred Stocks--3.8%
ApplianceWare Holding Corp., Cv., Series B(1,2) 524,781 $ 1,799,999
-------------------------------------------------------------------------------------------------
Blaze Network Products, Inc., 8% Cv., Series D(1,2) 166,836 1,067,750
-------------------------------------------------------------------------------------------------
Broadband Office, Inc., Cv., Series C(1,2) 52,909 999,980
-------------------------------------------------------------------------------------------------
Centerpoint Broadband Technologies, Inc., Cv., Series D(1,2) 463,822 5,000,001
-------------------------------------------------------------------------------------------------
fusionOne, Inc. 8% Non-Cum. Cv., Series D(1,2) 264,186 1,434,530
-------------------------------------------------------------------------------------------------
MicroPhotonix Integration Corp., Cv., Series C(1,2) 316,691 1,999,999
-------------------------------------------------------------------------------------------------
Questia Media, Inc., Cv., Series B(1,2) 258,859 999,998
-------------------------------------------------------------------------------------------------
Tellium, Inc., Cv., Series E(1,2) 166,667 5,000,010
-------------------------------------------------------------------------------------------------
Zaffire, Inc., Cv., Series C(1,2) 69,252 999,999
------------
Total Preferred Stocks (Cost $19,302,266) 19,302,266
Principal
Amount
=================================================================================================
Convertible Corporate Bonds and Notes--0.1%
Cyras Systems, Inc., 4.50% Cv. Unsec. Sub. Nts.,
8/15/05(3) (Cost $450,000) $ 450,000 488,250
=================================================================================================
Repurchase Agreements--31.1%
Repurchase agreement with Deutsche Bank Securities Inc., 6.51%,
dated 10/31/00, to be repurchased at $79,014,286 on 11/1/00,
collateralized by U.S. Treasury Nts., 6.125%-6.625%, 7/31/01-8/15/07,
with a value of $17,598,676 and U.S. Treasury Bonds, 3.875%-8.875%,
8/15/17-4/15/29, with a value of $63,239,701 79,000,000 79,000,000
-------------------------------------------------------------------------------------------------
Repurchase agreement with PaineWebber, Inc., 6.55%, dated 10/31/00,
to be repurchased at $79,813,519 on 11/1/00, collateralized by
Government National Mortgage Assn., 8%-8.50%, 3/20/30-9/20/30,
with a value of $83,009,793 79,799,000 79,799,000
------------
Total Repurchase Agreements (Cost $158,799,000) 158,799,000
-------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $536,967,815) 100.4% 512,231,512
-------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.4) (1,911,925)
--------------------------
Net Assets 100.0% $510,319,587
==========================
</TABLE>
Footnotes to Statement of Investments
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 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 $488,250 or 0.10% of the Fund's net assets
as of October 31, 2000.
See accompanying Notes to Financial Statements.
16 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES October 31, 2000
<TABLE>
<CAPTION>
=================================================================================================
<S> <C>
Assets
Investments, at value (including repurchase agreements of $158,799,000)
(cost $536,967,815)--see accompanying statement $512,231,512
-------------------------------------------------------------------------------------------------
Cash 33,767
-------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 6,422,911
Investments sold 3,752,222
Interest 32,930
Other 3,001
------------
Total assets 522,476,343
=================================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 11,389,931
Shares of beneficial interest redeemed 492,762
Distribution and service plan fees 105,971
Transfer and shareholder servicing agent fees 16,306
Other 151,786
------------
Total liabilities 12,156,756
=================================================================================================
Net Assets $510,319,587
============
=================================================================================================
Composition of Net Assets
Paid-in capital $540,702,352
-------------------------------------------------------------------------------------------------
Accumulated net investment loss (1)
-------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (5,646,461)
-------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments (24,736,303)
------------
Net Assets $510,319,587
============
=================================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$253,470,823 and 22,554,039 shares of beneficial interest outstanding) $11.24
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $11.93
-------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $200,250,557
and 17,877,179 shares of beneficial interest outstanding) $11.20
-------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $56,597,081
and 5,053,680 shares of beneficial interest outstanding) $11.20
-------------------------------------------------------------------------------------------------
Class Y Shares
Net asset value, redemption price and offering price per share (based on
net assets of $1,126 and 100 shares of beneficial interest outstanding) $11.26
</TABLE>
See accompanying Notes to Financial Statements.
17 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Period from April 25, 2000 (inception of offering) to October 31, 2000
==================================================================================
<S> <C>
Investment Income
Interest $ 2,785,068
----------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $644) 17,993
------------
Total income 2,803,061
==================================================================================
Expenses
Management fees 1,462,714
----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 188,939
Class B 548,051
Class C 144,827
----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 130,405
Class B 97,608
Class C 25,848
Class Y 1
----------------------------------------------------------------------------------
Registration and filing fees 138,812
----------------------------------------------------------------------------------
Shareholder reports 74,194
----------------------------------------------------------------------------------
Custodian fees and expenses 8,622
----------------------------------------------------------------------------------
Other 129,585
------------
Total expenses 2,949,606
Less expenses paid indirectly (6,762)
------------
Net expenses 2,942,844
==================================================================================
Net Investment Loss (139,783)
==================================================================================
Realized and Unrealized Loss
Net realized loss on investments (5,646,461)
----------------------------------------------------------------------------------
Net change in unrealized depreciation investments (24,736,303)
------------
Net realized and unrealized loss (30,382,764)
==================================================================================
Net Decrease in Net Assets Resulting from Operations $(30,522,547)
============
</TABLE>
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period Ended October 31, 2000(1)
----------------------------------------------------------------------------------
<S> <C>
Operations
Net investment loss $ (139,783)
----------------------------------------------------------------------------------
Net realized gain (loss) (5,646,461)
----------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) (24,736,303)
------------
Net decrease in net assets resulting from operations (30,522,547)
==================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial
interest transactions:
Class A 266,456,675
Class B 213,552,155
Class C 60,730,304
Class Y --
==================================================================================
Net Assets
Total increase 510,216,587
----------------------------------------------------------------------------------
Beginning of period 103,000(2)
------------
End of period (including accumulated net investment
loss of $1 for the period ended October 31, 2000) $510,319,587
============
</TABLE>
1. For the period from April 25, 2000 (inception of offering) to October 31,
2000.
2. Reflects the value of the Manager's initial seed money investment at April
18, 2000.
See accompanying Notes to Financial Statements.
19 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
Period Period Period Period
Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
2000(1) 2000(1) 2000(1) 2000(1)
=======================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00
-------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) .01 (.01) (.01) .02
Net realized and unrealized gain 1.23 1.21 1.21 1.24
------------------------------------------------------
Total income from investment operations 1.24 1.20 1.20 1.26
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.24 $11.20 $11.20 $11.26
======================================================
=======================================================================================================
Total Return, at Net Asset Value(2) 12.40% 12.00% 12.00% 12.60%
=======================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $253,471 $200,251 $56,597 $1
-------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $149,623 $106,620 $28,193 $1
-------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0.25% (0.48)% (0.47)% 0.33%
Expenses 1.65% 2.39% 2.39% 1.42%
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate 6% 6% 6% 6%
</TABLE>
1. For the period from April 25, 2000 (inception of offering) to October 31,
2000.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Significant Accounting Policies
Oppenheimer Emerging Technologies Fund (the Fund) is an open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek long-term 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. 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. Foreign currency exchange contracts are valued based on
the closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
21 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
1. Significant Accounting Policies Continued
Non-Diversification Risk. The Fund is "non-diversified" and can invest in the
securities of a single issuer without limit. To the extent the Fund invests a
relatively high percentage of its assets in the obligations of a single issuer
or a limited number of issuers, the Fund is subject to additional risk of loss
if those obligations lose market value or the borrower or issuer of those
obligations defaults.
--------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers to shareholders.
As of October 31, 2000, the Fund had available for federal income tax purposes
an unused capital loss carryover as follows:
Expiring
--------------------------------------
2008 $5,646,461
--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded 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.
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
22 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
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. 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.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
period ended October 31, 2000, amounts have been reclassified to reflect a
decrease in paid-in capital of $139,782. Accumulated net investment loss was
decreased by the same amount. Net assets of the Fund were unaffected by the
reclassifications.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable 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 EMERGING TECHNOLOGIES FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Period Ended October 31, 2000(1)
Shares Amount
----------------------------------------------------------------------------------
<S> <C> <C>
Class A
Sold 25,707,400 $304,796,287
Redeemed (3,163,361) (38,339,612)
-------------------------
Net increase 22,544,039 $266,456,675
=========================
----------------------------------------------------------------------------------
Class B
Sold 18,503,747 $221,172,552
Redeemed (626,668) (7,620,397)
-------------------------
Net increase 17,877,079 $213,552,155
=========================
----------------------------------------------------------------------------------
Class C
Sold 5,263,840 $ 63,254,836
Redeemed (210,260) (2,524,532)
-------------------------
Net increase 5,053,580 $ 60,730,304
=========================
----------------------------------------------------------------------------------
Class Y
Sold -- $ --
Redeemed -- --
-------------------------
Net increase -- $ --
=========================
</TABLE>
1. For the period from April 25, 2000 (inception of offering) to October 31,
2000.
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the period ended October 31, 2000, were
$396,176,380 and $12,361,103, respectively.
As of October 31, 2000, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $536,967,815 was:
Gross unrealized appreciation $ 25,045,493
Gross unrealized depreciation (49,781,796)
------------
Net unrealized depreciation $(24,736,303)
============
24 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
================================================================================
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 at an
annual rate of 1.00% of average annual net assets. The Fund's management fee
for the period ended October 31, 2000, was an annualized rate of 1.00%, before
any waiver by the Manager if applicable.
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager, 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.
--------------------------------------------------------------------------------
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
Period Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
October 31, 2000 $5,488,223 $674,370 $97,505 $6,637,607 $403,220
</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
Period Ended Retained by Distributor Retained by Distributor Retained by Distributor
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
October 31, 2000 $-- $90,379 $7,275
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
25 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares purchased. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net
assets consisting of Class A shares of the Fund. For the period ended October
31, 2000, payments under the Class A plan totaled $188,939, all of which was
paid by the Distributor to recipients. That included $12,438 paid to an
affiliate of the Distributor's parent company. Any unreimbursed expenses the
Distributor incurs with respect to Class A shares in any fiscal year cannot be
recovered in subsequent years.
--------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and asset-based sales charges from the
Fund under the plans. If any plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the period ended October 31,
2000, were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $548,051 $457,349 $7,706,714 3.85%
Class C Plan 144,827 104,067 604,988 1.07
</TABLE>
26 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
================================================================================
5. Illiquid or Restricted Securities
As of October 31, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 15% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of October 31, 2000, was
$19,302,266, which represents 3.78% of the Fund's net assets, all of which is
considered restricted. Information concerning restricted securities is as
follows:
<TABLE>
<CAPTION>
Valuation Unrealized
Per Unit as of Appreciation
Security Acquisition Date Cost Per Unit Oct. 31, 2000 (Depreciation)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stocks and Warrants
ApplianceWare Holding Corp.,
Cv., Series B 7/11/00 $ 3.43 $ 3.43 $--
------------------------------------------------------------------------------------------------------
Blaze Network Products, Inc.,
8% Cv., Series D 10/17/00 6.40 6.40 --
------------------------------------------------------------------------------------------------------
Broadband Office, Inc., Cv.,
Series C 8/28/00 18.90 18.90 --
------------------------------------------------------------------------------------------------------
Centerpoint Broadband Technologies,
Inc., Non-Cum. Cv., Series D 10/23/00 10.78 10.78 --
------------------------------------------------------------------------------------------------------
fusionOne, Inc., 8%, Non-Cum. Cv.,
Series D 9/6/00 5.43 5.43 --
------------------------------------------------------------------------------------------------------
MicroPhotonix Integration Corp., Cv.,
Series C 7/6/00 6.32 6.32 --
------------------------------------------------------------------------------------------------------
Questia Media, Inc., Cv., Series B 8/18/00 3.86 3.86 --
------------------------------------------------------------------------------------------------------
Tellium, Inc., Cv., Series E 9/20/00 30.00 30.00 --
------------------------------------------------------------------------------------------------------
Zaffire, Inc., Cv., Series C 5/26/00 14.44 14.44 --
</TABLE>
================================================================================
6. 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 or at
October 31, 2000.
27 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Emerging Technologies Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Emerging Technologies Fund as of
October 31, 2000, and the related statement of operations and statement of
changes in net assets and the financial highlights for the period from April
25, 2000 (inception of offering) to October 31, 2000. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of October 31, 2000, by
correspondence with the custodian and brokers; and where confirmations were not
received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Emerging Technologies Fund as of October 31, 2000, the results of
its operations, of changes in its net assets and the financial highlights for
the period from April 25, 2000 (inception of offering) to October 31, 2000, in
conformity with accounting principles generally accepted in the United States
of America.
KPMG LLP
Denver, Colorado
November 21, 2000
28 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations
of the U.S. Treasury Department require the Fund to report this information to
the Internal Revenue Service.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may affect your individual
tax return and the many variations in state and local tax regulations, we
recommend that you consult your tax advisor for specific guidance.
29 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
OPPENHEIMER EMERGING TECHNOLOGIES FUND
<TABLE>
============================================================================================
<S> <C>
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
Bruce L. Bartlett, 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 Shareholder OppenheimerFunds Services
Servicing Agent
============================================================================================
Custodian of The Bank of New York
Portfolio Securities
============================================================================================
Independent Auditors KPMG LLP
============================================================================================
Legal Counsel Mayer, Brown & Platt
For more complete information about Oppenheimer Emerging
Technologies Fund, please refer to the Prospectus. To
obtain a copy, call your financial advisor, call
OppenheimerFunds Distributor, Inc. at 1.800.525.7048 or
visit the OppenheimerFunds website at
www.oppenheimerfunds.com.
Shares of Oppenheimer funds are not deposits or obligations
of any bank, are not guaranteed by any bank, are not insured
by the FDIC or any other agency, and involve investment
risks, including the possible loss of the principal amount
invested.
Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York,
NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
</TABLE>
30 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
============================================================================================================
<S> <C> <C>
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
============================================================================================================
Equity
Stock Stock & Bond
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
============================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R)California Municipal Fund(2,3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund(2)
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
============================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another
Oppenheimer fund subject to shareholder approval.
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
31 | OPPENHEIMER EMERGING TECHNOLOGIES FUND
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to help.
Internet
24-hr access to account information and transactions(1)
www.oppenheimerfunds.com
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General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
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Telephone Transactions
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
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PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
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Telecommunications Device for the Deaf (TDD)
Mon-Fri 9am-6:30pm ET
1.800.843.4461
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OppenheimerFunds Market Hotline
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
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Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
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Ticker Symbols Class A: OETAX Class B: OETBX Class C: OETCX Class Y: N/A
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
RA0765.001.1000 December 30, 2000 [logo]OppenheimerFunds(R)
Distributor, Inc.
