1735319
[FRONT COVER]
Oppenheimer High Yield Fund
Annual Report June 30, 1996
[Picture of Petting Zoo]
"We need
our money
to work
as hard
as it can."
[LOGO OPPENHEIMERFUNDS (R)]
<PAGE>
News
Standardized Yields
For the 30 Days Ended 6/30/96:(3)
Class A
8.88%
Class B
8.51%
Class C
8.49%
The Fund's Class A shares are ranked [GRAPHIC-Four Stars] among 866 taxable bond
funds as of 6/30/96 by Morningstar Mutual Funds.(4)
This Fund is for people who want an investment that offers high income potential
as well as diversification for their income portfolio.
How Your Fund Is Managed
Oppenheimer High Yield Fund seeks high current income with a secondary objective
of capital growth. The Fund invests primarily in high-yielding, lower-rated
corporate bonds. These types of securities often offer the highest income
available from any type of fixed income investment.
Performance
Total return at net asset value for the twelve months ended 6/30/96 was 12.25%
for Class A shares and 11.40% for Class B shares. Cumulative total return at net
asset value for Class C shares since inception on 11/1/95 was 7.36%.(1)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1-, 5-, and 10-year periods ended 6/30/96 were 6.92%,
10.99% and 9.36%, respectively. For Class B shares, average annual total returns
for the 1-year period ended 6/30/96 and since inception of the Class on 5/3/93
were 6.40% and 7.88%, respectively. For Class C shares, cumulative total return
since inception on 11/1/95 was 6.36%.(2)
Outlook
"Our outlook is favorable. High yield bonds have been one of the best performing
sectors of the bond market over the period, and we expect that to continue in
the coming months."
Ralph Stellmacher, Portfolio Manager
June 30, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 6/30/95, 6/30/91
and 6/30/86, after deducting the current maximum initial sales charge of 4.75%.
Class B returns show results of hypothetical investments on 6/30/95 and 5/3/93
(inception of class), after the deduction of the applicable contingent deferred
sales charge of 5% (1-year) and 3% (since inception). Class C shares show
results of a hypothetical investment on 11/1/95 after the 1% contingent deferred
sales charge. An explanation of the different performance calculations is in the
Fund's prospectus.
3. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 6/30/96, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
4. Source: Morningstar Mutual Funds, 6/30/96. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"hybrid") based on risk-adjusted investment returns, after considering sales
charges and expenses. Investment return measures a fund's (or class's) 3-, 5-,
and 10-year (depending on the inception of the class or fund) average annual
total returns in excess of 90-day U.S. Treasury bill returns. Risk measures a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and returns are combined to produce star rankings, reflecting performance
relative to the average fund in a fund's category. Five stars is the "highest"
ranking (top 10%), 4 stars is "above average" and 1 star is the "lowest" (bottom
10%). The 4-star current ranking is a weighted average of the 3-, 5- and 10-year
rankings for the class, which were 3, 4 and 4 stars, respectively, weighted 20%,
30% and 50%. There were 866, 478 and 217 funds ranked in these respective
periods. Rankings are subject to change. The Fund's Class A, B and C shares have
the same portfolio.
2 Oppenheimer High Yield Fund
<PAGE>
[PHOTO-Bridget Macaskill] [PHOTO-James C. Swain]
James C. Swain
Chairman
Oppenheimer
High Yield Fund
Bridget A. Macaskill
President
Oppenheimer
High Yield Fund
Dear Shareholder,
Because of rising interest rates, the bond market has been volatile during the
first half of 1996. But we believe inflation fears have been somewhat overblown
and for this reason the future remains bright for bonds.
Let's review the immediate past. During the first half of the year,
interest rates rose sharply, as investors became concerned about renewed
inflation. Why was inflation a worry? First, economic growth appeared to
accelerate, catching many by surprise. Second, gasoline and food prices
increased sharply. As a result, the yield on the benchmark 30-year U.S. Treasury
bond moved from 6% in January to 7% by mid-year.
Even though an increase of one percentage point may seem modest, to bond
market investors it means a significant reduction in the value of their bonds.
And the longer the bond's maturity, the larger its decline in value. As the
Fund's investment advisor, it's our job to seek to minimize and possibly avoid
the decline in bond values in a rising interest rate environment. We accomplish
this by monitoring interest rates and strategically allocating the Fund's assets
in favorable investments.
Our current outlook is that interest rates will ease by the end of the
year. There are two primary reasons for our forecast. First, the economy appears
to be growing less rapidly than it did in the second half of 1995. Retail sales,
for example, have slowed from their faster first-quarter clip. And, a slower
growing economy also suggests lower inflation and interest rates. Second,
because there is no shortage of crude oil, the rise in gasoline prices appears
to be temporary. Indeed, excluding energy and food prices, inflation is
virtually nonexistent.
With the yield on the 30-year Treasuries over 7%, bonds offer significant
value--providing investors with substantial income. Typically, the yield on a
bond is compared to the current inflation rate, which is currently about 3%.
This "spread" of approximately 4 percentage points between bond yields and
inflation is considered very generous, historically.
In addition to receiving higher income, the value of bonds would appreciate
if interest rates were to fall as we expect. The reason: if you're getting 7%
and other investors have to settle with 6.5% or 6%, then your bond is more
valuable in the marketplace. It's the mirror image of what happened during the
first half of 1996.
Recently, the stock market volatility has captured the attention of
investors and given bonds an even more attractive place in the portfolios of
many investors, particularly those who are nearing retirement. Given the current
circumstances, diversifying into other asset classes, rather than relying solely
on equities, may make more sense now than ever before.
Your portfolio managers discuss the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/ James C. Swain /s/ Bridget A. Macaskill
-------------------- --------------------
James C. Swain Bridget A. Macaskill
July 22, 1996
3 Oppenheimer High Yield Fund
<PAGE>
Q+A
[PHOTO-Ralph Stellmacher] [PHOTO-Scott Scharer]
An interview with your Fund's managers.
Q How did
the Fund
perform?
How did the Fund perform over the past twelve months?
The Fund had an excellent year. High yield bonds performed well in the second
half of 1995 as the overall bond market was extremely strong and continued to
perform well through the first half of 1996 despite a rise in interest rates
that hurt many other types of bonds. The Fund's aggressive positioning at the
beginning of the period helped us take advantage of the strength of the high
yield market. For the twelve months ended June 30th, our performance was better
than roughly two-thirds of all high yield bond funds measured by Lipper
Analytical Services.
[PHOTO-Len Darling]
What investment decisions made positive contributions to
performance?
The Fund's good performance was primarily the result of several well-timed
sector allocations. In particular, our decision to be overweighted in the gaming
industry and underweighted in paper and forest products companies.
Gaming companies performed well because of ongoing consolidations and
mergers within the industry. Many gaming companies began growing their
businesses by making acquisitions rather than by opening new venues. With
financing available, management of many of these companies was able to
consolidate operations and improve bottom lines. With much of the consolidation
viewed as positive, the bonds of many of these companies did well.
We also benefited from avoiding the bonds of companies that make paper and
forest products. With demand for these products relatively light during the year
and supply ample, these bonds performed poorly.
4 Oppenheimer High Yield Fund
<PAGE>
Facing page
Top left: Ralph Stellmacher, Portfolio Manager
Top right: Scott Scharer, Member
of Fixed Income Investments Team
Bottom: Len Darling, Executive
VP, Director of Fixed Income Investments
This page
Top: Ralph Stellmacher
Bottom: David Negri with Mark Frank, Members of Fixed Income Investments Team
A Because
of our early
strong
positioning,
we had a very
good year.
In addition to timely industry allocations, we invested about 11% of our
assets in foreign government bonds--both in developed and emerging nations. By
doing so, we were able to diversify the portfolio as well as significantly
increase returns.(1)
Did any investments negatively impact performance?
Overall, we're pleased with our performance. However, we did experience a
temporary setback related to our heavy exposure to media and telecommunications
bonds. We expect deregulation and increasing demand to continue to drive future
growth in this area. However, over the past six months, an increase of high
yield issues in this sector has caused the supply and demand relationship to be
temporarily thrown off balance. Nevertheless, we have maintained a market weight
in this sector because we expect the imbalance to level out shortly.
What areas are you currently targeting?
In addition to maintaining our focus on growth businesses,
we continue to emphasize investment opportunities that offer good value. Because
lower-rated bonds have performed so well, their valuations have crept upward
since the beginning of the year and are now at a level where we feel they offer
less opportunity for price appreciation. Consequently, we're moving to higher
credit quality bonds within the high yield market, where valuations have not yet
peaked, while repositioning the Fund to become slightly more conservative. (2)
What is your outlook for the Fund?
Our outlook is favorable. High yield bonds have been one of the best performing
sectors of the bond market over the period, and we expect that to continue in
the coming months. There are two reasons for this. First, in a bond market where
coupon income is likely to drive returns, non-investment grade corporate bonds
offer the advantage of higher income. Second, because we expect corporate
earnings to remain strong, and the overall economy to be stronger than it was at
the end of 1995, we believe credit strength in this market will help to offset
some of the negative effects that interest rate changes may have on the high
yield bonds. [solid box]
1. The Fund's portfolio is subject to change.
2. Investors in high yield bonds are subject to a greater risk that the issuer
will default in its principal or interest payments.
5 Oppenheimer High Yield Fund
<PAGE>
Statement of Investments June 30, 1996
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
===================================================================================================================================
Mortgage-Backed Obligations--3.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped Mtg.-Backed Security:
Trust 240, Cl. 2, 10.969%--12.91%, 9/1/23(2) $ 66,947,903 $ 23,055,183
Trust 257, Cl. 2, 15.381%, 2/1/24(2) 5,996,280 2,072,464
---------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn., 6%, 7/15/26(3) 9,000,000 8,926,875
---------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl. E, 7.51%, 2/1/28(4)(5) 5,362,000 4,192,414
---------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Multifamily Mortgage Pass-Through
Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(3)(5) 3,750,000 2,803,125
---------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 2,721,837 2,596,378
Series 1995-C1, Cl. F, 6.90%, 2/25/27 2,672,907 2,187,608
---------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Series 1996-C1, Cl. E, 9.18%, 1/20/06 2,496,000 2,130,960
---------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through
Certificates, Series 1995-C4, Cl. E, 8.863%, 6/25/26(4)(5) 2,835,676 2,304,873
---------------------------------------------------------------------------------------------------------------
Total Mortgage-Backed Obligations (Cost $47,829,156) 50,269,880
===================================================================================================================================
Foreign Government Obligations--9.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Unsub. Unsec. Bonds, 10.25%, 2/6/03 DEM 8,700,000 5,772,797
---------------------------------------------------------------------------------------------------------------
Banco Estado Minas Gerais, 8.25%, 2/10/00 5,000,000 4,575,000
---------------------------------------------------------------------------------------------------------------
Banco Hipotecario Nacional (Argentina) Medium-Term Nts.,10.625%, 3/29/99(5) 1,000,000 1,012,500
---------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Capitalization Bonds, 8%, 4/15/14 2,435,467 1,506,946
Nts., Banco Estado Minas Gerais, 7.875%, 2/10/99 3,600,000 3,334,500
---------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, 10%, 3/5/01 DEM 2,520,000 1,688,676
---------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of):
Front-Loaded Interest Reduction Bearer Bonds, Tranche A, 2%, 7/28/12(4) 17,960,000 5,988,537
Interest Arrears Bonds, 6.25%, 7/28/11(4) 11,165,000 5,303,375
---------------------------------------------------------------------------------------------------------------
Canada (Government of) Real Return Debs., 4.517%, 12/1/21(6) CAD 5,580,000 4,021,496
---------------------------------------------------------------------------------------------------------------
Central Bank of Costa Rica Interest Claim Bonds, Series B, 6.328%, 5/21/05(4) 524,246 484,928
---------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%, 5/15/03 DKK 44,150,000 7,967,673
---------------------------------------------------------------------------------------------------------------
Ecuador (Republic of):
Disc. Bonds, 6.063%, 2/28/25(4) 3,400,000 1,929,500
Interest Equalization Registered Bonds, 6.625%, 12/21/04(4) 1,850,000 1,355,125
---------------------------------------------------------------------------------------------------------------
Germany (Republic of) Bonds, 7.375%, 12/2/02(7) DEM 4,860,000 3,403,924
---------------------------------------------------------------------------------------------------------------
Hashemite Kingdom of Jordan:
Disc. Bonds, 6.625%, 12/23/23(4) 3,500,000 2,458,750
Interest Arrears Bonds, 6.625%, 12/23/05(4) 2,080,000 1,679,600
---------------------------------------------------------------------------------------------------------------
Italy (Republic of) Certificati di Credito del Tesoro Nts.,
11.20%, 8/1/00(4)ITL 4,390,000,000 2,932,488
---------------------------------------------------------------------------------------------------------------
National Treasury Management Agency (Irish Government)
Bonds, 8%, 10/18/00 IEP 2,560,000 4,269,741
---------------------------------------------------------------------------------------------------------------
New South Wales Treasury Corp. Gtd. Bonds, 12%, 12/1/01 AUD 9,000,000 8,047,187
---------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 8%, 2/15/01(7) NZD 15,545,000 10,238,003
---------------------------------------------------------------------------------------------------------------
Panama (Republic of):
Debs., 6.629%, 5/10/02(4) 4,993,846 4,694,215
Interest Reduction Bonds, 3.50%, 7/17/14(3)(8) 1,500,000 831,094
</TABLE>
6 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Foreign Government
Obligations (continued)
Poland (Republic of) Treasury Bills, Zero Coupon:
21.656%, 10/2/96(9) PLZ 4,320,000 $ 1,508,006
21.635%, 11/20/96(9) PLZ 8,360,000 2,849,869
21.641%, 8/7/96(9) PLZ 4,000,000 1,440,834
---------------------------------------------------------------------------------------------------------------
Portugal (Republic of) Gtd. Bonds,
Obrigicion do tes Medio Prazo, 11.875%, 2/23/00(7) PTE 720,000,000 5,141,708
---------------------------------------------------------------------------------------------------------------
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado,12.25%, 3/25/00 ESP 367,000,000 3,244,611
---------------------------------------------------------------------------------------------------------------
Sweden (Kingdom of) Debs., Series 1030, 13%, 6/15/01 SEK 44,200,000 8,144,942
---------------------------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, 13% Bonds, 2/5/99 ITL 2,250,000,000 1,511,790
---------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 13%, 7/14/00(7) GBP 7,410,000 13,823,596
---------------------------------------------------------------------------------------------------------------
United Mexican States Bonds, 10.375%, 1/29/03 DEM 2,300,000 1,543,519
---------------------------------------------------------------------------------------------------------------
Venezuela (Republic of):
Disc. Bonds, Series DL, 6.625%, 12/18/07(4) 11,250,000 7,959,375
Front-Loaded Interest Reduction Bonds, Series A, 6.375%, 3/31/07(4) 1,490,000 1,078,387
New Money Bonds, Series A, 6.75%, 12/18/05(4) 2,000,000 1,428,750
New Money Bonds, Series B, 6.625%, 12/18/05(4) 500,000 357,188
---------------------------------------------------------------------------------------------------------------
Total Foreign Government Obligations (Cost $130,729,320) 133,528,630
===================================================================================================================================
Loan Participations--0.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.812%, 9/4/06(4)(10) 5,071,232 3,026,892
---------------------------------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds,
6.563%, 7/1/01(4)(10) 785,799 732,758
---------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.,
Tranche B, 6.312%, 11/15/04(4)(10) 450,000 352,125
---------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.437%, 1/1/09(4)(7) 7,450,000 5,366,328
---------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement:
Tranche A, 1.772%, 9/30/00(4)(10) JPY 31,990,250 249,373
Tranche B, 1.772%, 9/30/00(4)(10) JPY 344,884,749 2,688,480
---------------------------------------------------------------------------------------------------------------
Total Loan Participations (Cost $12,218,932) 12,415,956
===================================================================================================================================
Municipal Bonds and Notes--0.8%
- -----------------------------------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation Corridor Agency
Toll Road Capital Appreciation Revenue Bonds, Jr Lien:
Zero Coupon, 8.75%, 1/1/12(9) 15,000,000 4,838,805
Zero Coupon, 9%, 1/1/28(9)(11) 74,000,000 6,886,291
---------------------------------------------------------------------------------------------------------------
Total Municipal Bonds and Notes (Cost $8,601,927) 11,725,096
===================================================================================================================================
Corporate Bonds and Notes--76.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Basic Industry--12.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.6% Acetex Corp., 9.75% Sr. Sec. Nts., 10/1/03 10,330,000 10,226,700
---------------------------------------------------------------------------------------------------------------
Arcadian Partner LP, 10.75% Sr. Nts., Series B, 5/1/05 3,120,000 3,389,100
---------------------------------------------------------------------------------------------------------------
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05(12) 1,680,000 1,318,800
11.75% Sr. Sec. Nts., 10/15/03 2,400,000 2,460,000
---------------------------------------------------------------------------------------------------------------
Terra Industries, Inc., 10.50% Sr. Nts., Series B, 6/15/05 3,120,000 3,276,000
---------------------------------------------------------------------------------------------------------------
Texas Petrochemicals Corp., 11.125% Sr. Sub. Nts., 7/1/06(3)(5) 1,570,000 1,601,891
------------
22,272,491
</TABLE>
7 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Containers--2.1% Container Corp., 9.75% Gtd. Sr. Nts., 4/1/03 $1,500,000 $1,477,500
---------------------------------------------------------------------------------------------------------------
U.S. Can Co., 13.50% Sr. Sub. Nts., 1/15/02 25,450,000 27,358,750
------------
28,836,250
- -----------------------------------------------------------------------------------------------------------------------------------
Metals/Mining--1.2%
Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03 7,271,000 7,907,212
---------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 9.875% Sr. Nts., 2/15/02 6,350,000 6,286,500
---------------------------------------------------------------------------------------------------------------
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05 1,890,000 2,154,600
------------
16,348,312
- -----------------------------------------------------------------------------------------------------------------------------------
Paper--4.5% Asia Pulp & Paper International Finance Co.,
Zero Coupon Currency Nts., 16.551%, 5/15/97(9) IDR 1,500,000,000 560,414
---------------------------------------------------------------------------------------------------------------
Buckeye Cellulose Corp.:
8.50% Sr. Sub. Nts., 12/15/05 1,930,000 1,843,150
9.25% Sr. Sub. Nts., 9/15/08(3) 3,000,000 3,003,750
---------------------------------------------------------------------------------------------------------------
Domtar, Inc.:
11.25% Debs., 9/15/17 1,060,000 1,131,550
12% Nts., 4/15/01 1,060,000 1,226,950
---------------------------------------------------------------------------------------------------------------
Florida Coast Paper Co. LLC/Florida Coast Paper Finance Corp.,
12.75% First Mtg. Nts., 6/1/03(5) 480,000 499,200
---------------------------------------------------------------------------------------------------------------
Gaylord Container Corp.:
11.50% Sr. Nts., 5/15/01 2,500,000 2,575,000
12.75% Sr. Sub. Disc. Debs., 5/15/05 2,500,000 2,643,750
---------------------------------------------------------------------------------------------------------------
Indah Kiat International Finance Co. BV,
12.50% Sr. Sec. Gtd. Nts., Series C, 6/15/06 9,860,000 10,525,550
---------------------------------------------------------------------------------------------------------------
QUNO Corp., 9.125% Sr. Nts., 5/15/05 8,340,000 8,194,050
---------------------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02 3,890,000 3,685,775
---------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.25% Sr. Nts., 4/1/06 5,495,000 5,481,262
10.875% Sr. Sub. Nts., 4/1/08 3,665,000 3,628,350
---------------------------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., 12/15/04 8,300,000 8,839,500
---------------------------------------------------------------------------------------------------------------
Stone Container Corp.:
10.75% First Mtg. Nts., 10/1/02 2,840,000 2,882,600
10.75% Sr. Sub. Nts., 6/15/97 1,000,000 1,025,000
---------------------------------------------------------------------------------------------------------------
Tembec Finance Corp., 9.875% Gtd. Sr. Nts., 9/30/05 4,150,000 3,880,250
------------
61,626,101
- -----------------------------------------------------------------------------------------------------------------------------------
Steel--2.8% Armco, Inc., 8.50% Sinking Fund Debs., 9/1/01 27,317,000 27,043,830
---------------------------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 4,515,000 4,232,812
---------------------------------------------------------------------------------------------------------------
WCI Steel, Inc., 10.50% Sr. Gtd. Nts., Series B, 3/1/02 6,520,000 6,634,100
------------
37,910,742
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Related--17.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Products--3.4%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 11.681%, 5/27/98(9) 15,520,000 13,075,600
---------------------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 12,000,000 13,140,000
---------------------------------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc.,
0%/11.50% Sr. Sec. Disc. Nts., 8/15/03(12) 17,100,000 10,174,500
---------------------------------------------------------------------------------------------------------------
Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05 3,840,000 3,974,400
---------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(5) 5,990,000 6,274,525
------------
46,639,025
</TABLE>
8 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Food/Beverages/Tobacco--1.6%
Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03 $ 2,000,000 $ 2,100,000
---------------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 11,515,000 11,068,794
---------------------------------------------------------------------------------------------------------------
Curtice-Burns Foods, Inc., 12.25% Sr. Sub. Nts., 2/1/05 4,500,000 4,387,500
---------------------------------------------------------------------------------------------------------------
Foodbrands America, Inc., 10.75% Sr. Sub. Nts., 5/15/06 2,900,000 2,929,000
---------------------------------------------------------------------------------------------------------------
Unilever CR spol. s.r.o., guaranteed by Unilever NV, Rotterdam,
The Netherlands, Zero Coupon Promissory Nts., 11.184%, 10/11/96(9) CZK 40,000,000 1,409,365
------------
21,894,659
- -----------------------------------------------------------------------------------------------------------------------------------
Healthcare--3.9% Capstone Capital Corp., 10.50% Cv. Sub. Debs., 4/1/02 600,000 765,000
---------------------------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts., Series A, 4/15/04 13,630,000 14,720,400
---------------------------------------------------------------------------------------------------------------
Multicare Cos., Inc. (The), 12.50% Sr. Sub. Nts., 7/1/02 7,977,000 8,914,297
---------------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02 4,745,000 5,272,881
---------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05 14,250,000 15,105,000
---------------------------------------------------------------------------------------------------------------
Total Renal Care, Inc., 0%/12% Sr. Sub. Disc. Nts. 8/15/04(12) 9,203,000 9,018,940
------------
53,796,518
- -----------------------------------------------------------------------------------------------------------------------------------
Hotel/Gaming--4.5%
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A, 11/15/00(10) 2,750,000 1,787,500
---------------------------------------------------------------------------------------------------------------
Boyd Gaming Corp., 10.75% Sr. Sub. Nts., Series B, 9/1/03 6,000,000 6,330,000
---------------------------------------------------------------------------------------------------------------
California Hotel Finance Corp., 11% Sr. Sub. Nts., 12/1/02 1,700,000 1,802,000
---------------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A, 11/15/00(10)(13) 1,000,000 700,000
---------------------------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Sr. Gtd. Nts., 4/1/02 6,170,000 6,478,500
---------------------------------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 2,250,000 2,328,750
---------------------------------------------------------------------------------------------------------------
Griffin Gaming & Entertainment, Inc., 7.97% First Mtg.
Non-Recourse Pass-Through Nts., 6/30/00(4) 6,785,000 6,547,525
---------------------------------------------------------------------------------------------------------------
HMC Acquisition Properties, Inc., 9% Sr. Nts., 12/15/07 4,290,000 3,957,525
---------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 9.50% Sr. Sec. Nts., Series B, 5/15/05 3,930,000 3,753,150
---------------------------------------------------------------------------------------------------------------
Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03(5) 2,340,000 2,538,900
---------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., 11/15/02(5) 3,160,000 3,981,600
---------------------------------------------------------------------------------------------------------------
Players International, Inc., 10.875% Sr. Nts., 4/15/05 3,300,000 3,357,750
---------------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625% Sr. Sub. Nts., 7/15/05 1,900,000 1,985,500
---------------------------------------------------------------------------------------------------------------
Showboat Marina Casino Partnership/Showboat Marina Finance Corp.,
13.50% First Mtg. Nts., 3/15/03(5) 2,100,000 2,268,000
---------------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 6,200,000 6,107,000
---------------------------------------------------------------------------------------------------------------
Trump Atlantic City Associates/Trump Atlantic City Funding, Inc.,
11.25% First Mtg. Nts., 5/1/06 7,915,000 7,994,150
---------------------------------------------------------------------------------------------------------------
Trump's Castle Funding, Inc., 13.875% Sub. Nts., 11/15/05(17) 30 30
------------
61,917,880
- -----------------------------------------------------------------------------------------------------------------------------------
Leisure--0.4% Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02(10) 5,019,737 5,289,548
</TABLE>
9 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Restaurants--1.4%
Apple South, Inc., 9.75% Sr. Nts., 6/1/06 $ 5,772,000 $ 5,699,850
---------------------------------------------------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts., 8/15/03 6,840,000 6,976,800
---------------------------------------------------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 4,600,000 4,542,500
9.75% Sr. Sub. Nts., 6/1/02 2,500,000 2,412,500
---------------------------------------------------------------------------------------------------------------
19,631,650
- -----------------------------------------------------------------------------------------------------------------------------------
Textile/Apparel--2.6
Consoltex Group, Inc., 11% Sr. Sub. Gtd. Nts., Series B, 10/1/03 5,600,000 5,124,000
---------------------------------------------------------------------------------------------------------------
Polysindo International Finance Co. BV, 11.375% Bonds, 6/15/06 1,200,000 1,227,000
---------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc., 7% Sr. Nts., 5/15/98(10)(13)(14) 5,955,189 37,220
---------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa:
13% Sr. Nts., 6/15/01 7,150,000 7,847,125
Zero Coupon Promissory Nts., 17.90%, 10/23/96(9) IDR 9,000,000,000 3,643,636
Zero Coupon Promissory Nts., 19.111%, 2/28/97(9) IDR 4,500,000,000 1,705,185
---------------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 10,000,000 10,625,000
---------------------------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 6,105,000 5,952,375
------------
36,161,541
- -----------------------------------------------------------------------------------------------------------------------------------
Energy--7.3% Chesapeake Energy Corp., 9.125% Sr. Nts., 4/15/06 2,185,000 2,163,150
---------------------------------------------------------------------------------------------------------------
Crown Central Petroleum Corp., 10.875% Sr. Nts., 2/1/05 250,000 253,125
---------------------------------------------------------------------------------------------------------------
DeepTech International, Inc., 12% Sr. Sec. Nts., 12/15/00 5,995,000 5,965,025
---------------------------------------------------------------------------------------------------------------
Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01 9,700,000 10,063,750
---------------------------------------------------------------------------------------------------------------
Ferrellgas Partners LP, 9.375% Sr. Sec. Nts., 6/15/06(5) 2,310,000 2,240,700
---------------------------------------------------------------------------------------------------------------
Gerrity Oil & Gas Corp., 11.75% Sr. Sub. Nts., 7/15/04 3,000,000 3,180,000
---------------------------------------------------------------------------------------------------------------
Giant Industries, Inc., 9.75% Sr. Sub. Nts., 11/15/03 250,000 245,625
---------------------------------------------------------------------------------------------------------------
Kelley Oil & Gas Corp., 13.50% Sr. Nts., 6/15/99 5,380,000 5,716,250
---------------------------------------------------------------------------------------------------------------
Maxus Energy Corp., 11.50% Debs., 11/15/15 5,700,000 5,970,750
---------------------------------------------------------------------------------------------------------------
Mesa Operating Co., 0%/11.625% Gtd. Sr. Sub. Disc Nts., 7/1/06(3)(12) 9,000,000 5,276,250
---------------------------------------------------------------------------------------------------------------
Mesa Operating Co., 10.625% Gtd. Sr. Sub. Nts., 7/1/06(3) 3,700,000 3,757,812
---------------------------------------------------------------------------------------------------------------
Nuevo Energy Co., 12.50% Sr. Sub. Nts., 6/15/02 7,240,000 7,837,300
---------------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Sr. Gtd. Nts., 7/15/02 11,765,000 13,059,150
---------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc.:
12.25% Sub. Debs., 2/1/05 4,709,000 5,203,445
9.375% Sub. Debs., 2/1/06 3,830,000 3,619,350
---------------------------------------------------------------------------------------------------------------
Santa Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04 8,090,000 8,737,200
---------------------------------------------------------------------------------------------------------------
TransTexas Gas Corp., 11.50% Sr. Sec. Gtd. Nts., 6/15/02 6,300,000 6,315,750
---------------------------------------------------------------------------------------------------------------
Triton Energy Corp., Zero Coupon Sr. Sub. Disc. Nts., 9.486%, 11/1/97(9) 7,000,000 6,335,000
---------------------------------------------------------------------------------------------------------------
Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 4,465,000 4,219,425
------------
100,159,057
</TABLE>
10 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Financial Services--4.2%
- -----------------------------------------------------------------------------------------------------------------------------------
Banks & Thrifts--0.6%
Banco Bamerindus do Brasil SA, 11% Unsub. Unsec. Nts., 11/24/97 $ 1,775,000 $ 1,717,312
---------------------------------------------------------------------------------------------------------------
Banco de Colombia, 5.20% Cv. Jr. Sub. Unsec. Nts., 2/1/99 1,650,000 1,501,500
---------------------------------------------------------------------------------------------------------------
First Nationwide (Parent) Holdings, Inc., 12.50% Sr. Nts., 4/15/03 3,120,000 3,268,200
---------------------------------------------------------------------------------------------------------------
Hutama Karya, Zero Coupon Medium-Term Nts., 17.668%, 3/26/97(9) IDR 4,000,000,000 1,527,689
------------
8,014,701
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--1.3%
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(10) 1,624,837 1,787,321
---------------------------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 5,590,000 5,590,000
---------------------------------------------------------------------------------------------------------------
GPA Holland BV, 8.94% Medium-Term Nts., Series C, 2/16/99 7,300,000 7,263,500
---------------------------------------------------------------------------------------------------------------
GPA Investment BV, 6.40% Nts., 11/19/98 2,000,000 1,910,000
---------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(10)(13) 8,802,000 1,804,410
------------
18,355,231
- -----------------------------------------------------------------------------------------------------------------------------------
Insurance--2.3%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04 11,980,000 12,549,050
---------------------------------------------------------------------------------------------------------------
Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 10,170,000 11,136,150
---------------------------------------------------------------------------------------------------------------
Reliance Group Holdings, Inc., 9.75% Sr. Sub. Debs., 11/15/03 8,250,000 8,229,375
------------
31,914,575
- -----------------------------------------------------------------------------------------------------------------------------------
Housing Related--2.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Building Materials--0.5%
Building Materials Corp., 0%/11.75% Sr. Deferred Coupon Nts.,
Series B, 7/1/04(12) 3,000,000 2,227,500
---------------------------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 5,165,000 5,048,787
------------
7,276,287
- -----------------------------------------------------------------------------------------------------------------------------------
Homebuilders/
Real Estate--1.6%
First Place Tower, Inc.:
9.22% First Mtg. Bonds, 12/15/05 CAD 1,464,450 1,091,137
Units (each unit consists of one $10 principal amount of 8.50%
cv. sub. debs., 12/15/15 and 40 common shares)(15) CAD 880,730 1,160,875
---------------------------------------------------------------------------------------------------------------
NVR, Inc., 11% Sr. Gtd. Nts., 4/15/03 7,100,000 7,135,500
---------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5) 8,900,000 6,764,000
---------------------------------------------------------------------------------------------------------------
U.S. Home Corp., 9.75% Sr. Nts., 6/15/03 6,100,000 5,947,500
------------
22,099,012
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--2.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Aerospace/Electronics/
Computers--1.1%
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(10) 3,850,000 2,117,500
---------------------------------------------------------------------------------------------------------------
Tracor, Inc., 10.875% Sr. Sub. Nts., 8/15/01 10,730,000 11,481,100
---------------------------------------------------------------------------------------------------------------
UNC, Inc., 11% Sr. Sub. Nts., 6/1/06(5) 2,000,000 2,035,000
------------
15,633,600
- -----------------------------------------------------------------------------------------------------------------------------------
Automotive--1.5% Aftermarket Technology Corp.:
12% Sr. Sub. Nts., Series B, 8/1/04 3,530,000 3,830,050
12% Sr. Sub. Nts., Series D, 8/1/04 970,000 1,052,450
---------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 4,650,000 4,743,000
---------------------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp.:
11.25% Sr. Nts., 10/1/02 1,325,000 1,371,375
9.50% Sr. Sec. Nts., 6/1/00 800,000 800,000
</TABLE>
11 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Automotive
(continued)
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06(3) $6,000,000 $ 6,082,500
---------------------------------------------------------------------------------------------------------------
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01 2,000,000 2,055,000
---------------------------------------------------------------------------------------------------------------
19,934,375
- -----------------------------------------------------------------------------------------------------------------------------------
Media--10.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Broadcasting--2.3%
Argyle Television, Inc., 9.75% Sr. Sub. Nts., 11/1/05 915,000 862,387
---------------------------------------------------------------------------------------------------------------
Granite Broadcasting Corp., 9.375% Sr. Sub. Nts., Series A, 12/1/05(5) 3,700,000 3,404,000
---------------------------------------------------------------------------------------------------------------
New World Communications Group Holding Corp.,
Zero Coupon Sr. Disc. Nts., Series B, 11.689%, 6/15/99(9) 4,220,000 3,085,875
---------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts. 10/1/02 9,950,000 10,397,750
---------------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., 10.75% Sr. Sub. Nts., 5/15/06(5) 2,730,000 2,730,000
---------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 10% Sr. Sub. Nts., 9/30/05 7,320,000 7,137,000
---------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 9% Sr. Sub. Nts., 1/15/06 4,500,000 4,027,500
------------
31,644,512
- -----------------------------------------------------------------------------------------------------------------------------------
Cable Television--6.2%
American Telecasting, Inc., 0%/14.50% Sr. Disc. Nts., 6/15/04(12) 11,388,688 7,972,082
---------------------------------------------------------------------------------------------------------------
Australis Media Ltd., Units (each unit consists of $1,000 principal
amount of 0%/14% sr. sub. disc. nts., 5/15/03 and one warrant to
purchase 57.721 ordinary shares)(12)(15) 14,610,000 8,766,000
---------------------------------------------------------------------------------------------------------------
Bell Cablemedia PLC:
0%/11.875% Sr. Disc. Nts., 9/15/05(12) 9,370,000 5,762,550
0%/11.95% Sr. Disc. Nts., 7/15/04(12) 2,900,000 2,044,500
---------------------------------------------------------------------------------------------------------------
Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 1,600,000 1,620,000
---------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 7,800,000 8,073,000
---------------------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 11% Sr. Sub. Debs., 6/1/07 2,430,000 2,753,639
---------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(12) 8,980,000 6,555,400
---------------------------------------------------------------------------------------------------------------
EchoStar Satellite Broadcasting Corp., 0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(5) 3,250,000 2,031,250
---------------------------------------------------------------------------------------------------------------
International CableTel, Inc.:
0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(12) 640,000 467,200
0%/12.75% Sr. Deferred Coupon Nts., 4/15/05(12) 14,595,000 9,413,775
---------------------------------------------------------------------------------------------------------------
Marcus Cable Operating Co. LP/Marcus Cable Capital Corp.,
0%/13.50% Sr. Sub. Gtd. Disc. Nts., Series II, 8/1/04(12) 3,385,000 2,437,200
---------------------------------------------------------------------------------------------------------------
People's Choice TV Corp., 0%/13.125% Sr. Disc. Nts., 6/1/04(12) 8,580,000 4,933,500
---------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 11% Sr. Sub. Gtd. Debs., 12/1/15 1,650,000 1,703,625
---------------------------------------------------------------------------------------------------------------
TeleWest PLC, 0%/11% Sr. Disc. Debs., 10/1/07(12) 6,070,000 3,611,650
---------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 5,000,000 5,566,740
---------------------------------------------------------------------------------------------------------------
United International Holdings, Inc.:
0%/14% Sr. Disc. Nts., 5/15/06(5)(12) 1,925,000 1,015,438
Zero Coupon Sr. Sec. Disc. Nts., Series B, 13.239%, 11/15/99(9) 7,690,000 5,075,400
Zero Coupon Sr. Sec. Disc. Nts., 12.23%, 11/15/99(9) 1,675,000 1,105,500
---------------------------------------------------------------------------------------------------------------
Videotron Holdings PLC, 0%/11% Sr. Disc. Nts., 8/15/05(12) 6,200,000 4,061,000
------------
84,969,449
</TABLE>
12 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Media--2.2%
Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 $ 6,950,000 $ 7,236,688
---------------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 7,550,000 7,757,625
---------------------------------------------------------------------------------------------------------------
News America Holdings, Inc., 10.125% Sr. Gtd. Debs., 10/15/12 2,000,000 2,264,488
---------------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(12) 10,670,000 9,336,250
9.75% Sr. Sec. Nts., 8/1/00 3,025,000 3,146,000
------------
29,741,051
- -----------------------------------------------------------------------------------------------------------------------------------
Publishing/Printing--0.2%
Bell & Howell Co. (New), 0%/11.50% Sr. Disc. Debs , Series B, 3/1/05(12) 3,130,000 2,151,875
- -----------------------------------------------------------------------------------------------------------------------------------
Other--1.6%
- -----------------------------------------------------------------------------------------------------------------------------------
Environmental--0.4%
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 6,100,000 5,612,000
---------------------------------------------------------------------------------------------------------------
Mid-American Waste Systems, Inc., 12.25% Sr. Sub. Nts., 2/15/03(10)(13) 800,000 524,000
------------
6,136,000
- -----------------------------------------------------------------------------------------------------------------------------------
Services--1.2% Borg-Warner Security Corp., 9.125% Sr. Sub. Nts., 5/1/03 1,550,000 1,453,125
---------------------------------------------------------------------------------------------------------------
Protection One, Inc., 0%/13.625% Sr. Disc. Nts., 6/30/05(12) 15,350,000 13,124,250
---------------------------------------------------------------------------------------------------------------
Sociedad Comercial del Plata SA, 11.50% Medium-Term Nts., 5/9/00 1,340,000 1,353,400
------------
15,930,775
- -----------------------------------------------------------------------------------------------------------------------------------
Retail--4.8%
- -----------------------------------------------------------------------------------------------------------------------------------
Specialty Retailing--1.8%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B, 9/1/03 11,100,000 10,489,500
---------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 7,270,000 7,306,350
---------------------------------------------------------------------------------------------------------------
Matahari International Finance Co. BV, 11.25% Gtd Nts., 3/15/01(5) 3,500,000 3,657,500
---------------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts. 5/1/05 2,500,000 2,693,750
------------
24,147,100
- -----------------------------------------------------------------------------------------------------------------------------------
Supermarkets--3.0%
Grand Union Co., 12% Sr. Nts., 9/1/04 22,426,000 21,052,408
---------------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03 7,618,658 7,675,798
---------------------------------------------------------------------------------------------------------------
Penn Traffic Co.:
11.50% Sr. Nts., 4/15/06 1,835,000 1,711,138
9.625% Sr. Sub. Nts., 4/15/05 8,710,000 6,292,975
---------------------------------------------------------------------------------------------------------------
Ralph's Grocery Co., 10.45% Sr. Nts., 6/15/04 4,590,000 4,417,875
------------
41,150,194
- -----------------------------------------------------------------------------------------------------------------------------------
Transportation--2.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Air Transportation--0.5%
Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02 6,000,000 6,555,000
- -----------------------------------------------------------------------------------------------------------------------------------
Railroads--1.1% Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(12) 21,515,000 14,845,350
- -----------------------------------------------------------------------------------------------------------------------------------
Shipping--1.1% Gearbulk Holding Ltd., 11.25% Sr. Nts., 12/1/04 9,150,000 9,653,250
---------------------------------------------------------------------------------------------------------------
Sea Containers Ltd., 12.50% Sr. Sub. Debs., Series A, 12/1/04 260,000 289,900
---------------------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 5,370,000 5,557,950
------------
15,501,100
</TABLE>
13 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Utilities--10.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--0.9%
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(12) $ 2,060,000 $ 2,018,800
---------------------------------------------------------------------------------------------------------------
Calpine Corp., 10.50% Sr. Nts., 5/15/06(5) 3,200,000 3,216,000
---------------------------------------------------------------------------------------------------------------
Centragas Natural Gas Transmission System, 10.65% Sec. Sr. Bonds, 12/1/10(5) 1,158,321 1,195,967
---------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 3,250,000 3,241,875
---------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08(5) 2,586,206 2,237,069
------------
11,909,711
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications--9.1%
A+ Network, Inc., 11.875% Sr. Sub. Nts., 11/1/05 9,660,000 10,046,400
---------------------------------------------------------------------------------------------------------------
American Communications Services, Inc.:
0%/12.75% Sr. Disc. Nts., 4/1/06(12) 5,850,000 3,071,250
0%/13% Sr. Disc. Nts., 11/1/05(12) 2,575,000 1,442,000
---------------------------------------------------------------------------------------------------------------
Arch Communications Group, Inc., 0%/10.875% Sr. Disc. Nts., 3/15/08(12) 5,170,000 2,688,400
---------------------------------------------------------------------------------------------------------------
Brooks Fiber Properties, Inc., 0%/10.875% Sr. Disc. Nts., 3/1/06(5)(12) 3,700,000 1,988,750
---------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/13% Sr. Disc. Nts., 6/15/05(5)(12) 2,000,000 1,430,000
---------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.,
Zero Coupon Sr. Disc. Nts., 12.192%, 8/15/00(9) 17,365,000 10,853,125
---------------------------------------------------------------------------------------------------------------
Comcast Cellular Corp., Zero Coupon Nts., Series B, 6.23%, 3/5/00(9) 7,400,000 5,106,000
---------------------------------------------------------------------------------------------------------------
Comunicacion Celular SA, 0%/13.125% Sr. Deferred Coupon Bonds, 11/15/03(12) 5,000,000 3,225,000
---------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts., 12/15/05(5)(12) 1,400,000 1,387,750
---------------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Bonds, 12/15/05(12) 11,200,000 6,496,000
---------------------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(12) 13,788,000 12,995,190
---------------------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc., Units (each unit consists of
$1,000 principal amount of 0%/13% sr. disc. nts.,
4/15/03 and one warrant to purchase 1.8645 common stock)(5)(12)(15) 4,745,000 2,680,925
---------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp., 0%/14% Sr. Disc. Nts., 5/15/02(12) 2,950,000 1,054,625
---------------------------------------------------------------------------------------------------------------
IntelCom Group (USA), Inc.:
0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(5)(12) 8,090,000 4,429,275
0%/13.50% Sr. Disc. Nts., 9/15/05(12) 13,840,000 8,338,600
---------------------------------------------------------------------------------------------------------------
InterCel, Inc., 0%/12% Sr. Disc. Nts., 5/1/06(12) 7,200,000 3,960,000
---------------------------------------------------------------------------------------------------------------
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts., 1/15/06(12) 2,975,000 1,807,313
0%/9.375% Sr. Disc. Nts., 1/15/04(12) 8,520,000 6,475,200
---------------------------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc.:
9% Cv. Sub. Nts., 6/1/06(5) 630,000 743,400
Units (each unit consists of $1,000 principal amount of 0%/14% sr. disc. nts.,
6/1/04 and one warrant to purchase 34 ordinary shares)(5)(12)(15) 4,350,000 3,436,500
---------------------------------------------------------------------------------------------------------------
PriCellular Wireless Corp.:
0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(12) 11,050,000 8,784,750
0%/14% Sr. Sub. Disc. Nts., 11/15/01(12) 4,773,000 4,343,430
---------------------------------------------------------------------------------------------------------------
Rogers Cantel, Inc., 9.375% Sr. Sec. Debs., 6/1/08 3,000,000 2,917,500
---------------------------------------------------------------------------------------------------------------
Teleport Communications Group, Inc., 0%/11.125% Sr. Disc. Nts., 7/1/07(3)(12) 9,450,000 5,504,625
---------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II:
14% Sr. Nts., 11/1/04 2,000,000 2,310,000
9.50% Sr. Nts., 2/1/04 312,000 290,160
---------------------------------------------------------------------------------------------------------------
Western Wireless Corp., 10.50% Sr. Sub. Nts., 6/1/06 6,610,000 6,618,263
-------------
124,424,431
-------------
Total Corporate Bonds and Notes (Cost $1,046,534,731) 1,044,818,103
</TABLE>
14 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
===================================================================================================================================
Common Stocks--1.1%
- -----------------------------------------------------------------------------------------------------------------------------------
American Communications Services, Inc.(16) 9,500 $ 123,500
---------------------------------------------------------------------------------------------------------------
American Telecasting, Inc.(16) 14,000 185,500
---------------------------------------------------------------------------------------------------------------
Digicon, Inc.(16) 4,930 82,577
---------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A(16) 23,105 652,716
---------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(10) 1,350 1,350,000
---------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(10)(16) 39,357 98,392
---------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc.(16) 4,266 58,658
---------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., Cl. A(16) 96,000 750,000
---------------------------------------------------------------------------------------------------------------
Grand Union Co.(16) 144,928 942,032
---------------------------------------------------------------------------------------------------------------
Great Bay Power Corp.(16) 46,533 343,181
---------------------------------------------------------------------------------------------------------------
Griffin Gaming & Entertainment, Inc.(16) 56,538 876,339
---------------------------------------------------------------------------------------------------------------
Gulfstream Housing Corp.(16) 844,536 --
---------------------------------------------------------------------------------------------------------------
Hollywood Casino Corp.(16) 90,836 624,497
---------------------------------------------------------------------------------------------------------------
IntelCom Group, Inc.(16) 33,200 830,000
---------------------------------------------------------------------------------------------------------------
LTV Corp. 958 10,897
---------------------------------------------------------------------------------------------------------------
New World Communications Group, Inc., Cl. B(16) 18,225 266,541
---------------------------------------------------------------------------------------------------------------
Omnipoint Corp. (10)(16) 200,000 4,940,000
---------------------------------------------------------------------------------------------------------------
People's Choice TV Corp.(16) 7,800 142,350
---------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.(10)(14)(16) 1,688,400 52,763
---------------------------------------------------------------------------------------------------------------
Resorts International, Inc.(16) 187,187 --
---------------------------------------------------------------------------------------------------------------
Southland Corp.(16) 5,800 17,581
---------------------------------------------------------------------------------------------------------------
Teleport Communications Group, Inc., Cl. A(16) 12,900 246,713
---------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc.(10)(16) 370,500 370,500
---------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Cl. A(16) 45,400 624,250
---------------------------------------------------------------------------------------------------------------
Walter Industries, Inc.(16) 153,716 2,171,239
---------------------------------------------------------------------------------------------------------------
Zale Corp.(16) 10,113 170,657
------------
Total Common Stocks (Cost $17,608,196) 15,930,883
===================================================================================================================================
Preferred Stocks--2.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8.50% Cum. Cv., Series I 176,000 4,576,000
---------------------------------------------------------------------------------------------------------------
California Federal Bank, 10.625% Non-Cum., Series B 21,040 2,303,880
---------------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C(5)(17) 390,000 4,036,500
---------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 11.40% Series A Preferred Stock(17) 14,500 1,522,500
---------------------------------------------------------------------------------------------------------------
First Nationwide Bank, 11.50% Non-Cum. 108,300 11,858,850
---------------------------------------------------------------------------------------------------------------
K-III Communications Corp., $11.625 Exchangeable, Series B(17) 15,907 1,602,699
---------------------------------------------------------------------------------------------------------------
SDW Holdings Corp., 15% Cum. Sr. Exchangeable Preferred Stock(5)(16) 61,880 1,949,220
---------------------------------------------------------------------------------------------------------------
Unisys Corp., $3.75 Cv., Series A 29,400 896,700
---------------------------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $27,000,425) 28,746,349
</TABLE>
15 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
Market Value
Units See Note 1
<S> <C> <C>
===================================================================================================================================
Rights, Warrants and Certificates--0.7%
- -----------------------------------------------------------------------------------------------------------------------------------
American Communications Services, Inc. Wts., Exp 11/05(5) 2,575 $ 257,500
---------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99 40,000 240,000
---------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Certificates, Series AG-7A(10) 326,800 3,268
Litigation Trust(10) 1,045,990 10,460
---------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(10) 125,000 31,250
---------------------------------------------------------------------------------------------------------------
Casino America, Inc. Wts., Exp. 11/96 13,052 --
---------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc. Wts., Exp. 8/03 12,305 184,575
---------------------------------------------------------------------------------------------------------------
Communication Cellular SA Wts., Exp. 11/03(5) 5,000 25,000
---------------------------------------------------------------------------------------------------------------
Digicon, Inc. Wts., Exp. 7/96 1,657 52
---------------------------------------------------------------------------------------------------------------
Federated Department Stores, Inc.:
Cl. C Wts., Exp. 12/99 69,654 957,742
Cl. D Wts., Exp. 12/01 69,654 957,742
---------------------------------------------------------------------------------------------------------------
Furniture Brands International, Inc., Series 1 Wts., Exp. 8/99 32,716 102,238
---------------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 7/96 163,894 1,280,422
---------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02(5) 6,000 --
---------------------------------------------------------------------------------------------------------------
IntelCom Group, Inc. Wts., Exp. 9/05(5) 50,820 978,285
---------------------------------------------------------------------------------------------------------------
Jewel Recovery LP, Participation Units of Limited Partners' Interest 10,113 --
---------------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00 32,000 790,400
---------------------------------------------------------------------------------------------------------------
People's Choice TV Corp. Wts., Exp. 6/00 8,580 8,580
---------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03 182,000 2,707,250
Exp. 6/05 49,120 626,280
---------------------------------------------------------------------------------------------------------------
Republic Health Corp. Wts., Exp. 4/00 3,763 --
---------------------------------------------------------------------------------------------------------------
SDW Holdings Corp., Cl. B Wts., Exp. 12/06(5) 6,188 80,444
---------------------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96(5) 534 27
---------------------------------------------------------------------------------------------------------------
Trizec Corp. Wts., Exp. 7/99 16,277 13,707
---------------------------------------------------------------------------------------------------------------
UGI Corp. Wts., Exp. 3/98 63,583 3,179
---------------------------------------------------------------------------------------------------------------
Total Rights, Warrants and Certificates (Cost $2,242,708) 9,258,401
Face
Amount(1)
===================================================================================================================================
Structured Instruments--2.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch,
14% CD Linked Nts., 12/17/96 (indexed to the cross
currency rates of Greek Drachma and European Currency Unit) $ 3,500,000 3,505,600
---------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, New York Branch, 5.60%
CD Linked Nts., 1/30/97 (indexed to the closing Nikkei 225 Index on
1/23/97, 10 yr. Japanese Yen swap rate & New Zealand Dollar on 1/28/97) NZD 1,508,523 1,119,690
---------------------------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, New York Branch, 14%
CD Linked Nts., 11/25/96 (indexed to the cross currency rates of
Greek Drachma and European Currency Unit) 7,000,000 6,869,100
---------------------------------------------------------------------------------------------------------------
Internationale Nederlanden Bank NV, Prague Branch, Zero Coupon
Promissory Nts., 10.516%, 4/28/97(9) CZK 92,000,000 3,074,451
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.638%,
1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon, 1/2/97)(9) 1,600,000 1,508,320
</TABLE>
16 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
Structured Instruments
(continued)
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.886%,
1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon, 1/2/97)(9) $ 1,500,000 $ 1,414,050
---------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts., 12.61%,
1/3/97 (indexed to the Brazilian National Treasury Nts., Zero Coupon, 1/2/97)(9) 1,500,000 1,414,050
---------------------------------------------------------------------------------------------------------------
Swiss Bank Corp., New York Branch, 6.05% CD Linked Nts., 6/20/97
(indexed to the closing Nikkei 225 Index on 1/23/97 5 yr. & 3 mos.
Japanese Yen Swap rate & New Zealand Dollar) 4,300,000 4,343,645
---------------------------------------------------------------------------------------------------------------
United Mexican States Linked Nts. (indexed to the greater of
Cetes Option Amount or USD LIBOR Option Amount, 11/27/96) 3,300,000 3,828,000
------------
Total Structured Instruments (Cost $26,487,249) 27,076,906
===================================================================================================================================
Repurchase Agreement--3.5%
- -----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Canadian Imperial Bank of Commerce,
5.45%, dated 6/28/96, to be repurchased at $47,721,664 on 7/1/96,
collateralized by U.S. Treasury Bonds, 9.125%--11 25%, 2/15/15--5/11/18,
with a value of $16,861,371, and U.S. Treasury Nts., 5.25%--8.50%,
1/11/97--11/15/04, with a value of $31,865,741 (Cost $47,700,000) 47,700,000 47,700,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,366,952,644) 100.7% 1,381,470,204
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.7) (10,120,075)
------- ---------------
Net Assets 100.0% $ 1,371,350,129
======= ===============
1. Face amount is reported in U.S. Dollars, except for those denoted in the following currencies:
AUD--Australian Dollar ESP--Spanish Peseta JPY--Japanese Yen
CAD--Canadian Dollar GBP--British Pound Sterling NZD--New Zealand Dollar
CZK--Czech Koruna IDR--Indonesian Rupiah PLZ--Polish Zloty
DEM--German Deutsche Mark IEP--Irish Punt PTE--Portuguese Escudo
DKK--Danish Krone ITL--Italian Lira SEK--Swedish Krona
2. Interest-Only Strips represent the right to receive the monthly interest payments on an
underlying pool of mortgage loans. These securities typically decline in price as interest rates
decline. Most other fixed-income securities increase in price when interest rates decline. The
principal amount of the underlying pool represents the notional amount on which current interest
is calculated. The price of these securities is typically more sensitive to changes in prepayment
rates than traditional mortgage-backed securities (for example, GNMA pass-throughs). Interest
rates disclosed represent current yields based upon the current cost basis and estimated timing
and amount of future cash flows.
3. When-issued security to be delivered and settled after June 30, 1996.
4. Represents the current interest rate for a variable rate security.
5. Represents a security sold under Rule 144A, which is exempt from registration under the
Securities Act of 1933, as amended. This security has been determined to be liquid under
guidelines established by the Board of Trustees. These securities amount to $81,427,528 or 5.94%
of the Fund's net assets at June 30, 1996.
6. Indexed instrument for which the principal amount and/or interest due at maturity is affected
by the relative value of a foreign index.
</TABLE>
17 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Investments (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
7. A sufficient amount of liquid assets has been designated to cover outstanding written call
options, as follows:
Face Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OTC Australian Dollar Call Option 1,840,000 7/3/96 $ 1.25 $ 13,984 $ 1,472
--------------------------------------------------------------------------------------------------------------
OTC Czech Koruna/U.S
Dollar Call Option 4,380,000 9/6/96 28.357 58,692 107,879
--------------------------------------------------------------------------------------------------------------
OTC Mexican Peso Call Option 2,960,000 8/5/96 8.03 79,624 105,365
--------------------------------------------------------------------------------------------------------------
OTC Morocco (Kingdom of) Loan
Participation Agreement Call Option 3,500,000 7/12/96 71.25 33,250 43,050
------- --------
$185,550 $257,766
======== ========
8. Represents the current interest rate for an increasing rate security.
9. For zero coupon bonds, the interest rate shown is the effective yield on the date of purchase.
10. Identifies issues considered to be illiquid--See Note 8 of Notes to Financial Statements.
11. Securities with an aggregate market value of $6,886,291 are held in collateralized accounts
to cover initial margin requirements on open futures sales contracts. See Note 6 of Notes to
Financial Statements.
12. Denotes a step bond: a zero coupon bond that converts to a fixed rate of interest at a
designated future date.
13. Non-income producing--issuer is in default of interest payment.
14. Affiliated company. Represents ownership of at least 5% of the voting securities of the
issuer and is or was an affiliate, as defined in the investment Company Act of 1940, at or during
the period ended June 30, 1996. The aggregate fair value of all securities of affiliated
companies as of June 30, 1996 amounted to $89,983. Transactions during the period in which the
issuer was an affiliate are as follows:
Balance June 30, 1995 Gross Additions Gross Reductions Balance June 30, 1996 Dividend/
---------------------- ------------------ ------------------ --------------------- Interest
Stocks Shares/Face Cost Shares/Face Cost Shares/Face Cost Shares/Face Cost Income
- ------------------------------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc. 1,688,400 $1,114,384 -- $ -- -- $ -- 1,688,400 $1,114,384 $ --
Bonds and Notes
- ------------------------------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.,
7% Sr. Nts., 5/15/98 5,955,189 4,662,420 -- -- -- -- 5,955,189 4,662,420 --
---------- ---------- ---------- ---------- ---------
$5,776,804 $ -- $ -- $5,776,804 $ --
========== ========== ========== ========== =========
15. Units may be comprised of several components, such as debt and equity and/or warrants to
purchase equity at some point in the future. For units which represent debt securities, face
amount disclosed represents total underlying principal.
16. Non-income producing security.
17. Interest or dividend is paid in kind.
See accompanying Notes to Financial Statements.
</TABLE>
18 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilites June 30, 1996
<S> <C>
===================================================================================================================================
Assets Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,361,175,840) $1,381,380,221
Affiliated companies (cost $5,776,804) 89,983
---------------------------------------------------------------------------------------------------------------
Cash 339,927
---------------------------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5 455,452
---------------------------------------------------------------------------------------------------------------
Receivables:
Interest, dividends and principal paydowns 24,121,863
Shares of beneficial interest sold 8,838,437
Investments sold 7,495,406
Closed forward foreign currency exchange contracts 108,643
---------------------------------------------------------------------------------------------------------------
Other 47,452
-------------
Total assets 1,422,877,384
===================================================================================================================================
Liabilities Unrealized depreciation on forward foreign currency exchange contracts--Note 5 85,846
---------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $185,550)--see accompanying statement--Note 7 257,766
---------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $37,306,105 purchased on a when-issued basis)--Note 1 40,612,215
Dividends 4,769,682
Shares of beneficial interest redeemed 4,216,948
Distribution and service plan fees 714,654
Daily variation on futures contracts--Note 6 400,121
Closed forward foreign currency exchange contracts 86,804
Transfer and shareholder servicing agent fees 73,838
Trustees' fees 4,407
Other 304,974
--------------
Total liabilities 51,527,255
===================================================================================================================================
Net Assets $1,371,350,129
==============
===================================================================================================================================
Composition of
Net Assets
Paid-in capital $1,566,202,269
---------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (2,519,975)
---------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (206,188,005)
---------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 13,855,840
--------------
Net assets $1,371,350,129
==============
===================================================================================================================================
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $1,083,913,133
and 80,210,953 shares of beneficial interest outstanding) $ 13.51
Maximum offering price per share (net asset value plus sales charge of 4.75% of offering price) $ 14.18
---------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $279,789,186 and 20,835,599 shares of beneficial interest outstanding) $ 13.43
---------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $7,647,810 and 566,325 shares of beneficial interest outstanding) $ 13.50
See accompanying Notes to Financial Statements
</TABLE>
19 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations For the Year Ended June 30, 1996
<S> <C>
===================================================================================================================================
Investment Income Interest (net of foreign withholding taxes of $13,554) $139,098,481
---------------------------------------------------------------------------------------------------------------
Dividends 2,221,658
------------
Total income 141,320,139
===================================================================================================================================
Expenses Management fees--Note 4 8,502,884
---------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,226,304
Class B 2,363,575
Class C 22,282
---------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,470,988
---------------------------------------------------------------------------------------------------------------
Shareholder reports 514,981
---------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 305,724
---------------------------------------------------------------------------------------------------------------
Legal and auditing fees 94,089
---------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 59,918
---------------------------------------------------------------------------------------------------------------
Insurance expenses 39,842
---------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class B 28,287
Class C 2,472
---------------------------------------------------------------------------------------------------------------
Other 62,416
------------
Total expenses 15,693,762
===================================================================================================================================
Net Investment Income 125,626,377
===================================================================================================================================
Realized and Unrealized
Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 17,382,314
Closing of futures contracts (2,173,241)
Closing and expiration of options written (247,438)
Foreign currency transactions (384,019)
------------
Net realized gain 14,577,616
---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 13,483,995
Translation of assets and liabilities denominated in foreign currencies (132,672)
------------
Net change 13,351,323
------------
Net realized and unrealized gain 27,928,939
------------
Net Increase in Net Assets Resulting From Operations $153,555,316
============
See accompanying Notes to Financial Statements.
</TABLE>
20 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Year Ended June 30,
1996 1995
===================================================================================================================================
<S> <C> <C>
Operations Net investment income $125,626,377 $110,729,752
---------------------------------------------------------------------------------------------------------------
Net realized gain (loss) 14,577,616 (57,178,186)
---------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 13,351,323 26,763,120
-------------- --------------
Net increase in net assets resulting from operations 153,555,316 80,314,686
===================================================================================================================================
Dividends and
Distributions
To Shareholders
Dividends from net investment income:
Class A (103,496,917) (98,284,579)
Class B (20,649,798) (11,983,690)
Class C (185,655) --
---------------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A -- -- (998,196)
Class B -- -- (181,114)
===================================================================================================================================
Beneficial Interest
Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions--Note 2:
Class A (1,432,524) 40,387,389
Class B 82,693,557 107,007,443
Class C 7,649,000 --
===================================================================================================================================
Net Assets Total increase 118,132,979 116,261,939
---------------------------------------------------------------------------------------------------------------
Beginning of period 1,253,217,150 1,136,955,211
-------------- --------------
End of period (including overdistributed net investment income
of $2,519,975 and $3,769,638, respectively) $1,371,350,129 $1,253,217,150
============== ==============
See accompanying Notes to Financial Statements.
</TABLE>
21 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
Class A
------------------------------------------------------------------------------
Year Ended June 30,
1996 1995 1994 1993 1992
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $13.22 $13.63 $14.16 $13.76 $13.08
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.29 1.30 1.42 1.60 1.79
Net realized and unrealized gain (loss) .27 (.40) (.54) .36 .68
---------- ---------- ---------- ---------- --------
Total income from investment
operations 1.56 .90 .88 1.96 2.47
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.27) (1.30) (1.41) (1.56) (1.79)
Tax return of capital distribution -- (.01) -- -- --
---------- ---------- ---------- ---------- --------
Total dividends and distributions
to shareholders (1.27) (1.31) (1.41) (1.56) (1.79)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.51 $13.22 $13.63 $14.16 $13.76
========== ========== ========== ========== ========
===================================================================================================================================
Total Return, at Net Asset Value(3) 12.25% 7.09% 6.27% 15.31% 20.06%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $1,083,913 $1,060,752 $1,049,446 $1,119,056 $902,562
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,092,002 $1,005,746 $1,111,103 $ 978,671 $768,339
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.59% 9.81% 10.10% 11.59% 13.15%
Expenses 1.03% 1.03% 0.96% 0.97% 0.92%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 104.9% 93.7% 96.7% 87.2% 64.0%
<CAPTION>
Class B Class C
---------------------------------------------------------- ----------
Period
Ended
Year Ended June 30, June 30,
1996 1995 1994 1993(2) 1996(1)
<S> <C> <C> <C> <C> <C>
===================================================================================================================================
Per Share Operating Data:
Net asset value, beginning of period $13.15 $13.57 $14.12 $13.87 $13.30
- -----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.18 1.20 1.35 .23 .77
Net realized and unrealized gain (loss) .27 (.42) (.60) .27 .19
---------- ---------- ---------- ---------- --------
Total income from investment
operations 1.45 .78 .75 .50 .96
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.17) (1.19) (1.30) (.25) (.76)
Tax return of capital distribution -- (.01) -- -- --
---------- ---------- ---------- ---------- --------
Total dividends and distributions
to shareholders (1.17) (1.20) (1.30) (.25) (.76)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.43 $13.15 $13.57 $14.12 $13.50
========== ========== ========== ========== ========
===================================================================================================================================
Total Return, at Net Asset Value(3) 11.40% 6.21% 5.31% 3.54% 7.36%
===================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $279,789 $192,465 $87,509 $10,493 $7,648
- -----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $236,362 $134,550 $51,816 $ 4,405 $3,378
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.75% 8.95% 8.98% 10.84%(4) 8.41%(4)
Expenses 1.84% 1.84% 1.88% 2.28%(4) 1.90%(4)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 104.9% 93.7% 96.7% 87.2% 104.9%
</TABLE>
1. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
2. For the period from May 3, 1993 (inception of offering) to June 30, 1993.
3. Assumes a 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.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1996 were $1,387,208,016 and $1,318,582,145, respectively.
See accompanying Notes to Financial Statements.
22 Oppenheimer High Yield Fund
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer High Yield Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek a high level of
current income primarily through investing in a diversified portfolio of
high-yield fixed income securities. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge. Class B and
Class C shares may be subject to a contingent deferred sales charge. All three
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution and/or service plan,
expenses directly attributable to a particular class and exclusive voting rights
with respect to matters affecting a single class. Class B shares will
automatically convert to Class A shares six years after the date of purchase.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
asked price 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 the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by the
Board of Trustees to determine fair value in good faith. Short-term "money
market type" debt securities having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount. Forward foreign currency exchange contracts
are valued based on the closing prices of the forward currency contract rates in
the London foreign exchange markets on a daily basis as provided by a reliable
bank or dealer. 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 or asked
price closest to the last reported sale price is used.
- --------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During the
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of June 30, 1996, the
Fund had entered into outstanding when-issued or forward commitments of
$37,306,105.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Fund may enter into mortgage "dollar-rolls" in
which the Fund sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The Fund records each dollar-roll as a sale and a new purchase
transaction.
- --------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At June 30, 1996, securities with an
aggregate market value of $3,065,630, representing 0.22% of the Fund's net
assets, were in default.
- --------------------------------------------------------------------------------
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 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.
23 Oppenheimer High Yield Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
1. Significant
Accounting Policies
(continued)
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, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and 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. At June 30, 1996, the Fund
had available for federal income tax purposes an unused capital loss carryover
of approximately $193,339,000, which expires between 1997 and 2004.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
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 the distributions made during the year from net investment income
or net realized gains may differ from their 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 year that the
income or realized gain (loss) was recorded by the Fund.
During the year ended June 30, 1996, the Fund changed the classification of
distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. During the year ended June 30, 1996, amounts have been
reclassified to reflect an increase in overdistributed net investment income of
$44,344. Accumulated net realized loss on investments was decreased by the same
amount.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and options written and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes. Dividends in kind are
recognized as income on the ex-dividend date, at the current market value of the
underlying security. Interest on payment-in-kind debt instruments is accrued as
income at the coupon rate and a market adjustment is made periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
24 Oppenheimer High Yield Fund
<PAGE>
================================================================================
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended June 30, 1996(1) Year Ended June 30, 1995
--------------------------------- --------------------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
====================================================================================================================================
Class A:
Sold 19,901,989 $ 267,392,441 19,902,935 $ 270,466,315
Dividends reinvested 4,497,586 60,481,931 4,217,534 45,347,591
Redeemed (24,448,371) (329,306,896) (20,862,882) (275,426,517)
----------- ------------ ----------- ------------
Net increase (decrease) (48,796) $ (1,432,524) 3,257,587 $ 40,387,389
=========== ============ =========== ============
Class B:
Sold 11,155,284 $ 149,169,252 10,963,657 $ 143,405,028
Dividends reinvested 730,103 9,766,261 431,770 5,641,548
Redeemed (5,689,226) (76,241,956) (3,205,114) (42,039,133)
----------- ------------ ----------- ------------
Net increase 6,196,161 $ 82,693,557 8,190,313 $ 107,007,443
=========== ============ =========== ============
Class C:
Sold 870,562 $ 11,774,656 -- $ --
Dividends reinvested 8,861 120,139 -- --
Redeemed (313,098) (4,245,795) -- --
----------- ------------ ----------- ------------
Net increase 566,325 $ 7,649,000 -- $ --
=========== ============ =========== ============
</TABLE>
1. For the year ended June 30, 1996 for Class A and Class B shares and for the
period from November 1, 1995 (inception of offering) to June 30, 1996 for Class
C shares.
================================================================================
3. Unrealized Gains
And Losses on
Investments
At June 30, 1996, net unrealized appreciation on investments and options written
of $14,445,344 was composed of gross appreciation of $53,064,831, and gross
depreciation of $38,619,487.
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% on the first
$200 million of average annual net assets with a reduction of 0.03% on each $200
million thereafter to $800 million, 0.60% on the next $200 million and 0.50% on
net assets in excess of $1 billion. The Manager has agreed to reimburse the Fund
if aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended June 30, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $2,823,797, of which $688,648 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $4,015,481 and $71,787, of which $54,698 was paid to an
affiliated broker/dealer for Class B shares. During the year ended June 30,
1996, OFDI received contingent deferred sales charges of $765,717 upon
redemption of Class B shares as reimbursement for sales commissions advanced by
OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and share holder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the average annual net
assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the year ended June 30, 1996, OFDI paid $30,542 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class B shares to reimburse OFDI for its services and costs in distributing
Class B shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B shares that are
outstanding for 6 years or less. OFDI also receives a service fee of 0.25% per
year to reimburse dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual
25 Oppenheimer High Yield Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
4. Management Fees
And Other Transactions
With Affiliates
(continued)
net assets of Class B shares, determined as of the close of each regular
business day. If the Plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to OFDI for
certain expenses it incurred before the Plan was terminated. During the year
ended June 30, 1996, OFDI paid $4,093 to an affiliated broker/dealer as
reimbursement for Class B personal service and maintenance expenses and retained
$2,017,065 as reimbursement for Class B sales commissions and service fee
advances, as well as financing costs. As of June 30, 1996, OFDI had incurred
unreimbursed expenses of $10,766,237 for Class B.
The Fund has adopted a compensation type Distribution and Service Plan for
Class C shares to compensate OFDI for its services and costs in distributing
Class C shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class C shares. Both fees are computed
on the average annual net assets of Class C shares, determined as of the close
of each regular business day. If the Plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before the Plan was terminated.
During the year ended June 30, 1996, OFDI retained $22,282 as compensation for
Class C sales commissions and service fee advances, as well as financing costs.
As of June 30, 1996, OFDI had incurred unreimbursed expenses of $135,220 for
Class C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks.
They may also be used to tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon the purchase or sale of
a security denominated in a foreign currency. In addition, the Fund may enter
into such contracts as a hedge against changes in foreign currency exchange
rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will realize a gain or loss
upon the closing or settlement of the forward transaction.
Securities are held in segregated accounts to cover net exposure on
outstanding forward contracts. Unrealized appreciation or depreciation on
forward contracts is reported in the Statement of Assets and Liabilities.
Realized gains and losses are reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
Risks include the potential inability of the counterparty to meet the terms
of the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
At June 30, 1996, the Fund had outstanding forward contracts to purchase and
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Contract Valuation as of Unrealized Unrealized
Contracts to Purchase Exchange Date Amount (000s) June 30, 1996 Appreciation Depreciation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Italian Lira (ITL) 5/9/97 6,166,265 ITL $ 3,945,355 $ 77,225 $ --
Contracts to Sell
- ------------------------------------------------------------------------------------------------------------------------------------
Japanese Yen (JPY) 12/18/96--4/14/97 334,675 JPY $ 3,158,346 $ 194,332 $ --
Swiss Francs (CHF) 7/18/96--5/9/97 32,916 CHF 26,638,266 183,895 85,846
------------ ---------- --------
$ 29,796,612 378,227 85,846
============ ---------- --------
Total Appreciation and Depreciation $ 455,452 $ 85,846
========== ========
</TABLE>
================================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
26 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
6. Futures Contracts
(continued)
Securities held in collateralized accounts to cover initial margin requirements
on open futures contracts are noted in the Statement of Investments. The
Statement of Assets and Liabilities reflects a receivable or payable for the
daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At June 30, 1996, the Fund had outstanding futures contracts to sell debt
securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Contracts to Sell Expiration Date Futures Contracts June 30, 1996 Depreciation
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Notes 9/96 776 $82,062,000 $942,203
</TABLE>
================================================================================
7. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the year ended June 30, 1996 was as follows:
<TABLE>
<CAPTION>
Call Options
-----------------------------------------
Number of Amount of
Options Premiums
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at June 30, 1995 -- $ --
- ------------------------------------------------------------------------------------------------------------------------------------
Options written 26,475,298 660,646
- ------------------------------------------------------------------------------------------------------------------------------------
Options closed or expired (13,674,013) (445,385)
- ------------------------------------------------------------------------------------------------------------------------------------
Options exercised (3,617,785) (29,711)
----------- -----------
Options outstanding at June 30, 1996 9,183,500 $ 185,550
=========== ===========
</TABLE>
================================================================================
8. Illiquid and
Restricted Securities
At June 30, 1996, investments in securities included issues that are illiquid or
restricted. The 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 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 from time to time) in illiquid or restricted securities.
The aggregate value of these securities subject to this limitation at June 30,
1996 was $27,953,760, which represents 2.04% of the Fund's net assets.
Information concerning these securities is as follows:
27 Oppenheimer High Yield Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
8. Illiquid and
Restricted Securities
(continued)
<TABLE>
<CAPTION>
Valuation
Per Unit
as of
Security Acquisition Date Cost Per Unit June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Algeria (Republic of) Reprofiled Debt Loan Participation, Tranche A,
6.812%, 9/4/06 3/13/96--3/21/96 $ 54.75 $ 59.69
- ------------------------------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Certificates, Series Ag-7A 12/30/92 -- .01
Litigation Trust 12/30/92 -- .01
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A, 11/15/00 11/18/93 100.00 65.00
- ------------------------------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 2.00 .25
- ------------------------------------------------------------------------------------------------------------------------------------
Businessland, Inc., 5.50% Sub. Debs., 3/1/07 9/20/91--1/13/92 52.17 55.00
- ------------------------------------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A, 11/15/00 11/18/93--12/15/95 87.50 70.00
- ------------------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds,
6.563%, 7/1/01 12/5/95 92.00 93.25
- ------------------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.:
14% Sub. Nts., 6/10/02 4/14/92--3/3/93 100.00 110.00
Common Stock 4/14/92 1,000.00 1,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc. Common Stock 12/16/94 1.50 2.50
- ------------------------------------------------------------------------------------------------------------------------------------
Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 8/26/92--12/23/92 102.17 105.37
- ------------------------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.,
Tranche B, 6.312%, 11/15/04 3/12/96 71.75 78.25
- ------------------------------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03 2/5/93--10/31/95 92.50 20.50
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-American Waste Systems, Inc., 12.25% Sr. Sub. Nts., 2/15/03 4/19/95--3/15/96 102.00 65.50
- ------------------------------------------------------------------------------------------------------------------------------------
OmniPoint Corp. Common Stock 1/26/96 16.00 24.70
- ------------------------------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.:
7% Sr. Nts., 5/15/98 12/8/88--5/22/95 73.92 .63
Common Stock 12/5/88 .66 .03
- ------------------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. Common Stock 5/2/94 9.50 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement:
Tranche A, 1.772%, 9/30/00 12/13/95--4/1/96 .83 .78
Tranche B, 1.772%, 9/30/00 12/13/95--4/3/96 .81 .78
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to be liquid and are not included within the 10%
limitation specified above.
28 Oppenheimer High Yield Fund
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders of Oppenheimer High Yield Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer High Yield Fund as of June 30,
1996, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1996 and 1995,
and the financial highlights for the period July 1, 1991 to June 30, 1996. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 at June 30,
1996 by correspondence with the custodian and brokers; where replies were not
received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer High
Yield Fund at June 30, 1996, the results of its operations, the changes in its
net assets, and the financial highlights for the respective stated periods, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
July 22, 1996
29 Oppenheimer High Yield Fund
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended June 30, 1996 which
are not designated as capital gain distributions should be multiplied by 1.36%
to arrive at the net amount eligible for the corporate dividend-received
deduction.
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.
30 Oppenheimer High Yield Fund
<PAGE>
Oppenheimer High Yield Fund
- ------
Officers and Trustees
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Ralph W. Stellmacher, Vice President
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
Servicing Agent
OppenheimerFunds Services
================================================================================
Custodian of
Portfolio Securities
The Bank of New York
================================================================================
Independent Auditors
Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppenheimer High Yield Fund. This
report must be preceded or accompanied by a Prospectus of Oppenheimer High Yield
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, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
31 Oppenheimer High Yield Fund
<PAGE>
[BACK COVER]
Information
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Saturday 10 a.m.-2 p.m. ET
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August 31, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
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And when you need help, our Customer Service Representatives are only a
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When you want to make a transaction, you can do it easily by calling our
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For added convenience, you can get automated information with OppenheimerFunds
PhoneLink service, available 24 hours a day, 7 days a week. PhoneLink gives you
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You can count on us whenever you need assistance. That's why the International
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So call us today--we're here to help.
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- ---------------------------------------------
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