Annual Report June 30, 1997
OPPENHEIMER
HIGH
YIELD FUND
[GRAPHIC OMITTED]
[Oppenheimer Logo]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview
with the Fund's Managers
11 Statement of Investments
30 Statement of
Assets &
Liabilities
32 Statement of Operations
33 Statements of Changes in
Net Assets
34 Financial Highlights
36 Notes to Financial
Statements
45 Independent Auditors' Report
46 Federal
Income Tax
Information
47 Officers & Trustees
48 Information &
Services
Report highlights
- --------------------------------------------------------------------------------
o During the past 12 months, each fixed-income class in the portfolio
outperformed its relevant benchmark. As a result, the Fund continued to provide
competitive returns.
o Activity in the bond market over the past year was volatile. However,
ultimately all the ups and downs in the market resulted in positive performance
as of June 30, 1997.
o Mergers and acquisitions in the broadcasting and energy industries boosted the
returns of the Fund's investments in these areas.
o The outlook: We believe that although valuations in the financial markets
may be high, factors conducive to rising corporate profits remain in place,
including moderate economic growth and low interest rates that enable companies
to borrow the capital necessary to increase productivity.
- -------------------------------
Total Returns
- -------------------------------
For the Period Ended 6/30/97(1)
Class A
6 months 1 year
- -------------------------------
4.45% 13.10%
- -------------------------------
Class B
6 months 1 year
- -------------------------------
4.01% 12.18%
- -------------------------------
Class C
6 months 1 year
- -------------------------------
4.05% 12.23%
- -------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account. Total returns for the six-month period are cumulative and are not
annualized.
2 Oppenheimer High Yield Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO]
James C. Swain
Chairman
Oppenheimer
High Yield Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
High Yield Fund
We would like to welcome you to the premier issue of our newly redesigned
shareholder reports. As you can see, we've changed the format to allow easier
access to the information you need to monitor your investments. Some notable
additions are "at-a-glance" report highlights and charts that let you quickly
assess how your Fund has performed. On the following pages, your portfolio team
discuss their current investment thinking, your Fund's strategies, and
performance. Before these commentaries, we'd like to share a few global
observations.
As we consider the world's financial markets over the past six months, some
global trends emerge. For example, inflation has hit its lowest level in three
decades worldwide, which has helped spur many bullish financial markets. The
United States has been a beneficiary of this low-inflation environment, as well
as of a strong dollar, robust corporate earnings and a healthy economy. However,
many financial analysts are now concerned that the United States has reached a
point in the business cycle where earnings could decline because companies are
unable to further reduce costs.
On the other hand, a wave of corporate restructuring throughout Europe has
resulted in some exciting changes and opportunities. Because a similar
restructuring took place in the United States ten years ago, European companies
have been able to enjoy the benefit of hindsight by following our footsteps.
Latin America, too, has begun to shift its economies more toward the U.S.
capitalist model and has reported positive earnings growth along the way.
With major changes occurring in today's economies around the globe, it's
more important than ever to maintain a diversified portfolio across different
countries and market sectors. Now is the time to speak to your financial adviser
to ensure that your assets are allocated properly, so you have the opportunity
to benefit from investments in both domestic and international funds. It's
important to remember that investing abroad can involve greater risk and
expenses--including political and economic uncertainties--and should be
undertaken with a long-term approach in mind.
To keep in touch with our views on the markets, visit our website,
www.oppenheimerfunds.com, where you can access your account information and fund
performance data, 24 hours a day. The site also features prospectuses, timely
market updates and insightful commentaries. Our new shareholder reports and
presence on the Internet are just two examples of our commitment to keeping you
well informed.
Thank you for your confidence in OppenheimerFunds, The Right Way to Invest.
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, 1997
3 Oppenheimer High Yield Fund
<PAGE>
Performance update
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- -------------------------------
Avg Annual Total Returns
- -------------------------------
For the Period Ended 6/30/97(1)
CLASS A
Since
1 year 5 year Inception
- -------------------------------
7.73% 9.67% 9.86%
- -------------------------------
CLASS B
Since
1 year 5 year Inception
- -------------------------------
7.18% N/A 8.93%
- -------------------------------
CLASS C
Since
1 year 5 year Inception
- -------------------------------
11.23% N/A 11.85%
- -------------------------------
Oppenheimer High Yield Fund performed very well over the past twelve months. As
of June 30, 1997 the Fund's Class A shares were ranked ***** among 1,248
(3-year), 677 (5-year) and 283 (10-year) fixed-income funds for the combined 3-,
5-, and 10-year periods ended June 30, 1997 by Morningstar Mutual Funds.(2)
Growth of $10,000
Over ten years
(without sales charge)(3)
Oppenheimer High Yield
Fund Class A Shares
Merrill Lynch High Yield Bond
Master Index
[The following table was originally depicted in the printed version as a
mountain chart]
Growth of $10,000 Over 10 years (without sales charge)(3)
Oppenheimer High Yield Merrill Lynch High Yield
Date Fund Class A Shares Bond Master Index
- --------------------------------------------------------------------------------
6/30/87 $10,000.00 $10,000.00
6/88 $10,674.47 $10,568.77
6/89 $11,632.15 $11,621.78
6/90 $11,731.08 $11,619.10
6/91 $13,127.14 $12,896.22
6/92 $15,760.79 $16,426.72
6/93 $18,173.75 $18,168.93
6/94 $19,313.64 $20,757.78
6/95 $20,682.25 $22,163.48
6/96 $23,215.48 $26,429.61
6/97 $26,257.19 $29,464.41
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 7/28/78. The Fund's maximum
sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 2% (since inception on
5/3/93). Class C returns include the contingent deferred sales charge of 1% for
the 1-year result. An explanation of the different performance calculations is
in the Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge. 2. Source: Morningstar Mutual Funds, 6/30/97.
Morningstar, Inc., ranks mutual funds in broad investment classes, based on
risk-adjusted returns after considering sales charges and expenses. Return and
risk are measured as performance above and below 90-day U.S. Treasury bill
returns, respectively. Current star rankings are based on the weighted average
of 3-, 5- and 10-year (if applicable) rankings for a fund or class and are
subject to change monthly. Top 10%: 5 stars. Next 22.5%: 4 stars. Middle 35%: 3
stars. Next 22.5%: 2 stars. Bottom 10%: 1 star. The Fund is ranked 4 stars
(3-year), 5 stars (5-year) and 5 stars (10-year) weighted 20%/30%/50%,
respectively.
4 Oppenheimer High Yield Fund
<PAGE>
Portfolio review
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Oppenheimer High Yield Fund is for investors
looking for high income and diversification in their portfolio.
WHAT WE LOOK FOR
o Strong management willing to make tough decisions.
o Industries that are currently undervalued or are trading relatively "cheap."
o Improving or expanding businesses in industries with room for growth.
o Changes in the business cycle that might affect corporate profits.
CORPORATE BONDS AND NOTES SECTOR BREAKDOWN (Percentage of net assets)(4)
- --------------------------------------------------------------------------------
Consumer Related 17.6%
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Technology 12.3
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Basic Industry 9.9
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Media 8.0
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Energy 7.8
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Manufacturing 7.0
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Financial Services 3.7
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Other 3.2
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Retail 3.0
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Transportation 2.6
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Housing Related 2.2
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Utilities 1.9
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3. Results of a hypothetical $10,000 investment in Class A shares on June 30,
1987. The Merrill Lynch High Yield Bond Master Index is an unmanaged index
including reinvestment of income, and cannot be purchased directly by investors.
4. Corporate Bonds and Notes represent 79.2% of the Fund's net assets. The
Fund's portfolio is subject to change.
5 Oppenheimer High Yield Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
"Our sizeable
research team
is skilled at
finding companies
that are potential `diamonds in the
rough.'"
How has the Fund performed during the 12-month period ended June 30, 1997?
Oppenheimer High Yield Fund continued to provide attractive returns over the
12-month period ended June 30, 1997. The Fund's Class A shares generated a total
rate of return of 13.10%1 and, for the 30 days ended 6/30/97, a standardized
yield of 8.44%.(2)
How would you characterize the performance of the high-yield bond market over
the period? Although the bond market was volatile over the past year, the net
result was positive. The volatile trading period began back in November of 1996
when the expanding economy caused concern among many investors:Would the economy
expand so much it would trigger higher inflation, or would it simply peak and
then begin a marked slowdown? High-yield bonds performed relatively well during
this period of uncertainty, probably in response to the stock market's gains.(3)
However, by April, it became clearer that the economy was growing
robustly, and widespread inflation fears emerged. To forestall a potential
resurgence of inflation, the Federal Reserve Board raised key short-term
interest rates. Stocks and U.S. government bonds reacted negatively in
anticipation of this shift in monetary policy, and high-yield bonds fell in
response. When investors subsequently realized that inflation was not likely to
be an issue in the foreseeable future, many stocks and bonds recaptured their
previous losses. High-yield bonds also rallied, but not as strongly as other
fixed-income securities.
How was the Fund managed over the past year?
The Fund has been managed cautiously due to our concern over the economy's
position so late in an expansion stage of the business cycle. We've been in this
bull market
6 Oppenheimer High Yield Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Ralph Stellmacher
(Fund Manager)
Scott Scharer
for seven years now, which is a long time, so valuations are high.
Now the markets are moving into uncharted territory. As a result, we've shifted
our assets during the past year to noncyclical industries and economic sectors
that are typically less sensitive to the fluctuations of the economic cycle. For
example, we invested in supermarkets because even when the financial markets
turn or the economy slows, people still shop for groceries. Consumers may scale
back on the specialty items they buy, but food is an essential need, making
supermarkets an attractive investment. Similarly, we also invested more heavily
in energy companies in the oil, gas and energy services industries. These
industries have the benefit of a global presence that helps cushion them against
the fluctuations of the U.S. economy.
During the past twelve months, we also focused on growth areas, in various
industries and countries that should continue to grow even if the U.S. economy
becomes sluggish. Broadcasting proved especially attractive during the past
year, particularly the areas of radio and television, where mergers and
acquisitions boosted the returns of our investments in these areas. Countries
with growing economies, such as the Philippines, were also appealing. And, our
investments in foreign bonds, which
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2. Standardized yield is based on net investment income calculated for the
30-day period ended 6/30/97. Falling net asset values will tend to artificially
raise yields.
3. The Fund may invest without limit in below-investment-grade
securities which carry a greater risk that the issuer may default on principal
or interest payments.
7 Oppenheimer High Yield Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
represented over 18% of net assets, though subject to exchange rate and
political uncertainties, proved to be particularly advantageous when the U.S.
dollar strengthened relative to local currencies.
"...During the past year
we focused on
areas that should
continue to grow..."
Did any bonds in the portfolio perform particularly well during the period? Were
there any notable disappointments?
Several holdings did particularly well. Standouts include companies whose bond
prices rose sharply with the announcement of plans for debt refinancing.
Likewise, U.S. supermarket chains benefited from a general rally as investors in
the supermarket industry responded to a wave of consolidations. In addition,
mergers and acquisitions in the broadcasting and energy industries boosted the
returns of our investments in these areas. Because every sector in our portfolio
outperformed its benchmark, we didn't have many disappointments. However, our
investments in the telecommunications industry performed below expectations.
These companies rely on the capital generated from new investors to finance
growth. But, the increase in interest rates in the first quarter of 1997
tightened the supply of new money and, as a result, these companies didn't have
the capital to finance expansion. This resulted in underperformance during the
period.
How do you manage the risks of high-yield investing?
Primarily, we pay careful attention to how the economy is performing relative to
the business cycle and allocate the portfolio based on this analysis. Different
industries and markets do well in different economic environments. So, we'll
emphasize those areas that work well in both the current environment, as well as
the climate we anticipate in the near future. However, before we decide to
realign the portfolio in any direction, we keep track of what our peers are
doing. In fact, we choose one as a benchmark--a
8 Oppenheimer High Yield Fund
<PAGE>
"neutral" position or "ground zero"--and overweight or underweight in certain
areas relative to its structure.
What characteristics do you look for when evaluating candidates for the Fund?
Our longstanding approach identifies industries that we believe are selling at
prices that do not reflect their true values. The marketplace may have simply
overlooked these companies because they seem unattractive at first glance. But,
our sizeable research team is skilled at digging beneath the surface and finding
those potential "diamonds in the rough" the majority of the market may miss.
For instance, our research might discover an overlooked company with
management that has recently demonstrated the ability to make tough choices to
increase profitability. Or, we'll invest in a company that has a strong,
improving balance sheet, or a recently upgraded credit rating. It's in-depth
research that brings these qualities to light.
What is your outlook for the Fund and the high-yield bond market over the
foreseeable future?
We remain cautiously optimistic. Our caution stems from our concern that
valuations in the financial markets may be too high. On the positive side,
factors conducive to rising corporate profits remain in place, including
moderate economic growth and low interest rates that enable companies to borrow
the capital necessary to increase productivity. On the other hand, experience
tells us that no market rises forever, and that corrections--and more severe
downtrends--inevitably occur from time to time. So while we believe that further
gains are quite possible, we are prepared for the possibility that they may not
materialize. However, we believe that Oppenheimer High Yield Fund continues to
be a particularly attractive investment alternative despite uncertain market
conditions.
"...even if the U.S.
economy becomes
sluggish."
9 Oppenheimer High Yield Fund
<PAGE>
Financials
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10 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==============================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--3.4%
- ----------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg.
Pass-Through Certificates, Series 1997-D4:
Cl. B1, 7.525%, 4/14/29(2) $ 2,250,000 $ 2,109,726
Cl. B2, 7.525%, 4/14/29(2) 3,750,000 3,428,906
Cl. B3, 7.525%, 4/14/29(2) 1,500,000 1,331,953
- ---------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Mtg
Pass-Through Certificates, Series 1997-C1:
Cl. F, 7.50%, 6/20/29 1,400,000 1,299,157
Cl. G, 7.50%, 6/20/29 1,900,000 1,693,079
Cl. H, 7.50%, 6/20/29 1,400,000 1,030,750
- ---------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 177, Cl. B:
12.604%, 7/1/26(3) 28,113,635 10,028,661
11.945%, 7/1/26(3) 14,491,564 5,169,413
11.683%, 7/1/26(3) 5,361,878 1,912,683
- ---------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security, Trust 240, Cl. 2, 11.244%-13.205%, 9/1/23(3) 22,765,536 7,807,868
- ---------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg
Pass-Through Certificates, Series 1997-CHL1, 8.13%, 2/25/11(2) 4,500,000 3,583,125
- ---------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg
Pass-Through Certificates:
Series 1996-C1, Cl. E, 7.51%, 2/15/28(2)(4) 5,362,000 4,912,932
Series 1997-HF1, Cl. F, 6.86%, 7/15/29 1,960,000 1,756,650
Series 1997-MC1, Cl. F, 7.452%, 5/20/07(4) 1,400,000 1,295,875
- ---------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 2,574,548 2,584,396
Series 1995-C1, Cl. F, 6.90%, 2/25/27 2,174,308 2,009,537
- ---------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Series 1996-C1, Cl. E, 9.18%, 1/20/06 2,496,000 2,524,080
-----------
Total Mortgage-Backed Obligations (Cost $51,278,645) 54,478,791
=============================================================================================
Foreign Government Obligations--5.8%
- ---------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion
de Deudas, Series I, 3.242%, 4/1/01(2)(5) ARP 7,500,296 6,857,721
- ---------------------------------------------------------------------------------------------
Argentina (Republic of) Bonos del Tesoro Bonds, 8.75%, 5/9/02 3,000,000 3,002,625
- ---------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon:
23.87%, 2/4/98(6) MXP 28,300,000 3,147,344
22.666%, 3/5/98(6) MXP 101,500,000 11,114,003
23.181%, 4/2/98(6) MXP 43,513,230 4,697,582
- ---------------------------------------------------------------------------------------------
City of Buenos Aires Bonds, 10.50%, 5/28/04(4) ARP 1,710,000 1,750,824
- ---------------------------------------------------------------------------------------------
City of St. Petersburg Sr. Unsub. Nts., 9.50%, 6/18/02(7) 3,130,000 3,131,956
- ---------------------------------------------------------------------------------------------
Ecuador (Republic of) Past Due Interest Bonds, 5.39%, 2/27/15(2) 6,091,914 3,925,493
- ---------------------------------------------------------------------------------------------
Hashemite (Kingdom of) Jordan Disc. Bonds, 6.75%, 12/23/23(2) 1,000,000 827,500
- ---------------------------------------------------------------------------------------------
Hashemite (Kingdom of) Jordan Par Bonds, 4%, 12/23/23(8) 5,250,000 3,465,000
- ---------------------------------------------------------------------------------------------
</TABLE>
11 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
=============================================================================================
Foreign Government Obligations (continued)
- ---------------------------------------------------------------------------------------------
Hellenic Republic Treasury Bills, Zero Coupon, 9.154%,
4/1/98(6) GRD 818,000,000 $ 2,771,669
- ---------------------------------------------------------------------------------------------
Hong Kong & Shanghai Bank Banker's Acceptance Bills,
Zero Coupon:
6.924%, 7/23/97(6) MYR 3,500,000 1,383,086
7.022%, 7/8/97(6) MYR 300,000 118,784
7.022%, 7/9/97(6) MYR 6,955,000 2,753,487
- ---------------------------------------------------------------------------------------------
Moldova (Republic of) Bonds, 9.875%, 6/13/02(7) 1,530,000 1,564,348
- ---------------------------------------------------------------------------------------------
Moldova (Republic of) Sr. Unsub. Nts., 8.465%, 12/10/99(2) 2,140,000 2,167,017
- ---------------------------------------------------------------------------------------------
Philippines (Republic of) Bonds, 8.60%, 6/15/27 1,500,000 1,485,000
- ---------------------------------------------------------------------------------------------
Poland (Republic of) Bonds:
12%, 6/12/01 PLZ 5,580,000 1,368,152
12%, 6/12/02 PLZ 12,000,000 2,905,747
16%, 10/12/98 PLZ 9,600,000 2,717,070
16%, 2/12/99 PLZ 16,700,000 4,695,571
- ---------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts., Zero Coupon:
15.378%, 11/19/97(6) IDR 10,000,000,000 3,879,958
14.201%, 3/17/98(6) IDR 4,000,000,000 1,485,197
- ---------------------------------------------------------------------------------------------
Renel R.A. Nts., 8.562%, 2/21/02(2)(4) 2,500,000 2,504,687
- ---------------------------------------------------------------------------------------------
Romanian Commercial Bank SA Bonds, 9.125%, 3/10/00 4,690,000 4,648,962
- ---------------------------------------------------------------------------------------------
South Africa (Republic of) Bonds, Series 162, 12.50%, 1/15/02 ZAR 32,274,000 6,699,512
- ---------------------------------------------------------------------------------------------
Telkom SA Ltd. Bonds, Series TK05, 12%, 3/31/98 ZAR 20,350,000 4,383,373
- ---------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series W-A, 6.812%, 3/31/20(2) 2,750,000 2,437,188
----------
Total Foreign Government Obligations (Cost $93,295,452) 91,888,856
=============================================================================================
Loan Participations--1.0%
- ---------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation,
Tranche A, 6.977%, 9/4/06(2) 10,900,000 9,554,531
- ---------------------------------------------------------------------------------------------
AO Rostelecom Loan Facility Nts., 9.50%, 2/15/00(2) 4,000,000 4,000,000
- ---------------------------------------------------------------------------------------------
GPA Investment BV Nts., 6.40%, 11/19/98(4) 2,000,000 1,952,500
-----------
Total Loan Participations (Cost $14,518,877) 15,507,031
=============================================================================================
Municipal Bonds and Notes--1.0%
- ---------------------------------------------------------------------------------------------
San Joaquin Hills, CA Transportation Corridor Agency Toll Road
Capital Appreciation Revenue Bonds, Jr. Lien, Zero Coupon:
9%, 1/1/28(6)(9) 74,000,000 10,060,300
8.75%, 1/1/12(6) 15,000,000 5,808,450
-----------
Total Municipal Bonds and Notes (Cost $9,383,037) 15,868,750
</TABLE>
12 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
=============================================================================================
Corporate Bonds and Notes--79.2%
- ---------------------------------------------------------------------------------------------
Basic Industry--9.9%
- ---------------------------------------------------------------------------------------------
Chemicals--2.2%
Harris Chemical North America, Inc., 10.25% Gtd. Sr. Sec. Disc
Nts., 7/15/01 $ 790,000 $ 819,625
- ---------------------------------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts., 6/1/07(7) 1,400,000 1,445,500
- ---------------------------------------------------------------------------------------------
ISP Holdings, Inc.:
9% Sr. Nts., 10/15/03 6,970,000 7,257,512
9.75% Sr. Nts., 2/15/02 1,400,000 1,491,000
- ---------------------------------------------------------------------------------------------
NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05(10) 6,870,000 6,535,087
11.75% Sr. Sec. Nts., 10/15/03 1,475,000 1,613,281
- ---------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07(7) 3,245,000 3,212,550
- ---------------------------------------------------------------------------------------------
Polytama International, 11.25% Gtd. Sec. Nts., 6/15/07 1,250,000 1,296,875
- ---------------------------------------------------------------------------------------------
Sterling Chemical Holdings, Inc., 0%/13.50% Sr. Disc. Nts.,
8/15/08(10) 3,325,000 2,211,125
- ---------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.25% Sr. Sub. Nts., 4/1/07(7) 310,000 330,150
11.75% Sr. Unsec. Sub. Nts., 8/15/06 4,560,000 4,947,600
- ---------------------------------------------------------------------------------------------
Terra Industries, Inc., 10.50% Sr. Nts., Series B, 6/15/05 3,345,000 3,637,687
-----------
34,797,992
- ---------------------------------------------------------------------------------------------
Containers--0.8%
Consumers International, Inc., 10.25% Sr. Sec. Nts., 4/1/05(7) 2,700,000 2,916,000
- ---------------------------------------------------------------------------------------------
IVEX Holdings Corp., 0%/13% Sr. Disc. Debs., Series B, 3/15/05(10) 5,820,000 4,714,200
- ---------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., 10/15/06 4,750,000 5,094,375
-----------
12,724,575
- ---------------------------------------------------------------------------------------------
Metals/Mining--1.3%
Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03 7,271,000 7,961,745
- ---------------------------------------------------------------------------------------------
Royal Oak Mines, Inc., 11% Sr. Sub. Nts., 8/15/06 13,950,000 13,392,000
-----------
21,353,745
- ---------------------------------------------------------------------------------------------
Paper--3.0%
APP International Finance Co. BV, 11.75% Gtd. Sec. Nts., 10/1/05 1,500,000 1,655,625
- ---------------------------------------------------------------------------------------------
Buckeye Cellulose Corp., 9.25% Sr. Sub. Nts., 9/15/08 7,205,000 7,457,175
- ---------------------------------------------------------------------------------------------
Container Corp., 9.75% Gtd. Sr. Nts., 4/1/03 1,500,000 1,605,000
- ---------------------------------------------------------------------------------------------
Four M Corp., 12% Sr. Nts., Series B, 6/1/06 645,000 667,575
- ---------------------------------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07(7) 560,000 561,400
- ---------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 8,880,000 9,190,800
- ---------------------------------------------------------------------------------------------
QUNO Corp., 9.125% Sr. Nts., 5/15/05(4) 5,300,000 5,724,000
- ---------------------------------------------------------------------------------------------
Riverwood International Corp., 10.25% Sr. Nts., 4/1/06 2,115,000 2,109,712
- ---------------------------------------------------------------------------------------------
Riverwood International Corp., 10.875% Sr. Sub. Nts., 4/1/08 6,215,000 5,640,112
- ---------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 6,450,000 7,207,875
</TABLE>
13 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Paper (continued)
Stone Container Corp.:
10.75% First Mtg. Nts., 10/1/02 $ 3,325,000 $ 3,474,625
9.875% Sr. Nts., 2/1/01 3,190,000 3,190,000
-----------
48,483,899
- ---------------------------------------------------------------------------------------------
Steel--2.6%
AK Steel Corp., 9.125% Sr. Nts., 12/15/06 5,675,000 5,859,437
- ---------------------------------------------------------------------------------------------
Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 6,865,000 7,637,312
- ---------------------------------------------------------------------------------------------
Armco, Inc., 8.50% Sinking Fund Debs., 9/1/01 20,207,000 20,004,930
- ---------------------------------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 4,150,000 4,305,625
- ---------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 2,990,000 2,788,175
-----------
40,595,479
- ---------------------------------------------------------------------------------------------
Consumer Related--17.6%
- ---------------------------------------------------------------------------------------------
Consumer Products--5.3%
Coleman Escrow Corp., Zero Coupon Sr. First Priority Disc. Nts.,
11.125%, 5/15/01(6)(7) 14,000,000 8,925,000
- ---------------------------------------------------------------------------------------------
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 3.838%, 5/27/98(4)(6) 16,995,000 15,841,753
- ---------------------------------------------------------------------------------------------
E & S Holdings Corp., 10.375% Sr. Sub. Nts., 10/1/06 13,470,000 14,109,825
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 12,000,000 12,840,000
- ---------------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc., 0%/11.50%
Sr. Sec. Disc. Nts., 8/15/03(10) 10,210,000 6,074,950
- ---------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.,
11.001%, 3/15/01(6)(7) 17,635,000 12,035,887
- ---------------------------------------------------------------------------------------------
Samsonite Corp., 11.125% Sr. Sub. Nts., 7/15/05(4) 10,085,000 11,446,475
- ---------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05 2,695,000 3,099,250
-----------
84,373,140
- ---------------------------------------------------------------------------------------------
Food/Beverages/Tobacco--1.8%
CFP Holdings, Inc., 11.625% Gtd. Sr. Nts., 1/15/04(7) 6,930,000 7,207,200
- ---------------------------------------------------------------------------------------------
Consolidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03 2,000,000 2,120,000
- ---------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 10,015,000 10,465,675
- ---------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 6,845,000 7,084,575
- ---------------------------------------------------------------------------------------------
Windy Hill Pet Food, Inc., 9.75% Sr. Sub. Nts., 5/15/07(7) 1,680,000 1,688,400
28,565,850
-----------
</TABLE>
14 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Healthcare--2.3%
Genesis Health Ventures, Inc., 9.25% Sr. Sub. Nts., 10/1/06 $ 10,575,000 $10,945,125
- ---------------------------------------------------------------------------------------------
Integrated Health Services, Inc.:
11% Sr. Sub. Nts., 4/30/06(2)(7) 5,330,000 5,703,100
9.50% Sr. Sub. Nts., 9/15/07(7) 8,000,000 8,220,000
- ---------------------------------------------------------------------------------------------
Magellan Health Services, Inc., 11.25% Sr. Sub. Nts.,
Series A, 4/15/04 9,480,000 10,617,600
- ---------------------------------------------------------------------------------------------
Mariner Health Group, Inc., 9.50% Sr. Sub. Nts., Series B, 4/1/06 1,000,000 1,016,250
-----------
36,502,075
- ---------------------------------------------------------------------------------------------
Hotel/Gaming--4.5%
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series B, 11/15/00(4) 2,750,000 1,608,750
- ---------------------------------------------------------------------------------------------
Capital Gaming International, Inc., Promissory Nts., 8/1/95(11) 22,500 --
- ---------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00(4)(11) 1,000,000 187,500
- ---------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02(4) 8,070,000 8,594,550
- ---------------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% Gtd. First Mtg. Nts., 12/1/03 10,205,000 10,689,737
- ---------------------------------------------------------------------------------------------
Griffin Gaming & Entertainment, Inc., 8.015% First Mtg
Non-Recourse Pass-Through Nts., 6/30/00(2) 6,785,000 6,895,256
- ---------------------------------------------------------------------------------------------
HMC Acquisition Properties, Inc., 9% Sr. Nts., Series B, 12/15/07 6,390,000 6,549,750
- ---------------------------------------------------------------------------------------------
HMH Properties, Inc., 9.50% Sr. Sec. Nts., Series B, 5/15/05 4,880,000 5,099,600
- ---------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07(7) 6,125,000 6,201,562
- ---------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., Series B,
11/15/02 5,085,000 6,686,775
- ---------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.:
10.625% Sr. Sub. Nts., 7/15/05 1,900,000 2,047,250
9.50% Gtd. Sr. Sub. Nts., 4/15/07 3,785,000 3,908,012
- ---------------------------------------------------------------------------------------------
Showboat Marina Casino Partnership/Showboat Marina
Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 6,400,000 7,328,000
- ---------------------------------------------------------------------------------------------
Trump Atlantic City Associates/Trump Atlantic City Funding, Inc.,
11.25% First Mtg. Nts., 5/1/06 6,530,000 6,399,400
- ---------------------------------------------------------------------------------------------
Trump's Castle Funding, Inc., 13.875% Sub. Nts., 11/15/05(5) 34 31
-----------
72,196,173
- ---------------------------------------------------------------------------------------------
Restaurants--1.3%
Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 7,140,000 7,479,150
- ---------------------------------------------------------------------------------------------
Carrols Corp., 11.50% Sr. Nts., 8/15/03 7,840,000 8,388,800
- ---------------------------------------------------------------------------------------------
Foodmaker, Inc.:
9.25% Sr. Nts., 3/1/99 3,475,000 3,579,250
9.75% Sr. Sub. Nts., 6/1/02 710,000 737,512
-----------
20,184,712
</TABLE>
15 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Textile/Apparel--2.4%
CMI Industries, Inc., 9.50% Sr. Sub. Nts., 10/1/03(4) $ 3,765,000 $ 3,812,062
- ---------------------------------------------------------------------------------------------
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03(4) 5,600,000 5,796,000
- ---------------------------------------------------------------------------------------------
GFSI, Inc., 9.625% Sr. Sub. Nts., 3/1/07(7) 3,460,000 3,511,900
- ---------------------------------------------------------------------------------------------
Polysindo International Finance Co. BV, 11.375% Gtd. Sec. Nts.,
6/15/06 3,250,000 3,583,125
- ---------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc., 7% Sr. Nts., 5/15/98(4)(11)(12) 5,955,189 37,220
- ---------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Gtd. Nts., 6/15/01 5,490,000 6,231,150
- ---------------------------------------------------------------------------------------------
Tultex Corp., 9.625% Sr. Nts., 4/15/07(7) 2,180,000 2,312,162
- ---------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 9,545,000 9,974,525
- ---------------------------------------------------------------------------------------------
William Carter Co., 10.375% Sr. Sub. Nts., 12/1/06 3,375,000 3,552,187
-----------
38,810,331
- ---------------------------------------------------------------------------------------------
Energy--7.8%
- ---------------------------------------------------------------------------------------------
Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07(7) 10,290,000 10,264,275
- ---------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
8.50% Sr. Nts., 3/15/12 1,060,000 969,900
9.125% Sr. Nts., 4/15/06 8,720,000 8,763,600
- ---------------------------------------------------------------------------------------------
Clark Oil Refining & Marketing Corp., 10.50% Sr. Nts., 12/1/01 4,000,000 4,150,000
- ---------------------------------------------------------------------------------------------
Clark R&M Holdings, Inc., Zero Coupon Sr. Sec. Nts., Series A,
10.528%, 2/15/00(6) 10,445,000 7,964,312
- ---------------------------------------------------------------------------------------------
Cross Timbers Oil Co., 9.25% Sr. Sub. Nts., 4/1/07 500,000 512,500
- ---------------------------------------------------------------------------------------------
DI Industries, Inc., 8.875% Sr. Nts., 7/1/07 4,025,000 3,984,750
- ---------------------------------------------------------------------------------------------
Energy Corp. of America, 9.50% Sr. Sub. Nts., 5/15/07(7) 6,100,000 6,069,500
- ---------------------------------------------------------------------------------------------
Flores & Rucks, Inc., 9.75% Sr. Sub. Nts., 10/1/06 225,000 238,500
- ---------------------------------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., 2/15/07 6,445,000 6,332,213
9.50% Sr. Sub. Nts., 11/1/06 2,650,000 2,756,000
- ---------------------------------------------------------------------------------------------
J. Ray McDermott SA, 9.375% Sr. Sub. Bonds, 7/15/06 7,510,000 7,754,075
- ---------------------------------------------------------------------------------------------
Mariner Energy, Inc., 10.50% Sr. Sub. Nts., 8/1/06 7,560,000 7,900,200
- ---------------------------------------------------------------------------------------------
Maxus Energy Corp., 11.50% Debs., 11/15/15 5,700,000 6,006,375
- ---------------------------------------------------------------------------------------------
Mesa Operating Co., 0%/11.625% Gtd. Sr. Sub. Disc. Nts., 7/1/06(10) 24,250,000 18,793,750
- ---------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., 11/1/06 4,890,000 5,061,150
- ---------------------------------------------------------------------------------------------
Parker Drilling Corp., 9.75% Gtd. Sr. Nts., 11/15/06 700,000 740,250
- ---------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 13,615,000 13,002,325
- ---------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sub. Nts., 5/15/07(7) 8,025,000 8,055,094
- ---------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals (Canada), Inc.,
11.75% First Mtg., Series B, 11/15/03 925,000 980,500
- ---------------------------------------------------------------------------------------------
Vintage Petroleum, Inc., 9% Sr. Sub. Nts., 12/15/05 800,000 812,000
- ---------------------------------------------------------------------------------------------
Wiser Oil Co., 9.50% Sr. Sub. Nts., 5/15/07(7) 3,450,000 3,467,250
-----------
124,578,519
</TABLE>
16 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Financial Services--3.7%
- ---------------------------------------------------------------------------------------------
Banks & Thrifts--0.7%
Banco de Colombia, 5.20% Cv. Jr. Unsec. Sub. Nts., 2/1/99(4) $ 1,650,000 $ 1,575,750
- ---------------------------------------------------------------------------------------------
First Nationwide Holdings, Inc.:
10.625% Sr. Sub. Nts., 10/1/03 6,450,000 7,159,500
9.125% Sr. Sub. Nts., 1/15/03 250,000 259,375
- ---------------------------------------------------------------------------------------------
Shoshone Partners Trust, 8% Sr. Nts., 5/31/02(2)(4) 2,796,000 2,799,871
-----------
11,794,496
- ---------------------------------------------------------------------------------------------
Diversified Financial--1.6%
Americredit Corp., 9.25% Sr. Nts., 2/1/04 5,300,000 5,220,500
- ---------------------------------------------------------------------------------------------
Amresco, Inc., 10% Sr. Sub. Nts., Series 97-A, 3/15/04 3,300,000 3,366,000
- ---------------------------------------------------------------------------------------------
Cityscape Financial Corp., 12.75% Sr. Nts., 6/1/04(7) 5,110,000 5,058,900
- ---------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(4) 922,935 1,018,690
- ---------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(4)(11) 8,802,000 1,716,390
- ---------------------------------------------------------------------------------------------
Olympic Financial Ltd., Units (each unit consists of $1,000
principal amount of 11.50% sr. nts., 3/15/07 and one warrant to
purchase 6.84 shares of common stock)(13) 2,600,000 2,684,500
- ---------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust,
11.625% Sr. Sec. Nts., Series B, 4/1/02 1,700,000 1,810,500
- ---------------------------------------------------------------------------------------------
Wilshire Financial Services Group, Inc., 13% Nts., 1/1/04 3,200,000 3,248,000
-----------
24,123,480
- ---------------------------------------------------------------------------------------------
Insurance--1.4%
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04 6,980,000 7,887,400
- ---------------------------------------------------------------------------------------------
Reliance Group Holdings, Inc., 9.75% Sr. Sub. Debs., 11/15/03 3,400,000 3,553,000
- ---------------------------------------------------------------------------------------------
Residential Reinsurance, 11.951% Nts., 12/15/98(2) 3,500,000 3,520,125
- ---------------------------------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03(7) 7,460,000 7,721,100
-----------
22,681,625
- ---------------------------------------------------------------------------------------------
Housing Related--2.2%
- ---------------------------------------------------------------------------------------------
Building Materials1.1%
Building Materials Corp. of America, 8.625% Sr. Nts., 12/15/06 6,550,000 6,681,000
- ---------------------------------------------------------------------------------------------
Falcon Building Products, Inc.:
0%/10.50% Sr. Disc. Nts., 6/15/07(7)(10) 3,360,000 1,999,200
9.50% Sr. Sub. Nts., 6/15/07(7) 3,820,000 3,820,000
- ---------------------------------------------------------------------------------------------
Nortek, Inc., 9.25% Sr. Nts., 3/15/07 5,275,000 5,406,875
-----------
17,907,075
</TABLE>
17 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Homebuilders/Real Estate--1.1%
Continental Homes Holding Corp., 10% Gtd. Unsec. Bonds, 4/15/06 $ 590,000 $ 610,650
- ---------------------------------------------------------------------------------------------
First Place Tower, Inc.:
9.22% First Mtg. Bonds, 12/15/05 CAD 1,464,450 1,219,731
Units (each unit consists of one $10 principal amount of 8.50% cv
sub. debs., 12/15/15 and 40 common shares)(13) CAD 880,730 1,655,888
- ---------------------------------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Sr. Nts., 3/1/04 1,940,000 2,104,900
- ---------------------------------------------------------------------------------------------
Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 420,000 438,900
- ---------------------------------------------------------------------------------------------
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 3,100,000 3,270,500
- ---------------------------------------------------------------------------------------------
Standard Pacific Corp., 8.50% Sr. Nts., 6/15/07 3,295,000 3,303,238
- ---------------------------------------------------------------------------------------------
U.S. Home Corp., 9.75% Sr. Nts., 6/15/03 3,980,000 4,159,100
-----------
16,762,907
- ---------------------------------------------------------------------------------------------
Manufacturing--7.0%
- ---------------------------------------------------------------------------------------------
Aerospace--2.8%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05 13,275,000 13,789,406
- ---------------------------------------------------------------------------------------------
Atlas Air, Inc., 12.25% Pass-Through Certificates, 12/1/02(4) 6,425,000 7,131,750
- ---------------------------------------------------------------------------------------------
Continental Airlines, Inc., 9.50% Sr. Unsec. Nts., 12/15/01 1,800,000 1,890,000
- ---------------------------------------------------------------------------------------------
GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 7,540,000 7,709,650
- ---------------------------------------------------------------------------------------------
GPA Holland BV, 8.94% Medium-Term Nts., Series C, 2/16/99(4) 7,300,000 7,423,188
- ---------------------------------------------------------------------------------------------
Northwest Airlines Corp., 8.375% Gtd. Nts., 3/15/04 1,120,000 1,137,139
- ---------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts., Cl A,
6/15/04(4) 2,500,000 2,521,750
- ---------------------------------------------------------------------------------------------
UNC, Inc., 11% Sr. Sub. Nts., 6/1/06 2,000,000 2,320,000
-----------
43,922,883
- ---------------------------------------------------------------------------------------------
Automotive--2.4%
Collins & Aikman Products Co., 11.50% Gtd. Sr. Sub. Nts., 4/15/06 10,450,000 11,886,875
- ---------------------------------------------------------------------------------------------
Hayes Wheels International, Inc.:
11% Sr. Sub. Nts., 7/15/06 9,300,000 10,253,250
9.125% Sr. Sub. Nts., 7/15/07(4) 6,000,000 6,007,500
- ---------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., 3/15/07(7) 500,000 530,000
- ---------------------------------------------------------------------------------------------
Lear Corp., 9.50% Sub. Nts., 7/15/06 7,415,000 7,896,975
- ---------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Sub. Nts., 6/15/07(7) 2,400,000 2,403,000
-----------
38,977,600
</TABLE>
18 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Capital Goods--1.8%
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05 $ 350,000 $ 381,500
- ---------------------------------------------------------------------------------------------
Consorcio Ecuatoriano, 14% Nts., 5/1/02(4) 2,575,000 2,735,938
- ---------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts., 6/1/05(4) 2,000,000 2,170,000
- ---------------------------------------------------------------------------------------------
Mettler Toledo, Inc., 9.75% Gtd. Sr. Sub. Nts., 10/1/06 10,385,000 10,956,175
- ---------------------------------------------------------------------------------------------
Roller Bearing Co. (America), 9.625% Sr. Sub. Nts., 6/15/07(7) 1,120,000 1,136,800
- ---------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 9.25% Sr. Sub. Nts., 2/15/07(7) 5,020,000 5,145,500
- ---------------------------------------------------------------------------------------------
Titan Wheel International, Inc., 8.75% Sr. Sub. Nts., 4/1/07 3,950,000 4,048,750
- ---------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03(4) 2,800,000 2,898,000
-----------
29,472,663
- ---------------------------------------------------------------------------------------------
Media--8.0%
- ---------------------------------------------------------------------------------------------
Broadcasting--2.4%
American Radio Systems Corp., 9% Sr. Sub. Nts., 2/1/06 350,000 356,125
- ---------------------------------------------------------------------------------------------
Argyle Television, Inc., 9.75% Sr. Sub. Nts., 11/1/05 915,000 960,750
- ---------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07(7) 2,000,000 1,945,000
- ---------------------------------------------------------------------------------------------
Chancellor Radio Broadcasting Co., 8.75% Sr. Sub. Nts., 6/15/07(7) 7,000,000 6,965,000
- ---------------------------------------------------------------------------------------------
Granite Broadcasting Corp., 9.375% Sr. Sub. Nts., Series A, 12/1/05 3,700,000 3,598,250
- ---------------------------------------------------------------------------------------------
Jacor Communications Co., 8.75% Gtd. Sr. Sub. Nts., 6/15/07(7) 2,000,000 1,990,000
- ---------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., 5/15/04(7)(8) 1,800,000 1,611,000
- ---------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., 10.75% Sr. Sub. Nts., Series B, 5/15/06 1,965,000 2,122,200
- ---------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
10% Sr. Sub. Nts., 9/30/05 5,975,000 6,184,125
9% Sr. Sub. Nts., 7/15/07(7) 3,500,000 3,399,375
- ---------------------------------------------------------------------------------------------
Spanish Broadcasting System, Inc.:
11% Sr. Nts., 3/15/04(7) 1,520,000 1,603,600
12.50% Sr. Nts., 6/15/02 700,000 778,750
- ---------------------------------------------------------------------------------------------
Young Broadcasting, Inc.:
8.75% Sr. Sub. Debs., 6/15/07(7) 3,850,000 3,686,375
9% Sr. Sub. Nts., Series B, 1/15/06 3,500,000 3,447,500
-----------
38,648,050
- ---------------------------------------------------------------------------------------------
Cable Television--2.5%
Adelphia Communications Corp., 9.875% Sr. Nts., 3/1/07(7) 3,760,000 3,651,900
- ---------------------------------------------------------------------------------------------
Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08(9) 1,600,000 1,726,382
- ---------------------------------------------------------------------------------------------
Cablevision Systems Corp.:
9.875% Sr. Sub. Debs., 2/15/13 600,000 633,000
9.875% Sr. Sub. Nts., 5/15/06 3,400,000 3,646,500
- ---------------------------------------------------------------------------------------------
EchoStar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(10) 1,500,000 1,267,500
- ---------------------------------------------------------------------------------------------
EchoStar DBS Corp., 12.50% Gtd. Nts., 7/1/02(7) 5,600,000 5,572,000
- ---------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(4) 2,555,295 2,529,743
- ---------------------------------------------------------------------------------------------
EchoStar II, 8.25% Bonds, 11/9/01(4) 2,280,958 2,258,149
</TABLE>
19 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Cable Television (continued)
EchoStar Satellite Broadcasting Corp., 0%/13.125%
Sr. Sec. Disc. Nts., 3/15/04(10) $ 4,715,000 $ 3,383,013
- ---------------------------------------------------------------------------------------------
Optel, Inc., Units (each unit consists of $1,000 principal amount
of 13% sr. nts., 2/15/05 and one warrant to purchase one share
of non-vtg. common stock)(7)(13) 3,030,000 2,908,800
- ---------------------------------------------------------------------------------------------
TCI Satellite Entertainment, Inc.:
0%/10.875% Sr. Sub. Nts., 2/15/07(7)(10) 5,210,000 3,099,950
10.875% Sr. Sub. Nts., 2/15/07(7) 3,385,000 3,418,850
- ---------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 5,000,000 5,503,435
-----------
39,599,222
- ---------------------------------------------------------------------------------------------
Diversified Media--2.0%
Ackerley Communications, Inc., 10.75% Sr. Sec. Nts.,
Series A, 10/1/03 6,950,000 7,471,250
- ---------------------------------------------------------------------------------------------
Jacor Communications Co., 9.75% Gtd. Unsec. Sr. Sub. Nts., 12/15/06 250,000 262,500
- ---------------------------------------------------------------------------------------------
Katz Media Corp., 10.50% Sr. Sub. Nts., 1/15/07 2,450,000 2,413,250
- ---------------------------------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 4,945,000 5,093,350
- ---------------------------------------------------------------------------------------------
News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 2,000,000 2,253,712
- ---------------------------------------------------------------------------------------------
Outdoor Systems, Inc., 8.875% Sr. Sub. Nts., 6/15/07(7) 8,750,000 8,542,188
- ---------------------------------------------------------------------------------------------
Universal Outdoor, Inc.:
9.75% Sr. Sub. Nts., 10/15/06 4,185,000 4,352,400
9.75% Sr. Sub. Nts., Series B, 10/15/06 2,000,000 2,080,000
-----------
32,468,650
- ---------------------------------------------------------------------------------------------
Entertainment/Film--0.2%
Azteca Holdings SA, 11% Sr. Nts., 6/15/02(7) 2,965,000 3,009,475
- ---------------------------------------------------------------------------------------------
Publishing/Printing--0.9%
Hollinger International Publishing, Inc.:
9.25% Gtd. Sr. Sub. Nts., 2/1/06 3,200,000 3,272,000
9.25% Gtd. Sr. Sub. Nts., 3/15/07 4,875,000 4,996,875
- ---------------------------------------------------------------------------------------------
Sun Media Corp., 9.50% Sr. Sub. Nts., 2/15/07(7) 6,200,000 6,293,000
-----------
14,561,875
- ---------------------------------------------------------------------------------------------
Other--3.2%
- ---------------------------------------------------------------------------------------------
Conglomerates--0.4%
Cia Latino Americana de Infraestructura & Servicios SA - CLISA,
11.625% Gtd. Sr. Nts., 6/1/04(7) 365,000 386,900
- ---------------------------------------------------------------------------------------------
Empresas ICA Sociedad Controladora SA de CV, 5% Cv. Sub. Debs.,
3/15/04 4,900,000 3,886,313
- ---------------------------------------------------------------------------------------------
Mechala Group Jamaica Ltd.:
12% Bonds, 2/15/02 700,000 721,726
12.75% Bonds, 12/30/99 775,000 812,551
-----------
5,807,490
</TABLE>
20 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Environmental--0.0%
Allied Waste North America, Inc., 10.25% Sr. Sub. Nts., 12/1/06(7) $ 400,000 $ 430,000
- ---------------------------------------------------------------------------------------------
Services--2.8%
Borg-Warner Security Corp.:
9.125% Sr. Sub. Nts., 5/1/03 1,550,000 1,581,000
9.625% Sr. Sub. Nts., 3/15/07(7) 10,425,000 10,555,313
- ---------------------------------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(4)(10) 5,475,000 3,777,750
- ---------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 6,260,000 6,134,800
- ---------------------------------------------------------------------------------------------
Neodata Services, Inc., 12% Sr. Nts., Series B, 5/1/03 1,400,000 1,512,000
- ---------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc.:
0%/13.625% Sr. Disc. Nts., 6/30/05(10) 15,350,000 15,964,000
6.75% Cv. Gtd. Sr. Sub. Nts., 9/15/03 2,432,000 2,477,600
- ---------------------------------------------------------------------------------------------
Road King Infrastructure Finance (1997) Ltd., 9.50% Gtd. Unsec.
Unsub. Bonds, 7/15/07(4)(14) 400,000 403,000
- ---------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 2,500,000 2,800,000
-----------
45,205,463
- ---------------------------------------------------------------------------------------------
Retail--3.0%
- ---------------------------------------------------------------------------------------------
Specialty Retailing--1.1%
Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B,
9/1/03 6,325,000 6,751,938
- ---------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 2,100,000 2,320,500
- ---------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03(4) 4,970,000 5,293,050
- ---------------------------------------------------------------------------------------------
Profitt's, Inc., 8.125% Sr. Nts., 5/15/04(7) 1,400,000 1,410,500
- ---------------------------------------------------------------------------------------------
Specialty Retailers, Inc.:
8.50% Gtd. Sr. Nts., 7/15/05(7) 1,250,000 1,265,625
9% Gtd. Sr. Sub. Nts., 7/15/07(7) 550,000 555,500
-----------
17,597,113
- ---------------------------------------------------------------------------------------------
Supermarkets--1.9%
Dominick's Finer Foods, Inc., 10.875% Sr. Sub. Nts., 5/1/05 2,600,000 2,889,250
- ---------------------------------------------------------------------------------------------
Grand Union Co., 12% Sr. Nts., 9/1/04 1,893,000 1,410,285
- ---------------------------------------------------------------------------------------------
Jitney-Jungle Stores of America, Inc., 12% Gtd. Sr. Nts., 3/1/06 5,925,000 6,628,594
- ---------------------------------------------------------------------------------------------
Ralph's Grocery Co.:
(New), 11% Sr. Sub. Nts., 6/15/05(7) 2,300,000 2,507,000
10.45% Sr. Nts., 6/15/04 8,570,000 9,244,888
- ---------------------------------------------------------------------------------------------
Randall's Food Markets, 9.375% Sr. Sub. Nts., 7/1/07(7) 5,050,000 5,024,750
- ---------------------------------------------------------------------------------------------
Smith's Food & Drug Centers, Inc., 11.25% Sr. Unsec. Sub. Nts.,
5/15/07 2,330,000 2,746,488
-----------
30,451,255
</TABLE>
21 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Technology--12.3%
- ---------------------------------------------------------------------------------------------
Information Technology--6.4%
Amphenol Corp., 9.875% Sr. Sub. Nts., 5/15/07 $ 1,400,000 $ 1,452,500
- ---------------------------------------------------------------------------------------------
Bell & Howell Co. (New), 0%/11.50% Sr. Disc. Debs.,
Series B, 3/1/05(10) 3,130,000 2,535,300
- ---------------------------------------------------------------------------------------------
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(4) 3,850,000 2,310,000
- ---------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/13% Sr. Disc. Nts., 6/15/05(4)(10) 3,100,000 2,201,000
- ---------------------------------------------------------------------------------------------
Cellular Communications International, Inc., Zero Coupon
Sr. Disc. Nts., 12.096%, 8/15/00(6) 18,765,000 14,402,138
- ---------------------------------------------------------------------------------------------
Comcast Cellular Communications, Inc., 9.50% Sr. Nts., 5/1/07(7) 4,585,000 4,619,388
- ---------------------------------------------------------------------------------------------
Comunicacion Celular SA, 0%/13.125% Sr. Deferred
Coupon Bonds, 11/15/03(10) 5,700,000 4,089,750
- ---------------------------------------------------------------------------------------------
Diamond Cable Communications plc, 0%/10.75% Sr. Disc. Nts.,
2/15/07(7)(10) 700,000 406,000
- ---------------------------------------------------------------------------------------------
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 1,850,000 1,803,750
- ---------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07(7) 2,805,000 2,840,063
- ---------------------------------------------------------------------------------------------
Geotek Communications, Inc., 0%/15% Sr. Sec. Disc. Nts., 7/15/05(10) 850,000 531,250
- ---------------------------------------------------------------------------------------------
Globalstar LP/Globalstar Capital Corp., 11.25% Sr. Nts., 6/15/04(7) 3,430,000 3,232,775
- ---------------------------------------------------------------------------------------------
McCaw International Ltd., Units (each unit consists of $1,000
principal amount of 0%/13% sr. disc. nts., 4/15/07 and one warrant
to purchase 0.10616 shares of common stock)(7)(10)(13) 4,300,000 2,085,500
- ---------------------------------------------------------------------------------------------
Metrocall, Inc., 10.375% Sr. Sub. Nts., 10/1/07 2,390,000 2,198,800
- ---------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 1,440,000 1,389,600
11.625% Sr. Nts., Series A, 8/15/06 3,530,000 3,406,450
- ---------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp.,
14% Sr. Nts., 8/15/04 1,890,000 1,918,350
- ---------------------------------------------------------------------------------------------
Pierce Leahy Corp., 11.125% Sr. Sub. Nts., 7/15/06 4,950,000 5,469,750
- ---------------------------------------------------------------------------------------------
PriCellular Wireless Corp.:
0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(10) 10,290,000 9,724,050
0%/14% Sr. Sub. Disc. Nts., 11/15/01(10) 3,373,000 3,558,515
10.75% Sr. Nts., 11/1/04 2,740,000 2,890,700
- ---------------------------------------------------------------------------------------------
Rogers Cantel, Inc., 9.375% Sr. Sec. Debs., 6/1/08 3,250,000 3,440,938
- ---------------------------------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum Finance Corp.:
0%/12.50% Sr. Disc. Nts., 8/15/06(10) 5,730,000 4,168,575
11% Sr. Nts., 8/15/06 2,425,000 2,691,750
- ---------------------------------------------------------------------------------------------
Therma-Wave, Inc., 10.625% Sr. Nts., 5/15/04(7) 840,000 894,600
- ---------------------------------------------------------------------------------------------
Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 4,375,000 4,429,688
- ---------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 5,200,000 5,642,000
- ---------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 3,400,000 3,774,000
- ---------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07(7) 3,360,000 3,465,000
-----------
101,572,180
</TABLE>
22 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Telecommunications-Technology--5.9%
American Communications Services, Inc., 0%/12.75%
Sr. Disc. Nts., 4/1/06(10) $ 3,970,000 $ 2,183,500
- ---------------------------------------------------------------------------------------------
Bell Cablemedia plc:
0%/11.875% Sr. Disc. Nts., 9/15/05(10) 11,470,000 9,634,800
0%/11.95% Sr. Disc. Nts., 7/15/04(10) 3,400,000 3,094,000
- ---------------------------------------------------------------------------------------------
Brooks Fiber Properties, Inc.:
0%/10.875% Sr. Disc. Nts., 3/1/06(10) 1,425,000 977,906
0%/11.875% Sr. Disc. Nts., 11/1/06(10) 2,435,000 1,594,925
10% Sr. Nts., 6/1/07(7) 4,900,000 4,985,750
- ---------------------------------------------------------------------------------------------
Colt Telecom Group plc, Units (each unit consists of $1,000
principal amount of 0%/12% sr. disc. nts., 12/15/06 and one
warrant to purchase 7.8 ordinary shares)(10)(13) 5,210,000 3,412,550
- ---------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc. Debs.,
11/15/07(10) 7,495,000 5,714,938
- ---------------------------------------------------------------------------------------------
Diamond Cable Communications plc, 0%/11.75% Sr. Disc. Nts.,
12/15/05(10) 12,265,000 8,340,200
- ---------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub. Disc. Nts.,
12/15/05(7)(10) 1,400,000 834,750
- ---------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Bonds, 12/15/05(10) 1,370,000 852,825
- ---------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc., 0%/13% Sr. Disc. Nts.,
Series B, 4/15/03(10) 1,090,000 553,175
- ---------------------------------------------------------------------------------------------
ICG Holdings, Inc.:
0%/12.50% Gtd. Sr. Disc. Nts., 5/1/06(10) 1,900,000 1,254,000
0%/13.50% Sr. Disc. Nts., 9/15/05(10) 8,790,000 6,328,800
- ---------------------------------------------------------------------------------------------
IXC Communications, Inc., 12.50% Nts., Series B, 10/1/05 1,790,000 2,040,600
- ---------------------------------------------------------------------------------------------
McLeod, Inc., 0%/10.50% Sr. Disc. Nts., 3/1/07(7)(10) 4,950,000 3,180,375
- ---------------------------------------------------------------------------------------------
MFS Communications Co., Inc.:
0%/8.875% Sr. Disc. Nts., 1/15/06(10) 2,435,000 1,935,825
0%/9.375% Sr. Disc. Nts., 1/15/04(10) 5,170,000 4,833,950
- ---------------------------------------------------------------------------------------------
NTL, Inc.:
0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(10) 640,000 558,400
0%/12.75% Sr. Deferred Coupon Nts., 4/15/05(10) 150,000 115,500
10% Sr. Nts., 2/15/07(7) 7,110,000 7,269,975
- ---------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc.:
9% Cv. Sub. Nts., 6/1/06(7) 630,000 619,763
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)(4)(10)(13) 4,350,000 3,675,750
- ---------------------------------------------------------------------------------------------
PTC International Finance BV, 0%/10.75% Gtd. Sr. Sub.
Unsec. Bonds, 7/1/07(4)(10) 1,420,000 866,200
</TABLE>
23 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------
Telecommunications-Technology (continued)
Teleport Communications Group, Inc.:
0%/11.125% Sr. Disc. Nts., 7/1/07(10) $ 4,135,000 $ 2,992,706
9.875% Sr. Nts., 7/1/06 2,805,000 3,001,350
- ---------------------------------------------------------------------------------------------
Telewest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(10) 6,015,000 4,360,875
9.625% Sr. Debs., 10/1/06 750,000 787,500
- ---------------------------------------------------------------------------------------------
UNIFI Communications, Inc., Units (each unit consists of $1,000
principal amount of 14% sr. nts., 3/1/04 and one warrant to
purchase 27.52 ordinary shares)(7)(13) 6,000,000 5,970,000
- ---------------------------------------------------------------------------------------------
Videotron Holdings plc, 0%/11% Sr. Disc. Nts., 8/15/05(10) 2,500,000 2,100,000
-------------
94,070,888
- ---------------------------------------------------------------------------------------------
Transportation--2.6%
- ---------------------------------------------------------------------------------------------
Railroads--1.4%
TFM SA de CV, 0%/11.75% Gtd. Sr. Disc. Bonds, 6/15/09(7)(10) 2,210,000 1,287,325
- ---------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375%
Sr. Disc. Nts., Series B, 12/15/03(10) 24,415,000 20,630,675
-------------
21,918,000
- ---------------------------------------------------------------------------------------------
Shipping--0.7%
Gearbulk Holding Ltd., 11.25% Sr. Nts., 12/1/04 6,865,000 7,620,150
- ---------------------------------------------------------------------------------------------
Greyhound Lines, Inc., 11.50% Sr. Nts., 4/15/07(7) 1,800,000 1,935,000
- ---------------------------------------------------------------------------------------------
Transportacion Maritima Mexicana SA de CV, 9.25% Nts., 5/15/03 1,500,000 1,496,250
-------------
11,051,400
- ---------------------------------------------------------------------------------------------
Trucking--0.5%
Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., 7/1/07(7) 1,050,000 1,044,750
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(7) 8,900,000 7,372,137
-------------
8,416,887
- ---------------------------------------------------------------------------------------------
Utilities--1.9%
- ---------------------------------------------------------------------------------------------
Electric Utilities--1.9%
California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 7,290,000 7,891,425
- ---------------------------------------------------------------------------------------------
Calpine Corp.:
10.50% Sr. Nts., 5/15/06 5,745,000 6,262,050
9.25% Sr. Nts., 2/1/04 2,410,000 2,458,200
- ---------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Bonds, Series E, 5/1/11 5,550,000 6,063,375
- ---------------------------------------------------------------------------------------------
Panda Global Energy Co., 12.50% Sr. Nts., 4/15/04(7) 4,500,000 4,410,000
- ---------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08(7) 2,482,758 2,582,243
-------------
29,667,293
-------------
Total Corporate Bonds and Notes (Cost $1,240,645,598) 1,263,284,460
</TABLE>
24 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
==============================================================================================
Common Stocks--0.9%
- ---------------------------------------------------------------------------------------------
BayCorp Holdings Ltd.(15) 16,133 $ 123,014
- ---------------------------------------------------------------------------------------------
Cellnet Data Systems, Inc.(15) 16,000 199,000
- ---------------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A(15) 32,100 501,563
- ---------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(4) 1,350 1,355,062
- ---------------------------------------------------------------------------------------------
El Paso Electric Co.(15) 60,400 426,575
- ---------------------------------------------------------------------------------------------
Equitable Bag, Inc.(4)(15) 39,357 196,785
- ---------------------------------------------------------------------------------------------
Grand Union Co.(15) 144,928 326,088
- ---------------------------------------------------------------------------------------------
Greate Bay Casino Corp.(15) 15,247 20,965
- ---------------------------------------------------------------------------------------------
Hollywood Casino Corp., Cl. A(15) 90,836 272,508
- ---------------------------------------------------------------------------------------------
News Corp. Ltd., Sponsored ADR, Preference 166,271 2,597,984
- ---------------------------------------------------------------------------------------------
Omnipoint Corp.(4)(15) 200,000 3,158,750
- ---------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.(4)(12)(15) 1,688,400 211,050
- ---------------------------------------------------------------------------------------------
Southwest Airlines Co. 123,700 3,200,738
- ---------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc.(4)(15) 370,500 370,500
- ---------------------------------------------------------------------------------------------
Walter Industries, Inc.(15) 544 9,112
- ---------------------------------------------------------------------------------------------
WorldCom, Inc. 59,300 1,897,600
-----------
Total Common Stocks (Cost $17,564,349) 14,867,294
=============================================================================================
Preferred Stocks--3.0%
- ---------------------------------------------------------------------------------------------
American Radio Systems Corp., 11.375% Cum. Exchangeable
Preferred(5)(7) 19,917 2,116,181
- ---------------------------------------------------------------------------------------------
Cablevision Systems Corp., 8.50% Cum. Cv., Series I 142,500 3,865,313
- ---------------------------------------------------------------------------------------------
California Federal Bank, 11.50% Non-Cum., Non-Vtg 97,300 10,800,300
- ---------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred(4)(12)(15) 130,000 3,250,000
- ---------------------------------------------------------------------------------------------
CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock, Series B 26,000 939,250
- ---------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cv. Sr. Preferred Stock, Series C(4)(15) 390,000 4,056,000
- ---------------------------------------------------------------------------------------------
El Paso Electric Co., 11.40% Series A Preferred Stock(5) 20,229 2,280,820
- ---------------------------------------------------------------------------------------------
Fidelity Federal Bank, 12% Non-Cum. Exchangeable Perpetual
Preferred Stock, Series A(4) 3,150 88,200
- ---------------------------------------------------------------------------------------------
Fresenius Medical Care Trust, 9% Preferred Securities 6,070,000 6,312,800
- ---------------------------------------------------------------------------------------------
Glendale Federal Bank, F.S.B., 8.75% Non-Cum. Cv., Series E 11,500 747,500
- ---------------------------------------------------------------------------------------------
K-III Communications Corp., $11.625 Exchangeable, Series B(4)(5) 17,335 1,876,549
- ---------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Sr. Exchangeable
Preferred(5)(15) 71,742 3,784,391
- ---------------------------------------------------------------------------------------------
Panamsat Corp., 12.75% Sr. Preferred Exchangeable(5) 1,968 2,413,260
- ---------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 21,000 498,750
- ---------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Preferred Stock 194,900 5,067,400
-----------
Total Preferred Stocks (Cost $45,282,106) 48,096,714
</TABLE>
25 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
==============================================================================================
Other Securities--0.4%
- ---------------------------------------------------------------------------------------------
SD Warren Co., 14% Cum. Exchangeable, Series B(15) 72,000 $ 3,114,000
- ---------------------------------------------------------------------------------------------
SDW Holdings Corp., 15% Cum. Sr. Exchangeable Preferred(7)(15) 86,880 3,127,680
-----------
Total Other Securities (Cost $5,428,859) 6,241,680
Units
=============================================================================================
Rights, Warrants and Certificates--0.5%
- ---------------------------------------------------------------------------------------------
American Communications Services, Inc. Wts., Exp. 11/05(4) 2,575 128,750
- ---------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99(4) 40,000 20,200
- ---------------------------------------------------------------------------------------------
Ames Department Stores, Inc., Litigation Trust(4) 1,045,990 10,460
- ---------------------------------------------------------------------------------------------
Australis Media Ltd. Wts., Exp. 5/00(4) 825 6
- ---------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(4) 125,000 15,625
- ---------------------------------------------------------------------------------------------
Cellular Communications International, Inc. Wts., Exp. 8/03(4) 12,305 184,575
- ---------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(4)(12) 130,000 65,000
- ---------------------------------------------------------------------------------------------
Coinstar, Inc. Wts., Exp. 11/03(4) 5,475 383,250
- ---------------------------------------------------------------------------------------------
Comunicacion Celular SA Wts., Exp. 11/03(4) 5,700 313,500
- ---------------------------------------------------------------------------------------------
Federated Department Stores, Inc.:
Cl. C Wts., Exp. 12/99 69,654 931,622
Cl. D Wts., Exp. 12/01 69,654 966,449
- ---------------------------------------------------------------------------------------------
Furniture Brands International, Inc., Series 1 Wts., Exp. 8/99 32,716 351,697
- ---------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/02 163,894 1,311,152
- ---------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc. Wts., Exp. 4/01(4) 1,090 32,700
- ---------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(4) 50,820 406,560
- ---------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 6,000 --
- ---------------------------------------------------------------------------------------------
Jewel Recovery LP, Participation Units of Limited Partners' Interest 10,113 --
- ---------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc. Wts., Exp. 2/09(4) 69,290 693
- ---------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(4) 32,000 505,400
- ---------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03(4) 182,000 1,342,250
Exp. 6/05(4) 49,120 362,260
- ---------------------------------------------------------------------------------------------
Republic Health Corp. Wts., Exp. 4/00 3,763 --
- ---------------------------------------------------------------------------------------------
SDW Holdings Corp., Cl. B Wts., Exp. 12/06(4) 6,188 80,444
- ---------------------------------------------------------------------------------------------
Trizec Corp. Wts., Exp. 7/99 16,277 69,023
- ---------------------------------------------------------------------------------------------
Venezuela Oil Linked Certificates Wts., Exp. 4/20 24,990 --
- ---------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Wts., Exp. 1/02(4) 114,400 157,300
-----------
Total Rights, Warrants and Certificates (Cost $2,150,564) 7,638,916
</TABLE>
26 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
=============================================================================================
Structured Instruments--3.7%
- ---------------------------------------------------------------------------------------------
Bayerische Landesbank (New York Branch) CD, 13.75%, 8/18/97
(indexed to the cross currency rates of Greek Drachma &
Swiss Franc) $ 7,000,000 $ 6,684,300
- ---------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale (New York Branch):
Deutsche Mark Currency Protected Yield Curve CD, 6.28%, 7/25/97 1,500,000 1,563,825
Lehman Brothers High Yield Bond Index Nts., 12.50%, 7/8/97 8,000,000 8,220,800
Lehman Brothers High Yield Bond Index Nts., 12.50%, 8/7/97 2,000,000 2,046,200
Nikkei 225 Equity-Linked Nts., 6.03%, 4/23/98 3,500,000 3,857,350
- ---------------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce (New York Branch):
CD, 11.25%, 9/4/97 (indexed to the Russian Federation GKO,
Zero Coupon, 8/27/97)(4) 600,000 598,500
U.S. Dollar CD Linked to South African Rand, 17%, 1/21/98 1,750,000 1,804,775
- ---------------------------------------------------------------------------------------------
Credit Suisse First Boston (Cayman) Ltd., City of Moscow, Credit &
Convertibility Linked Nts., Series EM 215, Zero Coupon, 12.046%,
12/30/97(6)(14) 6,000,000 5,685,240
- ---------------------------------------------------------------------------------------------
German Bank (New York Branch) 2x High Yield Index Nts., 11.95%,
8/5/97(4) 9,500,000 9,523,750
- ---------------------------------------------------------------------------------------------
ING (U.S.) Financial Holdings Corp.:
Nts., Linked to the Greek Drachma/Swiss Franc Exchange Rate,
Zero Coupon, 14.437%, 12/10/97(6) 1,020,000 929,475
U.S. Dollar Hedged GKO Pass-Through Nts., Zero Coupon, 13.161%,
10/29/97(4)(6) 3,000,000 2,871,480
Zero Coupon Nts., Linked to the Greek Drachma/Swiss Franc
Exchange Rate, 14.235%, 10/8/97(6) 3,000,000 2,807,880
Zero Coupon Nts., Linked to the Greek Drachma/Swiss Franc
Exchange Rate, 14.462%, 3/31/98(6) 4,500,000 3,859,875
- ---------------------------------------------------------------------------------------------
Morgan Guaranty Trust Co. of New York, Nassau Branch,
Leveraged Nts. on Emerging Markets Bond Index Yield, 12%, 11/14/97 2,300,000 2,294,020
- ---------------------------------------------------------------------------------------------
Salomon, Inc. Russian S-Account Credit Linked Nts., Zero Coupon,
14.166%, 5/22/98(6) 3,375,000 2,962,136
Standard Chartered Bank, Korean Wong Principal & Interest
Linked Deposit:
8.04%, 12/17/97 1,500,000 1,491,750
8.63%, 6/30/98 1,500,000 1,486,650
-----------
Total Structured Instruments (Cost $58,612,497) 58,688,006
</TABLE>
27 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Date Strike Contracts See Note 1
===============================================================================================
<S> <C> <C> <C> <C>
Put Options Purchased--0.0%
- ------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds,
Buoni del Tesoro Poliennali, 9.50%,
2/1/06 Put Opt. (Cost $189,766) 7/97 99.96%(ITL) 5,532 $ --
Total Investments, at Value (Cost $1,538,349,750) 98.9% 1,576,560,498
Other Assets Net of Liabilities 1.1 17,635,050
Net Assets 100.0% $1,594,195,548
===== ==============
</TABLE>
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP--Argentine Peso MXP--Mexican Peso
CAD--Canadian Dollar MYR--Malaysian Ringgit
GRD--Greek Drachma PLZ--Polish Zloty
IDR--Indonesian Rupiah ZAR--South African Rand
ITL--Italian Lira
2. Represents the current interest rate for a variable rate security.
3. 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.
4. Identifies issues considered to be illiquid or restricted--See Note 7
of Notes to Financial Statements.
5. Interest or dividend is paid in kind.
6. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid under guidelines established by the
Board of Trustees. These securities amount to $268,749,090 or 16.86% of the
Fund's net assets, at June 30, 1997.
8. Represents the current interest rate for an increasing rate security.
9. Securities with an aggregate market value of
$15,402,182 are held in collateralized accounts to cover initial margin
requirements on open futures sales contracts. See Note 5 of Notes to Financial
Statements.
10. Denotes a step bond: a zero coupon bond that converts to a fixed
or variable interest rate at a designated future date.
11. Non-income producing issuer is in default of interest payment.
28 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
12. 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, 1997. The
aggregate fair value of all securities of affiliated companies as of June 30,
1997 amounted to $3,563,270. Transactions during the period in which the issuer
was an affiliate are as follows:
<TABLE>
<CAPTION>
Balance Balance
June 30, 1996 Gross Additions Gross Reductions June 30, 1997
- -------------------------------------------------------------------------------------------------
Stocks and Warrants Shares/Face Shares/Face Shares/Face Shares/Face
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CGA Group Ltd. Preferred -- 130,000 -- 130,000
CGA Group Ltd. Wts., Exp. 12/49 -- 130,000 -- 130,000
Pope, Evans & Robbins, Inc. 1,688,400 -- -- 1,688,400
Bonds and Notes
- -------------------------------------------------------------------------------------------------
Pope, Evans, & Robbins, Inc.,
7% Sr. Nts., 5/15/98 $5,955,189 -- -- $5,955,189
</TABLE>
13. 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.
14. When-issued security to be delivered and settled after June 30, 1997.
15. Non-income producing security.
See accompanying Notes to Financial Statements.
29 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1997
- --------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,529,322,946) $ 1,572,997,228
Affiliated companies (cost $9,026,804) 3,563,270
Receivables:
Investments sold 65,260,611
Interest, dividends and principal paydowns 27,105,896
Shares of beneficial interest sold 3,492,788
Closed forward foreign currency exchange contracts 575,458
Other 25,639
Total assets 1,673,020,890
================================================================================
Liabilities
Bank overdraft 44,234,218
- --------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $12,968,776
purchased on a when-issued
basis)--Note 1 23,604,432
Dividends 4,707,007
Shares of beneficial interest redeemed 4,544,062
Distribution and service plan fees 823,580
Daily variation on futures contracts Note--5 350,937
Transfer and shareholder servicing agent fees 80,881
Closed forward foreign currency exchange contracts 133,037
- --------------------------------------------------------------------------------
Trustees' fees 6,178
Other 341,010
---------------
Total liabilities 78,825,342
================================================================================
Net Assets $ 1,594,195,548
===============
Composition of Net Assets
Paid-in capital $ 1,739,334,661
- --------------------------------------------------------------------------------
Undistributed net investment income 276,928
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (183,149,812)
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments and
translation of Assets and liabilities denominated
in foreign currencies 37,733,771
---------------
Net assets $ 1,594,195,548
===============
30 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $1,167,054,667
and 83,454,351 shares of beneficial interest outstanding) $13.98
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $14.68
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (less applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$396,677,987 and 28,573,358 shares of beneficial interest outstanding) $13.88
- --------------------------------------------------------------------------------
Class C Shares: Net asset value, redemption price (less applicable
contingent deferred sales charge) and offering price per share (based
on net assets of $30,462,894 and 2,181,030 shares of beneficial
interest outstanding) $13.97
See accompanying Notes to Financial Statements
31 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended June 30, 1997
- --------------------------------------------------------------------------------
Investment Income
Interest (net of foreign withholding taxes of $31,323) $ 148,247,572
- --------------------------------------------------------------------------------
Dividends 2,914,897
------------
Total income 151,162,469
================================================================================
Expenses
Management fees--Note 4 9,226,623
- --------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,322,035
Class B 3,345,679
Class C 175,760
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,626,415
- --------------------------------------------------------------------------------
Shareholder reports 443,059
- --------------------------------------------------------------------------------
Custodian fees and expenses 162,192
- --------------------------------------------------------------------------------
Legal and auditing fees 86,039
- --------------------------------------------------------------------------------
Trustees' fees and expenses 66,727
- --------------------------------------------------------------------------------
Registration and filing fees:
Class A 167
Class B 33,936
Class C 6,840
- --------------------------------------------------------------------------------
Other 78,903
------------
Total expenses 17,574,375
================================================================================
Net Investment Income 133,588,094
================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 31,374,457
Closing of futures contracts--Note 5 (2,343,893)
Closing and expiration of option contracts written--Note 6 (1,675,609)
Foreign currency transactions (5,396,913)
------------
Net realized gain 21,958,042
- --------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 25,365,278
Translation of assets and liabilities denominated
in foreign currencies (1,487,347)
------------
Net change 23,877,931
------------
Net realized and unrealized gain 45,835,973
================================================================================
Net Increase in Net Assets Resulting From Operations $179,424,067
============
See accompanying Notes to Financial Statements
32 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
1997 1996
=====================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $133,588,094 $125,626,377
- ---------------------------------------------------------------------------------------------------------------------
Net realized gain 21,958,042 14,577,616
- ---------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 23,877,931 13,351,323
----------- -----------
Net increase in net assets resulting from operations 179,424,067 153,555,316
=====================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (100,736,506) (103,496,917)
Class B (27,545,181) (20,649,798)
Class C (1,429,353) (185,655)
=====================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase (decrease) in net assets resulting
from beneficial interest transactions--Note 2:
Class A 44,730,912 (1,432,524)
Class B 106,093,196 82,693,557
Class C 22,308,284 7,649,000
=====================================================================================================================
NET ASSETS
Total increase 222,845,419 118,132,979
- ---------------------------------------------------------------------------------------------------------------------
Beginning of period 1,371,350,129 1,253,217,150
-------------- --------------
End of period [including undistributed (overdistributed) net
investment income of $276,928 and $(2,519,975), respectively] $1,594,195,548 $1,371,350,129
============== ==============
</TABLE>
See accompanying Notes to Financial Statements
33 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended June 30,
1997 1996 1995 1994 1993
============================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $13.51 $13.22 $13.63 $14.16 $13.76
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income 1.27 1.29 1.30 1.42 1.60
Net realized and unrealized
gain (loss) .43 .27 (.40) (.54) .36
------ ------ ------ ------ ------
Total income from investment
operations 1.70 1.56 .90 .88 1.96
- ------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.23) (1.27) (1.30) (1.41) (1.56)
Tax return of capital distribution -- -- (.01) -- --
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.23) (1.27) (1.31) (1.41) (1.56)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.98 $13.51 $13.22 $13.63 $14.16
====== ====== ====== ====== ======
============================================================================================================
Total Return, at Net Asset Value(3) 13.10% 12.25% 7.09% 6.27% 15.31%
============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $1,167,055 $1,083,913 $1,060,752 $1,049,446 $1,119,056
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,127,509 $1,092,002 $1,005,746 $1,111,103 $978,671
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.22% 9.59% 9.81% 10.10% 11.59%
Expenses 1.00% 1.03% 1.03% 0.96% 0.97%
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 125.8% 104.9% 93.7% 96.7% 87.2%
</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.
34 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
------------------------------------------------------------- -----------------------
Year Ended June 30, Year Ended June 30,
1997 1996 1995 1994 1993(2) 1997 1996(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning
of period $13.43 $13.15 $13.57 $14.12 $13.87 $13.50 $13.30
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income 1.15 1.18 1.20 1.35 .23 1.14 .77
Net realized and unrealized
gain (loss) .43 .27 (.42) (.60) .27 .45 .19
------ ------ ------ ------ ------ ------ ------
Total income from investment
operations 1.58 1.45 .78 .75 .50 1.59 .96
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (1.13) (1.17) (1.19) (1.30) (.25) (1.12) (.76)
Tax return of capital distribution -- -- (.01) -- -- -- --
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.13) (1.17) (1.20) (1.30) (.25) (1.12) (.76)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.88 $13.43 $13.15 $13.57 $14.12 $13.97 $13.50
====== ====== ====== ====== ====== ====== ======
================================================================================================================================
Total Return, at Net Asset Value(3) 12.18% 11.40% 6.21% 5.31% 3.54% 12.23% 7.36%
================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $396,678 $279,789 $192,465 $87,509 $10,493 $30,463 $7,648
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $335,220 $236,362 $134,550 $51,816 $4,405 $17,654 $3,378
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.41% 8.75% 8.95% 8.98% 10.84%(4) 8.40% 8.41%(4)
Expenses 1.80% 1.84% 1.84% 1.88% 2.28%(4) 1.82% 1.90%(4)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 125.8% 104.9% 93.7% 96.7% 87.2% 125.8% 104.9%
</TABLE>
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, 1997 were $1,882,628,909 and $1,742,733,767, respectively.
See accompanying Notes to Financial Statements.
35 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, lower-rated, fixed income securities. The Fund's investment adviser 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 classes
of shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution and/or service plan, expenses
directly attributable to that class and exclusive voting rights with respect to
matters affecting that class. Class B shares will automatically convert to Class
A shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
================================================================================
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency exchange contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank or
dealer. Options are valued based upon the last sale price on the principal
exchange on which the option is traded or, in the absence of any transactions
that day, the value is based upon the last sale price on the prior trading date
if it is within the spread between the closing bid and asked prices. If the last
sale price is outside the spread, the closing bid is used.
36 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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, 1997, the
Fund had entered into outstanding when-issued or forward commitments of
$12,968,776.
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, 1997, securities with an
aggregate market value of $1,941,110, representing 0.12% 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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
37 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
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, 1997, the Fund
had available for federal income tax purposes an unused capital loss carryover
of approximately $169,033,000, which expires between 1999 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 fiscal year in
which the income or realized gain was recorded by the Fund.
During the year ended June 30, 1997, the Fund adjusted the
classification of net investment income and net realized gain (loss) to
shareholders to reflect the differences between financial statement amounts and
distributions determined in accordance with income tax regulations. Accordingly,
during the year ended June 30, 1997, amounts have been reclassified to reflect
an increase in overdistributed net investment income of $1,080,151. Accumulated
net realized loss on investments was decreased by the same amount.
38 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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.
================================================================================
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 30,1997 Year Ended June 30, 1996(1)
----------------------- ---------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 20,692,314 $285,257,249 19,901,989 $ 267,392,441
Dividends reinvested 4,327,859 59,845,032 4,497,586 60,481,931
Redeemed (21,776,775) (300,371,369) (24,448,371) (329,306,896)
----------- ------------ ----------- ------------
Net increase (decrease) 3,243,398 $ 44,730,912 (48,796) $ (1,432,524)
=========== ============ =========== =============
- -------------------------------------------------------------------------------------
Class B:
Sold 14,179,293 $194,365,424 11,155,284 $ 149,169,252
Dividends reinvested 951,852 13,080,795 730,103 9,766,261
Redeemed (7,393,386) (101,353,023) (5,689,226) (76,241,956)
----------- ------------ ----------- ------------
Net increase 7,737,759 $106,093,196 6,196,161 $ 82,693,557
=========== ============ =========== =============
- -------------------------------------------------------------------------------------
Class C:
Sold 2,112,964 $ 29,194,779 870,562 $ 11,774,656
Dividends reinvested 66,911 925,795 8,861 120,139
Redeemed (565,170) (7,812,290) (313,098) (4,245,795)
----------- ------------ ----------- ------------
Net increase 1,614,705 $ 22,308,284 566,325 $ 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.
39 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
At June 30, 1997, net unrealized appreciation on investments of $38,210,748 was
composed of gross appreciation of $69,241,100, and gross depreciation of
$31,030,352.
================================================================================
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% of the first
$200 million of average annual net assets, 0.72% of the next $200 million, 0.69%
of the next $200 million, 0.66% of the next $200 million, 0.60% of the next $200
million and 0.50% of average annual net assets over $1 billion.
For the year ended June 30, 1997, commissions (sales charges paid by
investors) on sales of Class A shares totaled $2,724,041, of which $719,342 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 $4,834,653 and $223,999, respectively, of which $78,254
and $3,081 was paid to an affiliated broker/dealer for Class B and Class C
shares, respectively. During the year ended June 30, 1997, OFDI received
contingent deferred sales charges of $975,794 and $18,172, respectively, upon
redemption of Class B and Class C shares as reimbursement for sales commissions
advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and 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 shareholder accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers that
hold Class A shares. During the year ended June 30, 1997, OFDI paid $37,465 to
an affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
40 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund has adopted a 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. 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
net assets of Class B shares, determined as of the close of each regular
business day. During the year ended June 30, 1997, OFDI paid $7,271 to an
affiliated broker/dealer as reimbursement for Class B personal service and
maintenance expenses and retained $2,779,601, as reimbursement for Class B sales
commissions and service fee advances, as well as financing costs. 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 distributing shares before
the Plan was terminated. As of June 30, 1997, OFDI had incurred unreimbursed
expenses of $12,071,339 for Class B.
The Fund has adopted a 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. During the year ended June 30, 1997, OFDI retained
$147,841 as compensation for Class C sales commissions and service fee advances,
as well as financing costs. 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 distributing shares before the Plan was terminated. As of June 30,
1997, OFDI had incurred unreimbursed expenses of $397,196 for Class C.
================================================================================
5. 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.
41 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. 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, 1997, the Fund had outstanding futures contracts to purchase debt
securities as follows:
<TABLE>
<CAPTION>
Number of Valuation as of Unrealized
Contracts to Purchase Expiration Date Futures Contracts June 30, 1997 Depreciation
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Bonds 9/97 633 $70,302,563 $430,469
</TABLE>
================================================================================
6. 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.
42 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Written option activity for the year ended June 30, 1997 was as follows:
Call Options Put Options
--------------------------- ------------------------
Number of Amount of Number of Amount of
Options Premiums Options Premiums
- -------------------------------------------------------------------------------
Options outstanding at
June 30, 1996 9,183,500 $ 185,550 -- $ --
Options written 486,233,714 3,206,197 2,886,513 222,393
Options closed or expired (486,634,164) (3,256,157) (2,885,853) (218,829)
Options exercised (8,783,050) (135,590) (660) (3,564)
------------ ----------- ---------- ---------
Options outstanding at
June 30, 1997 -- $ -- -- $ --
============ =========== ========== =========
================================================================================
7. Illiquid and Restricted Securities
At June 30, 1997, investments in securities included issues that are illiquid or
restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid and restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at June 30, 1997 was $158,344,196, which represents
9.93% of the Fund's net assets, of which $11,535,278 is considered restricted.
Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Dates Cost Per Unit June 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
Arizona Charlie's, Inc.,
12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93 100.00% 58.50%
- -------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc.,
12% First
Mtg. Nts., Series A, 11/15/00 11/18/93-12/15/95 87.50 18.75
- -------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts.,
6/10/02 4/14/92-3/3/93 100.00 110.37
Stocks and Warrants
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .13
- -------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred 6/17/97 25.00 25.00
- -------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .50
- -------------------------------------------------------------------------------------------
ECM Fund, L.P.I. 4/14/92 1,000.00 1,003.75
- -------------------------------------------------------------------------------------------
Omnipoint Corp. 1/26/96 16.00 15.79
- -------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00 11/29/95 -- 15.79
- -------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. 5/2/94 9.50 1.00
</TABLE>
43 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
8. Other Matters
At a meeting held on June 24, 1997, the Board of Trustees approved the addition
of Class Y shares for Oppenheimer High Yield Fund, to be offered at a future
date.
44 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,
1997, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1997 and 1996,
and the financial highlights for the period July 1, 1992 to June 30, 1997. 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, 1997 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, 1997, 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, 1997
45 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 1998, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. 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,
1997 which are not designated as capital gain distributions should be multiplied
by 1.97% 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 adviser for specific
guidance.
46 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 Adviser OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder Servicing
Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
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.
47 Oppenheimer High Yield Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
Internet
24-hr access to account information
- -----------------------------------
www.oppenheimerfunds.com
- -----------------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- -----------------------------------
1-800-525-7048
- -----------------------------------
Account Transactions
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- -----------------------------------
1-800-852-8457
- -----------------------------------
PhoneLink
24-hr automated information
and automated transactions
- -----------------------------------
1-800-533-3310
- -----------------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- -----------------------------------
1-800-843-4461
- -----------------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- -----------------------------------
1-800-835-3104
- -----------------------------------
RA0280.001.0697 August 30, 1997 [LOGO] OppenheimerFunds(SM)
Distributor, Inc.
