<PAGE>
-----------------------------------
Semiannual Report December 31, 1998
-----------------------------------
OPPENHEIMER
High Yield
Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
High Yield Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
High Yield Fund
Dear shareholder,
- --------------------------------------------------------------------------------
In retrospect, 1998 has been an unsettling year for the financial markets.
Around the world, stock and bond markets experienced considerable instability,
with particular tumult being felt in Southeast Asia, Russia and Latin America.
The U.S. stock market was not immune from the extreme volatility, as it climbed
to record levels through July before correcting sharply in the third quarter and
rebounding to new highs in the fourth quarter. In the bond market, yields on
U.S. Treasury securities declined to record lows before rising modestly late in
the year.
Does the swift recovery of the U.S. stock market and the favorable
economic environment for the bond market mean that domestic stocks and bonds
will continue to prosper? We are optimistic over the long term, but we do expect
that concerns about corporate earnings growth in a slow-growth economy will
contribute to more stock market volatility in 1999. In the bond market, the
Federal Reserve Board's decisions to reduce short-term interest rates should
help create a positive climate for fixed income securities. While lower interest
rates are generally good for bond prices, it will become more difficult for bond
funds to maintain their dividends at current levels if yields decline further.
As an Oppenheimer fund shareholder, you may wonder how this potential
volatility will affect you. If you maintain a long-term perspective, as we do,
short-term volatility over the coming months should have little bearing on your
ability to achieve your future financial goals. That's why we continue to
suggest that you adhere to your long-term investment plan. In fact, we are very
encouraged that most of our shareholders stayed the course during last summer's
stock market correction, avoiding the temptation of selling into a temporarily
declining market.
Finally, I would like to thank those shareholders who contacted us about
our revised account statement. Response has been very positive, and we are
pleased that many of you find the new format easier to read and more
informative. If you have any questions about the new statement or any other
matter, please don't hesitate to call us at 1-800-525-7048. In the meantime,
thank you for choosing OppenheimerFunds, The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
January 25, 1999
3 Oppenheimer High Yield Fund
<PAGE>
"We have
restructured our
emerging markets
portfolio,
emphasizing
nations that we
believe have the
financial strength
to withstand
the current
credit crunch."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How did the Fund perform during the six-month period that ended December 31,
1998?
Over the past six months that ended December 31, 1998, the various markets in
which Oppenheimer High Yield Fund invests experienced extreme volatility. That's
because the ongoing financial crisis in Southeast Asia, as well as the
persistent recession in Japan began to adversely affect U.S. corporate earnings
and economic growth during the second half of 1998. As a result, the Fund's
performance over the period was hurt.
Why should events overseas affect high yield bonds from issuers in the United
States?
Investor sentiment in the United States turned negative at mid-year when the
Asian financial crisis spread to Russia, which effectively defaulted on its
government bonds. The spread of the "Asian contagion" to other emerging markets
renewed concerns that developed markets -- including the United States -- might
suffer. As a result, both U.S. and foreign investors shifted their assets away
from investments they perceived as risky. Emerging-market debt, preferred stocks
and high yield corporate bonds were particularly hard hit during this "flight to
quality."
4 Oppenheimer High Yield Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
David Negri,
Thomas Reedy
When the fourth quarter of the year began, however, many of the concerns about
the global financial crisis began to ease. Investors appeared encouraged when
the International Monetary Fund, the U.S. Federal Reserve Board and other
nations' central banks announced measures designed to stimulate global economic
growth. Perhaps most significant, the Japanese government announced plans to
restructure its ailing banking system and boost its economy. With a possible end
to the financial crisis in sight, the perceived risks to the U.S. economy
appeared to be lower than they were just a few months previously. As a result,
high yield bond markets worldwide rebounded strongly, retracing much -- but not
all -- of their previous declines.
How was the Fund managed in this environment?
When it became apparent to us early in the year that investors were likely to
shift assets away from high yield bonds into relatively safe havens such as U.S.
Treasury securities, we attempted to position the portfolio defensively in
advance of the heightened volatility. At that time, we also became concerned
that prices on many high yield securities had risen to the high end of their
valuation ranges, making them more vulnerable to any future disappointments.
1. Effective February 1, 1999, the Fund's portfolio managers are David Negri and
Thomas Reedy.
5 Oppenheimer High Yield Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 12/31/98(2)
Class A
1 year 5 year 10 Year
- ------------------------------
- -4.65% 6.50% 9.29%
- ------------------------------
Class B
Since
1 year 5 year Inception
- ------------------------------
- -5.26% 6.38% 7.74%
- ------------------------------
Class C
Since
1 year 5 year Inception
- ------------------------------
- -1.60% N/A 8.02%
- ------------------------------
Class Y
Since
1 year 5 year Inception
- ------------------------------
0.32% N/A 0.92%
- ------------------------------
An interview with your Fund's managers
- --------------------------------------------------------------------------------
Accordingly, we reduced our exposure to the high yield corporate market, and we
increased our cash position. We also altered the portfolio's composition, adding
to those market sectors that we believed would maintain their values during a
downturn, and shifting assets away from sectors that we regarded as most
susceptible to prevailing risks. For example, our holdings of mortgage-backed
securities issued by U.S. government agencies held up relatively well during the
market's decline. We also established a position in U.S. Treasury securities
which provided positive returns even as prices of other bonds declined. U.S.
Treasury securities were considered a safe haven by many investors, and demand
for direct obligations of the federal government soared when perceptions of risk
increased.
During the rebound in the fourth quarter, we took advantage of
opportunities to redeploy some of our cash reserves and shift assets from U.S.
Treasury securities to higher-yielding bonds. We emphasized quality for these
new purchases, focusing on higher-rated corporate bonds. We also continued to
focus on industries where we identified good growth prospects, such as cable
television and telecommunications companies.
6 Oppenheimer High Yield Fund
<PAGE>
In the foreign bond sector, we maintained positions totaling about 13% of the
Fund's assets throughout the year, split between emerging market debt and bonds
from developed markets in Europe. However, unlike our foreign bond holdings
early in the year, which were predominately denominated in U.S. dollars, our
positions in the latter part of the year were mostly denominated in the local
currencies of their issuers. We made this change because of our expectation that
the U.S. dollar is likely to weaken relative to many foreign currencies in 1999,
which has the potential effect of boosting returns in U.S. dollar terms.
Did any sectors of the high yield bond market have a particularly positive or
negative effect on the Fund's performance?
Within the high yield corporate portion of the portfolio, we received relatively
good results from our holdings of bonds issued by media companies, including
broadcasters and cable television firms.
2. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A 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 1% (since inception on
5/3/93). Class C returns for the one-year result include the contingent deferred
sales charge of 1%. Class C shares have an inception date of 11/1/95. Class Y
shares were first publicly offered on 10/15/97 and are not available for sale to
individual shareholders. Class B and C shares are subject to an annual 0.75%
asset-based sales charge. An explanation of the different performance
calculations is in the Fund's prospectus.
7 Oppenheimer High Yield Fund
<PAGE>
Standardized Yields3
For the 30 Days Ended 12/31/98
- ------------------------------
Class A 9.24%
- ------------------------------
Class B 8.92
- ------------------------------
Class C 8.92
- ------------------------------
Class Y 9.71
- ------------------------------
An interview with your Fund's managers
- --------------------------------------------------------------------------------
Companies whose earnings are sensitive to fluctuations in economic conditions
also performed relatively well in a low-inflation, moderate-growth environment.
On the other hand, the portfolio's performance was hurt by our holdings in the
energy and telecommunications industries, which were relatively hard-hit during
last summer's sell-off.
What is your outlook for the future?
Looking forward, we are cautiously optimistic. Although U.S. economic growth may
continue to moderate in response to global financial problems, we believe that
the domestic economy will continue to expand in an environment characterized by
low inflation and an accommodative monetary policy. In our view, despite the
likelihood of above-average volatility over the near term, these conditions
should prove favorable for high-income securities.
3. Standardized yield is based on net investment income for the 30-day period
ended December 31, 1998. Falling share prices will tend to artificially raise
yields.
4. Portfolio is subject to change. Percentages are as of December 31, 1998, and
are dollar-weighted based on total market value of investments. Average credit
quality includes securities rated by national ratings organizations as well as
unrated securities (16.5% of total investments as of December 31, 1998) which
have ratings assigned by the Manager in categories equivalent to those of
ratings organizations. Under normal market conditions, the Fund invests at least
65% of its assets in high yield, lower rated, fixed income securities commonly
known as "junk bonds." Securities rated below investment grade carry a greater
risk of default. While the Fund has generally invested under 15% of its assets
in foreign securities, which are subject to exchange rate and political
uncertainties, it is not restricted to any amount by the prospectus.
5. Portfolio is subject to change. Percentages are as of December 31, 1998, and
are based on total market value of net assets.
8 Oppenheimer High Yield Fund
<PAGE>
Credit Allocation4
[GRAPHIC]
Treasury/Agency 0.5%
AAA/AA 7.2
A/BBB 4.6
BB/B 74.6
Below B 13.1
Furthermore, we believe that last summer's market declines created some areas of
compelling value, and we are hopeful that the Fund will benefit as these
securities' prices return to more normal levels. In our view, buying securities
inexpensively and holding them while they appreciate in a recovering market is
an important part of The Right Way to Invest.
- --------------------------------------------------------------------------------
Top 10 Sectors -- Corporate Bonds & Notes5
- --------------------------------------------------------------------------------
Media/Entertainment: Telecommunications 14.7%
- --------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications 7.4
- --------------------------------------------------------------------------------
Gaming/Leisure 5.9
- --------------------------------------------------------------------------------
Transportation 5.4
- --------------------------------------------------------------------------------
Service 5.2
- --------------------------------------------------------------------------------
Energy 5.1
- --------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video 3.5
- --------------------------------------------------------------------------------
Metals/Minerals 2.7
- --------------------------------------------------------------------------------
Manufacturing 2.5
- --------------------------------------------------------------------------------
Chemicals 2.4
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 Oppenheimer High Yield Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
============================================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--2.8%
- ------------------------------------------------------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp.,
Multiclass Mtg. Pass-Through Certificates,
Series 1997-C1, Cl. H, 7%, 6/17/29(2) $ 840,000 $ 577,763
- ------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through
Certificates, Series 1997-D4, Cl. B3, 7.525%, 4/14/29(3) 1,500,000 1,058,906
- ------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 7.76%, 12/25/03(2)(3) 1,452,000 1,353,083
- ------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp.,
Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. F, 7.50%, 6/20/13(2) 1,400,000 1,091,563
Series 1997-C1, Cl. G, 7.50%, 6/20/14(2) 1,900,000 1,360,281
Series 1997-C1, Cl. H, 7.50%, 8/20/14(2) 1,400,000 960,750
Series 1997-C2, Cl. F, 7.46%, 5/17/14 3,500,000 2,965,156
Series 1997-C2, Cl. H, 7.46%, 1/17/35 1,500,000 1,020,000
- ------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 197, Cl. IO, 9.863%, 4/1/28(4) 19,523,982 5,076,235
Series 199, Cl. IO, 20.118%, 8/1/28(4) 14,828,131 3,607,406
- ------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, 8.098%, 2/25/11(2)(3) 4,500,000 3,497,344
- ------------------------------------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust,
Interest-Only Stripped Mtg.-Backed Security:
Series 1997-C1, Cl. IO, 9.979%, 4/18/27(4) 15,742,960 1,093,398
Series 1997-C1, 9.945%, 4/18/27(4) 50,094,786 3,479,239
- ------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg
Obligations, Series 1997-C2, Cl. F, 6.75%, 4/16/29 3,000,000 2,042,813
- ------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 1997-C1, Cl. X, 9.077%, 7/15/27(4) 75,126,798 6,714,458
- ------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg
Pass-Through Certificates:
Series 1997-RR, Cl. D, 7.671%, 4/30/39(2) 5,000,000 4,715,625
Series 1997-RR, Cl. F, 7.672%, 4/30/39(2) 8,000,000 5,810,000
- ------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg
Pass-Through Certificates, Series 1997-MC1,
Cl. F, 7.452%, 5/20/07(2) 1,400,000 1,163,148
- ------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1995-C1, Cl. F, 6.90%, 2/25/27 1,493,254 1,397,243
- ------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Series 1996-C1,
Cl. E, 9.184%, 1/20/06 2,496,000 2,552,160
------------
Total Mortgage-Backed Obligations (Cost $54,533,160) 51,536,571
</TABLE>
11 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
============================================================================================================
<S> <C> <C>
Foreign Government Obligations--3.2%
- ------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion
de Deudas, Series I, 3.011%, 4/1/07(3)ARP $ 18,638,022 $ 12,014,338
- ------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07ARP 1,660,000 1,399,813
- ------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon,
34.778%, 2/11/99(5)MXP 26,700,000 2,605,397
- ------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 7,654,530 4,573,582
- ------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Eligible Interest Bonds, 6.125%,
4/15/06(3) 5,760,000 3,715,200
- ------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 3.011%,
4/1/07(3)ARP 2,650,228 1,505,180
- ------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Disc. Bonds, Tranche A, 6.688%, 7/28/24(3) 3,384,000 2,377,260
- ------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Front-Loaded Interest Reduction
Bearer Bonds, Tranche A, 2.50%, 7/28/12(6) 1,500,000 858,750
- ------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 6.688%, 7/28/11(3) 5,650,000 3,799,625
- ------------------------------------------------------------------------------------------------------------
Ecuador (Republic of) Debs., 6.625%, 2/27/15(3) 2,643,557 1,070,641
- ------------------------------------------------------------------------------------------------------------
Germany (Republic of) Treasury Bills, Zero Coupon,
3.404%, 1/15/99(5)DEM 12,000,000 7,196,650
- ------------------------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Disc. Bonds, 6.0%, 12/23/23(3) 1,750,000 1,054,375
- ------------------------------------------------------------------------------------------------------------
Panama (Government of) Bonds, 8.875%, 9/30/27 785,000 729,559
- ------------------------------------------------------------------------------------------------------------
Panama (Government of) Interest Reduction Bonds,
4%,7/17/14(6) 1,375,000 1,027,813
- ------------------------------------------------------------------------------------------------------------
Panama (Government of) Past Due Interest Debs., 6.688%,
7/17/16(3) 1,898,388 1,409,553
- ------------------------------------------------------------------------------------------------------------
Peru (Republic of) Front-Loaded Interest Reduction Bonds,
3.25%, 3/7/17(6) 1,000,000 568,750
- ------------------------------------------------------------------------------------------------------------
Peru (Republic of) Past Due Interest Bonds, Series 20 yr.,
4%, 3/7/17(6) 2,350,000 1,480,500
- ------------------------------------------------------------------------------------------------------------
Perusahaan Listr, 17%, 8/21/01(2)IDR 1,000,000,000 68,750
- ------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Debs., 6%, 12/1/09(3) 968,000 791,340
- ------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon,
14.313%, 3/31/99(5)PLZ 7,000,000 1,932,046
- ------------------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts., Zero Coupon, 3/17/99(2)(7)IDR 4,000,000,000 125,000
- ------------------------------------------------------------------------------------------------------------
Russia (Government of) Debs., 5.969%, 12/15/15(3) 93,453 10,338
- ------------------------------------------------------------------------------------------------------------
Russia (Government of) Principal Loan Debs., Series 24 yr.,
5.969%, 12/15/20(3) 5,550,000 343,478
- ------------------------------------------------------------------------------------------------------------
United Mexican States Bills, Zero Coupon, 34.23%, 5/6/99(5)MXP 45,670,820 4,163,314
- ------------------------------------------------------------------------------------------------------------
United Mexican States Sr. Nts., 8.625%, 3/12/08 1,500,000 1,391,250
- ------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 5.938%,
12/18/07(3) 4,714,285 2,999,464
------------
Total Foreign Government Obligations (Cost $62,531,654) 59,211,966
</TABLE>
12 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
============================================================================================================
<S> <C> <C>
Loan Participations--0.1%
- ------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.,
Tranche 1, 6.375%, 9/4/06(3) $ 1,179,272 $ 536,569
- ------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.312%, 1/1/09(2)(3) 1,140,000 903,450
------------
Total Loan Participations (Cost $1,831,533) 1,440,019
============================================================================================================
Corporate Bonds and Notes--77.0%
- ------------------------------------------------------------------------------------------------------------
Aerospace/Defense--2.0%
Amtran, Inc.:
9.625% Nts., 12/15/05 2,300,000 2,311,500
10.50% Sr. Nts., 8/1/04 5,600,000 5,852,000
- ------------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375%, Sr. Nts., 11/15/06(8) 5,600,000 5,740,000
10.75% Sr. Nts., 8/1/05 115,000 121,325
12.25% Pass-Through Certificates, 12/1/02(9) 6,425,000 6,939,000
- ------------------------------------------------------------------------------------------------------------
BE Aerospace, Inc., 9.50% Sr. Sub. Nts., 11/1/08(8) 4,000,000 4,260,000
- ------------------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable
Asset-Backed Nts., Series 1997-1, 1/1/01(2) 3,000,000 2,940,000
- ------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., Units (each unit consists of
$1,000 principal amount of 12% sr. sub. nts., 9/30/08 and
one warrant to purchase 1.55 shares of common stock)(8)(10) 4,000,000 4,020,000
- ------------------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts.,
Series 1997-A, Cl. B, 6/15/04(2) 2,264,656 2,415,030
- ------------------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 1,996,786 1,976,818
------------
36,575,673
- ------------------------------------------------------------------------------------------------------------
Chemicals--2.4%
Brunner Mond Group plc, 12.50% Sr. Sub. Nts., 7/15/08(8)GBP 5,600,000 8,588,444
- ------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 4,630,000 4,676,300
- ------------------------------------------------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts., 6/1/07 1,400,000 1,309,000
- ------------------------------------------------------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 2,890,000 2,326,450
- ------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03(11) 11,325,000 12,089,437
- ------------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07 1,000,000 775,000
- ------------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 2,020,000 1,626,100
- ------------------------------------------------------------------------------------------------------------
Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 7,255,000 7,400,100
- ------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.25% Sr. Sub. Nts., 4/1/07 1,560,000 1,318,200
11.75% Sr. Unsec. Sub. Nts., 8/15/06(11) 1,905,000 1,647,825
- ------------------------------------------------------------------------------------------------------------
Texas Petrochemicals Corp., 11.125% Sr. Sub. Nts., 7/1/06 1,485,000 1,470,150
------------
43,227,006
</TABLE>
13 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Durables--0.2%
- ------------------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 $ 340,000 $ 205,700
- ------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 2,695,000 3,128,922
------------
3,334,622
- ------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--2.3%
AKI Holdings, Inc.:
0%/13.50% Sr. Disc. Debs., 7/1/09(8)(12) 2,520,000 995,400
10.50% Sr. Nts., 7/1/08(8) 4,200,000 4,011,000
- ------------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 6,517,000 3,747,275
- ------------------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Sub. Nts., 8/15/08(8) 3,500,000 3,570,000
- ------------------------------------------------------------------------------------------------------------
Consoltex Group, Inc., 11% Sr. Sub. Nts., Series B, 10/1/03 3,780,000 3,855,600
- ------------------------------------------------------------------------------------------------------------
Globe Manufacturing, Inc., 10% Sr. Sub. Nts., 8/1/08(8) 3,500,000 3,185,000
- ------------------------------------------------------------------------------------------------------------
Phillips-Van Heusen Corp., 9.50% Sr. Unsec. Sub. Nts., 5/1/08 1,525,000 1,532,625
- ------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc., 7% Sr. Nts., 5/15/98(2)(7)(13)(16) 5,955,189 --
- ------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp.:
8.625% Sr. Unsec. Sub. Nts., 2/1/08 5,335,000 4,881,525
9% Sr. Nts., 11/1/06(8) 2,750,000 2,750,000
- ------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 14.41%, 3/15/01(5) 11,720,000 6,739,000
- ------------------------------------------------------------------------------------------------------------
Salton/Maxim Housewares, Inc., 10.75% Sr. Sub. Nts., 12/15/05(8) 5,600,000 5,663,000
- ------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08 1,200,000 1,146,000
------------
42,076,425
- ------------------------------------------------------------------------------------------------------------
Energy--5.1%
AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(8) 3,500,000 3,473,750
- ------------------------------------------------------------------------------------------------------------
Belden & Blake Corp., 9.875% Sr. Sub. Nts., 6/15/07 2,470,000 2,013,050
- ------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06(14) 3,227,000 2,436,385
9.625% Sr. Unsec. Nts., Series B, 5/1/05 3,845,000 2,902,975
- ------------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 5,450,000 4,877,750
- ------------------------------------------------------------------------------------------------------------
Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 3,175,000 2,936,875
- ------------------------------------------------------------------------------------------------------------
Dailey International, Inc., 9.50% Sr. Unsec. Nts., Series B, 2/15/08 2,800,000 1,246,000
- ------------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 2,500,000 2,112,500
- ------------------------------------------------------------------------------------------------------------
Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(8) 2,800,000 1,918,000
- ------------------------------------------------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., Series B, 2/15/07 5,095,000 3,795,775
9.50% Sr. Sub. Nts., 11/1/06 2,750,000 2,131,250
- ------------------------------------------------------------------------------------------------------------
Gothic Energy Corp., 0%/14.125% Sr. Disc. Nts., 5/1/06(12) 14,875,000 4,908,750
- ------------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(8) 9,725,000 7,634,125
- ------------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08 4,015,000 2,750,275
- ------------------------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., Series D, 11/1/06(7) 5,995,000 2,248,125
</TABLE>
14 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Energy (continued)
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 $ 4,980,000 $ 4,008,900
- ------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 5,800,000 5,887,000
- ------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 9.375% Sr. Sub. Debs., 2/1/06 13,615,000 12,798,100
- ------------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 7,525,000 6,998,250
- ------------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 12,535,000 8,837,175
- ------------------------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals (Canada), Inc.,
11.75% First Mtg. Nts., Series B, 11/15/03 925,000 929,625
- ------------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 4,210,000 4,083,700
- ------------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc.:
0%/9.875% Sr. Disc. Nts., 2/15/08(12) 4,200,000 2,541,000
0%/11.375% Sr. Disc. Nts., 2/15/09(12) 1,680,000 1,008,000
------------
94,477,335
- ------------------------------------------------------------------------------------------------------------
Financial--1.3%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 1,125,000 770,625
- ------------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 78,000 62,790
- ------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 287,233 287,951
- ------------------------------------------------------------------------------------------------------------
Emergent Group, Inc., 10.75% Sr. Nts., Series B, 9/15/04 4,455,000 2,249,775
- ------------------------------------------------------------------------------------------------------------
Industrial Bank of Japan Preferred Capital Co. (The) LLC,
8.69% Bonds, 12/29/49(3)(8) 4,485,000 3,864,092
- ------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(2)(7) 8,802,000 --
- ------------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 10.206% Nts., 11/15/07(3) 1,000,000 1,020,000
- ------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 24% Nts., 6/19/03IDR 2,464,500,000 36,967
- ------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts.,
Series B, 4/1/08 10,710,000 10,013,850
- ------------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28 2,525,000 2,278,812
- ------------------------------------------------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 3,820,000 3,820,000
------------
24,404,862
- ------------------------------------------------------------------------------------------------------------
Food & Drug--2.1%
Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 4,730,000 4,954,675
- ------------------------------------------------------------------------------------------------------------
Fleming Cos., Inc.:
10.50% Sr. Sub. Nts., Series B, 12/1/04 3,665,000 3,481,750
10.625% Sr. Sub. Nts., Series B, 7/31/07 8,255,000 7,739,062
- ------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(12) 5,610,000 4,628,250
12.625% Sub. Nts., 6/15/02 10,000,000 9,800,000
- ------------------------------------------------------------------------------------------------------------
Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 5,645,000 6,138,937
- ------------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04 1,065,000 1,166,175
------------
37,908,849
</TABLE>
15 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Food/Tobacco--2.0%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 $ 1,680,000 $ 1,755,600
- ------------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 10,015,000 9,864,775
- ------------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., Series B,
12/15/07(12) 6,950,000 4,795,500
- ------------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 6,845,000 7,443,937
- ------------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 6,400,000 6,432,000
- ------------------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10 1,150,000 1,178,750
- ------------------------------------------------------------------------------------------------------------
SmithField Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08 2,240,000 2,262,400
- ------------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts.,
11/15/07 3,435,000 3,331,950
------------
37,064,912
- ------------------------------------------------------------------------------------------------------------
Forest Products/Containers--1.8%
Ball Corp.:
7.75% Sr. Nts., 8/1/06(8) 2,500,000 2,625,000
8.25% Sr. Sub. Nts., 8/1/08(8) 3,300,000 3,448,500
- ------------------------------------------------------------------------------------------------------------
Four M Corp., 12% Sr. Sec. Nts., Series B, 6/1/06 655,000 487,975
- ------------------------------------------------------------------------------------------------------------
Mail-Well I Corp., 8.75% Sr. Sub. Nts., 12/15/08(8) 5,000,000 5,025,000
- ------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.625% Sr. Unsec. Nts., 8/1/07 3,820,000 3,800,900
10.875% Sr. Sub. Nts., 4/1/08 4,730,000 4,304,300
- ------------------------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 4,450,000 4,867,187
- ------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 0%/12.75% Sr. Disc. Nts., 3/15/08(12) 1,500,000 532,500
- ------------------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 2,750,000 2,832,500
- ------------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 5,590,000 5,645,900
------------
33,569,762
- ------------------------------------------------------------------------------------------------------------
Gaming/Leisure--5.9%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(12) 1,400,000 763,000
- ------------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 3,080,000 2,849,000
- ------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc.,
11.50% Promissory Nts., 8/1/95(7) 22,500 --
- ------------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00(2)(7) 1,000,000 60,000
- ------------------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts.,
Series B, 8/15/03 3,000,000 3,405,000
- ------------------------------------------------------------------------------------------------------------
Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06 860,000 860,000
- ------------------------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Sr. Nts., 4/1/02 8,070,000 8,594,550
- ------------------------------------------------------------------------------------------------------------
Grand Casinos, Inc., 10.125% First Mtg. Sec. Nts., 12/1/03 6,360,000 6,964,200
- ------------------------------------------------------------------------------------------------------------
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05 4,100,000 4,120,500
- ------------------------------------------------------------------------------------------------------------
Harveys Casino Resorts, 10.625% Sr. Unsec. Sub. Nts., 6/1/06 280,000 303,800
</TABLE>
16 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gaming/Leisure (continued)
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 $ 11,355,000 $ 11,780,812
- ------------------------------------------------------------------------------------------------------------
Intrawest Corp.:
9.75% Sr. Nts., 8/15/08 4,230,000 4,356,900
9.75% Sr. Unsec. Nts., 8/15/08(8) 3,000,000 3,090,000
- ------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority (Connecticut),
13.50% Sr. Sec. Nts., Series B, 11/15/02 5,085,000 6,127,425
- ------------------------------------------------------------------------------------------------------------
Outboard Marine Corp., 10.75% Sr. Nts., 6/1/08(8) 2,745,000 2,690,100
- ------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 12/15/05(8) 4,000,000 4,025,000
- ------------------------------------------------------------------------------------------------------------
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(12) 4,880,000 3,330,600
9.25% Sr. Nts., 4/1/06 1,850,000 1,921,688
- ------------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.:
9.50% Sr. Sub. Nts., 4/15/07 5,790,000 6,426,900
10.625% Sr. Sub. Nts., 7/15/05 1,900,000 2,080,500
- ------------------------------------------------------------------------------------------------------------
Showboat Marina Casino Partnership/Showboat Marina
Finance Corp., 13.50% First Mtg. Nts., Series B, 3/15/03 7,585,000 8,608,975
- ------------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06 3,640,000 3,753,750
- ------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
8.875% Sr. Sub. Nts., 12/1/08(8) 4,700,000 4,794,000
9.625% Sr. Sub. Nts., 6/1/03 600,000 621,660
9.75% Sr. Sub. Nts., 4/15/07 5,800,000 6,090,000
10.125% Sr. Sub. Nts., 3/15/06 6,000,000 6,315,000
- ------------------------------------------------------------------------------------------------------------
Venetian Casino Resort LLC/Las Vegas Sands, Inc.:
10% Sr. Unsec. Sub. Nts., 11/15/05(6) 2,600,000 2,301,000
12.25% Mtg. Nts., 11/15/04 3,015,000 2,864,250
------------
109,098,610
- ------------------------------------------------------------------------------------------------------------
Healthcare--1.1%
ICN Pharmaceutical, Inc., 8.75% Sr. Nts., 11/15/08(8) 5,040,000 5,115,600
- ------------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc.:
9.25% Sr. Sub. Nts., Series A, 1/15/08 460,000 432,400
9.50% Sr. Sub. Nts., 9/15/07 3,515,000 3,356,825
10.25% Sr. Sub. Nts., 4/30/06 5,330,000 5,250,050
- ------------------------------------------------------------------------------------------------------------
Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts.,
Series B, 11/1/07 85,000 81,813
- ------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(8) 4,200,000 3,969,000
- ------------------------------------------------------------------------------------------------------------
Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07 2,755,000 2,245,325
------------
20,451,013
- ------------------------------------------------------------------------------------------------------------
Housing--1.3%
Engle Homes, Inc., 9.25% Sr. Unsec. Nts., Series C, 2/1/08 2,160,000 2,170,800
- ------------------------------------------------------------------------------------------------------------
Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 995,000 900,475
- ------------------------------------------------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Sr. Nts., 3/1/04 1,940,000 2,056,400
</TABLE>
17 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Housing (continued)
Nortek, Inc.:
8.875% Sr. Nts., 8/1/08(8) $ 1,750,000 $ 1,793,750
9.125% Sr. Nts., Series B, 9/1/07 9,540,000 9,873,900
9.25% Sr. Nts., Series B, 3/15/07 7,545,000 7,771,350
------------
24,566,675
- ------------------------------------------------------------------------------------------------------------
Information Technology--2.0%
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(2) 3,780,000 2,702,700
- ------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc.,
0%/13.50% Sr. Disc. Nts., 3/15/08(12) 10,970,000 6,088,350
- ------------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 5,250,000 5,013,750
- ------------------------------------------------------------------------------------------------------------
Dialog Corp. plc, 11% Sr. Sub. Nts., Series B, 11/15/07 3,250,000 3,250,000
- ------------------------------------------------------------------------------------------------------------
DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 2,355,000 2,343,225
- ------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,805,000 2,819,025
- ------------------------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 5,200,000 6,058,000
- ------------------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts., Series B, 3/1/05(12) 10,160,000 5,588,000
- ------------------------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 3,360,000 3,208,800
------------
37,071,850
- ------------------------------------------------------------------------------------------------------------
Manufacturing--2.5%
Axia, Inc. (New), 10.75% Sr. Sub. Nts., 7/15/08 2,020,000 2,060,400
- ------------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 2,150,000 2,096,250
- ------------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc.,
12% Sr. Sub. Nts., Series B, 8/1/05 350,000 366,625
- ------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 2,800,000 2,646,000
- ------------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 2,250,000 2,036,250
- ------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 4,225,000 4,034,875
- ------------------------------------------------------------------------------------------------------------
Insilco Corp., Units (each unit consists of $1,000 principal
amount of 12% Sr. Sub. Nts., 8/15/07 and one warrant to
purchase 0.52 shares of common stock)(8)(10) 7,055,000 7,337,200
- ------------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts.,
Series B, 6/1/05 6,055,000 6,403,163
- ------------------------------------------------------------------------------------------------------------
Mechala Group Jamaica Ltd., 12% Bonds, 2/15/02 700,000 435,750
- ------------------------------------------------------------------------------------------------------------
MOLL Industries, Inc., 10.50% Sr. Sub. Nts., 7/1/08(8) 1,960,000 1,930,600
- ------------------------------------------------------------------------------------------------------------
Paragon Corp. Holdings, Inc., 9.625% Sr. Unsec. Nts.,
Series B, 4/1/08 1,000,000 852,500
- ------------------------------------------------------------------------------------------------------------
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07 3,900,000 3,987,750
- ------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 2,000,000 1,990,000
- ------------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts.,
Series B, 6/15/07 4,480,000 4,368,000
- ------------------------------------------------------------------------------------------------------------
Terex Corp., 8.875% Sr. Unsec. Sub. Nts., 4/1/08 1,960,000 1,930,600
- ------------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 2,800,000 2,926,000
------------
45,401,963
</TABLE>
18 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Broadcasting--2.0%
Allbritton Communications Co., 8.875% Sr. Sub. Nts.,
Series B, 2/1/08 $ 1,625,000 $ 1,649,375
- ------------------------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 5,170,000 5,376,800
- ------------------------------------------------------------------------------------------------------------
CBS Radio, Inc., 11.375% Unsec. Sub. Debs., 1/15/09(13) 2,048,300 2,447,719
- ------------------------------------------------------------------------------------------------------------
Chancellor Media Corp.:
8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,400,000 1,442,000
9% Sr. Sub. Nts., 10/1/08(8) 9,000,000 9,540,000
10.50% Sr. Sub. Nts., Series B, 1/15/07 1,240,000 1,364,000
- ------------------------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(6) 1,800,000 1,809,000
- ------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
9% Sr. Unsec. Sub. Nts., 7/15/07 7,245,000 7,426,125
10% Sr. Sub. Nts., 9/30/05 1,175,000 1,251,375
- ------------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc.:
11% Sr. Nts., 3/15/04 1,520,000 1,618,800
12.50% Sr. Nts., 6/15/02 700,000 759,500
- ------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 2,850,000 2,907,000
------------
37,591,694
- ------------------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--3.5%
Adelphia Communications Corp.:
8.125% Sr. Nts., Series B, 7/15/03 3,000,000 3,086,250
8.375% Sr. Nts., Series B, 2/1/08 3,700,000 3,838,750
9.875% Sr. Nts., Series B, 3/1/07 3,545,000 3,934,950
- ------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
9.875% Sr. Sub. Debs., 2/15/13(11) 600,000 675,000
9.875% Sr. Sub. Debs., 4/1/23 3,000,000 3,352,500
9.875% Sr. Sub. Nts., 5/15/06(11) 3,000,000 3,285,000
- ------------------------------------------------------------------------------------------------------------
Diva Systems Corp., Units (each unit consists of $1,000
principal amount of 0%/12.625% sr. disc. nts., 3/1/08 and three
warrants to purchase three shares of common stock)(8)(10)(12) 2,500,000 1,037,500
- ------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 12.50% Sr. Sec. Nts., 7/1/02 11,090,000 12,808,950
- ------------------------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(2) 2,355,716 2,355,717
- ------------------------------------------------------------------------------------------------------------
EchoStar II, 8.25% Sinking Fund Bonds, 11/9/01(2) 2,397,646 2,397,647
- ------------------------------------------------------------------------------------------------------------
EchoStar Satellite Broadcasting Corp.,
0%/13.125% Sr. Sec. Disc. Nts., 3/15/04(12) 8,600,000 8,621,500
- ------------------------------------------------------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs.,
Series B, 4/15/10(12) 8,305,000 5,730,450
- ------------------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 9,200,000 9,154,000
- ------------------------------------------------------------------------------------------------------------
Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07CAD 3,030,000 1,910,710
- ------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(12) 5,110,000 2,784,950
------------
64,973,874
</TABLE>
19 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Diversified Media--2.0%
Ackerley Group, Inc., 9% Sr. Sub. Nts., 1/15/09(8) $ 5,500,000 $ 5,610,000
- ------------------------------------------------------------------------------------------------------------
Hollinger International Publishing, Inc.,
9.25% Sr. Unsec. Sub. Nts., 2/1/06 4,950,000 5,247,000
- ------------------------------------------------------------------------------------------------------------
Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 1,300,000 965,250
- ------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.:
8.875% Sr. Sub. Nts., 12/15/10(8) 5,000,000 4,987,500
9.50% Sr. Sub. Nts., 6/1/08(8) 2,750,000 2,873,750
- ------------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Sub. Nts., 12/1/08(8) 8,000,000 8,050,000
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 9,175,000 9,129,125
------------
36,862,625
- ------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--14.7%
Amazon.Com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(12) 12,150,000 8,079,750
- ------------------------------------------------------------------------------------------------------------
COLT Telecom Group plc:
0%/12% Sr. Unsec. Disc. Nts., 12/15/06(12) 850,000 718,250
7.625% Bonds, 7/31/08DEM 9,750,000 5,791,811
8.875% Sr. Nts., 11/30/07DEM 2,295,000 1,415,837
10.125% Sr. Nts., 11/30/07GBP 3,275,000 5,728,600
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)(12) 7,055,000 5,961,475
- ------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc
Debs., 11/15/07(12) 5,570,000 4,734,500
- ------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 3,065,000 3,141,625
- ------------------------------------------------------------------------------------------------------------
Convergent Communications, Inc., 13% Sr. Nts., 4/1/08 2,800,000 1,358,000
- ------------------------------------------------------------------------------------------------------------
Diamond Cable Communications plc:
0%/10.75% Sr. Disc. Nts., 2/15/07(12) 700,000 497,000
0%/11.75% Sr. Disc. Nts., 12/15/05(12) 15,425,000 12,841,313
9.125% Sr. Nts., 2/1/08 1,400,000 1,344,000
- ------------------------------------------------------------------------------------------------------------
DTI Holdings, Inc., 0%/12.50% Sr. Unsec. Disc. Nts.,
Series B, 3/1/08(12) 7,500,000 1,987,500
- ------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07 4,320,000 4,050,000
- ------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08 2,725,000 2,738,625
- ------------------------------------------------------------------------------------------------------------
FaciliCom International, Inc., 10.50% Sr. Nts.,
Series B, 1/15/08 2,915,000 2,346,575
- ------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts.,
4/15/08(12) 4,810,000 1,467,050
- ------------------------------------------------------------------------------------------------------------
Focal Communications Corp., 0%/12.125% Sr. Unsec
Disc. Nts., 2/15/08(12) 5,740,000 3,070,900
- ------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08 5,295,000 5,639,175
- ------------------------------------------------------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts., 5/1/05 7,510,000 6,195,750
- ------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub.
Disc. Nts., 12/15/05(8)(12) 1,400,000 1,111,250
</TABLE>
20 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
GST Telecommunications, Inc./GST Network Funding Corp., Inc.,
0%/10.50% Sr. Disc. Nts., 5/1/08(8)(12) $ 1,740,000 $ 756,900
- ------------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(12) 4,360,000 3,150,100
- ------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc.:
0%/12.50% Sr. Sec. Disc. Nts., 5/1/06(12) 800,000 600,000
0%/13.50% Sr. Disc. Nts., 9/15/05(12) 7,180,000 5,959,400
- ------------------------------------------------------------------------------------------------------------
ICG Services, Inc., 0%/10% Sr. Unsec. Disc. Nts., 2/15/08(12) 3,985,000 2,131,975
- ------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
8.60% Sr. Unsec. Nts., Series B, 6/1/08 8,125,000 7,759,375
8.875% Sr. Nts., 11/1/07 4,995,000 4,845,150
- ------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc., 0%/12.50% Sr. Unsec. Disc. Nts.,
2/15/08(12) 12,340,000 5,984,900
- ------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. 12/1/08(8)(12) 14,000,000 8,225,000
9.125% Sr. Unsec. Nts., 5/1/08 9,600,000 9,528,000
- ------------------------------------------------------------------------------------------------------------
Long Distance International, Inc., 12.25% Sr. Nts., 4/15/08(8) 2,800,000 2,338,000
- ------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Nts., 11/15/08(8) 6,000,000 6,195,000
- ------------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(12)DEM 2,800,000 962,459
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(12) 1,400,000 801,500
- ------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Unsec. Nts., 4/15/08(12) 3,820,000 2,196,500
9.625% Sr. Nts., 10/1/07 9,895,000 9,499,200
10.75% Sr. Nts., 11/15/08(8) 6,600,000 6,748,500
- ------------------------------------------------------------------------------------------------------------
NorthEast Optic Network, Inc., 12.75% Sr. Nts., 8/15/08 2,700,000 2,659,500
- ------------------------------------------------------------------------------------------------------------
NTL, Inc.:
0%/9.75% Sr. Deferred Coupon Nts., 4/1/08(8)(12) 6,745,000 4,215,625
0%/10.75% Sr. Unsec. Unsub. Nts., Series REGS, 4/1/08(12)GBP 5,000,000 5,201,978
0%/12.375% Sr. Nts., 10/1/08(8)(12) 16,000,000 10,100,000
7% Cv. Sub. Nts., 12/15/08(8) 2,000,000 2,165,000
10% Sr. Nts., Series B, 2/15/07 3,930,000 4,047,900
11.50% Sr. Nts., 10/1/08(8) 6,000,000 6,585,000
- ------------------------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc., 9% Cv. Sub. Nts., 6/1/06(8) 630,000 233,888
- ------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(8) 4,000,000 990,000
- ------------------------------------------------------------------------------------------------------------
PSINet, Inc.:
10% Sr. Unsec. Nts., Series B, 2/15/05 6,330,000 6,298,350
11.50% Sr. Nts., 11/1/08(8) 10,000,000 10,525,000
- ------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/9.47% Sr. Disc
Nts., 10/15/07(12) 7,955,000 6,185,013
- ------------------------------------------------------------------------------------------------------------
RSL Communications plc:
0%/10% Bonds, 3/15/08(12)DEM 7,775,000 2,582,097
0%/10.125% Sr. Disc. Nts., 3/1/08(12) 3,365,000 1,943,288
10.50% Sr. Nts., 11/15/08(8) 4,800,000 4,692,000
</TABLE>
21 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
TeleWest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(12) $ 9,060,000 $ 7,610,400
11.25% Sr. Nts., 11/1/08(8) 4,515,000 5,079,375
- ------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 6,100,000 6,435,500
- ------------------------------------------------------------------------------------------------------------
US Xchange LLC, 15% Sr. Nts., 7/1/08 2,800,000 2,884,000
- ------------------------------------------------------------------------------------------------------------
Verio, Inc.:
10.375% Sr. Unsec. Nts., 4/1/05 4,800,000 4,728,000
11.25% Sr. Nts., 12/1/08(8) 5,000,000 5,050,000
13.50% Sr. Unsec. Nts., 6/15/04 725,000 786,625
- ------------------------------------------------------------------------------------------------------------
Viatel, Inc.:
0%/12.40% Sr. Disc. Nts., 4/15/08(12)DEM 3,000,000 1,071,734
0%/12.50% Sr. Unsec. Disc. Nts., 4/15/08(12) 5,350,000 3,183,250
11.15% Sr. Nts., 4/15/08DEM 7,500,000 4,480,569
11.25% Sr. Sec. Nts., 4/15/08 1,925,000 1,977,938
------------
269,612,975
- ------------------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications--7.4%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(8) 1,400,000 1,407,000
- ------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(12) 11,650,000 2,970,750
- ------------------------------------------------------------------------------------------------------------
Cellular Communications International, Inc.,
0%/9.50% Bonds, 4/1/05(12)XEU 11,500,000 11,410,820
- ------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 10.75% Sr. Sub. Nts., 12/15/08(8) 4,000,000 4,000,000
- ------------------------------------------------------------------------------------------------------------
Clearnet Communications, Inc., 0%/14.75% Sr. Disc
Nts., 12/15/05(12) 1,280,000 1,100,800
- ------------------------------------------------------------------------------------------------------------
Crown Castle International Corp., 0%/10.625% Sr. Unsec
Disc. Nts., 11/15/07(12) 8,790,000 6,196,950
- ------------------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(12) 4,650,000 2,115,750
- ------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 560,000 574,000
- ------------------------------------------------------------------------------------------------------------
ICO Global Communications (Holdings) Ltd., Units
(each unit consists of $1,000 principal amount of 15% sr. nts.,
8/1/05 and one warrant to buy 19.85 shares of common stock)(10) 2,800,000 2,100,000
- ------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc., 0%/11.125% Sr. Disc
Nts., Series B, 10/15/07(12)CAD 6,405,000 2,310,651
- ------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA, 0%/13.50% Sr. Disc
Nts., 6/1/06(12) 760,000 541,500
- ------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(12) 9,675,000 5,901,750
0%/9.95% Sr. Disc. Nts., 2/15/08(12) 5,690,000 3,399,775
0%/10.65% Sr. Disc. Nts., 9/15/07(12) 9,220,000 5,923,850
- ------------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 5,900,000 4,130,000
11.625% Sr. Nts., Series A, 8/15/06 9,080,000 6,356,000
- ------------------------------------------------------------------------------------------------------------
Optel, Inc., 11.50% Sr. Unsec. Nts., 7/1/08 2,000,000 1,960,000
- ------------------------------------------------------------------------------------------------------------
Orange plc, 8% Sr. Nts., 8/1/08 12,500,000 12,687,500
</TABLE>
22 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Wireless Communications (continued)
ORBCOMM Global LP/ORBCOMM Capital Corp.,
14% Sr. Nts., 8/15/04 $ 4,275,000 $ 4,424,625
- ------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts.,
1/15/07(12) 5,310,000 3,345,300
- ------------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(12) 9,895,000 5,813,313
- ------------------------------------------------------------------------------------------------------------
Price Communications Cellular Holdings, Inc., 11.25% Sr. Nts.,
8/15/08(13) 3,000,000 2,850,000
- ------------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., 12/15/06(8) 10,625,000 10,784,375
11.75% Sr. Sub. Nts., 7/15/07 4,225,000 4,478,500
- ------------------------------------------------------------------------------------------------------------
Rogers Cantel, Inc., 8.80% Sr. Sub. Nts., 10/1/07 5,000,000 5,068,750
- ------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 6,400,000 6,448,000
- ------------------------------------------------------------------------------------------------------------
Satelites Mexicanos SA, 10.125% Sr. Nts., 11/1/04 4,160,000 3,338,400
- ------------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(12) 18,320,000 10,625,600
- ------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(8)(12) 7,550,000 3,812,750
------------
136,076,709
- ------------------------------------------------------------------------------------------------------------
Metals/Minerals--2.7%
Algoma Steel, Inc., 12.375% First Mtg. Nts., 7/15/05 6,665,000 5,098,725
- ------------------------------------------------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 2,265,000 2,429,213
- ------------------------------------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 5,025,000 4,597,875
- ------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts.,
Series B, 5/15/08 4,540,000 4,596,750
- ------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 1,400,000 1,323,000
- ------------------------------------------------------------------------------------------------------------
Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 825,000 792,000
- ------------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(12) 11,000,000 3,795,000
- ------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 10,585,000 9,896,975
- ------------------------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 7,090,000 7,284,975
- ------------------------------------------------------------------------------------------------------------
WHX Corp., 10.50% Sr. Unsec. Nts., 4/15/05 11,000,000 10,285,000
------------
50,099,513
- ------------------------------------------------------------------------------------------------------------
Retail--1.3%
Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(8) 5,435,000 5,570,875
- ------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125% Sr. Sub. Nts., 5/1/08(8) 3,435,000 3,280,425
- ------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 6,585,000 5,827,725
- ------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 2,100,000 1,942,500
- ------------------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(8) 5,240,000 5,213,800
- ------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,684,000
------------
23,519,325
- ------------------------------------------------------------------------------------------------------------
Service--5.2%
Allied Waste North America, Inc., 7.875% Sr. Nts., 1/1/09(8) 4,165,000 4,237,888
- ------------------------------------------------------------------------------------------------------------
Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 10,425,000 11,311,125
</TABLE>
23 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Service (continued)
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(12) $ 5,475,000 $ 4,516,875
- ------------------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07 3,000,000 3,015,000
- ------------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Sub. Nts., 2/1/08(8) 1,510,000 1,517,550
9% Sr. Unsec. Sub. Nts., 2/1/08 8,425,000 8,467,125
- ------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Sub. Nts., 8/15/08(8) 4,050,000 4,131,000
- ------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 8.50% Sr. Nts., Series B, 1/15/08 5,895,000 5,629,725
- ------------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 10,570,000 10,570,000
- ------------------------------------------------------------------------------------------------------------
Lamar Advertising Co.:
8.625% Sr. Sub. Nts., 9/15/07 3,300,000 3,481,500
9.625% Sr. Sub. Nts., 12/1/06 5,065,000 5,444,875
- ------------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10(2) 11,000,000 11,000,000
- ------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc.:
6.75% Cv. Sr. Sub. Nts., 9/15/03 2,432,000 2,495,840
13.625% Sr. Sub. Disc. Nts., 6/30/05 8,545,000 9,784,025
- ------------------------------------------------------------------------------------------------------------
United Rentals, Inc., 9.25% Sr. Sub. Nts., 1/15/09(8) 8,000,000 8,060,000
- ------------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 1,685,000 1,887,200
------------
95,549,728
- ------------------------------------------------------------------------------------------------------------
Transportation--5.4%
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 3,760,000 3,252,400
- ------------------------------------------------------------------------------------------------------------
Coach USA, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 1,325,000 1,358,125
- ------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co.,
11.50% Sr. Unsec. Sub. Nts., 4/15/06 10,970,000 11,463,650
- ------------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc.:
9.125% Sr. Sub. Nts., 7/15/07 6,000,000 6,255,000
11% Sr. Sub. Nts., 7/15/06 8,625,000 9,616,875
- ------------------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05(8) 4,100,000 3,710,500
- ------------------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 2,845,000 2,674,300
- ------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000
principal amount of 12% first priority ship mtg. nts., 7/15/05
and one warrant to purchase five shares of common stock)(8)(10) 6,400,000 5,152,000
- ------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(8) 6,935,000 6,137,475
Units (each unit consists of $1,000 principal amount of 12%
second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(8)(10) 4,620,000 4,181,100
- ------------------------------------------------------------------------------------------------------------
Oxford Automotive, Inc.:
10.125% Sr. Sub. Nts., 6/15/07(2) 4,000,000 4,180,000
10.125% Sr. Unsec. Sub. Nts., 6/15/07 1,150,000 1,196,000
- ------------------------------------------------------------------------------------------------------------
Pacific & Atlantic Holdings, Inc.,
11.50% First Preferred Ship Mtg. Nts., 5/30/08 4,000,000 3,020,000
- ------------------------------------------------------------------------------------------------------------
TFM SA de CV, 10.25% Sr. Nts., 6/15/07 560,000 462,000
</TABLE>
24 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Transportation (continued)
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 $ 11,400,000 $ 9,633,000
- --------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(12) 25,515,000 24,621,975
- --------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(8) 3,652,068 2,218,632
--------------
99,133,032
- --------------------------------------------------------------------------------------------------------------
Utility--0.8%
Calpine Corp., 10.50% Sr. Nts., 5/15/06 2,990,000 3,311,425
- --------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 5,550,000 6,451,875
- --------------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp.:
0%/8.50% Sr. Unsec. Nts., Series H, 7/1/10(12) 3,000,000 2,338,164
7.75% Sr. Unsec. Nts., Series G, 10/1/08 2,500,000 2,747,095
- --------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08(8) 144,727 109,872
--------------
14,958,431
--------------
Total Corporate Bonds and Notes (Cost $1,479,998,262) 1,417,607,463
<CAPTION>
Shares
==============================================================================================================
<S> <C> <C>
Preferred Stocks--6.3%
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(13) 72,237 1,823,984
- --------------------------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A(2)(13)(16) 155,258 3,881,450
- --------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cum. Cv.(8) 100,000 1,025,000
- --------------------------------------------------------------------------------------------------------------
Clark USA, Inc., 11.50% Cum. Exchangeable(13) 3,007 2,533,397
- --------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Preferred, Series B(13) 4,715 4,043,117
- --------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 8.50% Cum. Cv., Series I, Non-Vtg 142,500 10,740,937
- --------------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(2)(15) 140,000 5,372,500
- --------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 12.25% Sr. Exchangeable(13) 4,968 4,433,940
- --------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable Preferred Stock 4,921 2,423,592
- --------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., Cum. Exchangeable, Series B,
3/1/08, Non-Vtg.(15) 28,000 1,421,000
- --------------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cum. Cv., Series C, Non-Vtg.(8)(13) 390,000 585,000
- --------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., 12.125% Sr. Redeemable
Exchangeable, Series B, Non-Vtg.(13) 5,787 6,727,387
- --------------------------------------------------------------------------------------------------------------
Fidelity Federal Bank FSB Glendale California, l2% Non-Cum
Exchangeable Perpetual Preferred Stock, Series A 30 697
- --------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable
Preferred, 12/1/08(8)(15) 58,000 5,698,500
- --------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable(13) 2,909 3,207,172
- --------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
13.50% Exchangeable, Series B(13) 2,886 2,864,355
Depositary Shares Representing one one-hundredth
7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg.(8) 84,480 1,541,760
</TABLE>
25 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
============================================================================================================
<S> <C> <C>
Preferred Stocks (continued)
International Utility Structures, Inc.:
13% Preferred(8)(13) 36 $ 31,050
Units (each unit consists of $1,000 principal amount of
13% sr. exchangeable preferred stock and one warrant to
purchase 30 shares of common stock)(2)(13) 560 484,400
- ------------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Cum. Exchangeable(13) 86,806 4,362,002
- ------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 11.125% Exchangeable, Series E(13) 3,197 2,885,293
- ------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum. Exchangeable, Vtg.(13) 148,837 7,925,570
- ------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable,
Non-Vtg.(13) 400 3,410,000
- ------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., Jr. Cv. Preferred Stock(15) 45,926 80,371
- ------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable 101,200 9,765,800
9.20% Exchangeable, Series F 22,500 2,216,250
- ------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(13) 7,244 6,755,030
- ------------------------------------------------------------------------------------------------------------
SD Warren Co., 14% Cum. Exchangeable, Series B, Non-Vtg.(15) 213,500 10,941,875
- ------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 13.75% Cum. Nts., Series B,
3/15/09, Non-Vtg.(13) 84 363,300
- ------------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc./Capstar Broadcasting Corp.,
12.625% Cum., Series E, Non-Vtg.(13) 7,452 901,692
- ------------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc., 14.25% Cum. Exchangeable,
Non-Vtg.(8)(13) 2,921 2,986,723
- ------------------------------------------------------------------------------------------------------------
Viatel, Inc., 10% Cv., Series A(13) 3,646 401,972
- ------------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc.:
9.16% Cv., Series B 4,650 106,950
9.20% Preferred 158,950 3,457,163
------------
Total Preferred Stocks (Cost $128,262,192) 115,399,229
</TABLE>
26 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
============================================================================================================
<S> <C> <C>
Common Stocks--0.4%
- ------------------------------------------------------------------------------------------------------------
BayCorp Holdings Ltd.(15) 16,133 $ 56,466
- ------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(2) 1,350 1,194,750
- ------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(2)(15) 39,357 39,357
- ------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc.(15) 107,699 1,790,496
- ------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(15) 2,545 43,901
- ------------------------------------------------------------------------------------------------------------
News Corp. Ltd., Sponsored ADR, Preference 166,271 4,104,815
- ------------------------------------------------------------------------------------------------------------
Omnipoint Corp.(15) 40,000 372,500
- ------------------------------------------------------------------------------------------------------------
Optel, Inc.(15) 7,425 74
- ------------------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.(2)(15)(16) 1,688,400 --
- ------------------------------------------------------------------------------------------------------------
Resorts International, Inc.(15) 187,187 --
- ------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., Cl. C(15) 6,108 12,216
- ------------------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(2)(15) 239,111 203,245
------------
Total Common Stocks (Cost $6,433,594) 7,817,820
<CAPTION>
Units
============================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.5%
- ------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99(2) 40,000 400
- ------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc., Litigation Trust(2) 1,045,990 10,460
- ------------------------------------------------------------------------------------------------------------
Australis Holdings PTY Ltd./Australia Media Ltd. Wts., Exp. 5/00(2) 825 5
- ------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(2) 125,000 31,250
- ------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/07(8) 5,837 29,915
- ------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(2)(16) 130,000 39,000
- ------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/07(2) 3,330 495,870
- ------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc. Wts., Exp. 3/08(2) 10,970 548,500
- ------------------------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/08(2) 11,200 14,000
- ------------------------------------------------------------------------------------------------------------
DTI Holdings, Inc. Wts., Exp. 3/08(2) 37,500 1,875
</TABLE>
27 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Units See Note 1
============================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates (continued)
e.spire Communications, Inc. Wts., Exp. 11/05 2,575 $ 62,150
- ------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc. Wts., Exp. 4/08(2) 4,810 48,100
- ------------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/02 163,894 901,417
- ------------------------------------------------------------------------------------------------------------
Globix Corp. Wts., Exp. 5/05(2) 7,510 75,100
- ------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/01 107,699 491,377
- ------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/03(8) 137,280 1,373
Exp. 9/04(2) 168,000 189,000
Exp. 5/05(2) 118,003 11,800
- ------------------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc. Wts., Exp. 4/01 1,090 66,986
- ------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(2) 50,820 696,519
- ------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 6,000 --
- ------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/08(2) 12,340 32,392
- ------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., 4/08(2) 2,800 7,000
- ------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/05(2) 6,400 40,000
- ------------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(2) 32,000 298,000
- ------------------------------------------------------------------------------------------------------------
Orbital Imaging Corp. Wts., Exp. 3/05(2) 2,435 97,704
- ------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc. Wts., Exp. 1/07(2) 3,910 48,875
- ------------------------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(2) 31,716 1,514,477
- ------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 6/05(2) 49,120 491,200
Exp. 11/03(2) 182,000 2,275,000
- ------------------------------------------------------------------------------------------------------------
Republic Health Corp. Wts., Exp. 4/00 3,763 --
- ------------------------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/03(2) 24,520 343,292
- ------------------------------------------------------------------------------------------------------------
Trizec Hahn Corp. Wts., Exp. 7/99 16,277 47,827
- ------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Oil Linked Payment Obligation Wts., Exp. 4/20 24,990 --
- ------------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Wts., Exp. 1/02(2) 114,400 85,800
- ------------------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/05(2) 30,480 243,840
------------
Total Rights, Warrants and Certificates (Cost $1,989,969) 9,240,504
</TABLE>
28 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==============================================================================================================
<S> <C> <C>
Structured Instruments--4.6%
- --------------------------------------------------------------------------------------------------------------
Bear Stearns High Yield Composite Index Linked Nts., 9%, 2/5/99 $ 25,000,000 $ 23,047,750
- --------------------------------------------------------------------------------------------------------------
Commerzbank International SA, Lehman High Yield Index Nts.,
8.50%, 2/8/99 26,000,000 24,278,800
- --------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, Hungarian Forint Linked Nts.,
16.25%, 2/23/99 2,000,000 2,006,025
- --------------------------------------------------------------------------------------------------------------
Goldman Sachs Group LP, High Yield Index Nts., 8%, 3/4/99 10,000,000 9,356,000
- --------------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 6.97%, 4/28/02
(representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(2)(3) 23,200,000 20,805,957
- --------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Philippines Peso/Japanese Yen
Linked Nts.:
19.50%, 2/26/99 2,000,000 1,863,400
20%, 2/19/99 2,000,000 1,904,400
- --------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Philippines Peso/Singapore
Dollar Linked Nts., 18.70%, 3/8/99 1,500,000 1,493,400
--------------
Total Structured Instruments (Cost $91,978,001) 84,755,732
<CAPTION>
Date Strike Contracts
==============================================================================================================
<S> <C> <C> <C> <C>
Put Options Purchased--0.0%
- --------------------------------------------------------------------------------------------------------------
Mexican Peso Put Opt.(2)
(Cost $115,600) 2/99 10.75MXP 43,000,000 17,200
<CAPTION>
Face
Amount(1)
==============================================================================================================
<S> <C> <C>
Repurchase Agreements--4.2%
- --------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.75%,
dated 12/31/98, to be repurchased at $76,140,164 on 1/4/99,
collateralized by U.S. Treasury Nts., 4%--8.875%, 2/15/99--7/15/06,
with a value of $77,652,747 (Cost $76,100,000) $ 76,100,000 76,100,000
- --------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,903,773,964) 99.1% 1,823,126,504
- --------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.9 17,441,664
------------- --------------
Net Assets 100.0% $1,840,568,168
============= ==============
</TABLE>
29 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP--Argentine Peso IDR--Indonesian Rupiah
CAD--Canadian Dollar MXP--Mexican Peso
DEM--German Mark PLZ--Polish Zloty
GBP--British Pound Sterling XEU--European Currency Units
2. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
3. Represents the current interest rate for a variable rate security.
4. 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.
5. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
6. Represents the current interest rate for an increasing rate security.
7. Non-income producing--issuer is in default.
8. 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 $302,230,412 or 16.42% of the Trust's net
assets as of December 31, 1998.
9. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
Contracts Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mexican Peso Call Opt. 20,040,000 2/9/99 10.02MXP $18,000 $14,028
- ----------------------------------------------------------------------------------------------
Mexican Peso Call Opt. 19,980,000 2/9/99 9.99MXP 14,000 11,988
------- -------
$32,000 $26,016
======= =======
</TABLE>
10. 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.
11. Securities with an aggregate market value of $17,697,263 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
12. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
13. Interest or dividend is paid in kind.
14. A sufficient amount of securities has been designated to cover outstanding
forward foreign currency exchange contracts. See Note 6 of Notes to Financial
Statements.
15. Non-income producing security.
30 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
16. 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 December 31, 1998.
The aggregate fair value of all securities of affiliated companies held by the
Fund as of December 31, 1998 amounts to $3,920,450. Transactions during the
period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares/Face
Shares/Face Gross Gross December 31,
June 30, 1998 Additions Reductions 1998 Dividends
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stocks and Warrants
CGA Group Ltd., Preferred
Stock, Series A 130,000 25,258 -- 155,258 $632,284
- -------------------------------------------------------------------------------------------------------------------
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 --
--------
$632,284
========
</TABLE>
See accompanying Notes to Financial Statements.
31 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,894,747,160) $ 1,819,206,054
Affiliated companies (cost $9,026,804) 3,920,450
- -------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 378,023
- -------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 33,423,746
Investments sold 7,793,035
Shares of beneficial interest sold 5,783,035
Daily variation on futures contracts--Note 6 30,410
Other 54,784
---------------
Total assets 1,870,589,537
===============================================================================
Liabilities
Bank overdraft 12,096,116
- -------------------------------------------------------------------------------
Unrealized depreciation on forward foreign currency
exchange contracts--Note 5 27,912
- -------------------------------------------------------------------------------
Options written, at value (premiums received $32,000)--
see accompanying statement--Note 7 26,016
- -------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 9,887,504
Dividends 5,542,853
Investments purchased 1,128,447
Distribution and service plan fees 961,514
Shareholder reports 167,479
Custodian fees 131,909
Transfer and shareholder servicing agent fees 18,003
Other 33,616
---------------
Total liabilities 30,021,369
===============================================================================
Net Assets $ 1,840,568,168
===============
===============================================================================
Composition of Net Assets
Paid-in capital $ 2,097,176,421
- -------------------------------------------------------------------------------
Overdistributed net investment income (1,266,310)
- -------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (174,966,265)
- -------------------------------------------------------------------------------
Net unrealized depreciation on investments and
translation of assets and liabilities denominated
in foreign currencies (80,375,678)
---------------
Net assets $ 1,840,568,168
===============
32 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 $1,185,721,897 and 90,075,853
shares of beneficial interest outstanding) $13.16
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $13.82
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $544,774,362 and
41,740,704 shares of beneficial interest outstanding) $13.05
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price
per share (based on net assets of $82,170,537 and
6,251,540 shares of beneficial interest outstanding) $13.14
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price
per share (based on net assets of $27,901,372 and 2,125,548
shares of beneficial interest outstanding) $13.13
See accompanying Notes to Financial Statements.
33 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Interest (net of foreign withholding taxes of $23,046) $85,525,585
- -------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding
taxes of $2,227) 6,472,157
Affiliated companies 632,284
--------------
Total income 92,630,026
===============================================================================
Expenses
Management fees--Note 4 5,424,786
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 1,260,885
Class B 2,595,676
Class C 355,930
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 565,517
Class B 246,729
Class C 33,830
Class Y 13,873
- -------------------------------------------------------------------------------
Shareholder reports 242,866
- -------------------------------------------------------------------------------
Legal, auditing and other professional fees 41,398
- -------------------------------------------------------------------------------
Custodian fees and expenses 40,790
- -------------------------------------------------------------------------------
Trustees' fees and expenses 32,521
- -------------------------------------------------------------------------------
Registration and filing fees 10,855
- -------------------------------------------------------------------------------
Other 43,432
--------------
Total expenses 10,909,088
===============================================================================
Net Investment Income 81,720,938
===============================================================================
Realized and Unrealized Loss
Net realized loss on:
Investments (33,900,223)
Closing of futures contracts (6,603,271)
Foreign currency transactions (1,502,596)
--------------
Net realized loss (42,006,090)
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (120,737,399)
Translation of assets and liabilities denominated in
foreign currencies (2,146,431)
--------------
Net realized and unrealized loss (164,889,920)
===============================================================================
Net Decrease in Net Assets Resulting from Operations $ (83,168,982)
==============
See accompanying Notes to Financial Statements.
34 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1998 Year Ended
(Unaudited) June 30,1998
==================================================================================================
<S> <C> <C>
Operations
Net investment income $ 81,720,938 $ 146,672,693
- --------------------------------------------------------------------------------------------------
Net realized gain (loss) (42,006,090) 44,126,205
- --------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (122,883,830) 4,774,381
--------------- ---------------
Net increase (decrease) in net assets resulting
from operations (83,168,982) 195,573,279
==================================================================================================
Dividends to Shareholders
Dividends from net investment income:
Class A (54,676,960) (103,411,688)
Class B (22,025,325) (35,809,231)
Class C (3,000,928) (3,671,943)
Class Y (931,579) (345,783)
==================================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 38,189,178 51,643,094
Class B 64,466,981 117,957,555
Class C 22,770,404 33,959,979
Class Y 17,569,504 11,285,065
==================================================================================================
Net Assets
Total increase (decrease) (20,807,707) 267,180,327
- --------------------------------------------------------------------------------------------------
Beginning of period 1,861,375,875 1,594,195,548
--------------- ---------------
End of period (including overdistributed net investment
income of $1,266,310 and $2,352,456, respectively) $ 1,840,568,168 $ 1,861,375,875
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
35 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
1998 (Unaudited) 1998 1997
=====================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.44 $ 13.98 $ 13.51
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .63 1.24 1.27
Net realized and unrealized gain (loss) (1.29) .43 .43
--------- --------- ---------
Total income (loss) from investment operations (.66) 1.67 1.70
- -----------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.62) (1.21) (1.23)
Tax return of capital distribution -- -- --
--------- --------- ---------
Total dividends and distributions to shareholders (.62) (1.21) (1.23)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.16 $ 14.44 $ 13.98
========= ========= =========
=====================================================================================================
Total Return, at Net Asset Value(3) (4.52)% 12.34% 13.10%
=====================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 1,186 $ 1,257 $ 1,167
- -----------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 1,179 $ 1,227 $ 1,128
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.34%(4) 8.64% 9.22%
Expenses 0.96%(4) 1.00% 1.00%
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 21.8% 116.8% 125.8%
</TABLE>
1. For the period from October 15, 1997 (inception of offering) to June 30,
1998.
2. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
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.
36 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
- ------------------------------------------- -------------------------------------------
Six Months
Ended
December 31, Year Ended June 30,
1996 1995 1994 1998 (Unaudited) 1998 1997
=============================================================================================
<S> <C> <C> <C> <C> <C>
$ 13.22 $ 13.63 $ 14.16 $ 14.33 $ 13.88 $ 13.43
- ---------------------------------------------------------------------------------------------
1.29 1.30 1.42 .58 1.11 1.15
.27 (.40) (.54) (1.29) .44 .43
- --------- --------- --------- --------- --------- ---------
1.56 .90 .88 (.71) 1.55 1.58
- ---------------------------------------------------------------------------------------------
(1.27) (1.30) (1.41) (.57) (1.10) (1.13)
-- (.01) -- -- -- --
- --------- --------- --------- --------- --------- ---------
(1.27) (1.31) (1.41) (.57) (1.10) (1.13)
- ---------------------------------------------------------------------------------------------
$ 13.51 $ 13.22 $ 13.63 $ 13.05 $ 14.33 $ 13.88
========= ========= ========= ========= ========= =========
=============================================================================================
12.25% 7.09% 6.27% (4.93)% 11.50% 12.18%
=============================================================================================
$ 1,084 $ 1,061 $ 1,049 $ 545 $ 528 $ 397
- ---------------------------------------------------------------------------------------------
$ 1,092 $ 1,006 $ 1,111 $ 515 $ 464 $ 335
- ---------------------------------------------------------------------------------------------
9.59% 9.81% 10.10% 8.55%(4) 7.86% 8.41%
1.03% 1.03% 0.96% 1.74%(4) 1.79% 1.80%
- ---------------------------------------------------------------------------------------------
104.9% 93.7% 96.7% 21.8% 116.8% 125.8%
</TABLE>
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1998, were $522,116,919 and $346,144,241, respectively.
37 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B (continued)
-------------------------------------
Year Ended June 30,
1996 1995 1994
============================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 13.15 $ 13.57 $ 14.12
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.18 1.20 1.35
Net realized and unrealized gain (loss) .27 (.42) (.60)
------- ------- -------
Total income (loss) from investment operations 1.45 .78 .75
- --------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.17) (1.19) (1.30)
Tax return of capital distribution -- (.01) --
------- ------- -------
Total dividends and distributions to shareholders (1.17) (1.20) (1.30)
- --------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.43 $ 13.15 $ 13.57
======= ======= =======
============================================================================================
Total Return, at Net Asset Value(3) 11.40% 6.21% 5.31%
============================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 280 $ 192 $ 88
- --------------------------------------------------------------------------------------------
Average net assets (in millions) $ 236 $ 135 $ 52
- --------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.75% 8.95% 8.98%
Expenses 1.84% 1.84% 1.88%
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 104.9% 93.7% 96.7%
</TABLE>
1. For the period from October 15, 1997 (inception of offering) to June 30,
1998.
2. For the period from November 1, 1995 (inception of offering) to June 30,
1996.
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.
38 Oppenheimer High Yield Fund
<PAGE>
<TABLE>
<CAPTION>
Class C Class Y
- ------------------------------------------------------ -------------------------
Six Months Six Months Period
Ended Ended Ended
December 31, Year Ended June 30, December 31, June 30,
1998 (Unaudited) 1998 1997 1996(2) 1998 (Unaudited) 1998(1)
==========================================================================================
<S> <C> <C> <C> <C> <C>
$ 14.42 $ 13.97 $ 13.50 $ 13.30 $ 14.42 $ 14.48
- ------------------------------------------------------------------------------------------
.58 1.22 1.14 .77 .66 .90
(1.29) .33 .45 .19 (1.31) (.08)
- ------- ------- ------- ------- ------- -------
(.71) 1.55 1.59 .96 (.65) .82
- ------------------------------------------------------------------------------------------
(.57) (1.10) (1.12) (.76) (.64) (.88)
-- -- -- -- -- --
- ------- ------- ------- ------- ------- -------
(.57) (1.10) (1.12) (.76) (.64)
- ------------------------------------------------------------------------------------------
$ 13.14 $ 14.42 $ 13.97 $ 13.50 $ 13.13 $ 14.42
======= ======= ======= ======= ======= =======
==========================================================================================
(4.90)% 11.42% 12.23% 7.36% (4.45)% 5.81%
==========================================================================================
$ 82 $ 66 $ 30 $ 8 $ 28 $ 11
- ------------------------------------------------------------------------------------------
$ 71 $ 48 $ 18 $ 3 $ 19 $ 6
- ------------------------------------------------------------------------------------------
8.56%(4) 7.87% 8.40% 8.41%(4) 9.78%(4) 9.14%(4)
1.74%(4) 1.78% 1.82% 1.90%(4) 0.79%(4) 0.81%(4)
- ------------------------------------------------------------------------------------------
21.8% 116.8% 125.8% 104.9% 21.8% 116.8%
</TABLE>
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended December 31, 1998, were $522,116,919 and $346,144,241, respectively.
See accompanying Notes to Financial Statements.
39 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
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 by investing in a diversified portfolio of high-yield,
lower-rated, fixed-income securities. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C
and Class Y shares. Class A shares are sold 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 expenses directly attributable to
that class and exclusive voting rights with respect to matters affecting that
class. Classes A, B and C have separate distribution and/or service plans. No
such plan has been adopted for Class Y shares. Class B shares will automatically
convert to Class A shares six years after the date of purchase. The following is
a summary of significant accounting policies consistently followed by the Fund.
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.
40 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Structured Notes. The Fund invests in foreign currency-linked structured notes
whereby the market value and redemption price are linked to foreign currency
exchange rates. The structured notes may be leveraged, which increases the
notes' volatility relative to the face of the security. Fluctuations in values
of the securities are recorded as unrealized gains and losses in the
accompanying financial statements. During the six months ended December 31,
1998, the market value of these securities comprised an average of 5% of the
Fund's net assets, and resulted in realized and unrealized losses of
$16,159,929.
- --------------------------------------------------------------------------------
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.
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. As of December 31, 1998, securities with an
aggregate market value of $2,433,125, representing 0.13% 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.
41 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B, Class C and Class Y 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 its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in which
the income or realized gain was recorded by the Fund.
- --------------------------------------------------------------------------------
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
42 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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>
Six Months Ended December 31, 1998 Year Ended June 30, 1998
---------------------------------- -------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 15,560,430 $ 206,667,938 20,518,863 $ 295,681,300
Dividends reinvested 2,544,692 33,876,403 4,392,564 63,310,546
Redeemed (15,058,067) (202,355,163) (21,336,980) (307,348,752)
----------- ------------- ----------- -------------
Net increase 3,047,055 $ 38,189,178 3,574,447 $ 51,643,094
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------------------
Class B:
Sold 11,377,447 $ 150,867,093 14,865,015 $ 212,496,036
Dividends reinvested 847,723 11,184,873 1,246,353 17,834,997
Redeemed (7,301,723) (97,584,985) (7,867,469) (112,373,478)
----------- ------------- ----------- -------------
Net increase 4,923,447 $ 64,466,981 8,243,899 $ 117,957,555
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------------------
Class C:
Sold 3,056,463 $ 40,752,398 3,414,708 $ 49,159,490
Dividends reinvested 144,481 1,916,972 164,692 2,373,237
Redeemed (1,491,639) (19,898,966) (1,218,195)
----------- ------------- ----------- -------------
Net increase 1,709,305 $ 22,770,404 2,361,205 $ 33,959,979
=========== ============= =========== =============
- -------------------------------------------------------------------------------------------------------
Class Y:
Sold 1,582,993 $ 20,692,638 846,505 $ 12,239,429
Dividends reinvested 70,750 931,531 23,836 345,872
Redeemed (308,883) (4,054,665) (1,300,236)
----------- ------------- ----------- -------------
Net increase 1,344,860 $ 17,569,504 780,688 $ 11,285,065
=========== ============= =========== =============
</TABLE>
43 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
As of December 31, 1998, net unrealized depreciation on investments and options
written of $80,641,476 was composed of gross appreciation of $59,638,431, and
gross depreciation of $140,279,907.
================================================================================
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. The Fund's
management fee for the six months ended December 31, 1998 was 0.60% of the
average annual net assets of Class A, Class B, Class C and Class Y shares.
For the six months ended December 31, 1998, commissions (sales
charges paid by investors) on sales of Class A shares totaled $1,686,924, of
which $442,900 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the
Fund's Class A, Class B and Class C shares totaled $73,857, $3,402,695 and
$262,446, respectively. Amounts paid to an affiliated broker/dealer for Class B
and Class C shares were $103,815 and $5,598, respectively. During the six months
ended December 31, 1998, OFDI received contingent deferred sales charges of
$666,674 and $24,333, 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 other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
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 six months ended December 31, 1998, OFDI paid
$27,165 to an affiliated broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
44 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund has adopted a Distribution and Service Plan for Class B shares to
reimburse OFDI for its 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 for its services rendered in distributing
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.
Each fee is computed on the average annual net assets of Class B shares,
determined as of the close of each regular business day. During the six months
ended December 31, 1998, OFDI paid $6,404 to an affiliated broker/dealer as
reimbursement for Class B personal service and maintenance expenses and retained
$2,119,743 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 December 31, 1998, OFDI had incurred excess distribution and servicing costs
of $16,627,205 for Class B.
The Fund has adopted a Distribution and Service Plan for Class C
shares to compensate OFDI for its 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 for its services rendered in
distributing 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. Each fee is computed on the average annual net assets of Class C
shares, determined as of the close of each regular business day. During the six
months ended December 31, 1998, OFDI paid $2,374 to an affiliated broker/dealer
as compensation for Class C personal service and maintenance expenses and
retained $295,812 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 December 31, 1998, OFDI had incurred excess distribution and servicing costs
of $1,118,586 for Class C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward contracts as a hedge upon the purchase or
sale of a security denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes in foreign currency
exchange rates on portfolio positions.
45 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Forward Contracts (continued)
Forward contracts are valued based on the closing prices of the forward currency
contract rates in the London foreign exchange markets on a daily basis as
provided by a reliable bank or dealer. The Fund will realize a gain or loss upon
the closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of Investments where
applicable. Unrealized appreciation or depreciation on forward contracts is
reported in the Statement of Assets and Liabilities. Realized gains and losses
are reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
As of December 31, 1998, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
Contract
Amount Valuation as of Unrealized Unrealized
Contract Description Expiration Date (000's) December 31, 1998 Appreciation Depreciation
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Sell
Canadian Dollar (CAD) 3/15/99 7,485CAD $ 4,888,302 $ -- $27,912
British Pound Sterling (GBP) 3/15/99 12,615GBP 20,869,432 378,023 --
-------- -------
Total Unrealized Appreciation and Depreciation $378,023 $27,912
======== =======
</TABLE>
================================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against
increases in interest rates and the resulting negative effect on the value of
fixed rate portfolio securities. The Fund may also purchase futures contracts to
gain exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to
deposit either cash or securities (initial margin) in an amount 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.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments.
46 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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.
As of December 31, 1998, the Fund had outstanding futures contracts as follows:
Valuation as of
Expiration Number of December 31, Unrealized
Contract Description Date Contracts 1998 Depreciation
- --------------------------------------------------------------------------------
Contracts to Sell
Standard & Poor's 500 3/18/99 35 $10,898,125 $82,325
================================================================================
7. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call
options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to
sell or purchase the underlying security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in
the Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are detailed
in a footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
47 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
7. Option Activity (continued)
Written option activity for the six months ended December 31, 1998 was as
follows:
Call Options
-------------------------
Number of Amount of
Options Premiums
- --------------------------------------------------------------------------------
Options outstanding as of June 30, 1998 -- $ --
Options written 40,020,000 32,000
---------- -------
Options outstanding as of December 31, 1998 40,020,000 $32,000
========== =======
================================================================================
8. Illiquid and Restricted Securities
As of December 31, 1998, 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 as of December 31, 1998, was $90,529,861, which
represents 4.92% of the Fund's net assets, of which $10,898,141 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation Per
Unit as of
Cost December 31,
Security Acquisition Dates Per Unit 1998
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
Capitol Queen & Casino, Inc., 12%
First Mtg. Nts., Series A, 11/15/00 11/18/93-12/15/95 95.74% 6.00%
- ------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 4/14/92-3/3/93 100.00 100.25
- ------------------------------------------------------------------------------------------------------
TAG Heuer International SA,
12% Sr. Sub. Nts., 12/15/05 12/8/95-5/14/96 104.57 116.10
- ------------------------------------------------------------------------------------------------------
Trans World Airlines Lease,
14% Equipment Trust, 7/2/08 3/19/98 101.00 99.00
Stocks and Warrants
- ------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .25
- ------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .30
- ------------------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A 6/17/97 25.00 25.00
- ------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I 4/14/92 1,000.00 885.00
- ------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00 11/29/95 -- 9.31
</TABLE>
48 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
9. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended
December 31, 1998.
================================================================================
10. Subsequent Event
Effective February 1, 1999, the Fund's portfolio managers are David P. Negri and
Thomas P. Reedy.
49 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, Trustee, Vice President, Treasurer
and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Ralph W. Stellmacher, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of Portfolio The Bank of New York
Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer 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, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
50 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
================================================================================
Real Asset Funds
- --------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
================================================================================
Global Stock Funds
- --------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income
Company Fund Fund
================================================================================
Stock Funds
- --------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Quest Capital Value Fund Quest Value Fund
Fund Large Cap Growth Fund
================================================================================
Stock & Bond Funds
- --------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Disciplined Allocation
Income Fund1 Quest Balanced Fund
Quest Opportunity Value Fund Multiple Strategies Fund
Value Fund Equity Income Fund Convertible Securities
Fund
================================================================================
Taxable Bond Funds
- --------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government
High Yield Fund Bond Fund Fund
================================================================================
Municipal Bond Funds
- --------------------------------------------------------------------------------
California Municipal Fund2 Pennsylvania Municipal Rochester Division:
Florida Municipal Fund2 Fund2 Rochester Fund
New Jersey Municipal Fund2 Municipal Bond Fund Municipals
New York Municipal Fund2 Insured Municipal Fund Limited Term New York
Intermediate Municipal Municipal Fund
Fund
================================================================================
Money Market Funds3
- --------------------------------------------------------------------------------
Money Market Fund Cash Reserves
1. On 12/22/98, the Fund's name was changed from "Main Street Income & Growth
Fund."
2. Available only to investors in certain states.
3. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
51 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 or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
Internet
24-hr access to account
information. Online
transactions now available
- ----------------------------
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-8pm 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
- ----------------------------
RS0280.001.1298 March 1, 1999
