---------------------------
Annual Report June 30, 1999
---------------------------
OPPENHEIMER
High Yield
Fund
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
5 An Interview with Your Fund's Managers
10 Fund Performance
- --------------------------------------------
14 Financial Statements
53 Independent Auditors' Report
- --------------------------------------------
54 Federal Income Tax Information
55 Officers and Trustees
56 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o Our strongest gains were among growth-oriented industries, such as
telecommunications, that are benefiting from global economic and
technological trends.
o We believe that the economic environment is likely to be favorable for
high yield bonds in the near future, and we are closely monitoring the
market's challenges and opportunities.
Avg Annual Total Returns
For the 1-Year Period
Ended 6/30/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------------
- -0.71% -5.42%
- -------------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------------
- -1.48% -6.00%
- -------------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------------
- -1.49% -2.39%
- -------------------------------------
Class Y
Without With
Sales Chg.(1) Sales Chg.(2)
- -------------------------------------
- -0.54% -0.54%
- -------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. The Fund's
performance may from time to time be subject to substantial short-term changes,
particularly during periods of market or interest rate volatility. For updates
on the Fund's performance, please contact your financial advisor, call us at
1-800-525-7048 or visit our website, www.oppenheimerfunds.com.
(1) Includes changes in net asset value per share without deducting any sales
charges.
(2) Class A returns include the current maximum initial sales charge of 4.75%.
Class B returns include the applicable contingent deferred sales charge of 5%.
Class C returns include the contingent deferred sales charge of 1%. Class Y
shares are offered only to certain institutional investors under special
agreements with the Distributor. 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.
2 Oppenheimer High Yield Fund
<PAGE>
[PHOTO OMITTED]
James C. Swain
Chairman
Oppenheimer
High Yield Fund
[PHOTO OMITTED]
Bridget A. Macaskill
President
Oppenheimer
High Yield Fund
Dear shareholder,
- --------------------------------------------------------------------------------
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities.(1)
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified portfolio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most analysts'
expectations and the breadth of the market's positive performance has begun to
widen. This has raised concerns that inflationary pressures may re-emerge.
Looking outside of the United States, many foreign economies also appear to be
on the mend. The impact of these changes, as it applies to your fund, is
discussed more fully inside by your portfolio manager.
(over, please)
(1) Foreign investing entails higher expenses and risks, such as foreign
currency fluctuations, economic and political instability, and differences in
accounting standards.
3 Oppenheimer High Yield Fund
<PAGE>
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of our Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1999
4 Oppenheimer High Yield Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
[PHOTO OMITTED]
Portfolio Management
Team (l to r)
David Negri
Thomas Reedy
How did Oppenheimer High Yield Fund perform during the one-year period that
ended June 30, 1999?
The performance over the past year is best understood in the light of the high
level of volatility and the difficult environment for bonds that prevailed
during much of the period. However, we are reasonably pleased that the Fund
generated above-average income.
What made this such a difficult and volatile period?
During most of the summer of 1998, investors showed little concern that the
financial crisis in Asia might affect U.S.-based bond and equity holdings. Their
complacency vanished that August when Russia effectively defaulted on its
government bonds. Fears grew that the "Asian contagion" might spread to other
markets and that a global slowdown might eventually cause the U.S. economy to
suffer. As a result, both U.S. and foreign investors shifted their assets away
from investments they perceived as risky. High yield corporate bonds were hit
particularly hard during this "flight to quality." In fact, August 1998 saw the
second worst high yield bond price decline in the market's history.
5 Oppenheimer High Yield Fund
<PAGE>
An interview with your Fund's managers
- --------------------------------------------------------------------------------
Avg Annual Total Returns
For the Periods Ended 6/30/99(1)
Class A
1 year 5 year 10 year
- ---------------------------------
- -5.42% 7.63% 9.14%
- ---------------------------------
Class B
Since
1 year 5 year Inception
- ---------------------------------
- -6.00% 7.55% 7.82%
- ---------------------------------
Class C
Since
1 year 5 year Inception
- ---------------------------------
- -2.39% N/A 7.93%
- ---------------------------------
Class Y
Since
1 year 5 year Inception
- ---------------------------------
- -0.54% N/A 3.04%
- ---------------------------------
Fears of a global slowdown eased during November and December 1998 after the
Federal Reserve Board, International Monetary Fund and other nations' central
banks announced measures designed to stimulate global economic growth. High
yield bond markets worldwide rebounded strongly, regaining some of the ground
they'd lost during the summer.
Early in 1999, evidence mounted that the U.S. economy was continuing to
grow at unexpectedly high levels. Most bond sectors reacted negatively to the
economy's unexpectedly high rate of growth and the resulting increased potential
for inflation, since inflation undermines the value of a bond's yield. However,
high yield instruments remained relatively strong as investors shifted their
focus from fixed income sectors offering higher levels of safety, such as
Treasuries, to sectors offering greater yields, such as high yield corporate
bonds.
(1) Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 7/28/78. The Fund's maximum
sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Class B shares have an inception date of
5/3/93. Class B returns include the applicable contingent deferred sales charge
of 5% (1-year). 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.
6 Oppenheimer High Yield Fund
<PAGE>
How did you manage the Fund in light of these conditions?
Before the recent one-year period began, it became apparent to us that high
yield bonds were priced at the high end of their valuation ranges, especially
considering the threat to global growth posed by the Asian crisis. Accordingly,
we reduced the Fund's emerging market debt and high yield corporate bond
exposure, increasing our cash position to approximately 7.5% of the Fund's
portfolio at the beginning of the period. We also established a small position
in U.S. Treasuries and other U.S. government-related securities. These moves
helped cushion the Fund's performance during the summer decline in high yield
markets.
As 1998 drew to a close, we aggressively redeployed our cash reserves and
most of our Treasuries and other government-related securities in higher
yielding bonds. As a result, the Fund enjoyed strong growth throughout the high
yield rally that began in mid-October 1998 and continued through March 1999.
Since early April 1999, investors have evidenced renewed interest in basic
industries that stand to benefit from a recovery in global markets. We have
begun to increase our exposure to specific industries, such as paper and
specialty chemicals, that we believe are most likely to benefit in an
environment of global growth.
7 Oppenheimer High Yield Fund
<PAGE>
Standardized Yields(2)
For the 30 Days Ended 6/30/99
- -----------------------------
Class A 9.27%
- -----------------------------
Class B 8.94
- -----------------------------
Class C 8.94
- -----------------------------
Class Y 9.94
- -----------------------------
An interview with your Fund's managers
- --------------------------------------------------------------------------------
Did any sectors of the high yield bond market have a particularly positive or
negative effect on the Fund's performance?
We focused primarily on fast-growing industries that we believed were likely to
benefit from global economic and technological trends. Our largest group of
holdings were in the telecommunications sector, among high yielding debt
obligations of companies such as NTL, Inc., a British cable and broadcasting
company, and providers of integrated data and telecommunications services. These
investments generally performed well during the high yield market's rally. On
the other hand, the portfolio's performance was hurt by our holdings in the
energy sector, which declined during the second half of 1998 as a result of weak
Asian demand and the inability of oil-producing nations to coordinate production
targets. However, since March 1999, we have seen recovery in the energy sector
in response to growing global demand, and we believe the sector holds potential
for further gains.
What is your outlook for the Fund?
We believe that the current valuations of high yield instruments remain
attractive. If, as we expect, the U.S. economy continues to grow without
overheating in the coming months, we anticipate a favorable environment for
investments in corporate high yield bonds. At the same time, a number of
developments bear careful observation. Emerging markets, which have demonstrated
remarkable resilience in recent months, still face fundamental economic
challenges. We continue to look for signs of strength that might lead us to
allocate more of the Fund's resources to those markets.
8 Oppenheimer High Yield Fund
<PAGE>
Credit Allocation(3)
[The following table was represented as a pie chart in the printed material.]
Treasury/Agency 1.0%
A/BBB 0.8%
BB/B 69.5%
Other 28.7%
We also remain cautious regarding the possibility of Y2K-related business
disruptions that might affect corporate performance. Our disciplined investment
strategy will guide us in evaluating investment challenges and opportunities as
they arise, which is why Oppenheimer High Yield Fund remains part of The Right
Way to Invest.
Corporate Bonds & Notes--Top 10 Sectors(4)
- ----------------------------------------------------------
Media/Entertainment: Telecommunications 17.6%
- ----------------------------------------------------------
Media/Entertainment: Wireless Communications 6.9
- ----------------------------------------------------------
Service 6.8
- ----------------------------------------------------------
Gaming/Leisure 5.6
- ----------------------------------------------------------
Energy 4.9
- ----------------------------------------------------------
Transportation 4.6
- ----------------------------------------------------------
Metals/Minerals 3.4
- ----------------------------------------------------------
Media/Entertainment: Cable/Wireless Video 3.2
- ----------------------------------------------------------
Chemicals 2.8
- ----------------------------------------------------------
Forest Products/Containers 2.6
- ----------------------------------------------------------
(2) Standardized yield is based on net investment income for the 30-day period
ended June 30, 1999. Falling share prices will tend to artificially raise
yields.
(3) Portfolio is subject to change. Percentages are as of June 30, 1999, and are
dollar-weighted based on total market value of investments. Average credit
quality and ratings allocations include securities rated by a national rating
organization. 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 prospectus.
(4) Portfolio is subject to change. Percentages are as of June 30, 1999, and are
based on total market value of net assets.
9 Oppenheimer High Yield Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended June 30, 1999, followed by a graphical
comparison of the Fund's performance to appropriate broad-based market indices.
o Management's Discussion of Performance. During the Fund's fiscal year
that ended June 30, 1999, bond markets experienced a high degree of volatility.
From July to mid-October 1998, high yield bond prices fell sharply in response
to fears of the possibility of global recession, while prices of Treasury bonds
rose to historically high levels. The Fund's managers attempted to cushion the
impact of those changes by shifting a portion of the Fund's assets into
Treasuries and cash. When recession fears eased in late 1998, the managers
redeployed those assets back into high yielding bonds, which performed well
during the remainder of the twelve-month period. Beginning in April 1999, the
managers increased the Fund's exposure to bonds of companies in cyclical,
economically sensitive industries that stand to benefit from a recovery in
global markets. This bond sector performed relatively strongly from early April
through the end of the period. The Fund's portfolio holdings, allocations and
strategies are subject to change.
10 Oppenheimer High Yield Fund
<PAGE>
o Comparing the Fund's Performance to the Market.
The graphs that follow show the performance of a hypothetical $10,000 investment
in each class of shares of the Fund held until June 30, 1999. In the case of
Class A shares, performance is measured over a ten-year period. In the case of
Class B shares, performance is measured from the inception of the class on May
3, 1993, in the case of Class C shares, from the inception of the class on
November 1, 1995, and in the case of Class Y shares, performance is measured
from inception of the class on October 15, 1997. The Fund's performance reflects
the deduction of the maximum initial sales charge on Class A shares and the
applicable contingent deferred sales charge for Class B and Class C shares. The
graphs assume that all dividends and capital gains distributions were reinvested
in additional shares.
The Fund's performance is compared to the performance of the Merrill Lynch
High Yield Bond Master Index and Lehman Brothers Corporate Bond Index. The
Merrill Lynch High Yield Bond Master Index is an index of below-investment-grade
U.S. corporate issuers (ratings are generally comparable to below BBB of S&P).
It is widely recognized as a measure of the U.S. corporate high yield bond
market. The Lehman Brothers Corporate Bond Index is an unmanaged index of
publicly-issued nonconvertible investment-grade corporate debt of U.S. issuers,
widely recognized as a measure of the U.S. fixed rate corporate bond market.
Index performance reflects the reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the data
in the graphs that follow shows the effect of taxes. The Fund's performance
reflects the effects of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's performance, it
must be noted that the Fund's investments are not limited to the investments in
the index. Oppenheimer High Yield Fund Oppenheimer High Yield Fund
11 Oppenheimer High Yield Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer High Yield Fund (Class A), Merrill Lynch High Yield Bond Master
Index and Lehman Brothers Corporate Bond Index
[GRAPHIC OMITTED]
Average Annual Total Return of Class A Shares of the Fund at 6/30/99(1)
1 year -5.42% 5 year 7.63% 10 year 9.14%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer High Yield Fund (Class B), Merrill Lynch High Yield Bond Master
Index and Lehman Brothers Corporate Bond Index
[GRAPHIC OMITTED]
Average Annual Total Return of Class B Shares of the Fund at 6/30/99(2)
1 year -6.00% 5 year 7.55% Life 7.82%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for both indices in the graphs begins on 6/30/89 for
Class A, 4/30/93 for Class B, 10/31/95 for Class C and 09/30/97 for Class Y.
(1) The average annual total returns are shown net of the applicable 4.75%
maximum initial sales charge.
(2) Class B shares of the Fund were first publicly offered on 5/3/93. The
average annual total return for the one-year period is shown net of the
applicable 5% contingent deferred sales charge.
12 Oppenheimer High Yield Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer High Yield Fund (Class C), Merrill Lynch High Yield Bond Master
Index and Lehman Brothers Corporate Bond Index
[GRAPHIC OMITTED]
Average Annual Total Return of Class C Shares of the Fund at 6/30/99(3)
1 year -2.39% Life 7.93%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer High Yield Fund (Class Y), Merrill Lynch High Yield Bond Master
Index and Lehman Brothers Corporate Bond Index
Average Annual Total Return of Class Y Shares of the Fund at 6/30/99(4)
1 year -0.54% Life 3.04%
(3) Class C shares of the Fund were first publicly offered on 11/1/95. The
average annual total return for the one-year period is shown net of the
applicable 1% contingent deferred sales charge.
(4) Class Y shares of the Fund was first publicly offered on 10/15/97. Past
performance is not predictive of future performance. Graphs are not drawn to the
same scale.
13 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==============================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--2.6%
- ----------------------------------------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp.,
Multiclass Mtg. Pass-Through Certificates, Series
1997-C1, Cl. H, 7%, 6/17/29(2) $ 840,000 $ 547,312
- ----------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg
Pass-Through Certificates, Series 1997-D4, Cl. B3,
7.525%, 4/14/29(3) 1,500,000 1,024,219
- ----------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 6.944%, 12/25/03(2)(3) 1,452,000 1,263,240
- ----------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 194, Cl. IO, 10.219%, 4/1/28(4) 32,181,086 9,966,080
Series 197, Cl. IO, 10.986%, 4/1/28(4) 18,842,384 5,911,798
Series 199, Cl. IO, 22.643%, 8/1/28(4) 14,142,122 4,434,881
- ----------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, 8.055%, 2/25/11(2)(3) 4,500,000 3,217,500
- ----------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
Collateralized Mtg. Obligations, Series 1997-C2,
Cl. F, 6.75%, 4/16/29 3,000,000 1,968,750
Interest-Only Stripped Mtg.-Backed Security, Series 1997-C1,
Cl. X, 9.043%, 7/15/27(4) 73,878,466 6,233,496
- ----------------------------------------------------------------------------------------------
Goldman Sachs Group, LP, Collateralized Bond Obligation,
Sub. Bonds, Series 1A, Cl. D, 12.54%, 6/13/01 2,000,000 1,995,000
- ----------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg
Pass-Through Certificates:
Series 1997-RR, Cl. D, 7.671%, 4/30/39(2) 5,000,000 3,835,938
Series 1997-RR, Cl. F, 7.649%, 4/30/39(2) 8,000,000 4,392,500
- ----------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg
Pass-Through Certificates, Series 1997-MC1, Cl. F,
7.452%, 5/20/07(2) 1,400,000 1,120,000
- ----------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1995-C1, Cl. F, 6.90%, 2/25/27 1,348,873 1,229,161
- ----------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Series 1996-C1, Cl. E, 9.184%, 1/20/06 2,496,000 2,387,580
-----------
Total Mortgage-Backed Obligations (Cost $52,909,524) 49,527,455
==============================================================================================
Foreign Government Obligations--1.2%
- ----------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de
Consolidacion de Deudas, Series I, 2.841%, 4/1/07(3) ARP 15,777,043 9,823,924
- ----------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds,
Series PBA1, 2.88%, 4/1/07(3) ARP 2,489,687 1,531,948
- ----------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds,
5.875%, 7/28/11(3) 5,650,000 3,842,000
- ----------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Disc. Bonds,
6.086%, 12/23/23(3) 1,750,000 1,071,875
</TABLE>
14 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=================================================================================================
<S> <C> <C>
Foreign Government Obligations (continued)
Panama (Republic of):
Bonds, 8.875%, 9/30/27 $ 785,000 $ 645,662
Interest Reduction Bonds, 4%, 7/17/14(5) 1,375,000 1,010,625
Past Due Interest Debs., 5.41%, 7/17/16(3) 1,924,740 1,417,090
=================================================================================================
Peru (Republic of):
Front-Loaded Interest Reduction Bonds, 3.75%, 3/7/17(5) 1,000,000 543,750
Past Due Interest Bonds, Series 20 yr., 4%, 3/7/17(5) 2,350,000 1,427,625
- -------------------------------------------------------------------------------------------------
Perusahaan Listr, 17%, 8/21/01(2) IDR 1,000,000,000 76,255
- -------------------------------------------------------------------------------------------------
Philippines (Republic of) Debs., 6%, 12/1/09(3) 924,000 852,390
- -------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts.,
Zero Coupon, 3/17/99(2)(6) IDR 4,000,000,000 159,773
-----------
Total Foreign Government Obligations (Cost $24,279,110) 22,402,917
=================================================================================================
Loan Participations--0.4%
- -------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan
Participation Nts., Tranche 1, 6%, 9/4/06(3) 1,179,272 738,520
- -------------------------------------------------------------------------------------------------
Central Bank of Indonesia Gtd. Nts.:
Series 2 yr., 8.375%, 8/25/00(2)(3) 3,000,000 2,797,500
Series 2 yr., 8.375%, 8/25/00(2)(3) 1,000,000 932,500
Series 3 yr., 8.375%, 8/25/01(2)(3) 2,500,000 2,200,000
Series 4 yr., 8.625%, 8/25/02(2)(3) 500,000 428,750
- -------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation
Agreement, Tranche A, 5.906%, 1/1/09(2)(3) 1,085,714 876,714
-----------
Total Loan Participations (Cost $6,816,854) 7,973,984
=================================================================================================
Corporate Bonds and Notes--82.4%
- -------------------------------------------------------------------------------------------------
Aerospace/Defense--1.8%
Amtran, Inc.:
9.625% Nts., 12/15/05 2,300,000 2,256,875
10.50% Sr. Nts., 8/1/04 5,600,000 5,628,000
- -------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375% Sr. Unsec. Nts., 11/15/06 5,600,000 5,348,000
10.75% Sr. Nts., 8/1/05 115,000 117,875
- -------------------------------------------------------------------------------------------------
BE Aerospace, Inc., 9.50% Sr. Unsec. Sub. Nts., 11/1/08 4,000,000 4,110,000
- -------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable
Asset-Backed Nts., Series 1997-1, 1/1/01(2) 3,000,000 2,872,500
- -------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., 12% Sr. Sub. Nts., 9/30/08(7) 4,000,000 4,060,000
- -------------------------------------------------------------------------------------------------
Fairchild Corp., 10.75% Sr. Sub. Gtd. Nts., 4/15/09(7) 6,650,000 6,550,250
- -------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust,
11.76% Sr. Nts., Series 1997-A, Cl. B, 6/15/04(2) 2,164,900 2,252,362
- -------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 1,954,751 1,915,657
-----------
35,111,519
</TABLE>
15 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==================================================================================================
<S> <C> <C>
Chemicals--2.8%
Brunner Mond Group plc, 12.50% Sr. Unsec. Sub. Nts., 7/15/08 GBP $ 4,600,000 $ 4,386,843
- --------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 4,630,000 4,450,587
- --------------------------------------------------------------------------------------------------
Huntsman Corp./ICI Chemical Co. plc:
10.125% Sr. Unsec. Sub. Nts., 7/1/09(7) 3,000,000 3,045,000
10.125% Sr. Unsec. Sub. Nts., 7/1/09 EUR 2,700,000 2,826,205
- --------------------------------------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts., 6/1/07 700,000 521,500
- --------------------------------------------------------------------------------------------------
Lyondell Chemical Co.:
9.875% Nts., Series B, 5/1/07(7) 2,300,000 2,363,250
10.875% Sr. Sub. Nts. 5/1/09(7) 3,000,000 3,135,000
- --------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 11,325,000 11,947,875
- --------------------------------------------------------------------------------------------------
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07 1,000,000 815,000
- --------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 2,020,000 1,666,500
- --------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 2,000,000 1,950,000
- --------------------------------------------------------------------------------------------------
Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec
Sub. Nts., Series B, 8/1/07 7,255,000 7,309,412
- --------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.25% Sr. Sub. Nts., 4/1/07 1,560,000 1,162,200
11.75% Sr. Unsec. Sub. Nts., 8/15/06 4,905,000 3,752,325
- --------------------------------------------------------------------------------------------------
ZSC Specialty Chemical plc, 11% Sr. Nts., 7/1/09(7) 4,200,000 4,257,750
------------
53,589,447
- --------------------------------------------------------------------------------------------------
Consumer Durables--0.2%
Holmes Products Corp., 9.875% Sr. Sub. Nts.,
Series C, 11/15/07(2) 1,000,000 972,500
- --------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts.,
Series B, 7/15/02 340,000 256,700
- --------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts.,
12/15/05(2) 2,695,000 3,031,848
------------
4,261,048
- --------------------------------------------------------------------------------------------------
Consumer Non-Durables--2.5%
AKI Holdings, Inc.:
0%/13.50% Sr. Disc. Debs., 7/1/09(8) 2,520,000 970,200
10.50% Sr. Unsec. Nts., 7/1/08 4,200,000 4,095,000
- --------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 4,000,000 2,550,000
- --------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 8/15/08 4,675,000 4,675,000
- --------------------------------------------------------------------------------------------------
Consoltex Group, Inc., 11% Sr. Sub. Nts., Series B, 10/1/03 3,780,000 3,836,700
- --------------------------------------------------------------------------------------------------
Fruit of the Loom, Inc., 8.875% Sr. Unsec. Nts., 4/15/06(7) 7,000,000 6,055,000
- --------------------------------------------------------------------------------------------------
Globe Manufacturing Corp., 10% Sr. Unsec. Sub. Nts.,
Series B, 8/1/08 3,500,000 2,642,500
- --------------------------------------------------------------------------------------------------
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)(6)(9)(10) 5,955,189 --
</TABLE>
16 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
======================================================================================================
<S> <C> <C>
Consumer Non-Durables (continued)
Revlon Consumer Products Corp.:
8.625% Sr. Unsec. Sub. Nts., 2/1/08 $ 5,335,000 $ 5,014,900
9% Sr. Nts., 11/1/06 4,515,000 4,469,850
- ------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec
Disc. Nts., Series B, 17.32%, 3/15/01(11) 6,420,000 4,205,100
- ------------------------------------------------------------------------------------------------------
Salton, Inc., 10.75% Sr. Unsec. Sub. Nts., 12/15/05 7,000,000 7,280,000
- ------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 1,200,000 1,170,000
------------
48,496,875
- ------------------------------------------------------------------------------------------------------
Energy--4.9%
AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(7) 3,500,000 3,438,750
- ------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06(12) 3,227,000 2,855,895
9.625% Sr. Unsec. Nts., Series B, 5/1/05 4,450,000 4,183,000
- ------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875%
Sr. Sub. Nts., 11/15/07 5,450,000 4,816,437
- ------------------------------------------------------------------------------------------------------
Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05 3,175,000 2,782,094
- ------------------------------------------------------------------------------------------------------
Dailey International, Inc., 9.50% Sr. Unsec. Nts., Series B, 2/15/08 2,800,000 1,778,000
- ------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 2,500,000 2,243,750
- ------------------------------------------------------------------------------------------------------
Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(7) 2,800,000 1,834,000
- ------------------------------------------------------------------------------------------------------
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., Series B, 2/15/07(6) 1,700,000 1,198,500
9.50% Sr. Sub. Nts., 11/1/06(6) 1,700,000 1,088,000
- ------------------------------------------------------------------------------------------------------
Gothic Energy Corp., 0%/14.125% Sr. Disc. Nts., 5/1/06(8) 14,875,000 5,280,625
- ------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(7) 9,725,000 8,606,625
- ------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08 4,015,000 2,148,025
- ------------------------------------------------------------------------------------------------------
Leviathan Gas Pipeline Partners LP/Leviathan Financial Corp.,
10.375% Sr. Sub. Nts., 6/1/09(7) 3,750,000 3,843,750
- ------------------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., Series D, 11/1/06(6) 5,995,000 2,368,025
- ------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 4,980,000 3,610,500
- ------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 5,400,000 5,386,500
- ------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07 7,525,000 7,167,562
- ------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 12.25% Sr. Nts., 3/15/06(7) 6,000,000 6,210,000
- ------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08 12,535,000 6,627,881
- ------------------------------------------------------------------------------------------------------
RBF Finance Co.:
11% Sec. Nts., 3/15/06(7) 6,000,000 6,210,000
11.375% Sec. Nts., 3/15/09(7) 2,500,000 2,600,000
- ------------------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals
(Canada), Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 925,000 982,812
- ------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 4,210,000 4,210,000
- ------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc.:
0%/9.875% Sr. Disc. Nts., 2/15/08(8) 4,200,000 2,646,000
0%/11.375% Sr. Disc. Nts., 2/15/09(8) 1,680,000 1,016,400
------------
95,133,131
</TABLE>
17 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==========================================================================================================
<S> <C> <C>
Financial--1.3%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 $ 1,125,000 $ 849,375
- ----------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07(2) 78,000 67,957
- ----------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 66,283 66,449
- ----------------------------------------------------------------------------------------------------------
Emergent Group, Inc., 10.75% Sr. Nts., Series B, 9/15/04 4,455,000 2,606,175
- ----------------------------------------------------------------------------------------------------------
Industrial Bank of Japan Preferred Capital Co.
(The) LLC, 8.79% Bonds, 12/29/49(3)(7) 4,485,000 3,762,713
- ----------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(2)(6) 8,802,000 --
- ----------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 9.643% Nts., 11/19/07(3)(7) 1,000,000 1,025,000
- ----------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 24% Nts., 6/19/03(6) IDR 2,464,500,000 46,535
- ----------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75%
Sr. Sec. Nts., Series B, 4/1/08 11,610,000 10,855,350
- ----------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28 2,525,000 2,026,312
- ----------------------------------------------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 3,820,000 3,762,700
------------
25,068,566
- ----------------------------------------------------------------------------------------------------------
Food & Drug--2.3%
AmeriKing, Inc., 10.75% Sr. Nts., 12/1/06 4,730,000 4,800,950
- ----------------------------------------------------------------------------------------------------------
Family Restaurants, Inc.:
9.75% Sr. Nts., 2/1/02 9,500,000 4,856,875
10.875% Sr. Sub. Disc. Nts., 2/1/04(2) 450,000 237,375
- ----------------------------------------------------------------------------------------------------------
Fleming Cos., Inc.:
10.50% Sr. Sub. Nts., Series B, 12/1/04 3,050,000 2,882,250
10.625% Sr. Sub. Nts., Series B, 7/31/07 8,255,000 7,697,787
- ----------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(8) 5,610,000 5,581,950
12.625% Sub. Nts., 6/15/02 10,500,000 10,710,000
- ----------------------------------------------------------------------------------------------------------
Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 5,645,000 5,955,475
- ----------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04(2) 1,065,000 1,142,212
------------
43,864,874
- ----------------------------------------------------------------------------------------------------------
Food/Tobacco--2.2%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 1,680,000 1,654,800
- ----------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 10,015,000 9,839,737
- ----------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., Series B, 12/15/07(8) 4,571,000 3,382,540
- ----------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 6,845,000 7,221,475
- ----------------------------------------------------------------------------------------------------------
New World Pasta Co., 9.25% Sr. Sub. Nts., 2/15/09(7) 6,000,000 5,865,000
- ----------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05 6,400,000 6,304,000
- ----------------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10 1,150,000 868,250
- ----------------------------------------------------------------------------------------------------------
SmithField Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08 2,240,000 2,038,400
- ----------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts., 11/15/07 3,435,000 2,765,175
- ----------------------------------------------------------------------------------------------------------
Triarc Consumer Products Group LLC, 10.25% Sr. Sub. Nts., 2/15/09(7) 3,500,000 3,447,500
------------
43,386,877
</TABLE>
18 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=========================================================================================================
<S> <C> <C>
Forest Products/Containers--2.6%
Ball Corp.:
7.75% Sr. Unsec. Nts., 8/1/06 $ 2,500,000 $ 2,453,125
8.25% Sr. Unsec. Sub. Nts., 8/1/08 3,300,000 3,267,000
- ---------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07 4,000,000 3,820,000
- ---------------------------------------------------------------------------------------------------------
Mail-Well Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08 3,335,000 3,251,625
- ---------------------------------------------------------------------------------------------------------
Packaging Corp. of America, 9.625% Sr. Sub. Nts., 4/1/09(7) 1,500,000 1,530,000
- ---------------------------------------------------------------------------------------------------------
Repap Enterprises (New Brunswick), 9%
First Priority Sr. Sec. Nts., 6/1/04 2,900,000 2,718,750
- ---------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.625% Sr. Unsec. Nts., 8/1/07 3,220,000 3,316,600
10.875% Sr. Sub. Nts., 4/1/08 6,400,000 6,256,000
- ---------------------------------------------------------------------------------------------------------
SD Warren Co.:
12% Sr. Sub. Nts., Series B, 12/15/04 4,450,000 4,783,750
14% Unsec. Nts., 12/15/06(9) 9,895,722 11,355,341
- ---------------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 2,750,000 2,884,062
- ---------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 5,590,000 5,590,000
------------
51,226,253
- ---------------------------------------------------------------------------------------------------------
Gaming/Leisure--5.6%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(8) 1,400,000 770,000
- ---------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 3,080,000 2,791,250
- ---------------------------------------------------------------------------------------------------------
Aztar Corp., 8.875% Sr. Sub. Nts., 5/15/07(7) 4,500,000 4,331,250
- ---------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/95(6) 22,500 --
- ---------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00(2)(6) 1,000,000 50,000
- ---------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 3,000,000 2,820,000
- ---------------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B, 8/15/03 3,000,000 3,408,750
- ---------------------------------------------------------------------------------------------------------
Coast Hotel & Casinos, Inc., 9.50% Sr. Sub. Nts., 4/1/09(7) 2,250,000 2,176,875
- ---------------------------------------------------------------------------------------------------------
Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06 860,000 863,225
- ---------------------------------------------------------------------------------------------------------
Florida Panthers Holdings, Inc., 9.875% Sr. Sub. Nts., 4/15/09 4,800,000 4,512,000
- ---------------------------------------------------------------------------------------------------------
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05 4,100,000 3,884,750
- ---------------------------------------------------------------------------------------------------------
Harveys Casino Resorts, 10.625% Sr. Unsec. Sub. Nts., 6/1/06 280,000 292,600
- ---------------------------------------------------------------------------------------------------------
Hollywood Casino Corp., 11.25% Sec. Nts., 5/1/07(7) 4,500,000 4,556,250
- ---------------------------------------------------------------------------------------------------------
Hollywood Park, Inc., 9.25% Sr. Unsec. Sub. Nts., Series B, 2/15/07 6,000,000 5,985,000
- ---------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 11,355,000 11,596,294
- ---------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 7,980,000 8,079,750
- ---------------------------------------------------------------------------------------------------------
Isle of Capri Casinos, Inc., 8.75% Sr. Sub. Nts., 4/15/09(7) 4,900,000 4,618,250
- ---------------------------------------------------------------------------------------------------------
Jupiters Ltd., 8.50% Sr. Nts., 3/1/06(7) 5,200,000 5,122,000
- ---------------------------------------------------------------------------------------------------------
Meristar Hospitality Corp., 8.75% Sr. Sub. Nts., 8/15/07(7) 2,200,000 2,101,000
- ---------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 8.75% Sr. Unsec. Sub. Nts., 1/1/09 5,000,000 4,975,000
</TABLE>
19 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
========================================================================================================
<S> <C> <C>
Gaming/Leisure (continued)
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(8) $ 4,880,000 $ 3,263,500
9.25% Sr. Nts., 4/1/06 1,850,000 1,831,500
9.75% Sr. Nts., 6/15/07 5,000,000 5,075,000
- --------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06 3,640,000 3,658,200
- --------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
9.75% Sr. Sub. Nts., 4/15/07 5,800,000 5,916,000
10.125% Sr. Sub. Nts., 3/15/06 6,000,000 6,225,000
- --------------------------------------------------------------------------------------------------------
Venetian Casino Resort LLC/Las Vegas
Sands, Inc., 12.25% Mtg. Nts., 11/15/04 9,000,000 9,045,000
------------
107,948,444
- --------------------------------------------------------------------------------------------------------
Healthcare--1.1%
ICN Pharmaceuticals, Inc., 8.75% Sr. Nts., 11/15/08(7) 5,040,000 4,977,000
- --------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc.:
9.50% Sr. Sub. Nts., 9/15/07 3,515,000 2,583,525
10.25% Sr. Sub. Nts., 4/30/06 5,330,000 3,937,537
- --------------------------------------------------------------------------------------------------------
Kinetic Concepts, Inc., 9.625% Sr. Unsec. Sub. Nts., Series B, 11/1/07 85,000 76,075
- --------------------------------------------------------------------------------------------------------
King Pharmaceutical, Inc., 10.75% Sr. Unsec. Sub. Nts., 2/15/09 4,500,000 4,668,750
- --------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(7) 4,200,000 4,347,000
- --------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.125% Sr. Unsec. Sub. Nts., Series B, 12/1/08 1,250,000 1,187,500
------------
21,777,387
- --------------------------------------------------------------------------------------------------------
Housing--1.6%
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 4,320,000 4,082,400
- --------------------------------------------------------------------------------------------------------
Del Webb Corp., 10.25% Sr. Unsec. Sub. Nts., 2/15/10 4,500,000 4,477,500
- --------------------------------------------------------------------------------------------------------
Engle Homes, Inc., 9.25% Sr. Unsec. Nts., Series C, 2/1/08 2,160,000 2,019,600
- --------------------------------------------------------------------------------------------------------
Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 995,000 957,687
- --------------------------------------------------------------------------------------------------------
Nortek, Inc:
8.875% Sr. Nts., 8/1/08(7) 1,750,000 1,723,750
9.125% Sr. Nts., Series B, 9/1/07 9,540,000 9,492,300
9.25% Sr. Nts., Series B, 3/15/07 7,545,000 7,582,725
------------
30,335,962
- --------------------------------------------------------------------------------------------------------
Information Technology--2.6%
Amkor Technologies, Inc.:
9.25% Sr. Nts., 5/1/06(7) 9,500,000 9,310,000
10.50% Sr. Sub. Nts., 5/1/09(7) 9,500,000 9,191,250
- --------------------------------------------------------------------------------------------------------
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(2) 3,780,000 2,579,850
- --------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 4,000,000 3,730,000
- --------------------------------------------------------------------------------------------------------
Dialog Corp. plc, 11% Sr. Sub. Nts., Series B, 11/15/07 3,250,000 2,957,500
- --------------------------------------------------------------------------------------------------------
DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 2,355,000 2,319,675
- --------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,805,000 2,734,875
</TABLE>
20 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
========================================================================================================
<S> <C> <C>
Information Technology (continued)
Fairchild Semiconductor Corp., 10.375% Sr. Sub. Nts., 10/1/07(7) $ 9,175,000 $ 9,060,312
- --------------------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 5,200,000 5,798,000
- --------------------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 3,360,000 2,990,400
------------
50,671,862
- --------------------------------------------------------------------------------------------------------
Manufacturing--2.6%
Applied Power, Inc., 8.75% Sr. Sub. Nts., 4/1/09 3,600,000 3,510,000
- --------------------------------------------------------------------------------------------------------
Axia, Inc., 10.75% Sr. Sub. Nts., 7/15/08 2,020,000 2,002,325
- --------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 2,150,000 1,655,500
- --------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05 350,000 360,500
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec
Sub. Nts., 3/1/08 2,800,000 2,674,000
- --------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 2,250,000 1,653,750
- --------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 3,500,000 3,167,500
- --------------------------------------------------------------------------------------------------------
Insilco Corp., 12% Sr. Sub. Nts., 8/15/07 7,055,000 6,984,450
- --------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts., Series B, 6/1/05 6,055,000 6,312,337
- --------------------------------------------------------------------------------------------------------
Jordan Industries, Inc., 10.375% Sr. Unsec. Nts., Series D, 8/1/07 3,150,000 3,205,125
- --------------------------------------------------------------------------------------------------------
Mechala Group Jamaica Ltd., 12% Bonds, 2/15/02 700,000 243,250
- --------------------------------------------------------------------------------------------------------
Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts., 7/1/08 1,960,000 1,734,600
- --------------------------------------------------------------------------------------------------------
Paragon Corp. Holdings, Inc., 9.625% Sr. Unsec. Nts., Series B, 4/1/08 1,000,000 585,000
- --------------------------------------------------------------------------------------------------------
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07 3,900,000 3,861,000
- --------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts.,
Series B, 6/15/07 5,480,000 5,206,000
- --------------------------------------------------------------------------------------------------------
Terex Corp.:
8.875% Sr. Unsec. Sub. Nts., 4/1/08 1,960,000 1,881,600
8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08(7) 2,000,000 1,920,000
- --------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 2,800,000 2,870,000
------------
49,826,937
- --------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--2.0%
Allbritton Communications Co., 8.875% Sr. Sub. Nts.,
Series B, 2/1/08 1,625,000 1,572,187
- --------------------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 5,170,000 5,273,400
- --------------------------------------------------------------------------------------------------------
CBS Radio, Inc., 11.375% Unsec. Sub. Debs., 1/15/09(9) 2,048,300 2,332,502
- --------------------------------------------------------------------------------------------------------
Chancellor Media Corp.:
8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,400,000 1,401,750
9% Sr. Unsec. Sub. Nts., 10/1/08 9,000,000 9,202,500
10.50% Sr. Sub. Nts., Series B, 1/15/07 1,240,000 1,308,200
- --------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09(7) 5,500,000 5,259,375
- --------------------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(5) 1,800,000 1,863,000
- --------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 9% Sr. Unsec. Sub. Nts., 7/15/07 5,045,000 5,007,162
</TABLE>
21 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
====================================================================================================
<S> <C> <C>
Media/Entertainment: Broadcasting (continued)
Spanish Broadcasting Systems, Inc.:
11% Sr. Nts., 3/15/04 $ 1,520,000 $ 1,634,000
12.50% Sr. Nts., 6/15/02 700,000 773,500
- ----------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 2,850,000 2,778,750
------------
38,406,326
- ----------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--3.2%
Adelphia Communications Corp.:
8.125% Sr. Nts., Series B, 7/15/03 3,000,000 2,955,000
8.375% Sr. Nts., Series B, 2/1/08 3,700,000 3,579,750
9.875% Sr. Nts., Series B, 3/1/07 3,545,000 3,722,250
- ----------------------------------------------------------------------------------------------------
Bresnan Communications, Inc.:
0%/9.25% Sr. Disc. Nts., 2/1/09(7)(8) 6,350,000 4,159,250
8% Sr. Nts., 2/1/09(7) 1,350,000 1,339,875
- ----------------------------------------------------------------------------------------------------
Charter Communication Holdings LLC/Charter
Communication Holdings Capital Corp.:
0%/9.92% Sr. Disc. Nts., 4/1/11(7)(8) 8,000,000 5,000,000
8.25% Sr. Nts., 4/1/07(7) 2,000,000 1,925,000
8.625% Sr. Nts., 4/1/09(7) 1,000,000 965,000
- ----------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
9.875% Sr. Sub. Debs., 2/15/13 600,000 643,500
9.875% Sr. Sub. Nts., 5/15/06 3,000,000 3,195,000
- ----------------------------------------------------------------------------------------------------
Diva Systems Corp., 0%/12.625% Sr. Disc. Nts., Series B, 3/1/08(8) 2,500,000 734,375
- ----------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09(7) 17,000,000 17,382,500
- ----------------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(2) 1,934,677 1,934,677
- ----------------------------------------------------------------------------------------------------
EchoStar II, 8.25% Sinking Fund Bonds, 11/9/01(2) 2,026,356 2,026,357
- ----------------------------------------------------------------------------------------------------
Falcon Holding Group LP, 0%/9.285% Sr. Disc. Debs.,
Series B, 4/15/10(8) 8,305,000 5,855,025
- ----------------------------------------------------------------------------------------------------
Rogers Communications, Inc., 8.75% Sr. Nts., 7/15/07 CAD 3,030,000 2,088,176
- ----------------------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(8) 6,110,000 4,047,875
------------
61,553,610
- ----------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--1.9%
Ackerley Group, Inc., 9% Sr. Unsec. Sub. Nts., Series B, 1/15/09 5,500,000 5,458,750
- ----------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 4,000,000 3,780,000
- ----------------------------------------------------------------------------------------------------
IPC Magazines Group plc, 0%/10.75% Bonds, 3/15/08(8) GBP 250,000 202,732
- ----------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.:
8.875% Sr. Unsec. Sub. Nts., 12/15/10 2,000,000 1,850,000
9.50% Sr. Unsec. Sub. Nts., 6/1/08 2,750,000 2,585,000
- ----------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Unsec. Sub. Nts., 12/1/08 8,000,000 7,800,000
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 9,175,000 9,037,375
</TABLE>
22 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=================================================================================================
<S> <C> <C>
Media/Entertainment: Diversified Media (continued)
TV Guide, Inc., 8.125% Sr. Sub. Nts., 3/1/09(7) $ 4,000,000 $ 3,805,000
- -------------------------------------------------------------------------------------------------
World Color Press, Inc., 7.75% Sr. Unsec. Sub. Nts., 2/15/09 3,000,000 2,835,000
------------
37,353,857
- -------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--17.6%
Allegiance Telecom, Inc., 12.875% Sr. Nts., 5/15/08 1,000,000 1,085,000
- -------------------------------------------------------------------------------------------------
Amazon.Com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(8) 14,940,000 9,823,050
- -------------------------------------------------------------------------------------------------
COLT Telecom Group plc:
0%/12% Sr. Unsec. Disc. Nts., 12/15/06(8) 850,000 709,750
7.625% Bonds, 7/31/08 DEM 9,750,000 5,121,718
8.875% Sr. Nts., 11/30/07 DEM 2,295,000 1,262,691
10.125% Sr. Nts., 11/30/07 GBP 3,275,000 5,568,662
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)(8)(13) 7,055,000 5,890,925
- -------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20% Sr. Disc
Debs., 11/15/07(8) 5,570,000 5,103,512
- -------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07 3,065,000 3,225,913
- -------------------------------------------------------------------------------------------------
Convergent Communications, Inc., 13% Sr. Nts., 4/1/08 2,500,000 2,190,625
- -------------------------------------------------------------------------------------------------
Covad Communications Group, Inc., 0%/13.50%
Sr. Disc. Nts., 3/15/08(8) 16,200,000 8,991,000
- -------------------------------------------------------------------------------------------------
Diamond Cable Communications plc:
0%/10.75% Sr. Disc. Nts., 2/15/07(8) 700,000 542,500
0%/11.75% Sr. Disc. Nts., 12/15/05(8) 16,675,000 15,090,875
- -------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 1,400,000 1,410,500
- -------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07 2,750,000 2,158,750
- -------------------------------------------------------------------------------------------------
Exodus Communications, Inc.:
11.25% Sr. Nts., 7/1/08(7) 4,000,000 4,220,000
11.25% Sr. Nts., 7/1/08 2,725,000 2,874,875
- -------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13%
Sr. Disc. Nts., 4/15/08(2)(8) 5,000,000 2,625,000
- -------------------------------------------------------------------------------------------------
Focal Communications Corp., 0%/12.125%
Sr. Unsec. Disc. Nts., 2/15/08(8) 5,740,000 3,243,100
- -------------------------------------------------------------------------------------------------
Global Crossing Ltd., 9.625% Sr. Nts., 5/15/08 5,295,000 5,427,375
- -------------------------------------------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts., 5/1/05(2) 6,510,000 6,249,600
- -------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875%
Cv. Sr. Sub. Disc. Nts., 12/15/05(7)(8) 1,400,000 1,898,750
- -------------------------------------------------------------------------------------------------
GST Telecommunications, Inc./GST Network
Funding Corp., Inc., 0%/10.50% Sr. Disc. Nts., 5/1/08(7)(8) 4,730,000 2,696,100
- -------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(8) 4,360,000 3,597,000
- -------------------------------------------------------------------------------------------------
Hyperion Telecommunication, Inc., 12% Sr. Sub. Nts., 11/1/07(7) 7,825,000 8,040,188
- -------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 0%/12.50% Sr. Sec. Disc. Nts., 5/1/06(8) 800,000 628,000
- -------------------------------------------------------------------------------------------------
ICG Services, Inc., 0%/10% Sr. Exchangeable
Unsec. Disc. Nts., 2/15/08(8) 3,985,000 2,291,375
</TABLE>
23 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
====================================================================================================
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
Intermedia Communications, Inc.:
0%/12.25% Sr. Disc. Nts., Series B, 3/1/09(8) $ 6,000,000 $ 3,360,000
8.50% Sr. Nts., Series B, 1/15/08 5,895,000 5,423,400
8.60% Sr. Unsec. Nts., Series B, 6/1/08 5,000,000 4,625,000
8.875% Sr. Nts., 11/1/07 4,995,000 4,707,788
- ----------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc.:
0%/12.50% Sr. Unsec. Disc. Nts., 2/15/08(2)(8) 12,340,000 6,848,700
13.50% Sr. Nts., 5/15/09(7) 1,800,000 1,811,250
- ----------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08(8) 16,000,000 9,920,000
9.125% Sr. Unsec. Nts., 5/1/08 1,000,000 987,500
- ----------------------------------------------------------------------------------------------------
Long Distance International, Inc., 12.25% Sr. Unsec. Nts., 4/15/08 1,090,000 659,450
- ----------------------------------------------------------------------------------------------------
McLeodUSA, Inc., 8.125% Sr. Nts., 2/15/09(7) 1,950,000 1,813,500
- ----------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts.,
Series B, 11/15/08 7,000,000 7,227,500
- ----------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(8) DEM 2,800,000 922,743
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(8) 1,400,000 878,500
- ----------------------------------------------------------------------------------------------------
Netia Holdings II BV, 13.125% Sr. Nts., 6/15/09(7) 5,000,000 5,050,000
- ----------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Unsec. Nts., 4/15/08(8) 1,200,000 720,000
9.625% Sr. Nts., 10/1/07 9,895,000 9,672,363
10.75% Sr. Unsec. Nts., 11/15/08 6,600,000 6,781,500
10.75% Sr. Unsec. Nts., 6/1/09 1,000,000 1,030,000
- ----------------------------------------------------------------------------------------------------
NorthEast Optic Network, Inc., 12.75% Sr. Nts., 8/15/08 2,700,000 2,808,000
- ----------------------------------------------------------------------------------------------------
NTL, Inc.:
0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(8) 3,995,000 2,756,550
0%/9.75% Sr. Nts., 4/15/09(8) GBP 19,350,000 18,110,209
0%/10.75% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(2)(8) GBP 2,955,000 3,062,613
0%/12.375% Sr. Unsec. Nts., Series B, 10/1/08(8) 13,905,000 9,559,688
10% Sr. Nts., Series B, 2/15/07 3,930,000 4,087,200
11.50% Sr. Unsec. Nts., Series B, 10/1/08 7,000,000 7,743,750
- ----------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 15,535,000 11,884,275
- ----------------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc., 9% Cv. Sub. Nts., 6/1/06(7) 630,000 350,438
- ----------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(2) 4,000,000 970,000
- ----------------------------------------------------------------------------------------------------
PSINet, Inc.:
10% Sr. Unsec. Nts., Series B, 2/15/05 4,530,000 4,575,300
11.50% Sr. Unsec. Nts., 11/1/08 10,000,000 10,600,000
- ----------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/9.47%
Sr. Disc. Nts., 10/15/07(8) 5,520,000 4,333,200
- ----------------------------------------------------------------------------------------------------
RSL Communications plc, 10.50% Gtd. Sr. Nts., 11/15/08 4,800,000 4,776,000
- ----------------------------------------------------------------------------------------------------
Tele1 Europe BV, Units (each unit consists of $1,000
principal amount of 13% Sr. Nts., 5/15/09 and one
warrant to purchase 40.403 shares of common stock)(7)(13) 1,000,000 1,042,500
</TABLE>
24 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=================================================================================================
<S> <C> <C>
Media/Entertainment: Telecommunications (continued)
Telewest Communications plc:
0%/9.25% Sr. Nts., 4/15/09(7)(8) $ 7,500,000 $ 5,034,375
0%/9.875% Sr. Nts., 4/15/09(7)(8) GBP 8,500,000 8,843,043
0%/11% Sr. Disc. Debs., 10/1/07(8) 9,060,000 8,108,700
11.25% Sr. Nts., 11/1/08 6,065,000 6,838,288
- -------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 6,100,000 6,283,000
- -------------------------------------------------------------------------------------------------
US Xchange LLC, 15% Sr. Unsec. Nts., 7/1/08(2) 2,800,000 2,926,000
- -------------------------------------------------------------------------------------------------
Verio, Inc.:
10.375% Sr. Unsec. Nts., 4/1/05 5,300,000 5,419,250
11.25% Sr. Nts., 12/1/08 5,400,000 5,683,500
13.50% Sr. Unsec. Nts., 6/15/04 725,000 815,625
- -------------------------------------------------------------------------------------------------
Viatel, Inc.:
0%/12.50% Sr. Unsec. Disc. Nts., 4/15/08(8) 8,350,000 5,385,750
11.15% Sr. Nts., 4/15/08 DEM 5,000,000 2,656,182
11.25% Sr. Sec. Nts., 4/15/08 2,925,000 2,998,125
- -------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts.,
Series B, 3/1/05(2)(8) 10,160,000 6,197,600
- -------------------------------------------------------------------------------------------------
Winstar Equipment Corp., 12.50% Gtd. Sr. Sec
Exchangeable Nts., 3/15/04 2,000,000 2,095,000
------------
340,350,189
- -------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications--6.9%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07 1,400,000 1,211,000
- -------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(8) 9,220,000 3,918,500
- -------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 10.75% Sr. Sub. Nts., 12/15/08(7) 4,000,000 4,150,000
- -------------------------------------------------------------------------------------------------
Clearnet Communications, Inc., 0%/14.75%
Sr. Disc. Nts., 12/15/05(8) 670,000 616,400
- -------------------------------------------------------------------------------------------------
Crown Castle International Corp.:
0%/10.375% Sr. Disc. Nts., 5/15/11(8) 6,500,000 3,802,500
0%/10.625% Sr. Unsec. Disc. Nts., 11/15/07(8) 8,790,000 6,153,000
9% Sr. Nts., 5/15/11 5,200,000 5,122,000
- -------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(8) 4,650,000 2,266,875
- -------------------------------------------------------------------------------------------------
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 1,160,000 1,235,400
- -------------------------------------------------------------------------------------------------
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 purchase
19.85 shares of common stock)(13) 2,800,000 1,162,000
- -------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 2,000,000 1,745,000
- -------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.:
0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(8) CAD 6,405,000 2,672,270
0%/12% Sr. Disc. Nts., 6/1/09(7)(8) 7,000,000 4,025,000
0%/14% Sr. Disc. Nts., Series B, 6/1/06(8) 3,900,000 3,168,750
- -------------------------------------------------------------------------------------------------
Millicom International Cellular SA, 0%/13.50%
Sr. Disc. Nts., 6/1/06(8) 1,760,000 1,302,400
</TABLE>
25 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
======================================================================================================
<S> <C> <C>
Media/Entertainment: Wireless Communications (continued)
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(8) $ 3,000,000 $ 2,107,500
0%/9.95% Sr. Disc. Nts., 2/15/08(8) 5,690,000 3,926,100
0%/10.65% Sr. Disc. Nts., 9/15/07(8) 4,915,000 3,600,238
- ------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 5,810,000 5,955,250
11.625% Sr. Nts., Series A, 8/15/06 8,545,000 8,758,625
- ------------------------------------------------------------------------------------------------------
Orange plc, 8% Sr. Nts., 8/1/08 12,500,000 12,000,000
- ------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts., 8/15/04 4,275,000 4,168,125
- ------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(8) 5,310,000 2,947,050
- ------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(8) 9,895,000 5,714,363
- ------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., Series B, 12/15/06 8,000,000 8,120,000
11.75% Sr. Sub. Nts., 7/15/07 4,225,000 4,753,125
- ------------------------------------------------------------------------------------------------------
Rogers Cantel, Inc., 8.80% Sr. Sub. Nts., 10/1/07 5,000,000 5,012,500
- ------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 6,400,000 6,464,000
- ------------------------------------------------------------------------------------------------------
Satelites Mexicanos SA, 10.125% Sr. Nts., 11/1/04 500,000 398,750
- ------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(8) 16,320,000 9,465,600
- ------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc.:
0%/11.25% Sr. Disc. Nts., 4/15/09(7)(8) 5,175,000 2,923,875
0%/12% Sr. Disc. Nts., 7/15/08(7)(8) 7,550,000 4,794,250
------------
133,660,446
- ------------------------------------------------------------------------------------------------------
Metals/Minerals--3.4% AK Steel Corp.:
7.875% Sr. Nts., 2/15/09(7) 11,175,000 10,783,875
9.125% Sr. Nts., 12/15/06 1,000,000 1,035,000
- ------------------------------------------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 2,265,000 2,347,106
- ------------------------------------------------------------------------------------------------------
California Steel Industries Corp., 8.50% Sr. Nts., 4/1/09(7) 4,000,000 3,915,000
- ------------------------------------------------------------------------------------------------------
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 4,449,200
- ------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 1,400,000 1,410,500
- ------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 2,975,000 3,049,375
- ------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(8) 11,000,000 4,235,000
- ------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 9,585,000 9,249,525
- ------------------------------------------------------------------------------------------------------
National Steel Corp.:
9.875% First Mtg. Bonds, Series D, 3/1/09 2,400,000 2,454,000
9.875% Nts., Series B, 3/1/09(7) 3,850,000 3,936,625
- ------------------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 7,090,000 7,391,325
- ------------------------------------------------------------------------------------------------------
WHX Corp., 10.50% Sr. Unsec. Nts., 4/15/05 7,000,000 6,632,500
------------
65,486,906
</TABLE>
26 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
==================================================================================================
<S> <C> <C>
Retail--1.1%
Boyds Collection Ltd. (The), 9% Sr. Sub. Nts., 5/15/08(7) $ 3,221,000 $ 3,196,843
- --------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125%
Sr. Unsec. Sub. Nts., 5/1/08 3,435,000 3,005,625
- --------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 6,585,000 6,321,600
- --------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 2,100,000 2,037,000
- --------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08 5,240,000 5,213,800
- --------------------------------------------------------------------------------------------------
Just For Feet, Inc., 11% Sr. Sub. Nts., 5/1/09(7) 1,000,000 650,000
- --------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,620,000
------------
22,044,868
- --------------------------------------------------------------------------------------------------
Service--6.8%
Allied Waste North America, Inc., 7.875% Sr. Unsec. Nts.,
Series B, 1/1/09 4,400,000 4,103,000
- --------------------------------------------------------------------------------------------------
American Plumbing & Mechanical, Inc., 11.625%
Gtd. Sr. Sub. Nts., 10/15/08(7) 6,500,000 6,305,000
- --------------------------------------------------------------------------------------------------
Cherokee International LLC, 10.50% Sr. Sub. Nts., 5/1/09(7) 6,000,000 6,015,000
- --------------------------------------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(8) 4,000,000 4,100,000
- --------------------------------------------------------------------------------------------------
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07(2) 3,000,000 2,838,750
- --------------------------------------------------------------------------------------------------
Dura Operating Corp.:
9% Sr. Sub. Nts., 5/1/09(7) 6,500,000 6,240,000
9% Sr. Sub. Nts., 5/1/09(7) EUR 2,500,000 2,481,502
- --------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Unsec. Sub. Nts., 2/1/08 8,425,000 8,045,875
9% Sr. Unsec. Sub. Nts., 2/1/08 1,510,000 1,442,050
- --------------------------------------------------------------------------------------------------
Formica Corp., 10.875% Sr. Sub. Nts., 3/1/09(7) 5,000,000 4,875,000
- --------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25%
Sr. Unsec. Sub. Nts., 8/15/08 4,050,000 4,191,750
- --------------------------------------------------------------------------------------------------
IT Group, Inc., 11.25% Sr. Sub. Nts., 4/1/09(7) 4,000,000 3,860,000
- --------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 10,570,000 10,094,350
- --------------------------------------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 5,065,000 5,242,275
- --------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10(2) 11,000,000 9,350,000
- --------------------------------------------------------------------------------------------------
Panolam Industries International, Inc., 11.50%
Sr. Sub. Nts., 2/15/09(7) 4,000,000 4,150,000
- --------------------------------------------------------------------------------------------------
Premier Graphics, Inc., 11.50% Sr. Unsec. Nts., 12/1/05(2) 5,000,000 4,825,000
- --------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc.:
6.75% Cv. Sr. Sub. Nts., 9/15/03 2,432,000 2,216,160
13.625% Sr. Sub. Disc. Nts., 6/30/05 8,545,000 9,602,444
- --------------------------------------------------------------------------------------------------
Quest Diagnostic, Inc., 9.875% Sr. Sub. Nts., 7/1/09(7)(14) 4,200,000 4,252,500
- --------------------------------------------------------------------------------------------------
Royster-Clark, Inc., 10.25% First Mtg. Nts., 4/1/09(7) 3,900,000 3,861,000
- --------------------------------------------------------------------------------------------------
Tele1 Europe BV, Units (each unit consists of $1,000
principal amount of 13% sr. nts., 5/15/09 and one
warrant to purchase 40.403 shares of common stock)(2)(13) EUR 3,000,000 3,209,838
- --------------------------------------------------------------------------------------------------
Tembec Industries, Inc., 8.625% Sr. Nts., 6/30/09 4,000,000 4,000,000
</TABLE>
27 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=====================================================================================================
<S> <C> <C>
Service (continued)
United Rentals, Inc.:
9% Nts., 4/1/09(7) $ 2,900,000 $ 2,856,500
9.25% Sr. Unsec. Sub. Nts., Series B, 1/15/09 8,000,000 7,920,000
- -----------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 1,685,000 1,853,500
- -----------------------------------------------------------------------------------------------------
URS Corp., 12.25% Sr. Sub. Nts., 5/1/09(7) 3,000,000 3,060,000
------------
130,991,494
- -----------------------------------------------------------------------------------------------------
Transportation--4.6%
Budget Group, Inc., 9.125% Sr. Nts., 4/1/06(7) 11,000,000 10,285,000
- -----------------------------------------------------------------------------------------------------
Coach USA, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 1,325,000 1,384,625
- -----------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Sr. Unsec
Sub. Nts., 4/15/06 6,750,000 6,817,500
- -----------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc.:
9.125% Sr. Sub. Nts., 7/15/07 1,000,000 1,007,500
11% Sr. Sub. Nts., 7/15/06 8,625,000 9,379,688
- -----------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05(7) 4,100,000 4,161,500
- -----------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 2,845,000 2,802,325
- -----------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000
principal amount of 12% first priority ship mtg. sr. sec. nts.,
7/15/05 and one warrant to purchase five shares of
common stock)(2)(13) 6,400,000 3,616,000
- -----------------------------------------------------------------------------------------------------
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(7) 6,935,000 3,432,825
Units (each unit consists of $1,000 principal amount of 12%
second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(7)(13) 4,620,000 1,501,500
- -----------------------------------------------------------------------------------------------------
Oxford Automotive, Inc.:
10.125% Sr. Sub. Nts., 6/15/07(7) 4,000,000 4,020,000
10.125% Sr. Unsec. Sub. Nts., 6/15/07 1,150,000 1,155,750
- -----------------------------------------------------------------------------------------------------
Pacific & Atlantic Holdings, Inc., 11.50% First
Preferred Ship Mtg. Nts., 5/30/08 4,000,000 1,615,000
- -----------------------------------------------------------------------------------------------------
TFM SA de CV, 10.25% Sr. Nts., 6/15/07 560,000 487,200
- -----------------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 11,200,000 9,926,000
- -----------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375%
Sr. Disc. Nts., Series B, 12/15/03(8) 25,515,000 25,387,425
- -----------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(2) 3,583,160 1,863,244
------------
88,843,082
- -----------------------------------------------------------------------------------------------------
Utilities--0.8%
Calpine Corp., 10.50% Sr. Nts., 5/15/06 2,990,000 3,199,300
- -----------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 5,550,000 6,152,497
- -----------------------------------------------------------------------------------------------------
Integrated Electric Services, Inc., 9.375% Sr. Sub. Nts., 2/1/09(7) 3,000,000 2,970,000
</TABLE>
28 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
=======================================================================================================
<S> <C> <C>
Utilities (continued)
Niagara Mohawk Power Corp., 0%/8.50% Sr. Unsec. Nts.,
Series H, 7/1/10(8) $ 3,000,000 $ 2,262,465
- -------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., 12/28/08(2) 135,620 121,381
--------------
14,705,643
--------------
Total Corporate Bonds and Notes (Cost $1,683,074,160) 1,594,095,603
<CAPTION>
Shares
=======================================================================================================
<S> <C> <C>
Preferred Stocks--6.4%
- -------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(9) 74,545 1,658,626
- -------------------------------------------------------------------------------------------------------
Capstar Communications, Inc., 12.625% Cum
Exchangeable, Series E, Non-Vtg.(2)(9) 7,922 920,932
- -------------------------------------------------------------------------------------------------------
CGA Group Ltd., Series A(2)(9)(10) 160,595 4,014,875
- -------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cv., Non-Vtg.(7) 72,575 1,787,159
- -------------------------------------------------------------------------------------------------------
Clark USA, Inc., 11.50% Cum. Sr. Exchangeable(9) 3,180 2,154,450
- -------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Sr. Redeemable
Exchangeable, Series B, Non-Vtg.(9) 5,038 4,723,130
- -------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 8.50% Cum. Cv., Series I, Non-Vtg 142,500 15,390,000
- -------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(2)(15) 140,000 6,195,000
- -------------------------------------------------------------------------------------------------------
Dobson Communications Corp.:
12.25% Sr. Exchangeable(9) 5,286 5,008,485
13% Sr. Exchangeable(7)(9) 8,000 7,860,000
- -------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable Non-Vtg.(9) 3,096 1,091,340
- -------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., Cum. Exchangeable,
Series B, 3/1/08, Non-Vtg.(15) 28,000 1,463,000
- -------------------------------------------------------------------------------------------------------
Earthwatch, Inc., $8.50 Cv. Sr. Preferred, Series C, Non-Vtg.(7)(9) 172,052 258,078
- -------------------------------------------------------------------------------------------------------
Fidelity Federal Bank FSB Glendale California, l2% Non-Cum
Exchangeable Perpetual Preferred Stock, Series A(2)(15) 30 697
- -------------------------------------------------------------------------------------------------------
Global Crossing Ltd., 10.50% Sr. Exchangeable Preferred, 12/1/08 45,000 4,781,250
- -------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.(9) 3,120 3,112,200
- -------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
Depositary Shares Representing one one-hundredth 7%
Cum. Cv. Jr., Series E, Non-Vtg.(7) 84,480 2,428,800
13.50% Exchangeable, Series B(9) 3,080 3,026,100
- -------------------------------------------------------------------------------------------------------
International Utility Structures, Inc.:
13% Preferred, Non-Vtg.(7)(9) 74 70,392
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)(9)(13) 560 553,700
- -------------------------------------------------------------------------------------------------------
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable
Exchangeable Preferred Stock, Non-Vtg.(9) 91,759 3,647,420
</TABLE>
29 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
================================================================================================
<S> <C> <C>
Preferred Stocks (continued)
Nextel Communications, Inc., 11.125%
Preferred, Series E, Non-Vtg.(9) 5,329 $ 5,342,322
- ------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum., Non-Vtg.(9) 149,822 7,603,467
- ------------------------------------------------------------------------------------------------
Packaging Corp. of America, 12.375%(7)(9) 10,000 1,057,500
- ------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr
Exchangeable, Non-Vtg.(9) 451 3,940,613
- ------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable, Series H, Non-Vtg 101,200 9,651,950
9.20% Exchangeable, Series F, Non-Vtg 22,500 2,207,813
- ------------------------------------------------------------------------------------------------
R&B Falcon Corp., 13.875% Cum. Sr. Preferred, Units
(one $1,000 sr. preferred shares and one warrant to
purchase 35 shares common stock at $9.50 per share)(2)(13)(15) 9,000 9,292,500
- ------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(9) 7,662 7,757,775
- ------------------------------------------------------------------------------------------------
SF Holdings Group, Inc.:
13.75% Cum. Nts., Series B, 3/15/09, Non-Vtg.(9) 84 186,900
13.75% Exchangeable(7)(9) 10 22,250
- ------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc., 14.25%
Cum. Exchangeable, Non-Vtg.(7)(9)(15) 3,129 3,402,788
- ------------------------------------------------------------------------------------------------
Star Gas Partners LP, Units (representing Ltd.
Partnership interests)(13) 5,999 103,108
- ------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc.:
9.16% Cv., Series B, Non-Vtg.(15) 4,650 114,216
9.20% Preferred, Vtg.(15) 158,950 3,437,294
------------
Total Preferred Stocks (Cost $129,486,950) 124,266,130
================================================================================================
Common Stocks--0.5%
- ------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(2) 1,350 1,194,750
- ------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc.(15) 30,000 660,000
- ------------------------------------------------------------------------------------------------
Resorts International, Inc.(15) 187,187 --
- ------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(2)(15) 39,357 39,357
- ------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., Cl. C(15) 3,108 31
- ------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(2)(15) 239,111 246,584
- ------------------------------------------------------------------------------------------------
Optel, Inc.(15) 7,425 74
- ------------------------------------------------------------------------------------------------
News Corp. Ltd., Sponsored ADR, Preference 50,000 1,578,125
- ------------------------------------------------------------------------------------------------
Viatel, Inc.(15) 20,000 1,122,500
- ------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(15) 1,618 48,540
- ------------------------------------------------------------------------------------------------
Price Communications Corp.(15) 258,681 3,880,215
- ------------------------------------------------------------------------------------------------
Pope, Evans & Robbins, Inc.(2)(10)(15) 1,688,400 --
- ------------------------------------------------------------------------------------------------
Zale Corp.(15) 2,785 111,400
------------
Total Common Stocks (Cost $7,426,395) 8,881,576
</TABLE>
30 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Units See Note 1
===========================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.6%
- -------------------------------------------------------------------------------------------
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 6
- -------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(2) 125,000 1,250
- -------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/07(7) 3,407 13,202
- -------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(2)(10) 130,000 39,000
- -------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/07(2) 3,330 1,165,916
- -------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/08(2) 11,200 85,400
- -------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc. Wts., Exp. 9/08 4,000 --
- -------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/08(2) 7,500 90,000
- -------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/05 2,575 148,214
- -------------------------------------------------------------------------------------------
FirstWorld Communications, Inc. Wts., Exp. 4/08(7) 5,000 250,625
- -------------------------------------------------------------------------------------------
Globix Corp. Wts., Exp. 5/05(2) 7,510 751,000
- -------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/01 107,699 141,355
- -------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/03 80,080 --
Exp. 1/03(2) 57,200 572
Exp. 5/05(2) 118,003 11,800
Exp. 9/04(2) 168,000 178,584
- -------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc. Wts., Exp. 4/01 1,090 83,658
- -------------------------------------------------------------------------------------------
Insilco Corp. Wts., Exp. 8/07(2) 7,055 --
- -------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/08(2) 12,340 31,627
- -------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/08(2) 2,800 8,400
- -------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/05(2) 6,400 11,200
- -------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(2) 32,000 926,000
- -------------------------------------------------------------------------------------------
PLD Telekom, Inc., 9% Cv. Sub. Nts. Wts., Exp. 3/03 630 32
- -------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(2) 31,716 2,902,087
- -------------------------------------------------------------------------------------------
Protection One, Inc. Wts.:
Exp. 11/03(2) 182,000 2,275,000
Exp. 6/05(2) 49,120 343,840
- -------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/05(7) 30,480 681,990
- -------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Wts., Exp. 1/02(2) 114,400 35,807
- -------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/02 163,894 1,229,205
- -------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(2) 50,820 733,002
- -------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 6,000 --
- -------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/07(2) 3,910 47,409
- -------------------------------------------------------------------------------------------
Republic Health Corp. Wts., Exp. 4/00 3,763 --
- -------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/03(2) 24,520 257,469
- -------------------------------------------------------------------------------------------
Trizec Hahn Corp. Wts., Exp. 7/99 16,277 35,192
------------
Total Rights, Warrants and Certificates (Cost $1,933,094) 12,489,302
</TABLE>
31 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
===================================================================================================================
<S> <C> <C>
Structured Instruments--1.9%
- -------------------------------------------------------------------------------------------------------------------
Bear Stearns High Yield Composite Index Linked Nts.,
8%, 8/16/99 $ 10,000,000 $ 9,661,100
- -------------------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 6.65%, 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 21,995,669
- -------------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Philippine Peso/Japanese
Yen Linked Nts., 17.96%, 9/20/99 5,000,000 5,292,000
--------------
Total Structured Instruments (Cost $38,484,770) 36,948,769
===================================================================================================================
Repurchase Agreements--2.3%
- -------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.80%, dated 6/30/99,
to be repurchased at $44,505,933 on 7/1/99, collateralized by U.S. Treasury
Nts., 5.50%-8%, 11/30/99-7/15/06, with a value of $37,566,954, U.S. Treasury
Bonds, 6%-9.25%, 2/15/16-2/15/26, with a value of $7,866,826 (Cost $44,500,000) 44,500,000 44,500,000
- -------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,988,910,857) 98.3% 1,901,085,736
- -------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.7 33,711,133
----------- --------------
Net Assets 100.0% $1,934,796,869
=========== ==============
</TABLE>
(1) Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP -- Argentine Peso EUR -- Euro
CAD -- Canadian Dollar GBP -- British Pound Sterling
DEM -- German Mark IDR -- Indonesian Rupiah
(2) Identifies issues considered to be illiquid or restricted--See Note 7 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) Represents the current interest rate for an increasing rate security.
(6) Non-income-producing--issuer is in default.
(7) Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $352,446,248 or 18.22% of the Fund's net
assets as of June 30, 1999.
32 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(8) Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
(9) Interest or dividend is paid-in-kind.
(10) Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended June 30, 1999. The
aggregate fair value of securities of affiliated companies held by the Fund as
of June 30, 1999 amounts to $4,053,875. Transactions during the period in which
the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares/Face Shares/Face
June 30, Gross Gross June 30, Dividend
1998 Additions Reductions 1999 Income
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Stocks and Warrants
CGA Group Ltd., Series A 130,000 30,595 -- 160,595 $764,942
CGA Group Ltd. Wts., Exp. 12/49 130,000 -- -- 130,000 --
Pope, Evans & Robbins, Inc. 1,688,400 -- -- 1,688,400 --
Siena Holdings, Inc.* 239,111 -- -- 239,111 --
Bonds and Notes
Pope, Evans, & Robbins, Inc.,
7% Sr. Nts., 5/15/98 $5,955,189 -- -- $5,955,189 --
--------
$764,942
========
</TABLE>
* Not an affiliate as of June 30, 1999.
(11) For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
(12) A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
(13) Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
(14) When-issued security to be delivered and settled after June 30, 1999.
(15) Non-income-producing security.
See accompanying Notes to Financial Statements.
33 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
==================================================================================================
<S> <C>
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,979,119,111) $ 1,897,031,861
Affiliated companies (cost $9,791,746) 4,053,875
- --------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts--Note 5 913,648
- --------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 34,906,981
Investments sold 11,983,789
Shares of beneficial interest sold 4,455,431
Closed foreign currency exchange contracts 496,463
Other 84,771
---------------
Total assets 1,953,926,819
==================================================================================================
Liabilities
Bank overdraft 2,998,286
- --------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts--Note 5 141,622
- --------------------------------------------------------------------------------------------------
Payables and other liabilities:
Dividends 5,895,437
Investments purchased (including $4,200,000 purchased on a
when-issued basis)--Note 1 5,852,665
Shares of beneficial interest redeemed 2,640,653
Distribution and service plan fees 1,054,628
Transfer and shareholder servicing agent fees 202,633
Shareholder reports 187,007
Custodian fees 26,896
Trustees' compensation 10,188
Other 119,935
---------------
Total liabilities 19,129,950
==================================================================================================
Net Assets $ 1,934,796,869
===============
==================================================================================================
Composition of Net Assets
Paid-in capital $ 2,180,993,090
- --------------------------------------------------------------------------------------------------
Undistributed net investment income 563,177
- --------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (159,686,850)
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (87,072,548)
---------------
Net assets $ 1,934,796,869
===============
</TABLE>
34 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 $1,207,729,504 and 92,443,747 shares of beneficial
interest outstanding) $13.06
Maximum offering price per share (net asset value plus sales
charge of 4.75% of offering price) $13.71
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $580,467,675 and 44,832,933
shares of beneficial interest outstanding) $12.95
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $93,606,759 and 7,176,052
shares of beneficial interest outstanding) $13.04
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on net assets of $52,992,931 and 4,069,141
shares of beneficial interest outstanding) $13.02
See accompanying Notes to Financial Statements
35 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
=========================================================================================
Investment Income
Interest (net of foreign withholding taxes of $47,997) $ 180,241,308
- -----------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $4,569) 11,978,764
Affiliated companies 764,942
-------------
Total income 192,985,014
=========================================================================================
Expenses
Management fees--Note 4 11,127,057
- -----------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 2,556,515
Class B 5,447,795
Class C 798,118
- -----------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 2,194,183
- -----------------------------------------------------------------------------------------
Shareholder reports 596,859
- -----------------------------------------------------------------------------------------
Custodian fees and expenses 107,854
- -----------------------------------------------------------------------------------------
Legal, auditing and other professional fees 79,166
- -----------------------------------------------------------------------------------------
Registration and filing fees 71,456
- -----------------------------------------------------------------------------------------
Trustees' compensation 64,879
- -----------------------------------------------------------------------------------------
Insurance expenses 17,292
- -----------------------------------------------------------------------------------------
Other 184,252
-------------
Total expenses 23,245,426
Less expenses paid indirectly--Note 1 (61,749)
-------------
Net expenses 23,183,677
=========================================================================================
Net Investment Income 169,801,337
=========================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments (42,451,791)
Closing of futures contracts (8,459,780)
Closing and expiration of option contracts written--Note 6 995
Foreign currency transactions (943,220)
-------------
Net realized loss (51,853,796)
- -----------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (128,689,667)
Translation of assets and liabilities denominated in foreign currencies (891,033)
-------------
Net change (129,580,700)
-------------
Net realized and unrealized loss (181,434,496)
=========================================================================================
Net Decrease in Net Assets Resulting from Operations $ (11,633,159)
=============
</TABLE>
See accompanying Notes to Financial Statements.
36 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
1999 1998
========================================================================================================
<S> <C> <C>
Operations
Net investment income $ 169,801,337 $ 146,672,693
- --------------------------------------------------------------------------------------------------------
Net realized gain (loss) (51,853,796) 44,126,205
- --------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (129,580,700) 4,774,381
--------------- ---------------
Net increase (decrease) in net assets resulting from operations (11,633,159) 195,573,279
========================================================================================================
Dividends to Shareholders
Dividends from net investment income:
Class A (111,798,886) (103,411,688)
Class B (46,977,882) (35,809,231)
Class C (6,828,204) (3,671,943)
Class Y (3,328,108) (345,783)
========================================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 70,287,073 51,643,094
Class B 105,348,488 117,957,555
Class C 35,072,177 33,959,979
Class Y 43,279,495 11,285,065
========================================================================================================
Net Assets
Total increase 73,420,994 267,180,327
- --------------------------------------------------------------------------------------------------------
Beginning of period 1,861,375,875 1,594,195,548
--------------- ---------------
End of period [including undistributed (overdistributed) net
investment income of $563,177 and $(2,352,456), respectively] $ 1,934,796,869 $ 1,861,375,875
=============== ===============
</TABLE>
See accompanying Notes to Financial Statements.
37 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended June 30,
1999 1998 1997 1996 1995
========================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.44 $ 13.98 $ 13.51 $ 13.22 $ 13.63
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.26 1.24 1.27 1.29 1.30
Net realized and
unrealized gain (loss) (1.39) .43 .43 .27 (.40)
-------- -------- -------- -------- --------
Total income (loss) from
investment operations (.13) 1.67 1.70 1.56 .90
- --------------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (1.25) (1.21) (1.23) (1.27) (1.30)
Tax return of capital distribution -- -- -- -- (.01)
-------- -------- -------- -------- --------
Total dividends and distributions
to shareholders (1.25) (1.21) (1.23) (1.27) (1.31)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.06 $ 14.44 $ 13.98 $ 13.51 $ 13.22
======== ======== ======== ======== ========
========================================================================================================
Total Return, at Net Asset Value(1) (0.71)% 12.34% 13.10% 12.25% 7.09%
========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 1,208 $ 1,257 $ 1,167 $ 1,084 $ 1,061
- --------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 1,199 $ 1,227 $ 1,128 $ 1,092 $ 1,006
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.40% 8.64% 9.22% 9.59% 9.81%
Expenses(3) 0.99% 1.00% 1.00% 1.03% 1.03%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 43% 117% 126% 105% 94%
</TABLE>
(1) Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2) Annualized for periods less than one full year.
(3) The expense ratio reflects the effect of expenses paid indirectly by the
fund.
(4) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $1,096,756,865 and $725,207,927, respectively.
38 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
-------------------------------------------------------
Year Ended June 30,
1999 1998 1997 1996 1995
===================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.33 $ 13.88 $ 13.43 $ 13.15 $ 13.57
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.14 1.11 1.15 1.18 1.20
Net realized and
unrealized gain (loss) (1.38) .44 .43 .27 (.42)
------- ------- ------- ------- -------
Total income (loss) from
investment operations (.24) 1.55 1.58 1.45 .78
- ---------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from
net investment income (1.14) (1.10) (1.13) (1.17) (1.19)
Tax return of capital distribution -- -- -- -- (.01)
------- ------- ------- ------- -------
Total dividends and distributions
to shareholders (1.14) (1.10) (1.13) (1.17) (1.20)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 12.95 $ 14.33 $ 13.88 $ 13.43 $ 13.15
======= ======= ======= ======= =======
===================================================================================================
Total Return at Net Asset Value(1) (1.48)% 11.50% 12.18% 11.40% 6.21%
===================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 580 $ 528 $ 397 $ 280 $ 192
- ---------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 545 $ 464 $ 335 $ 236 $ 135
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 8.61% 7.86% 8.41% 8.75% 8.95%
Expenses(3) 1.78% 1.79% 1.80% 1.84% 1.84%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 43% 117% 126% 105% 94%
</TABLE>
(1) Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2) Annualized for periods less than one full year.
(3) The expense ratio reflects the effect of expenses paid indirectly by the
fund.
(4) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $1,096,756,865 and $725,207,927, respectively.
39 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
-----------------------------------------------
Year Ended June 30,
1999 1998 1997 1996(5)
===========================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 14.42 $ 13.97 $ 13.50 $ 13.30
- -------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.15 1.22 1.14 .77
Net realized and
unrealized gain (loss) (1.39) .33 .45 .19
-------- -------- -------- --------
Total income (loss) from
investment operations (.24) 1.55 1.59 .96
- -------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (1.14) (1.10) (1.12) (.76)
Tax return of capital distribution -- -- -- --
-------- -------- -------- --------
Total dividends and distributions
to shareholders (1.14) (1.10) (1.12) (.76)
- -------------------------------------------------------------------------------------------
Net asset value, end of period $ 13.04 $ 14.42 $ 13.97 $ 13.50
-------- -------- -------- --------
===========================================================================================
Total Return at Net Asset Value(1) (1.49)% 11.42% 12.23% 7.36%
===========================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in millions) $ 94 $ 66 $ 30 $ 8
- -------------------------------------------------------------------------------------------
Average net assets (in millions) $ 80 $ 48 $ 18 $ 3
- -------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 8.60% 7.87% 8.40% 8.41%
Expenses(3) 1.78% 1.78% 1.82% 1.90%
- -------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 43% 117% 126% 105%
</TABLE>
(1) Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2) Annualized for periods less than one full year.
(3) The expense ratio reflects the effect of expenses paid indirectly by the
fund.
(4) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $1,096,756,865 and $725,207,927, respectively.
(5) For the period from November 1, 1995 (inception of offering) to June 30,
1996.
40 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y
-------------------
Year Ended June 30,
1999 1998(6)
=======================================================================
Per Share Operating Data
Net asset value, beginning of period $ 14.42 $ 14.48
- -----------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 1.28 .90
Net realized and unrealized gain (loss) (1.39) (.08)
------- -------
Total income (loss) from investment operations (.11) .82
- -----------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (1.29) (.88)
Tax return of capital distribution -- --
------- -------
Total dividends and distributions to shareholders (1.29) (.88)
- -----------------------------------------------------------------------
Net asset value, end of period $ 13.02 $ 14.42
======= =======
=======================================================================
Total Return at Net Asset Value(1) (0.54)% 5.81%
=======================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 53 $ 11
- -----------------------------------------------------------------------
Average net assets (in millions) $ 34 $ 6
- -----------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 9.73% 9.14%
Expenses(3) 0.76% 0.81%
- -----------------------------------------------------------------------
Portfolio turnover rate(4) 43% 117%
(1) Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2) Annualized for periods less than one full year.
(3) The expense ratio reflects the effect of expenses paid indirectly by the
fund.
(4) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $1,096,756,865 and $725,207,927, respectively.
(5) For the period from November 1, 1995 (inception of offering) to June 30,
1996.
(6) For the period from October 15, 1997 (inception of offering) to June 30,
1998.
See accompanying Notes to Financial Statements.
41 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer High Yield Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek a high level of
current income. 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, on investments up to $1 million.
Class B and Class C shares may be subject to a contingent deferred sales charge
(CDSC). Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
42 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Structured Notes. The Fund invests in foreign currency-linked structured notes
whose 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 value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of June 30, 1999, the market value of these securities
comprised 0.77% of the Fund's net assets and resulted in realized and unrealized
losses of $9,261,185. The Fund also hedges a portion of the foreign currency
exposure generated by these securities, as discussed in Note 5.
- --------------------------------------------------------------------------------
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. Normally the
settlement date occurs within six months after the transaction date; however,
the fund may, from time to time, purchase securities whose settlement date
extends beyond six months and possibly as long as two years or more beyond trade
date. During this 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 segregated assets with a market value equal to or
greater than the amount of its purchase commitments. The purchase of securities
on a when-issued or forward commitment basis may increase the volatility of the
Fund's net asset value to the extent the Fund makes such purchases while
remaining substantially fully invested. As of June 30, 1999, the Fund had
entered into outstanding when-issued or forward commitments of $4,200,000.
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 June 30, 1999, securities with an
aggregate market value of $4,910,833, representing 0.25% of the Fund's net
assets, were in default.
43 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. As of June 30, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $134,218,000, which expires between 2000 and 2007.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
44 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of distributions made during the year from net investment income or
net realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in which
the income or realized gain was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders
to reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended June 30, 1999, amounts have been reclassified to reflect a decrease
in paid-in capital of $27,174,497, a decrease in overdistributed net investment
income of $2,047,376, and a decrease in accumulated net realized loss on
investments of $25,127,121.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Discount on securities purchased is
amortized over the life of the respective securities, in accordance with federal
income tax requirements. Realized gains and losses on investments and options
written and unrealized appreciation and depreciation are determined on an
identified cost basis, which is the same basis used for federal income tax
purposes. Dividends-in-kind are recognized as income on the ex-dividend date, at
the current market value of the underlying security. Interest on payment-in-kind
debt instruments is accrued as income at the coupon rate and a market adjustment
is made periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
45 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended June 30, 1999 Year Ended June 30, 1998
---------------------------- ----------------------------
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------
Class A:
Sold 32,012,691 $ 425,721,467 20,518,863 $ 295,681,300
Dividends reinvested 5,234,985 69,582,895 4,392,564 63,310,546
Redeemed (31,832,727) (425,017,289) (21,336,980) (307,348,752)
----------- ------------- ----------- -------------
Net increase 5,414,949 $ 70,287,073 3,574,447 $ 51,643,094
=========== ============= =========== =============
- -----------------------------------------------------------------------------------
Class B:
Sold 21,331,218 $ 282,008,116 14,865,015 $ 212,496,036
Dividends reinvested 1,810,370 23,848,743 1,246,353 17,834,997
Redeemed (15,125,912) (200,508,371) (7,867,469) (112,373,478)
----------- ------------- ----------- -------------
Net increase 8,015,676 $ 105,348,488 8,243,899 $ 117,957,555
=========== ============= =========== =============
- -----------------------------------------------------------------------------------
Class C:
Sold 5,602,995 $ 74,516,748 3,414,708 $ 49,159,490
Dividends reinvested 325,453 4,315,117 164,692 2,373,237
Redeemed (3,294,631) (43,759,688) (1,218,195) (17,572,748)
----------- ------------- ----------- -------------
Net increase 2,633,817 $ 35,072,177 2,361,205 $ 33,959,979
=========== ============= =========== =============
- -----------------------------------------------------------------------------------
Class Y:
Sold 3,704,375 $ 48,757,945 846,505 $ 12,239,429
Dividends reinvested 244,820 3,235,007 23,836 345,872
Redeemed (660,742) (8,713,457) (89,653) (1,300,236)
----------- ------------- ----------- -------------
Net increase 3,288,453 $ 43,279,495 780,688 $ 11,285,065
=========== ============= =========== =============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized depreciation on investments of $87,825,121
was composed of gross appreciation of $56,741,596, and gross depreciation of
$144,566,717.
46 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% 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 year ended June 30, 1999 was 0.60% of
the average annual net assets for each class of shares.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Advisor's parent corporation, the Distributor acts as the Fund's
principal underwriter in the continuous public offering of the different classes
of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the
sale of shares or on the redemption of shares is shown in the table below for
the period indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End On Class A On Class B On Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 30, 1999 $3,108,752 $833,775 $172,062 $6,304,443 $521,622
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
June 30, 1999 $-- $1,486,887 $51,148
</TABLE>
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares under Rule 12b-1
of the Investment Company Act. Under those plans the Fund pays the Distributor
for all or a portion of its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
47 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased on or after April 1, 1988. The rate is 0.15% for shares
purchased before that date. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net assets
consisting of Class A shares of the Fund. For the fiscal year ended June 30,
1999, payments under the Class A Plan totaled $2,556,515, all of which was paid
by the Distributor to recipients. That included $56,507 paid to an affiliate of
the Distributor's parent company. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B plan allows the Distributor to be
reimbursed for its services and costs in distributing Class B and servicing
accounts. The Class C plan provides for the Distributor to be compensated at a
flat rate, whether the Distributor's distribution expenses are more or less than
the amounts paid by the Fund under the plan during the period for which the fee
is paid.
The Distributor retains the asset-based sales charge on Class B
shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. The asset-based sales charges
on Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C
shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. The
plans allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
48 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Distribution fees paid to the Distributor for the year ended June 30, 1999 were
as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as
Total Payments Amount Retained Expenses % of Net Assets
Class Under Plan By Distributor Under Plan Of Class
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $5,447,795 $4,452,533 $17,384,877 2.99%
- --------------------------------------------------------------------------------------------
Class C Plan $ 798,118 $ 522,240 $ 1,384,386 1.48%
</TABLE>
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuations. Risks to the Fund include
the potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement
of the foreign currency transactions. Realized gains and losses are reported
with all other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
As of June 30, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract
Expiration Amounts Valuation as of Unrealized Unrealized
Contract Description Dates (000s) June 30, 1999 Appreciation Depreciation
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Sell
British Pound Sterling (gbp) 7/15/99-
9/15/99 25,955 gbp $40,917,470 $902,890 $ --
Canadian Dollar (cad) 7/15/99 7,485 cad 5,058,362 -- 141,622
Euro (eur) 12/1/99 5,770 eur 6,020,036 10,758 --
-------- --------
Total Unrealized Appreciation
and Depreciation $913,648 $141,622
======== ========
</TABLE>
49 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
6. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call
options to hedge against adverse movements in the value of portfolio holdings.
When an option is written, the Fund receives a premium and becomes obligated to
sell or purchase the underlying security at a fixed price, upon exercise of the
option.
Options are valued daily based upon the last sale price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in
the Statement of Investments where applicable. Shares subject to call,
expiration date, exercise price, premium received and market value are detailed
in a note to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may incur
a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist.
Written option activity for the year ended June 30, 1999, 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 closed or expired (40,020,000) (32,000)
----------- ---------
Options outstanding as of June 30, 1999 -- $ --
=========== =========
50 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
7. Illiquid or Restricted Securities
As of June 30, 1999, investments in securities included issues that are illiquid
or restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 1999 was $150,061,346,
which represents 7.76% of the Fund's net assets, of which $11,239,829 is
considered restricted. Information concerning restricted securities is as
follows:
<TABLE>
<CAPTION>
Valuation
Acquisition Cost Per Unit as of
Security Dates Per Unit June 30, 1999
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
Capital Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93-12/15/95 95.74% 5.00%
- ----------------------------------------------------------------------------------------------------
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% 100.00-
Sr. Sub. Nts., 12/15/05 12/8/95-5/14/96 105.25 112.50
- ----------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14%
Equipment Trust, 7/2/08 3/19/98 101.00 98.00
Stocks and Warrants
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .01
- ----------------------------------------------------------------------------------------------------
CGA Group Ltd., Series A 6/17/97 25.00 25.00
- ----------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .30
- ----------------------------------------------------------------------------------------------------
ECM Fund, L.P.I. 4/14/92 1,000.00 885.00
- ----------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00 11/29/95 -- 28.94
</TABLE>
51 Oppenheimer High Yield Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
8. 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 year ended June
30, 1999.
52 Oppenheimer High Yield Fund
<PAGE>
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Independent Auditors' Report
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The Board of Trustees and Shareholders of
Oppenheimer High Yield Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer High Yield Fund as of June 30,
1999, the related statement of operations for the year then ended, the
statements of changes in net assets for the years ended June 30, 1999 and 1998,
and the financial highlights for the period July 1, 1994 to June 30, 1999. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 1999, by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
High Yield Fund as of June 30, 1999, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Denver, Colorado
July 22, 1999
53 Oppenheimer High Yield Fund
<PAGE>
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Federal Income Tax Information (Unaudited)
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In early 2000, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended June 30,
1999, which are not designated as capital gain distributions should be
multiplied by 7.10% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance. Oppenheimer High Yield Fund
54 Oppenheimer High Yield Fund
<PAGE>
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Oppenheimer High Yield Fund
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================================================================================
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
George C. Bowen, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
David P. Negri, Vice President
Thomas P. Reedy, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Vice President, Treasurer and Assistant
Secretary
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder Servicing
Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of
Oppenheimer High Yield Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
High Yield Fund. For material information concerning the
Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any bank,
are not insured by the FDIC or any other agency, and
involve investment risks, including the possible loss of
the principal amount invested.
55 Oppenheimer High Yield Fund
<PAGE>
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Information and Services
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As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to help.
Internet
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Transfer and Shareholder Servicing Agent
OppenheimerFunds Services,
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
OppenheimerFunds(R)
Distributor, Inc.
RP.0280.001.0699 August 27, 1999
