<PAGE> 1
[PHOTO]
Annual Report August 31, 2000
Oppenheimer
Capital Appreciation Fund
[OPPENHEIMERFUNDS(R) LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Manager
7 Fund Performance
12 FINANCIAL
STATEMENTS
36 INDEPENDENT
AUDITORS' REPORT
37 Federal
Income Tax
Information
38 Officers and Trustees
REPORT HIGHLIGHTS
--------------------------------------------------------------------------------
GOOD INDIVIDUAL STOCK SELECTIONS IN THE TECHNOLOGY, HEALTHCARE AND CAPITAL GOODS
SECTORS drove the Fund's strong performance.
By trimming the Fund's technology holdings during the first half of the period,
WE LIMITED THE IMPACT OF THE TECHNOLOGY SLUMP IN APRIL AND MAY 2000.
ECONOMIC AND MARKET CONDITIONS APPEAR HEALTHY, with excellent prospects for
sustainable growth.
AVERAGE ANNUAL
TOTAL RETURNS*
For the 1-Year Period Ended 8/31/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
48.01% 39.50%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
46.88% 41.88%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
46.89% 45.89%
Class Y
------------------------
48.64%
* SEE NOTES ON PAGE 10 FOR FURTHER DETAILS.
<PAGE> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Capital Appreciation
Fund
PRESIDENT'S LETTER
Dear Shareholder,
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace
of global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has
prompted the Treasury to buy back many of its long-term securities. The
resulting supply shortage boosted these securities' returns, causing an
inversion of the yield curve-- an unusual situation in which shorter term
Treasuries yield more than their longer term counterparts. Other bond sectors
are offering many opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in
the stock market. Formerly high-flying Internet stocks have generally come down
to earth, and investors have begun to refocus on companies with strong business
fundamentals and justifiable valuations. Investors have also returned to
long-neglected, value-oriented companies.
1 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 4
PRESIDENT'S LETTER
What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, healthcare and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor and
to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
September 22, 2000
THESE GENERAL MARKET VIEWS REPRESENT OPINIONS OF OPPENHEIMERFUNDS, INC.
AND ARE NOT INTENDED TO PREDICT OR DEPICT PERFORMANCE OF THE SECURITIES MARKETS
OR ANY PARTICULAR FUND. SPECIFIC DISCUSSION, AS IT APPLIES TO YOUR FUND, IS
CONTAINED IN THE PAGES THAT FOLLOW. STOCKS AND BONDS HAVE DIFFERENT TYPES OF
INVESTMENT RISKS; STOCKS ARE SUBJECT TO MARKET VOLATILITY AND BONDS ARE SUBJECT
TO CREDIT AND INTEREST RATE RISKS.
2 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Edward Amberger
Jane Putnam
(Portfolio Manager)
AN INTERVIEW WITH YOUR FUND'S MANAGER
HOW WOULD YOU CHARACTERIZE THE FUND'S PERFORMANCE DURING THE FISCAL YEAR THAT
ENDED AUGUST 31, 2000?
A. We are pleased with the Fund's performance. Despite a highly volatile market
environment that favored growth stocks regardless of price, we delivered strong
positive returns while maintaining our disciplined, growth-at-a-reasonable-price
investment strategy. We attribute the Fund's gains primarily to good individual
stock selections in the technology, healthcare and capital goods sectors, which
more than made up for disappointing results from our holdings in consumer
cyclicals. In addition, the Fund's Class A shares were rated 4-star (****)
overall by Morningstar.(1)
WHAT MADE THIS SUCH A VOLATILE PERIOD?
Throughout the period, investors struggled to weigh the positive impact of
encouraging economic data against the negative impact of rising interest rates.
In late 1999, equity markets--which had begun the period at high levels--were
driven yet higher by continued strength in the U.S. economy, low rates of
inflation, growing evidence of global economic recovery and diminishing fears of
Y2K-related problems. On the other hand, interest rate hikes by the Federal
Reserve Board (the Fed) threatened corporate profitability and heightened
concerns about the potential for rising inflation.
As the Fed continued to raise interest rates in 2000, many segments of the
market sagged. Yet, despite interest rate concerns, investors seemed willing to
pay increasingly higher prices for the high-growth potential of many
technology-related
1. Morningstar, Inc. rates mutual funds in broad investment classes, based on
risk adjusted returns after considering sales charges and expenses. Return and
risk are measured as performance above and below 90-day U.S. Treasury bill
returns, respectively. Current star ratings are based on the weighted average of
3-, 5- and 10-year (if applicable) ratings for a fund or class and are subject
to change monthly. The Fund's Class A shares are rated 4 stars (3-year), 5 stars
(5-year) and 4 stars (10-year) among 3,876, 2,419 and 796 domestic equity funds,
respectively for the periods ended 9/30/00. A fund's Morningstar rating is a
relative ranking of the fund within its peer group and does not necessarily mean
that the fund had high total returns.
3 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 6
AVERAGE ANNUAL
TOTAL RETURNS
For the Periods Ended 9/30/00(2)
Class A
1-Year 5-Year 10-Year
-------------------------
31.64% 24.26% 21.96%
Class B Since
1-Year 5-Year Inception
-------------------------
33.60% N/A 25.05%
Class C Since
1-Year 5-Year Inception
-------------------------
37.60% 24.73% 22.48%
Class Y Since
1-Year 5-Year Inception
-------------------------
40.28% N/A 24.78%
AN INTERVIEW WITH YOUR FUND'S MANAGER
stocks. Market strength became increasingly concentrated in a relatively small
number of technology stocks, driving the valuations of these companies to very
high levels by March 2000.
During the second quarter of 2000, interest rate concerns finally took
their toll on technology stocks, causing many of the highest-flying stocks in
the sector to fall as rapidly as they had risen. Investors showed renewed
concern about company fundamentals and profitability, shifting the focus of
market strength from growth- to value-oriented stocks in April and May. In June,
July and August, however, better-than-expected corporate earnings reports--along
with preliminary signs that U.S. economic growth might be slowing in response to
the Fed's measures--bolstered investor confidence and gave new impetus to the
broad markets. A number of sectors participated in this rally, including
technology, energy and healthcare.
HOW DID YOU MANAGE THE FUND IN LIGHT OF THESE CONDITIONS?
We remained firmly committed to our disciplined strategy of seeking stocks with
high growth potential at a reasonable price. This approach helped us limit the
impact of technology stock volatility on the Fund by steering us away from the
sector's most speculative stocks. We also trimmed our technology positions when
valuations reached unsustainable levels during the first half of the period.
Although we missed some of the sector's upside performance in late 1999 and
early 2000 as a result, we also avoided the worst of the downturn that occurred
when the technology bubble deflated in April and May 2000. We further enhanced
our gains by focusing on leading companies in semiconductors and
telecommunications equipment, two of the best-performing fields within
technology.
2. See page 10 for further details.
4 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 7
"We enhanced our gains by focusing on leading companies in semiconductors and
telecommunications equipment, two of the best-performing fields within
technology."
In addition, we scored notable successes in both the health-care and
capital goods sectors. Many healthcare stocks per-formed well during the period,
recovering from the previous year's challenging regulatory and competitive
environment. Our holdings among medical device companies, medical suppliers and
major pharmaceutical firms performed even better than did the sector's average.
The capital goods sector, on the other hand, generally produced flat performance
throughout the period. Nevertheless, our capital goods holdings performed well
as a group, bolstered by excellent returns from companies that provide
manufacturing services for the fast-growing telecommunications industry.
DID ANY INVESTMENTS FAIL TO MEET YOUR EXPECTATIONS?
Of course, not all of our stock selections performed equally well. We suffered
disappointments even among our strongest sectors. For example, after tripling in
value since we purchased it in early 1999, Nokia Corp. stock fell approximately
25% during one week in July 2000, when the company reported disappointing
earnings. Although we had trimmed our position shortly before the stock dropped,
it remains one of the Fund's largest holdings. We continue to believe the
wireless industry has plenty of room to grow, and that this leading supplier of
wireless products and networks is well positioned to profit from that growth.
Among other sectors we emphasized, we were generally disappointed by the
performance of our consumer cyclicals. Despite reasonably strong fundamentals,
many of our retailing and media and communications holdings were hurt by fears
that the economy might slow, reducing revenue growth.
WHAT IS YOUR OUTLOOK OVER THE COMING MONTHS?
We believe the economic outlook remains strong. The rate of U.S. economic growth
appears to be slowing, increasing the prospects for healthy, sustainable growth
in the future. We also see indications that a wider range of industries and
investment
5 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 8
SECTOR ALLOCATION(3)
[PIE CHART]
<TABLE>
<S> <C>
- Technology 32.8%
- Consumer
Staples 13.0
- Consumer
Cyclicals 11.1
- Financial 10.8
- Capital Goods 10.1
- Healthcare 7.2
- Energy 6.4
- Communication
Services 3.8
- Utilities 2.6
- Transportation 1.4
- Basic Materials 0.8
</TABLE>
sectors may be participating in the market's strength. We consider this a
positive development for the Fund's disciplined, diversified investment
approach. We have recently added to our holdings in such diverse sectors as
energy, utilities, financials, consumer staples and basic materials.
Going forward, we are committed to rigorously adhering to our fundamental
approach of seeking growth at the right price. In today's volatile economic
environment, we believe our disciplined approach and emphasis on selecting
stocks one company at a time should serve investors well. That's why Oppenheimer
Capital Appreciation Fund continues to be part of The Right Way to Invest.
<TABLE>
<CAPTION>
TOP FIVE COMMON STOCK INDUSTRIES(4)
...........................................................
<S> <C>
Electronics 9.7%
...........................................................
Communications Equipment 9.6
...........................................................
Manufacturing 7.2
...........................................................
Computer Software 7.0
...........................................................
Diversified Financial 5.5
</TABLE>
<TABLE>
<CAPTION>
TOP TEN COMMON STOCK HOLDINGS(4)
...........................................................
<S> <C>
Cisco Systems, Inc. 2.9%
...........................................................
Nokia Corp., A Shares, Sponsored ADR 2.8
...........................................................
Sanmina Corp. 2.8
...........................................................
Time Warner, Inc. 2.4
...........................................................
Microsoft Corp. 2.4
...........................................................
Nortel Networks Corp. 2.2
...........................................................
Citigroup, Inc. 1.6
...........................................................
News Corp. Ltd. (The), Sponsored ADR 1.5
...........................................................
Comcast Corp., Cl. A Special 1.5
...........................................................
Vodafone Group plc, Sponsored ADR 1.4
</TABLE>
3. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are based on total market value of the Fund's common stock holdings.
4. Portfolio is subject to change. Percentages are as of August 31, 2000, and
are based on net assets.
6 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 9
FUND PERFORMANCE
HOW HAS THE FUND PERFORMED? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended August 31, 2000, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the fiscal year that ended August
31, 2000, the U.S. economy enjoyed robust growth, supporting the performance of
growthoriented equity markets. The Fund participated strongly in the market's
gains. For the first six months of the period, market strength was concentrated
in technology stocks. The Fund participated in the technology run-up,
emphasizing semiconductor and telecommunications equipment stocks. As technology
valuations rose to levels we considered unsustainable, we trimmed the Fund's
positions, thereby limiting the impact of the technology slump in April and May
2000. As growth stocks enjoyed a broader-based advance during the last three
months of the period, we achieved strong returns from healthcare and capital
goods holdings, as well as technology. These gains outweighed disappointing
results from consumer cyclicals. The Fund's portfolio holdings, allocations and
strategies are subject to change.
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 August 31, 2000; in the case of Class A shares, performance is
measured over a 10 year period; in the case of Class B shares, from the
inception of the class on November 1, 1995, in the case of Class C shares, from
the inception of the Class on December 1, 1993, and in the case of Class Y
shares, from the inception of the class on November 3, 1997. The Fund's
performance reflects the deduction of the maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B and Class C
shares, and reinvestment of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Standard &
Poor's (S&P) 500 Index, a broad-based index of equity securities widely regarded
as a general measure of the performance of the U.S. equity securities market.
Index performance reflects the reinvestment of dividends but does not consider
the effect of capital gains or transaction costs, and none of the data in the
graphs shows the effect of taxes. The Fund's performance reflects the effect of
Fund business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index shown.
7 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 10
FUND PERFORMANCE
--------------------------------------------------------------------------------
[The following table was originally a line graph in the printed materials]
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
(Class A) S&P 500
<S> <C> <C>
12/31/90 9425 10000
12/31/91 13320 13040
12/31/92 14688 14032.1
12/31/93 15265 15443.3
12/31/94 15335 15646.1
12/31/95 20679 21518.7
8/31/96 23218 23122.1
8/31/97 32626 32515.4
8/31/98 31301 35156
8/31/99 46125 49150.3
8/31/00 68268 57164.8
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 8/31/00(2)
1-YEAR 39.50% 5-YEAR 26.81% 10-YEAR 21.78%
[The following table was originally a line graph in the printed materials]
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
(Class B) S&P 500
<S> <C> <C>
11/1/95 10000 10000
8/31/96 11353 11391.5
8/31/97 15813 16019.2
8/31/98 15044 17320.2
8/31/99 21995 24214.7
8/31/00 32106 28163.1
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 8/31/00(2)
1-YEAR 41.88% LIFE 27.29%
1. The Fund changed its fiscal year end from December 31 to August 31.
2. See page 10 for further details.
8 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 11
[The following table was originally a line graph in the printed materials]
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
(Class C) S&P 500
<S> <C> <C>
12/1/93 10000 10000
12/31/93 10117 10024.4
12/31/94 10066 10156.1
12/31/95 13443 13968.1
8/31/96 15010 15008.8
8/31/97 20917 21106.1
8/31/98 19905 22820.2
8/31/99 29092 31904.1
8/31/00 42735 37106.4
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 8/31/00(2)
1-YEAR 45.89% 5-YEAR 27.28% LIFE 24.01%
[The following table was originally a line graph in the printed materials]
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
<TABLE>
<CAPTION>
Oppenheimer
Capital
Appreciation
Fund
(Class Y) S&P 500
<S> <C> <C>
11/3/97 10000 10000
8/31/98 9256 10251
8/31/99 13688 14331.6
8/31/00 20347 16668.5
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS Y SHARES OF THE FUND AT 8/31/00(2)
1-YEAR 48.64% LIFE 28.56%
The performance information for S&P 500 in the graphs begins on 12/31/90 for
Class A, 10/31/95 for Class B, 11/30/93 for Class C and 10/31/97 for Class Y.
1. The Fund changed its fiscal year end from 12/31 to 8/31.
2. See page 10 for further details.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. GRAPHS ARE NOT DRAWN
TO THE SAME SCALE.
9 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 12
NOTES
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. THE FUND'S RETURNS
AT 9/30/00 INCLUDE RESULTS FOR PERIODS OF EXCEPTIONAL MARKET PERFORMANCE THAT IS
NOT TYPICAL OF HISTORICAL RESULTS. YOU SHOULD NOT EXPECT THOSE GROWTH RATES TO
CONTINUE. BECAUSE OF ONGOING MARKET VOLATILITY, THE FUND'S PERFORMANCE MAY BE
SUBJECT TO SHORT-TERM FLUCTUATIONS AND CURRENT PERFORMANCE MAY BE LESS THAN THE
RESULTS SHOWN. FOR QUARTERLY UPDATES ON THE FUND'S PERFORMANCE, PLEASE CONTACT
YOUR FINANCIAL ADVISOR, CALL US AT 1.800.525.7048 OR VISIT OUR WEBSITE AT
WWW.OPPENHEIMERFUNDS.COM.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
CLASS A The inception date of the Fund was 1/22/81. Class A returns include the
current maximum initial sales charge of 5.75%.
CLASS B Class B shares of the Fund were first publicly offered on 11/1/95. Class
B returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (since inception). Class B shares are subject to an annual 0.75%
asset-based sales charge. The ending account value shown in the graph is net of
the applicable 2% contingent deferred sales charge.
CLASS C Class C shares of the Fund were first publicly offered on 12/1/93. Class
C returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
CLASS Y Class Y shares of the Fund were first publicly offered on 11/3/97. Class
Y shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
10 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 13
FINANCIALS
11 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 14
STATEMENT OF INVESTMENTS August 31, 2000
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==================================================================================
COMMON STOCKS--88.5%
----------------------------------------------------------------------------------
<S> <C> <C>
BASIC MATERIALS--0.7%
----------------------------------------------------------------------------------
CHEMICALS--0.5%
Lafarge Corp. 400,300 $ 9,757,312
----------------------------------------------------------------------------------
PPG Industries, Inc. 300,000 12,150,000
----------------------------------------------------------------------------------
Union Carbide Corp. 230,000 9,214,375
-------------
31,121,687
----------------------------------------------------------------------------------
METALS--0.1%
Alcoa, Inc. 280,000 9,310,000
----------------------------------------------------------------------------------
PAPER--0.1%
Boise Cascade Corp. 160,000 4,780,000
----------------------------------------------------------------------------------
CAPITAL GOODS--8.9%
----------------------------------------------------------------------------------
AEROSPACE/DEFENSE--0.2%
Boeing Co. 230,000 12,333,750
----------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--0.9%
Vishay Intertechnology, Inc.(1) 1,500,000 60,468,750
----------------------------------------------------------------------------------
INDUSTRIAL SERVICES--0.6%
Coflexip SA, Sponsored ADR 145,200 8,625,787
----------------------------------------------------------------------------------
Republic Services, Inc.(1) 600,000 8,775,000
----------------------------------------------------------------------------------
Waste Management, Inc. 1,200,000 22,725,000
-------------
40,125,787
----------------------------------------------------------------------------------
MANUFACTURING--7.2%
Corning, Inc. 170,600 55,946,137
----------------------------------------------------------------------------------
Dover Corp. 600,000 29,325,000
----------------------------------------------------------------------------------
Flextronics International Ltd.(1) 1,130,000 94,143,125
----------------------------------------------------------------------------------
Honeywell International, Inc. 400,000 15,425,000
----------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 650,000 60,450,000
----------------------------------------------------------------------------------
Sanmina Corp.(1) 1,570,000 185,260,000
----------------------------------------------------------------------------------
Tyco International Ltd. 200,000 11,400,000
----------------------------------------------------------------------------------
United Technologies Corp. 260,000 16,233,750
----------------------------------------------------------------------------------
Veeco Instruments, Inc.(1) 180,000 16,132,500
-------------
484,315,512
</TABLE>
12 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 15
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
==================================================================================
<S> <C> <C>
COMMUNICATION SERVICES--3.3%
----------------------------------------------------------------------------------
TELECOMMUNICATIONS-LONG DISTANCE--0.6%
AT&T Corp. 350,000 $ 11,025,000
----------------------------------------------------------------------------------
WorldCom, Inc.(1) 830,000 30,295,000
-------------
41,320,000
----------------------------------------------------------------------------------
TELECOMMUNICATIONS-WIRELESS--2.7%
Amdocs Ltd.(1) 384,600 27,474,862
----------------------------------------------------------------------------------
AT&T Wireless Group(1) 372,400 9,752,225
----------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A(1) 600,000 33,262,500
----------------------------------------------------------------------------------
Tycom Ltd.(1) 116,200 4,836,825
----------------------------------------------------------------------------------
Vodafone Group plc, Sponsored ADR 2,300,000 94,156,250
----------------------------------------------------------------------------------
Williams Communications Group, Inc.(1) 421,800 12,390,375
-------------
181,873,037
----------------------------------------------------------------------------------
CONSUMER CYCLICALS--9.8%
----------------------------------------------------------------------------------
AUTOS & HOUSING--1.4%
Centex Corp. 615,000 17,758,125
----------------------------------------------------------------------------------
Ethan Allen Interiors, Inc. 485,550 13,079,503
----------------------------------------------------------------------------------
Ford Motor Co. 1,748,175 42,283,983
----------------------------------------------------------------------------------
Gentex Corp.(1) 680,000 17,595,000
-------------
90,716,611
----------------------------------------------------------------------------------
CONSUMER SERVICES--1.2%
Omnicom Group, Inc. 730,000 60,909,375
----------------------------------------------------------------------------------
Young & Rubicam, Inc. 330,000 19,305,000
-------------
80,214,375
----------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--1.1%
Carnival Corp. 2,200,000 43,862,500
----------------------------------------------------------------------------------
Harley-Davidson, Inc. 600,000 29,887,500
-------------
73,750,000
----------------------------------------------------------------------------------
MEDIA--3.9%
News Corp. Ltd. (The), Sponsored ADR 1,850,000 97,356,250
----------------------------------------------------------------------------------
Time Warner, Inc. 1,900,000 162,450,000
-------------
259,806,250
</TABLE>
13 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 16
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
----------------------------------------------------------------------------------
<S> <C> <C>
RETAIL: SPECIALTY--2.1%
Abercrombie & Fitch Co., Cl. A(1) 900,000 $ 20,868,750
----------------------------------------------------------------------------------
Gap, Inc. 1,750,000 39,265,625
----------------------------------------------------------------------------------
Nike, Inc., Cl. B 850,000 33,628,125
----------------------------------------------------------------------------------
Tiffany & Co. 800,000 33,300,000
----------------------------------------------------------------------------------
Zale Corp.(1) 398,800 14,730,675
-------------
141,793,175
----------------------------------------------------------------------------------
TEXTILE/APPAREL & HOME FURNISHINGS--0.1%
Too, Inc.(1) 360,000 8,865,000
----------------------------------------------------------------------------------
CONSUMER STAPLES--11.4%
----------------------------------------------------------------------------------
BEVERAGES--2.0%
Adolph Coors Co., Cl. B 500,000 29,781,250
----------------------------------------------------------------------------------
Anheuser-Busch Cos., Inc. 400,000 31,525,000
----------------------------------------------------------------------------------
PepsiCo, Inc. 800,000 34,100,000
----------------------------------------------------------------------------------
Seagram Co. Ltd. (The) 650,000 39,121,875
-------------
134,528,125
----------------------------------------------------------------------------------
BROADCASTING--5.0%
Cablevision Systems Corp., Cl. A(1) 430,000 28,917,500
----------------------------------------------------------------------------------
Clear Channel Communications, Inc.(1) 1,168,000 84,534,000
----------------------------------------------------------------------------------
Comcast Corp., Cl. A Special(1) 2,610,000 97,222,500
----------------------------------------------------------------------------------
Fox Entertainment Group, Inc., A Shares(1) 650,000 18,809,375
----------------------------------------------------------------------------------
Hispanic Broadcasting Corp.(1) 750,000 19,265,625
----------------------------------------------------------------------------------
Infinity Broadcasting Corp., Cl. A(1) 1,650,000 62,493,750
----------------------------------------------------------------------------------
Rogers Communications, Inc., Cl. B(1) 1,005,200 24,811,338
-------------
336,054,088
----------------------------------------------------------------------------------
ENTERTAINMENT--2.0%
Royal Caribbean Cruises Ltd. 2,280,000 52,155,000
----------------------------------------------------------------------------------
Viacom, Inc., Cl. B(1) 1,220,000 82,121,250
-------------
134,276,250
----------------------------------------------------------------------------------
FOOD--0.6%
Keebler Foods Co. 500,000 22,906,250
----------------------------------------------------------------------------------
Nabisco Holdings Corp., Cl. A 300,000 16,031,250
-------------
38,937,500
</TABLE>
14 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 17
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
----------------------------------------------------------------------------------
<S> <C> <C>
FOOD & DRUG RETAILERS--1.2%
CVS Corp. 1,000,000 $ 37,125,000
----------------------------------------------------------------------------------
Safeway, Inc.(1) 900,000 44,381,250
-------------
81,506,250
----------------------------------------------------------------------------------
HOUSEHOLD GOODS--0.6%
Avon Products, Inc. 1,100,000 43,106,250
----------------------------------------------------------------------------------
ENERGY--5.7%
----------------------------------------------------------------------------------
ENERGY SERVICES--2.5%
Coastal Corp. 800,000 55,100,000
----------------------------------------------------------------------------------
Constellation Energy Group, Inc. 150,000 5,737,500
----------------------------------------------------------------------------------
ENSCO International, Inc. 100,000 3,987,500
----------------------------------------------------------------------------------
Halliburton Co. 600,000 31,800,000
----------------------------------------------------------------------------------
Nabors Industries, Inc.(1) 540,000 25,683,750
----------------------------------------------------------------------------------
Schlumberger Ltd. 300,000 25,593,750
----------------------------------------------------------------------------------
Transocean Sedco Forex, Inc. 300,000 17,925,000
-------------
165,827,500
----------------------------------------------------------------------------------
OIL: DOMESTIC--2.3%
Amerada Hess Corp. 766,700 52,471,031
----------------------------------------------------------------------------------
Exxon Mobil Corp. 1,050,000 85,706,250
----------------------------------------------------------------------------------
Forest Oil Corp.(1) 600,000 9,187,500
----------------------------------------------------------------------------------
Tosco Corp. 160,000 4,880,000
-------------
152,244,781
----------------------------------------------------------------------------------
OIL: INTERNATIONAL--0.9%
Total Fina Elf SA, Sponsored ADR 700,000 52,150,000
----------------------------------------------------------------------------------
Varco International, Inc.(1) 460,000 9,286,250
-------------
61,436,250
----------------------------------------------------------------------------------
FINANCIAL--9.6%
----------------------------------------------------------------------------------
BANKS--1.8%
Bank of America Corp. 600,000 32,137,500
----------------------------------------------------------------------------------
Chase Manhattan Corp. 1,125,000 62,859,375
----------------------------------------------------------------------------------
FleetBoston Financial Corp. 525,000 22,410,937
-------------
117,407,812
</TABLE>
15 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 18
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
----------------------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED FINANCIAL--5.5%
Associates First Capital Corp., Cl. A 1,300,000 $ 36,562,500
----------------------------------------------------------------------------------
C.I.T. Group, Inc., Cl. A 580,000 10,150,000
----------------------------------------------------------------------------------
Citigroup, Inc. 1,800,000 105,075,000
----------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 400,000 58,000,000
----------------------------------------------------------------------------------
Morgan Stanley Dean Witter & Co. 660,000 70,991,250
----------------------------------------------------------------------------------
Price (T. Rowe) Associates, Inc. 256,800 11,620,200
----------------------------------------------------------------------------------
Schwab (Charles) Corp. 862,500 32,936,719
----------------------------------------------------------------------------------
Stilwell Financial, Inc.(1) 880,000 42,570,000
-------------
367,905,669
----------------------------------------------------------------------------------
INSURANCE--1.6%
American International Group, Inc. 345,000 30,748,125
----------------------------------------------------------------------------------
AXA Financial, Inc. 1,350,000 69,862,500
----------------------------------------------------------------------------------
Everest Re Group Ltd. 200,000 8,050,000
-------------
108,660,625
----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--0.7%
Boston Properties, Inc. 900,000 36,393,750
----------------------------------------------------------------------------------
Equity Office Properties Trust 300,000 8,662,500
-------------
45,056,250
----------------------------------------------------------------------------------
HEALTHCARE--6.4%
----------------------------------------------------------------------------------
HEALTHCARE/DRUGS--4.9%
ALZA Corp., Cl. A(1) 525,000 39,703,125
----------------------------------------------------------------------------------
Amgen, Inc.(1) 630,000 47,761,875
----------------------------------------------------------------------------------
Elan Corp. plc, ADR(1) 1,050,000 61,228,125
----------------------------------------------------------------------------------
Forest Laboratories, Inc.(1) 240,000 23,490,000
----------------------------------------------------------------------------------
Pfizer, Inc. 2,070,000 89,527,500
----------------------------------------------------------------------------------
Pharmacia Corp. 1,120,000 65,590,000
-------------
327,300,625
----------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--1.5%
Baxter International, Inc. 335,000 27,888,750
----------------------------------------------------------------------------------
Becton, Dickinson & Co. 1,000,000 30,125,000
----------------------------------------------------------------------------------
Medtronic, Inc. 540,000 27,675,000
----------------------------------------------------------------------------------
PerkinElmer, Inc. 150,000 13,490,625
-------------
99,179,375
</TABLE>
16 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 19
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
----------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY--29.2%
----------------------------------------------------------------------------------
COMPUTER HARDWARE--2.9%
Compaq Computer Corp. 800,000 $ 27,250,000
----------------------------------------------------------------------------------
Dell Computer Corp.(1) 200,000 8,725,000
----------------------------------------------------------------------------------
Hewlett-Packard Co. 200,000 24,150,000
----------------------------------------------------------------------------------
Network Appliance, Inc.(1) 384,700 45,009,900
----------------------------------------------------------------------------------
Read-Rite Corp.(1) 110,000 993,438
----------------------------------------------------------------------------------
Seagate Technology, Inc.(1) 1,100,000 65,312,500
----------------------------------------------------------------------------------
Sun Microsystems, Inc.(1) 150,000 19,040,625
-------------
190,481,463
----------------------------------------------------------------------------------
COMPUTER SOFTWARE--7.0%
America Online, Inc.(1) 1,100,000 64,487,500
----------------------------------------------------------------------------------
BMC Software, Inc.(1) 1,000,000 27,000,000
----------------------------------------------------------------------------------
Microsoft Corp.(1) 2,300,000 160,568,750
----------------------------------------------------------------------------------
Novell, Inc.(1) 2,170,000 26,582,500
----------------------------------------------------------------------------------
Oracle Corp.(1) 900,000 81,843,750
----------------------------------------------------------------------------------
Sybase, Inc.(1) 840,000 23,047,500
----------------------------------------------------------------------------------
Veritas Software Corp.(1) 390,000 47,019,375
----------------------------------------------------------------------------------
Yahoo!, Inc.(1) 280,000 34,020,000
-------------
464,569,375
----------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--9.6%
ADC Telecommunications, Inc.(1) 400,000 16,375,000
----------------------------------------------------------------------------------
Cisco Systems, Inc.(1) 2,800,000 192,150,000
----------------------------------------------------------------------------------
L.M. Ericsson Telephone Co. ADR, Cl. B 800,000 16,400,000
----------------------------------------------------------------------------------
Lucent Technologies, Inc. 1,350,000 56,446,875
----------------------------------------------------------------------------------
Nokia Corp., A Shares, Sponsored ADR 4,170,000 187,389,375
----------------------------------------------------------------------------------
Nortel Networks Corp. 1,800,000 146,812,500
----------------------------------------------------------------------------------
Tellabs, Inc.(1) 470,000 26,408,125
-------------
641,981,875
----------------------------------------------------------------------------------
ELECTRONICS--9.7%
Analog Devices, Inc.(1) 540,000 54,270,000
----------------------------------------------------------------------------------
Applied Materials, Inc.(1) 238,832 20,614,187
----------------------------------------------------------------------------------
Atmel Corp.(1) 3,400,000 68,000,000
----------------------------------------------------------------------------------
Cypress Semiconductor Corp.(1) 800,000 39,550,000
----------------------------------------------------------------------------------
DuPont Photomasks, Inc.(1) 299,100 22,694,213
----------------------------------------------------------------------------------
International Rectifier Corp.(1) 650,000 40,909,375
</TABLE>
17 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 20
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
----------------------------------------------------------------------------------
<S> <C> <C>
ELECTRONICS Continued
JDS Uniphase Corp.(1) 150,000 $ 18,672,656
----------------------------------------------------------------------------------
Micron Technology, Inc.(1) 600,000 49,050,000
----------------------------------------------------------------------------------
National Semiconductor Corp.(1) 880,000 39,160,000
----------------------------------------------------------------------------------
Novellus Systems, Inc.(1) 640,000 39,400,000
----------------------------------------------------------------------------------
RF Micro Devices, Inc.(1) 1,400,000 62,475,000
----------------------------------------------------------------------------------
Texas Instruments, Inc. 800,000 53,550,000
----------------------------------------------------------------------------------
Vitesse Semiconductor Corp.(1) 905,000 80,375,313
----------------------------------------------------------------------------------
Waters Corp.(1) 720,000 57,285,000
-------------
646,005,744
----------------------------------------------------------------------------------
TRANSPORTATION--1.2%
----------------------------------------------------------------------------------
AIR TRANSPORTATION--0.1%
AMR Corp.(1) 300,000 9,843,750
----------------------------------------------------------------------------------
RAILROADS & TRUCKERS--0.7%
Canadian Pacific Ltd. 1,450,000 39,603,125
----------------------------------------------------------------------------------
CSX Corp. 381,600 9,110,700
-------------
48,713,825
----------------------------------------------------------------------------------
SHIPPING--0.4%
FedEx Corp.(1) 600,000 24,210,000
----------------------------------------------------------------------------------
UTILITIES--2.3%
----------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.6%
Calpine Corp.(1) 886,400 87,753,600
----------------------------------------------------------------------------------
Potomac Electric Power Co. 700,000 17,631,250
-------------
105,384,850
----------------------------------------------------------------------------------
GAS UTILITIES--0.7%
Kinder Morgan, Inc. 300,000 11,043,750
----------------------------------------------------------------------------------
Williams Cos., Inc. (The) 800,000 36,850,000
-------------
47,893,750
-------------
Total Common Stocks (Cost $4,063,739,153) 5,913,305,916
</TABLE>
18 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 21
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
====================================================================================
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--0.4%
U.S. Treasury Nts., 6.375%, 4/30/02 (Cost $29,804,581) $30,000,000 $ 30,056,250
====================================================================================
STRUCTURED INSTRUMENTS--0.4%
Credit Suisse First Boston Corp. (New York Branch),
Carnival Corp. Equity Linked Nts., 7%, 7/17/02(2) 15,000,834 14,475,805
------------------------------------------------------------------------------------
Merrill Lynch & Co. Medium-Term Linked Nts., Series B,
7%, 7/8/02 15,000,000 10,950,000
-------------
Total Structured Instruments (Cost $30,000,834) 25,425,805
====================================================================================
SHORT-TERM NOTES--7.2%
American Express Credit Corp., 6.52%, 9/13/00 21,100,000 21,054,143
------------------------------------------------------------------------------------
CIESCO LP, 6.49%, 10/5/00 50,000,000 49,693,528
------------------------------------------------------------------------------------
Coca-Cola Enterprises, Inc., 6.49%, 9/15/00 30,000,000 29,924,283
------------------------------------------------------------------------------------
Corporate Asset-Backed Corp., 6.51%, 10/6/00 35,100,000 34,877,846
------------------------------------------------------------------------------------
Corporate Receivables Corp., 6.53%, 9/20/00 50,000,000 49,827,681
------------------------------------------------------------------------------------
GE Capital International Funding, Inc., 6.52%, 9/21/00 50,000,000 49,818,889
------------------------------------------------------------------------------------
Heller Financial, Inc., 6.57%, 9/21/00 25,000,000 24,908,750
------------------------------------------------------------------------------------
Heller Financial, Inc., 6.61%, 9/5/00 50,000,000 49,963,278
------------------------------------------------------------------------------------
Household Finance Corp., 6.51%, 9/14/00 25,000,000 24,941,229
------------------------------------------------------------------------------------
Motiva Enterprises LLC, 6.51%, 9/18/00 25,000,000 24,923,146
------------------------------------------------------------------------------------
Motiva Enterprises LLC, 6.52%, 9/19/00 20,000,000 19,934,800
------------------------------------------------------------------------------------
New Center Asset Trust, 6.52%, 10/19/00 50,000,000 49,565,333
------------------------------------------------------------------------------------
Wal-Mart Stores, Inc., 6.50%, 10/11/00 50,000,000 49,638,889
-------------
Total Short-Term Notes (Cost $479,071,795) 479,071,795
SHARES
====================================================================================
OTHER SECURITIES--0.7%
Nasdaq-100 Unit Investment Trust(1) (Cost $40,833,810) 420,000 42,787,500
</TABLE>
19 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 22
STATEMENT OF INVESTMENTS Continued
<TABLE>
<CAPTION>
PRINCIPAL MARKET VALUE
AMOUNT SEE NOTE 1
===================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--2.6%
Repurchase agreement with Zion First National Bank, 6.57%,
dated 8/31/00, to be repurchased at $174,935,920 on 9/1/00,
collateralized by U.S. Treasury Nts., 5.25%-7.75%, 2/28/01-7/15/06,
with a value of $178,748,017 (Cost $174,904,000) $174,904,000 $ 174,904,000
---------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $4,818,354,173) 99.8% 6,665,551,266
---------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.2 14,326,190
------------------------------
NET ASSETS 100.0% $6,679,877,456
==============================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 23
STATEMENT OF ASSETS AND LIABILITIES August 31, 2000
<TABLE>
===================================================================================================
<S> <C>
ASSETS
Investments, at value (cost $4,818,354,173)--see accompanying statement $ 6,665,551,266
---------------------------------------------------------------------------------------------------
Cash 800,527
---------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 17,525,560
Interest and dividends 5,037,504
Other 332,127
-----------------
Total assets 6,689,246,984
===================================================================================================
LIABILITIES
Payables and other liabilities:
Shares of beneficial interest redeemed 3,482,119
Distribution and service plan fees 2,037,605
Transfer and shareholder servicing agent fees 1,964,735
Investments purchased 715,143
Registration and filing fees 533,533
Trustees' compensation 340,653
Other 295,740
-----------------
Total liabilities 9,369,528
===================================================================================================
NET ASSETS $6,679,877,456
=================
===================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $4,320,720,098
---------------------------------------------------------------------------------------------------
Overdistributed net investment income (277,880)
---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and
foreign currency transactions 512,238,145
---------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 1,847,197,093
-----------------
NET ASSETS $6,679,877,456
=================
</TABLE>
21 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 24
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
==============================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $3,648,961,253 and 58,738,938 shares of beneficial interest outstanding) $62.12
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $65.91
----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$1,333,386,578 and 22,296,891 shares of beneficial interest outstanding) $59.80
----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$402,442,191 and 6,799,509 shares of beneficial interest outstanding) $59.19
----------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $1,295,087,434 and 20,718,203 shares of
beneficial interest outstanding) $62.51
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 25
STATEMENT OF OPERATIONS For the Year Ended August 31, 2000
<TABLE>
==============================================================================================
<S> <C>
INVESTMENT INCOME
Interest $ 27,097,486
----------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $414,408) 25,774,191
---------------
Total income 52,871,677
==============================================================================================
EXPENSES
Management fees 29,201,218
----------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 6,679,168
Class B 9,208,551
Class C 2,791,044
----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 5,744,473
Class B 1,861,755
Class C 561,676
Class Y 43,089
----------------------------------------------------------------------------------------------
Trustees' compensation 205,344
----------------------------------------------------------------------------------------------
Custodian fees and expenses 199,919
----------------------------------------------------------------------------------------------
Other 1,751,079
---------------
Total expenses 58,247,316
Less expenses paid indirectly (70,909)
---------------
Net expenses 58,176,407
==============================================================================================
NET INVESTMENT LOSS (5,304,730)
==============================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 610,655,373
Foreign currency transactions (133,737)
---------------
Net realized gain 610,521,636
----------------------------------------------------------------------------------------------
Net change in unrealized appreciation on:
Investments 1,150,735,827
Translation of assets and liabilities denominated in foreign currencies 247,932
---------------
Net change 1,150,983,759
---------------
Net realized and unrealized gain 1,761,505,395
==============================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,756,200,665
===============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 26
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 2000 1999
================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment loss $ (5,304,730) $ (4,314,868)
----------------------------------------------------------------------------------------------------------------
Net realized gain 610,521,636 213,387,917
----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation 1,150,983,759 635,648,269
--------------- ----------------
Net increase in net assets resulting from operations 1,756,200,665 844,721,318
================================================================================================================
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A -- (3,435,127)
Class Y -- (1,089,768)
----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (156,146,182) (101,506,314)
Class B (44,540,426) (17,982,633)
Class C (13,722,828) (6,603,979)
Class Y (34,586,462) (14,490,090)
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial interest transactions:
Class A 665,798,352 332,180,412
Class B 530,123,230 250,141,075
Class C 155,176,037 57,426,203
Class Y 632,947,701 165,100,529
================================================================================================================
NET ASSETS
Total increase 3,491,250,087 1,504,461,626
----------------------------------------------------------------------------------------------------------------
Beginning of period 3,188,627,369 1,684,165,743
--------------- ----------------
End of period (including overdistributed net investment
income of $277,880 and $213,477, respectively) $6,679,877,456 $3,188,627,369
=============== ================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 27
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
CLASS A 2000 1999 1998 1997 1996(1) 1995
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $44.73 $32.53 $38.63 $30.81 $27.44 $ 22.63
------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.02) (.04) .17 .18 .11 .24
Net realized and unrealized gain (loss) 20.63 14.87 (1.55) 11.36 3.26 7.61
-----------------------------------------------------------------
Total income (loss) from
investment operations 20.61 14.83 (1.38) 11.54 3.37 7.85
------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.09) (.15) (.17) -- (.24)
Distributions from net realized gain (3.22) (2.54) (4.57) (3.55) -- (2.80)
-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (3.22) (2.63) (4.72) (3.72) -- (3.04)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $62.12 $44.73 $32.53 $38.63 $30.81 $27.44
================================================================
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 48.01% 47.36% (4.06)% 40.52% 12.28% 34.85%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $3,649 $2,071 $1,234 $1,179 $789 $758
------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $2,898 $1,789 $1,353 $ 986 $790 $538
------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) 0% (0.05)% 0.48% 0.53% 0.55% 1.08%
Expenses 1.06% 1.04% 1.00%(4) 1.01%(4) 1.09%(4) 1.03%(4)
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 59% 60% 66% 45% 72%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 28
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
CLASS B 2000 1999 1998 1997 1996(1) 1995(2)
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $43.48 $31.85 $38.07 $30.56 $27.37 $29.77
------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.20) (.21) (.02) .07 -- (.14)
Net realized and unrealized gain (loss) 19.74 14.38 (1.62) 11.05 3.19 .78
------------------------------------------------------------------
Total income (loss) from
investment operations 19.54 14.17 (1.64) 11.12 3.19 .64
------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- (.01) (.06) -- (.24)
Distributions from net realized gain (3.22) (2.54) (4.57) (3.55) -- (2.80)
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (3.22) (2.54) (4.58) (3.61) -- (3.04)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $59.80 $43.48 $31.85 $38.07 $30.56 $27.37
==================================================================
==================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 46.88% 46.20% (4.86)% 39.30% 11.65% 1.67%
==================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1,333 $532 $194 $52 $5 $3
------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 922 $372 $133 $24 $4 $1
------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment loss (0.76)% (0.86)% (0.37)% (0.33)% (0.25)% (0.54)%
Expenses 1.83% 1.84% 1.81%(5) 1.86%(5) 1.94%(5) 2.62%(5)
------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 59% 60% 66% 45% 72%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. For the period from November 1, 1995 (inception of offering) to December 31,
1995.
3. 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.
4. Annualized for periods of less than one full year.
5. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 29
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
AUG. 31, DEC. 31,
CLASS C 2000 1999 1998 1997 1996(1) 1995
=================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $43.06 $31.57 $37.76 $30.27 $27.11 $22.50
-----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.18) (.23) (.03) .01 (.03) .09
Net realized and unrealized gain (loss) 19.53 14.26 (1.59) 11.03 3.19 7.43
------------------------------------------------------------------
Total income (loss) from
investment operations 19.35 14.03 (1.62) 11.04 3.16 7.52
-----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- -- -- -- -- (.11)
Distributions from net realized gain (3.22) (2.54) (4.57) (3.55) -- (2.80)
------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (3.22) (2.54) (4.57) (3.55) -- (2.91)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $59.19 $43.06 $31.57 $37.76 $30.27 $27.11
==================================================================
=================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 46.89% 46.16% (4.84)% 39.35% 11.66% 33.56%
=================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $402 $165 $76 $36 $10 $7
-----------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $279 $126 $62 $20 $ 9 $4
-----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income (loss) (0.76)% (0.86)% (0.36)% (0.32)% (0.30)% 0.19%
Expenses 1.83% 1.85% 1.82%(4) 1.85%(4) 1.93%(4) 1.90%(4)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 59% 60% 66% 45% 72%
</TABLE>
1. For the eight months ended August 31, 1996. The Fund changed its fiscal year
end from December 31 to August 31.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 30
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
AUGUST 31, AUGUST 31,
CLASS Y 2000 1999 1998(1)
=================================================================================================================
<S> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $44.81 $32.56 $40.15
-----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .13 .13 .30
Net realized and unrealized gain (loss) 20.79 14.85 (3.11)
---------------------------------
Total income (loss) from investment operations 20.92 14.98 (2.81)
-----------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.19) (.21)
Distributions from net realized gain (3.22) (2.54) (4.57)
---------------------------------
Total dividends and/or distributions
to shareholders (3.22) (2.73) (4.78)
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $62.51 $44.81 $32.56
=================================
=================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(2) 48.64% 47.90% (7.45)%
=================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1,295 $420 $181
-----------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $ 855 $307 $139
Ratios to average net assets:(3)
Net investment income 0.45% 0.30% 0.75%
Expenses 0.64% 0.68% 0.69%(4)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 59% 60%
</TABLE>
1. For the period from November 3, 1997 (inception of offering) to August 31,
1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Capital Appreciation Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Fund's investment objective is to seek capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold at their offering price, which is normally net asset value plus
a front-end sales charge. Class B and Class C shares are sold without a
front-end sales charge but may be subject to a contingent deferred sales charge
(CDSC). Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own expenses directly attributable to that class and exclusive voting rights
with respect to matters affecting that class. Classes A, B and C 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. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
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.
29 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 32
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, 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.
--------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the year ended
August 31, 2000, a provision of $75,428 was made for the Fund's projected
benefit obligations and payments of $11,052 were made to retired trustees,
resulting in an accumulated liability of $277,915 as of August 31, 2000.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
--------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
30 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 33
--------------------------------------------------------------------------------
CLASSIFICATION OF DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal 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 dividends and 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 August 31, 2000, amounts have been reclassified to reflect an
increase in paid-in capital of $51,894,190, a decrease in overdistributed net
investment income of $5,240,327, and a decrease in accumulated net realized gain
on investments of $57,134,517. This reclassification includes $51,906,667
distributed in connection with Fund share redemptions which increased paid-in
capital and reduced accumulated net realized gain. Net assets of the Fund were
unaffected by the reclassifications.
--------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
31 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 34
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. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31, 2000 YEAR ENDED AUGUST 31, 1999
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Sold 21,248,494 $1,161,716,520 16,486,612 $ 682,694,426
Dividends and/or
distributions reinvested 2,997,611 146,972,843 2,761,935 101,086,519
Redeemed (11,817,625) (642,891,011) (10,867,095) (451,600,533)
------------------------------------------------------------------------
Net increase 12,428,480 $665,798,352 8,381,452 $332,180,412
========================================================================
---------------------------------------------------------------------------------------------------------------
CLASS B
Sold 12,651,311 $ 670,804,410 8,303,860 $ 339,552,020
Dividends and/or
distributions reinvested 907,173 43,064,587 488,475 17,477,638
Redeemed (3,488,619) (183,745,767) (2,644,213) (106,888,583)
------------------------------------------------------------------------
Net increase 10,069,865 $530,123,230 6,148,122 $250,141,075
========================================================================
---------------------------------------------------------------------------------------------------------------
CLASS C
Sold 4,959,476 $ 257,314,222 3,159,608 $ 128,803,033
Dividends and/or
distributions reinvested 280,983 13,200,947 180,148 6,384,452
Redeemed (2,278,272) (115,339,132) (1,911,652) (77,761,282)
------------------------------------------------------------------------
Net increase 2,962,187 $155,176,037 1,428,104 $ 57,426,203
========================================================================
---------------------------------------------------------------------------------------------------------------
CLASS Y
Sold 12,933,936 $723,894,124 4,483,054 $ 191,633,897
Dividends and/or
distributions reinvested 703,262 34,586,461 426,028 15,579,858
Redeemed (2,302,166) (125,532,884) (1,069,125) (42,113,226)
------------------------------------------------------------------------
Net increase 11,335,032 $632,947,701 3,839,957 $165,100,529
========================================================================
</TABLE>
================================================================================
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended August 31, 2000, were
$3,232,360,809 and $1,987,229,452, respectively.
As of August 31, 2000, unrealized appreciation (depreciation) based on cost
of securities for federal income tax purposes of $4,826,490,281 was:
Gross unrealized appreciation $ 2,127,096,232
Gross unrealized depreciation (288,035,247)
---------------
Net unrealized appreciation $ 1,839,060,985
===============
32 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 35
================================================================================
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee 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 $700 million, 0.58% of the next $1.0 billion and 0.56% of average
annual net assets over $2.5 billion. Effective January 1, 2000, the rate was
revised to 0.56% of average annual net assets over $2.5 billion to $4.5 billion
and 0.54% of average annual net assets over $4.5 billion. The Fund's management
fee for the year ended August 31, 2000 was an annualized rate of 0.59%, before
any waiver by the Manager if applicable.
--------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer funds.
--------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
August 31, 2000 $9,222,674 $2,675,878 $1,710,262 $12,986,219 $1,180,044
</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>
August 31, 2000 $35,205 $1,325,150 $46,952
</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.
33 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the year ended August 31, 2000, payments
under the Class A plan totaled $6,679,168 prior to Manager waivers if
applicable, all of which were paid by the Distributor to recipients, and
included $405,591 paid to an affiliate of the Manager. Any unreimbursed expenses
the Distributor incurs with respect to Class A shares in any fiscal year cannot
be recovered in subsequent years.
--------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended August 31, 2000,
were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $9,208,551 $7,675,513 $18,419,726 1.38%
Class C Plan 2,791,044 1,039,502 2,181,019 0.54
</TABLE>
34 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 37
--------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency 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 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.
--------------------------------------------------------------------------------
6. ILLIQUID SECURITIES
As of August 31, 2000, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of August
31, 2000 was $14,475,805, which represents 0.22% of the Fund's net assets.
Certain restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limit.
--------------------------------------------------------------------------------
7. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the year ended August 31,
2000.
35 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 38
INDEPENDENT AUDITORS' REPORT
================================================================================
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER CAPITAL APPRECIATION FUND:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Capital Appreciation Fund as of
August 31, 2000, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the years in
the four-year period then ended, the eight-month period ended August 31, 1996
and the year ended December 31, 1995. 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 2000, by correspondence with the custodian and
brokers; and where confirmations were not received from brokers, we performed
other auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Capital Appreciation Fund as of August 31, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the four-year period then ended, the eight-month period
ended August 31, 1996 and the year ended December 31, 1995, in conformity with
accounting principles generally accepted in the United States of America.
KPMG LLP
Denver, Colorado
September 22, 2000
36 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 39
FEDERAL INCOME TAX INFORMATION Unaudited
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $3.2245, per share were paid to Class A, Class B, Class C
and Class Y shareholders on December 7, 1999, of which $2.2512 was designated as
a "capital gain distribution" for federal income tax purposes. Whether received
in stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of capital assets held for more than one
year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended August 31, 2000
which are not designated as capital gain distributions should be multiplied by
5.77% 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.
37 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 40
OPPENHEIMER CAPITAL APPRECIATION FUND
===============================================================================
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Jane Putnam, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
===============================================================================
INVESTMENT ADVISOR OppenheimerFunds, Inc.
===============================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
===============================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
===============================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
===============================================================================
INDEPENDENT AUDITORS KPMG LLP
===============================================================================
LEGAL COUNSEL Mayer, Brown & Platt
For more complete information about Oppenheimer
Capital Appreciation Fund, please refer to the
Prospectus. To obtain a copy, call your financial
advisor, call OppenheimerFunds Distributor, Inc. at
1.800.525.7048, or visit the OppenheimerFunds
Internet website, at WWW.OPPENHEIMERFUNDS.COM.
SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY
BANK, AND ARE NOT INSURED BY THE FDIC OR ANY OTHER
AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
OPPENHEIMER FUNDS ARE DISTRIBUTED BY OPPENHEIMERFUNDS
DISTRIBUTOR, INC., TWO WORLD TRADE CENTER, NEW YORK,
NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights
reserved.
38 OPPENHEIMER CAPITAL APPRECIATION FUND
<PAGE> 41
OPPENHEIMERFUNDS FAMILY
<TABLE>
===========================================================================================================
<S> <C> <C>
GLOBAL EQUITY
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
===========================================================================================================
EQUITY
Stock Stock & Bond
Emerging Technologies Fund Main Street(R) Growth & Income Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R) Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund(1) Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R) Opportunity Fund Disciplined Allocation Fund(2)
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund(2) Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
===========================================================================================================
FIXED INCOME
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund(2) Main Street(R) California Municipal Fund(2,3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund(2)
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
===========================================================================================================
MONEY MARKET(4)
Money Market Fund Cash Reserves
</TABLE>
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund, subject to shareholder approval.
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
39 OPPENHEIMER CAPITAL APPRECIATION FUND
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INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to help.
INTERNET
24-hr access to account information and transactions(1)
WWW.OPPENHEIMERFUNDS.COM
--------------------------------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
--------------------------------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
--------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OPPENHEIMERFUNDS MARKET HOTLINE
24 hours a day, timely and insightful messages on the
economy and issues that may affect your investments
1.800.835.3104
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TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
--------------------------------------------------------------------------------
TICKER SYMBOLS Class A: OPTFX Class B: OTGBX Class C: OTFCX Class Y: OTCYX
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[OPPENHEIMERFUNDS(R) LOGO]
RA0320.001.0800 October 30, 2000>
