--------------------------------
Semiannual Report April 30, 1998
--------------------------------
OPPENHEIMER
Disciplined
Value Fund
[Logo]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview
with the Fund's
Managers
9 Statement of
Investments
14 Statement of
Assets and
Liabilities
16 Statement of
Operations
17 Statements of
Changes in
Net Assets
18 Financial Highlights
21 Notes to Financial
Statements
26 Officers and
Directors
28 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o The Fund's Class A shares have an overall 4-star ranking (****) from
Morningstar for the combined 3-, 5- and 10-year periods ended March 31, 1998,
among 2,437 (3-year), 1,363 (5-year) and 698 (10-year) domestic equity funds.(1)
o In the last several years, various experts have predicted that the market
would decline, or at least level off, but it has continued to reach new highs.
At present, we are somewhat uncomfortable with market valuation levels.
- ---------------------------------------
Cumulative Total Returns
- ---------------------------------------
For the 6-Month Period
Ended 4/30/98
Class A
Without With
Sales Chg.(2) Sales Chg.(3)
- ---------------------------------------
14.27% 7.70%
- ---------------------------------------
Class B
Without With
Sales Chg.(2) Sales Chg.(3)
- ---------------------------------------
13.79% 8.79%
- ---------------------------------------
Class C
Without With
Sales Chg.(2) Sales Chg.(3)
- ---------------------------------------
13.83% 12.83%
- ---------------------------------------
Class Y
Without With
Sales Chg.(2) Sales Chg.(3)
- ---------------------------------------
14.43% 14.43%
- ---------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
Prior to March 1, 1996, the Fund had a different investment advisor. However,
the prior portfolio management team is now employed by OppenheimerFunds, Inc.,
the current advisor.
(1). Source: Morningstar, Inc., 3/31/98. Morningstar ranks mutual funds in broad
investment classes, based on risk-adjusted returns after considering sales
charges and expenses. Return and risk are measured as performance above and
below 90-day U.S. Treasury bill returns, respectively. Current star rankings are
based on the weighted average of 3-, 5- and 10-year (if applicable) rankings for
a fund or class and are subject to change monthly. Top 10%: 5 stars. Next 22.5%:
4 stars. Middle 35%: 3 stars. Next 22.5%: 2 stars. Bottom 10%: 1 star. The Fund
is ranked 3 stars (3-year), 3 stars (5-year) and 4 stars (10-year), weighted
20%/30%/50%, respectively.
(2). Includes changes in net asset value per share without deducting any sales
charges. This performance is not annualized.
(3). Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class Y
shares were first publicly offered on 12/16/96 and are not available for sale to
individual shareholders. An explanation of the different performance
calculations is contained in the Fund's prospectus. Class B and C shares are
subject to an annual 0.75% asset-based sales charge. This performance is not
annualized.
2 Oppenheimer Disciplined Value Fund
<PAGE>
[Photo Omitted]
Bridget A. Macaskill
President
Oppenheimer
Disciplined Value Fund
Dear shareholder,
- --------------------------------------------------------------------------------
As we move further into 1998, we remain impressed by the remarkable resilience
of the financial markets. Recent efforts by the United States to help support
the Japanese Yen have inspired hope that the fallout of the Asian economic
crisis can be contained. In general, the U.S. and world markets have continued
to build wealth for investors at a virtually unprecedented pace.
At OppenheimerFunds, we are pleased to help our fund shareholders
participate in the potential rewards of today's markets, but we also recognize
that this rate of growth cannot last forever. Because no one can predict exactly
when the next correction or bear market might occur, we think it is prudent to
continually identify, evaluate and manage the risks that may affect our fund
shareholders.
We believe that one of the leading risks facing investors today is that
stock valuations are at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these facts, we believe it is
unlikely that stocks will sustain the growth rate of the past three years. Stock
prices could continue trading near current levels until earnings "catch up," or
there could be a market correction. However, we believe that either scenario
would be only a temporary pause on the way to potentially greater long-term
gains.
We are also examining the potential economic effects of the "millennium
problem" that may render many computer systems unable to recognize the year 2000
when it arrives. Solving this problem has required companies to divert
substantial human and financial resources from their core businesses, possibly
constraining global economic growth during 1999 and 2000.
For our part, we can report that OppenheimerFunds has made solid progress
toward ensuring that our shareholder accounting systems are fully "year 2000
compliant," and that all shareholder accounts will make a seamless transition
into the 21st century.
We encourage you to meet with your financial advisor to discuss how a
possible market correction or the millennium problem may affect your
investments. Together, you can prepare your investment portfolio for the
challenges and opportunities of the new century.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
May 21, 1998
3 Oppenheimer Disciplined Value Fund
<PAGE>
- ---------------------------------------
Avg Annual Total Returns
- ---------------------------------------
For the Periods Ended 3/31/98(1)
Class A
1 year 5 year 10 year
- ---------------------------------------
28.22% 18.20% 17.87%
- ---------------------------------------
Class B
Since
1 year 5 year Inception
- ---------------------------------------
29.96% N/A 23.04%
- ---------------------------------------
Class C
Since
1 year 5 year Inception
- ---------------------------------------
34.00% N/A 23.95%
- ---------------------------------------
Class Y
Since
1 year 5 year Inception
- ---------------------------------------
36.48% N/A 30.08%
- ---------------------------------------
- ---------------------------------------
Cumulative Total Return
- ---------------------------------------
For the Period Ended 3/31/98(1)
Class A
5 year
- ---------------------------------------
130.68% $23,068(4)
- ---------------------------------------
Performance update
- --------------------------------------------------------------------------------
The Fund performed well over the six-month period which ended April 30, 1998.
Its Class A shares produced a cumulative total return of 14.27%, without sales
charges.(2) In addition, Oppenheimer Disciplined Value Fund's Class A shares
have an overall 4-star ranking (****) from Morningstar for the combined 3-, 5-
and 10-year periods ended March 31, 1998, among 2,437 (3-year), 1,363 (5-year)
and 698 (10-year) domestic equity funds.(3)
Growth of $10,000
Over five years(4)
(without sales charges)
[The following information was represented by a line chart in the printed
materials.]
Oppenheimer
Disciplined
Value Fund S & P 500
Class A Shares Index
- --------------------------------------------------------------------------------
3/93 10000.0 10000.0
- --------------------------------------------------------------------------------
6/93 10344.6 10048.7
- --------------------------------------------------------------------------------
9/93 11037.8 10308.3
- --------------------------------------------------------------------------------
12/93 11192.6 10547.3
- --------------------------------------------------------------------------------
3/94 10933.9 10147.4
- --------------------------------------------------------------------------------
6/94 10719.8 10190.1
- --------------------------------------------------------------------------------
9/94 11267.8 10688.4
- --------------------------------------------------------------------------------
12/94 11119.5 10686.7
- --------------------------------------------------------------------------------
3/95 12098.3 11727.2
- --------------------------------------------------------------------------------
6/95 13124.5 12846.7
- --------------------------------------------------------------------------------
9/95 14240.4 13867.6
- --------------------------------------------------------------------------------
12/95 15166.8 14702.5
- --------------------------------------------------------------------------------
3/96 15889.4 15491.7
- --------------------------------------------------------------------------------
6/96 16088.9 16186.9
- --------------------------------------------------------------------------------
9/96 16536.1 16687.1
- --------------------------------------------------------------------------------
12/96 17954.2 18078.2
- --------------------------------------------------------------------------------
3/97 17991.2 18562.8
- --------------------------------------------------------------------------------
6/97 20423.9 21803.5
- --------------------------------------------------------------------------------
9/97 22542.2 23436.8
- --------------------------------------------------------------------------------
12/97 22262.8 24109.7
- --------------------------------------------------------------------------------
3/98 24474.0 27472.8
- --------------------------------------------------------------------------------
(1). Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 9/16/85. The Fund's maximum
sales charge for Class A shares was lower prior to 3/18/96, so actual
performance may have been higher. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 3% (since inception on
10/2/95). Class C returns for the one-year period include the contingent
deferred sales charge of 1%. Class C shares have an inception date of 5/1/96.
Class Y shares were first publicly offered on 12/16/96 and are not available for
sale to individual shareholders. An explanation of the different performance
calculations is contained in the Fund's prospectus. Class B and C shares are
subject to an annual 0.75% asset-based sales charge.
4 Oppenheimer Disciplined Value Fund
<PAGE>
[The following information was represented by a pie chart in the printed
materials.]
Asset Allocation(5)
o Equities 87.7%
o Cash Equivalents 12.3
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer Disciplined Value Fund is for investors looking for solid growth
opportunities over time.
What We Look For
o Companies that are undervalued, with lower price/earnings ratios than the
market average (S&P 500).
o The potential for better-than-expected earnings.
o Solid, well-established companies that have been overlooked by the market.
Top 10 Stock Holdings(5)
- --------------------------------------------------------------------------------
Storage Technology Corp. 2.8% Conseco, Inc. 1.9%
- --------------------------------------------------------------------------------
Xerox Corp. 2.7 BankBoston Corp. 1.8
- --------------------------------------------------------------------------------
Fort James Corp. 2.2 US West Communications Group 1.8
- --------------------------------------------------------------------------------
AT&T Corp. 2.1 Penney (J.C.) Co., Inc. 1.7
- --------------------------------------------------------------------------------
Textron, Inc. 2.0 Tenet Healthcare Corp. 1.6
- --------------------------------------------------------------------------------
Top 5 Industries(5)
- --------------------------------------------------------------------------------
Insurance 10.5%
- --------------------------------------------------------------------------------
Manufacturing 9.9
- --------------------------------------------------------------------------------
Retail: General 8.3
- --------------------------------------------------------------------------------
Computer Hardware 7.8
- --------------------------------------------------------------------------------
Telephone Utilities 7.3
- --------------------------------------------------------------------------------
(2). Includes changes in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
(3). Source: Morningstar, Inc. 3/31/98. The Fund is ranked 3 stars (3-year), 3
stars (5-year) and 4 stars (10-year), weighted 20%/30%/50%, respectively.
(4). Results of a hypothetical $10,000 investment in Class A shares on March 31,
1993. The Standard & Poor's 500 Index is a broad-based unmanaged stock index
including daily reinvestment of dividends, and cannot be purchased directly by
investors.
(5). Portfolio is subject to change. Percentages are as of April 30, 1998 and
are based on total market value of investments.
5 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
"We shifted away from Asia, toward companies that are much more focused on U.S.
economic activity."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How has the Fund performed in the past six months?
For the six-month period ending April 30, 1998, the Fund's Class A shares
produced a cumulative total return of 14.27%, without sales charges.(1) The
stock markets turned somewhat mixed in December--primarily in response to the
broader effects of the difficulties of many Asian countries. In the first
quarter of 1998, however, stock performance rebounded as investor concerns
eased.
What steps did you take to respond to the Asian crisis, and to the changes in
the stock markets?
We made a significant move away from companies that have a large exposure to
worldwide economic activity, and especially to Asia. Instead, we shifted toward
companies that are much more focused on U.S. economic activity, and, even more
specifically, toward the U.S. consumer. For example, basic materials and capital
goods companies have a significant exposure to Southeast Asia, so we reduced our
investment in those sectors, while increasing our holdings of domestic
retailers.
Were there any areas where you trimmed the Fund's exposure?
One of the most important was in energy stocks. At the beginning of the period,
energy represented approximately 12% of the portfolio. We've reduced that to 4%,
primarily because energy stocks have been negatively impacted by the slowdown in
Asia. When a country's manufacturing activity drops, its energy consumption
drops, as well.
(1). Includes changes in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
6 Oppenheimer Disciplined Value Fund
<PAGE>
[Photo Omitted]
Portfolio Management
Team (l to r)
Kenneth White
Peter Antos
(Portfolio Manager)
Michael Strathearn
Have any new trends emerged as you analyze your stock universe?
We look for two characteristics in a stock: A low price-to-earnings ratio, and a
positive earnings surprise. A positive earnings surprise is reported earnings
that are better than the consensus of expectations among Wall Street analysts.
Understandably, if you can buy a stock where the earnings exceed Wall Street
expectations, its price will tend to go up. We have definitely seen changes in
this second characteristic--positive earnings surprises in the recent period are
increasingly being reported versus significantly reduced expectations. We have
followed our findings, reducing our holdings in capital goods, in energy stocks,
and in basic materials companies--that's where we've seen the biggest reduction
in earnings expectations. We are closely watching this trend.
What do you see in the stock market as a whole?
The main thing we see is unprecedented performance. In the last several years,
various experts have predicted that the market would decline, or at least level
off, but it has continued to make new highs. At present, we are somewhat
uncomfortable with market valuation levels. However, as investment managers, we
do not try to time the market or forecast where it's going. Instead, we deal
with the market as it is on any given day, analyzing, buying, and selling stocks
on a case-by-case basis.
7 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
"Energy stocks have been negatively impacted by the slowdown in Asia."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How does your value stock management style work in general--and right now?
Our "value" management style is actually a combination of a value and a growth
discipline. We developed this discipline back in 1986-87. First, our value
standard is a low price/earnings ratio. Simply explained, the price/earnings
ratio (or P/E) of a stock is the result of dividing a stock's per-share price by
its per-share earnings. The definition of a low P/E is comparative, of course,
and it changes over time. Today, a "low" P/E might even be higher than a "high"
P/E of 30 or 40 years ago. Nonetheless, low P/E investing, the value tactic, has
been studied extensively all the way back into the 1930s. These studies show
that, for virtually every five-year period since the mid-1930s, buying stocks
with low P/Es creates a portfolio that can outperform the stock market as a
whole.
The positive earnings surprise component of the strategy--the growth
tactic--doesn't have as long a history. But, where there are studies, results
have shown that buying stocks with positive earnings surprises adds value. It's
natural, when you think about it: Buying stocks in companies that are doing
better than people expected can add value over time.
We believe that having a two-pronged strategy can protect us in a variety
of market conditions. From time to time, one leg of the strategy might
underperform the market, but it would be unusual for both the value and growth
styles to underperform the market at the same time for an extended period.
Generally, one of these styles leads us to solidly performing stocks, and, when
both parts of the strategy produce, the Fund as a whole can provide very strong
returns.
8 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--87.4%
- --------------------------------------------------------------------------------
Basic Materials--1.0%
- --------------------------------------------------------------------------------
Paper--1.0%
Union Camp Corp. 114,500 $ 6,912,937
- --------------------------------------------------------------------------------
Consumer Cyclicals--21.3%
- --------------------------------------------------------------------------------
Autos & Housing--5.0%
Dollar Thrifty Automotive Group, Inc.(1) 235,600 4,446,950
- --------------------------------------------------------------------------------
Federal-Mogul Corp. 138,200 8,939,812
- --------------------------------------------------------------------------------
Ford Motor Co. 73,100 3,348,894
- --------------------------------------------------------------------------------
Lear Corp.(1) 116,500 6,240,031
- --------------------------------------------------------------------------------
Republic Industries, Inc.(1) 155,400 4,322,062
- --------------------------------------------------------------------------------
Whirlpool Corp. 118,300 8,517,600
-----------
35,815,349
- --------------------------------------------------------------------------------
Leisure & Entertainment--5.8%
Alaska Air Group, Inc.(1) 97,600 5,477,800
- --------------------------------------------------------------------------------
America West Holdings Corp., Cl. B(1) 236,600 7,157,150
- --------------------------------------------------------------------------------
AMR Corp.(1) 73,200 11,153,850
- --------------------------------------------------------------------------------
Delta Air Lines, Inc. 36,500 4,243,125
- --------------------------------------------------------------------------------
Hasbro, Inc. 265,300 9,766,356
- --------------------------------------------------------------------------------
Outback Steakhouse, Inc.(1) 100,400 3,827,750
-----------
41,626,031
- --------------------------------------------------------------------------------
Retail: General--8.3%
Dayton Hudson Corp. 102,200 8,923,337
- --------------------------------------------------------------------------------
Federated Department Stores, Inc.(1) 184,300 9,065,256
- --------------------------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 188,800 7,056,400
- --------------------------------------------------------------------------------
K Mart Corp.(1) 222,000 3,871,125
- --------------------------------------------------------------------------------
Liz Claiborne, Inc. 89,100 4,382,606
- --------------------------------------------------------------------------------
Nordstrom, Inc. 59,900 3,919,706
- --------------------------------------------------------------------------------
Penney (J.C.) Co., Inc. 170,900 12,144,581
- --------------------------------------------------------------------------------
Sears Roebuck & Co. 172,600 10,237,337
-----------
59,600,348
- --------------------------------------------------------------------------------
Retail: Specialty--2.2%
Brylane, Inc.(1) 61,600 3,619,000
- --------------------------------------------------------------------------------
Inacom Corp.(1) 141,600 5,071,050
- --------------------------------------------------------------------------------
Payless ShoeSource, Inc.(1) 99,500 7,114,250
-----------
15,804,300
9 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Consumer Non-Cyclicals--8.8%
- --------------------------------------------------------------------------------
Food--2.1%
Kroger Co.(1) 214,000 $ 8,961,250
- --------------------------------------------------------------------------------
Safeway, Inc.(1) 156,800 5,997,600
-----------
14,958,850
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--2.2%
Tenet Healthcare Corp.(1) 305,470 11,436,033
- --------------------------------------------------------------------------------
WellPoint Health Networks, Inc.(1) 55,600 4,010,150
-----------
15,446,183
- --------------------------------------------------------------------------------
Household Goods--4.5%
Dial Corp. (The) 265,900 6,481,312
- --------------------------------------------------------------------------------
Fort James Corp. 319,162 15,838,414
- --------------------------------------------------------------------------------
Premark International, Inc. 305,100 10,182,713
-----------
32,502,439
- --------------------------------------------------------------------------------
Energy--4.2%
- --------------------------------------------------------------------------------
Energy Services & Producers--2.4%
Diamond Offshore Drilling, Inc. 194,000 9,821,250
- --------------------------------------------------------------------------------
Global Marine, Inc.(1) 122,100 2,876,981
- --------------------------------------------------------------------------------
Tidewater, Inc. 112,900 4,473,663
-----------
17,171,894
- --------------------------------------------------------------------------------
Oil-Integrated--1.8%
Exxon Corp. 98,500 7,184,344
- --------------------------------------------------------------------------------
Mobil Corp. 70,100 5,537,900
-----------
12,722,244
- --------------------------------------------------------------------------------
Financial--18.9%
- --------------------------------------------------------------------------------
Banks--5.5%
Bank of New York Co., Inc. (The) 55,000 3,248,438
- --------------------------------------------------------------------------------
BankAmerica Corp. 46,700 3,969,500
- --------------------------------------------------------------------------------
BankBoston Corp. 121,600 13,125,200
- --------------------------------------------------------------------------------
Comerica, Inc. 25,250 1,690,172
- --------------------------------------------------------------------------------
First Union Corp. 60,400 3,646,650
- --------------------------------------------------------------------------------
NationsBank Corp. 61,600 4,666,200
- --------------------------------------------------------------------------------
Norwest Corp. 43,000 1,706,563
- --------------------------------------------------------------------------------
Wells Fargo & Co. 19,000 7,001,500
-----------
39,054,223
10 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Diversified Financial--2.9%
American Express Co. 25,000 $ 2,550,000
- --------------------------------------------------------------------------------
Money Store, Inc. (The) 63,900 2,100,713
- --------------------------------------------------------------------------------
Morgan Stanley, Dean Witter & Co. 90,200 7,114,525
- --------------------------------------------------------------------------------
Travelers Group, Inc. 148,850 9,107,759
-----------
20,872,997
- --------------------------------------------------------------------------------
Insurance--10.5%
Allstate Corp. 110,200 10,606,750
- --------------------------------------------------------------------------------
Chubb Corp. 128,300 10,127,681
- --------------------------------------------------------------------------------
Conseco, Inc. 272,500 13,522,813
- --------------------------------------------------------------------------------
Equitable Cos., Inc. 181,900 11,164,113
- --------------------------------------------------------------------------------
MBIA, Inc. 37,000 2,761,125
- --------------------------------------------------------------------------------
St. Paul Cos., Inc. 94,500 8,008,875
- --------------------------------------------------------------------------------
Torchmark Corp. 174,100 7,758,331
- --------------------------------------------------------------------------------
Travelers Property Casualty Corp., Cl. A 259,700 10,907,400
-----------
74,857,088
- --------------------------------------------------------------------------------
Industrial--12.0%
- --------------------------------------------------------------------------------
Industrial Materials--1.0%
USG Corp.(1) 132,200 6,791,775
- --------------------------------------------------------------------------------
Industrial Services--1.1%
Viad Corp. 302,200 7,800,538
- --------------------------------------------------------------------------------
Manufacturing--9.9%
AGCO Corp. 176,700 4,726,725
- --------------------------------------------------------------------------------
Case Corp. 99,200 6,305,400
- --------------------------------------------------------------------------------
Deere & Co. 136,200 7,959,188
- --------------------------------------------------------------------------------
Dover Corp. 83,000 3,278,500
- --------------------------------------------------------------------------------
Ingersoll-Rand Co. 196,700 9,060,494
- --------------------------------------------------------------------------------
PACCAR, Inc. 128,600 7,635,625
- --------------------------------------------------------------------------------
Parker-Hannifin Corp. 151,200 6,747,300
- --------------------------------------------------------------------------------
Textron, Inc. 180,900 14,155,425
- --------------------------------------------------------------------------------
U.S. Industries, Inc. 411,600 11,164,650
-----------
71,033,307
- --------------------------------------------------------------------------------
Technology--10.5%
- --------------------------------------------------------------------------------
Aerospace/Defense--2.2%
General Dynamics Corp. 168,800 7,131,800
- --------------------------------------------------------------------------------
Lockheed Martin Corp. 80,071 8,917,908
-----------
16,049,708
11 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments April 30, 1998 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Computer Hardware--7.8%
Gateway 2000, Inc.(1) 89,500 $ 5,252,531
- --------------------------------------------------------------------------------
International Business Machines Corp. 42,600 4,936,275
- --------------------------------------------------------------------------------
Lexmark International Group, Inc., Cl. A(1) 107,000 6,192,625
- --------------------------------------------------------------------------------
Storage Technology Corp. (New)(1) 236,400 19,961,025
- --------------------------------------------------------------------------------
Xerox Corp. 172,100 19,533,350
------------
55,875,806
- --------------------------------------------------------------------------------
Computer Software/Services--0.2%
Symantec Corp.(1) 60,200 1,745,800
- --------------------------------------------------------------------------------
Electronics--0.3%
SCI Systems, Inc.(1) 56,400 2,322,975
- --------------------------------------------------------------------------------
Utilities--10.7%
- --------------------------------------------------------------------------------
Electric Utilities--2.2%
Edison International 213,500 6,364,969
- --------------------------------------------------------------------------------
FPL Group, Inc. 150,000 9,309,375
------------
15,674,344
- --------------------------------------------------------------------------------
Gas Utilities--1.3%
Columbia Energy Group 118,500 9,628,125
- --------------------------------------------------------------------------------
Telephone Utilities--7.2%
Ameritech Corp. 189,900 8,082,619
- --------------------------------------------------------------------------------
AT&T Corp. 246,500 14,805,406
- --------------------------------------------------------------------------------
Bell Atlantic Corp. 104,900 9,814,706
- --------------------------------------------------------------------------------
Century Telephone Enterprises, Inc. 59,100 2,515,444
- --------------------------------------------------------------------------------
Frontier Corp. 126,400 3,784,100
- --------------------------------------------------------------------------------
U S West Communications Group 243,000 12,818,250
------------
51,820,525
------------
Total Common Stocks (Cost $506,432,383) 626,087,786
12 Oppenheimer Disciplined Value Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
==============================================================================================
Short-Term Notes--7.9%(2)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage Corp.:
5.42%, 5/13/98-5/18/98 $30,000,000 $ 29,930,745
5.43%, 5/7/98 14,800,000 14,786,606
5.44%, 5/13/98 12,000,000 11,978,240
------------
Total Short-Term Notes (Cost $56,695,591) 56,695,591
==============================================================================================
Repurchase Agreements--4.4%
- ----------------------------------------------------------------------------------------------
Repurchase agreement with Zion First National Bank, 5.52%,
dated 4/30/98, to be repurchased at $31,404,815 on 5/1/98,
collateralized by U.S. Treasury Nts., 7.25%, 8/15/07, with a
value of $30,692,244, and U.S. Treasury Bills maturing 10/8/98,
with a value of $1,379,129 (Cost $31,400,000) 31,400,000 31,400,000
- ----------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $594,527,974) 99.7% 714,183,377
- ----------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.3 2,379,319
------------ ------------
Net Assets 100.0% $716,562,696
============ ============
</TABLE>
(1). Non-income producing security.
(2). Short-term notes are generally traded on a discount basis; the interest
rate is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
13 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<S> <C>
Assets
Investments, at value (cost $594,527,974)--see accompanying statement $714,183,377
- ------------------------------------------------------------------------------------
Cash 199,511
- ------------------------------------------------------------------------------------
Receivables:
Investments sold 22,955,452
Shares of capital stock sold 1,385,619
Interest and dividends 831,663
- ------------------------------------------------------------------------------------
Other 8,468
------------
Total assets 739,564,090
====================================================================================
Liabilities Payables and other liabilities:
Investments purchased 21,186,721
Shares of capital stock redeemed 1,378,826
Distribution and service plan fees 121,801
Directors' fees--Note 1 64,487
Transfer and shareholder servicing agent fees 36,745
Other 212,814
------------
Total liabilities 23,001,394
====================================================================================
Net Assets $716,562,696
============
====================================================================================
Composition of Net Assets
Par value of shares of capital stock $30,668
- ------------------------------------------------------------------------------------
Additional paid-in capital 543,184,342
- ------------------------------------------------------------------------------------
Undistributed net investment income 2,658,796
- ------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 51,033,487
- ------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 119,655,403
------------
Net assets $716,562,696
============
</TABLE>
14 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $456,997,498 and 19,554,617 shares of capital stock outstanding) $23.37
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $24.80
- --------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $116,998,479 and 5,007,567 shares of capital stock outstanding) $23.36
- --------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $16,469,050 and 712,651 shares of capital stock outstanding) $23.11
- --------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $126,097,669 and 5,393,452 shares of capital stock outstanding) $23.38
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended April 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<S> <C>
Investment Income
Dividends $ 3,993,081
- ----------------------------------------------------------------------------------
Interest 2,051,838
-----------
Total income 6,044,919
==================================================================================
Expenses
Management fees--Note 4 1,684,175
- ----------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 507,220
Class B 483,019
Class C 63,108
- ----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 244,446
Class B 57,533
Class C 7,609
Class Y 32,642
- ----------------------------------------------------------------------------------
Shareholder reports 94,027
- ----------------------------------------------------------------------------------
Registration and filing fees:
Class A 39,027
Class B 12,589
Class C 2,288
Class Y 13,342
- ----------------------------------------------------------------------------------
Custodian fees and expenses 27,809
- ----------------------------------------------------------------------------------
Legal and auditing fees 22,995
- ----------------------------------------------------------------------------------
Directors' fees and expenses--Note 1 13,794
- ----------------------------------------------------------------------------------
Accounting service fees--Note 4 7,500
- ----------------------------------------------------------------------------------
Insurance expenses 4,262
- ----------------------------------------------------------------------------------
Other 6,925
-----------
Total expenses 3,324,310
==================================================================================
Net Investment Income 2,720,609
==================================================================================
Realized and Unrealized Gain
Net realized gain on investments 51,109,577
- ----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 30,948,195
-----------
Net realized and unrealized gain 82,057,772
==================================================================================
Net Increase in Net Assets Resulting from Operations $84,778,381
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31,
(Unaudited) 1997
===============================================================================================
<S> <C> <C>
Operations
Net investment income $ 2,720,609 $ 3,074,306
- -----------------------------------------------------------------------------------------------
Net realized gain 51,109,577 67,704,492
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 30,948,195 (16,812,534)
------------ ------------
Net increase in net assets resulting from operations 84,778,381 53,966,264
===============================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (2,052,925) (641,547)
Class B (205,525) (12,589)
Class C (15,289) (1,655)
Class Y (722,961) (3)
- -----------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (44,818,205) (12,873,125)
Class B (10,406,714) (496,006)
Class C (1,243,556) (63,782)
Class Y (11,174,826) (69)
===============================================================================================
Capital Stock Transactions
Net increase in net assets resulting from
capital stock transactions--Note 2:
Class A 76,721,784 164,714,499
Class B 31,476,625 75,670,149
Class C 5,785,544 8,998,996
Class Y 32,103,371 79,722,352
===============================================================================================
Net Assets
Total increase 160,225,704 368,983,484
- -----------------------------------------------------------------------------------------------
Beginning of period 556,336,992 187,353,508
------------ ------------
End of period (including undistributed net investment
income of $2,658,796 and $2,934,887, respectively) $716,562,696 $556,336,992
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Six Months
Ended
April 30,
1998 Year Ended October 31,
(Unaudited) 1997 1996(4)
==================================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $23.31 $19.65 $17.84
- ------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .09 .23(5) .15
Net realized and unrealized gain (loss) 2.85 4.91(5) 1.88
------ ------ ------
Total income (loss) from investment operations 2.94 5.14 2.03
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.12) (.07) (.10)
Distributions from net realized gain (2.76) (1.41) (.12)
------ ------ ------
Total dividends and distributions to shareholders (2.88) (1.48) (.22)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.37 $23.31 $19.65
====== ====== ======
==================================================================================================================
Total Return, at Net Asset Value(6) 14.27% 27.60% 11.41%
==================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $456,997 $371,810 $180,784
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $409,612 $234,314 $135,940
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.96%(7) 1.05% 1.01%(7)
Expenses 0.99%(7) 1.07% 1.13%(7)
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 53.9% 103.1% 73.9%
Average brokerage commission rate(9) $0.0700 $0.0700 $0.0697
</TABLE>
(1). For the period from December 16, 1996 (inception of offering) to October
31, 1997.
(2). For the period from May 1, 1996 (inception of offering) to October 31,
1996.
(3). For the period from October 2, 1995 (inception of offering) to December 31,
1995.
(4). For the ten months ended October 31, 1996. The Fund changed its fiscal year
end from December 31 to October 31. On March 18, 1996, OppenheimerFunds, Inc.
became the investment advisor to the Fund.
(5). Per share amounts calculated based on the average shares outstanding during
the period.
18 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-------------------------------------------------------
Year Ended December 31,
1995 1994 1993
===========================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $14.20 $15.14 $14.20
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .25 .22 .30
Net realized and unrealized gain (loss) 4.88 (.32) 2.64
------ ------ ------
Total income (loss) from investment operations 5.13 (.10) 2.94
- -----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.25) (.22) (.30)
Distributions from net realized gain (1.24) (.62) (1.70)
------ ------ ------
Total dividends and distributions to shareholders (1.49) (.84) (2.00)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $17.84 $14.20 $15.14
====== ====== ======
===========================================================================================================
Total Return, at Net Asset Value(6) 36.40% (0.65)% 20.91%
===========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $118,118 $78,390 $64,495
- -----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $98,063 $71,956 $54,682
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.53% 1.50% 1.95%
Expenses 1.22% 1.02% 1.05%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 69.7% 98.5% 99.7%
Average brokerage commission rate(9) -- -- --
</TABLE>
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------------------------------
Six Months
Ended Period
April 30, Ended
1998 Year Ended October 31, December 31,
(Unaudited) 1997 1996(4) 1995(3)
=================================================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $23.32 $19.77 $18.08 $17.83
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .09(5) .05 .02
Net realized and unrealized gain (loss) 2.83 4.91(5) 1.83 1.40
------ ------ ------ ------
Total income (loss) from investment operations 2.85 5.00 1.88 1.42
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.05) (.04) (.07) (.02)
Distributions from net realized gain (2.76) (1.41) (.12) (1.15)
------ ------ ------ ------
Total dividends and distributions to shareholders (2.81) (1.45) (.19) (1.17)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.36 $23.32 $19.77 $18.08
====== ====== ====== ======
=============================================================================================================================
Total Return, at Net Asset Value(6) 13.79% 26.61% 10.43% 8.04%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $116,998 $83,291 $5,854 $717
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $97,591 $30,019 $2,903 $306
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.20%(7) 0.22% 0.22%(7) 0.21%(7)
Expenses 1.74%(7) 1.84% 1.88%(7) 1.97%(7)
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 53.9% 103.1% 73.9% 69.7%
Average brokerage commission rate(9) $0.0700 $0.0700 $0.0697 --
</TABLE>
(6). Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(7). Annualized.
19 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
-------------------------------------------------------
Six Months
Ended
April 30,
1998 Year Ended October 31,
(Unaudited) 1997 1996(2)
================================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $23.07 $19.57 $18.79
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .02 .10(5) .06
Net realized and unrealized gain (loss) 2.81 4.85(5) .94
------ ------ ------
Total income (loss) from investment
operations 2.83 4.95 1.00
- ----------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.03) (.04) (.10)
Distributions from net realized gain (2.76) (1.41) (.12)
------ ------ ------
Total dividends and distributions to
shareholders (2.79) (1.45) (.22)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $23.11 $23.07 $19.57
====== ====== ======
================================================================================================================
Total Return, at Net Asset Value(6) 13.83% 26.64% 5.35%
================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $16,469 $10,243 $715
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $12,761 $4,477 $342
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.18%(7) 0.17% 0.04%(7)
Expenses 1.75%(7) 1.86% 1.87%(7)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 53.9% 103.1% 73.9%
Average brokerage commission rate(9) $0.0700 $0.0700 $0.0697
</TABLE>
<TABLE>
<CAPTION>
Class Y
-----------------------------------
Six Months
Ended Period
April 30, Ended
1998 October 31,
(Unaudited) 1997(1)
======================================================================================
<S> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $23.34 $20.31
- ----------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .12 .31(5)
Net realized and unrealized gain (loss) 2.85 4.20(5)
------ ------
Total income (loss) from investment
operations 2.97 4.51
- ----------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.17) (.07)
Distributions from net realized gain (2.76) (1.41)
------ ------
Total dividends and distributions to
shareholders (2.93) (1.48)
- ----------------------------------------------------------------------------------
Net asset value, end of period $23.38 $23.34
====== ======
==================================================================================
Total Return, at Net Asset Value(6) 14.43% 23.62%
==================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $126,098 $90,994
- ----------------------------------------------------------------------------------
Average net assets (in thousands) $107,873 $51,775
- ----------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.25%(7) 1.21%(7)
Expenses 0.68%(7) 0.78%(7)
- ----------------------------------------------------------------------------------
Portfolio turnover rate(8) 53.9% 103.1%
Average brokerage commission rate(9) $0.0700 $0.0700
</TABLE>
(8). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended April 30, 1998 were $353,603,781 and $299,307,706, respectively.
(9). Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
20 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Disciplined Value Fund (the Fund), a series of Oppenheimer Series
Fund, Inc. (the Company), is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
Fund's investment objective is to seek long-term growth of capital by investing
primarily in common stocks with low price-earnings ratios and
better-than-anticipated earnings. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B, Class C
and Class Y shares. Class A shares are sold with a front-end sales charge. Class
B and Class C shares may be subject to a contingent deferred sales charge. All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own expenses directly attributable to
that class and exclusive voting rights with respect to matters affecting that
class. Classes A, B and C have separate distribution and/or service plans. No
such plan has been adopted for Class Y shares. Class B shares will automatically
convert to Class A shares six years after the date of purchase. The following is
a summary of significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Directors. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Directors to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
21 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Directors' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent directors. Benefits are based on years of service and
fees paid to each director during the years of service. During the six months
ended April 30, 1998, a provision of $4,244 was made for the Fund's projected
benefit obligations and payments of $3,017 were made to retired directors,
resulting in an accumulated liability of $63,676 at April 30, 1998.
The Board of Directors has adopted a Deferred Compensation plan
for independent Directors that enables Directors to elect to defer receipt of
all or a portion of annual fees 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 Director in shares of one or more
Oppenheimer funds selected by the Director. The amount paid to the Director
under the plan will be determined based upon the performance of the selected
funds. Deferral of Directors' 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 income per share.
- --------------------------------------------------------------------------------
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 carry overs, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. 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.
22 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Capital Stock
The Fund has authorized 500 million of $0.001 par value shares of capital stock.
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended April 30, 1998 Year Ended October 31, 1997(1)
------------------------------- ------------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 3,010,713 $67,031,053 3,692,585 $80,366,467
Dividends and distributions
reinvested 1,943,823 40,173,437 682,565 13,378,298
Issued in connection with the
acquisition of Oppenheimer
Value Stock Fund--Note 6 -- -- 7,652,373 178,988,994
Redeemed (1,347,981) (30,482,706) (5,280,662) (108,019,260)
------------- ------------- ------------- -------------
Net increase 3,606,555 $76,721,784 6,746,861 $164,714,499
============= ============= ============= =============
- -----------------------------------------------------------------------------------------------------
Class B:
Sold 1,379,492 $31,130,910 1,144,402 $25,787,163
Dividends and distributions
reinvested 487,886 10,102,650 25,026 494,015
Issued in connection with the
acquisition of Oppenheimer
Value Stock Fund--Note 6 -- -- 2,351,076 55,109,219
Redeemed (432,135) (9,756,935) (244,280) (5,720,248)
------------- ------------- ------------- -------------
Net increase 1,435,243 $31,476,625 3,276,224 $75,670,149
============= ============= ============= =============
- -----------------------------------------------------------------------------------------------------
Class C:
Sold 302,464 $6,671,506 289,313 $6,258,500
Dividends and distributions
reinvested 59,153 1,212,058 3,239 63,228
Issued in connection with the
acquisition of Oppenheimer
Value Stock Fund--Note 6 -- -- 150,017 3,478,897
Redeemed (92,984) (2,098,020) (35,084) (801,629)
------------- ------------- ------------- -------------
Net increase 268,633 $5,785,544 407,485 $8,998,996
============= ============= ============= =============
- -----------------------------------------------------------------------------------------------------
Class Y:
Sold 1,172,206 $25,961,356 4,130,366 $85,062,741
Dividends and distributions
reinvested 575,974 11,897,787 -- --
Redeemed (253,433) (5,755,772) (231,661) (5,340,389)
------------- ------------- ------------- -------------
Net increase 1,494,747 $32,103,371 3,898,705 $79,722,352
============= ============= ============= =============
</TABLE>
(1). For the year ended October 31, 1997 for Class A, B and C shares and for the
period from December 16, 1996 (inception of offering) to October 31, 1997 for
Class Y shares.
23 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
At April 30, 1998, net unrealized appreciation on investments of $119,655,403
was composed of gross appreciation of $124,425,033, and gross depreciation of
$4,769,630.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.625% of the first
$300 million of average annual net assets, 0.50% of the next $100 million and
0.45% of average annual net assets in excess of $400 million. The manager acts
as the accounting agent for the Fund at an annual fee of $15,000, plus
out-of-pocket costs and expenses reasonably incurred.
For the six months ended April 30, 1998, commissions (sales
charges paid by investors) on sales of Class A shares totaled $953,615, of which
$439,714 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by an affiliated broker/dealer.
Sales charges advanced to broker/dealers by OFDI on sales of the Fund's Class B
and Class C shares totaled $994,388 and $56,021, respectively, of which $241,874
and $3,743, respectively, was paid to an affiliated broker/dealer. During the
six months ended April 30, 1998, OFDI received contingent deferred sales charges
of $73,486 and $7,161, respectively, upon redemption of Class B and Class C
shares as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
registered investment companies. OFS's total costs of providing such services
are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in connection with the
personal service and maintenance of shareholder accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may not exceed
0.25% of the average annual net assets of Class A shares of the Fund. OFDI uses
the service fee to reimburse brokers, dealers, banks and other financial
institutions quarterly for providing personal service and maintenance of
accounts of their customers that hold Class A shares. During the six months
ended April 30, 1998, OFDI paid $311,407 to an affiliated broker/dealer as
reimbursement for Class A personal service and maintenance expenses.
24 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge 0.75% per year for its services rendered in
distributing Class B and Class C shares. OFDI also receives a service fee of
0.25% per year to compensate dealers for providing personal services for
accounts that hold Class B and Class C shares. Each fee is computed on the
average annual net assets of Class B or Class C shares, determined as of the
close of each regular business day. During the six months ended April 30, 1998,
OFDI paid $17,942 and $4,326, respectively, to an affiliated broker/dealer as
compensation for Class B and Class C personal service and maintenance expenses
and retained $408,103 and $45,033, respectively, as compensation for Class B and
Class C sales commissions and service fee advances, as well as financing costs.
If either Plan is terminated by the Fund, the Board of Directors may allow the
Fund to continue payments of the asset-based sales charge to OFDI for
distributing shares before the Plan was terminated. As of April 30, 1998, OFDI
had incurred excess distribution and servicing costs of $2,648,189 for Class B
and $174,069 for Class C.
================================================================================
5. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months
ended April 30, 1998.
================================================================================
6. Acquisition of Oppenheimer Value Stock Fund
On July 25, 1997, the Fund acquired all the net assets of Oppenheimer Value
Stock Fund, pursuant to an agreement and plan of reorganization approved by the
Oppenheimer Value Stock Fund shareholders on July 21, 1997. The Fund issued
7,652,373, 2,351,076 and 150,017 shares of common stock for Class A,
Class B and Class C, respectively, valued at $178,988,994, $55,109,219 and
$3,478,897, in exchange for the net assets, resulting in combined Class A net
assets of $356,598,856, Class B net assets of $74,391,341 and Class C net assets
of $8,707,171 on July 25, 1997. The net assets acquired included net unrealized
appreciation of $79,130,574. The exchange qualified as a tax-free reorganization
for federal income tax purposes.
25 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Disciplined Value Fund
- --------------------------------------------------------------------------------
A series of Oppenheimer Series Fund, Inc.
===============================================================================
Officers and Leon Levy, Chairman of the Board of Directors
Directors Donald W. Spiro, Vice Chairman of the Board of Directors
Bridget A. Macaskill, Director and President
Robert G. Galli, Director
Benjamin Lipstein, Director
Elizabeth B. Moynihan, Director
Kenneth A. Randall, Director
Edward V. Regan, Director
Russell S. Reynolds, Jr., Director
Pauline Trigere, Director
Clayton K. Yeutter, Director
Peter M. Antos, Vice President
Robert C. Doll, Jr., Vice President
Stephen F. Libera, Vice President
Michael C. Strathearn, Vice President
Kenneth B. White, Vice President
Arthur J. Zimmer, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG Peat Marwick LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken
from the records of the Fund without examination of the
independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Disciplined Value Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
Disciplined Value Fund. For material information
concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any bank,
and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the
principal amount invested.
26 Oppenheimer Disciplined Value Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
===============================================================================================
Real Asset Funds
- -----------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
===============================================================================================
Global Stock Funds
- -----------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
===============================================================================================
Stock Funds
- -----------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
===============================================================================================
Stock & Bond Funds
- -----------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
===============================================================================================
Taxable Bond Funds
- -----------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
===============================================================================================
Municipal Funds
- -----------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
===============================================================================================
Money Market Funds(4)
- -----------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
(1). On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
(2). On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
(3). Available only to investors 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 seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
27 Oppenheimer Disciplined Value Fund
<PAGE>
Internet
24-hr access to account
information. Online
transactions now available
- ------------------------------
www.oppenheimerfunds.com
- ------------------------------
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
- ------------------------------
1-800-525-7048
- ------------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- ------------------------------
1-800-852-8457
- ------------------------------
PhoneLink
24-hr automated information
and automated transactions
- ------------------------------
1-800-533-3310
- ------------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- ------------------------------
1-800-843-4461
- ------------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- ------------------------------
1-800-835-3104
- ------------------------------
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[Logo] OppenheimerFunds(SM)
Distributor, Inc.
RS0375.001.0498 June 29, 1998
