<PAGE>
===============================
Semiannual Report June 30, 1998
===============================
OPPENHEIMER
Bond Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 Fund Performance
6 An Interview with the Fund's Manager
11 Statement of Investments
28 Statement of Assets and Liabilities
30 Statement of Operations
31 Statements of Changes in Net Assets
32 Financial Highlights
35 Notes to Financial Statements
43 Officers and Trustees
44 Information and Services
Report highlights
- --------------------------------------------------------------------------------
. We found attractive yields in the corporate and commercial mortgage-backed
sectors of the bond market.
. The aftereffects of the Asian crisis could slow the U.S. economy and
prevent the Federal Reserve from raising interest rates.
<TABLE>
<CAPTION>
================================
Cumulative Total Returns
================================
For the 6-Month Period
Ended 6/30/98
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
================================
<S> <C>
3.81% (1.12)%
================================
<CAPTION>
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
================================
<S> <C>
3.42% (1.58)%
================================
<CAPTION>
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
================================
<S> <C>
3.42% 2.42%
================================
<CAPTION>
Class Y
Without With
Sales Chg.(1) Sales Chg.(2)
================================
<S> <C>
2.54% 2.54%
================================
</TABLE>
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
1. Includes changes in net asset value per share without deducting any sales
charges. This performance is not annualized.
2. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%
(1-year) and 1% (since inception on 5/1/93). Class C return includes the
applicable contingent deferred sales charge of 1%. Class Y shares were first
publicly offered on 4/27/98 and are not available for sale to individual
shareholders. An explanation of the different performance calculations is in the
Fund's prospectus. Class B and C shares are subject to an annual 0.75%
asset-based sales charge.
2 Oppenheimer Bond Fund
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer Bond Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer Bond Fund
Dear shareholder,
- --------------------------------------------------------------------------------
As we move further into 1998, we remain impressed by the strength of the U.S.
economy, despite the volatility in the world's financial markets. While we've
seen a decline in stock prices this summer, taking a wider perspective of the
markets reveals that, over the long term, U.S. and many world markets have
continued to serve investors well.
At OppenheimerFunds, we are pleased to help our shareholders seek the
rewards of rising markets, but we also recognize that increasing levels of
return cannot last forever. In fact, we've already begun to see signs of change.
Because no one can predict exactly how the markets will react tomorrow or the
next day, we feel it is prudent to continually identify, evaluate and manage the
risks that may affect our fund shareholders.
One of the leading risks facing investors today is rooted in the fact that
stock valuations remain at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these circumstances, we believe,
regardless of daily fluctuations in the markets, it is unlikely that stocks will
sustain the unprecedented growth rate of the past three years. However, we also
believe that any market corrections we may see would be only temporary pauses on
the way to potential long-term gains.
We are also examining the potential economic effects of the "millennium
problem" that will render many computer systems unable to recognize the year
2000 when it arrives. Solving this problem may require some 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 today's
uncertain markets 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/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 22, 1998
3 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===================================
Avg Annual Total Returns
===================================
For the Periods Ended 6/30/98(1)
Class A
Since
1 year 5 year Inception
===================================
<S> <C> <C>
5.02% 5.65% 7.93%
===================================
<CAPTION>
Class B
Since
1 year 5 year Inception
===================================
<S> <C> <C>
4.42% 5.56% 5.84%
===================================
<CAPTION>
Class C
Since
1 year 5 year Inception
===================================
<S> <C> <C>
8.41% N/A 6.95%
===================================
<CAPTION>
Class Y
Since
1 year 5 year Inception
===================================
<S> <C> <C>
N/A N/A 2.54%
===================================
<CAPTION>
===================================
Cumulative Total Return
===================================
For the Period Ended 6/30/98(1)
Class A
5 year
===================================
31.60% $13,160(3)
===================================
</TABLE>
Performance update
- --------------------------------------------------------------------------------
Oppenheimer Bond Fund performed well over the past six months, primarily because
of our allocation of assets to quality securities that provide relatively high
yields, including corporate bonds and commercial mortgage-backed securities. The
Fund's Class A shares also ranked in the top half of all A-rated corporate debt
funds for the six-month period ended 6/30/98, as measured by Lipper Analytical
Services, Inc./2/
Growth of $10,000
Over five years(3)
(without sales charges)
[THE FOLLOWING TABLE WAS REPRESENTED BY A MOUNTAIN CHART IN THE
PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Oppenheimer Bond Lehman Brothers
Date Fund Class A shares Corporate Bond Index
- ---- ------------------- --------------------
<S> <C> <C>
6/30/93 $ 0 $ 0
$10,000 $10,000
$10,308 $10,348
$10,252 $10,332
94 $ 9,927 $ 9,968
$ 9,788 $ 9,811
$ 9,833 $ 9,883
$ 9,855 $ 9,927
95 $10,344 $10,514
$10,989 $11,296
$11,091 $11,563
$11,524 $12,134
96 $11,372 $11,821
$11,428 $11,873
$11,685 $12,110
$12,085 $12,532
97 $12,067 $12,406
$12,532 $12,917
$12,979 $13,423
$13,309 $13,814
6/30/98 $13,536 $14,025
$13,817 $14,387
</TABLE>
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 4/15/88. The Fund's maximum
sales charge for Class A shares was lower prior to 3/29/91, so actual
performance may have been higher. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 1% (since inception on
5/1/93). Class C returns for the one-year result include the contingent deferred
sales charge of 1%. Class C shares have an inception date of 7/11/95. Class Y
shares were first publicly offered on 4/27/98 and are not available for sale to
individual shareholders. An explanation of the different performance
calculations is in the Fund's prospectus. Class B and C shares are subject to an
annual 0.75% asset-based sales charge.
2. Source: Lipper Analytical Services, Inc., 6/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 65 of 150 (6-months) and 58 of
143 (1-year) among all A-rated corporate debt funds for the period ended
6/30/98.
4 Oppenheimer Bond Fund
<PAGE>
Credit Allocation(4)
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<S> <C>
Treasury/Agency 39.6%
AAA/AA 12.7
A/BBB 31.0
BB/B 16.0
CCC/C 0.7
</TABLE>
Portfolio review
- --------------------------------------------------------------------------------
Oppenheimer Bond Fund is for investors looking for solid income potential from a
fund emphasizing quality securities.
What We Look For
. Sectors of the market that offer relative value.
. Primarily investment-grade securities that help reduce credit risk.(4)
. High income potential from different types of government and corporate
securities.
<TABLE>
<CAPTION>
Corporate Bonds & Notes--Top 10 Sectors
(Percentage of net assets)(5)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Financial 10.5% Media/Entertainment:
Wireless Communications 1.9%
- --------------------------------------------------------------------------------
Energy 5.2 Manufacturing 1.9
- --------------------------------------------------------------------------------
Transportation 3.7 Retail 1.6
- --------------------------------------------------------------------------------
Utility 3.5 Gaming/Leisure 1.3
- --------------------------------------------------------------------------------
Aerospace 2.3 Service 1.2
- --------------------------------------------------------------------------------
</TABLE>
3. Results of a hypothetical $10,000 investment in Class A shares on June 30,
1993. The Lehman Brothers Corporate Bond Index includes a broad range of
publicly issued nonconvertible investment-grade corporate debt of U.S. issuers,
widely recognized as a measure of the U.S. fixed-rate corporate bond market. It
is an unmanaged index including reinvestment of income, and cannot be purchased
directly by investors.
4. Pie chart is based on total market value of investments as of June 30,
1998 and is subject to change. Average credit quality and ratings allocations
include rated securities and those not rated by a national rating organization
(currently 6.6% of total investments) but to which ratings given above have been
assigned by the Manager for internal purposes as being comparable, in the
Manager's judgment, to securities rated by a rating agency in the same category.
Under normal market conditions, the Fund invests at least 65% of its assets in
investment grade securities. Securities rated below investment grade (up to 35%
of Fund's assets) carry a greater risk of default. While the Fund has generally
invested under 10% of its assets in foreign securities, which are subject to
exchange rate and political uncertainties, it is not restricted to any amount by
prospectus.
5. Portfolio is subject to change. Percentages are as of June 30, 1998 and are
based on net assets.
5 Oppenheimer Bond Fund
<PAGE>
"The various sectors of the bond market responded differently to the same
economic influences."
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How has Oppenheimer Bond Fund performed over the past
six months?
The Fund's Class A shares provided a cumulative total return, without deducting
sales charges, of 3.81% for the six-month period ended June 30, 1998.(1)
Has the U.S. economy behaved as you expected so far in 1998?
When the year began, the economy was growing strongly. Yet, inflation was not a
problem, primarily because of higher productivity of U.S. companies and intense
competition from imported goods. At the time, we thought the U.S. economy would
slow during the first half of 1998 because of the Asian financial crisis, which
began in late 1997. We anticipated that weak demand for U.S. goods and services
from Asia would cause domestic growth to slow.
That forecast has been partially true. Export growth has been quite weak
because of the Asian crisis. However, basic economic growth in the United States
has remained strong. American consumers appear to have picked up any slack
caused by weak demand from Asia. In fact, the U.S. employment rate is at its
highest levels in years, and Americans are borrowing and spending more than
previous decades on major purchases, such as cars, boats and second homes.
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 Bond Fund
<PAGE>
[PHOTO]
Portfolio Management Team (l to r)
Leslie Falconio
David Negri
(Portfolio Manager)
Gina Palmieri
Len Darling
How did the U.S. bond market respond to that economic environment?
The various sectors of the bond market responded differently to the same
economic influences. High-yield corporate bonds, generally referred to as "junk
bonds," represented the top-performing sector of the bond market over the last
six months. Although junk bonds are subject to a greater risk of default, they
were in great demand by investors looking to maximize yields in a low
interest-rate environment.
Despite some volatility early in the year, investment-grade corporate bonds
performed relatively well. A strong domestic economy held positive implications
for corporate earnings, so investors were confident regarding the credit quality
of most corporate bonds.
Returns were almost as strong in U.S. Treasuries as long-term interest
rates declined modestly. However, prices of residential mortgage-backed
securities issued by U.S. government agencies were generally lower, providing
the weakest returns in the U.S. bond market.
Commercial mortgage-backed securities, which are backed by mortgages on
commercial real estate, also provided attractive total returns. That's primarily
because the strong economy reduced the risk that commercial real estate owners
might fall behind in their mortgage payments.
7 Oppenheimer Bond Fund
<PAGE>
"Strong economic growth and low inflation helped create an especially attractive
environment for high-yield corporate bonds."
An interview with your Fund's manager
- --------------------------------------------------------------------------------
Has the Fund's composition changed significantly over the past six months?
We've made a few modest changes in our allocations among the various bond market
sectors, increasing our holdings of longer maturity U.S. Treasuries. We also
slightly increased the Fund's exposure to corporate bonds and commercial
mortgage-backed securities to capture their relatively higher yields. At the
same time, we decreased our holdings of mortgage-backed securities issued by
U.S. government agencies. We also established a small position in bank trust
preferreds, which provided attractive yields and enjoyed high credit quality
relative to many other fixed-income securities.
What industries provided attractive opportunities within the corporate bond
sector? Which industries have you avoided?
We continued to find competitive yields in corporate bonds issued by businesses
such as telecommunications, cable television and financial services companies,
which are enjoying the benefits of the strong economy. We also found attractive
opportunities in the transportation industry, particularly in railroads and
trucking.
On the other hand, we tended to avoid bonds issued by utilities and basic
industries such as steel, chemicals and mining. The outlook for utilities is
uncertain because of deregulation, and basic industries, unable to raise prices
in a low-inflation environment, have suffered most from foreign price
competition.
8 Oppenheimer Bond Fund
<PAGE>
"We believe that the economic impact of the Asian crisis is finally starting to
affect the U.S. economy..."
What's your outlook for the bond market over the rest of this year?
We think the U.S. bond market remains attractive. We believe that the Federal
Reserve Board will not tighten U.S. monetary policy because of the increasing
likelihood of an economic slowdown stemming from the recessions throughout Asia.
In fact, we believe that the economic impact of the Asian crisis is finally
starting to affect the U.S. economy, and will probably constrain economic growth
during the second half of this year.
A neutral interest-rate policy, low inflation and slowing economic growth
could set the stage for long-term interest rates to decline further, which may
be especially good for U.S. Treasury bond prices. At the same time, we would
expect healthy investor demand to support prices of corporate bonds.
Of course, we will continue to monitor the U.S. economy and bond market
carefully. Whatever the next six months bring, we intend to remain vigilant in
our efforts to deliver solid income potential from a broadly diversified
portfolio of quality securities.
9 Oppenheimer Bond Fund
<PAGE>
Financials
--------------------------------------------
10 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
Statement of Investments June 30, 1998 (Unaudited)
===============================================================================================
Face Market Value
Amount(1) See Note 1
===============================================================================================
<S> <C> <C>
Asset-Backed Securities--0.2%
- -----------------------------------------------------------------------------------------------
Dayton Hudson Credit Card Master Trust, Asset-Backed
Certificates, Series 1997-1, Cl. A, 6.25%, 8/25/05 $ 125,000 $ 126,366
- -----------------------------------------------------------------------------------------------
IROQUOIS Trust, Asset-Backed Amortizing Nts., Series 1997-2, Cl. A,
6.752%, 6/25/07(2) 175,000 176,203
- -----------------------------------------------------------------------------------------------
Olympic Automobile Receivables Trust, Automobile
Receivables-Backed Nts.:
Series 1996-A, Cl. A-4, 5.85%, 7/15/01 145,000 144,887
Series 1997-A, Cl. A-5, 6.80%, 2/15/05 150,000 153,025
-----------
Total Asset-Backed Securities (Cost $594,468) 600,481
===============================================================================================
Mortgage-Backed Obligations--44.4%
- -----------------------------------------------------------------------------------------------
Government Agency--27.8%
- -----------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--23.0%
Federal Home Loan Mortgage Corp.:
Certificates of Participation:
9%, 3/1/17 369,594 392,055
Series 17-039, 13.50%, 11/1/10 39,950 47,201
Series 17-094, 12.50%, 4/1/14 23,885 27,928
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg.
Participation Certificates:
Series 1343, Cl. LA, 8%, 8/15/22 1,600,000 1,744,161
Series 151, Cl. F, 9%, 5/15/21 1,000,000 1,067,022
Series 1711, Cl. EA, 7%, 3/15/24 200,000 207,686
Series 1712, Cl. B, 6%, 3/15/09 1,000,000 993,430
Series 1714, Cl. M, 7%, 8/15/23 1,000,000 1,018,750
Gtd. Multiclass Mtg. Participation Certificates:
6%, 3/1/09 276,774 276,393
Series 1460, Cl. H, 7%, 5/15/07 1,500,000 1,551,555
Series 1574, Cl. PD, 5.55%, 3/15/13(2) 7,210 7,195
Series 1843, Cl. VB, 7%, 4/15/03 85,000 87,470
Series 1849, Cl. VA, 6%, 12/15/10 217,017 216,677
Series G056, Cl. H, 9%, 7/20/24 2,493,000 2,725,161
Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates:
Series 1914, Cl. G, 6.50%, 2/15/24 3,000,000 2,997,180
Series 2054, Cl. TE, 6.25%, 4/15/24 850,000 852,125
Interest-Only Stripped Mtg.-Backed Security:
Series 1583, Cl. IC, 10.318%, 1/15/20(3) 500,000 57,500
Series 1661, Cl. PK, 15.625%, 11/15/06(3) 623,965 44,263
Series 177, Cl. B, (2.799)%, 7/1/26(3) 14,909,562 3,375,619
</TABLE>
11 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
Statement of Investments (Unaudited)(Continued)
===============================================================================================
Face Market Value
Amount(1) See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
FHLMC/FNMA/Sponsored (continued)
Federal National Mortgage Assn.:
11%, 7/1/16 $ 3,838,084 $ 4,382,613
6%, 12/1/03 193,517 192,834
6.50%, 4/1/26 175,043 174,741
6.50%, 7/1/28(4) 6,000,000 5,971,860
6.50%, 7/25/12(4) 10,600,000 10,659,678
7%, 1/1/09 277,222 283,355
7%, 11/1/25 316,862 321,486
7%, 2/1/09 270,200 276,178
7%, 4/1/00 80,990 81,591
7%, 7/1/12(4) 10,980,000 11,179,067
7.50%, 2/1/08 229,805 236,247
7.50%, 3/1/08 268,933 276,472
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates:
Trust 1992-34, Cl. G, 8%, 3/25/22 540,000 572,227
Trust 1993-181, Cl. C, 5.40%, 10/25/02 109,599 109,119
Trust 1993-190, Cl. Z, 5.85%, 7/25/08 196,954 196,584
Gtd. Mtg. Pass-Through Certificates, 8%, 8/1/17 401,311 410,774
Gtd. Real Estate Mtg. Investment Conduit Pass-Through
Certificates:
Trust 1991-170, Cl. E, 8%, 12/25/06 2,500,000 2,592,608
Trust 1992-162, Cl. C, 7%, 10/25/21 8,400,000 8,581,104
Trust 1995-4, Cl. PC, 8%, 5/25/25 869,210 957,381
Trust 1997-25, Cl. B, 7%, 12/18/22 510,000 518,721
Interest-Only Stripped Mtg.-Backed Security:
Trust 276, Cl. 2, 7.256%, 10/1/24(3) 10,678,590 2,808,135
Medium-Term Nts., 6.56%, 11/13/01 125,000 125,215
Principal-Only Stripped Mtg.-Backed Security:
Trust 277-C1, 17.047%, 4/1/27(5) 311,803 265,617
Trust 294, Cl. 1, 3.634%, 2/1/28(5) 1,915,475 1,510,233
----------
70,373,211
- -----------------------------------------------------------------------------------------------
GNMA/Guaranteed--4.8%
Government National Mortgage Assn.:
10%, 11/15/09 177,958 201,454
10.50%, 12/15/17-5/15/19 240,790 267,205
11%, 10/20/19 772,512 876,319
12%, 1/15/99-5/15/14 4,847 5,031
13%, 12/15/14 27,132 31,906
6%, 7/20/27 231,981 237,092
7%, 7/1/28(4) 9,780,000 9,935,893
7%, 7/15/09-7/20/25 1,193,142 1,221,901
8%, 10/15/05-10/15/06 1,234,401 1,275,074
9%, 2/15/09-6/15/09 405,058 433,997
----------
14,485,872
</TABLE>
12 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
===============================================================================================
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Private--16.6%
- -----------------------------------------------------------------------------------------------
Commercial--13.2%
Amresco Commercial Mortgage Funding I Corp.,
Multiclass Mtg. Pass-Through Certificates, Series 1997-C1,
Cl.G,7%,6/17/29(2) $ 150,000 $ 139,875
- -----------------------------------------------------------------------------------------------
Asset Securitization Corp.:
Commercial Mtg. Pass-Through Certificates:
Series 1996-D3, Cl. A5, 8.143%, 10/13/26(2)(6) 800,000 870,375
Series 1996-MD6, Cl. A5, 6.956%, 11/13/26(6) 2,000,000 2,109,375
Series 1997-D4, Cl. B1, 7.525%, 4/14/29(6) 333,000 322,334
Series 1997-D4, Cl. B2, 7.525%, 4/14/29(6) 333,000 315,309
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(6) 334,000 308,637
Series 1997-D5, Cl. A6, 7.18%, 2/14/41(6) 1,500,000 1,510,313
Series 1997-D5, Cl. B1, 6.93%, 2/14/41 2,000,000 1,827,500
Series 1997-MD7, Cl. A6, 7.97%, 1/13/30(6) 200,000 215,375
Interest-Only Stripped Mtg.-Backed Security, Series
1997-D5, Cl. PS1, 1.367%, 2/14/41(3) 6,202,412 661,914
- -----------------------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only
Corporate-Backed Pass-Through Certificates,
Series 1997-CTL1, 9.55%, 6/22/24(2)(3) 13,612,616 643,877
- -----------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 7.76%, 12/25/03(2)(6) 250,000 253,875
- -----------------------------------------------------------------------------------------------
CMC Securities Corp. I, Collateralized Mtg. Obligations,
Series 1993-D, Cl. D-3, 10%, 7/25/23(2) 420,506 441,532
- -----------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Interest-Only
Stripped Mtg.-Backed Security, Series 1996-C1,
Cl. X-2, .981%, 12/25/20(2)(3) 18,624,900 448,162
- -----------------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates, Series 1994-C1:
Cl. 2-D, 8.70%, 9/25/25(2) 1,000,000 1,033,000
Cl. 2-E, 8.70%, 9/25/25(2) 1,000,000 1,042,500
- -----------------------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust,
Commercial Mtg. Pass-Through Certificates, Series 1998-C2,
Cl. E, 6.778%, 5/18/13 2,000,000 1,893,750
- -----------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg. Obligations:
Series 1997-C2, Cl. D, 7.192%, 1/15/08 1,500,000 1,521,563
Series 1997-C2, Cl. F, 6.75%, 4/16/29 1,000,000 864,375
Series 1998-C1, Cl. E, 7.153%, 3/15/11 1,500,000 1,529,531
- -----------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg.
Pass-Through Certificates, Series 1997-CL1:
Cl. F, 6.845%, 7/13/30 1,000,000 1,023,438
Cl. F, 7.823%, 7/13/30 1,000,000 1,029,375
- -----------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through
Certificates, Series 1996-C1, Cl. D:
7.42%, 4/25/28 1,500,000 1,547,578
6.87%, 12/10/29(6) 1,000,000 1,012,500
</TABLE>
13 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================
Statement of Investments (Unaudited)(Continued)
===================================================================================================
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
Commercial (continued)
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates:
Series 1996-C1, Cl. D-1, 7.438%, 2/15/28(2)(6) $ 1,000,000 $ 1,036,875
Series 1996-C1, Cl. E, 7.438%, 2/15/28(2)(6) 1,100,000 1,072,156
Series 1997-HF1, Cl. F, 6.86%, 2/15/10(2) 225,000 210,164
Series 1997-RR, Cl. E, 7.74%, 4/30/39(2)(6) 400,000 380,750
Series 1997-RR, Cl. F, 7.74%, 4/30/39(2) 400,000 334,375
- ---------------------------------------------------------------------------------------------------
NationsCommercial Corp., NB Commercial Mtg. Pass-Through
Certificates, Series-DMC, Cl. B, 8.562%, 8/12/11(2) 3,000,000 3,219,375
- ---------------------------------------------------------------------------------------------------
PNC Mortgage Securities Corp., Commercial Mtg. Pass-Through
Certificates, Series 1995-2, Cl. A3, 6.50%, 2/25/12 74,000 74,147
- ---------------------------------------------------------------------------------------------------
Potomac Gurnee Financial Corp., Commercial Mtg.
Pass-Through Certificates, Series 1, Cl. D, 7.683%, 12/21/26(2) 1,500,000 1,548,750
- ---------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1994-C1:
Cl. C, 8%, 6/25/26 1,500,000 1,525,664
Cl. D, 6.90%, 2/25/27 2,500,000 2,498,750
- ---------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Series 1996-C1,
Cl. E, 9.184%, 1/20/06 700,000 740,250
- ---------------------------------------------------------------------------------------------------
Structured Asset Securities Corp.:
Commercial Mtg. Pass-Through Certificates,
Series 1997-LLI, Cl. D, 7.15%, 4/12/12 2,500,000 2,585,156
Multiclass Pass-Through Certificates, Series 1996-C3,
Cl. D, 8%, 6/25/30(2) 2,500,000 2,544,531
-----------
40,337,006
- ---------------------------------------------------------------------------------------------------
Manufactured Housing--0.0%
Green Tree Financial Corp., Series 1994-6, Cl. A3, 7.70%, 1/15/20 46,771 46,844
- ---------------------------------------------------------------------------------------------------
Multi-Family--1.0%
Countrywide Funding Corp., Mtg. Pass-Through Certificates,
Series 1994-10, Cl. A3, 6%, 5/25/09 250,000 249,218
- ---------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg.
Pass-Through Certificates:
Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 254,890 247,243
Series 1996-MC1, Cl. G, 7.15%, 6/15/06(7) 2,250,000 2,141,719
- ---------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates, Series 1991-M5, Cl. A, 9%, 3/25/17 254,499 254,519
-----------
2,892,699
- ---------------------------------------------------------------------------------------------------
Other--0.5%
GE Capital Mortgage Services, Inc., Series 1994-14, Cl. A1,
6.50%, 4/25/24(2) 12,960 12,912
- ---------------------------------------------------------------------------------------------------
JHM Mtg. Acceptance Corp., Collateralized Mtg. Obligation
Bonds, Series E, Cl. 5, 8.96%, 4/1/19 1,376,132 1,419,137
</TABLE>
14 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================
===============================================================================================
Face Market Value
Amount(1) See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Other (continued)
Salomon Brothers Mortgage Securities VI, Interest-Only
Stripped Mtg.-Backed Security, Series 1987-3:
Cl. A, 12.50%, 10/23/17(5) $ 129,612 $ 108,064
Cl. B, 12.50%, 10/23/17(3) 104,803 29,361
-----------
1,569,474
- -----------------------------------------------------------------------------------------------
Residential--1.9%
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through
Certificates, Series 1997-C1:
Cl. E, 7.50%, 3/1/11(2) 1,000,000 1,058,500
Cl. F, 7.50%, 6/20/13(2) 150,000 148,275
Cl. G, 7.50%, 6/20/14(2) 150,000 141,750
Cl. H, 7.50%, 8/20/14(2) 105,000 85,575
- -----------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1:
6.929%, 2/25/11(2)(6) 750,000 660,750
8.129%, 5/25/08(2)(6) 750,000 771,525
- -----------------------------------------------------------------------------------------------
GE Capital Mortgage Services, Inc., Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates, Series 1994-7,
Cl. A18, 6%, 2/25/09 198,885 191,302
- -----------------------------------------------------------------------------------------------
NationsBank Trust, Lease Pass-Through Certificates,
Series 1997A-1, 7.442%, 1/10/11(6) 500,000 526,094
- -----------------------------------------------------------------------------------------------
Residential Accredit Loans, Inc., Mtg. Asset-Backed
Pass-Through Certificates, Series 1997-QS9, Cl. 2, 6.75%, 9/25/27 175,000 174,725
- -----------------------------------------------------------------------------------------------
Residential Funding Mortgage Securities I, Inc., Mtg.
Pass-Through Certificates, Series 1993-S10, Cl. A9, 8.50%, 2/25/23 365,345 379,503
- -----------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp. III, Sub. Bonds, Series 1992-A,
Cl. 1A, 8.23%, 3/29/30(6) 328,790 333,620
- -----------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Series 1996-B,
Cl. 1, 7.132%, 4/25/26 1,951,165 1,454,228
-----------
5,925,847
-----------
Total Mortgage-Backed Obligations (Cost $133,841,767) 135,630,953
===============================================================================================
U.S. Government Obligations--16.0%
- -----------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
10.375%, 11/15/09 5,500,000 6,881,880
11.625%, 11/15/04 2,375,000 3,139,456
12.75%, 11/15/10 1,000,000 1,425,313
6%, 2/15/26 200,000 208,125
6.125%, 11/15/27 4,500,000 4,823,442
7.50%, 11/15/16 1,645,000 1,975,543
8.875%, 8/15/17(8) 6,000,000 8,184,378
STRIPS, 6.37%, 2/15/07(9) 725,000 450,646
STRIPS, 6.29%, 8/15/22(9) 7,500,000 1,905,938
</TABLE>
15 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
Statement of Investments (Unaudited)(continued)
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Obligations (continued)
U.S. Treasury Nts.:
5.50%, 5/31/00 $ 4,500,000 $ 4,501,409
5.625%, 2/15/06 550,000 552,407
5.75%, 8/15/03 325,000 328,555
6%, 8/15/00 1,000,000 1,009,688
6.125%, 8/15/07 6,000,000 6,247,506
6.50%, 8/15/05 650,000 686,360
6.75%, 6/30/99 380,000 384,631
7.50%, 10/31/99 3,430,000 3,515,753
7.50%, 11/15/01 2,625,000 2,780,862
-----------
Total U.S. Government Obligations (Cost $47,067,899) 49,001,892
=============================================================================================
Corporate Bonds and Notes--41.2%
- ---------------------------------------------------------------------------------------------
Aerospace--2.3%
Atlas Air, Inc.:
10.75% Sr. Nts., 8/1/05 125,000 133,125
12.25% Pass-Through Certificates, 12/1/02 1,950,000 2,154,750
8.01% Nts., 1/2/10(7) 1,000,000 1,006,181
- ---------------------------------------------------------------------------------------------
Boeing Co., 7.50% Debs., 8/15/42 2,000,000 2,293,746
- ---------------------------------------------------------------------------------------------
Rolls-Royce Capital, Inc., 7.125% Gtd. Nts., 7/29/03 1,000,000 1,036,250
- ---------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts.,
Series B, 9/1/07 250,000 260,000
- ---------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 250,000 263,750
-----------
7,147,802
- ---------------------------------------------------------------------------------------------
Chemicals--0.6%
Du Pont (E.I.) De Nemours & Co., 8.50% Debs., 2/15/03 150,000 158,683
- ---------------------------------------------------------------------------------------------
FMC Corp., 8.75% Sr. Nts., 4/1/99 250,000 254,648
- ---------------------------------------------------------------------------------------------
Harris Chemical North America, Inc.,
10.75% Gtd. Sr. Sub. Nts., 10/15/03 100,000 105,625
- ---------------------------------------------------------------------------------------------
Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 85,000 113,661
- ---------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 492,000 544,275
- ---------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 200,000 199,000
- ---------------------------------------------------------------------------------------------
PPG Industries, Inc., 9% Debs., 5/1/21 85,000 109,047
- ---------------------------------------------------------------------------------------------
Sovereign Specialty Chemicals, Inc., 9.50% Sr
Unsec. Sub. Nts., Series B, 8/1/07 175,000 179,375
-----------
1,664,314
- ---------------------------------------------------------------------------------------------
Consumer Durables--0.3%
Black & Decker Corp., 6.625% Nts., 11/15/00 145,000 146,582
- ---------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., Series B, 7/15/02 400,000 416,000
- ---------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 370,000 434,180
-----------
996,762
</TABLE>
16 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Non-Durables--0.3%
Fruit of the Loom, Inc., 7% Debs., 3/15/11 $ 500,000 $ 469,922
- ---------------------------------------------------------------------------------------------
Kimberly-Clark Corp., 7.875% Debs., 2/1/23 85,000 93,472
- ---------------------------------------------------------------------------------------------
Phillips-Van Heusen Corp., 9.50% Sr. Sub. Nts., 5/1/08(7) 250,000 250,937
- ---------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Sub. Nts., 7/1/08(7) 200,000 204,000
-----------
1,018,331
- ---------------------------------------------------------------------------------------------
Energy--5.2%
Chesapeake Energy Corp., 9.625% Sr. Nts., 5/1/05(7) 250,000 251,875
- ---------------------------------------------------------------------------------------------
Coastal Corp.:
8.125% Sr. Nts., 9/15/02 85,000 91,062
8.75% Sr. Nts., 5/15/99 380,000 388,464
- ---------------------------------------------------------------------------------------------
Eastern Energy Ltd., 6.75% Sr. Nts., 12/1/06(7) 2,000,000 2,056,552
- ---------------------------------------------------------------------------------------------
ENSCO International, Inc.:
6.75% Nts., 11/15/07 1,000,000 1,016,515
7.20% Debs., 11/15/27 1,000,000 1,041,300
- ---------------------------------------------------------------------------------------------
Enterprise Oil plc, 6.70% Sr. Nts., 9/15/07 1,000,000 1,030,280
- ---------------------------------------------------------------------------------------------
Global Marine, Inc., 7.125% Nts., 9/1/07 2,000,000 2,096,662
- ---------------------------------------------------------------------------------------------
Grey Wolf, Inc., 8.875% Sr. Nts., 7/1/07(7) 350,000 339,500
- ---------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd.:
8.25% Sr. Nts., 3/15/17 75,000 82,832
9% Debs., 8/15/99 75,000 77,281
- ---------------------------------------------------------------------------------------------
Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 100,000 112,531
- ---------------------------------------------------------------------------------------------
McDermott, Inc., 9.375% Nts., 3/15/02 100,000 107,550
- ---------------------------------------------------------------------------------------------
Occidental Petroleum Corp., 11.125% Sr. Debs., 6/1/19 2,000,000 2,196,346
- ---------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Gtd. Sr. Sec. Nts., 6/1/08(7) 200,000 191,000
- ---------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 400,000 413,000
- ---------------------------------------------------------------------------------------------
Parker Drilling Co., 9.75% Gtd. Nts., 11/15/06(7) 350,000 359,625
- ---------------------------------------------------------------------------------------------
Petroleum Geo-Services ASA, 7.50% Nts., 3/31/07 75,000 81,594
- ---------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 750,000 678,750
- ---------------------------------------------------------------------------------------------
Phillips Petroleum Co., 7.53% Pass-Through Certificates,
Series 1994-A1, 9/27/98 79,912 80,153
- ---------------------------------------------------------------------------------------------
Standard Oil/British Petroleum Co. plc, 9% Debs., 6/1/19 85,000 86,731
- ---------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 400,000 405,000
- ---------------------------------------------------------------------------------------------
Talisman Energy, Inc., 7.25% Debs., 10/15/27 500,000 524,138
- ---------------------------------------------------------------------------------------------
TransCanada PipeLines Ltd., 9.875% Debs., 1/1/21 1,500,000 2,046,240
- ---------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.25% Sr
Unsec. Debs., 2/1/06 100,000 100,001
-----------
15,854,982
</TABLE>
17 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
Statement of Investments (Unaudited)(continued)
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Financial--10.5%
Aetna Services, Inc., 8% Debs., 1/15/17 $ 697,000 $ 712,999
- ---------------------------------------------------------------------------------------------
Allmerica Capital I, 8.207% Debs., 2/3/27 2,000,000 2,304,660
- ---------------------------------------------------------------------------------------------
American General Finance Corp., 8.50% Sr. Nts., 8/15/98 60,000 60,161
- ---------------------------------------------------------------------------------------------
American General Institutional Capital B, 8.125% Bonds,
Series B, 3/15/46(7) 75,000 88,386
- ---------------------------------------------------------------------------------------------
Associates Corp. of North America, 7.40% Medium-Term
Nts., 7/7/99 300,000 304,172
- ---------------------------------------------------------------------------------------------
Beneficial Corp., 12.875% Debs., 8/1/13 20,000 21,114
- ---------------------------------------------------------------------------------------------
BHP Finance (USA) Ltd., 8.50% Gtd. Debs., 12/1/12 1,500,000 1,754,484
- ---------------------------------------------------------------------------------------------
Capital One Financial Corp., 7.25% Nts., 12/1/03 50,000 51,219
- ---------------------------------------------------------------------------------------------
CB Richard Ellis Services, Inc., 8.875% Sr. Unsec. Sub.
Nts., 6/1/06 250,000 249,375
- ---------------------------------------------------------------------------------------------
Chelsea GCA Realty Partner, Inc., 7.75% Gtd. Unsec.
Unsub. Nts., 1/26/01 60,000 61,736
- ---------------------------------------------------------------------------------------------
Cigna Corp., 7.90% Nts., 12/14/98 150,000 151,340
- ---------------------------------------------------------------------------------------------
Citicorp Capital I, 7.933% Gtd. Bonds, 2/15/27 1,000,000 1,089,522
- ---------------------------------------------------------------------------------------------
Citicorp, 5.625% Sr. Nts., 2/15/01 90,000 89,088
- ---------------------------------------------------------------------------------------------
Commercial Credit Co., 5.55% Unsec. Nts., 2/15/01 145,000 143,580
- ---------------------------------------------------------------------------------------------
Conseco Financing Trust III, 8.796% Bonds, 4/1/27 100,000 114,001
- ---------------------------------------------------------------------------------------------
Countrywide Home Loans, Inc., 6.05% Gtd. Medium-Term
Nts., Series D, 3/1/01 90,000 90,025
- ---------------------------------------------------------------------------------------------
First Nationwide Holdings, Inc., 10.625% Sr. Sub. Nts., 10/1/03 150,000 166,500
- ---------------------------------------------------------------------------------------------
Fleet Mtg./Norstar Group, Inc., 9.90% Sub. Nts., 6/15/01 145,000 160,052
- ---------------------------------------------------------------------------------------------
Ford Motor Credit Co., 6.75% Nts., 8/15/08 1,000,000 1,036,828
- ---------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.625% Nts., 2/15/01 175,000 173,558
- ---------------------------------------------------------------------------------------------
Golden West Financial Corp., 8.625% Sub. Nts., 8/30/98 55,000 55,221
- ---------------------------------------------------------------------------------------------
Integra Financial Corp., 6.50% Sub. Nts., 4/15/00 145,000 146,510
- ---------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 6.625% Sr. Sub. Nts., 2/15/08 1,000,000 1,012,829
- ---------------------------------------------------------------------------------------------
Liberty Mutual Insurance Co., 7.697% Nts., 10/15/2097(7) 1,000,000 1,105,609
- ---------------------------------------------------------------------------------------------
Long Island Savings Bank, 6.20% Nts., 4/2/01 1,000,000 1,001,990
- ---------------------------------------------------------------------------------------------
Lumbermens Mutual Casualty Co., 8.30% Surplus Nts., 12/1/37(7) 2,000,000 2,217,948
- ---------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.:
6.50% Nts., 4/1/01 150,000 152,244
6.875% Nts., 3/1/03 750,000 775,023
- ---------------------------------------------------------------------------------------------
Metropolitan Life Insurance Co., 6.30% Nts., 11/1/03(7) 1,000,000 998,550
- ---------------------------------------------------------------------------------------------
Midland American Capital Corp., 12.75% Gtd. Nts., 11/15/03 205,000 210,121
- ---------------------------------------------------------------------------------------------
National Westminster Bank plc, 9.375% Gtd. Capital Nts., 11/15/03 70,000 80,425
- ---------------------------------------------------------------------------------------------
NationsBank Corp.:
10.20% Sub. Nts., 7/15/15 1,300,000 1,797,610
8.50% Exchangeable Sub. Nts., 3/1/99 60,000 60,993
- ---------------------------------------------------------------------------------------------
Ocwen Capital Trust I, 10.875% Gtd. Bonds, 8/1/27 300,000 328,500
</TABLE>
18 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Financial (continued)
Penske Truck Leasing Co. LP, 7.75% Sr. Nts., 5/15/99 $ 1,825,000 $ 1,852,618
- ---------------------------------------------------------------------------------------------
Rank Group Finance plc, 6.75% Gtd. Nts., 11/30/04 1,000,000 1,015,967
- ---------------------------------------------------------------------------------------------
Royal Bank of Scotland Group (The) plc,
10.125% Gtd. Sub. Capital Nts., 3/1/04 500,000 593,881
- ---------------------------------------------------------------------------------------------
Ryder System, Inc., 8.75% Debs., Series J, 3/15/17 1,447,000 1,508,409
- ---------------------------------------------------------------------------------------------
Salomon Smith Barney Holdings, Inc., 6.25% Bonds, 1/15/05 2,000,000 2,000,630
- ---------------------------------------------------------------------------------------------
Salomon, Inc., 7.30% Nts., 5/15/02 1,000,000 1,040,893
- ---------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec.
Nts., Series B, 4/1/08 400,000 397,000
- ---------------------------------------------------------------------------------------------
Source One Mortgage Services Corp., 9% Debs., 6/1/12 1,250,000 1,393,862
- ---------------------------------------------------------------------------------------------
Travelers Group, Inc., 6.875% Debs., 2/15/2098 1,000,000 1,021,418
- ---------------------------------------------------------------------------------------------
Travelers Property Casualty Corp., 6.75% Nts., 4/15/01 145,000 148,030
- ---------------------------------------------------------------------------------------------
Veritas Holdings, Inc., 9.625% Sr. Nts., 12/15/03 135,000 142,087
- ---------------------------------------------------------------------------------------------
Washington Mutual Capital I, 8.375% Gtd. Bonds, 6/1/27 2,000,000 2,220,674
-----------
32,101,842
- ---------------------------------------------------------------------------------------------
Food & Drug--0.3%
Ameriking, Inc., 10.75% Sr. Nts., 12/1/06 160,000 172,000
- ---------------------------------------------------------------------------------------------
Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 550,000 576,125
- ---------------------------------------------------------------------------------------------
Stater Brothers Holdings, Inc., 9% Sr. Unsec. Sub. Nts., 7/1/04 150,000 153,750
-----------
901,875
- ---------------------------------------------------------------------------------------------
Food/Tobacco--1.1%
B.A.T. Capital Corp., 6.66% Medium-Term Nts., 3/22/00(7) 250,000 252,602
- ---------------------------------------------------------------------------------------------
Coca-Cola Enterprises, Inc., 6.95% Debs., 11/15/26 2,000,000 2,103,240
- ---------------------------------------------------------------------------------------------
Dole Food Distributing, Inc., 6.75% Nts., 7/15/00 150,000 152,018
- ---------------------------------------------------------------------------------------------
Eagle Family Foods, Inc., 8.75% Sr. Sub. Nts., 1/15/08(7) 200,000 196,000
- ---------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Sub. Nts., 3/15/10(7) 250,000 258,125
- ---------------------------------------------------------------------------------------------
SmithField Foods, Inc., 7.625% Sr. Sub. Nts., 2/15/08(7) 250,000 253,750
-----------
3,215,735
- ---------------------------------------------------------------------------------------------
Forest Products/Containers--0.3%
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 200,000 209,000
- ---------------------------------------------------------------------------------------------
Scotia Pacific Holding Co., 7.95% Timber Collateralized
Nts., 7/20/15 401,548 423,895
- ---------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 250,000 265,000
-----------
897,895
</TABLE>
19 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
Statement of Investments (Unaudited)(continued)
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Gaming/Leisure--1.3%
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 $ 150,000 $ 156,375
- ---------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts.,
Series B, 8/15/03 235,000 271,425
- ---------------------------------------------------------------------------------------------
Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06(7) 200,000 201,500
- ---------------------------------------------------------------------------------------------
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05(7) 100,000 103,000
- ---------------------------------------------------------------------------------------------
Hilton Hotels Corp.:
7.375% Nts., 6/1/02 75,000 76,204
7.95% Sr. Nts., 4/15/07 1,000,000 1,043,415
- ---------------------------------------------------------------------------------------------
HMC Acquisition Properties, Inc., 9% Sr. Nts., Series B, 12/15/07 800,000 872,000
- ---------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.875% Sr. Nts., 7/15/07 500,000 560,000
- ---------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 100,000 106,375
- ---------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority (Connecticut),
13.50% Sr. Sec. Nts., Series B, 11/15/02 310,000 392,150
- ---------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.:
10.625% Sr. Sub. Nts., 7/15/05 100,000 107,500
9.50% Gtd. Sr. Sub. Nts., 4/15/07 200,000 210,500
-----------
4,100,444
- ---------------------------------------------------------------------------------------------
Healthcare--0.6%
Columbia/HCA Healthcare Corp., 6.875% Nts., 7/15/01 160,000 156,326
- ---------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 9.50% Sr. Sub. Nts., 4/1/01 500,000 520,000
- ---------------------------------------------------------------------------------------------
Imcera Group, Inc., 6% Nts., 10/15/03 500,000 499,052
- ---------------------------------------------------------------------------------------------
Integrated Health Services, Inc., 9.50% Sr. Sub. Nts., 9/15/07 30,000 31,500
- ---------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(7) 350,000 360,500
- ---------------------------------------------------------------------------------------------
Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07(7) 220,000 224,400
-----------
1,791,778
- ---------------------------------------------------------------------------------------------
Housing--0.7%
American Standard Cos., Inc., 10.875% Sr. Nts., 5/15/99(2) 70,000 73,325
- ---------------------------------------------------------------------------------------------
First Industrial LP, 7.15% Bonds, 5/15/27 75,000 77,559
- ---------------------------------------------------------------------------------------------
Greystone Homes, Inc., 10.75% Gtd. Sr. Nts., 3/1/04(2) 50,000 54,250
- ---------------------------------------------------------------------------------------------
Nortek, Inc.:
9.125% Sr. Nts., Series B, 9/1/07 250,000 256,875
9.25% Sr. Nts., Series B, 3/15/07 250,000 258,125
- ---------------------------------------------------------------------------------------------
Trizec Hahn Corp., 7.95% Sr. Unsec. Debs., 6/1/07CAD 2,000,000 1,406,352
-----------
2,126,486
- ---------------------------------------------------------------------------------------------
Information Technology--1.0%
Bell Technology Group Ltd., Units (each unit consists
of $1,000 principal amount of 13% sr. nts., 5/1/05 and one
warrant to purchase one share of common stock)(7)(10) 200,000 203,000
- ---------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 200,000 200,000
</TABLE>
20 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
=============================================================================================
Face Market Value
Amount(1) See Note 1
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Information Technology (continued)
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 $ 250,000 $ 258,750
- ---------------------------------------------------------------------------------------------
General Electric Capital Corp., 8.75% Debs., 5/21/07 1,000,000 1,187,654
- ---------------------------------------------------------------------------------------------
PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 350,000 358,750
- ---------------------------------------------------------------------------------------------
Tracor, Inc., 8.50% Sr. Sub. Nts., 3/1/07 200,000 218,000
- ---------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 300,000 347,625
- ---------------------------------------------------------------------------------------------
WAM!Net, Inc., Units (each unit consists of $1,000 principal
amount of 0%/13.25% sr. disc. nts., 3/1/05 and three
warrants to purchase 6.03 shares of common stock)(7)(10)(11) 400,000 254,000
-----------
3,027,779
- ---------------------------------------------------------------------------------------------
Manufacturing--1.9%
Caterpillar, Inc., 9.75% Debs., 6/1/19 1,750,000 1,877,601
- ---------------------------------------------------------------------------------------------
Clark-Schwebel, Inc.:
10.50% Sr. Nts., 4/15/06 650,000 728,000
12.50% Debs., Series B, 7/15/07(2)(12) 137,982 146,951
- ---------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05 500,000 562,500
- ---------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Sub. Nts., 3/1/08(7) 350,000 355,250
- ---------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08(7) 200,000 200,000
- ---------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 325,000 334,750
- ---------------------------------------------------------------------------------------------
Maxxam Group, Inc., 0%/12.25% Sr. Sec. Disc. Nts., 8/1/03(11) 100,000 105,250
- ---------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 150,000 152,437
- ---------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Gtd. Sr. Sub. Nts.,
Series B, 6/15/07 200,000 205,500
- ---------------------------------------------------------------------------------------------
Terex Corp., 8.875% Sr. Sub. Nts., 4/1/08(7) 200,000 197,500
- ---------------------------------------------------------------------------------------------
Westinghouse Electric Corp., 8.375% Nts., 6/15/02 1,000,000 1,055,146
-----------
5,920,885
- ---------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--0.5%
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 175,000 184,625
- ---------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 520,000 560,300
- ---------------------------------------------------------------------------------------------
Young Broadcasting, Inc.:
8.75% Sr. Sub. Debs., 6/15/07 300,000 312,750
9% Sr. Sub. Nts., Series B, 1/15/06 400,000 418,000
-----------
1,475,675
</TABLE>
21 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================
Statement of Investments (Unaudited)(continued)
=================================================================================================
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Cable/Wireless Video--0.7%
Adelphia Communications Corp., 9.25% Sr. Nts., 10/1/02 $ 150,000 $ 156,375
- -------------------------------------------------------------------------------------------------
EchoStar Communications Corp.,
0%/12.875% Sr. Disc. Nts., 6/1/04(11) 250,000 245,000
- -------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 12.50% Gtd. Sr. Nts., 7/1/02 200,000 223,500
- -------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 200,000 221,000
- -------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,125,000 1,232,714
----------
2,078,589
- -------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--0.3%
Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 100,000 104,000
- -------------------------------------------------------------------------------------------------
Lamar Advertising Co.:
8.625% Sr. Sub. Nts., 9/15/07 400,000 411,500
9.625% Sr. Sub. Nts., 12/1/06 150,000 161,250
- -------------------------------------------------------------------------------------------------
SFX Entertainment, Inc., 9.125% Sr. Sub. Nts., 2/1/08(7) 125,000 123,125
----------
799,875
- -------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--1.0%
COLT Telecom Group plc, Units (each unit consists of $1,000
principal amount of 0%/12% sr. disc. nts., 12/15/06 and one
warrant to purchase 7.8 ordinary shares)(10)(11) 350,000 348,250
- -------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08(7) 100,000 104,250
- -------------------------------------------------------------------------------------------------
FaciliCom International, Inc., 10.50% Sr. Nts., 1/15/08(7) 250,000 247,500
- -------------------------------------------------------------------------------------------------
Focal Communications Corp., 0%/12.125% Sr. Disc. Nts., 2/15/08(7)(11) 350,000 210,437
- -------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub.
Disc. Nts., 12/15/05(7)(11) 100,000 81,125
- -------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 8.60% Sr. Nts., 6/1/08(7) 500,000 508,750
- -------------------------------------------------------------------------------------------------
Long Distance International, Inc., Units (each unit consists of
$1,000 principal amount of 12.25% sr. nts., 4/15/08 and one
warrant to purchase 15.0875 shares of common stock)(7)(10) 150,000 149,250
- -------------------------------------------------------------------------------------------------
McLeodUSA, Inc., 8.375% Sr. Nts., 3/15/08(7) 100,000 100,750
- -------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Nts., 4/15/08(7)(11) 400,000 246,500
9.625% Sr. Nts., 10/1/07 100,000 103,000
- -------------------------------------------------------------------------------------------------
NTL, Inc., 10% Sr. Nts., 2/15/07 100,000 107,500
- -------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.:
0%/8.29% Sr. Disc. Nts., 2/1/08(7)(11) 400,000 290,000
0%/9.47% Sr. Disc. Nts., 10/15/07(11) 365,000 274,662
- -------------------------------------------------------------------------------------------------
Teleport Communications Group, Inc.,
0%/11.125% Sr. Disc. Nts., 7/1/07(11) 150,000 130,500
- -------------------------------------------------------------------------------------------------
Viatel, Inc., Units (each unit consists of $1,000 principal amount
of 11.25% sr. nts., and .483 shares of series A preferred stock)(7)(10) 200,000 210,000
----------
3,112,474
</TABLE>
22 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================
=================================================================================================
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Media/Entertainment: Wireless Communications--1.9%
American Mobile Satellite Corp./AMSC Acquisition Co., Inc., Units
(each unit consists of $1,000 principal amount of 12.25% sr. nts., 4/1/08
and one warrant to purchase 3.75749 shares of common stock)(7)(10) $ 175,000 $ 165,375
- -------------------------------------------------------------------------------------------------
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07(7) 200,000 202,250
- -------------------------------------------------------------------------------------------------
Cellular Communications International, Inc., 0%/9.50%
Bonds, 4/1/05(7)(11)XEU 600,000 475,946
- -------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(2)(13) 25,000 625
- -------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/10.65% Sr. Disc. Nts., 9/15/07(11) 50,000 33,875
- -------------------------------------------------------------------------------------------------
Omnipoint Corp., 11.625% Sr. Nts., 8/15/06 70,000 74,025
- -------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts.,
8/15/04 65,000 73,937
- -------------------------------------------------------------------------------------------------
Orbital Imaging Corp., 11.625% Sr. Nts., 3/1/05(7) 300,000 309,750
- -------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(11) 200,000 153,000
- -------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Disc. Nts., 3/15/08(7)(11) 200,000 132,000
- -------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc., 9.125% Sr. Sec. Nts., 12/15/06(7) 500,000 501,875
- -------------------------------------------------------------------------------------------------
Real Time Data, Inc., Units (each unit consists of $1,000 principal
amount of 0%/13.50% sub. disc. nts., 8/15/06 and one warrant to
purchase six ordinary shares)(7)(10)(11) 1,000,000 535,000
- -------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., 5/15/08(7) 500,000 502,500
- -------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Disc. Nts., 3/1/08(7)(11) 800,000 504,000
- -------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(7)(11) 300,000 168,000
- -------------------------------------------------------------------------------------------------
Sprint Spectrum LP/Sprint Spectrum Finance Corp., 0%/12.50%
Sr. Disc. Nts., 8/15/06(11) 2,000,000 1,715,000
- -------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 9.50% Sr. Nts., 2/1/04 100,000 91,250
----------
5,638,408
- -------------------------------------------------------------------------------------------------
Metals/Minerals--0.4%
AK Steel Corp., 9.125% Sr. Nts., 12/15/06 350,000 367,500
- -------------------------------------------------------------------------------------------------
Alcan Aluminum Ltd., 9.625% Debs., 7/15/19 165,000 177,913
- -------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., 5/15/08(7) 250,000 256,250
- -------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08(7) 175,000 179,375
- -------------------------------------------------------------------------------------------------
Keystone Consolidated Industries, Inc., 9.625% Sr. Sec. Nts., 8/1/07 200,000 205,500
----------
1,186,538
- -------------------------------------------------------------------------------------------------
Retail--1.6%
Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(7) 650,000 653,250
- -------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125% Sr. Sub. Nts., 5/1/08(7) 150,000 150,000
- -------------------------------------------------------------------------------------------------
Federated Department Stores, Inc., 10% Sr. Nts., 2/15/01 60,000 65,539
- -------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000 100,750
</TABLE>
23 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================
Statement of Investments (Unaudited)(continued)
=================================================================================================
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Retail (continued)
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 $ 200,000 $ 201,750
- -------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08(7) 400,000 410,500
- -------------------------------------------------------------------------------------------------
May Department Stores Cos., 10.625% Debs., 11/1/10 405,000 549,842
- -------------------------------------------------------------------------------------------------
Neiman Marcus Group, Inc., 6.65% Sr. Nts., 6/1/08 2,000,000 2,019,938
- -------------------------------------------------------------------------------------------------
Price/Costco Cos., Inc., 7.125% Sr. Nts., 6/15/05 120,000 126,263
- -------------------------------------------------------------------------------------------------
Sears Canada, Inc., 11.70% Debs., 7/10/00CAD 500,000 378,337
- -------------------------------------------------------------------------------------------------
Sears Roebuck & Co., 8.39% Medium-Term Nts., 3/23/99 300,000 305,104
----------
4,961,273
- -------------------------------------------------------------------------------------------------
Service--1.2%
Archer Daniels Midland Co., 7.125% Debs., 3/1/13 750,000 807,026
- -------------------------------------------------------------------------------------------------
Arvin Industries, Inc., 6.75% Nts., 3/15/08 500,000 503,146
- -------------------------------------------------------------------------------------------------
Clear Channel Communications, Inc., 6.625% Nts., 6/15/08 2,000,000 1,987,578
- -------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/08 275,000 274,313
- -------------------------------------------------------------------------------------------------
Sun Co., Inc., 7.95% Debs., 12/15/01 75,000 79,264
- -------------------------------------------------------------------------------------------------
USI American Holdings, Inc., 7.25% Gtd. Sr. Nts., Series B, 12/1/06 80,000 82,521
----------
3,733,848
- -------------------------------------------------------------------------------------------------
Transportation--3.7%
Cambridge Industries, Inc., 10.25% Sr. Sub. Nts., Series B, 7/15/07 100,000 101,500
- -------------------------------------------------------------------------------------------------
Canadian Pacific Ltd., 9.45% Debs., 8/1/21 1,000,000 1,301,570
- -------------------------------------------------------------------------------------------------
Chrysler Corp., 7.40% Debs., 8/1/2097 3,000,000 3,249,801
- -------------------------------------------------------------------------------------------------
Coach USA, Inc., 9.375% Gtd. Sr. Sub. Nts., Series B, 7/1/07 350,000 365,750
- -------------------------------------------------------------------------------------------------
CSX Corp., 7.05% Debs., 5/1/02 85,000 87,322
- -------------------------------------------------------------------------------------------------
Ford Motor Co., 8.875% Debs., 11/15/22 2,000,000 2,250,350
- -------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 200,000 225,000
- -------------------------------------------------------------------------------------------------
Johnson Controls, Inc., 7.70% Debs., 3/1/15 500,000 560,839
- -------------------------------------------------------------------------------------------------
Kansas City Southern Industries, Inc., 6.625% Nts., 3/1/05 750,000 770,265
- -------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 200,000 209,000
- -------------------------------------------------------------------------------------------------
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(7) 400,000 419,000
Units (each unit consists of $1,000 principal amount of
12% second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(7)(10) 100,000 113,500
- -------------------------------------------------------------------------------------------------
Norfolk Southern Corp., 7.35% Nts., 5/15/07 75,000 80,554
- -------------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., 6/15/07 200,000 207,000
- -------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03(11) 1,100,000 1,028,500
- -------------------------------------------------------------------------------------------------
Union Pacific Corp.:
7% Nts., 6/15/00 150,000 152,393
9.65% Medium-Term Nts., 4/17/00 100,000 106,062
----------
11,228,406
</TABLE>
24 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================
=================================================================================================
Face Market Value
Amount(1) See Note 1
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Utility--3.5%
Ameritech Capital Funding Corp., 5.65% Gtd. Nts., 1/15/01 $ 100,000 $ 99,459
- -------------------------------------------------------------------------------------------------
California Energy, Inc., 10.25% Sr. Disc. Nts., 1/15/04 300,000 323,250
- -------------------------------------------------------------------------------------------------
Calpine Corp., 8.75% Sr. Nts., 7/15/07 185,000 191,013
- -------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.15% Lease Obligation Bonds,
Series 1986B:
1/15/16(2) 71,000 75,743
1/15/16 4,000 4,000
- -------------------------------------------------------------------------------------------------
Laclede Gas Co., 8.50% First Mtg. Bonds, 11/15/04 500,000 561,129
- -------------------------------------------------------------------------------------------------
National Fuel Gas Co., 7.75% Debs., 2/1/04 500,000 534,166
- -------------------------------------------------------------------------------------------------
New York Telephone Co., 9.375% Debs., 7/15/31 2,500,000 2,807,545
- -------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp.:
7.75% Sr. Unsec. Nts., Series G, 10/1/08 2,000,000 2,062,500
0%/8.50% Sr. Unsec. Nts., Series H, 7/1/10(10) 3,000,000 2,070,000
- -------------------------------------------------------------------------------------------------
Northern Illinois Gas Co., 6.45% First Mtg. Bonds, 8/1/01 220,000 223,185
- -------------------------------------------------------------------------------------------------
Public Service Co. of Colorado, 8.75% First Mtg. Bonds, 3/1/22 250,000 275,140
- -------------------------------------------------------------------------------------------------
South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000 587,173
- -------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 100,000 109,483
- -------------------------------------------------------------------------------------------------
Texas Gas Transmission Corp., 8.625% Nts., 4/1/04 500,000 559,350
- -------------------------------------------------------------------------------------------------
Union Gas Ltd., 13% Debs., 6/30/03CAD 464,000 321,071
-----------
10,804,207
-----------
Total Corporate Bonds and Notes (Cost $120,453,605) 125,786,203
<CAPTION>
Shares
=================================================================================================
<S> <C> <C>
Preferred Stocks--1.1%
- -------------------------------------------------------------------------------------------------
Allstate Financing I, 7.95% Gtd. Quarterly Income
Preferred Securities, Series A 80,000 2,045,000
- -------------------------------------------------------------------------------------------------
CRIIMI MAE, Inc., 10.875% Cum. Cv. Preferred Stock,
Series B, Non-Vtg. 13,000 437,937
- -------------------------------------------------------------------------------------------------
EchoStar Communications Corp., 12.125% Sr. Redeemable
Exchangeable Preferred Stock, Series B(2)(12) 109 121,807
- -------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust III, 9% Preferred Securities(2) 505,000 526,463
- -------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.,
14% Sr. Exchangeable Preferred(12) 2,028 119,145
- -------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., 12.625% Cum., Series E, Non-Vtg.(12) 531 60,136
-----------
Total Preferred Stocks (Cost $3,110,770) 3,310,488
=================================================================================================
Common Stocks--0.0%
- -------------------------------------------------------------------------------------------------
Optel, Inc.(2)(14) (Cost $0) 100 --
</TABLE>
25 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================
Statement of Investments (Unaudited)(continued)
=================================================================================================
Market Value
Units See Note 1
=================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.0%
- -------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/07 50 $ 6,750
- -------------------------------------------------------------------------------------------------
Dairy Mart Convenience Stores, Inc. Wts., Exp. 12/01(2) 333 167
- -------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/05(2) 300 58,440
- -------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/03(2) 2,621 26
- -------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 9/04(2) 2,800 3,150
- -------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(2) 1,980 58,436
- -------------------------------------------------------------------------------------------------
Intermedia Communications, Inc. Wts., Exp. 6/00(2) 50 8,506
- -------------------------------------------------------------------------------------------------
Orbital Imaging Corp. Wts., Exp. 3/05(2) 300 13,500
- -------------------------------------------------------------------------------------------------
Orion Network Systems, Inc. Wts., Exp. 1/07(2) 200 3,025
- -------------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(2) 258 3,902
- -------------------------------------------------------------------------------------------------
Signature Brands, Inc. Wts., Exp. 12/49(2) 50 1,006
------------
Total Rights, Warrants and Certificates (Cost $3,972) 156,908
<CAPTION>
Face
Amount(1)
=================================================================================================
<S> <C> <C>
Structured Instruments--1.2%
- -------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale (New York Branch)
Lehman High Yield Index Nts., 8.50%, 3/8/99 $1,100,000 1,100,000
- -------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, Lehman High Yield
Index Nts., 7.95%, 8/5/98 1,000,000 993,800
- -------------------------------------------------------------------------------------------------
Bear Stearns High Yield Composite Index Linked Nts.,
9%, 2/16/99(2) 900,000 902,880
- -------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 9.719%, 4/28/02
(representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(2)(6) 750,000 830,517
------------
Total Structured Instruments (Cost $3,750,000) 3,827,197
=================================================================================================
Repurchase Agreements--7.7%
- -------------------------------------------------------------------------------------------------
Repurchase agreement with Salomon Smith Barney
Holdings, Inc., 5.90%, dated 6/30/98, to be repurchased at
$23,403,835 on 7/1/98, collateralized by U.S. Treasury Bonds,
8.75%-10.625%, 2/15/15--2/15/19, with a value of $24,022,175
(Cost $23,400,000) 23,400,000 23,400,000
- -------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $332,222,481) 111.8% 341,714,122
- -------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (11.8) (36,078,414)
---------- ------------
Net Assets 100.0% $305,635,708
========== ============
</TABLE>
26 Oppenheimer Bond Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
CAD--Canadian Dollar XEU--European Currency Units
2. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
3. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
4. When-issued security to be delivered and settled after June 30, 1998.
5. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these securities
generally increases as interest rates decline and prepayment rates rise. The
price of these securities is typically more volatile than that of coupon-bearing
bonds of the same maturity. Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing of future cash flows.
6. Represents the current interest rate for a variable rate security.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $22,221,768 or 7.27% of the Fund's net
assets as of June 30, 1998.
8. Securities with an aggregate market value of $954,189 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
9. For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
10. Units may be comprised of several components, such as debt and equity
and/or warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
11. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
12. Interest or dividend is paid-in-kind.
13. Non-income producing: issuer is in default of interest payment.
14. Non-income producing security.
See accompanying Notes to Financial Statements.
27 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
============================================================================================
Statement of Assets and Liabilities June 30, 1998 (Unaudited)
============================================================================================
============================================================================================
<S> <C>
Assets
Investments, at value (cost $332,222,481)--see accompanying statement $ 341,714,122
- --------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency
exchange contracts--Note 5 27,059
- --------------------------------------------------------------------------------------------
Receivables:
Investments sold (including $31,440,305 sold on a when-issued basis)--Note 1 32,387,929
Interest and principal paydowns 3,870,468
Shares of beneficial interest sold 539,571
Daily variation on futures contracts--Note 6 95,063
Closed forward foreign currency exchange contracts 1,255
- --------------------------------------------------------------------------------------------
Other 315,349
-------------
Total assets 378,950,816
============================================================================================
Liabilities
Bank overdraft 59,484
- --------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $69,200,716 purchased
on a when-issued basis)--Note 1 71,304,764
Shares of beneficial interest redeemed 744,998
Dividends 479,360
Distribution and service plan fees 169,219
Daily variation on futures contracts--Note 6 75,516
Transfer and shareholder servicing agent fees 67,242
Closed forward foreign currency exchange contracts 6,214
Other 408,311
-------------
Total liabilities 73,315,108
============================================================================================
Net Assets $ 305,635,708
=============
============================================================================================
Composition of Net Assets
Paid-in capital $ 297,393,755
- --------------------------------------------------------------------------------------------
Undistributed net investment income 7,515
- --------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions (1,850,897)
- --------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 10,085,335
-------------
Net assets $ 305,635,708
=============
</TABLE>
28 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================
==========================================================================================
==========================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $230,262,872 and 20,891,480 shares of beneficial interest outstanding) $11.02
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $11.57
- ------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $60,663,624
and 5,506,562 shares of beneficial interest outstanding) $11.02
- ------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $14,708,187
and 1,333,807 shares of beneficial interest outstanding) $11.03
- ------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $1,025 and 93 shares of beneficial interest outstanding) $11.02
</TABLE>
See accompanying Notes to Financial Statements.
29 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
======================================================================================
Statement of Operations For the Six Months Ended June 30, 1998 (Unaudited)
======================================================================================
======================================================================================
<S> <C>
Investment Income
Interest $10,229,275
- --------------------------------------------------------------------------------------
Dividends 114,925
-----------
Total income 10,344,200
======================================================================================
Expenses
Management fees--Note 4 975,819
- --------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 243,584
Class B 271,284
Class C 58,142
- --------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 215,733
- --------------------------------------------------------------------------------------
Shareholder reports 56,014
- --------------------------------------------------------------------------------------
Legal, auditing and other professional fees 30,858
- --------------------------------------------------------------------------------------
Custodian fees and expenses 13,168
- --------------------------------------------------------------------------------------
Trustees' fees and expenses 3,478
- --------------------------------------------------------------------------------------
Other 11,390
-----------
Total expenses 1,879,470
======================================================================================
Net Investment Income 8,464,730
======================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 1,314,777
Closing of futures contracts--Note 6 (341,920)
Foreign currency transactions (4,478)
-----------
Net realized gain 968,379
- --------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 624,957
Translation of assets and liabilities denominated in foreign currencies (26,992)
-----------
Net change 597,965
-----------
Net realized and unrealized gain 1,566,343
======================================================================================
Net Increase in Net Assets Resulting from Operations $10,031,074
===========
</TABLE>
See accompanying Notes to Financial Statements.
30 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================
Statements of Changes in Net Assets
=================================================================================================================
Six Months Ended Year Ended
June 30, 1998 December 31,
(Unaudited) 1997
=================================================================================================================
<S> <C> <C>
Operations
Net investment income $ 8,464,730 $ 16,543,377
- -----------------------------------------------------------------------------------------------------------------
Net realized gain 968,379 2,197,371
- -----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 597,965 3,665,014
------------ ------------
Net increase in net assets resulting from operations 10,031,074 22,405,762
=================================================================================================================
Dividends to Shareholders
Dividends from net investment income:
Class A (6,532,966) (13,459,796)
Class B (1,591,226) (2,655,088)
Class C (339,590) (389,245)
Class Y (12) --
=================================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions--Note 2:
Class A 38,378,032 (7,491,024)
Class B 12,092,859 8,379,500
Class C 5,447,890 4,696,745
Class Y 1,005 --
=================================================================================================================
Net Assets
Total increase 57,487,066 11,486,854
- -----------------------------------------------------------------------------------------------------------------
Beginning of period 248,148,642 236,661,788
------------ ------------
End of period (including undistributed net investment
income of $7,515 and $6,579, respectively) $305,635,708 $248,148,642
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
31 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Financial Highlights
========================================================================================================
Class A
----------------------------------------------------------
Six Months
Ended
June 30,
1998 Year Ended December 31,
(Unaudited) 1997 1996 1995
========================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.97 $10.70 $10.98 $10.01
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 .77 .78 .69
Net realized and unrealized gain (loss) .05 .27 (.28) .96
-------- -------- -------- --------
Total income (loss) from investment
operations .41 1.04 .50 1.65
- --------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.36) (.77) (.75) (.68)
Dividends in excess of net investment income -- -- -- --
Tax return of capital distribution -- -- (.03) --
-------- -------- -------- --------
Total dividends and distributions
to shareholders (.36) (.77) (.78) (.68)
- --------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.02 $10.97 $10.70 $10.98
======== ======== ======== ========
========================================================================================================
Total Return, at Net Asset Value(4) 3.81% 10.13% 4.87% 16.94%
========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $230,263 $190,706 $193,515 $169,059
- --------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $198,757 $187,458 $178,130 $116,940
- --------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 6.65%(5) 7.20% 7.35% 6.47%
Expenses, before voluntary reimbursement
by the Manager 1.24%(5) 1.27% 1.30% 1.27%
Expenses, net of voluntary reimbursement
by the Manager N/A N/A N/A 1.26%
- --------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 17.4% 50.5% 53.7% 175.4%
</TABLE>
1. For the period from April 27, 1998 (inception of offering) to June 30,
1998.
2. For the period from July 11, 1995 (inception of offering) to December 31,
1995.
3. For the period from May 3, 1993 (inception of offering) to December 31,
1993.
32 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================================
========================================================================================================================
Class B
- ------------------------------------------------------------------------------------------------------------------------
Six Months
Ended
June 30,
1998 Year Ended December 31,
1994 1993 (Unaudited) 1997 1996 1995 1994 1993(3)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
$11.12 $10.74 $10.97 $10.69 $10.98 $10.01 $11.11 $11.10
- ------------------------------------------------------------------------------------------------------------------------
.65 .69 .32 .69 .70 .63 .58 .40
(1.08) .40 .05 .28 (.29) .94 (1.08) .06
-------- -------- ------- ------- ------- ------- ------ ----
(.43) 1.09 .37 .97 .41 1.57 (.50) .46
- ------------------------------------------------------------------------------------------------------------------------
(.65) (.71) (.32) (.69) (.67) (.60) (.57) (.42)
(.03) -- -- -- -- -- (.03) --
-- -- -- -- (.03) -- -- --
-------- -------- ------- ------- ------- ------- ------ ----
(.68) (.71) (.32) (.69) (.70) (.60) (.60) (.42)
- ------------------------------------------------------------------------------------------------------------------------
$10.01 $11.12 $11.02 $10.97 $10.69 $10.98 $10.01 $11.14
======== ======== ======= ======= ======= ======= ====== ======
========================================================================================================================
(3.87)% 10.30% 3.42% 9.41% 3.99% 16.06% (4.53)% 3.53%
========================================================================================================================
$96,640 $110,759 $60,664 $48,255 $38,826 $39,187 $3,451 $1,809
- ------------------------------------------------------------------------------------------------------------------------
$102,168 $111,702 $54,780 $41,439 $38,068 $12,823 $2,747 $922
- ------------------------------------------------------------------------------------------------------------------------
6.25% 6.20% 5.87%(5) 6.42% 6.59% 5.84% 5.53% 4.80%(5)
1.06% 1.06% 2.00%(5) 2.02% 2.05% 2.12% 1.78% 1.90%(5)
N/A N/A N/A N/A N/A 2.08% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
70.3% 110.1% 17.4% 50.5% 53.7% 175.4% 70.3% 110.1%
</TABLE>
4. 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.
5. Annualized.
33 Oppenheimer Bond Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Financial Highlights (Continued)
====================================================================================================================================
Class C Class Y
--------------------------------------------------------- ---------------
Six Months Period
Ended Ended
June 30, June 30,
1998 Year Ended December 31, 1998
(Unaudited) 1997 1996 1995(2) (Unaudited)(1)
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $10.98 $10.70 $10.99 $10.89 $10.88
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .32 .69 .70 .28 .14
Net realized and unrealized gain (loss) 05 .28 (.29) .10 .14
------ ------ ------ ------ ------
Total income (loss) from investment
operations .37 .97 .41 .38 .28
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.32) (.69) (.67) (.28) (.14)
Dividends in excess of net investment income -- -- -- -- --
Tax return of capital distribution -- -- (.03) -- --
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.32) (.69) (.70) (.28) (.14)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.03 $10.98 $10.70 $10.99 $11.02
====== ====== ====== ====== ======
====================================================================================================================================
Total Return, at Net Asset Value(4) 3.42% 9.39% 4.00% 3.76% 2.54%
====================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $14,708 $9,188 $4,322 $3,971 $1
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $11,755 $6,134 $3,404 $ 979 $1
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.84%(5) 6.36%(5) 6.60% 6.32%(5) 7.09%(5)
Expenses, before voluntary
reimbursement by the Manager 1.99%(5) 2.02%(5) 2.05% 2.25%(5) 0.72%(5)
Expenses, net of voluntary
reimbursement by the Manager N/A N/A N/A 1.96%(5) N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 17.4% 50.5% 53.7% 175.4% 17.4%
</TABLE>
(6.) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1998 were $10,057,923 and $3,841,521, respectively. For the year
ended December 31, 1995, purchases and sales of investment securities included
mortgage dollar-rolls.
See accompanying Notes to Financial Statements.
34 Oppenheimer Bond Fund
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited)
================================================================================
================================================================================
1. Significant Accounting Policies
Oppenheimer Bond Fund (the Fund) is a separate fund of Oppenheimer Integrity
Funds, a diversified, open-end management investment company registered under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is to seek a high level of current income by investing mainly in debt
instruments. The Fund will, under normal market conditions, invest at least 65%
of its total assets in a diversified portfolio of investment grade debt
securities. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Forward foreign currency contracts are valued based on the
closing prices of the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
35 Oppenheimer Bond Fund
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
1. Significant Accounting Policies (continued)
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of June 30, 1998, the
Fund had entered into outstanding when-issued or forward commitments of
$37,755,887.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Fund may enter into mortgage dollar-rolls in which
the Fund sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type coupon and
maturity) but not identical securities on a specified future date. The Fund
records each dollar-roll as a sale and a new purchase transaction.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class) gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
36 Oppenheimer Bond Fund
<PAGE>
================================================================================
================================================================================
================================================================================
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B, Class C and Class Y shares from net investment income each
day the New York Stock Exchange is open for business and pay such dividends
monthly. Distributions from net realized gains on investments, if any, will be
declared at least once each year.
- -------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from net investment income
or net realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year in which
the income or realized gain was recorded by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Discount on securities purchased is amortized
over the life of the respective securities, in accordance with federal income
tax requirements. Realized gains and losses on investments and 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
37 Oppenheimer Bond Fund
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998(1) Year Ended December 31, 1997
-------------------------------- ----------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,473,703 $ 26,851,208 2,678,397 $ 28,887,221
Dividends reinvested 418,040 4,597,540 831,219 8,947,815
Issued in connection with
the acquisition of Oppenheimer
LifeSpan Income Fund--Note 9 2,793,467 30,889,321 -- --
Redeemed (2,176,803) (23,960,037) (4,216,384) (45,326,060)
------------ ------------ ------------ ------------
Net increase (decrease) 3,508,407 $ 38,378,032 (706,768) $ (7,491,024)
============ ============ ============ ============
- ------------------------------------------------------------------------------------------------
Class B:
Sold 1,630,634 $ 17,841,141 1,711,754 $ 18,512,789
Dividends reinvested 100,011 1,099,648 168,332 1,813,048
Issued in connection with
the acquisition of Oppenheimer
LifeSpan Income Fund--Note 9 85,715 947,405 -- --
Redeemed (709,722) (7,795,335) (1,110,660) (11,946,337)
------------ ------------ ------------ ------------
Net increase 1,106,638 $ 12,092,859 769,426 $ 8,379,500
============ ============ ============ ============
- ------------------------------------------------------------------------------------------------
Class C:
Sold 619,112 $ 6,791,766 536,735 $ 5,809,737
Dividends reinvested 22,125 243,490 25,947 280,265
Issued in connection with
the acquisition of Oppenheimer
LifeSpan Income Fund--Note 9 8,737 96,665 -- --
Redeemed (153,184) (1,684,031) (129,410) (1,393,257)
------------ ------------ ------------ ------------
Net increase 496,790 $ 5,447,890 433,272 $ 4,696,745
============ ============ ============ ============
- ------------------------------------------------------------------------------------------------
Class Y:
Sold 93 $ 1,005 -- $ --
------------ ------------ ------------ ------------
Net increase 93 $ 1,005 -- $ --
============ ============ ============ ============
</TABLE>
1. For the six months ended June 30, 1998 for Class A, Class B, and Class C
shares and for the period from April 27, 1998 (inception of offering) to June
30, 1998 for Class Y shares.
38 Oppenheimer Bond Fund
<PAGE>
================================================================================
================================================================================
================================================================================
3. Unrealized Gains and Losses on Investments
At June 30, 1998, net unrealized appreciation on investments of $9,491,641 was
composed of gross appreciation of $12,618,034, and gross depreciation of
$3,126,393.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% of the first
$200 million of the Fund's average annual net assets, 0.72% of the next $200
million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60%
of the next $200 million, and 0.50% of net assets in excess of $1 billion.
For the six months ended June 30, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $317,678, of which $101,544 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 shares
and C totaled $554,977 and $57,651, respectively, of which $38,164 and $2,287,
respectively, was paid to an affiliated broker/dealer. During the six months
ended June 30, 1998, OFDI received contingent deferred sales charges of $88,130
and $2,634, 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 June 30, 1998, OFDI paid $78,647 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
39 Oppenheimer Bond Fund
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
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 of 0.75% per year on Class B and Class C shares 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 and Class C shares, determined as of
the close of each regular business day. During the six months ended June 30,
1998, OFDI paid $3,094 to an affiliated broker/dealer as compensation for Class
B personal service and maintenance expenses and retained $226,996 and $38,082,
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 Trustees may allow the Fund to continue payments of
the asset-based sales charge to OFDI for distributing shares before the Plan was
terminated. At June 30, 1998, OFDI had incurred unreimbursed expenses of
$1,683,303 for Class B and $198,844 for Class C.
================================================================================
5. Forward Contracts
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency risks.
They may also be used to tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon the purchase or sale of
a security denominated in a foreign currency. In addition, the Fund may enter
into such contracts as a hedge against changes in foreign currency exchange
rates on portfolio positions.
Forward contracts are valued based on the closing prices of the forward
currency contract rates in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will realize a gain or loss
upon the closing or settlement of the forward transaction.
Securities held in designated accounts to cover net exposure on outstanding
forward contracts are noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward contracts is reported in the
Statement of Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the terms
of the contract and unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
40 Oppenheimer Bond Fund
<PAGE>
================================================================================
================================================================================
================================================================================
5. Forward Contracts (continued)
At June 30, 1998, the Fund had outstanding forward contracts as follows:
<TABLE>
<CAPTION>
Expiration Contract Amount Valuation as of Unrealized
Date (000s) June 30, 1998 Appreciation
- -----------------------------------------------------------------------------------------------------
Contracts to Sell
- -----------------
<S> <C> <C> <C> <C>
Canadian Dollar (CAD) 7/15/98 2,970 CAD $2,021,757 $27,059
</TABLE>
================================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
At June 30, 1998, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Date Contracts June 30, 1998 (Depreciation)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
- ---------------------
U.S. Treasury Bonds, 30 yr. 9/98 338 $41,774,688 $371,281
--------
Contracts to Sell
- ------------------
U.S. Treasury Nts., 5 yr. 9/98 329 36,087,188 (192,773)
U.S. Treasury Nts., 10 yr. 9/98 156 17,759,625 (125,750)
--------
(318,523)
--------
$ 52,758
========
</TABLE>
41 Oppenheimer Bond Fund
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
================================================================================
7. Illiquid and Restricted Securities
At June 30, 1998, investments in securities included issues that are illiquid or
restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation at June 30, 1998 was $21,846,999, which represents
7.15% of the Fund's net assets.
================================================================================
8. Acquisition of Oppenheimer LifeSpan Income Fund
On June 11, 1998, the Fund acquired all the net assets of Oppenheimer LifeSpan
Income Fund, pursuant to an agreement and plan of reorganization approved by the
Oppenheimer LifeSpan Income Fund shareholders on May 25, 1998. The Fund issued
2,793,467, 85,715 and 8,737 shares of beneficial interest for Class A, Class B
and Class C, respectively, valued at $30,889,321, $947,405 and $96,665 in
exchange for the net assets, resulting in combined Class A net assets of
$230,808,283, Class B net assets of $59,193,669 and Class C net assets of
$13,957,428 on June 12, 1998. The net assets acquired included net unrealized
appreciation of $514,326. The exchange qualified as a tax-free reorganization
for federal income tax purposes.
================================================================================
9. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended June 30,
1998.
42 Oppenheimer Bond Fund
<PAGE>
================================================================================
Oppenheimer Bond Fund
================================================================================
A Series of Oppenheimer Integrity Funds
================================================================================
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
David P. Negri, Vice President
Jerry Webman, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors. This is a
copy of a report to shareholders of Oppenheimer
Bond Fund. This report must be preceded by a
Prospectus of Oppenheimer Bond 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.
43 Oppenheimer Bond Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak to a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
Internet
24-hr access to account
information. Online
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RS0285.001.0698 August 28, 1998
