[photo of utility lines]
Semiannual Report June 30, 2000
Oppenheimer
Bond Fund
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
Higher interest rates and economic uncertainty have created a credit crunch in
the corporate bond market, causing prices to fall.
Corporate bonds are currently providing unusually high yields compared to U.S.
Treasury securities.
The Fund has attempted to reduce credit risks through broad diversification
among government, corporate, mortgage-backed and asset-backed securities.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Managers
8 Financial
Statements
38 Officers and
Trustees
Cumulative
Total Returns*
For the 6-Month Period
Ended 6/30/00
Class A
Without With
Sales Chg. Sales Chg.
------------------------
1.76% -3.08%
Class B
Without With
Sales Chg. Sales Chg.
------------------------
1.48% -3.43%
Class C
Without With
Sales Chg. Sales Chg.
------------------------
1.37% 0.39%
Class Y
Without With
Sales Chg. Sales Chg.
------------------------
1.70% 1.70%
* See Notes on page 7 for further details.
<PAGE>
PRESIDENT'S LETTER
Dear Shareholder,
The 1990s, although not free of volatility, were distinguished by an overall
bull market. In contrast, the year 2000 has been characterized so far as a
relatively difficult investment environment with high levels of volatility.
As we entered the year, a vital concern weighing on investors' minds was
growing evidence of a trend toward higher inflation. While productivity
improvements and various economic forces helped keep inflation low over the last
decade, the year 2000 has seen upward pressure on wages and some prices. That's
primarily because the U.S. economy has been growing at a vigorous pace, creating
a labor shortage for businesses and high spending levels among consumers. In
response, since the summer of 1999, the Federal Reserve Board raised short-term
interest rates six times through June 30, 2000, in an attempt to forestall
inflationary pressures.
During that period, higher interest rates adversely affected many stocks and
bonds. In a dramatic decline, previously high-flying technology stocks generally
fell to more reasonable valuations. At the same time, long-neglected value
stocks began to attract investor interest. The result: narrowing of the
valuation gap between growth stocks and value stocks. Finally, in the bond
market, higher interest rates caused prices of most fixed income securities to
fall.
At OppenheimerFunds, we were not surprised by these developments, many of
which we anticipated in our recent letters to investors. What did concern us was
that, prior to the April 2000 correction, we began to see disturbing signs that
short-term trading was taking place not just in technology stocks, but also in
mutual funds. Prudent investors will understand our concern: most stock and bond
funds are carefully
[photos]
James C. Swain
Chairman
Oppenheimer
Bond Fund
Bridget A. Macaskill
President
Oppenheimer
Bond Fund
1 | OPPENHEIMER BOND FUND
<PAGE>
PRESIDENT'S LETTER
designed as long-term investments to help individuals and families progress
toward significant financial goals. In general, short-term trading is risky and
may compromise a well planned financial strategy. It may also result in
unforeseen adverse consequences, such as unnecessarily high tax bills.
We continue to believe that maintaining a long-term perspective and
practicing diversification are the fundamental drivers of consistent performance
over time. These strategies have helped individual investors, as well as
professional investors, weather declining markets and participate in rising
ones. On the following pages, your portfolio manager discusses the long-term
strategies and particular investment decisions that affected your fund during
the reporting period.
You can remain confident that our portfolio managers will continue to monitor
areas of opportunity in the arenas in which your fund invests, as the effects of
today's changing investment environment take hold. Knowing what's going on in
the world's economies, markets and companies--and making investment decisions
designed to try to take advantage of them over the long term--is central to what
makes OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
July 24, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of any particular fund. Specific
discussion, as it applies to your Fund, is contained in the pages that follow.
Stocks and bonds have different types of investment risks; stocks are subject to
market volatility and bonds are subject to credit and interest rate risks.
2 | OPPENHEIMER BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Q How did Oppenheimer Bond Fund perform over the six-month period that ended
June 30, 2000?
A. The Fund's performance over the past six months reflected a very challenging
investment environment. First, rising interest rates eroded the prices of most
bond-market sectors, especially the higher-income sectors, such as corporate
bonds. Second, because many corporate bonds respond to changes in their issuers'
stock prices, the corporate bond market was generally hurt by the decline of the
Nasdaq stock market during March and April, 2000.
Has the income from corporate bonds compensated investors for the risks of the
current environment?
Yes. In fact, the differences in yield between corporate bonds and U.S. Treasury
securities recently reached their widest levels in more than 15 years. This is
occurring because corporations are attempting to attract investors by paying
unusually high rates of interest relative to the safest bonds available. We
believe that these wide spreads make corporate bonds very attractive to
income-oriented investors.
What economic forces most affected the bond market and the Fund?
Rising interest rates were partly responsible for the weakness of most
bond-market sectors over the past six months. Because higher interest rates tend
to increase borrowing costs for companies that finance their operations and
growth through the bond market, investors were concerned that higher interest
rates might reduce earnings for these companies.
[photo]
Portfolio Management
Team (l to r)
David Negri
John Kowalik
3 | OPPENHEIMER BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Interest rates have been rising because of concerns that the U.S. economy may
be growing too quickly, potentially reigniting long-dormant inflationary
pressures. To ease these pressures, the Federal Reserve Board (the Fed) has
raised key short-term interest rates three times during the six-month reporting
period. Including the three rate hikes implemented before the reporting period
began, the Fed has raised interest rates by a total of 1.75 percentage points.
In addition, corporate-bond issuers have been adversely affected by
more-stringent loan requirements from many lenders, which has made credit scarce
in both the banking system and the public markets. This development is
especially bad for companies that need to borrow in order to refinance maturing
debt.
How was the Fund managed in this market environment?
Because the Fund's investment objective is to seek a high level of current
income, we have continued to manage the Fund to seek higher yields. Part of that
investment approach entails investing in higher-yielding, longer maturity
corporate bonds. As a result, as interest rates continued to rise early in the
period, the Fund's duration--a measure of the Fund's sensitivity to changing
interest rates--was at a relatively high level.
To lower the Fund's duration, we proceeded to reduce our holdings of
longer-term corporate bonds, and redeployed those assets to the
intermediate-term sector of the corporate-bond market. The advantage was that
intermediate-term bonds were providing virtually the same yield of longer-term
bonds, with less interest-rate risk. In addition, we focused our corporate-bond
holdings primarily among highly liquid names, which could be quickly turned into
cash to take advantage of better income opportunities that might arise.(2)
Average Annual
Total Returns
For the Periods Ended 6/30/00(1)
Class A
1-Year 5-Year 10-Year
------------------------
-2.99% 4.04% 6.49%
Class B Since
1-Year 5-Year Inception
------------------------
-3.56% 3.97% 4.43%
Class C Since
1-Year 5-Year Inception
------------------------
0.13% N/A 4.14%
Class Y Since
1-Year 5-Year Inception
------------------------
1.95% N/A 2.14%
1. See Notes on page 7 for further details.
2. The Fund's duration and portfolio are subject to change.
4 | OPPENHEIMER BOND FUND
<PAGE>
Despite reducing the Fund's duration in February and April, this posture hurt
the Fund's price performance, offsetting any yield advantage it may have
provided. We ended the reporting period with a duration that was modestly lower
than our peer group average (in general, the lower a portfolio's duration, the
less it is adversely affected by rising interest rates).(1)
Did the Fund invest in U.S. Treasury securities during the reporting period?
Yes. In fact, we increased our exposure to U.S. Treasuries to take advantage of
unusual conditions in that market sector. More specifically, longer-term U.S.
Treasury securities have rallied over the past six months because of unique
supply-and-demand influences. Because U.S. Treasuries are generally considered
the most creditworthy investments in the world, demand for them has historically
remained high among U.S. and international investors. However, after the federal
government used a portion of the budget surplus to buy back some seasoned,
long-term U.S. Treasury bonds, the available supply has dwindled. As a result,
for most of the six-month period, longer-term U.S. Treasury bonds provided lower
yields--and higher prices--than comparable short-term securities. The Fund's
greater exposure to longer-term U.S. Treasuries enabled us to participate in
some of those price gains.
What is your outlook for the future?
While we have been frustrated by the extent to which the higher-yielding sectors
of the bond market have been out of favor, we are encouraged that historically
wide spreads may attract interest from investors who are no longer receiving
spectacular results in the stock market.
Standardized Yields(3)
For the 30 Days Ended 6/30/00
-----------------------------
Class A 6.95%
-----------------------------
Class B 6.54
-----------------------------
Class C 6.54
-----------------------------
Class Y 7.46
3. Standardized yield is based on net investment income for the 30-day period
ended June 30, 2000. Falling share prices will tend to artificially raise
yields.
5 | OPPENHEIMER BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
Nonetheless, the economic environment remains uncertain, and we do not expect
any lasting market recovery to take place until the success of the Federal
Reserve Board's inflation-fighting strategy becomes more apparent.
In the meantime, corporate bonds are providing attractive levels of income,
and, in our opinion, their prices are currently reflecting a worst-case economic
scenario. Having the patience and discipline to take advantage of temporary
market weaknesses is an important part of what makes OppenheimerFunds The Right
Way to Invest.
Credit Allocation(4)
[pie chart]
Treasury/
Agency 13.9%
AAA/AA 8.8
A/BBB 49.3
BB/B 20.8
CCC/C 1.0
Other Securities 6.2
Corporate Bonds & Notes--Top Ten Industries(5)
-----------------------------------------------------------
Financial 20.0%
-----------------------------------------------------------
Transportation 4.8
-----------------------------------------------------------
Energy 3.6
-----------------------------------------------------------
Utility 3.1
-----------------------------------------------------------
Service 3.1
-----------------------------------------------------------
Media/Entertainment: Broadcasting 2.0
-----------------------------------------------------------
Retail 1.8
-----------------------------------------------------------
Media/Entertainment: Telecommunications 1.4
-----------------------------------------------------------
Media/Entertainment: Cable/Wireless Video 1.3
-----------------------------------------------------------
Media/Entertainment: Wireless Communications 1.3
Top Five Holdings by Issuer(4)
-----------------------------------------------------------
Federal Home Loan Mortgage Corp. 6.9%
-----------------------------------------------------------
Treasury Repo 6.1
-----------------------------------------------------------
U.S. Treasury 5.6
-----------------------------------------------------------
Lehman Brothers Holdings, Inc. 3.9
-----------------------------------------------------------
Rothmans Nederland Holdings BV 2.9
4. Portfolio is subject to change. Percentages are as of June 30, 2000, and are
based on total market value of investments.
5. Portfolio is subject to change. Percentages are as of June 30, 2000, and are
based on net assets.
6 | OPPENHEIMER BOND FUND
<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. The Fund's
performance may from time to time be subject to substantial short-term changes,
particularly during periods of market or interest rate volatility. For quarterly
updates on the Fund's performance, please contact your financial advisor, call
us at 1.800.525.7048 or visit our website at www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A 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 A returns include the current maximum initial sales
charge of 4.75%.
Class B shares of the Fund were first publicly offered on 5/3/93. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (5-year). Because Class B shares convert to Class A shares 72 months
after purchase, the "life of class" return for Class B uses Class A performance
for the period after conversion. Class B shares are subject to an annual 0.75%
asset-based sales charge.
Class C shares of the Fund were first publicly offered on 7/11/95. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 4/27/98. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
7 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS June 30, 2000 / Unaudited
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
==================================================================================================
<S> <C> <C>
Asset-Backed Securities--0.1%
Dayton Hudson Credit Card Master Trust, Asset-Backed Certificates,
Series 1997-1, Cl. A, 6.25%, 8/25/05 $ 125,000 $ 122,656
--------------------------------------------------------------------------------------------------
IROQUOIS Trust, Asset-Backed Amortizing Nts.,
Series 1997-2, Cl. A, 6.752%, 6/25/07(1) 95,156 92,866
--------------------------------------------------------------------------------------------------
Olympic Automobile Receivables Trust, Automobile
Receivables-Backed Nts., Series 1997-A, Cl. A-5, 6.80%, 2/15/05 150,000 148,852
-----------
Total Asset-Backed Securities (Cost $369,909) 364,374
==================================================================================================
Mortgage-Backed Obligations--33.7%
--------------------------------------------------------------------------------------------------
Government Agency--9.6%
--------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--8.9%
Federal Home Loan Mortgage Corp., Certificates of Participation:
9%, 3/1/17 210,100 216,842
Series 17-039, 13.50%, 11/1/10 23,088 25,847
Series 17-094, 12.50%, 4/1/14 10,945 12,096
--------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg. Obligations,
Gtd. Multiclass Mtg. Participation Certificates:
Series 151, Cl. F, 9%, 5/15/21 472,035 490,176
Series 1711, Cl. EA, 7%, 3/15/24 200,000 192,624
Series 1714, Cl. M, 7%, 8/15/23 1,000,000 959,680
--------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp.,
Gtd. Multiclass Mtg. Participation Certificates:
6%, 3/1/09 181,852 175,631
Series 1843, Cl. VB, 7%, 4/15/03 85,000 84,814
Series 1849, Cl. VA, 6%, 12/15/10 127,005 125,536
--------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Series 2054, Cl. TE, 6.25%, 4/15/24 850,000 802,188
--------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security:
Series 194, Cl. IO, 11.63%, 4/1/28(2) 16,347,344 5,222,210
Series 197, Cl. IO, 11.25%, 4/1/28(2) 7,439,001 2,324,688
Series 202, Cl. IO, 11.32%, 4/1/29(2) 30,132,534 10,047,317
Series 1583, Cl. IC, 11.34%, 1/15/20(2) 230,301 17,344
Series 1661, Cl. PK, 8.20%, 11/15/06(1,2) 113,131 2,121
--------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
6%, 12/1/03 91,748 90,043
6.50%, 4/1/26 131,170 124,339
7%, 1/1/09-11/1/25 509,720 500,791
7.50%, 2/1/08-3/1/08 190,201 190,479
--------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
Trust 1992-34, Cl. G, 8%, 3/25/22 540,000 548,100
Trust 1993-190, Cl. Z, 5.85%, 7/25/08 47,159 46,791
Federal National Mortgage Assn., Gtd. Mtg
Pass-Through Certificates, 8%, 8/1/17 141,582 142,016
--------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security, Trust 294, Cl. 2, 15.95%, 2/1/28(2) 16,316,083 5,216,048
-----------
27,557,721
8 | OPPENHEIMER BOND FUND
<PAGE>
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.7%
Government National Mortgage Assn.:
6.75%, 7/20/25-7/20/27 $ 455,640 $ 457,892
7%, 7/15/09 170,708 169,368
8%, 6/15/05-10/15/06 697,799 709,043
9%, 2/15/09-6/15/09 185,843 193,564
10%, 11/15/09 115,200 125,519
10.50%, 12/15/17-5/15/21 157,899 170,092
11%, 10/20/19 356,157 383,361
12%, 5/15/14 873 970
13%, 12/15/14 17,741 20,153
-----------
2,229,962
--------------------------------------------------------------------------------------------------
Private--24.1%
--------------------------------------------------------------------------------------------------
Commercial--17.0%
AMRESCO Commercial Mortgage Funding I Corp., Multiclass Mtg
Pass-Through Certificates, Series 1997-C1, Cl. G, 7%, 6/17/29(1) 150,000 118,547
--------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through Certificates:
Series 1997-D4, Cl. B1, 7.525%, 4/14/29(3) 333,000 252,039
Series 1997-D4, Cl. B2, 7.525%, 4/14/29(3) 333,000 246,680
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(3) 334,000 223,832
Series 1997-D5, Cl. B1, 6.93%, 2/14/41 2,000,000 1,285,625
--------------------------------------------------------------------------------------------------
Asset Securitization Corp., Interest-Only Stripped Mtg.-Backed Security,
Series 1997-D5, Cl. PS1, 8.02%, 2/14/41(2) 6,043,848 485,397
--------------------------------------------------------------------------------------------------
Capital Lease Funding Securitization LP, Interest-Only
Corporate Credit-Backed Pass-Through Certificates,
Series 1997-CTL1, 9.59%, 6/22/24(1,2) 12,768,885 466,862
--------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 6.72%, 12/25/03(1,3) 250,000 214,844
--------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Collateralized
Mtg. Obligations, Series 2000-FL2, 8.98%, 7/15/02(3,4) 1,400,000 1,398,256
--------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 1996-C1, Cl. X-2, 26.33%, 12/25/20(1,2) 14,935,316 186,691
--------------------------------------------------------------------------------------------------
Commercial Mortgage Asset Trust, Series 1999-C1, Cl. C, 7.35%, 8/17/13 362,600 341,920
--------------------------------------------------------------------------------------------------
CRIIMI MAE Trust I, Commercial Mtg. Trust:
Series 1998-C1, Cl. A1, 7%, 11/2/06(5) 1,812,000 1,631,791
Series 1998-C1, Cl. A2, 7%, 3/2/11(5) 5,250,000 4,609,746
--------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through Certificates:
Series 1997-C1, Cl. E, 7.50%, 3/1/11(1) 1,000,000 900,625
Series 1998-C1, Cl. F, 6%, 5/17/40(1) 2,500,000 1,518,750
Series 1999-C1, Cl. C, 7.942%, 9/15/09(3) 3,500,000 3,467,188
--------------------------------------------------------------------------------------------------
Delta Funding Corp., Collateralized Mtg. Obligations,
Series 2000-02, Cl. B, 8.36%, 8/15/30 2,931,000 2,418,991
--------------------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates:
Series 1994-C1, Cl. 2-D, 8.70%, 9/25/25 1,000,000 977,813
Series 1994-C1, Cl. 2-E, 8.70%, 9/25/25 1,000,000 961,875
--------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through Certificates:
Series 1997, Cl. D, 8.083%, 5/25/08(1,3) 750,000 618,984
Series 1997, Cl. E, 8.083%, 2/25/11(1,3) 750,000 548,438
9 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------
Commercial Continued
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 $ 1,676,875
------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg. Obligations:
Series 1997-C2, Cl. D, 7.192%, 1/15/08 1,500,000 1,318,359
Series 1997-C2, Cl. F, 6.75%, 4/16/29 1,000,000 590,469
Series 1998-C1, Cl. E, 7.089%, 3/15/11(3) 1,500,000 1,359,844
------------------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through
Certificates, Series 1997-CL1, Cl. F, 7.823%, 7/13/30(3) 1,000,000 901,250
------------------------------------------------------------------------------------------------------
LB-UBS Securities Commercial Mortgage Trust, Commercial
Mtg. Pass-Through Certificates:
Series 2000-C3, Cl. C, 7.95%, 2/15/10 3,134,519 3,155,090
Series 2000-C3, Cl. G, 7.95%, 2/15/10 2,300,000 2,169,906
------------------------------------------------------------------------------------------------------
Merrill Lynch Mortgage Investors, Inc., Mtg. Pass-Through Certificates:
Series 1996-C1, Cl. D, 7.42%, 4/25/28 1,500,000 1,445,977
Series 1997-C2, Cl. D, 7.071%, 12/10/29(3) 1,000,000 933,906
------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through Certificates:
Series 1996-C1, Cl. E, 7.415%, 3/15/06(1,3) 1,100,000 922,453
Series 1997-HF1, Cl. F, 6.86%, 2/15/10(1) 225,000 180,492
Series 1997-RR, Cl. E, 7.748%, 4/30/39(1,3) 400,021 266,139
Series 1997-RR, Cl. F, 7.766%, 4/30/39(1) 400,021 222,887
------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(1) 254,890 209,328
------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Multifamily Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(5) 2,250,000 1,880,508
------------------------------------------------------------------------------------------------------
NationsBank Trust, Lease Pass-Through Certificates,
Series 1997A-1, 7.442%, 1/10/11(3) 479,346 462,195
------------------------------------------------------------------------------------------------------
NationsCommercial Corp., NB Commercial Mtg. Pass-Through
Certificates, Series DMC, Cl. B, 8.562%, 8/12/11(1) 3,000,000 2,739,844
------------------------------------------------------------------------------------------------------
Nomura Asset Securitization Corp., Commercial Mtg. Pass-Through
Certificates, Series 1998-D6, Series 1998-D6, Cl. A3, 6.98%, 3/17/28(3) 2,625,000 2,430,381
------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1994-C1, Cl. C, 8%, 6/25/26 590,385 586,972
Series 1995-C1, Cl. D, 6.90%, 2/25/27 2,500,000 2,444,531
------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Commercial Mtg. Pass-Through Certificates:
Series 1996-C1, Cl. E1, 8.888%, 1/20/06 700,000 637,875
Series 2000-NL1, Cl. A2, 6.905%, 9/15/08(1) 1,750,000 1,641,719
------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Commercial Mortgage
Pass-Through Certificates, Series 2000-C2, Cl. K, 8.39%, 3/20/03(1,3) 1,400,000 1,389,938
-----------
52,441,832
------------------------------------------------------------------------------------------------------
Manufactured Housing--1.2%
Conseco Finance Securitization Corp., Home Equity Loan
Pass-Through Certificates, Series 2000-D, Cl. A5, 8.41%, 12/15/25 3,500,000 3,512,031
10 | OPPENHEIMER BOND FUND
<PAGE>
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------
Multi-Family--0.9%
CMC Securities Corp. I, Collateralized Mtg. Obligations,
Series 1993-D, Cl. D-3, 10%, 7/25/23 $ 30,138 $ 29,960
------------------------------------------------------------------------------------------------------
Countrywide Funding Corp., Mtg. Pass-Through Certificates,
Series 1994-10, Cl. A3, 6%, 5/25/09 250,000 245,000
------------------------------------------------------------------------------------------------------
Option One Mortgage Trust, Collateralized Mtg. Obligations,
Series 1999-1A, 10.06%, 3/1/29(1) 2,658,130 2,610,782
------------
2,885,742
------------------------------------------------------------------------------------------------------
Other--0.0%
Salomon Brothers Mortgage Securities VI, Interest-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. B, 11.58%, 10/23/17(2) 50,609 13,878
------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VI, Principal-Only Stripped
Mtg.-Backed Security, Series 1987-3, Cl. A, (1.53)%, 10/23/17(6) 74,893 61,811
------------
75,689
------------------------------------------------------------------------------------------------------
Residential--5.0%
GE Capital Mortgage Services, Inc., Gtd. Real Estate Mtg
Investment Conduit Pass-Through Certificates,
Series 1994-7, Cl. A18, 6%, 2/25/09 198,885 181,171
------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations,
Series 1999-I, Cl. ECFD, 8.75%, 12/25/28 6,817,598 6,374,454
------------------------------------------------------------------------------------------------------
Option One Mortgage Trust, Collateralized Mtg. Obligations,
Series 1999-3, Cl. BB, 10.80%, 12/15/29 2,635,194 2,614,607
------------------------------------------------------------------------------------------------------
Residential Funding Mortgage Securities I, Inc., Mtg. Pass-Through
Certificates, Series 1993-S10, Cl. A9, 8.50%, 2/25/23 63,014 63,605
------------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp. III, Sub. Bonds,
Series 1992-A, Cl. 1A, 8.257%, 3/29/30(3) 165,512 159,914
------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII, Commercial Mtg
Pass-Through Certificates, Series 1996-B, Cl. 1, 6.79%, 4/25/26(1) 1,874,077 1,224,007
------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through Certificates,
Series 1999-1, 10%, 8/25/28(1) 2,447,276 2,409,038
------------------------------------------------------------------------------------------------------
Washington Mutual Finance Corp., Collateralized Mtg. Obligations,
Series 2000-1, Cl. B1, 10.61%, 1/25/40(1) 2,450,000 2,450,000
------------
15,476,796
------------
Total Mortgage-Backed Obligations (Cost $107,133,000) 104,179,773
======================================================================================================
U.S. Government Obligations--5.5%
U.S. Treasury Bonds, STRIPS, 6.27%, 11/15/21(7) 18,700,000 5,062,277
------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6.50%, 2/15/10 11,575,000 11,972,891
------------
Total U.S. Government Obligations (Cost $16,931,311) 17,035,168
11 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
=================================================================================================
Foreign Government Obligations--2.9%
Israel (State of) Bonds:
7.25%, 12/15/28 $1,750,000 $1,525,622
7.75%, 3/15/10 3,500,000 3,462,659
-------------------------------------------------------------------------------------------------
United Mexican States Bonds, 11.375%, 9/15/16 3,500,000 4,007,500
----------
Total Foreign Government Obligations (Cost $9,363,393) 8,995,781
=================================================================================================
Loan Participations--0.8%
Ferrell Cos., Inc., 10.853% Sr. Sec. Loan Participation Nts.,
Series B, 7/17/06(1,3) 1,700,000 1,670,250
-------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 8.252%, 4/28/02
(representing a basket of reference loans and a total return
swap between Chase Manhattan Bank and the Trust)(1,3) 750,000 576,683
----------
Total Loan Participations (Cost $2,435,927) 2,246,933
=================================================================================================
Corporate Bonds and Notes--47.9%
-------------------------------------------------------------------------------------------------
Aerospace/Defense--0.3%
Atlas Air, Inc. Pass-Through Certificates, Series 1998-1, 8.01%, 1/2/10 870,006 820,716
-------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06 100,000 73,000
-------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07(1) 100,000 95,500
----------
989,216
-------------------------------------------------------------------------------------------------
Chemicals--0.4%
Avecia Group plc, 11% Sr. Unsec. Nts., 7/1/09 200,000 197,000
-------------------------------------------------------------------------------------------------
Morton International, Inc., 9.25% Credit Sensitive Nts., 6/1/20 85,000 98,209
-------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 492,000 504,300
-------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 100,000 66,500
-------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 150,000 128,250
-------------------------------------------------------------------------------------------------
PPG Industries, Inc., 9% Debs., 5/1/21 85,000 94,242
-------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.75% Sr. Unsec. Sub. Nts., 8/15/06 100,000 82,500
12.375% Sr. Sec. Nts., Series B, 7/15/06 100,000 102,000
----------
1,273,001
-------------------------------------------------------------------------------------------------
Consumer Durables--0.3%
Boyds Collection Ltd. (The), 9% Sr. Unsec. Sub. Nts., Series B, 5/15/08 390,000 345,150
-------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 12% Unsec. Nts., 7/15/05(1) 111,000 72,150
-------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(1) 370,000 398,253
----------
815,553
-------------------------------------------------------------------------------------------------
Consumer Non-Durables--0.1%
Bell Sports, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 8/15/08 125,000 125,000
-------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 145,000 15,225
----------
140,225
12 | OPPENHEIMER BOND FUND
<PAGE>
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------------------
Energy--3.6%
Central Hudson Gas & Electric Corp., 9.25% First Mtg. Nts., 5/1/21 $7,700,000 $ 7,986,863
------------------------------------------------------------------------------------------------------------------
Eastern Energy Ltd., 6.75% Sr. Nts., 12/1/06(5) 2,000,000 1,888,588
------------------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(5) 350,000 328,125
------------------------------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd., 8.25% Sr. Nts., 3/15/17 75,000 69,375
------------------------------------------------------------------------------------------------------------------
Louisiana Land & Exploration Co., 7.65% Debs., 12/1/23 100,000 95,058
------------------------------------------------------------------------------------------------------------------
McDermott, Inc., 9.375% Nts., 3/15/02 100,000 71,368
------------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 200,000 167,000
------------------------------------------------------------------------------------------------------------------
RBF Finance Co., 11% Sr. Sec. Nts., 3/15/06 245,000 263,681
------------------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 300,000 286,500
------------------------------------------------------------------------------------------------------------------
Williams Holdings of Delaware, Inc., 6.25% Sr. Unsec. Debs., 2/1/06 100,000 92,938
-----------
11,249,496
------------------------------------------------------------------------------------------------------------------
Financial--20.0%
Aetna Services, Inc., 8% Debs., 1/15/17 553,000 504,687
------------------------------------------------------------------------------------------------------------------
American General Institutional Capital, 8.125% Bonds, Series B, 3/15/46(5) 75,000 70,801
------------------------------------------------------------------------------------------------------------------
Capital One Financial Corp., 7.25% Nts., 12/1/03 50,000 48,855
------------------------------------------------------------------------------------------------------------------
Chelsea GCA Realty Partner, Inc., 7.75% Unsec. Nts., 1/26/01 60,000 59,948
------------------------------------------------------------------------------------------------------------------
CIT Group, Inc., 7.375% Unsec. Unsub. Nts., 3/15/03 525,000 518,455
------------------------------------------------------------------------------------------------------------------
First Industrial LP, 7.15% Bonds, 5/15/27 75,000 73,433
------------------------------------------------------------------------------------------------------------------
ForeningsSparbanken AB (Swedbank):
7.50% Unsec. Sub. Nts., 11/29/49(3) 4,550,000 4,256,420
9% Non-Cum. Capital Bonds, 12/29/49(5) 1,750,000 1,717,371
------------------------------------------------------------------------------------------------------------------
Household Finance Corp., 8% Nts., 5/9/05 6,000,000 6,053,490
------------------------------------------------------------------------------------------------------------------
HSBC Capital Funding LP, 10.176% Bond., Series 2, 12/31/49(5) 3,500,000 3,757,078
------------------------------------------------------------------------------------------------------------------
HVB Fund Trust III, 9% Bonds, 10/22/31(5) 3,500,000 3,353,178
------------------------------------------------------------------------------------------------------------------
Hypovereinsbank, 8.741% Bonds, 6/30/31(5) 3,500,000 3,263,488
------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.:
8.25% Unsec. Nts., 6/15/07 8,050,000 8,067,541
8.80% Sr. Nts., 3/1/15 3,500,000 3,708,257
------------------------------------------------------------------------------------------------------------------
Liberty Mutual Insurance Co., 7.697% Unsec. Nts., 10/15/97(5) 9,000,000 6,843,186
------------------------------------------------------------------------------------------------------------------
Nordbanken AB, 8.95% Bonds, 11/29/49(5) 5,250,000 5,250,341
------------------------------------------------------------------------------------------------------------------
Ocwen Capital Trust I, 10.875% Capital Nts., 8/1/27 300,000 160,500
------------------------------------------------------------------------------------------------------------------
Rothmans Nederland Holdings BV, 6.875% Sr. Unsec. Unsub. Nts., 5/6/08 9,900,000 8,624,880
------------------------------------------------------------------------------------------------------------------
Ryder System, Inc. Debs., Series J, 8.75%, 3/15/17 49,000 50,191
------------------------------------------------------------------------------------------------------------------
Safeco Capital Trust I, 8.072% Nts., 7/15/37 4,000,000 3,394,748
------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts., Series B, 4/1/08 435,000 377,363
------------------------------------------------------------------------------------------------------------------
Sovereign Bank, 10.20% Pass-Through Certificates, 6/30/05(1) 1,750,000 1,751,094
-----------
61,905,305
------------------------------------------------------------------------------------------------------------------
Food & Drug--0.0%
Pathmark Stores, Inc., 12.625% Sub. Nts., 6/15/02(8,9) 150,000 38,250
13 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
-------------------------------------------------------------------------------------------------
Food/Tobacco--0.2%
Canandaigua Brands, Inc., 8.625% Sr. Unsec. Nts., 8/1/06 $300,000 $ 297,750
-------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10(1,8,9) 100,000 29,500
-------------------------------------------------------------------------------------------------
SmithField Foods, Inc., 7.625% Sr. Unsec. Sub. Nts., 2/15/08 250,000 225,000
----------
552,250
-------------------------------------------------------------------------------------------------
Forest Products/Containers--0.2%
Kimberly-Clark Corp., 7.875% Debs., 2/1/23 85,000 83,240
-------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.625% Sr. Unsec. Nts., 8/1/07 200,000 195,000
-------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 250,000 257,500
----------
535,740
-------------------------------------------------------------------------------------------------
Gaming/Leisure--0.9%
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 150,000 137,250
-------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts., Series B, 8/15/03 235,000 250,275
-------------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.45% Sr. Nts., Series C, 12/1/08 900,000 838,125
-------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 100,000 99,000
-------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 250,000 248,750
-------------------------------------------------------------------------------------------------
Meristar Hospitality Corp., 8.75% Sr. Unsec. Sub. Nts., 8/15/07 700,000 626,500
-------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority:
8.125% Sr. Nts., 1/1/06 200,000 191,000
8.75% Sr. Unsec. Sub. Nts., 1/1/09 100,000 95,500
-------------------------------------------------------------------------------------------------
Premier Parks, Inc., 9.75% Sr. Nts., 6/15/07 200,000 194,250
-------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.75% Sr. Sub. Nts., 4/15/07 150,000 150,750
----------
2,831,400
-------------------------------------------------------------------------------------------------
Healthcare--0.7%
Columbia/HCA Healthcare Corp., 6.875% Nts., 7/15/01 160,000 156,033
-------------------------------------------------------------------------------------------------
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08(1) 150,000 133,875
-------------------------------------------------------------------------------------------------
HEALTHSOUTH Corp., 9.50% Sr. Sub. Nts., 4/1/01 500,000 502,500
-------------------------------------------------------------------------------------------------
ICN Pharmaceutical, Inc.:
8.75% Sr. Nts., 11/15/08(5) 125,000 123,750
9.75% Sr. Nts., 11/15/08(5) 140,000 138,600
-------------------------------------------------------------------------------------------------
Imcera Group, Inc., 6% Nts., 10/15/03 500,000 481,869
-------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Unsec. Nts., 5/15/05 250,000 260,000
-------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.625% Sr. Sub. Nts., 1/15/07 400,000 384,000
----------
2,180,627
-------------------------------------------------------------------------------------------------
Housing--0.4%
Building Materials Corp. of America, 8% Sr. Unsec. Nts., 12/1/08 200,000 158,000
-------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 300,000 262,500
-------------------------------------------------------------------------------------------------
Nortek, Inc.:
9.125% Sr. Nts., Series B, 9/1/07 250,000 232,500
9.25% Sr. Nts., Series B, 3/15/07 450,000 423,000
----------
1,076,000
14 | OPPENHEIMER BOND FUND
<PAGE>
Principal Market Value
Amount See Note 1
------------------------------------------------------------------------------------------------------
Information Technology--0.3%
Communications & Power Industries, Inc., 12% Sr. Sub. Nts., Series B, 8/1/05 $ 500,000 $ 353,750
------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 200,000 189,000
------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc., 9% Sr. Unsec. Sub. Nts., 2/1/08 225,000 207,000
----------
749,750
------------------------------------------------------------------------------------------------------
Manufacturing--0.2%
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 100,000 38,500
------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 150,000 115,500
------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625%
Sr. Sub. Nts., Series B, 6/15/07 300,000 276,000
------------------------------------------------------------------------------------------------------
Terex Corp., 8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08(1) 150,000 135,750
----------
565,750
------------------------------------------------------------------------------------------------------
Media/Entertainment: Broadcasting--2.0%
AMFM Operating, Inc., 12.625% Sr. Sub. Debs., Series E, 10/31/06(10) 24,000 28,140
------------------------------------------------------------------------------------------------------
British Sky Broadcasting Group plc, 8.20% Sr. Unsec. Nts., 7/15/09 3,500,000 3,288,961
------------------------------------------------------------------------------------------------------
Chancellor Media Corp.:
8.75% Sr. Unsec. Sub. Nts., Series B, 6/15/07 1,200,000 1,209,000
9% Sr. Unsec. Sub. Nts., 10/1/08 800,000 826,000
------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Unsec
Sub. Nts., Series B, 3/15/09 300,000 275,250
------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc.:
8.75% Sr. Sub. Debs., 6/15/07 300,000 277,500
9% Sr. Sub. Nts., Series B, 1/15/06 400,000 378,000
----------
6,282,851
------------------------------------------------------------------------------------------------------
Media/Entertainment: Cable/Wireless Video--1.3%
Adelphia Communications Corp.:
8.375% Sr. Nts., Series B, 2/1/08 700,000 622,125
9.25% Sr. Nts., 10/1/02 150,000 148,688
------------------------------------------------------------------------------------------------------
Charter Communications Holdings LLC/Charter
------------------------------------------------------------------------------------------------------
Communications Holdings Capital Corp.:
8.25% Sr. Unsec. Nts., 4/1/07 1,500,000 1,331,250
8.625% Sr. Unsec. Nts., 4/1/09 250,000 220,938
------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 100,000 93,000
------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09 750,000 723,750
------------------------------------------------------------------------------------------------------
Insight Midwest LP/Insight Capital, Inc., 9.75% Sr. Nts., 10/1/09 300,000 295,500
------------------------------------------------------------------------------------------------------
NTL Communications Corp., 11.50% Sr. Unsec. Nts., Series B, 10/1/08 400,000 400,000
------------------------------------------------------------------------------------------------------
NTL, Inc., 10% Sr. Nts., Series B, 2/15/07 100,000 95,000
----------
3,930,251
15 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------------------------
Media/Entertainment: Diversified Media--0.5%
Amazon.com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(11) $200,000 $ 109,000
--------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Unsec. Sub. Nts., 2/1/11 150,000 68,250
--------------------------------------------------------------------------------------------------
Imax Corp., 7.875% Sr. Nts., 12/1/05(1) 400,000 364,000
--------------------------------------------------------------------------------------------------
Lamar Advertising Co., 8.625% Sr. Sub. Nts., 9/15/07 400,000 386,000
--------------------------------------------------------------------------------------------------
Lamar Media Corp., 9.625% Sr. Unsec. Sub. Nts., 12/1/06 150,000 151,500
--------------------------------------------------------------------------------------------------
Mail-Well Corp., 8.75% Sr. Unsec. Sub. Nts., Series B, 12/15/08 135,000 114,075
--------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Unsec. Sub. Nts., 12/1/08 150,000 151,500
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 125,000 126,250
----------
1,470,575
--------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--1.4%
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)(11,12) 350,000 445,813
--------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc., 0%/13% Sr. Disc. Nts.,
Series B, 4/15/03(11) 250,000 233,750
--------------------------------------------------------------------------------------------------
Intermedia Communications, Inc., 8.60% Sr. Unsec. Nts., Series B, 6/1/08 400,000 372,000
--------------------------------------------------------------------------------------------------
International CableTel, Inc., 0%/11.50% Sr. Deferred Coupon Nts.,
Series B, 2/1/06(11) 750,000 695,625
--------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Unsec. Nts., Series B, 11/15/08 350,000 346,500
--------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
9% Sr. Nts., 3/15/08 150,000 138,000
9.625% Sr. Nts., 10/1/07 900,000 852,750
--------------------------------------------------------------------------------------------------
PSINet, Inc.:
10% Sr. Unsec. Nts., Series B, 2/15/05 75,000 69,375
11.50% Sr. Unsec. Nts., 11/1/08 350,000 330,750
--------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/8.29%
Sr. Unsec. Disc. Nts., Series B, 2/1/08(11) 400,000 316,197
--------------------------------------------------------------------------------------------------
Versatel Telecom International NV, 11.875% Sr. Nts., 7/15/09(EUR) 250,000 232,461
--------------------------------------------------------------------------------------------------
Viatel, Inc., 11.25% Sr. Sec. Nts., 4/15/08 200,000 149,000
--------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts., Series B, 3/1/05(11) 400,000 226,500
----------
4,408,721
--------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications--1.3%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07 100,000 77,000
--------------------------------------------------------------------------------------------------
Crown Castle International Corp., 10.75% Sr. Nts., 8/1/11 600,000 611,250
--------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(8,9) 25,000 --
--------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.50% Sr. Nts., 9/15/09(5) 350,000 376,250
11.625% Sr. Nts., 8/15/06 60,000 65,100
11.625% Sr. Nts., Series A, 8/15/06 200,000 217,000
16 | OPPENHEIMER BOND FUND
<PAGE>
Principal Market Value
Amount See Note 1
-------------------------------------------------------------------------------------------------------------
Media/Entertainment: Wireless Communications Continued
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(1,11) $ 200,000 $ 83,000
-------------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(11) 200,000 139,000
-------------------------------------------------------------------------------------------------------------
Price Communications Wireless, Inc., 9.125% Sr. Sec. Nts., Series B, 12/15/06 500,000 507,500
-------------------------------------------------------------------------------------------------------------
Real Time Data Co., 13% Disc. Nts., 5/31/09(5,10) 394,554 387,874
-------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 500,000 487,500
-------------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(11) 800,000 568,000
-------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(11) 300,000 210,000
-------------------------------------------------------------------------------------------------------------
VoiceStream Wireless Corp., 10.375% Sr. Nts., 11/15/09(5) 150,000 156,000
----------
3,885,474
-------------------------------------------------------------------------------------------------------------
Metals/Minerals--1.0%
AK Steel Corp.:
7.875% Sr. Unsec. Nts., 2/15/09 500,000 446,250
9.125% Sr. Nts., 12/15/06 1,840,000 1,775,600
-------------------------------------------------------------------------------------------------------------
Alcan Aluminium Ltd., 9.625% Debs., 7/15/19 25,000 24,998
-------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08 250,000 218,750
-------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 175,000 144,375
-------------------------------------------------------------------------------------------------------------
National Steel Corp., 9.875% First Mtg. Bonds, Series D, 3/1/09 200,000 168,000
-------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 300,000 279,750
----------
3,057,723
-------------------------------------------------------------------------------------------------------------
Retail--1.8%
Finlay Enterprises, Inc., 9% Debs., 5/1/08 100,000 88,500
-------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 200,000 179,000
-------------------------------------------------------------------------------------------------------------
May Department Stores Co., 10.625% Debs., 11/1/10 405,000 487,460
-------------------------------------------------------------------------------------------------------------
Sherwin-Williams Co., 7.45% Debs., 2/1/97 5,250,000 4,901,605
----------
5,656,565
-------------------------------------------------------------------------------------------------------------
Service--3.1%
Allied Waste North America, Inc., 7.875% Sr. Unsec. Nts., Series B, 1/1/09 300,000 257,250
-------------------------------------------------------------------------------------------------------------
Arvin Industries, Inc., 6.75% Nts., 3/15/08 500,000 436,520
-------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 250,000 191,250
-------------------------------------------------------------------------------------------------------------
Harcourt General, Inc., 7.30% Sr. Debs., 8/1/97 5,400,000 4,265,795
-------------------------------------------------------------------------------------------------------------
Protection One, Inc., 7.375% Sr. Unsec. Nts., 8/15/05 500,000 375,000
-------------------------------------------------------------------------------------------------------------
Safety-Kleen Corp., 9.25% Sr. Unsec. Nts., 5/15/09(8,9) 500,000 12,500
-------------------------------------------------------------------------------------------------------------
URS Corp., 12.25% Sr. Sub. Nts., Series B, 5/1/09 500,000 515,000
-------------------------------------------------------------------------------------------------------------
USI American Holdings, Inc., 7.25% Sr. Nts., Series B, 12/1/06 80,000 76,208
-------------------------------------------------------------------------------------------------------------
UST, Inc., 8.80% Nts., 3/15/05(5) 3,500,000 3,538,563
----------
9,668,086
17 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------------------------------
Transportation--4.8%
Amtran, Inc., 9.625% Nts., 12/15/05(1) $ 200,000 $ 175,500
--------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375% Sr. Unsec. Nts., 11/15/06 1,000,000 965,000
10.75% Sr. Nts., 8/1/05 125,000 127,656
--------------------------------------------------------------------------------------------------------
Federal-Mogul Corp., 7.375% Nts., 1/15/06 3,850,000 2,802,846
--------------------------------------------------------------------------------------------------------
Ford Motor Co., 7.45% Bonds, 7/16/31 8,750,000 8,222,638
--------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Unsec. Sub. Nts., 8/15/08 150,000 150,563
--------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 200,000 197,500
--------------------------------------------------------------------------------------------------------
Johnson Controls, Inc., 7.70% Debs., 3/1/15 500,000 501,989
--------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc, 10.50% First Priority Ship
Mtg. Nts., 6/30/07(5) 300,000 121,500
--------------------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Unsec. Sub. Nts., Series D, 6/15/07 200,000 175,000
--------------------------------------------------------------------------------------------------------
Tenneco, Inc., 11.625% Sr. Unsec. Sub. Nts., Series B, 10/15/09 300,000 268,500
--------------------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 150,000 110,250
--------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
13.375% Sr. Disc. Nts., Series B, 12/15/03 1,100,000 1,095,875
------------
14,914,817
--------------------------------------------------------------------------------------------------------
Utility--3.1%
Azurix Corp., 10.75% Sr. Nts., 2/15/10(5) 100,000 96,750
--------------------------------------------------------------------------------------------------------
Calpine Corp.:
7.75% Sr. Nts., 4/15/09 350,000 331,625
8.75% Sr. Nts., 7/15/07 185,000 180,606
--------------------------------------------------------------------------------------------------------
Connecticut Light & Power Co., 7.875% First
Refunding Mtg. Bonds, 10/1/24(13) 3,900,000 3,934,125
--------------------------------------------------------------------------------------------------------
Constellation Energy Group, Inc., 7.875% Medium-Term Nts., 4/1/05 4,500,000 4,507,587
--------------------------------------------------------------------------------------------------------
South Carolina Electric & Gas Co., 9% Mtg. Bonds, 7/15/06 500,000 532,638
--------------------------------------------------------------------------------------------------------
Tennessee Gas Pipeline Co., 7.50% Bonds, 4/1/17 100,000 95,177
------------
9,678,508
------------
Total Corporate Bonds and Notes (Cost $157,827,293) 147,856,134
Shares
========================================================================================================
Preferred Stocks--0.7%
Conseco Financing Trust I, 9.16% Cum. Trust
Orginated Preferred Securities 33,900 489,431
--------------------------------------------------------------------------------------------------------
Conseco Financing Trust VI:
9% Cum. Trust Orginated Preferred Securities 60,000 877,500
9% Cum. Trust Orginated Preferred Securities 22,750 314,234
--------------------------------------------------------------------------------------------------------
Conseco Financing Trust VII, 9.44% Cum. Trust
Orginated Preferred Securities 11,500 173,937
--------------------------------------------------------------------------------------------------------
CRIIMI MAE, Inc., 10.875% Cum. Cv., Series B, Non-Vtg.(8) 13,000 220,188
--------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum., Non-Vtg.(10) 2,670 138,173
--------------------------------------------------------------------------------------------------------
Star Gas Partners LP 330 5,074
------------
Total Preferred Stocks (Cost $3,197,875) 2,218,537
18 | OPPENHEIMER BOND FUND
<PAGE>
Market Value
Shares See Note 1
===================================================================================================
Common Stocks--0.0%
Intermedia Communications, Inc.(8) 186 $ 5,534
---------------------------------------------------------------------------------------------------
Optel, Inc.(1,8) 100 1
---------------------------------------------------------------------------------------------------
Price Communications Corp.(8) 1,657 39,043
---------------------------------------------------------------------------------------------------
Viatel, Inc.(8) 795 22,707
------------
Total Common Stocks (Cost $5,930) 67,285
Units
===================================================================================================
Rights, Warrants and Certificates--0.0%
---------------------------------------------------------------------------------------------------
Dairy Mart Convenience Stores, Inc. Wts., Exp. 12/12/01(1) 333 117
---------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/1/05(1) 300 3,072
---------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/23/03 1,668 --
---------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/23/03(1) 953 10
---------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 9/1/04(1) 2,800 --
---------------------------------------------------------------------------------------------------
HF Holdings, Inc. Wts., Exp. 9/27/00(1) 1,062 106
---------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 1,980 27,926
---------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/13/08(1) 150 15
---------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07(1) 200 2,375
---------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc. Wts., Exp. 12/15/07(1) 50 23,506
---------------------------------------------------------------------------------------------------
Real Time Data Co. Wts., Exp. 5/31/04(1) 121,440 1,214
---------------------------------------------------------------------------------------------------
Signature Brands USA, Inc. Wts., Exp. 8/15/02(1) 50 1,006
---------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/1/05(1) 1,200 13,950
------------
Total Rights, Warrants and Certificates (Cost $20,652) 73,297
Date Strike Contracts
===================================================================================================
Call Options Purchased--0.0%
U.S. Long Bond Futures, 9/20/00 Call
(Cost $25,507) 7/21/00 98% 70 42,656
Principal
Amount
===================================================================================================
Repurchase Agreements--6.0%
Repurchase agreement with Banc One Capital Markets, Inc., 6.55%,
dated 6/30/00, to be repurchased at $18,535,112 on 7/3/00,
collateralized by U.S. Treasury Nts., 5%-7.50%, 8/31/00-5/15/08,
with a value of $13,974,485 and U.S. Treasury Bonds, 5.25%-12%,
8/15/03-11/15/28, with a value of $4,936,554 (Cost $18,525,000) $18,525,000 18,525,000
---------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $315,835,797) 97.6% 301,604,938
---------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 2.4 7,409,432
----------------------------
Net Assets 100.0% $309,014,370
============================
</TABLE>
19 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Footnotes to Statement of Investments
Principal amount is reported in U.S. Dollars, except for those denoted in the
following currency:
EUR Euro
1. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
2. 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.
3. Represents the current interest rate for a variable or increasing rate
security.
4. When-issued security to be delivered and settled after June 30, 2000.
5. 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 $39,533,488 or 12.79% of the Fund's net
assets as of June 30, 2000.
6. 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.
7. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
8. Non-income-producing security.
9. Issuer is in default.
10. Interest or dividend is paid in kind.
11. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
12. 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, principal amount disclosed represents total
underlying principal.
13. Securities with an aggregate market value of $554,813 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Unaudited
<TABLE>
<CAPTION>
June 30, 2000
===============================================================================================
<S> <C>
Assets
Investments, at value (cost $315,835,797)--see accompanying statement $301,604,938
-----------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 10,310,307
Interest, dividends and principal paydowns 4,627,376
Shares of beneficial interest sold 395,880
Daily variation on futures contracts 1,785
Other 711
------------
Total assets 316,940,997
===============================================================================================
Liabilities
Bank overdraft 115,980
-----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $1,398,256 purchased on a when-issued basis) 5,900,270
Shares of beneficial interest redeemed 830,277
Dividends 579,285
Distribution and service plan fees 187,765
Transfer and shareholder servicing agent fees 172,188
Trustees' compensation 1,968
Other 138,894
------------
Total liabilities 7,926,627
===============================================================================================
Net Assets $309,014,370
============
===============================================================================================
Composition of Net Assets
Paid-in capital $343,864,478
-----------------------------------------------------------------------------------------------
Overdistributed net investment income (162,848)
-----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (20,611,936)
-----------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (14,075,324)
------------
Net Assets $309,014,370
============
</TABLE>
21 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
<CAPTION>
Unaudited
=========================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$204,187,369 and 20,900,003 shares of beneficial interest outstanding) $ 9.77
Maximum offering price per share (net asset value plus sales charge of 4.75% of
offering price) $10.26
-----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $82,146,974
and 8,412,274 shares of beneficial interest outstanding) $ 9.77
-----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $22,391,425
and 2,290,750 shares of beneficial interest outstanding) $ 9.77
-----------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $288,602 and 29,604 shares of beneficial interest outstanding) $ 9.75
</TABLE>
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENT OF OPERATIONS Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 2000
=======================================================================================
<S> <C>
Investment Income
Interest $13,694,480
---------------------------------------------------------------------------------------
Dividends 309,910
-----------
Total income 14,004,390
=======================================================================================
Expenses
Management fees 1,167,770
---------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 249,234
Class B 427,578
Class C 112,177
---------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 304,705
Class B 124,892
Class C 32,862
Class Y 472
---------------------------------------------------------------------------------------
Custodian fees and expenses 37,003
---------------------------------------------------------------------------------------
Trustees' compensation 2,986
---------------------------------------------------------------------------------------
Other 107,114
-----------
Total expenses 2,566,793
Less expenses paid indirectly (17,032)
-----------
Net expenses 2,549,761
=======================================================================================
Net Investment Income 11,454,629
=======================================================================================
Realized and Unrealized Gain (Loss)
Net realized loss on:
Investments (7,203,721)
Closing of futures contracts (1,214,814)
Closing and expiration of option contracts written (391,353)
Foreign currency transactions (427)
-----------
Net realized loss (8,810,315)
---------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments 2,329,999
Translation of assets and liabilities denominated in foreign currencies (11,324)
-----------
Net change 2,318,675
-----------
Net realized and unrealized loss (6,491,640)
=======================================================================================
Net Increase in Net Assets Resulting from Operations $ 4,962,989
===========
</TABLE>
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER BOND FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 December 31,
(Unaudited) 1999
===========================================================================================================
<S> <C> <C>
Operations
Net investment income $ 11,454,629 $ 24,602,519
-----------------------------------------------------------------------------------------------------------
Net realized loss (8,810,315) (9,901,388)
-----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 2,318,675 (21,776,385)
------------------------------
Net increase (decrease) in net assets resulting from operations 4,962,989 (7,075,254)
===========================================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (7,949,178) (17,338,583)
Class B (2,863,537) (5,781,656)
Class C (752,652) (1,471,630)
Class Y (9,903) (2,474)
===========================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions:
Class A (11,971,232) (4,788,442)
Class B (10,896,477) 15,000,170
Class C (1,289,996) 4,420,733
Class Y 107,826 187,967
===========================================================================================================
Net Assets
Total decrease (30,662,160) (16,849,169)
-----------------------------------------------------------------------------------------------------------
Beginning of period 339,676,530 356,525,699
------------------------------
End of period (including overdistributed net investment
income of $162,848 and $42,207, respectively) $309,014,370 $339,676,530
==============================
</TABLE>
See accompanying Notes to Financial Statements.
24 | OPPENHEIMER BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 Dec. 31,
Class A (Unaudited) 1999 1998 1997 1996 1995
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.97 $10.86 $10.97 $10.70 $10.98 $10.01
--------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .37 .71 .71 .77 .78 .69
Net realized and unrealized gain (loss) (.20) (.89) (.11) .27 (.28) .96
-----------------------------------------------------------------------------
Total income (loss) from investment
operations .17 (.18) .60 1.04 .50 1.65
--------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.37) (.71) (.71) (.77) (.75) (.68)
Tax return of capital -- -- -- -- (.03) --
-----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.37) (.71) (.71) (.77) (.78) (.68)
--------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.97 $10.86 $10.97 $10.70 $10.98
=============================================================================
================================================================================================================================
Total Return, at Net Asset Value(1) 1.76% (1.65)% 5.61% 10.13% 4.87% 16.94%
================================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $204,187 $220,502 $246,668 $190,706 $193,515 $169,059
--------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $208,918 $251,190 $217,944 $187,458 $178,130 $116,940
--------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 7.51% 6.88% 6.46% 7.20% 7.35% 6.47%
Expenses 1.35% 1.24% 1.22%(3) 1.27%(3) 1.30%(3) 1.27%(3)
Expenses, net of voluntary assumption
of expenses N/A N/A N/A N/A N/A 1.26%
--------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 238% 67% 51% 54% 175%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
25 | OPPENHEIMER BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 Dec. 31,
Class B (Unaudited) 1999 1998 1997 1996 1995
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.96 $10.86 $10.97 $10.69 $10.98 $10.01
---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .33 .63 .62 .69 .70 .63
Net realized and unrealized gain (loss) (.19) (.90) (.10) .28 (.29) .94
----------------------------------------------------------------------------
Total income (loss) from investment
operations .14 (.27) .52 .97 .41 1.57
---------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.33) (.63) (.63) (.69) (.67) (.60)
Tax return of capital -- -- -- -- (.03) --
----------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.33) (.63) (.63) (.69) (.70) (.60)
---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.96 $10.86 $10.97 $10.69 $10.98
============================================================================
===========================================================================================================================
Total Return, at Net Asset Value(1) 1.48% (2.48)% 4.81% 9.41% 3.99% 16.06%
===========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $82,147 $94,845 $88,061 $48,255 $38,826 $39,187
---------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $85,915 $95,285 $64,330 $41,439 $38,068 $12,823
---------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income 6.75% 6.13% 5.68% 6.42% 6.59% 5.84%
Expenses 2.11% 1.99% 1.97%(3) 2.02%(3) 2.05%(3) 2.12%(3)
Expenses, net of voluntary assumption
of expenses N/A N/A N/A N/A N/A 2.08%
---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 238% 67% 51% 54% 175%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
26 | OPPENHEIMER BOND FUND
<PAGE>
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 Dec. 31,
Class C (Unaudited) 1999 1998 1997 1996 1995(1)
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.97 $10.87 $10.98 $10.70 $10.99 $10.89
--------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .33 .63 .62 .69 .70 .28
Net realized and unrealized gain (loss) (.20) (.90) (.10) .28 (.29) .10
---------------------------------------------------------------------------
Total income (loss) from investment
operations .13 (.27) .52 .97 .41 .38
--------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.33) (.63) (.63) (.69) (.67) (.28)
Tax return of capital -- -- -- -- (.03) --
---------------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.33) (.63) (.63) (.69) (.70) (.28)
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.77 $9.97 $10.87 $10.98 $10.70 $10.99
===========================================================================
==========================================================================================================================
Total Return, at Net Asset Value(2) 1.37% (2.47)% 4.81% 9.39% 4.00% 3.76%
==========================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $22,391 $24,143 $21,796 $9,188 $4,322 $3,971
--------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $22,549 $24,218 $15,198 $6,134 $3,404 $979
--------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 6.75% 6.13% 5.66% 6.36% 6.60% 6.32%
Expenses 2.11% 1.99% 1.96%(4) 2.02%(4) 2.05%(4) 2.25%(4)
Expenses, net of voluntary assumption
of expenses N/A N/A N/A N/A N/A 1.96%
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 167% 238% 67% 51% 54% 175%
</TABLE>
1. For the period from July 11, 1995 (inception of offering) to December 31,
1995.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
27 | OPPENHEIMER BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, 2000 Dec. 31,
Class Y (Unaudited) 1999 1998(1)
=====================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $9.95 $10.86 $10.88
-------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 .76 .49
Net realized and unrealized loss (.19) (.91) (.02)
----------------------------
Total income (loss) from investment operations .17 (.15) .47
-------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.37) (.76) (.49)
Tax return of capital -- -- --
----------------------------
Total dividends and/or distributions to shareholders (.37) (.76) (.49)
-------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $9.95 $10.86
============================
=====================================================================================
Total Return, at Net Asset Value(2) 1.70% (1.37)% 4.40%
=====================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $289 $186 $1
-------------------------------------------------------------------------------------
Average net assets (in thousands) $273 $31 $1
-------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 7.15% 7.94% 6.84%
Expenses 1.74% 0.83% 0.74%(4)
Expenses, net of voluntary assumption of expenses N/A N/A N/A
-------------------------------------------------------------------------------------
Portfolio turnover rate 167% 238% 67%
</TABLE>
1. For the period from April 27, 1998 (inception of offering) to December 31,
1998.
2. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period, (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
See accompanying Notes to Financial Statements.
28 | OPPENHEIMER 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, an 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's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class Y shares. Class A shares
are sold at their offering price, which is normally net asset value plus a
front-end sales charge. Class B and Class C shares are sold without a front-end
sales charge but may be subject to a contingent deferred sales charge (CDSC).
Class Y shares are sold to certain institutional investors without either a
front-end sales charge or a CDSC. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Classes A, B and C have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a when-issued basis can take place a
month or more after the trade date. Normally the settlement date occurs within
six months after the trade date; however, the Fund may, from time to time,
purchase securities whose settlement date extends beyond six months and possibly
as long as two years or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
segregated assets with a market value equal to or greater than the amount of its
purchase commitments. The purchase of securities on a when-issued or forward
commitment basis may increase the volatility of the Fund's net asset value to
the extent the Fund makes such purchases while remaining substantially fully
invested. As of June 30, 2000, the Fund had entered into outstanding net
when-issued or forward commitments of $1,398,256.
29 | OPPENHEIMER BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
1. Significant Accounting Policies Continued
In connection with its ability to purchase securities on a when-issued basis,
the Fund may enter into mortgage dollar-rolls in which the Fund sells securities
for delivery in the current month and simultaneously contracts with the same
counterparty to repurchase similar (same type, coupon and maturity) but not
identical securities on a specified future date. The Fund records each
dollar-roll as a sale and a new purchase transaction.
--------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. As of June 30, 2000, securities with an
aggregate market value of $80,250, representing 0.03% of the Fund's net assets,
were in default.
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
--------------------------------------------------------------------------------
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.
30 | 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. As of December 31, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $16,500,000, which expires between 2002 and 2007.
--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
Classification of Dividends and 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 dividends and distributions made during the
fiscal year from net investment income or net realized gains may differ from its
ultimate characterization for federal income tax purposes. Also, due to timing
of dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or realized gain was
recorded by the Fund.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Discount on securities purchased is
accreted over the life of the respective securities, in accordance with federal
income tax requirements. Realized gains and losses on investments and options
written and unrealized appreciation and depreciation are determined on an
identified cost basis, which is the same basis used for federal income tax
purposes. Dividends-in-kind are recognized as income on the ex-dividend date, at
the current market value of the underlying security. Interest on payment-in-kind
debt instruments is accrued as income at the coupon rate and a market adjustment
is made periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
31 | 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, 2000 Year Ended December 31, 1999
Shares Amount Shares Amount
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 2,988,924 $ 29,301,818 7,601,510 $ 79,476,026
Dividends and/or
distributions reinvested 583,904 5,715,299 1,198,033 12,396,430
Redeemed (4,795,975) (46,988,349) (9,387,618) (96,660,898)
----------------------------------------------------------
Net decrease (1,223,147) $(11,971,232) (588,075) $ (4,788,442)
==========================================================
---------------------------------------------------------------------------------------
Class B
Sold 1,182,598 $ 11,607,933 4,714,675 $ 49,226,055
Dividends and/or
distributions reinvested 205,390 2,010,457 402,538 4,154,699
Redeemed (2,495,938) (24,514,867) (3,708,753) (38,380,584)
----------------------------------------------------------
Net increase (decrease) (1,107,950) $(10,896,477) 1,408,460 $ 15,000,170
==========================================================
---------------------------------------------------------------------------------------
Class C
Sold 449,321 $ 4,394,587 1,334,801 $ 13,962,276
Dividends and/or
distributions reinvested 52,175 511,141 102,081 1,054,381
Redeemed (631,833) (6,195,724) (1,021,671) (10,595,924)
----------------------------------------------------------
Net increase (decrease) (130,337) $ (1,289,996) 415,211 $ 4,420,733
==========================================================
---------------------------------------------------------------------------------------
Class Y
Sold 30,153 $ 296,624 18,627 $ 187,967
Dividends and/or
distributions reinvested -- -- -- --
Redeemed (19,268) (188,798) -- --
----------------------------------------------------------
Net increase 10,885 $ 107,826 18,627 $ 187,967
==========================================================
</TABLE>
================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the six months ended June 30, 2000, were
$504,665,751 and $543,332,791, respectively.
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets of the Fund, 0.72% of the
next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, 0.60% of the next $200 million and 0.50% of average annual net assets
in excess of $1 billion. The Fund's management fee for the six months ended June
30, 2000 was an annualized rate of 0.74%, before any waiver by the Manager if
applicable.
32 | OPPENHEIMER BOND FUND
<PAGE>
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund on an
"at-cost" basis. OFS also acts as the transfer and shareholder servicing agent
for the other Oppenheimer funds.
--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 30, 2000 $169,831 $47,765 $39,572 $317,166 $34,250
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
June 30, 2000 $4,420 $223,452 $5,876
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
--------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the six months ended June 30, 2000, payments
under the Class A plan totaled $249,234, all of which were paid by the
Distributor to recipients, and included $55,635 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
--------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
33 | OPPENHEIMER BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
4. Fees and Other Transactions with Affiliates Continued
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended June 30,
2000, were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $427,578 $363,917 $3,007,101 3.66%
Class C Plan 112,177 37,143 392,508 1.75
</TABLE>
================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuations. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transaction. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
34 | OPPENHEIMER BOND FUND
<PAGE>
================================================================================
6. Futures Contracts
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a particular price on a stipulated future
date at a negotiated price. Futures contracts are traded on a commodity
exchange. The Fund may buy and sell futures contracts that relate to
broadly-based securities indices "financial futures" or debt securities
"interest rate futures" in order to gain exposure to or to seek to protect
against changes in market value of stock and bonds or 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 decreases in market value of 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
and/or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of June 30, 2000, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Expiration Number of Valuation as of Unrealized
Contract Description Date Contracts June 30, 2000 Appreciation
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
U.S. Long Bond Futures, 10 yr. 9/20/00 70 $ 6,814,063 $ 4,375
U.S. Treasury Nts., 5 yr. 9/20/00 74 7,327,156 54,015
U.S. Treasury Nts., 10 yr. 9/20/00 130 12,802,969 97,094
--------
$155,484
========
</TABLE>
35 | OPPENHEIMER BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
7. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.
Written option activity for the six months ended June 30, 2000 was as follows:
<TABLE>
<CAPTION>
Put Options
------------------------
Number of Amount of
Options Premiums
---------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding as of December 31, 1999 175 $ 176,859
Options written 405 246,719
Options closed or expired (580) (423,578)
------------------------
Options outstanding as of June 30, 2000 -- $ --
========================
</TABLE>
36 | OPPENHEIMER BOND FUND
<PAGE>
================================================================================
8. Illiquid or Restricted Securities
As of June 30, 2000, investments in securities included issues that are illiquid
or restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 2000, was $26,466,283,
which represents 8.60% of the Fund's net assets, of which $399,468 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Dates Cost Per Unit June 30, 2000
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bonds
TAG Heuer International SA, 12%
Sr. Sub. Nts., 12/15/05 12/8/95 100.00% 107.64%
Stocks and Warrants
Real Time Data Wts., Exp. 5/31/04 6/30/99 $0.01 $0.01
</TABLE>
================================================================================
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 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the six months ended June 30,
2000.
37 | OPPENHEIMER BOND FUND
<PAGE>
OPPENHEIMER BOND FUND
A Series of Oppenheimer Integrity Funds
================================================================================
Officers and Trustees James C. Swain, Trustee
and Chairman of the Board
Bridget A. Macaskill, Trustee and President
William L. Armstrong, Trustee
Robert G. Avis, Trustee
William A. Baker, Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
David P. Negri, Vice President
John S. Kowalik, Vice President
Andrew J. Donohue, Vice President and Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and OppenheimerFunds Services
Shareholder Servicing
Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been taken
from the records of the Fund without examination of
those records by 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 other material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any bank,
are not insured by the FDIC or any other agency, and
involve investment risks, including the possible loss of
the principal amount invested.
Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York,
NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights
reserved.
38 | OPPENHEIMER BOND FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
=========================================================================================================
<S> <C> <C>
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
=========================================================================================================
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
=========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
=========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this Fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
39 | OPPENHEIMER BOND FUND
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE>
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--------------------------------------------------------------------------------
General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
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--------------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
Ticker Symbols Class A: OPIGX Class B: OIGBX Class C: OPBCX Class Y: N/A
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[logo] OppenheimerFunds(R)
Distributor, Inc.
RS0285.001.0600 August 29, 2000
