Oppenheimer Asset Allocation Fund
Annual Report December 31, 1995
(Picture of Patio Barbecue)
"We need the
comfort
that comes
from
diversifying
across
different
types of
investments...
but we
want it from
one fund."
(Oppenheimer Logo(R))
<PAGE>
This Fund is for people who want one investment to do it all--strategically
allocating their money across stocks, bonds, and money market securities.
News
Outstanding Total Return
Cumulative Total Return for the
3-Year Period Ended 12/31/95:
Oppenheimer Asset Allocation Fund
Class A (at net asset value)1
40.53%
Lipper Flexible Portfolio Funds Average3
Performance
36.15%
How Your Fund Is Managed
Oppenheimer Asset Allocation Fund uses a combination of investment styles to
seek high total return while managing risk.
The Fund seeks to achieve its goals by investing in a combination of
stocks, bonds and money market instruments--strategically allocated to take
advantage of current economic conditions.
Investing in stocks can offer the best potential for long-term growth. The
Fund's managers invest in established U.S. and inter-national companies that
they believe have excellent potential for appreciation.
And the Fund seeks income from diver-sified fixed-income and money market
investments which can act as a cushion against fluctuations in the value of the
stocks in the Fund's portfolio.
Performance
Total return at net asset value for the 12 months ended 12/31/95 was 22.79% for
Class A shares and 21.69% for Class C shares.1
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 12/31/95 and since inception
of the Class on 4/24/87 were 15.73%, 10.31% and 8.77%, respectively. For Class C
shares, average annual total returns for the 1-year period ended 12/31/95 and
since inception of the Class on 12/1/93 were 20.69% and 9.68%, respectively.2
Outlook
"Our outlook remains optimistic. The domestic markets have performed very well
over the past year, and we expect them to continue to provide solid
opportunities to diversified investors like ourselves."
Richard Rubinstein, Portfolio Manager
December 31, 1995
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. 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. For more complete information, please review the
prospectus carefully before you invest.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales chanrges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 12/31/94,
12/31/90 and 4/24/87 (inception of class), after deducting the current maximum
initial sales charge of 5.75%. Prior to 4/1/91, the Fund's maximum sales charge
rate for Class A shares was higher, so that actual account results would have
been less. Class C returns show results of hypothetical investments on 12/31/94
and 12/1/93 (inception of class), with the 1% contingent deferred sales charge
deducted for the 1-year result. Class B cumulative total return since inception
(8/29/95) was -0.47%. An explanataion of the different performance calculations
is in the Fund's prospectus.
3. Source: Lipper Analytical Services. The Lipper total return average for the
3-year period was for 64 flexible portfolio funds. The average is shown for
comparative purposes only. Oppenheimer Asset Allocation Fund is characterized by
Lipper as a flexible portfolio fund. Lipper performance does not take sales
charges into consideration.
2 Oppenheimer Asset Allocation Fund
<PAGE>
(PHOTO OF BRIDGET A. MACASKILL)
Bridget A. Macaskill
President
Oppenheimer Asset
Allocation Fund
Dear OppenheimerFunds Shareholder,
The U.S. stock market put on quite a show in 1995 with the Dow Jones Industrial
Average breaking the 5000 barrier. During 1995, conditions were ideal for rising
stock prices. The economy grew fast enough to generate strong corporate
profits--but not so fast as to rekindle inflation. And intermediate and
long-term interest rates fell sharply, as investors anticipated that the Federal
Reserve Board had shifted from its restrictive monetary policy of the prior
year.
Leading the rally on Wall Street for much of the year were technology
stocks. Even after a bumpy Fall, many stocks in semiconductors, computers,
software and telecommunications doubled during the year. The global demand for
these products--developed and manufactured by American companies--continued
unabated.
The reduction in the rate of growth of health care expenditures is just one
reason why inflation remains moderate. Another reason is the plentiful supply of
inexpensive energy. In addition, the emergence of capitalism throughout the
world has created a global economy of new markets and new competitors, dampening
prices and labor costs. And after many years of promise, technology has finally
created efficiencies in the business environment.
But the primary fuel to stock prices came from corporate profits, which
have been surging in the past few years, due in large part to a rise in U.S.
corporate productivity. The determination of Corporate America to be successful
in today's highly competitive markets has led to a strategy of tight cost
control with an emphasis on efficiency. With a global boom in technology and a
weak dollar in the first half of the year--which made U.S. goods more attractive
overseas--corporate earnings and profitability have remained very strong,
growing about 20% between 1994 and 1995.
With the Dow less than 1000 just 15 years ago and only 2500 five years ago,
it's clear that the stock market's advance has been tremendous. So the question
remains, "Is the case for stocks still strong?"
Certainly, market volatility would be expected at this point in a five year
bull market, especially since there hasn't been a "normal correction" of 10% or
more since 1990. And the slowdown in the economy is likely to translate into
soft profit growth this year.
But the underlying economic conditions that have driven stocks thus
far--moderate growth with low inflation, falling interest rates, and a Corporate
America that's committed to increased efficiency--remain in place. Additionally,
there is increasing demand for U.S. exports in light of expanding inte rnational
economies, as well as the increasing belief that U.S. technologies lead the
world. As a result, we believe that the stock market continues to offer a good
value for investors. But, realistically, we don't expect another year like 1995
any time soon.
Your portfolio manager discusses the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, and we look forward to helping you reach your investment goals
in the future.
/s/ Bridget A. Macaskill
Bridget A. Macaskill
January 22, 1996
3 Oppenheimer Asset Allocation Fund
<PAGE>
Q + A
(PHOTO OF RICHARD RUBINSTEIN, PORTFOLIO MANAGER, WITH ROBERT DOLL, EXECUTIVE VP,
DIRECTOR OF EQUITY INVESTMENTS)
(PHOTO OF PAUL LAROCCO, MEMBER OF EQUITY INVESTMENTS TEAM)
(PHOTO OF ROBERT DOLL)
Q What
do you
look for in
stocks?
An interview with your Fund's managers.
How has the Fund performed over the past six months?
The Fund has performed very well over the period, primarily due to our broad
diversification. Because different types of securities will perform better at
different times, we employ five complementary investment strategies and invest
in both stocks and bonds. This approach to the markets has allowed us to turn in
another period of solid results with lower than average risk.
What are the primary reasons for the Fund's performance?
Our performance was driven primarily by our holdings in domestic stocks and
bonds. In stocks, we had large positions in two of the top-performing sectors of
the market, technology and healthcare. Both of these areas outperformed the
market due to expectations for continued strong earnings in what has become a
slower-growing economy. As for our investments in domestic bonds, declining
interest rates had a dramatic--and very positive--effect on longer-term issues.
We also benefited from our longer term Treasuries and dollar denominated foreign
bonds.1
Were there any investments that didn't perform as expected?
Though we believe they will outperform the U.S. over time, foreign stocks and
bonds performed relatively poorly over the past six months. Growth in Europe is
currently slow, and interest rates there haven't declined as quickly as
expected, which held markets back. In Japan, we believe there is again great
potential, but it hasn't translated into returns yet.
What areas have you targeted recently?
For the past several months, high quality growth stocks have been the place to
be--and these companies, such as brand name consumer products, pharmaceuticals
and
1. The Fund's portfolio is subject to change.
4 Oppenheimer Asset Allocation Fund
<PAGE>
Facing page
Top left: Richard Rubinstein, Portfolio Manager, with Robert Doll, Executive VP,
Director of Equity Investments
Top right: Paul LaRocco, Member of Equity Investments Team
Bottom: Robert Doll
This page
Top: Richard Rubinstein
Bottom: Bruce Bartlett, Member
of Equity Investments Team
A Dominant market positions
and strong
balance sheets.
food and beverage makers--should continue to benefit as the economy matures.
Because of the steady nature of their sales, we believe investors will be drawn
to these companies throughout 1996, when the economy is likely to grow at
a slower pace.
We've also continued to increase our exposure to foreign markets. We think
foreign investing makes sense. With populations that are less mature and with
many primary needs yet to be satisfied, foreign markets should grow faster than
the U.S. over time. We're taking advantage of a time of relatively low stock
prices as an opportunity to buy the companies we think have the best market
positions.
In addition, we're increasing our positions in some of our top holdings at
this time--companies with stock prices we consider low for the value of the
company and with managements that are maintaining a tight rein on costs. Beyond
that, we're always looking for opportunities to buy stocks that are temporarily
out of favor but that have dominant market positions and strong balance sheets.
As far as income, we're strategically positioned just about equally across
U.S. Treasuries, foreign bonds and corporate high yield bonds. As U.S. interest
rates came down, causing prices to go up on U.S. Treasuries over the year, we
began to sell our holdings in Treasuries and to increase our positions in
foreign bonds. Yields outside of the U.S. are currently much more attractive
than domestic yields, and though foreign investing entails greater expenses and
risks, we believe that the risk of currency fluctuation has declined now that
the dollar has stabilized.
What is your outlook for the Fund?
Our outlook remains optimistic. The domestic markets have performed very well
over the past year, and we expect them to continue to provide solid
opportunities. While corporate earnings rates are likely to slow from what we've
seen over the past two years, we believe they will remain strong--and continued
low interest rates should bode well for prices of both stocks and bonds. Outside
of the U.S., our foreign holdings offer both solid growth potential and an
opportunity for strategic diversification. (Soild Box)
(PHOTO OF RICHARD RUBINSTEIN)
(PHOTO OF BRUCE BARTLETT, MEMBER OF EQUITY INVESTMENTS TEAM)
5 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Investments December 31, 1995
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
==================================================================================================================================
Mortgage-Backed Obligations--0.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Government Agency--0.4%
- ----------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/Sponsored--0.2%
Federal National Mortgage Assn.:
11.50%, 7/1/11 $ 219,623 $ 247,103
11.75%, 1/1/16 279,716 318,002
-----------
565,105
- ----------------------------------------------------------------------------------------------------------------------------------
GNMA/Guaranteed--0.2%
Government National Mortgage Assn., 9%, 11/15/08--5/15/09 575,128 615,730
- ----------------------------------------------------------------------------------------------------------------------------------
Private--0.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Multi-Family--0.2% Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1994-C2, Cl. E, 8%, 4/25/25 394,662 372,463
-----------
Total Mortgage-Backed Obligations (Cost $1,410,596) 1,553,298
==================================================================================================================================
U.S. Government Obligations--14.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Treasury--14.2% U.S. Treasury Nts.:
7.875%, 6/30/96 8,500,000 8,611,562
8.25%, 7/15/98 16,000,000 17,130,000
8.875%, 11/15/98 950,000 1,040,250
9.25%, 1/15/96 825,000 827,320
9.25%, 8/15/98 9,450,000 10,362,510
-----------
Total U.S. Government Obligations (Cost $36,136,078) 37,971,642
==================================================================================================================================
Foreign Government Obligations--11.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of):
Bonds, Bonos de Consolidacion de Deudas, Series I, 5.836%, 4/1/01(2)(3) 1,481,550 1,163,275
Par Bonds, 5%, 3/31/23(4) 2,500,000 1,426,562
Past Due Interest Bonds, Series L, 6.812%, 3/31/05(2) 3,000,000 2,145,000
-------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon:
48.252%, 10/3/96(5) MXP 4,384,900 420,019
51.195%, 9/12/96(5) MXP 4,667,740 455,943
-------------------------------------------------------------------------------------------------------------
Canada (Government of) Bonds:
9.75%, 12/1/01 CAD 6,000,000 5,056,425
9.75%, 6/1/01 CAD 2,000,000 1,673,861
-------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 8%, 3/15/06 DKK 21,900,000 4,167,156
-------------------------------------------------------------------------------------------------------------
Eskom Loan Participation Agreements, Series 168, 11%, 6/1/08 ZAR 6,430,000 1,437,352
-------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali,
8.50%, 8/1/99 ITL 1,800,000,000 1,076,892
-------------------------------------------------------------------------------------------------------------
Poland (Republic of) Treasury Bills, Zero Coupon:
24.131%, 11/13/96(5) PLZ 2,300,000 766,728
24.426%, 7/3/96(5) PLZ 2,140,000 771,300
-------------------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Gtd. Exch. Nts., 10.50%, 5/15/03 AUD 5,000,000 4,192,008
-------------------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 8.25%, 10/15/03 AUD 3,000,000 2,228,812
-------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 13%, 7/14/00 GBP 1,050,000 2,017,409
-------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.812%, 3/31/07(2) 1,500,000 836,250
-----------
Total Foreign Government Obligations (Cost $28,390,840) 29,834,992
</TABLE>
6 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
==================================================================================================================================
Non-Convertible Corporate Bonds and Notes--12.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--1.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Chemicals--0.2% Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 $ 500,000 $ 568,969
- ----------------------------------------------------------------------------------------------------------------------------------
Metals--0.5% Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 400,000 418,668
-------------------------------------------------------------------------------------------------------------
Inland Steel Industries, Inc., 12.75% Nts., 12/15/02 400,000 452,000
-------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 500,000 551,250
-----------
1,421,918
- ----------------------------------------------------------------------------------------------------------------------------------
Paper--0.8% Gaylord Container Corp., 0%/12.75% Sr. Sub. Disc. Debs., 5/15/05(6) 600,000 591,000
-------------------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.875% Second Priority Sr. Nts., 5/1/06 1,000,000 955,000
-------------------------------------------------------------------------------------------------------------
Riverwood International Corp., 10.75% Sr. Nts., 6/15/00 500,000 534,375
-----------
2,080,375
- ----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--5.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.3%Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 725,000 685,125
- ----------------------------------------------------------------------------------------------------------------------------------
Leisure & Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 297,564 314,302
Entertainment--0.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Media--4.8% Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 1,000,000 980,000
-------------------------------------------------------------------------------------------------------------
Bell Cablemedia PLC, 0%/11.875% Sr. Disc. Nts., 9/15/05(6)(7) 800,000 508,000
-------------------------------------------------------------------------------------------------------------
Cablevision Industries Corp., 9.25% Sr. Debs., Series B, 4/1/08 1,000,000 1,085,000
-------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 500,000 531,250
-------------------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 1,000,000 1,065,000
-------------------------------------------------------------------------------------------------------------
Diamond Cable Communications PLC, 0%/13.25% Sr. Disc. Nts., 9/30/04(6) 500,000 353,750
-------------------------------------------------------------------------------------------------------------
News America Holdings, Inc., 8.50% Sr. Nts., 2/15/05 1,000,000 1,128,758
-------------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr. Sub.
Disc. Nts., 8/1/03(6) 1,250,000 1,031,250
-------------------------------------------------------------------------------------------------------------
People's Choice TV Corp., 0%/13.125% Sr. Disc. Nts., 6/1/04(6) 500,000 288,750
-------------------------------------------------------------------------------------------------------------
Rogers Cablesystems Ltd., 10% Sr. Sec. Second Priority Debs., 12/1/07 1,000,000 1,067,500
-------------------------------------------------------------------------------------------------------------
SCI Television, Inc., 11% Sr. Nts., Series 1, 6/30/05 500,000 527,500
-------------------------------------------------------------------------------------------------------------
TeleWest PLC, 9.625% Sr. Debs., 10/1/06 1,000,000 1,021,250
-------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 7.95% Nts., 2/1/00 1,000,000 1,057,336
-------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,100,000 1,294,457
-------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
12.819%, 11/15/99(5) 1,000,000 625,000
-------------------------------------------------------------------------------------------------------------
Videotron Holdings PLC, 0%/11% Sr. Disc. Nts., 8/15/05(6) 500,000 312,500
-----------
12,877,301
- ----------------------------------------------------------------------------------------------------------------------------------
Retail: General--0.3%
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 900,000 886,500
- ----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--0.2%
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 500,000 503,750
- ----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--1.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Food--0.8% Di Giorgio Corp., 12% Sr. Nts., 2/15/03 750,000 573,750
-------------------------------------------------------------------------------------------------------------
Grand Union Co., 12% Sr. Nts., 9/1/04 1,137,000 989,190
-------------------------------------------------------------------------------------------------------------
Ralph's Grocery Co., 11% Sr. Sub. Nts., 6/15/05 500,000 490,000
-----------
2,052,940
</TABLE>
7 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
<S> <C> <C>
==================================================================================================================================
Healthcare/Supplies Multicare Cos., Inc. (The), 12.50% Sr. Sub. Nts., 7/1/02 $ 345,000 $ 398,475
& Services--0.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Household Goods--0.3%
Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 12.09%, 5/27/98(5) 1,000,000 800,000
- ----------------------------------------------------------------------------------------------------------------------------------
Energy--0.9%
- ----------------------------------------------------------------------------------------------------------------------------------
Energy Services & Maxus Energy Corp., 11.50% Debs., 11/15/15 1,000,000 1,037,500
Producers--0.7% -------------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 750,000 853,125
-----------
1,890,625
- ----------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--0.2% Global Marine, Inc., 12.75% Sr. Sec. Nts., 12/15/99 400,000 443,000
- ----------------------------------------------------------------------------------------------------------------------------------
Financial--1.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Diversified GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 750,000 706,875
Financial--0.6% -------------------------------------------------------------------------------------------------------------
GPA Holland BV, 9.75% Medium-Term Nts., Series B, 6/10/96(7) 1,000,000 1,000,000
-----------
1,706,875
- ----------------------------------------------------------------------------------------------------------------------------------
Insurance--0.4% Conseco, Inc., 8.125% Sr. Nts., 2/15/03 1,000,000 987,965
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial--1.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Owens-Illinois, Inc.:
Materials--0.5% 10% Sr. Sub. Nts., 8/1/02 500,000 525,625
11% Sr. Debs., 12/1/03 650,000 736,937
-----------
1,262,562
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.3%
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 1,000,000 890,000
- ----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.2%
MacAndrews & Forbes Group, Inc., 12.25% Sub. Nts., 7/1/96 500,000 505,000
- ----------------------------------------------------------------------------------------------------------------------------------
Technology--0.8%
- ----------------------------------------------------------------------------------------------------------------------------------
Aerospace/ Communications & Power Industries, Inc., 12% Sr. Sub. Nts., 8/1/05 500,000 516,250
Defense--0.4% -------------------------------------------------------------------------------------------------------------
Unisys Corp., 13.50% Credit Sensitive Nts., 7/1/97(2) 400,000 382,000
-----------
898,250
- ----------------------------------------------------------------------------------------------------------------------------------
Telecommunications- Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 500,000 493,750
Technology--0.4% PriCellular Wireless Corp., 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(6) 800,000 622,000
-----------
1,115,750
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities--0.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Electric First PV Funding Corp., 10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 1,000,000 1,031,370
Utilities--0.4% -----------
Total Non-Convertible Corporate Bonds and Notes (Cost $32,720,862) 33,321,052
==================================================================================================================================
Convertible Corporate Bonds and Notes--0.5%
- ----------------------------------------------------------------------------------------------------------------------------------
MEDIQ, Inc., 7.50% Exchangeable Sub. Debs., 7/15/03 (Cost $1,541,270) 1,650,000 1,309,687
</TABLE>
8 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
==================================================================================================================================
Common Stocks--55.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Basic Materials--3.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.5% ARCO Chemical Co. 16,300 $ 792,587
-------------------------------------------------------------------------------------------------------------
Bayer AG, Sponsored ADR 90,000 2,380,041
-------------------------------------------------------------------------------------------------------------
IMC Global, Inc.(8) 19,200 784,800
----------
3,957,428
- ----------------------------------------------------------------------------------------------------------------------------------
Gold--0.1% Santa Fe Pacific Gold Corp. 14,600 177,025
- ----------------------------------------------------------------------------------------------------------------------------------
Metals--0.7% Brush Wellman, Inc. 93,300 1,609,425
-------------------------------------------------------------------------------------------------------------
Inland Steel Industries, Inc. 14,500 364,312
----------
1,973,737
- ----------------------------------------------------------------------------------------------------------------------------------
Paper--1.2% Aracruz Celulose SA, Sponsored ADR, Cl. B 110,000 852,500
-------------------------------------------------------------------------------------------------------------
Georgia-Pacific Corp. 9,300 638,212
-------------------------------------------------------------------------------------------------------------
Louisiana-Pacific Corp.(8) 29,300 710,525
-------------------------------------------------------------------------------------------------------------
MacMillan Bloedel Ltd. 20,900 253,412
-------------------------------------------------------------------------------------------------------------
Stone Container Corp. 46,300 665,562
----------
3,120,211
- ----------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--8.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--0.8%
Fiat SpA 320,000 1,040,848
-------------------------------------------------------------------------------------------------------------
General Motors Corp.(8) 20,000 1,057,500
----------
2,098,348
- ----------------------------------------------------------------------------------------------------------------------------------
Leisure & AMR Corp.(8)(9) 14,600 1,084,050
Entertainment--3.6% -------------------------------------------------------------------------------------------------------------
Carnival Corp., Cl. A 26,400 643,500
-------------------------------------------------------------------------------------------------------------
Cracker Barrel Old Country Store, Inc. 61,300 1,057,425
-------------------------------------------------------------------------------------------------------------
Eastman Kodak Co. 21,900 1,467,300
-------------------------------------------------------------------------------------------------------------
International Game Technology 69,600 756,900
-------------------------------------------------------------------------------------------------------------
King World Productions, Inc.(9) 40,000 1,555,000
-------------------------------------------------------------------------------------------------------------
Mattel, Inc.(8) 42,750 1,314,562
-------------------------------------------------------------------------------------------------------------
Shimano, Inc. 40,000 705,757
-------------------------------------------------------------------------------------------------------------
US West Media Group(9) 54,000 1,026,000
----------
9,610,494
- ----------------------------------------------------------------------------------------------------------------------------------
Media--1.8% Comcast Corp., Cl. A Special 95,000 1,727,812
-------------------------------------------------------------------------------------------------------------
Dow Jones & Co., Inc. 18,500 737,687
-------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR(7) 15,500 348,750
-------------------------------------------------------------------------------------------------------------
South China Morning Post Holdings Ltd. 1,200,000 733,322
-------------------------------------------------------------------------------------------------------------
Time Warner, Inc. 34,000 1,287,750
----------
4,835,321
- ----------------------------------------------------------------------------------------------------------------------------------
Retail: General--1.4%
Authentic Fitness Corp. 69,600 1,444,200
-------------------------------------------------------------------------------------------------------------
Cone Mills Corp.(9) 117,500 1,321,875
-------------------------------------------------------------------------------------------------------------
Price/Costco, Inc.(9) 65,900 1,004,975
-------------------------------------------------------------------------------------------------------------
Wal-Mart Stores, Inc. 1,400 31,325
----------
3,802,375
</TABLE>
9 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Retail: Specialty--0.6%
Best Buy Co., Inc.(9) 26,000 $ 422,500
-------------------------------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(9) 45,100 980,925
-------------------------------------------------------------------------------------------------------------
Venture Stores, Inc. 93,200 314,550
-----------
1,717,975
- ----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--11.0%
- ----------------------------------------------------------------------------------------------------------------------------------
Beverages--1.1% Guinness PLC 160,000 1,177,492
-------------------------------------------------------------------------------------------------------------
Whitman Corp. 75,100 1,746,075
-----------
2,923,567
- ----------------------------------------------------------------------------------------------------------------------------------
Food--1.3% Chiquita Brands International, Inc. 51,140 703,175
-------------------------------------------------------------------------------------------------------------
Groupe Danone 3,700 611,323
-------------------------------------------------------------------------------------------------------------
Nestle SA, Sponsored ADR 20,000 1,108,938
-------------------------------------------------------------------------------------------------------------
Sara Lee Corp.(8) 34,000 1,083,750
-----------
3,507,186
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.2%
Abbott Laboratories 18,000 751,500
-------------------------------------------------------------------------------------------------------------
American Home Products Corp. 9,000 873,000
-------------------------------------------------------------------------------------------------------------
Astra AB Free, Series A 37,250 1,489,504
-------------------------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 30,000 2,576,250
-------------------------------------------------------------------------------------------------------------
Ciba-Geigy AG 2,525 2,227,326
-------------------------------------------------------------------------------------------------------------
Genzyme Corp.(8)(9) 24,400 1,521,950
-------------------------------------------------------------------------------------------------------------
Johnson & Johnson 13,500 1,155,937
-------------------------------------------------------------------------------------------------------------
NBTY, Inc.(9) 137,500 653,125
-----------
11,248,592
- ----------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies Manor Care, Inc.(8) 32,000 1,120,000
& Services--3.3% -------------------------------------------------------------------------------------------------------------
Medtronic, Inc.(8) 24,800 1,385,700
-------------------------------------------------------------------------------------------------------------
Nellcor Puritan Bennett, Inc.(8)(9) 8,000 464,000
-------------------------------------------------------------------------------------------------------------
Pyxis Corp.(9) 33,300 487,012
-------------------------------------------------------------------------------------------------------------
U.S. Healthcare, Inc.(8) 75,000 3,487,500
-------------------------------------------------------------------------------------------------------------
Value Health, Inc.(9) 31,200 858,000
-------------------------------------------------------------------------------------------------------------
Wellpoint Health Networks, Inc., Cl. A(9) 35,000 1,124,375
-----------
8,926,587
- ----------------------------------------------------------------------------------------------------------------------------------
Household Goods--0.4%
Procter & Gamble Co. 12,000 996,000
- ----------------------------------------------------------------------------------------------------------------------------------
Tobacco--0.7% Philip Morris Cos., Inc.(8) 21,600 1,954,800
- ----------------------------------------------------------------------------------------------------------------------------------
Energy--3.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Energy Services & Coflexip SA, Sponsored ADR 41,900 790,863
Producers--1.0% -------------------------------------------------------------------------------------------------------------
Kerr-McGee Corp. 10,000 635,000
-------------------------------------------------------------------------------------------------------------
Landmark Graphics Corp.(9) 53,900 1,253,175
-----------
2,679,038
</TABLE>
10 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--2.7% Ashland Coal, Inc. 33,900 $ 724,613
-------------------------------------------------------------------------------------------------------------
Ashland, Inc. 20,000 702,500
-------------------------------------------------------------------------------------------------------------
Atlantic Richfield Co. 12,500 1,384,375
-------------------------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 7,000 987,875
-------------------------------------------------------------------------------------------------------------
Saga Petroleum AS, Cl. B 70,000 875,297
-------------------------------------------------------------------------------------------------------------
Total SA, Sponsored ADR 22,000 748,000
-------------------------------------------------------------------------------------------------------------
Unocal Corp. 62,000 1,805,750
-----------
7,228,410
- ----------------------------------------------------------------------------------------------------------------------------------
Financial--7.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Banks--4.5% Banco Frances del Rio de la Plata SA 120,750 1,068,844
-------------------------------------------------------------------------------------------------------------
Chemical Banking Corp. 86,200 5,064,250
-------------------------------------------------------------------------------------------------------------
Deutsche Bank, Sponsored ADR 22,500 1,068,502
-------------------------------------------------------------------------------------------------------------
NationsBank Corp. 68,700 4,783,238
-----------
11,984,834
- ----------------------------------------------------------------------------------------------------------------------------------
Diversified American Express Co. 29,400 1,216,425
Financial--1.2% -------------------------------------------------------------------------------------------------------------
H & R Block, Inc. 28,900 1,170,450
-------------------------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA 214,506 540,659
-------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(8) 8,000 408,000
-----------
3,335,534
- ----------------------------------------------------------------------------------------------------------------------------------
Insurance--1.5% Aetna Life & Casualty Co.(8) 9,000 623,250
-------------------------------------------------------------------------------------------------------------
American International Group, Inc.(8) 14,100 1,304,250
-------------------------------------------------------------------------------------------------------------
American Re Corp.(8) 52,000 2,125,500
-----------
4,053,000
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial--6.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--0.6%
General Electric Co. 23,800 1,713,600
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Corning, Inc. 30,300 969,600
Materials--1.4% -------------------------------------------------------------------------------------------------------------
Owens-Corning Fiberglass Corp.(8)(9) 60,000 2,692,500
-----------
3,662,100
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.1%
Huarte SA 88,350 399,088
- ----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--2.3% Jardine Matheson Holdings Ltd. 70,936 485,912
-------------------------------------------------------------------------------------------------------------
Mannesmann AG 7,412 2,364,027
-------------------------------------------------------------------------------------------------------------
Pacific Dunlop Ltd. 333,000 780,279
-------------------------------------------------------------------------------------------------------------
Tenneco, Inc. 38,200 1,895,675
-------------------------------------------------------------------------------------------------------------
Westinghouse Air Brake Co. 47,300 502,563
-----------
6,028,456
- ----------------------------------------------------------------------------------------------------------------------------------
Transportation--1.8% Burlington Northern Santa Fe Corp. 25,000 1,950,000
-------------------------------------------------------------------------------------------------------------
Consolidated Freightways, Inc.(8) 44,200 1,171,300
-------------------------------------------------------------------------------------------------------------
Stolt-Nielsen SA 56,900 1,642,988
-----------
4,764,288
</TABLE>
11 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Investments (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Technology--13.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.4%
McDonnell Douglas Corp.(8) 11,400 $ 1,048,800
- ----------------------------------------------------------------------------------------------------------------------------------
Computer Bay Networks, Inc.(8)(9) 23,580 969,728
Hardware--2.6% -------------------------------------------------------------------------------------------------------------
Cabletron Systems, Inc.(9) 12,000 972,000
-------------------------------------------------------------------------------------------------------------
EMC Corp.(9) 39,600 608,850
-------------------------------------------------------------------------------------------------------------
International Business Machines Corp. 10,900 1,000,075
-------------------------------------------------------------------------------------------------------------
Norand Corp.(9) 41,700 489,975
-------------------------------------------------------------------------------------------------------------
Sun Microsystems, Inc.(8)(9) 33,400 1,523,875
-------------------------------------------------------------------------------------------------------------
Xerox Corp.(8) 11,100 1,520,700
-----------
7,085,203
- ----------------------------------------------------------------------------------------------------------------------------------
Computer BMC Software, Inc.(8)(9) 11,000 470,250
Software--4.9% -------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 40,200 2,286,375
-------------------------------------------------------------------------------------------------------------
Electronic Arts, Inc.(8)(9) 42,300 1,105,088
-------------------------------------------------------------------------------------------------------------
Marcam Corp.(9) 74,300 1,133,075
-------------------------------------------------------------------------------------------------------------
Microsoft Corp.(8)(9) 8,000 702,000
-------------------------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 35,000 2,663,553
-------------------------------------------------------------------------------------------------------------
Novell, Inc.(9) 81,300 1,158,525
-------------------------------------------------------------------------------------------------------------
Structural Dynamics Research Corp.(8)(9) 48,000 1,410,000
-------------------------------------------------------------------------------------------------------------
Symantec Corp.(8)(9) 91,602 2,129,747
-----------
13,058,613
- ----------------------------------------------------------------------------------------------------------------------------------
Electronics--3.3% Advanced Micro Devices, Inc.(8)(9) 27,226 449,229
-------------------------------------------------------------------------------------------------------------
General Motors Corp., Cl. H 23,100 1,134,788
-------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co.(8) 16,600 1,390,250
-------------------------------------------------------------------------------------------------------------
Integrated Silicon Solution, Inc.(9) 21,000 351,422
-------------------------------------------------------------------------------------------------------------
Intel Corp.(8) 60,000 3,405,000
-------------------------------------------------------------------------------------------------------------
Kyocera Corp. 9,000 669,209
-------------------------------------------------------------------------------------------------------------
Philips Electronics NV 24,000 868,378
-------------------------------------------------------------------------------------------------------------
VLSI Technology, Inc.(8)(9) 31,900 578,188
-----------
8,846,464
- ----------------------------------------------------------------------------------------------------------------------------------
Telecommunications Airtouch Communications, Inc.(9) 36,500 1,031,125
Technology--2.1% -------------------------------------------------------------------------------------------------------------
AT&T Corp. 10,700 692,825
-------------------------------------------------------------------------------------------------------------
ECI Telecommunications Ltd.(8) 62,000 1,414,375
-------------------------------------------------------------------------------------------------------------
MCI Communications Corp.(8) 94,800 2,476,650
-----------
5,614,975
- ----------------------------------------------------------------------------------------------------------------------------------
Utilities--2.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Electric Korea Electric Power Co. 25,000 992,620
Utilities--0.8% -------------------------------------------------------------------------------------------------------------
Verbund Oest Electriz 19,000 1,143,366
-----------
2,135,986
</TABLE>
12 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--0.4% Hong Kong & China Gas 743,040 $ 1,196,447
- ----------------------------------------------------------------------------------------------------------------------------------
Telephone BCE, Inc. 34,000 1,173,000
Utilities--1.1% -------------------------------------------------------------------------------------------------------------
US West Communications Group 45,900 1,640,925
------------
2,813,925
------------
Total Common Stocks (Cost $108,046,548) 148,498,407
==================================================================================================================================
Preferred Stocks--1.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Alumax, Inc., $4.00 Cv., Series A 6,333 816,957
-------------------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co., $4.00 Cv., Series A 17,666 1,046,711
-------------------------------------------------------------------------------------------------------------
Delta Air Lines, Inc., $3.50 Cv. Depositary Shares, Series C 29,000 1,721,875
------------
Total Preferred Stocks (Cost $2,703,347) 3,585,543
Units
==================================================================================================================================
Rights, Warrants and
Certificates--0.0%
- ----------------------------------------------------------------------------------------------------------------------------------
People's Choice TV Corp. Wts., Exp. 6/00 (Cost $0) 500 5,000
Face
Amount(1)
==================================================================================================================================
Repurchase Agreement--4.2%
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 5.90%,
dated 12/29/95, to be repurchased at $11,207,342 on 1/2/96, collateralized
by U.S. Treasury Nts., 5.125%--8.75%, 12/31/96--11/5/04, with a value of
$6,079,441, U.S. Treasury Bonds, 6.25%--11.25%, 8/15/03--8/15/23,
with a value of $3,684,288, and U.S. Treasury Bills maturing 11/14/96,
with a value of $1,670,771 (Cost $11,200,000) $11,200,000 11,200,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $222,149,541) 99.7% 267,279,621
- ----------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.3 744,192
----------- ------------
Net Assets 100.0% $268,023,813
=========== ============
</TABLE>
1. Face amount is reported in U.S. Dollars, except for
those denoted in the following currencies:
AUD--Australian Dollar ITL--Italian Lira
CAD--Canadian Dollar MXP--Mexican Peso
DKK--Danish Krone PLZ--Polish Zloty
GBP--British Pound Sterling ZAR--Zaire Makuta
2. Represents the current interest rate for a variable
rate security.
3. Interest or dividend is paid in kind.
4. Represents the current interest rate for an increasing
rate security.
5. For zero coupon bonds, the interest rate shown is the
effective yield on the date of purchase.
6. Denotes a step bond: a zero coupon bond that converts
to a fixed rate of interest at a designated future date.
7. Represents a security sold under Rule 144A, which is
exempt from registration under the Securities Act of 1933,
as amended. This security has been determined to be
liquid under guidelines established by the Board of
Trustees. These securities amount to $1,856,750 or 0.69%
of the Fund's net assets, at December 31, 1995.
13 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Investments (Continued)
- -------------------------------------------------------------------------------
8. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
Market
Face/Shares Expiration Exercise Premium Value
Subject to Call Date Price Received See Note 1
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
AMR Corp. 2,800 1/96 $ 80 $ 13,300 $ 1,225
Advanced Micro Devices, Inc. 5,400 1/96 45 11,313 337
Aetna Life & Casualty Co. 4,400 4/96 75 11,143 5,500
American International Group, Inc. 2,000 2/96 80 15,439 38,625
American Re Corp. 10,400 7/96 45 19,187 18,200
BMC Software, Inc. 11,000 2/96 50 38,169 15,125
Bay Networks, Inc. 7,000 6/96 50 47,913 33,250
Consolidated Freightways, Inc. 10,400 6/96 30 18,595 28,600
ECI Telecommunications Ltd. 13,400 2/96 23 28,072 30,150
Electronic Arts, Inc. 12,200 3/96 35 89,609 9,150
General Motors Corp. 4,000 6/96 55 10,380 10,500
Genzyme Corp. 3,700 1/96 65 19,313 6,012
Hewlett-Packard Co. 3,000 5/96 105 18,659 6,375
IMC Global, Inc. 9,600 1/96 33 10,177 79,200
IMC Global, Inc. 9,600 4/96 38 20,855 48,000
Intel Corp. 12,000 4/96 75 20,639 9,750
Louisiana-Pacific Corp. 7,500 2/96 25 18,056 8,906
Louisiana-Pacific Corp. 7,500 2/96 30 5,475 3,281
MCI Communications Corp. 22,000 4/96 30 26,839 11,000
Manor Care, Inc. 8,000 1/96 35 8,840 7,500
Mattel, Inc. 8,000 7/96 35 10,888 10,000
McDonnell Douglas Corp . 2,200 5/96 100 9,834 8,525
Medtronic, Inc. 7,500 2/96 60 29,774 6,562
Medtronic, Inc. 6,000 5/96 65 15,791 9,750
Merrill Lynch & Co., Inc. 8,000 1/96 55 29,759 3,000
Microsoft Corp. 3,300 1/96 105 32,900 206
Microsoft Corp. 3,300 1/96 115 17,225 206
Nellcor Puritan Bennett, Inc. 8,000 4/96 60 15,759 27,000
Owens-Corning Fiberglass Corp. 12,000 3/96 45 20,639 27,750
Philip Morris Cos., Inc. 4,200 3/96 95 10,636 8,400
Sara Lee Corp. 6,800 7/96 35 9,145 5,950
Structural Dynamics Research Corp. 2,400 2/96 25 7,128 10,800
Structural Dynamics Research Corp. 7,200 5/96 30 15,083 24,300
Sun Microsystems, Inc. 10,800 1/96 25 27,199 230,850
Sun Microsystems, Inc. 10,000 4/96 35 31,099 130,000
Sun Microsystems, Inc. 10,000 7/96 48 80,472 87,500
Symantec Corp. 11,000 1/96 30 32,669 687
Symantec Corp. 11,000 1/96 35 20,294 2,062
U.S. Healthcare, Inc. 15,000 4/96 48 48,298 43,125
VLSI Technology, Inc. 5,800 4/96 25 14,326 6,887
Xerox Corp. 2,200 7/96 150 18,084 11,829
-------- ----------
$948,975 $1,026,075
======== ==========
</TABLE>
9. Non-income producing security.
See accompanying Notes to Financial Statements.
14 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Assets and Liabilities December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
==================================================================================================================================
Assets Investments, at value (cost $222,149,541)--see accompanying statement $267,279,621
-------------------------------------------------------------------------------------------------------------
Cash 140,946
-------------------------------------------------------------------------------------------------------------
Receivables:
Interest and dividends 2,909,233
Investments sold 635,407
Shares of beneficial interest sold 154,888
-------------------------------------------------------------------------------------------------------------
Other 29,080
------------
Total assets 271,149,175
==================================================================================================================================
Liabilities Options written, at value (premiums received $948,975)--
see accompanying statement--Note 4 1,026,075
-------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Dividends 762,430
Investments purchased 561,044
Shares of beneficial interest redeemed 414,277
Distribution and service plan fees 123,143
Deferred trustees' fees 122,797
Shareholder reports 70,917
Transfer and shareholder servicing agent fees 12,282
Other 32,397
------------
Total liabilities 3,125,362
==================================================================================================================================
Net Assets $268,023,813
============
==================================================================================================================================
Composition of Paid-in capital $222,854,847
Net Assets -------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (621,120)
-------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment and foreign currency transactions 736,164
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and foreign currency--Note 3 45,053,922
------------
Net assets $268,023,813
============
==================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value and redemption price per share (based on net assets of $251,353,155 and
19,233,516 shares of beneficial interest outstanding) $13.07
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $13.87
-------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $1,265,493 and 97,156 shares of beneficial interest outstanding) $13.03
-------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $15,405,165 and 1,184,070 shares of beneficial interest outstanding) $13.01
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Asset Allocation Fund
<PAGE>
Statement of Operations For the Year Ended December 31, 1995
<TABLE>
<S> <C> <C>
==================================================================================================================================
Investment Income Interest (net of foreign withholding taxes of $760) $10,714,677
-------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $77,428) 2,671,485
-----------
Total income 13,386,162
==================================================================================================================================
Expenses Management fees--Note 5 1,943,505
-------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 5:
Class A 450,363
Class B 1,749
Class C 118,298
-------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 295,734
-------------------------------------------------------------------------------------------------------------
Shareholder reports 107,532
-------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 62,946
-------------------------------------------------------------------------------------------------------------
Insurance expenses 43,150
-------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 42,699
-------------------------------------------------------------------------------------------------------------
Legal and auditing fees 22,613
-------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 797
Class B 433
Class C 1,517
-------------------------------------------------------------------------------------------------------------
Other 25,682
-----------
Total expenses 3,117,018
==================================================================================================================================
Net Investment Income 10,269,144
==================================================================================================================================
Realized Net realized gain (loss) on:
and Unrealized Investments 11,689,559
Gain (Loss) Closing and expiration of options written 354,160
Foreign currency transactions (291,420)
-----------
Net realized gain 11,752,299
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written 30,258,335
Translation of assets and liabilities denominated in foreign currencies 1,089,647
-----------
Net change 31,347,982
-----------
Net realized and unrealized gain 43,100,281
==================================================================================================================================
Net Increase in Net Assets Resulting From Operations $53,369,425
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Asset Allocation Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994
==================================================================================================================================
<S> <C> <C> <C>
Operations Net investment income $ 10,269,144 $ 10,887,916
-------------------------------------------------------------------------------------------------------------
Net realized gain 11,752,299 16,983,602
==================================================================================================================================
Net change in unrealized appreciation or depreciation 31,347,982 (32,351,338)
------------ ------------
Net increase (decrease) in net assets resulting
from operations 53,369,425 (4,479,820)
==================================================================================================================================
Dividends and Dividends from net investment income:
Distributions to Class A (9,264,819) (10,574,115)
Shareholders Class B (14,574) --
Class C (386,395) (258,031)
-------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (10,313,461) (15,027,395)
Class B (52,208) --
Class C (630,243) (578,336)
==================================================================================================================================
Beneficial Interest Net increase (decrease) in net assets resulting from
Transactions beneficial interest transactions--Note 2:
Class A (18,002,247) (10,144,316)
Class B 1,310,712 --
Class C 5,054,751 9,705,207
==================================================================================================================================
Net Assets Total increase (decrease) 21,070,941 (31,356,806)
-------------------------------------------------------------------------------------------------------------
Beginning of period 246,952,872 278,309,678
------------ ------------
End of period (including overdistributed net investment
income of $621,120 and $610,110 respectively) $268,023,813 $246,952,872
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Asset Allocation Fund
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------
Year Ended December 31,
1995 1994 1993 1992
<S> <C> <C> <C> <C>
==================================================================================================================================
Per Share Operating Data:
Net asset value, beginning of period $11.52 $13.05 $11.63 $11.22
-------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .52 .54 .44 .39
Net realized and unrealized gain (loss) 2.08 (.75) 1.43 .44
------ ------ ------ ------
Total income (loss) from investment operations 2.60 (.21) 1.87 .83
-------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.49) (.53) (.44) (.42)
Distributions from net realized gain (.56) (.79) (.01) --
------ ------ ------ ------
Total dividends and distributions
to shareholders (1.05) (1.32) (.45) (.42)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.07 $11.52 $13.05 $11.63
=============================================================================================================
Total Return, at Net Asset Value(5) 22.79% (1.59)% 16.30% 7.54%
=============================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $251,353 $237,771 $277,914 $266,713
-------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $249,660 $260,767 $272,303 $269,096
-------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 3.97% 4.10% 3.58% 3.41%
Expenses 1.15% 1.09% 1.14% 1.17%
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 28.5% 31.5% 32.7% 60.3%
Average brokerage commission rate(8) $0.04 -- -- --
</TABLE>
1. For the period from December 1, 1993 (inception of
offering) to December 31, 1993.
2. For the period from August 29, 1995 (inception of
offering) to December 31, 1995.
3. For the period from April 24, 1987 (commencement of
operations) to December 31, 1987.
4. Per share amounts calculated based on the weighted
average number of shares outstanding during the year.
5. Assumes a hypothetical initial investment on the
business day before the first day of the fiscal period,
with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in
the total returns. Total returns are not annualized for
periods of less than one full year.
18 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- ---------------------------------------------------------------- ------------ ------------------------------------------
Period Ended
December 31, Year Ended December 31,
1991(4) 1990 1989 1988 1987(3) 1995(2) 1995 1994 1993(1)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================================================
$10.19 $10.67 $ 9.78 $8.89 $10.00 $13.31 $11.49 $13.05 $12.86
- -----------------------------------------------------------------------------------------------------------------------------------
.40 .53 .49 .39 .27 .17 .40 .44 (.97)
1.06 (.43) 1.17 1.09 (1.11) .38 2.07 (.77) 1.29
- --------- ------ ------- ------ ------ ------ ------ ------ ------
1.46 .10 1.66 1.48 (.84) .55 2.47 (.33) .32
- -----------------------------------------------------------------------------------------------------------------------------------
(.43) (.52) (.48) (.40) (.26) (.27) (.39) (.44) (.12)
-- (.06) (.29) (.19) (.01) (.56) (.56) (.79) (.01)
- --------- ------ ------- ------ ------ ------ ------ ------ ------
(.43) (.58) (.77) (.59) (.27) (.83) (.95) (1.23) (.13)
- --------- ------ ------- ------ ------ ------ ------ ------ ------
$11.22 $10.19 $10.67 $9.78 $ 8.89 $13.03 $13.01 $11.49 $13.05
========= ====== ======= ====== ====== ====== ====== ====== ======
===================================================================================================================================
14.67% 0.93% 18.21% 15.88% (8.60)% 4.44% 21.69% (2.50)% 2.51%
===================================================================================================================================
$276,800 $83,292 $81,194 $51,602 $32,718 $1,265 $15,405 $9,182 $396
- -----------------------------------------------------------------------------------------------------------------------------------
$192,870 $82,490 $68,134 $40,662 $31,407 $ 520 $11,827 $5,601 $194
- -----------------------------------------------------------------------------------------------------------------------------------
3.78% 5.14% 4.71% 4.30% 3.84%(6) 2.62%(6) 3.08% 3.30% 2.19%(6)
1.27% 1.36% 1.47% 1.50% 1.60%(6) 2.27%(6) 1.99% 2.00% 2.50%(6)
- -----------------------------------------------------------------------------------------------------------------------------------
102.0% 71.3% 60.2% 185.5% 83.7% 28.5% 28.5% 31.5% 32.7%
-- -- -- -- -- $0.04 $0.04 -- --
</TABLE>
6. Annualized.
7. The lesser of purchases or sales of portfolio securities
for a period, divided by the monthly average of the market
value of portfolio securities owned during the period.
Securities with a maturity or expiration date at the time
of acquisition of one year or less are excluded from the
calculati on. Purchases and sales of investment securities
(excluding short-term securities) for the period ended
December 31, 1995 were $70,870,630 and $96,292,578,
respectively.
8. Total brokerage commissions paid on purchases and sales
of portfolio securities for the period divided by the total
number of related shares purchased and sold.
See accompanying Notes to Financial Statements.
19 Oppenheimer Asset Allocation Fund
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant Oppenheimer Asset Allocation Fund (the Fund) is registered
Accounting under the Investment Company Act of 1940, as amended, as a
Policies diversified, open-end management investment company. The
Fund's investment objective is to seek high total
investment return (current income and capital appreciation
the value of its shares). The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class
A, Class B and Class C shares. Class A shares are sold with
a front-end sales charge. Class B and Class C shares may
be subject to a contingent deferred sales charge. All
classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own
distribution and/or service plan, expenses directly
attributable to a particular class and exclusive voting
rights with respect to matters affecting a single class.
Class B shares will automatically convert to Class A shares
six years after the date of purchase. The following is a
summary of significant accounting policies consistently
followed by the Fund.
-----------------------------------------------------------
Investment Valuation. Portfolio securities are valued at
the close of the New York Stock Exchange on each trading
day. Listed and unlisted securities for which such
information is regularly reported are valued at the last
sale price of the day or, in the absence of sales, at
values based on the closing bid or asked price or the last
sale price on the prior trading day. Long-term and
short-term "non-money market" debt securities are valued
by a portfolio pricing service approved by the Board of
Trustees. Such securities which cannot be valued by the
approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is
satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are
valued under consistently applied procedures established by
the Board of Trustees to determine fair value in good
faith. Short-term "money market type" debt securities
having a remaining maturity of 60 days or less are valued
at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount.
Options are valued based upon the last sale price on the
principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based
upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices.
If the last sale price is outside the spread, the closing
bid or asked price closest to the last reported sale price
is used.
-----------------------------------------------------------
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 securities and investment
income are translated at the rate 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
securiti es is required to be at least 102% of the resale
price at the time of purchase. If the seller of the
agreement defaults and the value of the collateral
declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may
be delayed or limited.
-----------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated daily to
each class of shares based upon the relative proportion of
net assets represented by such class. Operating expenses
directly attribu table to a specific class are charged
against the operations of that class.
-----------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders.
Therefore, no f ederal income or excise tax provision is
required. At December 31, 1995, the Fund had available for
federal income tax purposes an unused capital loss
carryover of approximately $1,336,000, which expires
between 1996 and 1998.
20 Oppenheimer Asset Allocation Fund
<PAGE>
================================================================================
1. Significant Trustees' Fees and Expenses. The Fund has adopted a
Accounting nonfunded retirement plan for the Fund's independent
Policies trustees. Benefits are based on years of service and fees
(contined) paid to each trustee during the years of service. During
the year ended December 31, 1995, a provision of $3,936 was
made for the Fund's projected benefit obligations, and a
payment of $2,026 was made to a retired trustee, resulting
in an accumulated liability of $112,884 at December 31,
1995.
-----------------------------------------------------------
Distributions to Shareholders. Dividends and distributions
to shareholders are recorded on the ex-dividend date.
-----------------------------------------------------------
Classification of Distributions to Shareholders. Net
investment income (loss) and net realized gain (loss) may
differ for financial statement and tax purposes primarily
because of paydown gains and losses and the recognition of
certain foreign currency gains (losses) as ordinary income
(loss) for tax purposes. The character of the distributions
made during the year from net investment income or net
realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due
to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the year that
the income or realized gain (loss) was recorded by the
Fund.
During the year ended December 31, 1995, the Fund
changed the classification of distributions to shareholders
to better disclose the differences between financial
statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, during
the year ended December 31, 1995, amounts have been
reclassified to reflect an increase in paid-in capital of
$445,208, an increase in overdistributed net investment
income of $614,366, and an increase in accumulated net
realized gain on investments of $169,158.
-----------------------------------------------------------
Other. Investment transactions are accounted for on the
date the investments are purchased or sold (trade date) and
dividend income is recorded on the ex-dividend date.
Discount on securities purchased is amortized over the life
of the respective securities, in accordance with federal
income tax requirements. Realized gains and losses on
investments and options written and unrealized appreciation
and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax
purposes.
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 stat ements and the reported amounts of
income and expenses during the reporting period. Actual
results could differ from those estimates.
================================================================================
2. Shares of The Fund has authorized an unlimited number of no par
Beneficial value shares of beneficial interest. Transactions
Interest in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Year Ended December 31, 1995(1) Year Ended December 31, 1994
--------------------------------- --------------------------------
Shares Amount Shares Amount
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 1,154,810 $ 14,750,208 1,464,805 $ 18,650,064
Dividends and distributions reinvested 1,346,436 17,504,698 1,895,898 22,211,167
Redeemed (3,900,352) (50,257,153) (4,030,121) (51,005,547)
---------- ------------ ---------- ------------
Net decrease (1,399,106) $(18,002,247) (669,418) $(10,144,316)
========== ============ ========== ============
-------------------------------------------------------------------------------------------------------------
Class B:
Sold 93,459 $ 1,262,882 -- $ --
Dividends and distributions reinvested 4,293 55,836 -- --
Redeemed (596) (8,006) -- --
---------- ------------ ---------- ------------
Net increase 97,156 $ 1,310,712 -- $ --
========== ============ ========== ============
-------------------------------------------------------------------------------------------------------------
Class C:
Sold 556,244 $ 7,139,931 757,806 $ 9,618,332
Dividends and distributions reinvested 74,748 969,689 62,679 725,448
Redeemed (245,902) (3,054,869) (51,824) (638,573)
---------- ------------ ---------- ------------
Net increase 385,090 $ 5,054,751 768,661 $ 9,705,207
========== ============ ========== ============
</TABLE>
1. For the year ended December 31, 1995 for Class A and
Class C shares and for the period from August 29, 1995
(inception of offering) to December 31, 1995 for Class B
shares.
21 Oppenheimer Asset Allocation Fund
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
3. Unrealized At December 31, 1995, net unrealized appreciation on
Gains and Losses investments and options written of $45,053,922 was composed
on Investments of gross appreciation of $52,170,014, and gross
And Options depreciation of $7,116,092.
Written
================================================================================
4. Option Activity The Fund may buy and sell put and call options, or write
covered put and 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 footnote to the Statement of Investments.
Options written are reported as a liability in the
Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the
Fund gives up the opportunity for profit if the market
price of the security increases and the option is
exercised. The risk in writing a put option is that the
Fund may incur a loss if the market price of the security
decreases and the option is exerc ised. The risk in buying
an option is that the Fund pays a premium whether or not
the option is exercised. The Fund also has the additional
risk of not being able to enter into a closing transaction
if a liquid secondary market does not exist.
Written option activity for the year ended December 31,
1995 was as follows:
<TABLE>
<CAPTION>
Call Options
----------------------------------------------
Number Amount
of Options of Premiums
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1994 2,308 $ 640,077
------------------------------------------------------------------------------------------------------------
Options written 7,629 1,970,648
------------------------------------------------------------------------------------------------------------
Options cancelled in closing purchase transactions (1,632) (374,891)
------------------------------------------------------------------------------------------------------------
Options expired (2,624) (539,344)
------------------------------------------------------------------------------------------------------------
Options exercised (2,475) (747,515)
----- ----------
Options outstanding at December 31, 1995 3,206 $ 948,975
===== ==========
</TABLE>
22 Oppenheimer Asset Allocation Fund
<PAGE>
================================================================================
5. Management Management fees paid to the Manager are in accordance with
Fees and Other the investment advisory agreement with the Fund which
Transactions provides for a fee of .75% on the first $200 million of
With Affiliates average annual net assets, .72% on the next $200 million
with a reduction of .03% on each $200 million thereafter,
.60% on net assets in excess of $800 million. The Manager
has agreed to reimburse the Fund if aggregate expenses
(with specified exceptions) exceed the most stringent state
regulatory limit on Fund expenses.
For the year ended December 31, 1995, commissions
(sales charges paid by investors) on sales of Class A
shares totaled $348,120, of which $134,846 was retained by
OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of
the Manager, as general distributor, and by an affiliated
broker/dealer. Sal es charges advanced to broker/dealers by
OFDI on sales of the Fund's Class B and Class C shares
totaled $44,878 and $48,655, of which $311 and $3,536,
respectively, was paid to an affiliated broker/dealer.
During the year ended December 31, 1995, OFDI received
contingent deferred sales charges of $ 3,807 upon
redemption of Class C shares as reimbursement for sales
commissions advanced by OFDI at the time of sale of such
shares.
OppenheimerFunds Services (OFS), a division of
the Manager, is the transfer and shareholder servicing
agent for the Fund, and for other registered investment
companies. OFS's total costs of providing such services are
allocated ratably to these companies.
Under separate approved plans, each class may
expend up to .25% of its net assets annually to compensate
OFDI for costs incurred in connection with the personal
service and maintenance of accounts that hold shares of the
Fund, including amounts paid to brokers, dealers, banks and
other institution s. In addition, Class B and Class C
shares are subject to an asset-based sales charge of .75%
of net assets annually, to compensate OFDI for sales
commissions paid from its own resources at the time of sale
and associated financing costs. In the event of termination
or discontinuance of the Class B or Class C plan, the Board
of Trustees may allow the Fund to continue payment of the
asset-based sales charge to OFDI for distribution expenses
incurred on Class B or Class C shares sold prior to
termination or discontinuance of the plan. At December 31,
1995, OFDI had incurred unreimbursed expens es of $51,580
for Class B and $153,050 for Class C. During the year ended
December 31, 1995, OFDI paid $62,955 and $5,430,
respectively, to an affiliated broker/dealer as
compensation for Class A and Class C personal service and
maintenance expenses, and retained $1,745 and $70,168,
respectively, a s compensation for Class B and Class C
sales commissions and service fee advances, as well as
financing costs.
23 Oppenheimer Asset Allocation Fund
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders of Oppenheimer Asset
Allocation Fund:
We have audited the accompanying statements of investments
and assets and liabilities of Oppenheimer Asset Allocation
Fund as of December 31, 1995, and the related statement of
operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year
period t hen ended and the financial highlights for each of
the years in the eight-year period then ended and the
period from April 24, 1987 (commencement of operations) to
December 31, 1987. These financial statements and financial
highlights are the responsibility of the Fund's management.
Our responsibiity is to express an opinion on these
financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement.
An audit includes examining , on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1995, by correspondence
with the custodian and brokers; and where confirmations
were not received from brokers, we performed ot her
auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made
by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and
financial highlights referred to above present fairly, in
all material respects, the financial position of
Oppenheimer Asset Allocation Fund as of December 31, 1995,
the results of its operations for the year then ended, the
changes in its net assets fo r each of the years in the
two-year period then ended, and the financial highlights
for each of the years in the eight-year period then ended
and the period from April 24, 1987 (commencement of
operations) to December 31, 1987, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Denver, Colorado
January 22, 1996
24 Oppenheimer Asset Allocation Fund
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1996, shareholders will receive information
regarding all dividends and distributions paid to them by
the Fund during calendar year 1995. Regulations of the U.S.
Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Distributions of $.7187, $.7047 and $.6907 per
share were paid to Class A, Class B and Class C
shareholders, respectively, on December 28, 1995, of
which, for each class of shares, $.5228 was designated as
a "capital gain distribution" for federal income tax
purposes. Whether received in stock or cash, the capital
gain distribution should be treated by shareholders as a
gain from the sale of capital assets held for more than
one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year
ended December 31, 1995 which are not designated as capital
gain distributions should be multiplied by 20.47% to arrive
at the net amount eligible for the corporate dividend-
received deduction.
The foregoing information is presented to assist
shareholders in reporting distributions received from the
Fund to the Internal Revenue Service. Because of the
complexity of the federal regulations which may affect your
individual tax return and the many variations in state and
local tax regulatio ns, we recommend that you consult your
tax advisor for specific guidance.
25 Oppenheimer Asset Allocation Fund
<PAGE>
<TABLE>
<CAPTION>
Oppenheimer Asset Allocation Fund
<S> <C>
=================================================================
Officers and Leon Levy, Chairman of the Board of Trustees
Trustees Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Bridget A. Macaskill, Trustee and President
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Richard H. Rubinstein, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
=================================================================
Investment Advisor OppenheimerFunds, Inc.
=================================================================
Distributor OppenheimerFunds Distributor, Inc.
=================================================================
Transfer and OppenheimerFunds Services
Shareholder
Servicing Agent
=================================================================
Custodian of The Bank of New York
Portfolio
Securities
=================================================================
Independent KPMG Peat Marwick LLP
Auditors
=================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
</TABLE>
This is a copy of a report to shareholders of Oppenheimer
Asset Allocation Fund. This report must be preceded or
accompanied by a Prospectus of Oppenheimer Asset
Allocation Fund. For material information concerning the
Fund, see the Prospectus. Shares of Oppenheimer funds are
not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC
or any other agency, and involve investment risks,
including possible loss of the principal amount invested.
26 Oppenheimer Asset Allocation Fund
<PAGE>
Oppenheimer Funds Family
OppenheimerFunds offers over 35 funds designed to fit
virtually every investment goal. Whether you're investing
for retirement, your children's education or
tax-free income, we have the funds to help you seek your
objective.
When you invest with OppenheimerFunds, you can feel
comfortable knowing that you are investing with a
respected financial institution with over 35 years
of experience in helping people just like you reach their
financial goals. And you're investing with a leader in
global, growth stock and flexible fixed-income
investments--with over 2.8 million shareholder accounts
and more than $41 billion under Oppenheimer's
management and that of our affiliates.
At OppenheimerFunds, we don't charge a fee to exchange
shares. And you can exchange shares easily by mail or by
telephone.1 For more information on Oppenheimer funds,
please contact your financial advisor or call us at
1-800-525-7048 for a prospectus. You may also write us at
the address shown on the back cover. As always, please
read the prospectus carefully before you invest.
<TABLE>
<S> <C> <C>
====================================================================================================
Stock Funds Global Emerging Growth Fund Growth Fund
Enterprise Fund Global Fund
Discovery Fund Quest Global Value Fund
Quest Small Cap Value Fund Oppenheimer Fund
Gold & Special Minerals Fund Value Stock Fund
Target Fund Quest Value Fund
====================================================================================================
Stock & Bond Funds Main Street Income & Growth Fund Global Growth & Income Fund
Quest Opportunity Value Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
====================================================================================================
Bond Funds International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Strategic Income Fund Limited-Term Government Fund
Champion Income Fund
====================================================================================================
Tax-Exempt Funds California Tax-Exempt Fund2 Pennsylvania Tax-Exempt Fund2
Florida Tax-Exempt Fund2 Tax-Free Bond Fund
New Jersey Tax-Exempt Fund2 Insured Tax-Exempt Fund
New York Tax-Exempt Fund2 Intermediate Tax-Exempt Fund
====================================================================================================
Money Market Funds Money Market Fund Cash Reserves
</TABLE>
1. Exchange privileges are subject to change or
termination. Shares may be exchanged only for shares of
the same class of eligible funds.
2. Available only to investors in certain states.
Oppenheimer funds are distributed by OppenheimerFunds
Distributor, Inc., Two World Trade Center, New York, NY
10048-0203. (c) Copyright 1996 OppenheimerFunds, Inc.
All rights reserved.
27 Oppenheimer Asset Allocation Fund
<PAGE>
Information
General Information
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PhoneLink
24 hours a day, automated
information and transactions
1-800-533-3310
Telecommunications Device
for the Deaf (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RA0240.001.1295 February 28, 1996
(Picture of Jennifer Leonard)
(Caption) Jennifer Leonard, Customer Service Representative
OppenheimerFunds Service
"How may I help you?"
As an Oppenheimer funds shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
================================================================================
(Oppenheimer Logo(R))
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- --------------
Bulk Rate
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- --------------
