As filed with the Securities and Exchange Commission
on March 14, 1997
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. / /
OPPENHEIMER GLOBAL FUND
(Exact Name of Registrant as Specified in Charter)
Two World Trade Center, New York, New York 10048-0203
(Address of Principal Executive Offices)
212-323-0200
(Registrant's Telephone Number)
Andrew J. Donohue, Esq.
Executive Vice President & General Counsel
OppenheimerFunds, Inc.
Two World Trade Center, New York, New York 10048-0203
(212) 323-0256
(Name and Address of Agent for Service)
As soon as practicable after the Registration Statement becomes
effective.
(Approximate Date of Proposed Public Offering)
It is proposed that this filing will become effective on April
13, 1997, pursuant to Rule 488.
No filing fee is due because the Registrant has previously
registered an indefinite number of shares under Rule 24f-2; a
Rule 24f-2 notice for the year ended September 30, 1996 was filed
on November 27, 1996.
Pursuant to Rule 429, this Registration Statement relates to
shares previously registered by the Registrant on Form N-1A (Reg.
No. 2-31661; 811-1810).
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following pages and
documents:
Front Cover
Contents Page
Cross-Reference Sheet
Part A
Proxy Statement for Oppenheimer Global Emerging Growth Fund
and
Prospectus for Oppenheimer Global Fund
Part B
Statement of Additional Information
Part C
Other Information
Signatures
Exhibits
<PAGE>
FORM N-14
OPPENHEIMER GLOBAL FUND
Cross Reference Sheet
Part A of
Form N-14
Item No. Proxy Statement and Prospectus Heading and/or Title of
Document
1 (a) Cross Reference Sheet
(b) Front Cover Page
(c) *
2 (a) *
(b) Table of Contents
3 (a) Comparative Fee Tables
(b) Synopsis
(c) Principal Risk Factors
4 (a) Synopsis; Approval of the Reorganization; Comparison
between Oppenheimer Global Fund and Oppenheimer Global
Emerging Growth Fund; Miscellaneous
(b) Approval of the Reorganization - Capitalization Table
5 (a) Registrant's Prospectus; Comparison Between Oppenheimer
Global Fund and Oppenheimer Global Emerging Growth Fund
(b) *
(c) *
(d) *
(e) Miscellaneous
(f) Miscellaneous
6 (a) Prospectus of Oppenheimer Global Emerging Growth Fund;
Annual Report of Oppenheimer Global Emerging Growth
Fund; Comparison Between Oppenheimer Global Fund and
Oppenheimer Global Emerging Growth Fund
(b) Miscellaneous
(c) *
(d) *
7 (a) Synopsis; Information Concerning the Meeting
(b) *
(c) Synopsis; Information Concerning the Meeting
8 (a) Proxy Statement
(b) *
9 *
Part B of
Form N-14
Item No. Statement of Additional Information Heading
- --------- -------------------------------------------
10 Cover Page
11 Table of Contents
12 (a) Registrant's Statement of Additional Information
(b) *
(c) *
13 (a) Statement of Additional Information about Global
Emerging Growth Fund
(b) *
(c) *
14 Registrant's Statement of Additional Information;
Statement of Additional Information about Oppenheimer
Global Emerging Growth Fund; Annual Report of
Oppenheimer Global Emerging Growth Fund at 9/30/96;
Registrant's Annual Report at 9/30/96
Part C of
Form N-14
Item No. Other Information Heading
- --------- -------------------------
15 Indemnification
16 Exhibits
17 Undertakings
_______________
* Not Applicable or negative answer
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
2 World Trade Center, New York, New York 10048-0203
1-800-525-7048
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 17, 1997
To the Shareholders of Oppenheimer Global Emerging Growth Fund:
Notice is hereby given that a Special Meeting of the Shareholders
of Oppenheimer Global Emerging Growth Fund ("Global Emerging Growth
Fund"), a registered management investment company, will be held at
6803 South Tucson Way, Englewood, Colorado 80112 at 10:00 A.M.,
Denver time, on June 17, 1997, or any adjournments thereof (the
"Meeting"), for the following purposes:
1. To approve or disapprove an Agreement and Plan of
Reorganization between Global Emerging Growth Fund and Oppenheimer
Global Fund ("Global Fund"), and the transactions contemplated
thereby, including the transfer of substantially all the assets of
Global Emerging Growth Fund in exchange for Class A, Class B and
Class C shares of Global Fund, the distribution of such shares to
the Class A, Class B and Class C shareholders of Global Emerging
Growth Fund in complete liquidation of Global Emerging Growth Fund,
the de-registration of Global Emerging Growth Fund as an investment
company under the Investment Company Act of 1940, as amended, and
the cancellation of the outstanding shares of Global Emerging
Growth Fund (the "Proposal").
2. To act upon such other matters as may properly come before the
Meeting.
Shareholders of record at the close of business on April 11, 1997
are entitled to notice of, and to vote at, the Meeting. The
Proposal is more fully discussed in the Proxy Statement and
Prospectus. Please read it carefully before telling us, through
your proxy or in person, how you wish your shares to be voted.
Global Emerging Growth Fund's Board of Trustees recommends a vote
in favor of the Proposal. WE URGE YOU TO SIGN, DATE AND MAIL THE
ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Andrew J. Donohue, Secretary
April 14, 1997
Shareholders who do not expect to attend the Meeting are requested
to indicate voting instructions on the enclosed proxy and to date,
sign and return it in the accompanying postage-paid envelope. To
avoid unnecessary duplicate mailings, we ask your cooperation in
promptly mailing your proxy no matter how large or small your
holdings may be.
330<PAGE>
OPPENHEIMER GLOBAL FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
This Proxy Statement of Global Emerging Growth Fund relating to the
Reorganization Agreement and the transactions contemplated thereby
(the "Reorganization") also constitutes a Prospectus of Global Fund
included in a Registration Statement on Form N-14 filed by Global
Fund with the securities and Exchange Commission (the "SEC"). Such
Registration Statement relates to the registration of shares of
Global Fund to be offered to the shareholders of Global Emerging
Growth Fund pursuant to the Reorganization Agreement. Global
Emerging Growth Fund is located at Two World Trade Center, New
York, New York 10048-0203 (telephone 1-800-525-7048).
This Proxy Statement and Prospectus sets forth concisely
information about Global Fund that shareholders of Global Emerging
Growth Fund should know before voting on the Reorganization. A
copy of the Prospectus for Global Fund, dated January 7, 1997, as
supplemented January 7, 1997, is enclosed, and incorporated herein
by reference. The following documents have been filed with the SEC
and are available without charge upon written request to
OppenheimerFunds Services ("OFS"), the transfer and shareholder
servicing agent for Global Fund and Global Emerging Growth Fund, at
P.O. Box 5270, Denver, Colorado 80217, or by calling the toll-free
number shown above: (i) a Prospectus for Global Emerging Growth
Fund, dated January 13, 1997, as supplemented March 3, 1997, (ii)
a Statement of Additional Information about Global Emerging Growth
Fund, dated January 13, 1997, and (iii) a Statement of Additional
Information about Global Fund, dated January 7, 1997 (the "Global
Fund Additional Statement"). The Global Fund Additional Statement,
which is incorporated herein by reference, contains more detailed
information about Global Fund and its management. A Statement of
Additional Information relating to the Reorganization, dated April
16, 1997, has been filed with the SEC as part of the Global Fund
Registration Statement on Form N-14 and is incorporated herein by
reference, and is available by written request to OFS at the same
address immediately above or by calling the toll-free number shown
above.
Investors are advised to read and retain this Proxy Statement and
Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This Proxy Statement and Prospectus is dated April 16, 1997.
TABLE OF CONTENTS
PROXY STATEMENT AND PROSPECTUS
Page
Introduction
General
Record Date; Vote Required; Share Information
Proxies
Costs of the Solicitation and the Reorganization
Comparative Fee Table
Synopsis
Parties to the Reorganization
Shares to be Issued
The Reorganization
Reasons for the Reorganization
Tax Consequences of the Reorganization
Investment Objectives and Policies
Investment Advisory and Distribution and Service Plan Fees
Purchases, Exchanges and Redemptions
Principal Risk Factors
Approval of the Reorganization (The Proposal)
Reasons for the Reorganization
The Reorganization
Tax Aspects of the Reorganization
Capitalization Table (Unaudited)
Comparison Between Global Emerging Growth Fund and Global Fund
Investment Objectives and Policies
Permitted Investments by Global Emerging Growth Fund and
Global Fund
Investment Restrictions
Portfolio Turnover
Description of Brokerage Practices
Expense Ratios and Performance
Shareholder Services
Rights of Shareholders
Management and Distribution Arrangements
Purchase of Additional Shares
Method of Carrying Out the Reorganization
Miscellaneous
Additional Information
Financial Information
Public Information
Other Business
Annex A - Agreement and Plan of Reorganization by and between
Oppenheimer Global Emerging Growth Fund and
Oppenheimer Global Fund
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
PROXY STATEMENT AND PROSPECTUS
Special Meeting of Shareholders
to be held June 17, 1997
INTRODUCTION
General
This Proxy Statement and Prospectus is being furnished to the
shareholders of Oppenheimer Global Emerging Growth Fund ("Global
Emerging Growth Fund"), a registered management investment company,
in connection with the solicitation by the Board of Trustees (the
"Board") of proxies to be used at the Special Meeting of
Shareholders of Global Emerging Growth Fund to be held at 6803
South Tucson Way, Englewood, Colorado 80112, at 10:00 A.M., Denver
time, on June 17, 1997, or any adjournments thereof (the
"Meeting"). It is expected that the mailing of this Proxy
Statement and Prospectus will commence on or about April 30, 1997.
At the Meeting, shareholders of Global Emerging Growth Fund will be
asked to approve an Agreement and Plan of Reorganization (the
"Reorganization Agreement") between Global Emerging Growth Fund and
Oppenheimer Global Fund ("Global Fund"), and the transactions
contemplated thereby (the "Reorganization"), including the transfer
of substantially all the assets of Global Emerging Growth Fund in
exchange for Class A, Class B and Class C shares of Global Fund,
the distribution of such shares to the shareholders of Global
Emerging Growth Fund in complete liquidation of Global Emerging
Growth Fund, the de-registration of Global Emerging Growth Fund as
an investment company, under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the cancellation of the
outstanding shares of Global Emerging Growth Fund. Global Fund
currently offers Class A shares with a sales charge imposed at the
time of purchase. There is no initial sales charge on purchases of
Class B or Class C shares; however a contingent deferred sales
charge may be imposed, depending on when the shares are sold. The
Class A, Class B and Class C shares issued pursuant to the
Reorganization will be issued at net asset value without a sales
charge and without the imposition of the contingent deferred sales
charge as a result of the Reorganization. Additional information
with respect to these changes by Global Fund is set forth herein,
in the Prospectus of Global Fund accompanying this Proxy Statement
and Prospectus and in the Global Fund Statement of Additional
Information ("Global Fund Additional Statement"), which is
incorporated herein by reference.
Record Date; Vote Required; Share Information
The Board has fixed the close of business on April 11, 1997 as the
record date (the "Record Date") for the determination of
shareholders entitled to notice of, and to vote at, the Meeting.
An affirmative vote of the holders of a majority of the outstanding
voting securities of all of the Class A, Class B and Class C shares
in the aggregate of Global Emerging Growth Fund is required to
approve the Reorganization. That level of vote is defined in the
Investment Company Act of 1940 as the vote of the holders of the
lesser of: (i) 67% or more of the voting securities present or
represented by proxy at the shareholders meeting, if the holders of
more than 50% of the outstanding voting securities are present or
represented by proxy, or (ii) more than 50% of the outstanding
voting securities. Each shareholder will be entitled to one vote
for each share and a fractional vote for each fractional share held
of record at the close of business on the Record Date. Only
shareholders of Global Emerging Growth Fund will vote on the
Reorganization. The vote of shareholders of Global Fund is not
being solicited.
At the close of business on the Record Date, there were
approximately ____________ shares of Global Emerging Growth Fund
issued and outstanding, consisting of ____________________ shares
of Class A shares, ________________ Class B shares and
______________ Class C shares. At the close of business on the
Record Date, there were ______________________ shares of Global
Fund issued and outstanding, consisting of ________________ of
Class A shares, ____________________ Class B shares and
______________ Class C shares. The presence in person or by proxy
of the holders of a majority of the shares of Global Emerging
Growth Fund constitutes a quorum for the transaction of business at
the Meeting. To the knowledge of Global Emerging Growth Fund, as
of the Record Date, no person owned of record or beneficially owned
5% or more of its outstanding shares. As of the Record Date, to the
knowledge of Global Fund, no person owned of record or beneficially
owned 5% or more of its outstanding shares except for
_____________________________________ which owned of record
____________ Class A shares of Global Fund as of such date (____%
of the outstanding Class A shares of Global Fund which represented
____% of the outstanding shares of Global Fund) and
__________________________________________, which of record owned
_____________________ shares of Class B shares of Global Fund
(____% of the outstanding Class B shares of Global Fund as of such
date which represented less than ___% of the outstanding shares of
Global Fund). In addition, as of the record date, the Trustees and
officers of Global Emerging Growth Fund and Global Fund owned less
than ___% of the outstanding shares of either Global Emerging
Growth Fund or Global Fund, respectively.
Proxies
The enclosed form of proxy, if properly executed and returned, will
be voted (or counted as an abstention or withheld from voting) in
accordance with the choices specified thereon, and will be included
in determining whether there is quorum to conduct the Meeting. The
proxy will be voted in favor of the Proposal unless a choice is
indicated to vote against or to abstain from voting on the
Proposal.
Shares owned of record by broker-dealers for the benefit of their
customers ("street account shares") will be voted by the broker-
dealer based on instructions received from its customers. If no
instructions are received, the broker-dealer may (if permitted
under applicable stock exchange rules), as record holder, vote such
shares on the Proposal in the same proportion as that broker-dealer
votes street account shares for which voting instructions were
received in time to be voted. If a shareholder executes and
returns a proxy but fails to indicate how the votes should be cast,
the proxy will be voted in favor of the Proposal. The proxy may be
revoked at any time prior to the voting thereof by: (i) writing to
the Secretary of Global Emerging Growth Fund at Two World Trade
Center, New York, New York 10048-0203; (ii) attending the Meeting
and voting in person; or (iii) signing and returning a new proxy
(if returned and received in time to be voted).
Costs of the Solicitation and the Reorganization
All expenses of this solicitation, including the cost of printing
and mailing this Proxy Statement and Prospectus, will be borne by
Global Emerging Growth Fund. Any documents such as existing
prospectuses or annual reports that are included in that mailing
will be a cost of the fund issuing the document. In addition to
the solicitation of proxies by mail, proxies may be solicited by
officers of Global Emerging Growth Fund or officers and employees
of OFS, personally or by telephone or telegraph; any expenses so
incurred will be borne by OFS. Proxies may also be solicited by a
proxy solicitation firm hired at Global Emerging Growth Fund's
expense for such purpose. Brokerage houses, banks and other
fiduciaries may be requested to forward soliciting material to the
beneficial owners of shares of Global Emerging Growth Fund and to
obtain authorization for the execution of proxies. For those
services, if any, they will be reimbursed by Global Emerging Growth
Fund for their reasonable out-of-pocket expenses.
With respect to the Reorganization, Global Emerging Growth Fund and
Global Fund will bear the cost of their respective tax opinions.
Any other out-of-pocket expenses of Global Emerging Growth Fund and
Global Fund associated with the Reorganization, including legal,
accounting and transfer agent expenses, will be borne by Global
Emerging Growth Fund and Global Fund, respectively, in the amounts
so incurred by each.
COMPARATIVE FEE TABLE
Global Emerging Growth Fund and Global Fund each pay a variety of
expenses for management of their assets, administration,
distribution of their shares and other services, and those expenses
are reflected in each fund's net asset value per share.
Shareholders pay other expenses directly, such as sales charges.
The following table is provided to help you compare the direct
expenses of investing in each class of Global Emerging Growth Fund
with the direct expenses of investing in each class of Global Fund
and the pro forma expenses of the surviving fund after giving
effect to the reorganization.
<TABLE>
<CAPTION>
Global Emerging
Growth Fund Global Fund
Class A Class B Class C Class A Class B Class C
Shares Shares Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge on 5.75% None None 5.75% None None
Purchases (as a % of
offering price)
Sales Charge on None None None None None None
Reinvested Dividends
Deferred Sales None(1) 5% in the 1% if None(1) 5% in the 1% if
Charge (as a % first year, shares first year, shares are
of the lower declining are declining redeemed
of the original to 1% in the redeemed to 1% in the within 12
price sixth year within 12 sixth year months of
or redemption and months and eliminated purchase
proceeds) eliminated of thereafter
thereafter purchase
Exchange Fee None None None None None None
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Surviving Global Fund
Class A Class B Class C
Shares Shares Shares
Shareholder Transaction Expenses
<S> <C> <C> <C>
Maximum Sales Charge on 5.75% None None
Purchases (as a %
of offering price)
Sales Charge on None None None
Reinvested Dividends
Deferred Sales Charge None(1) 5% in the 1% if
(as a % of the lower first year, shares are
of the original declining redeemed
purchase price to 1% in the within 12
or redemption sixth year and months of
proceeds eliminated purchase
thereafter
Exchange Fee None None None
</TABLE>
(1) If you invest more than $1 million ($500,000 or more for
purchases by "Retirement Plans," as defined in "Class A Contingent
Deferred Sales Charge" in each fund's Prospectus) in Class A
shares, you may have to pay a sales charge of up to 1% if you sell
your shares within 18 calendar months from the end of the calendar
month during which you purchased those shares.
The following tables are the operating expenses of Class A, Class
B and Class C shares of Global Emerging Growth Fund and the
operating expenses of Class A, Class B and Class C shares of Global
Fund based on expenses for the twelve month period ended September
30, 1996. The pro forma information is an estimate of the business
expenses of the surviving Global Fund after giving effect to the
reorganization. All amounts shown are a percentage of net assets
of each class of each of the funds.
<TABLE>
<CAPTION>
Global Emerging
Growth Fund Global Fund Pro Forma Surviving Global Fund
Class A Class B Class C Class A Class B Class C Class A Class B Class C
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees .83% .83% .83% .71% .71% .71% .71% .71% .71%
12b-1 Distribution &
Service Plan Fees .24% 1.00% 1.00% .18% 1.00% 1.00% .18% 1.00% 1.00%
Other Expenses .80% .73% 0.71% .28% .29% .28% .28% .29% .28%
Total Fund Operating
Expenses 1.87% 2.56% 2.54% 1.17% 2.00% 1.99% 1.17% 2.00% 1.99%
</TABLE>
The 12b-1 fees for Class A shares of Global Emerging Growth Fund and
Global Fund are service plan fees. The service plan fees are a maximum
of 0.25% of average annual net assets of Class A shares of each fund. The
12b-1 fees for Class B shares and Class C shares of each of the funds are
Distribution and Service Plan fees which include a service fee of 0.25%
and an asset-based sales charge of 0.75%.
Examples
To try and show the effect of the expenses on an investment over time, the
Hypotheticals shown below have been created. Assume that you make a
$1,000 investment in Class A, Class B and Class C shares of Global
Emerging Growth Fund, or Class A, Class B and Class C shares of Global
Fund, or Class A, Class B and Class C of the pro forma surviving Global
Fund and that the annual return is 5% and that the operating expenses for
each fund are the ones shown in the chart above. If you were to redeem
your shares at the end of each period shown below, your investment would
incur the following expenses by the end of each period shown.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years*
<S> <C> <C> <C> <C>
Oppenheimer Global Emerging
Growth Fund
Class A Shares $75 $113 $153 $264
Class B Shares $76 $110 $156 $257
Class C Shares $36 $79 $135 $288
Oppenheimer Global Fund
Class A Shares $69 $93 $118 $191
Class B Shares $70 $93 $128 $192
Class C Shares $30 $62 $107 $232
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Surviving
Oppenheimer Global Fund
<S> <C> <C> <C> <C>
Class A Shares $69 $93 $118 $191
Class B Shares $70 $93 $128 $192
Class C Shares $30 $62 $107 $232
</TABLE>
If you did not redeem your investment, it would incur the following
expenses:
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years*
<S> <C> <C> <C> <C>
Oppenheimer Global Emerging
Growth Fund
Class A Shares $75 $113 $153 $264
Class B Shares $26 $80 $136 $257
Class C Shares $26 $79 $135 $288
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Global Fund
<S> <C> <C> <C> <C>
Class A Shares $69 $93 $118 $191
Class B Shares $20 $63 $108 $192
Class C Shares $20 $62 $107 $232
</TABLE>
<TABLE>
<CAPTION>
Pro Forma Surviving
Oppenheimer Global Fund
<S> <C> <C> <C> <C>
Class A Shares $69 $93 $118 $191
Class B Shares $20 $63 $108 $192
Class C Shares $20 $62 $107 $232
</TABLE>
* In the first example, expenses include the Class A initial sales
charge and the applicable Class B or Class C contingent deferred
sales charge. In the second example, Class A expenses include the
initial sales charge, but Class B and Class C expenses do not
include contingent deferred sales charges. The Class B expenses in
years 7 through 10 are based on the Class A expenses shown above,
because each of the funds automatically converts your Class B
shares into Class A shares after 6 years. Long term Class B and C
shareholders could pay the economic equivalent of more than the
maximum front-end sales charge allowed under applicable
regulations, because of the effect of the asset-based sales charge
and contingent deferred sales charge. The automatic conversion of
Class B shares to Class A Shares is designed to minimize the
likelihood that this will occur.
The examples show the effect of expenses on an investment, but are
not meant to state or predict actual or expected costs or
investment returns of the Fund, all of which may be more or less
than the amounts shown.
SYNOPSIS
The following is a synopsis of certain information contained in or
incorporated by reference in this Proxy Statement and Prospectus
and presents key considerations for shareholders of Global Emerging
Growth Fund to assist them in determining whether to approve the
Reorganization. This synopsis is only a summary and is qualified
in its entirety by the more detailed information contained in or
incorporated by reference in this Proxy Statement and Prospectus
and by the Reorganization Agreement, a copy of which is attached as
an Annex hereto. Shareholders should carefully review this Proxy
Statement and Prospectus and the Reorganization Agreement in their
entirety and, in particular, the current Prospectus of Global Fund
which accompanies this Proxy Statement and Prospectus and is
incorporated herein by reference.
Parties to the Reorganization
Global Emerging Growth Fund is a diversified, open-end management
investment company organized in 1987 as a Massachusetts business
trust. Global Fund was originally incorporated in Maryland in 1969
but was reorganized in 1986 as a Massachusetts business trust.
Global Fund is an open-end, diversified management investment
company, with an unlimited number of shares of beneficial interest.
Global Emerging Growth Fund and Global Fund are each located at Two
World Trade Center, New York, New York 10048-0203. The members of
the Board of Trustees (the "Board") of Global Emerging Growth Fund
and the Board of Trustees of Global Fund are the same.
OppenheimerFunds, Inc. (the "Manager") whose address is Two World
Trade Center, New York, New York 10048-0203, acts as investment
adviser to Global Emerging Growth Fund and Global Fund
(collectively referred to herein as the "funds"). Additional
information about the parties is set forth below.
Shares to be Issued. All shareholders of Global Emerging Growth
Fund who own Class A shares will receive Class A shares of Global
Fund in exchange for their Class A shares of Global Emerging Growth
Fund. Shareholders of Global Emerging Growth Fund who own Class B
shares will receive Class B shares of Global Fund in exchange for
their Class B shares of Global Emerging Growth Fund. Shareholders
of Global Emerging Growth Fund who own Class C shares will receive
Class C shares of Global Fund in exchange for their Class C shares
of Global Emerging Growth Fund. All classes of shares vote
together in the aggregate as to certain matters; however shares of
a particular class vote together on matters that affect that class
alone.
The Reorganization
The Reorganization Agreement provides for the transfer of the
assets of Global Emerging Growth Fund to Global Fund in exchange
for Class A, Class B and Class C shares of Global Fund. The net
asset value of Global Fund Class A, Class B and Class C shares
issued in the exchange will equal the value of the assets of Global
Emerging Growth Fund received by Global Fund. Following the
Closing of the Reorganization, presently scheduled for June 20,
1997, Global Emerging Growth Fund will distribute the Class A,
Class B and Class C shares, respectively, of Global Fund received
by Global Emerging Growth Fund on the Closing Date to holders of
Class A, Class B and Class C shares of Global Emerging Growth Fund,
respectively. As a result of the Reorganization, each Class A,
Class B and Class C Global Emerging Growth Fund shareholder will
receive the number of full and fractional Global Fund Class A,
Class B and Class C shares that is equal in value to such
shareholder's pro rata interest in the assets transferred to Global
Fund as of the Valuation Date. The Board has determined that the
interests of existing Global Emerging Growth Fund shareholders will
not be diluted as a result of the Reorganization. For the reasons
set forth below under "The Reorganization - Reasons for the
Reorganization," the Board, including the trustees who are not
"interested persons" of Global Emerging Growth Fund (the
"Independent Trustees'), as that term is defined in the Investment
Company Act, has concluded that the Reorganization is in the best
interests of Global Emerging Growth Fund and its shareholders and
recommends approval of the Reorganization by Global Emerging Growth
Fund shareholders. If the Reorganization is not approved, Global
Emerging Growth Fund will continue in existence and the Board will
determine whether to pursue alternative actions.
Reasons for the Reorganization
The Manager proposed to the Board a reorganization into Global Fund
so that shareholders of Global Emerging Growth Fund may become
shareholders of a larger fund, which after such reorganization
allows shareholders to experience a reduction in expenses. The
Board considered pro forma information which indicated the expense
ratio of a combined fund would be lower than that of Global
Emerging Growth Fund, as shown above under "Comparative Fee Table."
In addition, the Board also considered information with respect to
the historical performance of Global Emerging Growth Fund and
Global Fund. For the three and five year periods ended December
31, 1996, the average annual returns were better for Global Fund
than for Global Emerging Growth Fund.
The Board also considered that the Reorganization would be a tax
free reorganization, and there would be no sales charge imposed in
effecting the Reorganization. The Board concluded that the
Reorganization would not result in dilution to shareholders of
Global Emerging Growth Fund and it would not result in dilution to
shareholders of Global Fund.
Tax Consequences of the Reorganization
In the opinion of KPMG Peat Marwick LLP, tax adviser to Global
Emerging Growth Fund, the Reorganization will qualify as a tax-free
reorganization for Federal income tax purposes. As a result, no
gain or loss will be recognized by either fund, or by the
shareholders of either fund for Federal income tax purposes as a
result of the Reorganization. For further information about the
tax consequences of the Reorganization, see "Approval of the
Reorganization - Tax Aspects" below.
Investment Objectives and Policies
Global Emerging Growth Fund
Global Emerging Growth Fund invests its assets to aggressively seek
capital appreciation. Current income is not an objective. Global
Emerging Growth Fund seeks its investment objective by emphasizing
investment in common stocks or other equity securities, including
securities that are convertible into common stock. Global Emerging
Growth Fund may hold warrants and rights. These securities may be
traded on securities exchanges or in over-the-counter markets.
Under normal market conditions, Global Emerging Growth Fund invests
at least 65% of its total assets in securities of emerging growth
companies located in the United States and at least three foreign
countries. Emerging growth companies tend to be newer, smaller
companies that are developing new products or services or that are
expanding into new markets for their products. However, emerging
growth companies can be any size and can be in any industry, and
may include established companies entering a new growth cycle.
Emerging growth companies normally retain a large part of their
earnings for research, development and investment in capital
assets. Therefore, they tend not to emphasize the payment of
dividends. Global Emerging Growth Fund may invest a substantial
amount of its assets in foreign securities.
Global Fund
Global Fund invests its assets with the objective of capital
appreciation. Global Fund seeks capital appreciation by
emphasizing investments in common stocks or convertible securities
of "growth-type" companies. These may include securities of U.S.
companies or foreign companies, as discussed below. Global Fund
may invest in securities of smaller, less well-known companies as
well as those of large, well-known companies (not generally
included in the definition of "growth-type" companies). Global
Fund may hold warrants and rights. Current income is not a
consideration in the selection of portfolio securities. A portion
of Global Fund's assets may be invested in securities for liquidity
purposes.
As a matter of fundamental policy, under normal market
conditions (when the Manager believes that the securities markets
are not in a volatile or unstable period), Global Fund invests in
securities of issuers traded in markets in at least three different
countries (which may include the United States). The Manager
expects that Global Fund will normally invest a substantial portion
of its assets in foreign securities.
Investment Advisory and Distribution and Service Plan Fees
The terms and conditions of each investment advisory agreement are
substantially the same. Both funds obtain investment management
services from the Manager. The management fee is computed on the
net asset value of each fund as of the close of business each day
and payable monthly at the following annual rates: Global Emerging
Growth Fund pays 1% of the first $50 million of average annual net
asses, 0.75% of the next $150 million, 0.72% of the next $200
million, 0.69% of the next $200 million, -0.66% of the next $200
million and 0.60% of net assets in excess of $800 million. Global
Fund pays 0.80% of the first $250 million of aggregate net assets,
0.77% of the next $250 million, 0.75% of the next $500 million,
0.69% of the next $1 billion, 0.67% of the next $1.5 billion and
0.65% of aggregate net assets in excess of $3.5 billion.
Global Emerging Growth Fund and Global Fund have both adopted
Service Plans for their respective Class A shares. Both Service
Plans provide for compensation to the Distributor for a portion of
its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Under each plan,
payment is made at an annual rate that may not exceed 0.25% of the
average annual net assets of Class A shares of each of the funds.
Global Emerging Growth Fund and Global Fund have adopted
Distribution and Service Plans (the "Plans") for Class B and Class
C shares under which each fund pays the Distributor for its
services in connection with distributing Class B and Class C
shares and servicing accounts. Under each Plan, the funds pay the
Distributor an asset-based sales charge of 0.75% per annum on Class
B shares outstanding for six years or less and on Class C shares.
The funds also pay the Distributor a service fee of 0.25% per
annum, each of which is computed on the average annual net assets
of Class B and Class C shares determined as of the close of each
regular business day of each fund.
Purchases, Exchanges and Redemptions
Both Global Emerging Growth Fund and Global Fund are part of the
OppenheimerFunds complex of mutual funds. The procedures for
purchases, exchanges and redemptions of shares of the funds are
substantially the same. Class A, Class B or Class C shares of
either fund may be exchanged only for Class A, Class B or Class C
shares of the other Oppenheimer funds offering such shares.
Both Global Emerging Growth Fund and Global Fund have a maximum
initial sales charge of 5.75% on Class A shares. Investors who
purchase more than $1 million ($500,000 or more for purchases by
"Retirement Plans" as defined in "Class A Contingent Deferred Sales
Charge" in each fund's Prospectus) in Class A shares may have to
pay a sales charge of up to 1% if shares are sold within 18
calendar months from the end of the calendar month during which
shares are purchased. Each of the funds has a contingent deferred
sales charge imposed on the proceeds of Class B shares redeemed
within six years of buying them. The contingent deferred sales
charge ("CDSC") varies depending on how long you hold your shares.
Each of the funds has a contingent deferred sales charge of 1%
imposed on the proceeds of Class C shares if redeemed within twelve
months of their purchase. Class A, Class B and Class C shares of
Global Fund received in the Reorganization will be issued at net
asset value, without a sales charge and no CDSC will be imposed as
a result of the Reorganization. Services available to shareholders
of both funds include purchase and redemption of shares through
OppenheimerFunds AccountLink and PhoneLink (an automated telephone
system), telephone redemptions, and exchanges by telephone to other
Oppenheimer funds which offer Class A, Class B and Class C shares,
and reinvestment privileges. Please see "Shareholder Services,"
and you should refer to Global Emerging Growth Fund's Prospectus
and Global Fund's Prospectus included with this document for
further information.
PRINCIPAL RISK FACTORS
In evaluating whether to approve the Reorganization and invest in
Global Fund, shareholders should carefully consider the following
risk factors, the information set forth in this Proxy Statement and
Prospectus and the more complete description of risk factors set
forth in the documents incorporated by reference herein, including
the Prospectuses of the funds and their respective Statements of
Additional Information.
Foreign Securities
There are risks of foreign investing that increase the risk of
investing in Global Emerging Growth Fund and in Global Fund and
also increase the operating costs of both funds. For example,
foreign issuers are not required to use generally-accepted
accounting principles. If foreign securities are not registered
for sale in the U.S. under U.S. securities laws, the issuer does
not have to comply with the disclosure requirements of U.S. laws,
which are generally more stringent than foreign laws. The values
of foreign securities investments will be affected by other
factors, including exchange control regulations or currency
blockage and possible expropriation or nationalization of assets.
There are risks of changes in foreign currency values. Because
Global Emerging Growth Fund and Global Fund may purchase securities
denominated in foreign currencies, a change in value of a foreign
currency against the U.S. dollar will result in a change in the
U.S. dollar value of securities of that Fund denominated in that
currency. There may also be changes in governmental administration
or economic or monetary policy in the U.S. or abroad that can
affect foreign investing. In addition, it is generally more
difficult to obtain court judgments outside the United States if
that Fund has to sue a foreign broker or issuer. Additional costs
may be incurred because foreign broker commissions are generally
higher than U.S. rates, and there are additional custodial costs
associated with holding securities abroad.
If assets of Global Emerging Growth Fund or Global Fund are held
abroad, the countries in which they are held and the sub-custodians
holding them must be approved by that Fund's Board of Trustees.
More information about the risks and potential rewards of investing
in foreign securities is contained in the Statement of Additional
Information of both funds.
APPROVAL OF THE REORGANIZATION
(The Proposal)
Reasons for the Reorganization
At a meeting of the Board of Trustees (the "Board") held October
10, 1996, the Trustees reviewed and discussed materials relevant to
the proposed Reorganization. The Board, including the Independent
Trustees, unanimously approved and recommended to shareholders of
Global Emerging Growth Fund that they approve the Reorganization.
Both funds offer Class A, Class B and Class C shares and the terms
and conditions of their offer, sale, redemption and exchange,
distribution arrangements, expenses borne separately by each class
and other related matters are essentially the same. The Board
considered that this will facilitate an exchange. In the
reorganization, Class A, Class B and Class C shareholders of Global
Emerging Growth Fund will receive Class A, Class B and Class C
shares, respectively, of Global Fund.
In considering the proposed Reorganization, the Board reviewed
information which demonstrated that Global Emerging Growth Fund is
a significantly smaller fund, with $168,764,149 in assets as of
December 31, 1996. In comparison, Global Fund had $3,228,220,291
in assets as of December 31, 1996. It is not anticipated that
Global Emerging Growth Fund will increase substantially in size in
the near future. After the reorganization, the shareholders of
Global Emerging Growth Fund will be shareholders of a larger fund
and will incur lower operating, transfer agency and other expenses.
Thus economics of scale will benefit shareholders of Global
Emerging Growth Fund.
Among several other factors, the Board focused on the investment
objectives of the two funds. Oppenheimer Global Emerging Growth
Fund aggressively seeks capital appreciation and generally focuses
on "emerging growth" companies. Global Fund has the investment
objective of capital appreciation. Both funds are expected to
invest a substantial portion of their assets in foreign securities.
The Board determined that investment objectives were substantially
similar.
The Board, in reviewing financial information, considered the
investment advisory fee rate of both funds (also known as the
"management fee rate"). The management fee rates for Global
Emerging Growth Fund are 1.0% of the first $50 million of average
annual net assets; 0.75% of the next $150 million; 0.72% of the
next $200 million; 0.69% of the next $200 million; 0.66% of the
next $200 million; and 0.60% of average annual net assets in excess
of $800 million. Global Emerging Growth Fund's management fee for
its fiscal year ended September 30, 1996 was 0.83% of average
annual net assets for Class A, Class B and Class C shares. The
management fee rates of Global Fund are 0.80% of the first $250
million of average annual net assets; 0.77% of the next $250
million; 0.75% of the next $500 million; 0.69% of the next $1
billion; 0.67% of the next $1.5 billion and 0.65% of average annual
net assets in excess of $3.5 billion. Global Fund's management fee
for the fiscal year ended September 30, 1996 was 0.71% of average
annual net assets for Class A, Class B and Class C shares. If the
two funds were combined (and assuming no other change),
shareholders of Global Fund would continue to have a management fee
of 0.71% for Class A, Class B and Class C shares. The Board
considered pro forma information which indicated that the expense
ratio of a combined fund would therefore be lower than that of
Global Emerging Growth Fund.
In addition to the above, the Board also considered information
with respect to the historical performance of Global Emerging
Growth Fund and Global Fund, including the performance information
contained in Exhibit A to this Proxy Statement. The Board analyzed
that although for the twelve months ended December 31, 1996, the
average annual returns were slightly better for each class of
Global Emerging Growth Fund than for the corresponding class of
Global Fund, the average annual total returns of Global Fund were
much better than for Global Emerging Growth Fund for the three and
five year periods ended December 31, 1996. Although past
performance is not predictive of future results, shareholders of
Global Emerging Growth Fund would have an opportunity to become
shareholders of a fund with a better long-term performance history.
The Board also considered that the Reorganization would be a tax
free reorganization, and there would be no sales charge imposed in
effecting the Reorganization. The Board concluded that the
Reorganization would not result in dilution to shareholders of
Global Emerging Growth Fund and it would not result in dilution to
shareholders of Global Fund.
The Reorganization
The Reorganization Agreement (a copy of which is set forth in full
as Exhibit B to this Proxy Statement and Prospectus) contemplates
a reorganization under which (i) all of the assets of Global
Emerging Growth Fund (other than the cash reserve described below
(the "Cash Reserve")) will be transferred to Global Fund in
exchange for Class A, Class B and Class C shares of Global Fund,
(ii) these shares will be distributed among the shareholders of
Global Emerging Growth Fund in complete liquidation of Global
Emerging Growth Fund, (iii) the outstanding shares of Global
Emerging Growth Fund will be cancelled. Global Fund will not
assume any of Global Emerging Growth Fund's liabilities except for
portfolio securities purchased which have not settled and
outstanding shareholder redemption and dividend checks.
The result of effectuating the Reorganization would be that: (i)
Global Fund will add to its gross assets all of the assets (net of
any liability for portfolio securities purchased but not settled
and outstanding shareholder redemption and dividend checks) of
Global Emerging Growth Fund other than its Cash Reserve; and (ii)
the shareholders of Global Emerging Growth Fund as of the close of
business on the Closing Date will become shareholders of either
Class A, Class B or Class C shares of Global Fund.
The effect of the Reorganization will be that shareholders of
Global Emerging Growth Fund who vote their Class A, Class B and
Class C shares in favor of the Reorganization will be electing to
redeem their shares of Global Emerging Growth Fund (at net asset
value on the Valuation Date referred to below under "Method of
Carrying Out the Reorganization Plan," calculated after subtracting
the Cash Reserve) and reinvest the proceeds in the respective Class
A, Class B or Class C shares of Global Fund at net asset value
without sales charge and without recognition of taxable gain or
loss for Federal income tax purposes (see "Tax Aspects of the
Reorganization" below). The Cash Reserve is that amount retained
by Global Emerging Growth Fund which is sufficient in the
discretion of the Board for the payment of: (a) Global Emerging
Growth Fund's expenses of liquidation, and (b) its liabilities,
other than those assumed by Global Fund. Global Emerging Growth
Fund and Global Fund will bear all of their respective expenses
associated with the Reorganization, as set forth under "Costs of
the Solicitation and the Reorganization" above. Management
estimates that such expenses associated with the Reorganization to
be borne by Global Emerging Growth Fund will not exceed $100,000.
Liabilities as of the date of the transfer of assets will consist
primarily of accrued but unpaid normal operating expenses of Global
Emerging Growth Fund, excluding the cost of any portfolio
securities purchased but not yet settled and outstanding
shareholder redemption and dividend checks. See "Method of
Carrying Out the Reorganization Plan" below.
The Reorganization Agreement provides for coordination between the
funds as to their respective portfolios so that, after the closing,
Global Fund will be in compliance with all of its investment
policies and restrictions. Global Emerging Growth Fund will
recognize capital gain or loss on any sales made pursuant to this
paragraph.
Tax Aspects of the Reorganization
Immediately prior to the Valuation Date referred to in the
Reorganization Agreement, Global Emerging Growth Fund will pay a
dividend or dividends which, together with all previous such
dividends, will have the effect of distributing to Global Emerging
Growth Fund's shareholders all of Global Emerging Growth Fund's
investment company taxable income for taxable years ending on or
prior to the Closing Date (computed without regard to any deduction
for dividends paid) and all of its net capital gain, if any,
realized in taxable years ending on or prior to the Closing Date
(after reduction for any available capital loss carry-forward).
Such dividends will be included in the taxable income of Global
Emerging Growth Fund's shareholders as ordinary income and capital
gain, respectively. At September 30, 1996, Global Emerging Growth
Fund had available for federal income tax purposes an unused
capital loss carryover of approximately $29,567,000, which would
expire between 1998 and 2004. This makes it unlikely that the
final capital gain distribution would be taxable, if one is made.
Subsequent to the reorganization, Global Fund may utilize Global
Emerging Growth Fund's capital loss carryover, subject to the same
expiration period and annual limitations imposed by the Internal
Revenue Code.
The exchange of the assets of Global Emerging Growth Fund for Class
A and Class B shares of Global Fund and the assumption by Global
Fund of certain liabilities of Global Emerging Growth Fund is
intended to qualify for Federal income tax purposes as a tax-free
reorganization under Section 368(a)(1) of the Internal Revenue Code
of 1986, as amended (the "Code"). Global Emerging Growth Fund has
represented to KPMG Peat Marwick LLP, tax adviser to Global
Emerging Growth Fund, that there is no plan or intention by any
Fund shareholder who owns 5% or more of Global Emerging Growth
Fund's outstanding shares, and, to Global Emerging Growth Fund's
best knowledge, there is no plan or intention on the part of the
remaining Global Emerging Growth Fund shareholders, to redeem,
sell, exchange or otherwise dispose of a number of Global Fund
Class A or Class B shares received in the transaction that would
reduce Global Emerging Growth Fund shareholders' ownership of
Global Fund shares to a number of shares having a value, as of the
Closing Date, of less than 50% of the value of all the formerly
outstanding Global Emerging Growth Fund shares as of the same date.
Global Fund and Global Emerging Growth Fund have each represented
to KPMG Peat Marwick LLP, that, as of the Closing Date, it will
qualify as a regulated investment company or will meet the
diversification test of Section 368(a)(2)(F)(ii) of the Code.
As a condition to the closing of the Reorganization, Global Fund
and Global Emerging Growth Fund will receive the opinion of KPMG
Peat Marwick LLP to the effect that, based on the Reorganization
Agreement, the above representations, existing provisions of the
Code, Treasury Regulations issued thereunder, current Revenue
Rulings, Revenue Procedures and court decisions, for Federal income
tax purposes:
1. The transactions contemplated by the Reorganization Agreement
will qualify as a tax-free "reorganization" within the meaning
of Section 368(a)(1) of the Code.
2. Global Emerging Growth Fund and Global Fund will each qualify
as "a party to a reorganization" within the meaning of Section
368(b)(2) of the Code.
3. No gain or loss will be recognized by the shareholders of
Global Emerging Growth Fund upon the distribution of Class A,
Class B or Class C shares of beneficial interest in Global Fund
to the shareholders of Global Emerging Growth Fund pursuant to
Section 354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by Global Emerging Growth Fund by reason of the
transfer of its assets solely in exchange for Class A, Class B
or Class C shares of Global Fund.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Global Fund by reason of the transfer of Global
Emerging Growth Fund's assets solely in exchange for Class A,
Class B or Class C shares of Global Fund.
6. The shareholders of Global Emerging Growth Fund will have the
same tax basis and holding period for the shares of beneficial
interest in Global Fund that they receive as they had for
Global Emerging Growth Fund stock that they previously held,
pursuant to Sections 358(a) and 1223(1) of the Code,
respectively.
7. The securities transferred by Global Emerging Growth Fund to
Global Fund will have the same tax basis and holding period in
the hands of Global Fund as they had for Global Emerging Growth
Fund, pursuant to Sections 362(b) and 1223(1) of the Code,
respectively.
Shareholders of Global Emerging Growth Fund should consult their
tax advisors regarding the effect, if any, of the Reorganization in
light of their individual circumstances. Since the foregoing
discussion relates only to the Federal income tax consequences of
the Reorganization, shareholders of Global Emerging Growth Fund
should also consult their tax advisers as to state and local tax
consequences, if any, of the Reorganization.
Capitalization Table (Unaudited)
The table below sets forth the capitalization of Global Emerging
Growth Fund and Global Fund and indicates the pro forma combined
capitalization as of September 30, 1996 as if the Reorganization
had occurred on that date.
September 30, 1996
<TABLE>
<CAPTION>
Net Asset
Shares Value
Net Assets Outstanding Per Share
<S> <C> <C> <C>
Oppenheimer Global
Emerging Growth Fund
Class A $ 154,081,998 7,351,701 $ 20.96
Class B $ 10,854,911 522,496 $ 20.78
Class C $ 3,269,448 157,283 $ 20.79
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Global Fund
<S> <C> <C> <C>
Class A $ 2,498,748,991 64,074,825 $ 39.00
Class B $ 541,225,350 14,172,475 $ 38.19
Class C $ 17,626,614 455,146 $ 38.73
</TABLE>
Oppenheimer Global Fund
(Pro Forma Surviving Fund)
Class A $ 39.00
Class B $ 38.19
Class C $ 38.73
Reflects issuance of 3,950,821 Class A shares, 284,234 Class B
shares and 84,416 Class C shares of Global Fund in a tax-free
exchange for the net assets of Global Emerging Growth Fund,
aggregating $168,206,357.
The pro forma ratio of expenses to average annual net assets of the
Class A shares at September 30, 1996 would have been 1.17%. The
pro forma ratio of expenses to average net assets of Class B shares
at September 30, 1996 would have been 2.00%. The pro forma ratio of
expenses to average net assets of Class C shares at September 30,
1996 would have been 1.99%.
COMPARISON BETWEEN
GLOBAL EMERGING GROWTH FUND
AND GLOBAL FUND
Information about Global Emerging Growth Fund and Global Fund is
presented below. Additional information about Global Fund is set
forth in its Prospectus, accompanying this Proxy Statement and
Prospectus, and additional information about both funds is set
forth in documents that may be obtained upon request of the
transfer agent or upon review at the
offices of the SEC. See "Miscellaneous - Public Information."
Investment Objectives and Policies
Global Fund seeks capital appreciation by emphasizing investments
in common stocks or convertible securities of "growth-type"
companies. These may include securities of U.S. companies or
foreign companies, as discussed below. Global Fund may invest in
securities of smaller, less well-known companies as well as those
of large, well-known companies (not generally included in the
definition of "growth-type" companies). Global Fund may hold
warrants and rights. Current income is not a consideration in the
selection of portfolio securities. A portion of Global Fund's
assets may be invested in securities for liquidity purposes.
As a matter of fundamental policy, under normal market conditions
(when the Manager believes that the securities markets are not in
a volatile or unstable period), Global Fund invests in securities
of issuers traded in markets in at least three different countries
(which may include the United States). The Manager expects that
Global Fund will normally invest a substantial portion of its
assets in foreign securities (discussed in "Foreign Securities,"
below).
Global Fund's portfolio manager currently employs an investment
strategy in selecting foreign and domestic securities that
considers the effects of worldwide trends on the growth of various
business sectors. These trends or "global themes" currently
include telecommunications expansion, emerging consumer markets,
infrastructure development, natural resource use and development,
corporate restructuring, capital market development in foreign
countries, health care expansion, and global integration. These
trends, which may affect the growth of companies having businesses
in these sectors or affected by their development, may suggest
opportunities for investing Global Fund's assets. The Manager does
not invest a fixed or specific amount of Global Fund's assets in
any one sector, and these themes or this approach may change over
time.
Global Fund may also seek to take advantage of changes in the
business cycle by investing in companies that are sensitive to
those changes as well as in "special situations" the Manager
believes present opportunities for capital growth. For example,
when a country's economy is expanding, companies in the financial
services and consumer products industries may be in a position to
benefit from changes in the business cycle and may present long-
term growth opportunities.
When investing Global Fund's assets, the Manager considers many
factors, including the global themes discussed above, general
economic conditions abroad relative to the U.S. and the trends in
foreign and domestic stock markets. Global Fund may try to hedge
against losses in the value of its portfolio of securities by using
hedging strategies and derivative investments described below.
When market conditions are unstable, Global Fund may invest in debt
securities, such as rated or unrated bonds and debentures, cash
equivalents and preferred stocks. It is expected that short-term
debt securities (which are securities maturing in one year or less
from date of purchase) will be emphasized for defensive or
liquidity purposes, since those securities usually may be disposed
of quickly and their prices tend not to be as volatile as the
prices of longer term debt securities. When circumstances warrant,
securities may be sold without regard to the length of time held,
although short-term trading may increase brokerage costs borne by
Global Fund.
Global Emerging Growth Fund
Global Emerging Growth Fund seeks its investment objective by
emphasizing investment in common stocks or other equity securities,
including securities that are convertible into common stock.
Global Emerging Growth Fund may hold warrants and rights. These
securities may be traded on securities exchanges or in over-the-
counter markets.
Under normal market conditions, Global Emerging Growth Fund invests
at least 65% of its total assets in securities of emerging growth
companies located in the United States and at least three foreign
countries. Emerging growth companies tend to be newer, smaller
companies that are developing new products or services or that are
expanding into new markets for their products. However, emerging
growth companies can be any size and can be in any industry, and
may include established companies entering a new growth cycle.
Emerging growth companies normally retain a large part of their
earnings for research, development and investment in capital
assets. Therefore, they tend not to emphasize the payment of
dividends.
Global Emerging Growth Fund may invest a substantial amount of its
assets in foreign securities, discussed below.
Global Emerging Growth Fund's portfolio manager currently uses an
investment strategy in selecting foreign and domestic securities
that examines the effects of worldwide trends on the growth of
various business sectors. These trends, or "global themes,"
currently include telecommunications expansion, emerging consumer
markets, infrastructure development, natural resource use and
development, corporate restructuring, capital market development in
foreign countries, healthcare expansion and global integration.
These trends, which may affect the growth of companies having
businesses in these sectors or which are affected by their
development, may suggest opportunities for investing Global
Emerging Growth Fund's assets. The Manager does not invest a fixed
amount of Global Emerging Growth Fund's assets in any one sector,
and these themes and this approach may change over time.
When investing Global Emerging Growth Fund's assets, the Manager
considers many factors, including general economic conditions
abroad relative to those in the U.S. and the trends in foreign and
domestic stock markets. Global Emerging Growth Fund may try to
hedge against losses in the value of its portfolio of securities by
using hedging strategies or derivative investments, described
below.
Global Emerging Growth Fund may also seek to take advantage of
changes in the business cycle by investing in companies that are
sensitive to those changes, if the Manager believes they present
opportunities for growth. For example, when the economy of a
country is expanding, companies in the financial services and
consumer products industries may be in a position to benefit from
changes in the business cycle and may present long-term growth
opportunities.
When market or economic conditions are unstable, Global Emerging
Growth Fund may invest substantial amounts of its assets in debt
securities, such as money market instruments or government
securities, for temporary defensive purposes, as described below.
Global Emerging Growth Fund's portfolio manager may employ special
investment techniques in selecting securities for Global Emerging
Growth Fund. These are also described below. Additional
information may be found about them under the same headings in the
Statement of Additional Information.
Because of the types of companies in which the Fund invests and the
investment techniques the Fund uses, some of which may be
speculative, the Fund is designed for investors who are investing
for the long-term and who are willing to accept greater risks of
loss of their capital in the hope of achieving greater capital
appreciation. Investing for capital appreciation entails the risk
of loss of all or part of your investment.
The securities in which Global Fund and Strategic Investment Grade
Bond Fond invest are summarized below. Both funds invest in
substantially the same types of securities and other similar
restrictions.
Permitted Investments by Both Global Emerging Growth Fund and
Global Fund
Stock Investment Risks
Both Global Fund and Global Emerging Growth Fund each normally
invest most, or a substantial portion, of its assets in stocks.
Therefore, the value of each fund's portfolio will be affected by
changes in the stock markets. At times, the stock markets can be
volatile, and stock prices can change substantially. This market
risk will affect each fund's net asset values per share, which will
fluctuate as the values of each fund's portfolio securities change.
Not all stock prices change uniformly or at the same time, not all
stock markets move in the same direction at the same time, and
other factors can affect a particular stock's prices (for example,
poor earnings reports by an issuer, loss of major customers, major
litigation against an issuer, or changes in government regulations
affecting an industry). These factors cannot always be predicted.
As discussed below, each fund attempts to limit market risks by
diversifying its investments, that is, by not holding a substantial
amount of stock of any one company and by not investing too great
a percentage of the fund's assets in any one industry or sector.
Because of the types of securities each fund invests in and the
investment techniques each fund uses, some of which may be
speculative, both Global Fund and Global Emerging Growth Fund are
designed for investors who are investing for the long-term and who
are willing to accept greater risks of loss of their investment in
the hope of achieving capital appreciation. Neither fund is
intended for investors seeking assured income and preservation of
capital. Investing for capital appreciation entails the risk of
loss of all or part of your investment. Because changes in
securities market prices can occur at any time, there is no
assurance that either fund will achieve its investment objective,
and when you redeem your shares, they may be worth more or less
than what you paid for them.
Repurchase Agreements
Each of the funds may enter into repurchase agreements. Neither of
the funds will enter into repurchase agreements that will cause
more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. However, if the
vendor fails to pay the resale price on the delivery date, the
funds may experience costs in disposing of the collateral and
losses if there is any delay in doing so.
Foreign Securities
Global Fund will invest in at least three different countries
(which may include the United States). Otherwise, Global Fund may
invest its assets without limit in equity (and debt) securities
issued or guaranteed by foreign companies or foreign governments or
their agencies in any country, developed or underdeveloped.
Foreign securities are those that are traded primarily on a foreign
securities exchange or in the foreign over-the-counter markets.
Global Fund will hold foreign currency only in connection with the
purchase or sale of foreign securities.
Global Emerging Growth Fund may invest a substantial amount of its
assets in foreign securities. Global Emerging Growth Fund may
purchase securities issued or guaranteed by foreign companies or
foreign governments, including foreign government agencies. Global
Emerging Growth Fund may buy securities of companies in any
country, developed or underdeveloped. Other than the requirement
that Global Emerging Growth Fund will normally invest at least 65%
of its total assets in emerging growth companies located in the
U.S. and at least three foreign countries, there is no limit on the
amount of Global Emerging Growth Fund's assets that may be invested
in foreign securities. Global Emerging Growth Fund will hold
foreign currency only in connection with the purchase or sale of
foreign securities.
There are special risks in investing in foreign securities.
Because both Global Fund and Global Emerging Growth Fund may
purchase securities denominated in foreign currencies or traded
primarily in foreign markets, a change in the value of a foreign
currency against the U.S. dollar will result in a change in the
U.S. dollar value of those foreign securities. Foreign issuers are
not required to use generally-accepted accounting principals that
apply to U.S. issuers. If foreign securities are not registered
for sale in the U.S. under U.S. securities laws, the issuer does
not have to comply with disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected
by other factors, including exchange control regulations,
expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in
governmental, economic or monetary policy in the U.S. or abroad, or
other political and economic factors.
In addition, it is generally more difficult to obtain court
judgments outside the U.S. if either fund were to sue a foreign
issuer or broker. Additional costs may be incurred because foreign
brokerage commissions are generally higher than U.S. rates, and
there are additional custodial costs associated with holding
securities abroad. More information about the risks and potential
rewards of investing in foreign securities is contained in each
fund's respective Statement of Additional Information.
Portfolio Turnover
A change in the securities held by either fund is known as
"portfolio turnover." Neither Fund ordinarily engage in short-term
trading to try to achieve its objective. For each fund's portfolio
turnover rate, see "Financial Highlights" in each fund's respective
Prospectus or Annual Report.
Portfolio turnover affects brokerage costs, dealer markups and
other transaction costs, and results in Global Fund and Global
Emerging Growth Fund's realization of capital gains or losses for
tax purposes. It may also affect either fund's ability to qualify
as a "regulated investment company" under the Internal Revenue Code
for tax deductions for dividends and capital gains distributions
either fund pays to shareholders. Both funds qualified in their
last fiscal year and intend to do so in the coming year, although
both funds reserve the right not to qualify.
Hedging
Both funds may purchase and sell certain kinds of futures
contracts, put and call options, forward contracts, and options on
futures and broadly-based stock indices. These are all referred to
as "hedging instruments." Neither Fund uses hedging instruments
for speculative purposes, and both have limits on the use of them,
described below. The hedging instruments the funds may use are
described below and in greater detail in "Other Investment
Techniques and Strategies" section in each fund's respective
Statement of Additional Information.
Both funds may buy and sell options, futures and forward contracts
for a number of purposes. Each fund may do so to try to manage its
exposure to the possibility that the prices of its portfolio
securities may decline, or to establish a position in the
securities market as a temporary substitute for purchasing
individual securities. Each fund may do so to try to manage its
exposure to changing interest rates. Some of these strategies,
such as selling futures, buying puts and writing covered calls,
hedge the fund's portfolio against price fluctuations. Other
hedging strategies, such as buying futures and call options, tend
to increase the funds' exposure to the securities market.
Forward contracts are used by both funds to try to manage foreign
currency risks on foreign investments. Foreign currency options
are used to try to protect against declines in the dollar value of
foreign securities the funds own, or to protect against an increase
in the dollar cost of buying foreign securities. Writing covered
call options may also provide income to the funds for liquidity
purposes or to raise cash to distribute to shareholders.
Both funds may buy and sell futures contracts that relate to
broadly-based stock indices (these are referred to as Stock Index
Futures) or foreign currencies (these are called Forward Contracts
and are discussed below).
Both funds may buy and sell certain kinds of put options (puts) and
call options (calls). Calls the funds buy or sell must be listed
on a securities or commodities exchange, or quoted on the Automated
Quotation System ("NASDAQ") of The Nasdaq Stock Market, Inc., or
traded in the over-the-counter market. In the case of puts and
calls on a foreign currency, they must be traded on a securities or
commodities exchange or in the over-the-counter market, or must be
quoted by recognized dealers in those options. A call or put
option may not be purchased by either fund if the value of all of
each fund's put and call options would exceed 5% of either fund's
respective total assets.
Both funds may buy calls only on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures. The funds may
buy calls to terminate its obligation on a call they previously
wrote.
Both funds may write (that is, sell) covered call options. Each
call the funds write must be "covered" while it is outstanding.
That means the funds must own the investment on which the call was
written or each fund must own other securities that are acceptable
for the escrow arrangements required for calls. The funds may
write calls on futures contracts each fund owns, but these calls
must be covered by securities or other liquid assets each fund owns
and segregated to enable it to satisfy each fund's obligations if
the call is exercised. After either fund writes a call, not more
than 25% of either fund's assets may be subject to calls. When
either fund writes a call, it receives cash (called a premium).
The call gives the buyer the ability to buy the investment on which
the call was written from the respective fund at the call price
during the period in which the call may be exercised. If the value
of the investment does not rise above the call price, it is likely
that the call will lapse without being exercised, while the
respective fund keeps the cash premium (and the investment).
Both funds may purchase and sell put options. Buying a put on an
investment gives each fund the right to sell the investment at a
set price to a seller of a put on that investment. The funds can
buy only those puts that relate to securities that each fund owns,
broadly-based stock indices, foreign currencies or Stock Index
Futures. Both funds can buy a put on a Stock Index Future whether
or not each fund owns the particular Stock Index Future in its
portfolio.
Both funds may write puts on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures, but only if
those puts are covered by segregated liquid assets. Neither Fund
will write a put if it will require more than 25% of either fund's
total assets to be segregated.
Forward contracts are foreign currency exchange contracts. They
are used to buy or sell foreign currency for future delivery at a
fixed price. Both funds may use them to try to "lock in" the U.S.
dollar price of a security denominated in a foreign currency that
the Fund has bought or sold, or to protect against possible losses
from changes in the relative values of the U.S. dollar and foreign
currency. Both funds limit their exposure in foreign currency
exchange contracts in a particular foreign currency to the amount
of their respective assets denominated in that currency or in a
closely-correlated currency.
Hedging instruments can be volatile investments and may involve
special risks. The use of hedging instruments requires special
skills and knowledge of investment techniques that are different
from what is required for normal portfolio management. If the
Manager uses a hedging instrument at the wrong time or judges
market conditions incorrectly, hedging strategies may reduce either
fund's return. Either fund could also experience losses if the
prices of its futures and options positions were not correlated
with its other investments or if it could not close out a position
because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has special
tax effects on either fund. There are also special risks in
particular hedging strategies. If a covered call written by either
fund is exercised on an investment that has increased in value,
either fund will be required to sell the investment at the call
price and will not be able to realize any profit if the investment
has increased in value above the call price. In writing a put,
there is a risk that either fund may be required to buy the
underlying security at a disadvantageous price. The use of forward
contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign
currency. These risks are described in greater detail in each
fund's respective Statement of Additional Information.
Loan of Portfolio Securities
To raise cash for liquidity purposes, both funds may lend their
portfolio securities to brokers, dealers and other financial
institutions. Global Fund may loan portfolio securities pursuant
to a Securities Lending Agreement and Guaranty provided by The Bank
of New York to protect against risks of lending securities such as
delays in receiving additional collateral, a delay in the return of
the loaned securities or loss of rights in the collateral if the
borrower fails financially. Under the provisions of that agreement
loans must be adequately collateralized and may be made only in
conformity with Global Fund's Securities Lending Guidelines,
adopted by Global Fund's Board of Trustees. Both Global Fund and
Global Emerging Growth Fund restrict loans of securities wherein
the value of the securities loaned exceed 25% of the value of
either fund's total assets. Neither fund presently intends that
the value of the securities loaned in the current fiscal year, if
any, will exceed 5% of the value of either fund's total assets.
These loans are subject to the conditions in each fund's Statements
of Additional Information. Neither fund presently intends to lend
its portfolio securities, but if they do the value of the
securities borrowed is not expected to exceed 5% of each fund's
total assets.
Illiquid and Restricted Securities
Both of the funds may invest in illiquid and restricted securities.
Investments may be illiquid because of the absence of an active
trading market, making it difficult to value them or dispose of
them promptly at an acceptable price. A restricted security is one
that has a contractual restriction on its resale or which cannot be
sold publicly until it is registered under the Securities Act of
1933. The funds will not invest more than 10% of their net assets
in illiquid or restricted securities (each fund's Board may
increase that limit to 15%). The fund's percentage limitation on
these investments does not apply to certain restricted securities
that are eligible for resale to qualified institutional purchasers.
Derivative Investments
Global Emerging Growth Fund and Global Fund can invest in a number
of different kinds of "derivative investments." Each fund may use
some types of derivatives for hedging purposes, and may invest in
others because they offer the potential for increased income. In
general, a "derivative investment" is a specially-designed
investment whose performance is linked to the performance of
another investment or security, such as an option, future, index,
currency or commodity. The funds may not purchase or sell physical
commodities; however, the funds may purchase and sell foreign
currency in hedging transactions. This shall not prevent the funds
from buying or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities. In the broadest sense, derivative investments include
exchange-traded options and futures contracts (please refer to
"Hedging," above).
One risk of investing in derivative investments is that the company
issuing the instrument might not pay the amount due on the maturity
of the instrument. There is also the risk that the underlying
investment or security on which the derivative is based might not
perform the way the Manager expected it to perform. The
performance of derivative investments may also be influenced by
interest rate changes in the U.S. and abroad. All of these risks
can mean that the fund will realize less return than expected from
its investments, or that it can lose part of the value of its
investments, which will affect the fund's share price. Certain
derivative investments held by a fund may trade in the over-the-
counter markets and may be illiquid.
Warrants and Rights
Warrants basically are options to purchase stock at set prices that
are valid for a limited period of time. Rights are similar to
warrants but normally have a short duration and are distributed
directly by the issuer to its shareholders. Both funds may invest
up to 5% of their total assets in warrants or rights. That 5%
limitation does not apply to warrants either fund has acquired as
part of units with other securities or that are attached to other
securities. No more than 2% of either fund's total assets may be
invested in warrants that are not listed on either The New York
Stock Exchange or The American Stock Exchange. For further
details, see "Warrants and Rights" in each fund's respective
Statement of Additional Information.
Short Sales Against-the-Box
In a short sale, the seller does not own the security that is sold,
but normally borrows the security to fulfill its delivery
obligation. The seller later buys the security to repay the loan,
in the expectation that the price of the security will be lower
when the purchase is made, resulting in a gain. Neither fund may
sell securities short except in collateralized transactions
referred to as "short sales against-the-box," where either fund
owns an equivalent amount of the securities sold short. This
technique is primarily used for tax purposes. As a fundamental
policy, no more than 15% of either fund's net assets will be held
as collateral for such short sales at any one time.
Special Situations
Global Fund may invest in securities of companies that are in
"special situations" that the Manager believes may present
opportunities for capital growth. A "special situation" may be an
event such as a proposed merger, reorganization, or other unusual
development that is expected to occur and which may result in an
increase in the value of a company's securities, regardless of
general business conditions or the movement of prices in the
securities market as a whole. There is a risk that the price of
the security may decline if the anticipated development fails to
occur.
Investing In Small, Unseasoned Companies
Both funds may invest in securities of small, unseasoned companies.
These are companies that have been in operation less than three
years, including the operations of any predecessors. Securities of
these companies may have limited liquidity (which means that the
funds may have difficulty selling them at an acceptable price when
they want to) and the price of these securities may be volatile.
See "Investing in Small, Unseasoned Companies" in either fund's
respective Statement of Additional Information for a further
discussion of the risks involved in such investments.
Borrowing for Leverage
Both funds may borrow up to 10% of the value of their net assets
from banks on an unsecured basis to buy securities. This is a
speculative investment method known as "leverage". This technique
may subject either fund to greater risks and costs than funds that
do not borrow. These risks may include the possibility that either
fund's net asset value per share will fluctuate more than funds
that don't borrow. Borrowing is subject to regulatory limits under
the Investment Company Act, described in more detail in each fund's
respective Statement of Additional Information.
Temporary Defensive Investments
Each fund may invest substantial amounts of its assets in debt
securities when market conditions are unstable. Such debt
securities include rated or unrated bonds and debentures, cash
equivalents and preferred stocks, money market instruments,
commercial paper rated "A-1" or better by Standard & Poor's
Corporation or "P-1" or better by Moody's Investors Service, Inc.,
or government securities.
Investment Restrictions
Global Emerging Growth Fund and Global Fund have certain investment
restrictions that, together with their investment objectives, are
fundamental policies, changeable only by shareholder approval. Set
forth below is a summary of these investment restrictions which are
different for each fund. Other investment restrictions for each
fund are substantially the same.
Under these fundamental policies, the fund named cannot do the
following: (1) Global Fund will not borrow money or enter into
reverse repurchase agreements, except that it may borrow money from
banks and enter into reverse repurchase agreements as a temporary
measure for extraordinary or emergency purposes (but not for the
purpose of making investments) provided that the aggregate amount
of all such borrowings and commitments under such agreements does
not, at the time of borrowing or of entering into such an
agreement, exceed 10% of its total assets taken at current market
value; it will not purchase additional portfolio securities at any
time that the aggregate amount of its borrowings and its
commitments under reverse repurchase agreements exceed 5% of its
assets (for purposes of this restriction, entering into portfolio
lending agreements shall not be deemed to constitute borrowing
money); (2) Global Emerging Growth Fund will not buy securities of
an issuer which, together with any predecessor, has been in
operation for less than three years, if as a result, the aggregate
of such investments would exceed 5% of the value of its total
assets; Global Fund has the same policy, but it is not a
fundamental policy; (3) Global Fund will not pledge, mortgage or
hypothecate its assets, except that, to secure permitted
borrowings, it may pledge securities having a market value at the
time of the pledge not exceeding 15% of the cost of Global Fund's
total assets and except in connection with permitted transactions
in options, futures contracts and options on futures contracts, and
except for reverse repurchase agreements and securities lending;
(4) Global Emerging Growth Fund will not buy or sell commodities or
commodity contracts, including futures contracts, however, it may
buy and sell any of the hedging instruments which it may use as
approved by the Board, whether or not such hedging instrument is
considered to be a commodity or commodity contract; Global Fund has
no fundamental policy in this regard; (5) Global Emerging Growth
Fund may not buy securities on margin, except that Global Emerging
Growth Fund may make margin deposits in connection with any of the
hedging instruments which it may use; Global Fund has no
fundamental policy in this regard.
Description of Brokerage Practices
The brokerage practices of the funds are the same. Subject to the
provisions of each fund's advisory agreement, the procedures and
rules described above, allocations of brokerage are generally made
by the Manager's portfolio traders based upon new recommendations
from the Manager's portfolio managers. In certain instances,
portfolio managers may directly place trades and allocate
brokerage, also subject to the provisions of each advisory
agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's
executive officers and the Manager. Transactions in securities
other than those for which an exchange is the primary market are
generally done with principals or market makers. Brokerage
commissions are paid primarily for effecting transactions in listed
securities or for certain fixed-income agency transactions in the
secondary market and are otherwise paid only if it appears likely
that a better price or execution can be obtained. When either fund
engages in an option transaction, ordinarily the same broker will
be used for the purchase or sale of the option and any transaction
in the securities to which the option relates. When possible,
concurrent orders to purchase or sell the same security by more
than one of the accounts managed by the
Manager or its affiliates are combined. The transactions effected
pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually
placed for each account.
The research services provided by a particular broker may be
useful only to one or more of the advisory accounts of the Manager
and its affiliates, and investment research received for the
commissions of those other accounts may be useful both to either
fund and one or more of such other accounts. Such research, which
may be supplied by a third party at the instance of a broker,
includes information and analyses on particular companies and
industries as well as market or economic trends and portfolio
strategy, receipt of market quotations for portfolio evaluations,
information systems, computer hardware and similar products and
services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative
functions), then only the percentage or component that provides
assistance to the Manager in the investment decision-making process
may be paid in commission dollars. The Board of Trustees has
permitted the Manager to use concessions on fixed-price offerings
to obtain research, in the same manner as is permitted for agency
transactions. The Board has also permitted the Manager to use
stated commissions on secondary fixed-income agency trades to
obtain research where the broker has represented to Manager that:
(i) the trade is not from or for the broker's own inventory, (ii)
the trade was not executed by the broker on an agency basis at the
stated commission, and (iii) the trade is not a riskless principal
transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and
enabling the Manager to obtain market information for the valuation
of securities held in the each fund's portfolio or being considered
for purchase. The Board of Trustees, including the "independent"
Trustees of the funds (those Trustees of the funds who are not
"interested persons" as defined in the Investment Company Act, and
who have no direct or indirect financial interest in the operation
of the advisory agreement or the Distribution Plans described
below) annually reviews information furnished by the Manager as to
the commissions paid to brokers furnishing such services so that
the Board may ascertain whether the amount of such commissions was
reasonably related to the value or benefit of such services.
During Global Emerging Growth Fund's fiscal years ended
September 30, 1994, 1995 and 1996, total brokerage commissions paid
by the Fund (not including spreads or concessions on principal
transactions on a net trade basis) were $858,996, $1,698,126 and
$987,876, respectively. During the fiscal year ended September 30,
1996, $853,423 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those
transactions was $185,064,419. The transactions giving rise to
those commissions were allocated in accordance with the Manager's
internal allocation procedures.
Please refer to the Statement of Additional Information for
each fund for further information on each fund's brokerage
practices.
During Global Fund's fiscal years ended September 30, 1994, 1995
and 1996, total brokerage commissions paid by the Fund (not including
spreads or concessions on principal transactions on a net trade basis)
were $7,714,396, $10,853,162 and $13,381,857, respectively. During the
fiscal year ended September 30, 1996, $10,127,169 was paid to brokers
as commissions in return for research services; the aggregate dollar
amount of those transactions was $3,411,541,434. The transactions
giving rise to those commissions were allocated in accordance with the
Manager's internal allocation procedures.
Please refer to the Statement of Additional Information for
each fund for further information on each fund's brokerage
practices.
Expense Ratios and Performance
The ratio of expenses to average net assets for Global Emerging
Growth Fund for the fiscal year ended September 30, 1996 was 1.87%,
2.56% and 2.54% for Class A, Class B and Class C shares (on an
annualized basis). The ratio of expenses to average net assets for
Global Fund for the fiscal year ended September 30, 1996, for its
Class A, Class B and Class C shares (on an annualized basis) was
1.17%, 2.00% and 1.99%, respectively. Further details are set
forth above under "Comparative Fee Table", and in Global Emerging
Growth Fund's Annual Report as of September 30, 1996, and Global
Fund's Annual Report as of September 30, 1996, which are included
in the Statement of Additional Information. The performance of the
funds for the 1,3,5 and 10 year periods ended December 31, 1996 (as
applicable) is set forth in Exhibit B.
Shareholder Services
The policies of Global Emerging Growth Fund and Global Fund with
respect to minimum initial investments and subsequent investments
by its shareholders are the same. Both Global Emerging Growth Fund
and Global Fund offer the following privileges: (i) Right of
Accumulation, (ii) Letter of Intent, (iii) reinvestment of
dividends and distributions at net asset value, (iv) net asset
value purchases by certain individuals and entities, (v) Asset
Builder (automatic investment) Plans, (vi) Automatic Withdrawal and
Exchange Plans for shareholders who own shares of the fund valued
at $5,000 or more, (vii) reinvestment of net redemption proceeds at
net asset value within six months of a redemption, (viii)
AccountLink and PhoneLink arrangements, (ix) exchanges of shares
for shares of the same class of certain other funds at net asset
value, and (x) telephone redemption and exchange privileges.
Shareholders may purchase shares through OppenheimerFunds
AccountLink, which links a shareholder account to an account at a
bank or financial institution and enables shareholders to send
money electronically between those accounts to perform a number of
types of account transactions. This includes the purchase of
shares through the automated telephone system (PhoneLink).
Exchanges can also be made by telephone, or automatically through
PhoneLink. After AccountLink privileges have been established with
a bank account, shares may be purchased by telephone in an amount
up to $100,000. Shares of either Fund may be exchanged for shares
of certain OppenheimerFunds at net asset value per share; however,
shares of a particular class may be exchanged only for shares of
the same class of other OppenheimerFunds. At present, not all of
the OppenheimerFunds offer the same classes of shares.
Shareholders of the funds may redeem their shares by written
request or by telephone request in an amount up to $50,000 in any
seven-day period. Shareholders may arrange to have share
redemption proceeds wired to a pre-designated account at a U.S.
bank or other financial institution that is an ACH member, through
AccountLink. There is no dollar limit on telephone redemption
proceeds sent to a bank account when AccountLink has been
established. Shareholders may also redeem shares automatically by
telephone by using PhoneLink. Shareholders may also have the
Transfer Agent send redemption proceeds of $2,500 or more by
Federal Funds wire to a designated commercial bank which is a
member of the Federal Reserve wire system. Shareholders of the
funds have up to six months to reinvest redemption proceeds of
their Class A shares in Class A shares of the funds or other
Oppenheimer funds without paying a sales charge. Global Emerging
Growth Fund and Global Fund may redeem accounts valued at less than
$200 and $500, respectively, if the account has fallen below such
stated amounts for reasons other than market value fluctuations.
Both funds offer Automatic Withdrawal and Automatic Exchange Plans
under certain conditions.
Rights of Shareholders
Class A shares of Global Emerging Growth Fund and Class A shares of
Global Fund are each sold an initial sales charge of 5.75% on
purchases of less than $50,000. The reduced front-end sales loads
on larger purchases are the same for each fund. If Class A shares
of either fund are purchased as part of an investment of at least
$1 million in shares of one or more Oppenheimer funds ($500,000 or
more for purchases by "Retirement Plans," as defined in "Class A
Contingent Deferred Sales Charge" in each fund's Prospectus), there
is no initial sales charge, but if shares are sold within 18 months
after purchase, there may be imposed a contingent deferred sales
charge ("CDSC") which will vary, depending on the amount invested.
Class B shares of Global Emerging Growth Fund, and Class B shares
of Global Fund are sold at net asset value per share, without an
initial sales charge. However, if Class B shares of each fund are
sold within six years of purchase, there is a CDSC, depending on
how long the shares are owned. Both of the funds have the same
CDSC with respect to their Class B shares. Class C shares of both
funds are sold at net asset value per share, without an initial
sales charge. However, if Class C shares of either fund are
redeemed within twelve months of the date of purchase, normally
those shares will be charged a contingent deferred sales charge of
1%. The shares of each such fund, including shares of each class,
entitle the holder to one vote per share on the election of
trustees and all other matters submitted to shareholders of the
fund. Class A, Class B and Class C shares of Global Emerging
Growth Fund and the Class A, Class B and Class C shares of Global
Fund which Global Emerging Growth Fund shareholders will receive in
the Reorganization participate equally in the funds' dividends and
distributions and in the funds' net assets upon liquidation, after
taking into account the different expenses paid by each class.
Distributions and dividends for each class will be different and
Class B and Class C dividends and distributions will be lower than
Class A dividends. It is not contemplated that Global Emerging
Growth Fund or Global Fund will hold regular annual meetings of
shareholders. Under the Investment Company Act, shareholders of
Global Emerging Growth Fund do not have rights of appraisal as a
result of the transactions contemplated by the Reorganization
Agreement. However, they have the right at any time prior to the
consummation of such transaction to redeem their shares at net
asset value. Shareholders of both of the funds have the right,
under certain circumstances, to remove a Trustee and will be
assisted in communicating with other shareholders for such purpose.
Global Emerging Growth Fund was organized in 1987 as a
Massachusetts business trust. Global Fund was originally
incorporated in Maryland in 1969 and was reorganized in 1986 as a
Massachusetts business trust. Both Global Emerging Growth Fund and
Global Fund are open-end, diversified management investment
companies, with an unlimited number of authorized shares of
beneficial interest. Both funds are governed by the same Board of
Trustees (the "Board"). The Board has established three classes of
shares with respect to Global Fund and Global Emerging Growth Fund:
Class A, Class B and Class C. With respect to Global Emerging
Growth Fund and Global Fund, each class has its own dividends and
distributions and pays certain expenses which will be different for
the different classes. Each class may have a different net asset
value. Each share has one vote at shareholder meetings, with
fractional shares voting proportionately. Shares of a particular
class vote together on matters that affect that class. Most
amendments to the Declaration of Trust of each of the funds require
the approval of a "majority" (as defined in the Investment Company
Act) of the respective fund's shareholders. Under certain
circumstances, shareholders of the funds may be held personally
liable as partners for the funds' obligations, and under each
Declaration of Trust such a shareholder is entitled to
indemnification rights by the funds; the risk of a shareholder
incurring any such loss is limited to the remote circumstances in
which that fund is unable to meet its obligations.
Management and Distribution Arrangements
The Manager, located at Two World Trade Center, New York, New York
10048-0203, acts as the investment adviser for Global Emerging
Growth Fund and also acts as the investment adviser to Global Fund.
The terms and conditions of the investment advisory agreement for
each fund are substantially the same. The monthly management fee
payable to the Manager by each fund is set forth under "Synopsis -
Investment Advisory and Distribution and Service Plan Fees." The
12b-1 Distribution and Service Plan fees paid by fund with respect
to Class A, Class B and Class C shares are set forth above under
"Synopsis - Investment Advisory and Distribution and Service Plan
Fees."
Pursuant to each investment advisory agreement, the Manager
supervises the investment operations of the funds and the
composition of their portfolios, and furnishes advice and
recommendations with respect to investments, investment policies
and the purchase and sale of securities. Both investment advisory
agreements require the Manager to provide Global Emerging Growth
Fund and Global Fund with adequate office space, facilities and
equipment and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
administration for the funds, including the compilation and
maintenance of records with respect to their operations, the
preparation and filing of specified reports, and composition of
proxy materials and registration statements for continuous public
sale of shares of each fund.
Expenses not expressly assumed by the Manager under each fund's
advisory agreement or by OppenheimerFunds Distributor, Inc., the
funds' distributor (the "Distributor"), under the General
Distributor's Agreement are paid by the funds. The advisory
agreements list examples of expenses paid by the funds, the major
categories of which relate to interest, taxes, brokerage
commissions, fees to certain Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses,
including litigation costs. The management fee paid by Global
Emerging Growth Fund for the fiscal year ended September 30, 1996
was $1,233,678. For the fiscal year ended September 30, 1996, the
management fee paid by Global Fund was $19,638,352.
The funds' investment advisory agreements contain no expense
limitation. However, because of state regulations limiting fund
expenses that previously applied, the Manager had voluntarily
undertaken that the funds' total expenses in any fiscal year
(including the investment advisory fee but exclusive of taxes,
interest, brokerage commissions, distribution plan payments and any
extraordinary non-recurring expenses, including litigation) would
not exceed the most stringent state regulatory limitation
applicable to the funds. Due to changes in federal securities
laws, such state regulations no longer apply and the Manager's
undertaking is therefore inapplicable and has been withdrawn.
During the funds' last fiscal year, the funds' expenses did not
exceed the most stringent state regulatory limit and the voluntary
undertaking was not invoked.
The Manager is controlled by Oppenheimer Acquisition Corp., a
holding company owned in part by senior management of the Manager
and ultimately controlled by Massachusetts Mutual Life Insurance
Company, a mutual life insurance company that also advises pension
plans and investment companies. The Manager has operated as an
investment company adviser since 1959. The Manager and its
affiliates currently advise investment companies with combined net
assets aggregating over $62 billion as of December 31, 1996, with
more than 3 million shareholder accounts. OppenheimerFunds
Services, a division of the Manager, acts as transfer and
shareholder servicing agent on an at-cost basis for Global Emerging
Growth Fund and Global Fund and for certain other open-end funds
managed by the Manager and its affiliates.
The Distributor, under a General Distributor's Agreement for each
of the funds, acts as the principal underwriter in the continuous
public offering of Class A, Class B and Class C shares of each
fund. During Global Emerging Growth Fund's fiscal year ended
September 30, 1996, the aggregate sales charges on sales of Global
Emerging Growth Fund's Class A shares were $547,341, of which the
Distributor and an affiliated broker-dealer retained in the
aggregate $159,815. During Global Emerging Growth Fund's fiscal
year ended September 30, 1996, the contingent deferred sales
charges collected on Global Emerging Growth Fund's Class B and
Class C shares totalled $8,208 and $1,057, respectively, all of
which the Distributor retained. For the fiscal year ended
September 30, 1996, the aggregate amount of sales charges on sales
of Global Fund's Class A shares was $5,830,983, of which $1,861,170
was retained by the Distributor and an affiliated broker-dealer.
Contingent deferred sales charges collected by the Distributor on
the redemption of Class B and Class C shares for the fiscal year
ended September 30, 1996 totaled $743,491 and $6,445, respectively,
all of which was retained by the Distributor. For additional
information about distribution of the funds' shares and the
payments made by the funds to the Distributor in connection with
such activities, please refer to "Distribution and Service Plans,"
in each fund's Statement of Addition Information.
Purchase of Additional Shares
Class A shares of Global Emerging Growth Fund and Class A shares of
Global Fund may be purchased with an initial sales charge of 5.75%
for purchases of less than $25,000. The sales charge of 5.75% is
reduced for purchases of either fund's Class A shares of $25,000 or
more. If shares of Class A of either fund are redeemed within 18
months of the end of the calendar month of their purchase, a
contingent sales charge may be deducted from the redemption
proceeds. Class B shares of Global Emerging Growth Fund and Global
Fund are sold at net asset value without an initial sales charge,
however, if Class B shares of either fund are redeemed within six
years of the end of the calendar month of their purchase, a
contingent deferred sales charge may be deducted of up to 5%,
depending upon how long such shares had been held. Class C shares
of either fund may be purchased without an initial sales charge,
but if you sell your shares within 12 months of buying them, a
contingent deferred sales charge of 1% may be deducted.
The initial sales charge and contingent deferred sales charge on
Class A shares and Class B shares of Global Fund will only affect
shareholders of Global Emerging Growth Fund to the extent that they
desire to make additional purchases of shares of Global Fund in
addition to the shares which they will receive as a result of the
Reorganization. The Class A, Class B and Class C shares to be
issued under the Reorganization Agreement will be issued by Global
Fund at net asset value. Future dividends and capital gain
distributions of Global Fund, if any, may be reinvested without
sales charge. Any Global Emerging Growth Fund shareholder who is
entitled to a reduced sales charge on additional purchases by
reason of a Letter of Intent or Right of Accumulation based upon
holdings of shares of Global Emerging Growth Fund will continue to
be entitled to a reduced sales charge on any future purchase of
shares of Global Fund.
METHOD OF CARRYING OUT THE REORGANIZATION
The consummation of the transactions contemplated by the
Reorganization Agreement is contingent upon the approval of the
Reorganization by the shareholders of Global Emerging Growth Fund
and the receipt of the opinions and certificates set forth in
Sections 10 and 11 of the Reorganization Agreement and the
occurrence of the events described in those Sections. Under the
Reorganization Agreement, all the assets of Global Emerging Growth
Fund, excluding the Cash Reserve, will be delivered to Global Fund
in exchange for Class A, Class B and Class C shares of Global Fund.
The Cash Reserve to be retained by Global Emerging Growth Fund will
be sufficient in the discretion of the Board for the payment of
Global Emerging Growth Fund's liabilities, and Global Emerging
Growth Fund's expenses of liquidation.
Assuming the shareholders of Global Emerging Growth Fund approve
the Reorganization, the actual exchange of assets is expected to
take place on June 20, 1997, or as soon thereafter as is
practicable (the "Closing Date") on the basis of net asset values
as of the close of business on the business day preceding the
Closing Date (the "Valuation Date"). Under the Reorganization
Agreement, all redemptions of shares of Global Emerging Growth Fund
shall be permanently suspended on the Valuation Date; only
redemption requests received in proper form on or prior to the
close of business on that date shall be fulfilled by it; redemption
requests received by Global Emerging Growth Fund after that date
will be treated as requests for redemptions of Class A, Class B or
Class C shares of Global Fund to be distributed to the shareholders
requesting redemption. The exchange of assets for shares will be
done on the basis of the per share net asset value of the Class A,
Class B and Class C shares of Global Fund, and the value of the
assets of Global Emerging Growth Fund to be transferred as of the
close of business on the Valuation Date, valued in the manner used
by Global Fund in the valuation of assets. Global Fund is not
assuming any of the liabilities of Global Emerging Growth Fund,
except for portfolio securities purchased which have not settled
and outstanding shareholder redemption and dividend checks.
The net asset value of the shares transferred by Global Fund to
Global Emerging Growth Fund will be the same as the value of the
assets of the portfolio received by Global Fund. For example, if,
on the Valuation Date, Global Emerging Growth Fund were to have
securities with a market value of $95,000 and cash in the amount of
$10,000 (of which $5,000 was to be retained by it as the Cash
Reserve), the value of the assets which would be transferred to
Global Fund would be $100,000. If the net asset value per share of
Global Fund were $10 per share at the close of business on the
Valuation Date, the number of shares to be issued would be 10,000
($100,000 divided by $10). These 10,000 shares of Global Fund
would be distributed to the former shareholders of Global Emerging
Growth Fund. This example is given for illustration purposes only
and does not bear any relationship to the dollar amounts or shares
expected to be involved in the Reorganization.
After the Closing Date, Global Emerging Growth Fund will distribute
on a pro rata basis to its shareholders of record on the Valuation
Date the Class A, Class B and Class C shares of Global Fund
received by Global Emerging Growth Fund at the closing, in
liquidation of the outstanding shares of Global Emerging Growth
Fund, and the outstanding shares of Global Emerging Growth Fund
will be cancelled. To assist Global Emerging Growth Fund in this
distribution, Global Fund will, in accordance with a shareholder
list supplied by Global Emerging Growth Fund, cause its transfer
agent to credit and confirm an appropriate number of shares of
Global Fund to each shareholder of Global Emerging Growth Fund.
Certificates for Class A, Class B and Class C shares of Global Fund
will be issued upon written request of a former shareholder of
Global Emerging Growth Fund but only for whole shares with
fractional shares credited to the name of the shareholder on the
books of Global Fund. Former shareholders of Global Emerging
Growth Fund who wish certificates representing their shares of
Global Fund must, after receipt of their confirmations, make a
written request to OFS, P.O. Box 5270, Denver, Colorado 80217.
Shareholders of Global Emerging Growth Fund holding certificates
representing their shares will not be required to surrender their
certificates to anyone in connection with the Reorganization.
After the Reorganization, however, it will be necessary for such
shareholders to surrender such certificates in order to redeem,
transfer, pledge or exchange any shares of Global Fund.
Under the Reorganization Agreement, within one year after the
Closing Date, Global Emerging Growth Fund shall: (a) either pay or
make provision for all of its debts and taxes; and (b) either (i)
transfer any remaining amount of the Cash Reserve to Global Fund,
if such remaining amount is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of Global
Emerging Growth Fund who were such on the Valuation Date. Such
remaining amount shall be deemed to be material if the amount to be
distributed, after deducting the estimated expenses of the
distribution, equals or exceeds one cent per share of the number of
Global Emerging Growth Fund shares outstanding on the Valuation
Date. Within one year after the Closing Date, Global Emerging
Growth Fund will complete its liquidation.
Under the Reorganization Agreement, either Global Emerging Growth
Fund or Global Fund may abandon and terminate the Reorganization
Agreement without liability if the other party breaches any
material provision of the Reorganization Agreement or, if prior to
the closing, any legal, administrative or other proceeding shall be
instituted or threatened (i) seeking to restrain or otherwise
prohibit the transactions contemplated by the Reorganization
Agreement and/or (ii) asserting a material liability of either
party, which proceeding or liability has not been terminated or the
threat thereto removed prior to the Closing Date.
In the event that the Reorganization Agreement is not consummated
for any reason, the Board will consider and may submit to the
shareholders other alternatives.
MISCELLANEOUS
Additional Information
Financial Information
The Reorganization will be accounted for by the surviving fund in
its financial statements similar to a pooling. Further financial
information as to Global Emerging Growth Fund is contained in its
current Prospectus, which is available without charge from
OppenheimerFunds Services, the Transfer Agent, P.O. Box 5270,
Denver, Colorado 80217, and is incorporated herein by reference,
and in its Annual Report as of September 30, 1996, which is
included in the Additional Statement. Financial information for
Global Fund is contained in its current Prospectus accompanying
this Proxy Statement and Prospectus and incorporated herein by
reference, and in its Annual Report as of September 30, 1996, which
is included in the Additional Statement.
Public Information
Additional information about Global Emerging Growth Fund and Global
Fund is available, as applicable, in the following documents which
are incorporated herein by reference: (i) Global Fund's Prospectus
dated January 7, 1997, as supplemented January 7, 1997,
accompanying this Proxy Statement and incorporated herein; (ii)
Global Emerging Growth Fund's Prospectus dated January 13, 1997, as
supplemented March 3, 1997, which may be obtained without charge by
writing to OFS, P.O. Box 5270, Denver, Colorado 80217; (iii) Global
Fund's Annual Report as of September 30, 1996, which may be
obtained without charge by writing to OFS at the address indicated
above; and (iv) Global Emerging Growth Fund's Annual Report as of
September 30, 1996, which may be obtained without charge by writing
to OFS at the address indicated above. All of the foregoing
documents may be obtained by calling the toll-free number on the
cover of this Proxy Statement and Prospectus.
Additional information about the following matters is contained in
the Statement of Additional Information, which incorporates by
reference the Global Fund Statement of Additional Information dated
January 7, 1997, and Global Emerging Growth Fund's Prospectus dated
January 13, 1997, as supplemented March 3, 1997, and Statement of
Additional Information dated January 13, 1997; the organization and
operation of Global Fund and Global Emerging Growth Fund; more
information on investment policies, practices and risks;
information about Global Emerging Growth Fund's and Global Fund's
Boards of Trustees and their responsibilities; a further
description of the services provided by Global Fund's and Global
Emerging Growth Fund's investment adviser, distributor, and
transfer and shareholder servicing agent; dividend policies; tax
matters; an explanation of the method of determining the offering
price of the shares and/or contingent deferred sales charges, as
applicable of Class A, Class B and Class C shares of Global Fund
and Global Emerging Growth Fund; purchase, redemption and exchange
programs; the different expenses paid by each class of shares; and
distribution arrangements.
Global Emerging Growth Fund and Global Fund are subject to the
informational requirements of the Securities Exchange Act of 1934,
as amended, and in accordance therewith, file reports and other
information with the SEC. Proxy material, reports and other
information about Global Emerging Growth Fund and Global Fund which
are of public record can be inspected and copied at public
reference facilities maintained by the SEC in Washington, D.C. and
certain of its regional offices, and copies of such materials can
be obtained at prescribed rates from the Public Reference Branch,
Office of Consumer Affairs and Information Services, SEC,
Washington, D.C. 20549.
OTHER BUSINESS
Management of Global Emerging Growth Fund knows of no business
other than the matters specified above which will be presented at
the Meeting. Since matters not known at the time of the
solicitation may come before the Meeting, the proxy as solicited
confers discretionary authority with respect to such matters as
properly come before the Meeting, including any adjournment or
adjournments thereof, and it is the intention of the persons named
as attorneys-in-fact in the proxy to vote this proxy in accordance
with their judgment on such matters.
By Order of the Board of Trustees
/s/ Andrew J. Donohue
- -----------------------
Andrew J. Donohue, Secretary
April 14, 1997 330
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated
as of October 10, 1996 by and between Oppenheimer Global Emerging
Growth Fund ("Global Emerging Growth Fund"), a Massachusetts
business trust, and Oppenheimer Global Fund ("Global Fund"), a
Massachusetts business trust (the "Trust").
W I T N E S S E T H:
WHEREAS, the parties are each open-end investment companies of
the management type; and
WHEREAS, the parties hereto desire to provide for the
reorganization pursuant to Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"), of Global Emerging
Growth Fund through the acquisition by Global Fund of substantially
all of the assets of Global Emerging Growth Fund in exchange for
the voting shares of beneficial interest ("shares") of Class A,
Class B and Class C shares of Global Fund and the assumption by
Global Fund of certain liabilities of Global Emerging Growth Fund,
which Class A, Class B and Class C shares of Global Fund are
thereafter to be distributed by Global Emerging Growth Fund pro
rata to its shareholders in complete liquidation of Global Emerging
Growth Fund and complete cancellation of its shares;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. The parties hereto hereby adopt this Agreement and Plan
of Reorganization (the "Agreement") pursuant to Section 368(a)(1)
of the Code as follows: The reorganization will be comprised of
the acquisition by Global Fund of substantially all of the
properties and assets of Global Emerging Growth Fund in exchange
for Class A, Class B and Class C shares of Global Fund and the
assumption by Global Fund of certain liabilities of Global Emerging
Growth Fund, followed by the distribution of such Class A, Class B
and Class C shares of Global Fund shares to the Class A, Class B
and Class C shareholders of Global Emerging Growth Fund in exchange
for their Class A, Class B and Class C shares of Global Emerging
Growth Fund, all upon and subject to the terms of the Agreement
hereinafter set forth.
The share transfer books of Global Emerging Growth Fund
will be permanently closed at the close of business on the
Valuation Date (as hereinafter defined) and only redemption
requests received in proper form on or prior to the close of
business on the Valuation Date shall be fulfilled by Global
Emerging Growth Fund; redemption requests received by Global
Emerging Growth Fund after that date shall be treated as requests
for the redemption of the shares of Global Fund to be distributed
to the shareholder in question as provided in Section 5.
2. On the Closing Date (as hereinafter defined), all of the
assets of Global Emerging Growth Fund on that date, excluding a
cash reserve (the "Cash Reserve") to be retained by Global Emerging
Growth Fund sufficient in its discretion for the payment of the
expenses of Global Emerging Growth Fund's dissolution and its
liabilities, but not in excess of the amount contemplated by
Section 10E, shall be delivered as provided in Section 8 to Global
Fund, in exchange for and against delivery to Global Emerging
Growth Fund on the Closing Date of a number of Class A, Class B and
Class C shares of Global Fund, having an aggregate net asset value
equal to the value of the assets of Global Emerging Growth Fund so
transferred and delivered.
3. The net asset value of Class A, Class B and Class C
shares of Global Fund and the value of the assets of Global
Emerging Growth Fund to be transferred shall in each case be
determined as of the close of business of the New York Stock
Exchange on the Valuation Date. The computation of the net asset
value of the Class A, Class B and Class C shares of Global Fund and
the Class A, Class B and Class C shares of Global Emerging Growth
Fund shall be done in the manner used by Global Fund and Global
Emerging Growth Fund, respectively, in the computation of such net
asset value per share as set forth in their respective
prospectuses. The methods used by Global Fund in such computation
shall be applied to the valuation of the assets of Global Emerging
Growth Fund to be transferred to Global Fund.
Global Emerging Growth Fund shall declare and pay,
immediately prior to the Valuation Date, a dividend or dividends
which, together with all previous such dividends, shall have the
effect of distributing to Global Emerging Growth Fund's
shareholders all of Global Emerging Growth Fund's investment
company taxable income for taxable years ending on or prior to the
Closing Date (computed without regard to any dividends paid) and
all of its net capital gain, if any, realized in taxable years
ending on or prior to the Closing Date (after reduction for any
capital loss carry-forward).
4. The closing (the "Closing") shall be at the offices of
OppenheimerFunds, Inc. (the "Agent"), Two World Trade Center, 34th
Floor, New York, New York 10048, at 4:00 P.M. New York time on June
20, 1997 or at such other time or place as the parties may
designate or as provided below (the "Closing Date"). The business
day preceding the Closing Date is herein referred to as the
"Valuation Date."
In the event that on the Valuation Date either party has,
pursuant to the Investment Company Act of 1940, as amended (the
"Act"), or any rule, regulation or order thereunder, suspended the
redemption of its shares or postponed payment therefor, the Closing
Date shall be postponed until the first business day after the date
when both parties have ceased such suspension or postponement;
provided, however, that if such suspension shall continue for a
period of 60 days beyond the Valuation Date, then the other party
to the Agreement shall be permitted to terminate the Agreement
without liability to either party for such termination.
5. As soon as practicable after the closing, Global Emerging
Growth Fund shall distribute on a pro rata basis to the
shareholders of Global Emerging Growth Fund on the Valuation Date
the Class A, Class B and Class C shares of Global Fund received by
Global Emerging Growth Fund on the Closing Date in exchange for the
assets of Global Emerging Growth Fund in complete liquidation of
Global Emerging Growth Fund; for the purpose of the distribution by
Global Emerging Growth Fund of Class A, Class B and Class C shares
of Global Fund to its shareholders, Global Fund will promptly cause
its transfer agent to: (a) credit an appropriate number of Class A
and Class B shares of Global Fund on the books of Global Fund to
each Class A, Class B and Class C shareholder, respectively of
Global Emerging Growth Fund in accordance with a list (the
"Shareholder List") of its shareholders received from Global
Emerging Growth Fund; and (b) confirm an appropriate number of
Class A, Class B and Class C shares of Global Fund to each
shareholder of Global Emerging Growth Fund; certificates for Class
A, Class B and Class C shares of Global Fund will be issued upon
written request of a former shareholder of Global Emerging Growth
Fund but only for whole shares, with fractional shares credited to
the name of the shareholder on the books of Global Fund.
The Shareholder List shall indicate, as of the close of
business on the Valuation Date, the name and address of each
shareholder of Global Emerging Growth Fund, indicating his or her
share balance. Global Emerging Growth Fund agrees to supply the
Shareholder List to Global Fund not later than the Closing Date.
Shareholders of Global Emerging Growth Fund holding certificates
representing their shares shall not be required to surrender their
certificates to anyone in connection with the reorganization.
After the Closing Date, however, it will be necessary for such
shareholders to surrender their certificates in order to redeem,
transfer or pledge the shares of Global Fund which they received.
6. Within one year after the Closing Date, Global Emerging
Growth Fund shall (a) either pay or make provision for payment of
all of its liabilities and taxes, and (b) either (i) transfer any
remaining amount of the Cash Reserve to Global Fund, if such
remaining amount (as reduced by the estimated cost of distributing
it to shareholders) is not material (as defined below) or (ii)
distribute such remaining amount to the shareholders of Global
Emerging Growth Fund on the Valuation Date. Such remaining amount
shall be deemed to be material if the amount to be distributed,
after deduction of the estimated expenses of the distribution,
equals or exceeds one cent per share of Global Emerging Growth Fund
outstanding on the Valuation Date.
7. Prior to the Closing Date, there shall be coordination
between the parties as to their respective portfolios so that,
after the closing, Global Fund will be in compliance with all of
its investment policies and restrictions. At the Closing, Global
Emerging Growth Fund shall deliver to Global Fund two copies of a
list setting forth the securities then owned by Global Emerging
Growth Fund. Promptly after the Closing, Global Emerging Growth
Fund shall provide Global Fund a list setting forth the respective
federal income tax bases thereof.
8. Portfolio securities or written evidence acceptable to
Global Fund of record ownership thereof by The Depository Trust
Company or through the Federal Reserve Book Entry System or any
other depository approved by Global Emerging Growth Fund pursuant
to Rule 17f-4 and Rule 17f-5 under the Act shall be endorsed and
delivered, or transferred by appropriate transfer or assignment
documents, by Global Emerging Growth Fund on the Closing Date to
Global Fund, or at its direction, to its custodian bank, in proper
form for transfer in such condition as to constitute good delivery
thereof in accordance with the custom of brokers and shall be
accompanied by all necessary state transfer stamps, if any. The
cash delivered shall be in the form of certified or bank cashiers'
checks or by bank wire or intra-bank transfer payable to the order
of Global Fund for the account of Global Fund. Shares of Global
Fund representing the number of shares of Global Fund being
delivered against the assets of Global Emerging Growth Fund,
registered in the name of Global Emerging Growth Fund, shall be
transferred to Global Emerging Growth Fund on the Closing Date.
Such shares shall thereupon be assigned by Global Emerging Growth
Fund to its shareholders so that the shares of Global Fund may be
distributed as provided in Section 5.
If, at the Closing Date, Global Emerging Growth Fund is
unable to make delivery under this Section 8 to Global Fund of any
of its portfolio securities or cash for the reason that any of such
securities purchased by Global Emerging Growth Fund, or the cash
proceeds of a sale of portfolio securities, prior to the Closing
Date have not yet been delivered to it or Global Emerging Growth
Fund's custodian, then the delivery requirements of this Section 8
with respect to said undelivered securities or cash will be waived
and Global Emerging Growth Fund will deliver to Global Fund by or
on the Closing Date and with respect to said undelivered securities
or cash executed copies of an agreement or agreements of assignment
in a form reasonably satisfactory to Global Fund, together with
such other documents, including a due bill or due bills and
brokers' confirmation slips as may reasonably be required by Global
Fund.
9. Global Fund shall not assume the liabilities (except for
portfolio securities purchased which have not settled and for
shareholder redemption and dividend checks outstanding) of Global
Emerging Growth Fund, but Global Emerging Growth Fund will,
nevertheless, use its best efforts to discharge all known
liabilities, so far as may be possible, prior to the Closing Date.
The cost of printing and mailing the proxies and proxy statements
will be borne by Global Emerging Growth Fund. Global Emerging
Growth Fund and Global Fund will bear the cost of their respective
tax opinion. Any documents such as existing prospectuses or annual
reports that are included in that mailing will be a cost of the
fund issuing the document. Any other out-of-pocket expenses of
Global Fund and Global Emerging Growth Fund associated with this
reorganization, including legal, accounting and transfer agent
expenses, will be borne by Global Emerging Growth Fund and Global
Fund, respectively, in the amounts so incurred by each.
10. The obligations of Global Fund hereunder shall be subject
to the following conditions:
A. The Board of Trustees of Global Emerging Growth Fund
shall have authorized the execution of the Agreement, and the
shareholders of Global Emerging Growth Fund shall have approved the
Agreement and the transactions contemplated thereby, and Global
Emerging Growth Fund shall have furnished to Global Fund copies of
resolutions to that effect certified by the Secretary or an
Assistant Secretary of Global Emerging Growth Fund; such
shareholder approval shall have been by the affirmative vote of "a
majority of the outstanding voting securities" (as defined in the
Act) of Global Emerging Growth Fund at a meeting for which proxies
have been solicited by the Proxy Statement and Prospectus (as
hereinafter defined).
B. Global Fund shall have received an opinion dated the
Closing Date of counsel to Global Emerging Growth Fund, to the
effect that (i) Global Emerging Growth Fund is a business trust
duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts with full powers to carry
on its business as then being conducted and to enter into and
perform the Agreement; and (ii) that all action necessary to make
the Agreement, according to its terms, valid, binding and
enforceable on Global Emerging Growth Fund and to authorize
effectively the transactions contemplated by the Agreement have
been taken by Global Emerging Growth Fund.
C. The representations and warranties of Global
Emerging Growth Fund contained herein shall be true and correct at
and as of the Closing Date, and Global Fund shall have been
furnished with a certificate of the President, or a Vice President,
or the Secretary or the Assistant Secretary or the Treasurer of
Global Emerging Growth Fund, dated the Closing Date, to that
effect.
D. On the Closing Date, Global Emerging Growth Fund
shall have furnished to Global Fund a certificate of the Treasurer
or Assistant Treasurer of Global Emerging Growth Fund as to the
amount of the capital loss carry-over and net unrealized
appreciation or depreciation, if any, with respect to Global
Emerging Growth Fund as of the Closing Date.
E. The Cash Reserve shall not exceed 10% of the value
of the net assets, nor 30% in value of the gross assets, of Global
Emerging Growth Fund at the close of business on the Valuation
Date.
F. A Registration Statement on Form N-14 filed by
Oppenheimer Global Fund under the Securities Act of 1933, as
amended (the "1933 Act"), containing a preliminary form of the
Proxy Statement and Prospectus, shall have become effective under
the 1933 Act not later than August 30, 1997.
G. On the Closing Date, Global Fund shall have received
a letter of Andrew J. Donohue or other senior executive officer of
OppenheimerFunds, Inc. acceptable to Global Fund, stating that
nothing has come to his or her attention which in his or her
judgment would indicate that as of the Closing Date there were any
material actual or contingent liabilities of Global Emerging Growth
Fund arising out of litigation brought against Global Emerging
Growth Fund or claims asserted against it, or pending or to the
best of his or her knowledge threatened claims or litigation not
reflected in or apparent from the most recent audited financial
statements and footnotes thereto of Global Emerging Growth Fund
delivered to Global Fund. Such letter may also include such
additional statements relating to the scope of the review conducted
by such person and his or her responsibilities and liabilities as
are not unreasonable under the circumstances.
H. Global Fund shall have received an opinion, dated
the Closing Date, of KPMG Peat Marwick LLP, to the same effect as
the opinion contemplated by Section 11.E. of the Agreement.
I. Global Fund shall have received at the closing all
of the assets of Global Emerging Growth Fund to be conveyed
hereunder, which assets shall be free and clear of all liens,
encumbrances, security interests, restrictions and limitations
whatsoever.
11. The obligations of Global Emerging Growth Fund hereunder
shall be subject to the following conditions:
A. The Board of Trustees of Global Fund shall have
authorized the execution of the Agreement, and the transactions
contemplated thereby, and Global Fund shall have furnished to
Global Emerging Growth Fund copies of resolutions to that effect
certified by the Secretary or an Assistant Secretary of Global
Fund.
B. Global Emerging Growth Fund's shareholders shall
have approved the Agreement and the transactions contemplated
hereby, by an affirmative vote of "a majority of the outstanding
voting securities" (as defined in the Act) of Global Emerging
Growth Fund, and Global Emerging Growth Fund shall have furnished
Global Fund copies of resolutions to that effect certified by the
Secretary or an Assistant Secretary of Global Emerging Growth Fund.
C. Global Emerging Growth Fund shall have received an
opinion dated the Closing Date of counsel to Global Fund, to the
effect that (i) Global Fund is a business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with full powers to carry on its
business as then being conducted and to enter into and perform the
Agreement; (ii) all action necessary to make the Agreement,
according to its terms, valid, binding and enforceable upon Global
Fund and to authorize effectively the transactions contemplated by
the Agreement have been taken by Global Fund, and (iii) the shares
of Global Fund to be issued hereunder are duly authorized and when
issued will be validly issued, fully-paid and non-assessable,
except as set forth in Global Fund's then current Prospectus and
Statement of Additional Information.
D. The representations and warranties of Global Fund
contained herein shall be true and correct at and as of the Closing
Date, and Global Emerging Growth Fund shall have been furnished
with a certificate of the President, a Vice President or the
Secretary or an Assistant Secretary or the Treasurer of Global Fund
to that effect dated the Closing Date.
E. Global Emerging Growth Fund shall have received an
opinion of KPMG Peat Marwick LLP to the effect that the Federal tax
consequences of the transaction, if carried out in the manner
outlined in this Plan of Reorganization and in accordance with (i)
Global Emerging Growth Fund's representation that there is no plan
or intention by any Fund shareholder who owns 5% or more of Global
Emerging Growth Fund's outstanding shares, and, to Global Emerging
Growth Fund's best knowledge, there is no plan or intention on the
part of the remaining Fund shareholders, to redeem, sell, exchange
or otherwise dispose of a number of Global Fund shares received in
the transaction that would reduce Global Emerging Growth Fund
shareholders' ownership of Global Fund shares to a number of shares
having a value, as of the Closing Date, of less than 50% of the
value of all of the formerly outstanding Fund shares as of the same
date, and (ii) the representation by each of Global Emerging Growth
Fund and Global Fund that, as of the Closing Date, Global Emerging
Growth Fund and Global Fund will qualify as regulated investment
companies or will meet the diversification test of Section
368(a)(2)(F)(ii) of the Code, will be as follows:
1. The transactions contemplated by the Agreement
will qualify as a tax-free "reorganization" within the meaning of
Section 368(a)(1) of the Code, and under the regulations
promulgated thereunder.
2. Global Emerging Growth Fund and Global Fund
will each qualify as a "party to a reorganization" within the
meaning of Section 368(b)(2) of the Code.
3. No gain or loss will be recognized by the
shareholders of Global Emerging Growth Fund upon the distribution
of shares of beneficial interest in Global Fund to the shareholders
of Global Emerging Growth Fund pursuant to Section 354 of the Code.
4. Under Section 361(a) of the Code no gain or
loss will be recognized by Global Emerging Growth Fund by reason of
the transfer of substantially all its assets in exchange for shares
of Global Fund.
5. Under Section 1032 of the Code no gain or loss
will be recognized by Global Fund by reason of the transfer of
substantially all Global Emerging Growth Fund's assets in exchange
for Class A, Class B and Class C shares of Global Fund and Global
Fund's assumption of certain liabilities of Global Emerging Growth
Fund.
6. The shareholders of Global Emerging Growth Fund
will have the same tax basis and holding period for the Class A,
Class B or Class C shares of beneficial interest in Global Fund
that they receive as they had for Global Emerging Growth Fund
shares that they previously held, pursuant to Section 358(a) and
1223(1), respectively, of the Code.
7. The securities transferred by Global Emerging
Growth Fund to Global Fund will have the same tax basis and holding
period in the hands of Global Fund as they had for Global Emerging
Growth Fund, pursuant to Section 362(b) and 1223(1), respectively,
of the Code.
F. The Cash Reserve shall not exceed 10% of the value
of the net assets, nor 30% in value of the gross assets, of Global
Emerging Growth Fund at the close of business on the Valuation
Date.
G. A Registration Statement on Form N-14 filed by
Oppenheimer Global Fund under the 1933 Act, containing a
preliminary form of the Proxy Statement and Prospectus, shall have
become effective under the 1933 Act not later than August 30, 1997.
H. On the Closing Date, Global Emerging Growth Fund
shall have received a letter of Andrew J. Donohue or other senior
executive officer of OppenheimerFunds, Inc. acceptable to Global
Emerging Growth Fund, stating that nothing has come to his or her
attention which in his or her judgment would indicate that as of
the Closing Date there were any material actual or contingent
liabilities of Global Fund arising out of litigation brought
against Global Fund or claims asserted against it, or pending or,
to the best of his or her knowledge, threatened claims or
litigation not reflected in or apparent by the most recent audited
financial statements and footnotes thereto of Global Fund delivered
to Global Emerging Growth Fund. Such letter may also include such
additional statements relating to the scope of the review conducted
by such person and his or her responsibilities and liabilities as
are not unreasonable under the circumstances.
I. Global Emerging Growth Fund shall acknowledge
receipt of the shares of Global Fund.
12. Global Emerging Growth Fund hereby represents and
warrants that:
A. The financial statements of Global Emerging Growth
Fund as at September 30, 1996 (audited) heretofore furnished to
Global Fund, present fairly the financial position, results of
operations, and changes in net assets of Global Emerging Growth
Fund as of that date, in conformity with generally accepted
accounting principles applied on a basis consistent with the
preceding year; and that from September 30, 1996 through the date
hereof there have not been, and through the Closing Date there will
not be, any material adverse change in the business or financial
condition of Global Emerging Growth Fund, it being agreed that a
decrease in the size of Global Emerging Growth Fund due to a
diminution in the value of its portfolio and/or redemption of its
shares shall not be considered a material adverse change;
B. Contingent upon approval of the Agreement and the
transactions contemplated thereby by Global Emerging Growth Fund's
shareholders, Global Emerging Growth Fund has authority to transfer
all of the assets of Global Emerging Growth Fund to be conveyed
hereunder free and clear of all liens, encumbrances, security
interests, restrictions and limitations whatsoever;
C. The Prospectus, as amended and supplemented,
contained in Global Emerging Growth Fund's Registration Statement
under the 1933 Act, as amended, is true, correct and complete,
conforms to the requirements of the 1933 Act and does not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. The Registration Statement, as
amended, was, as of the date of the filing of the last Post-
Effective Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act and did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
D. There is no material contingent liability of Global
Emerging Growth Fund and no material claim and no material legal,
administrative or other proceedings pending or, to the knowledge of
Global Emerging Growth Fund, threatened against Global Emerging
Growth Fund, not reflected in such Prospectus;
E. There are no material contracts outstanding to which
Global Emerging Growth Fund is a party other than those ordinary in
the conduct of its business;
F. Global Emerging Growth Fund is a business trust duly
organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts; and has all necessary and
material Federal and state authorizations to own all of its assets
and to carry on its business as now being conducted; and Global
Emerging Growth Fund is duly registered under the Act and such
registration has not been rescinded or revoked and is in full force
and effect;
G. All Federal and other tax returns and reports of
Global Emerging Growth Fund required by law to be filed have been
filed, and all Federal and other taxes shown due on said returns
and reports have been paid or provision shall have been made for
the payment thereof and to the best of the knowledge of Global
Emerging Growth Fund no such return is currently under audit and no
assessment has been asserted with respect to such returns and to
the extent such tax returns with respect to the taxable year of
Global Emerging Growth Fund ended September 30, 1996 have not been
filed, such returns will be filed when required and the amount of
tax shown as due thereon shall be paid when due; and
H. Global Emerging Growth Fund has elected to be
treated as a regulated investment company and, for each fiscal year
of its operations, Global Emerging Growth Fund has met the
requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and Global Emerging
Growth Fund intends to meet such requirements with respect to its
current taxable year.
13. Global Fund hereby represents and warrants that:
A. The financial statements of Global Fund as at
September 30, 1996 (audited) heretofore furnished to Global
Emerging Growth Fund, present fairly the financial position,
results of operations, and changes in net assets of Global Fund, as
of that date, in conformity with generally accepted accounting
principles applied on a basis consistent with the preceding year;
and that from September 30, 1996 through the date hereof there have
not been, and through the Closing Date there will not be, any
material adverse changes in the business or financial condition of
Global Fund, it being understood that a decrease in the size of
Global Fund due to a diminution in the value of its portfolio
and/or redemption of its shares shall not be considered a material
or adverse change;
B. The Prospectus, as amended and supplemented,
contained in Oppenheimer Global Fund's Registration Statement under
the 1933 Act, is true, correct and complete, conforms to the
requirements of the 1933 Act and does not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. The Registration Statement, as amended,
was, as of the date of the filing of the last Post-Effective
Amendment, true, correct and complete, conformed to the
requirements of the 1933 Act and did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
C. There is no material contingent liability of Global
Fund and no material claim and no material legal, administrative or
other proceedings pending or, to the knowledge of Global Fund,
threatened against Global Fund, not reflected in such Prospectus;
D. There are no material contracts outstanding to which
Global Fund is a party other than those ordinary in the conduct of
its business;
E. Global Fund is a business trust duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts; has all necessary and material
Federal and state authorizations to own all its properties and
assets and to carry on its business as now being conducted; the
shares of Global Fund which it issues to Global Emerging Growth
Fund pursuant to the Agreement will be duly authorized, validly
issued, fully-paid and non-assessable, except as otherwise set
forth in Global Fund's Registration Statement; and will conform to
the description thereof contained in Global Fund's Registration
Statement, will be duly registered under the 1933 Act and in the
states where registration is required; and Global Fund is duly
registered under the Act and such registration has not been revoked
or rescinded and is in full force and effect;
F. All Federal and other tax returns and reports of
Global Fund required by law to be filed have been filed, and all
Federal and other taxes shown due on said returns and reports have
been paid or provision shall have been made for the payment thereof
and to the best of the knowledge of Global Fund no such return is
currently under audit and no assessment has been asserted with
respect to such returns and to the extent such tax returns with
respect to the taxable year of Global Fund ended September 30, 1996
have not been filed, such returns will be filed when required and
the amount of tax shown as due thereon shall be paid when due;
G. Global Fund has elected to be treated as a regulated
investment company and, for each fiscal year of its operations,
Global Fund has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company
and Global Fund intends to meet such requirements with respect to
its current taxable year;
H. Global Fund has no plan or intention (i) to dispose
of any of the assets transferred by Global Emerging Growth Fund,
other than in the ordinary course of business, or (ii) to redeem or
reacquire any of the shares issued by it in the reorganization
other than pursuant to valid requests of shareholders; and
I. After consummation of the transactions contemplated
by the Agreement, Global Fund intends to operate its business in a
substantially unchanged manner.
14. Each party hereby represents to the other that no broker
or finder has been employed by it with respect to the Agreement or
the transactions contemplated hereby. Each party also represents
and warrants to the other that the information concerning it in the
Proxy Statement and Prospectus will not as of its date contain any
untrue statement of a material fact or omit to state a fact
necessary to make the statements concerning it therein not
misleading and that the financial statements concerning it will
present the information shown fairly in accordance with generally
accepted accounting principles applied on a basis consistent with
the preceding year. Each party also represents and warrants to the
other that the Agreement is valid, binding and enforceable in
accordance with its terms and that the execution, delivery and
performance of the Agreement will not result in any violation of,
or be in conflict with, any provision of any charter, by-laws,
contract, agreement, judgment, decree or order to which it is
subject or to which it is a party. Global Fund hereby represents
to and covenants with Global Emerging Growth Fund that, if the
reorganization becomes effective, Global Fund will treat each
shareholder of Global Emerging Growth Fund who received any of
Global Fund's shares as a result of the reorganization as having
made the minimum initial purchase of shares of Global Fund received
by such shareholder for the purpose of making additional
investments in shares of Global Fund, regardless of the value of
the shares of Global Fund received.
15. Global Fund agrees that it will prepare and file a
Registration Statement on Form N-14 under the 1933 Act which shall
contain a preliminary form of proxy statement and prospectus
contemplated by Rule 145 under the 1933 Act. The final form of
such proxy statement and prospectus is referred to in the Agreement
as the "Proxy Statement and Prospectus." Each party agrees that it
will use its best efforts to have such Registration Statement
declared effective and to supply such information concerning itself
for inclusion in the Proxy Statement and Prospectus as may be
necessary or desirable in this connection. Oppenheimer Global
Emerging Growth Fund covenants and agrees to deregister as an
investment company under the Investment Company Act of 1940, as
amended, as soon as practicable and, thereafter, to cause the
cancellation of its outstanding shares.
16. The obligations of the parties under the Agreement shall
be subject to the right of either party to abandon and terminate
the Agreement without liability if the other party breaches any
material provision of the Agreement or if any material legal,
administrative or other proceeding shall be instituted or
threatened between the date of the Agreement and the Closing Date
(i) seeking to restrain or otherwise prohibit the transactions
contemplated hereby and/or (ii) asserting a material liability of
either party, which proceeding has not been terminated or the
threat thereof removed prior to the Closing Date.
17. The Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all taken together
shall constitute one Agreement. The rights and obligations of each
party pursuant to the Agreement shall not be assignable.
18. All prior or contemporaneous agreements and
representations are merged into the Agreement, which constitutes
the entire contract between the parties hereto. No amendment or
modification hereof shall be of any force and effect unless in
writing and signed by the parties and no party shall be deemed to
have waived any provision herein for its benefit unless it executes
a written acknowledgement of such waiver.
19. Global Emerging Growth Fund understands that the
obligations of Global Fund under the Agreement are not binding upon
any Trustee or shareholder of Global Fund personally, but bind only
Global Fund and Global Fund's property. Global Emerging Growth
Fund represents that it has notice of the provisions of the
Declaration of Trust of Global Fund disclaiming shareholder and
Trustee liability for acts or obligations of Global Fund.
20. Global Fund understands that the obligations of Global
Emerging Growth Fund under the Agreement are not binding upon any
Trustee or shareholder of Global Emerging Growth Fund personally,
but bind only Global Emerging Growth Fund and Global Emerging
Growth Fund's property. Global Fund represents that it has notice
of the provisions of the Declaration of Trust of Global Emerging
Growth Fund disclaiming shareholder and Trustee liability for acts
or obligations of Global Emerging Growth Fund.
IN WITNESS WHEREOF, each of the parties has caused the
Agreement to be executed and attested by its officers thereunto
duly authorized on the date first set forth above.
OPPENHEIMER GLOBAL FUND
/s/ Andrew J. Donohue
By: ----------------------
Andrew J. Donohue, Secretary
OPPENHEIMER GLOBAL EMERGING GROWTH
FUND
By: /s/ Andrew J. Donohue
----------------------
Andrew J. Donohue, Secretary
<PAGE>
Exhibit B
Average Annual Total Returns
for the Periods Ended 12/31/96
<TABLE>
<CAPTION>
1-year 3-year 5-year 10-year
<S> <C> <C> <C> <C>
Global Fund Class A Shares(1) 10.76% 7.76% 8.89% 12.00%
Global Emerging Growth 12.55% -4.76% -7.92% --
Fund Class A Shares
Global Fund Class B Shares(2) 11.54% 8.12% -- --
Global Emerging Growth 13.46% -- -- --
Fund Class B Shares
Global Fund Class C Shares(3) 15.48% -- -- --
Global Emerging Growth 17.46% -- -- --
Fund Class C Shares
</TABLE>
Total Returns include change in share price and reinvestment of
dividends and capital gains distributions in a hypothetical
investment for the periods shown. An explanation of the
different performance calculations is in each fund's Prospectus.
(1) Class A returns include the current maximum initial sales
charge of 5.75%. Global Fund's maximum sales charge rate for
Class A shares was higher during a portion of some of the periods
shown, so that actual results would have been lower. Oppenheimer
Global Fund was not managed or offered as a global fund prior to
1984, but held substantial amounts of foreign securities.
(2) Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 3% (3-year). Class B shares are
subject to an annual 0.75% asset-based sales charge.
(3) Class C returns include the 1% contingent deferred sales
charge for the 1-year result. Class C shares are subject to an
annual 0.75% asset-based sales charge.
<PAGE>
<PAGE>
Oppenheimer Global Emerging Growth Proxy for Shareholders Meeting
Fund - Class A Shares To Be Held June 17, 1997
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another mailing.
Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
Please detach at perforation before mailing.
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD JUNE 17, 1997
The undersigned shareholder of Oppenheimer Global Emerging Growth
Fund (the "Fund"), does hereby appoint George C. Bowen, Robert
Bishop and Scott Farrar, and each of them, as attorneys-in-fact
and proxies of the undersigned, with full power of substitution,
to attend the Special Meeting of the Fund to be held on June 17,
1997, at 6803 South Tucson Way, Englewood, Colorado 80112 at
10:00 A.M., Denver time, and at all adjournments thereof, and to
vote the shares held in the name of the undersigned on the record
date for said meeting on the Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO
RECOMMENDS A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE. THE
SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED ON THE
REVERSE SIDE OR FOR IF NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between
the Fund and Oppenheimer Global Fund ("Global Fund"), and
the transactions contemplated thereby, including the
transfer of substantially all the assets of the Fund, in
exchange for Class A, Class B and Class C shares of Global
Fund. The distribution of such shares to the Class A, Class
B and Class C shareholders of the Fund in complete
liquidation of the Fund, the de-registration of the Fund as
an investment company under the Investment Company Act of
1940, as amended, and the cancellation of the outstanding
shares of the Fund (the "Proposal").
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1997
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners
should sign this proxy. If the account is registered in the name
of a corporation, partnership or other entity, a duly authorized
individual must sign on its behalf and give his or her title.
PAGE
<PAGE>
Oppenheimer Global Emerging Growth Proxy for Shareholders Meeting
Fund - Class B Shares To Be Held June 17, 1997
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another mailing.
Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
Please detach at perforation before mailing.
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD JUNE 17, 1997
The undersigned shareholder of Oppenheimer Global Emerging Growth
Fund (the "Fund"), does hereby appoint George C. Bowen, Robert
Bishop and Scott Farrar, and each of them, as attorneys-in-fact
and proxies of the undersigned, with full power of substitution,
to attend the Special Meeting of the Fund to be held on June 17,
1997, at 6803 South Tucson Way, Englewood, Colorado 80112 at
10:00 A.M., Denver time, and at all adjournments thereof, and to
vote the shares held in the name of the undersigned on the record
date for said meeting on the Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO
RECOMMENDS A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE. THE
SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED ON THE
REVERSE SIDE OR FOR IF NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between
the Fund and Oppenheimer Global Fund ("Global Fund"), and
the transactions contemplated thereby, including the
transfer of substantially all the assets of the Fund, in
exchange for Class A, Class B and Class C shares of Global
Fund. The distribution of such shares to the Class A, Class
B and Class C shareholders of the Fund in complete
liquidation of the Fund, the de-registration of the Fund as
an investment company under the Investment Company Act of
1940, as amended, and the cancellation of the outstanding
shares of the Fund (the "Proposal").
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1997
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners
should sign this proxy. If the account is registered in the name
of a corporation, partnership or other entity, a duly authorized
individual must sign on its behalf and give his or her title.
PAGE
<PAGE>
Oppenheimer Global Emerging Growth Proxy for Shareholders Meeting
Fund - Class C Shares To Be Held June 17, 1997
Your shareholder Your prompt response can save your
vote is important! Fund the expense of another mailing.
Please mark your proxy on the reverse side, date and sign it, and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
Please detach at perforation before mailing.
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD JUNE 17, 1997
The undersigned shareholder of Oppenheimer Global Emerging Growth
Fund (the "Fund"), does hereby appoint George C. Bowen, Robert
Bishop and Scott Farrar, and each of them, as attorneys-in-fact
and proxies of the undersigned, with full power of substitution,
to attend the Special Meeting of the Fund to be held on June 17,
1997, at 6803 South Tucson Way, Englewood, Colorado 80112 at
10:00 A.M., Denver time, and at all adjournments thereof, and to
vote the shares held in the name of the undersigned on the record
date for said meeting on the Proposal specified on the reverse
side. Said attorneys-in-fact shall vote in accordance with their
best judgment as to any other matter.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES, WHO
RECOMMENDS A VOTE FOR THE PROPOSAL ON THE REVERSE SIDE. THE
SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED ON THE
REVERSE SIDE OR FOR IF NO CHOICE IS INDICATED.
Please mark your proxy, date and sign it on the reverse side and
return it promptly in the accompanying envelope, which requires
no postage if mailed in the United States.
The Proposal:
To approve an Agreement and Plan of Reorganization between
the Fund and Oppenheimer Global Fund ("Global Fund"), and
the transactions contemplated thereby, including the
transfer of substantially all the assets of the Fund, in
exchange for Class A, Class B and Class C shares of Global
Fund. The distribution of such shares to the Class A, Class
B and Class C shareholders of the Fund in complete
liquidation of the Fund, the de-registration of the Fund as
an investment company under the Investment Company Act of
1940, as amended, and the cancellation of the outstanding
shares of the Fund (the "Proposal").
FOR____ AGAINST____ ABSTAIN____
Dated: ___________________________, 1997
(Month) (Day)
___________________________________
Signature(s)
___________________________________
Signature(s)
Please read both sides of this ballot.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. When
signing as custodian, attorney, executor, administrator, trustee,
etc., please give your full title as such. All joint owners
should sign this proxy. If the account is registered in the name
of a corporation, partnership or other entity, a duly authorized
individual must sign on its behalf and give his or her title.
<PAGE>
<PAGE>
OPPENHEIMER GLOBAL FUND
Supplement dated January 7, 1997 to the
Prospectus dated January 7, 1997
The Prospectus is changed as follows:
In addition to paying dealers the regular commission for (1)
sales of Class A shares stated in the sales charge table in
"Buying Class A Shares" on page 29, (2) sales of Class B shares
described in the fifth paragraph in "Distribution and Service
Plans for Class B and Class C Shares" on page 36, and (3) sales
of Class C shares described in the sixth paragraph in
"Distribution and Service Plans for Class B and Class C Shares"
on page 36, the Distributor will pay additional commission to
each broker, dealer and financial institution that has a sales
agreement with the Distributor and agrees to accept that
additional commission (these are referred to as "participating
firms") for Class A, Class B and Class C shares of the Fund sold
in "qualifying transactions" (the "promotion"). The additional
commission will be 1.00% of the offering price of shares of the
Fund sold by a registered representative or sales representative
of a participating firm during the promotion. If the additional
commission is paid on the sale of Class A shares of $500,000 or
more or the sale of Class A shares to a SEP IRA with 100 or more
eligible participants and those shares are redeemed within 13
months from the end of the month in which they were purchased,
the participating firm will be required to return the additional
commission.
"Qualifying transactions" are aggregate sales of $150,000
or more of Class A, Class B and/or Class C shares of any one or
more of the Oppenheimer funds (except money market funds and
municipal bond funds) for rollovers or trustee-to-trustee
transfers from another retirement plan trustee, of IRA assets or
other employee benefit plan assets from an account or investment
other than an account or investment in the Oppenheimer funds to
(1) IRAs, rollover IRAs, SEP IRAs and SAR-SEP IRAs, using the
OppenheimerFunds, Inc. prototype IRA agreement, if the rollover
contribution is received during the period from January 1, 1997
through April 15, 1997 (the "promotion period"), or the
acceptance of a direct rollover or trustee-to-trustee transfer is
acknowledged by the trustee of the OppenheimerFunds prototype IRA
during the promotion period, and (2) IRAs, rollover IRAs, SEP
IRAs and SAR-SEP IRAs using the A.G. Edwards & Sons, Inc.
prototype IRA agreement, if the rollover contribution or trustee-
to-trustee payment is received during the promotion period.
"Qualifying transactions" do not include (1) purchases of Class A
shares intended but not yet made under a Letter of Intent, and
(2) purchases of Class A, Class B and/or Class C shares with the
redemption proceeds from an existing Oppenheimer funds account.
January 7, 1997 PS0330.017
<PAGE>
OPPENHEIMER GLOBAL FUND
Prospectus dated January 7, 1997
Oppenheimer Global Fund is a mutual fund with the investment
objective of capital appreciation. Current income is not an
objective. The Fund invests primarily in common stocks of U.S.
and foreign companies and normally invests a substantial portion
of its assets in foreign stocks. The Fund emphasizes investments
in "growth-type" companies, in industry sectors that the
portfolio manager believes have appreciation possibilities. The
Fund also uses "hedging" instruments to try to reduce the risks
of market and currency fluctuations that affect the value of the
securities the Fund holds.
Some of the Fund's investment techniques may be considered
speculative. Foreign investing involves special risks. These
techniques may increase the risks of investing in the Fund and
the Fund's operating costs. You should carefully review the
risks associated with an investment in the Fund. Please refer to
"Investment Policies and Strategies" for more information about
the types of securities the Fund invests in and the risks of
investing in the Fund.
This Prospectus explains concisely what you should know
before investing in the Fund. Please read this Prospectus
carefully and keep it for future reference. You can find more
detailed information about the Fund in the January 7, 1997
Statement of Additional Information. For a free copy, call
OppenheimerFunds Services, the Fund's Transfer Agent, at 1-800-
525-7048, or write to the Transfer Agent at the address on the
back cover. The Statement of Additional Information has been
filed with the Securities and Exchange Commission and is
incorporated into this Prospectus by reference (which means that
it is legally part of this Prospectus).
(logo) OppenheimerFunds
Shares of the Fund are not deposits or obligations of any bank,
are not guaranteed by any bank, are not insured by the F.D.I.C.
or any other agency, and involve investment risks, including the
possible loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
3 Expenses
5 A Brief Overview of the Fund
7 Financial Highlights
10 Investment Objective and Policies
17 How the Fund is Managed
19 Performance of the Fund
ABOUT YOUR ACCOUNT
23 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
35 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
37 How to Sell Shares
By Mail
By Telephone
39 How to Exchange Shares
40 Shareholder Account Rules and Policies
42 Dividends, Capital Gains and Taxes
45 Appendix A: Special Sales Charge Arrangement for Certain
Persons<PAGE>
ABOUT THE FUND
Expenses
The Fund pays a variety of expenses directly for management of
its assets, administration, distribution of its shares and other
services, and those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset value per share. All
shareholders therefore pay those expenses indirectly.
Shareholders pay other expenses directly, such as sales charges
and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing
in the Fund and your share of the Fund's business operating
expenses that you will bear indirectly. The numbers below are
based on the Fund's expenses during its fiscal year ended
September 30, 1996.
Shareholder Transaction Expenses are charges you pay when
you buy or sell shares of the Fund. Please refer to "About Your
Account," from pages ____ through ____, for an explanation of how
and when these charges apply.
<TABLE>
<CAPTION> Class A Class B Class C
------- ------- -------
<S> <C> <C> <C>
Maximum Sales Charge on Purchases 5.75% None None
(as a % of offering price)
Maximum Deferred Sales Charge None(1) 5% in the 1st 1% if redeemed
(as a % of the lower of the original year, declining within 12
offering price or redemption proceeds) to 1% in the 6th months of
year and purchase(2)
eliminated
thereafter(2)
Sales Charge on Reinvested Dividends None None None
Exchange Fee None None None
Redemption Fee None(3) None(3) None(3)
___________________________
</TABLE>
(1) If you invest $1 million or more ($500,000 or more for
purchases by "Retirement Plans," as defined in "Class A
Contingent Deferred Sales Charge" on page ___) in Class A shares,
you may have to pay a sales charge of up to 1% if you sell your
shares within 18 calendar months from the end of the calendar
month during which you purchased those shares. See "How to Buy
Shares - Buying Class A Shares," below.
(2) See "How to Buy Shares - Buying Class B Shares" and "How to
Buy Shares - Buying Class C Shares" below.
(3) There is a $10 transaction fee for redemptions paid by
Federal Funds wire, but not for redemptions paid by ACH transfer
through AccountLink.
Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its
business. For example, the Fund pays management fees to its
investment adviser, OppenheimerFunds, Inc. (which is referred to
in this Prospectus as the "Manager"). The rates of the Manager's
fees are set forth in "How the Fund is Managed," below. The Fund
has other regular expenses for services, such as transfer agent
fees, custodial fees paid to the bank that holds its portfolio
securities, audit fees and legal expenses. Those expenses are
detailed in the Fund's Financial Statements in the Statement of
Additional Information.
Annual Fund Operating Expenses
(as a Percentage of Average Net Assets)
Class A Class B Class C
-------- ------- -------
Management Fees .71% .71% .71%
12b-1 Distribution Plan
Fees .18% 1.00% 1.00%
Other Expenses .28% .29% .28%
Total Fund Operating Expenses 1.17% 2.00% 1.99%
The numbers for Class A, Class B and Class C shares in the
table above are based upon the Fund's business expenses in its
fiscal year ended September 30, 1996. These amounts are shown as
a percentage of the average net assets of each class of the
Fund's shares for that year. The 12b-1 Distribution Plan Fees
for Class A shares are service fees (the maximum fee is 0.25% of
average net assets of that class). For Class B and Class C
shares, the 12b-1 Distribution Plan Fees are service fees (the
maximum fee is 0.25% of average net assets of that class) and the
asset-based sales charge of 0.75%. These plans are described in
greater detail in "How to Buy Shares."
The actual expenses for each class of shares in future years
may be more or less than the numbers in the table, depending on a
number of factors, including changes in the actual value of the
Fund's assets represented by each class of shares.
Examples - To try to show the effect of these expenses on
an investment over time, we have created the hypothetical
examples shown below. Assume that you make a $1,000 investment
in each class of shares of the Fund, that the Fund's annual
return is 5%, and that its operating expenses for each class are
the ones shown in the Annual Fund Operating Expenses table above.
If you were to redeem your shares at the end of each period shown
below, your investment would incur the following expenses by the
end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years*
------ ------- ------- --------
Class A Shares $69 $93 $118 $191
Class B Shares $70 $93 $128 $192
Class C Shares $30 $62 $107 $232
If you did not redeem your investment, it would incur the
following expenses:
1 year 3 years 5 years 10 years*
------ ------- ------- --------
Class A Shares $69 $93 $118 $191
Class B Shares $20 $63 $108 $192
Class C Shares $20 $62 $107 $232
* In the first example, expenses include the Class A initial
sales charge and the applicable Class B or Class C contingent
deferred sales charge. In the second example, Class A expenses
include the initial sales charge, but Class B and Class C
expenses do not include contingent deferred sales charges. The
Class B expenses in years 7 through 10 are based on the Class A
expenses shown above, because the Fund automatically converts
your Class B shares into Class A shares after 6 years. Because
of the effect of the asset-based sales charge and contingent
deferred sales charge imposed on Class B and Class C shares,
long-term holders of Class B and Class C shares could pay the
economic equivalent of more than the maximum front-end sales
charge allowed under applicable regulations. For Class B
shareholders, the automatic conversion of Class B shares to Class
A shares is designed to minimize the likelihood that this will
occur. Please refer to "How to Buy Shares - Buying Class B
Shares" for more information.
These examples show the effect of expenses on an investment,
but are not meant to state or predict actual or expected costs or
investment returns of the Fund, all of which may be more or less
than those shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized
below, with references to the section of this Prospectus where
more complete information can be found. You should carefully
read the entire Prospectus before making a decision about
investing in the Fund. Keep the Prospectus for reference after
you invest, particularly for information about your account, such
as how to sell or exchange shares.
What Is The Fund's Investment Objective? The Fund's
investment objective is to seek capital appreciation. Current
income is not an objective.
What Does the Fund Invest In? The Fund primarily invests
in foreign and domestic common or convertible stocks of "growth
type" companies considered to have appreciation possibilities.
Investments in debt securities may be made in uncertain market
conditions. The Fund may also use hedging instruments and some
derivative investments to try to manage investment risks. These
investments are more fully explained in "Investment Objective and
Policies," starting on page ___.
Who Manages the Fund? The Fund's investment adviser (the
Manager)
is OppenheimerFunds, Inc. Prior to January 5, 1996, the Manager
was known as Oppenheimer Management Corporation. The Manager
(including a subsidiary) manages investment company portfolios
having over $55 billion in assets as of September 30, 1996. The
Manager is paid an advisory fee by the Fund, based on its net
assets. The Fund has a portfolio manager, William L. Wilby, who
is employed by the Manager. He is primarily responsible for the
selection of the Fund's securities. The Fund's Board of
Trustees, elected by shareholders, oversees the investment
adviser and the portfolio manager. Please refer to "How the Fund
is Managed," starting on page ___ for more information about the
Manager and its fees.
How Risky is the Fund? All investments carry risks to
some degree. It is important to remember that the Fund is
designed for long-term investors. The Fund's investments in
stocks and bonds are subject to changes in their value from a
number of factors such as changes in general bond and stock
market movements or the change in value of particular stocks
because of an event affecting the issuer. The Fund's investments
in foreign securities are subject to additional risks associated
with investing abroad, such as the effect of currency rate
changes on stock values. These changes affect the value of the
Fund's investments and its price per share. In the Oppenheimer
funds spectrum, the Fund is generally more volatile than the
other stock funds, the income and growth funds, and the more
conservative income funds. While the Manager tries to reduce
risks by diversifying investments, by carefully researching
securities before they are purchased for the portfolio, and in
some cases by using hedging techniques, there is no guarantee of
success in achieving the Fund's objective, and your shares may be
worth more or less than their original cost when you redeem them.
Please refer to "Investment Objective and Policies" starting on
page ___ for a more complete discussion of the Fund's investment
risks.
How Can I Buy Shares? You can buy shares through your
dealer or financial institution, or you can purchase shares
directly through the Distributor by completing an Application or
by using an Automatic Investment Plan under AccountLink. Please
refer to "How to Buy Shares" on page ___ for more details.
Will I Pay a Sales Charge to Buy Shares? The Fund offers
the individual investor three classes of shares. Each class has
the same investment portfolio but different expenses. Class A
shares are offered with a front-end sales charge, starting at
5.75%, and reduced for larger purchases. Class B and Class C
shares are offered without a front-end sales charge, but may be
subject to a contingent deferred sales charge if redeemed within
6 years or 12 months, respectively, of purchase. There is also
an annual asset-based sales charge on Class B and Class C shares.
Please review "How To Buy Shares" starting on page ___ for more
details, including a discussion about which class may be
appropriate for you.
How Can I Sell My Shares? Shares can be redeemed by mail
or by telephone call to the Transfer Agent on any business day,
or through your dealer. Please refer to "How to Sell Shares" on
page ___. The Fund also offers exchange privileges to other
Oppenheimer funds, described in "How To Exchange Shares" on page
__.
How Has the Fund Performed? The Fund measures its
performance by quoting its average annual total returns and
cumulative total returns, which measure historical performance.
Those returns can be compared to the returns (over similar
periods) of other funds. Of course, other funds may have
different objectives, investments, and levels of risk. The
Fund's performance can also be compared to a broad stock market
index, which we have done on page ___. Please remember that past
performance does not guarantee future results.
<PAGE>
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data, expense
ratios and other data based on the Fund's average net assets.
This information has been audited by KPMG Peat Marwick LLP, the
Fund's independent auditors, whose report on the Fund's financial
statements for the fiscal year ended September 30, 1996, is
included in the Statement of Additional Information.
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------------
- ------------------------------------
Year Ended September 30, Year Ended September
30,
1996 1995 1994 1993 1992 1996 1995
1994 1993(2)
================================================================================================================
===============
<S> <C> <C> <C> <C> <C> <C> <C>
<C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.84 $37.69 $35.04 $30.03 $32.05 $36.16 $37.36
$34.99 $33.33
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Income (loss) from investment operations:
Net investment income (loss) .23 .31 .17 .26 .17 (.05) .06
.08 .03
Net realized and unrealized
gain (loss) 4.22 2.59 6.10 4.99 (1.50) 4.13 2.49
5.83 1.63
Total income (loss) from ---- ---- ---- ---- ----- ---- ----
- ---- ----
investment operations 4.45 2.90 6.27 5.25 (1.33) 4.08 2.55
5.91 1.66
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.24) -- (.25) (.12) (.11) -- --
(.18) --
Distributions from net realized gain (2.05) (3.75) (3.37) (.12) (.58) (2.05) (3.75)
(3.36) --
Total dividends and distributions ---- ---- ---- ---- ----- ---- ----
- ---- ----
to shareholders (2.29) (3.75) (3.62) (.24) (.69) (2.05) (3.75)
(3.54) --
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Net asset value, end of period $39.00 $36.84 $37.69 $35.04 $30.03 $38.19 $36.16
$37.36 $34.99
====== ====== ====== ====== ====== ====== ======
====== ======
================================================================================================================
===============
TOTAL RETURN, AT NET ASSET VALUE(3) 12.98% 9.26% 19.19% 17.67% (4.23)% 12.07% 8.34%
18.10% 3.64%
================================================================================================================
===============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $2,499 $2,186 $1,921 $1,389 $1,215 $541 $340
$187 $6
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average net assets (in millions) $2,309 $1,979 $1,711 $1,213 $1,194 $438 $258 $
88 $3
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Amount of debt outstanding at end
of period (in thousands) N/A N/A N/A N/A $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A N/A N/A $18,247 $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average number of shares outstanding
throughout each period
(in thousands) N/A N/A N/A 39,853 37,435 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt per share
outstanding throughout each period N/A N/A N/A $0.46 $1.60 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Ratios to average net assets:
Net investment income (loss) 0.62% 0.90% 0.38% 0.84% 0.55% (0.17)% 0.09%
(0.30)% 1.52%(4)
Expenses 1.17% 1.20% 1.15% 1.18% 1.36% 2.00% 2.03%
2.08% 2.40%(4)
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Portfolio turnover rate(5) 102.9% 84.4% 78.3% 86.9% 18.0% 102.9% 84.4%
78.3% 86.9%
Average brokerage
commission rate(6) $0.0071 -- -- -- -- $0.0071 --
- -- --
<CAPTION>
Class C
-------
Period
Ended
Sept. 30,
1996(1)
==========================================================
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.67
- ----------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .09
Net realized and unrealized
gain (loss) 4.13
Total income (loss) from ----
investment operations 4.22
- ----------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.11)
Distributions from net realized gain (2.05)
Total dividends and distributions ------
to shareholders (2.16)
- ----------------------------------------------------------
Net asset value, end of period $38.73
======
==========================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.34%
==========================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $18
- ----------------------------------------------------------
Average net assets (in millions) $8
- ----------------------------------------------------------
Amount of debt outstanding at end
of period (in thousands) N/A
- ----------------------------------------------------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average number of shares outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average amount of debt per share
outstanding throughout each period N/A
- ----------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.04%(4)
Expenses 1.99%(4)
- ----------------------------------------------------------
Portfolio turnover rate(5) 102.9%
Average brokerage
commission rate(6) $0.0071
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to
September 30, 1996.
2. For the period from August 17, 1993 (inception of offering) to
September 30, 1993.
3. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of
offering), with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one
full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a
period, divided by the monthly average of the market value of
portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one
year or less are excluded from the calculation.Purchases and
sales of investment securities (excluding short-term securities)
for the period ended September 30, 1996 were $2,961,733,794 and
$2,678,446,475,respectively.
6. Total brokerage commissions paid on applicable purchases and
sales of portfolio securities for the period divided by the total
number of related shares purchased and sold.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets with the objective of
capital appreciation.
Investment Policies and Strategies. The Fund seeks capital
appreciation by emphasizing investments in common stocks or
convertible securities of "growth-type" companies. These may
include securities of U.S. companies or foreign companies, as
discussed below. The Fund may invest in securities of smaller,
less well-known companies as well as those of large, well-known
companies (not generally included in the definition of "growth-
type" companies). The Fund may hold warrants and rights.
Current income is not a consideration in the selection of
portfolio securities. A portion of the Fund's assets may be
invested in securities for liquidity purposes.
As a matter of fundamental policy, under normal market
conditions (when the Manager believes that the securities markets
are not in a volatile or unstable period), the Fund invests in
securities of issuers traded in markets in at least three
different countries (which may include the United States). The
Manager expects that the Fund will normally invest a substantial
portion of its assets in foreign securities (discussed in
"Foreign Securities," below).
The Fund's portfolio manager currently employs an investment
strategy in selecting foreign and domestic securities that
considers the effects of worldwide trends on the growth of
various business sectors. These trends or "global themes"
currently include telecommunications expansion, emerging consumer
markets, infrastructure development, natural resource use and
development, corporate restructuring, capital market development
in foreign countries, health care expansion, and global
integration. These trends, which may affect the growth of
companies having businesses in these sectors or that are affected
by their development, may suggest opportunities for investing the
Fund's assets. The Manager does not invest a fixed or specific
amount of the Fund's assets in any one sector, and these themes
or this approach may change over time.
The Fund may also seek to take advantage of changes in the
business cycle by investing in companies that are sensitive to
those changes as well as in "special situations" the Manager
believes present opportunities for capital growth. For example,
when a country's economy is expanding, companies in the financial
services and consumer products industries may be in a position to
benefit from changes in the business cycle and may present long-
term growth opportunities.
When investing the Fund's assets, the Manager considers many
factors, including the global themes discussed above, general
economic conditions abroad relative to the U.S. and the trends in
foreign and domestic stock markets. The Fund may try to hedge
against losses in the value of its portfolio of securities by
using hedging strategies and derivative investments described
below.
When market conditions are unstable, the Fund may invest in
debt securities, such as rated or unrated bonds and debentures,
cash equivalents and preferred stocks. It is expected that
short-term debt securities (which are securities maturing in one
year or less from date of purchase) will be emphasized for
defensive or liquidity purposes, since those securities usually
may be disposed of quickly and their prices tend not to be as
volatile as the prices of longer term debt securities. When
circumstances warrant, securities may be sold without regard to
the length of time held, although short-term trading may increase
brokerage costs borne by the Fund.
What are "Growth-Type" Companies? These tend to be newer
companies that may be developing new products or services, or
expanding into new markets for their products. While they may
have what the Manager believes to be favorable prospects for the
long-term, growth-type companies normally retain a large part of
their earnings for research, development and investment in
capital assets. Therefore, they tend not to emphasize the
payment of dividends.
Can the Fund's Investment Objective and Policies Change?
The Fund has an investment objective, which is described above,
as well as investment policies it follows to try to achieve its
objective. Additionally, the Fund uses certain investment
techniques and strategies in carrying out those investment
policies. The Fund's investment policies and techniques are not
"fundamental" unless this Prospectus or the Statement of
Additional Information says that a particular policy is
"fundamental." The Fund's investment objective is a fundamental
policy.
Fundamental policies are those that cannot be changed
without the approval of a "majority" of the Fund's outstanding
voting shares. The term "majority" is defined in the Investment
Company Act to be a particular percentage of outstanding voting
shares (and this term is explained in the Statement of Additional
Information). The Fund's Board of Trustees may change non-
fundamental policies without shareholder approval, although
significant changes will be described in amendments to this
Prospectus.
Stock Investment Risks. Because the Fund normally
invests most, or a substantial portion, of its assets in stocks,
the value of the Fund's portfolio will be affected by changes in
the stock markets. At times, the stock markets can be volatile,
and stock prices can change substantially. This market risk will
affect the Fund's net asset values per share, which will
fluctuate as the values of the Fund's portfolio securities
change. Not all stock prices change uniformly or at the same
time, not all stock markets move in the same direction at the
same time, and other factors can affect a particular stock's
prices (for example, poor earnings reports by an issuer, loss of
major customers, major litigation against an issuer, or changes
in government regulations affecting an industry). Not all of
these factors can be predicted.
As discussed below, the Fund attempts to limit market risks
by diversifying its investments, that is, by not holding a
substantial amount of stock of any one company and by not
investing too great a percentage of the Fund's assets in any one
company.
Because of the types of securities the Fund invests in and
the investment techniques the Fund uses, some of which may be
speculative, the Fund is designed for investors who are investing
for the long-term and who are willing to accept greater risks of
loss of their investment in the hope of achieving capital
appreciation. It is not intended for investors seeking assured
income and preservation of capital. Investing for capital
appreciation entails the risk of loss of all or part of your
investment. Because changes in securities market prices can
occur at any time, there is no assurance that the Fund will
achieve its investment objective, and when you redeem your
shares, they may be worth more or less than what you paid for
them.
Foreign Securities. The Fund will normally invest a
substantial amount of its assets in foreign securities. Foreign
securities are those that are traded primarily on a foreign
securities exchange or in the foreign over-the-counter markets.
The Fund can invest up to 100% of its assets in foreign
securities. The Fund may purchase equity (and debt) securities
issued or guaranteed by foreign companies or foreign governments
or their agencies. The Fund may buy securities of companies or
governments in any country, developed or underdeveloped.
The Fund does not limit its investments in bonds and
debentures to issues having specified credit ratings. The Fund
may invest in debt securities rated below "investment grade"
(investment grade securities are generally those in the four
highest rating categories of Moody's Investors Service, Inc. or
Standard & Poor's Corporation). Debt securities are subject to
changes in value due to changes in prevailing interest rates.
The values of outstanding debt securities rise when prevailing
interest rates decline, and decline when prevailing interest
rates rise. The Manager does not currently intend to invest more
than 5% of the Fund's assets in debt securities.
The Fund will hold foreign currency only in connection with
the purchase or sale of foreign securities. If the Fund's
securities are held abroad, the countries in which they are held
and the sub-custodians holding them must be approved by the
Fund's Board of Trustees.
Foreign securities have special risks. There are special
risks in investing in foreign securities. Because the Fund may
purchase securities denominated in foreign currencies or traded
primarily in foreign markets, a change in the value of a foreign
currency against the U.S. dollar will result in a change in the
U.S. dollar value of those foreign securities. Foreign issuers
are not required to use generally-accepted accounting principals
that apply to U.S. issuers. If foreign securities are not
registered for sale in the U.S. under U.S. securities laws, the
issuer does not have to comply with disclosure requirements that
U.S. companies are subject to. The value of foreign investments
may be affected by other factors, including exchange control
regulations, expropriation or nationalization of a company's
assets, foreign taxes, delays in settlement of transactions,
changes in governmental, economic or monetary policy in the U.S.
or abroad, or other political and economic factors.
In addition, it is generally more difficult to obtain court
judgments outside the U.S. if the Fund were to sue a foreign
issuer or broker. Additional costs may be incurred because
foreign brokerage commissions are generally higher than U.S.
rates, and there are additional custodial costs associated with
holding securities abroad. More information about the risks and
potential rewards of investing in foreign securities is contained
in the Statement of Additional Information.
Portfolio Turnover. A change in the securities held by
the Fund is known as "portfolio turnover." The Fund ordinarily
does not engage in short-term trading to try to achieve its
objective. As a result, the Fund's portfolio turnover is not
expected to be more than 100% each year. The "Financial
Highlights," above, show the Fund's portfolio turnover rate
during past fiscal years.
Portfolio turnover affects brokerage costs, dealer markups
and other transaction costs, and results in the Fund's
realization of capital gains or losses for tax purposes. It may
also affect the Fund's ability to qualify as a "regulated
investment company" under the Internal Revenue Code for tax
deductions for dividends and capital gains distributions the Fund
pays to shareholders. The Fund qualified in its last fiscal year
and intends to do so in the coming year, although it reserves the
right not to qualify.
Derivative Investments. In general, a "derivative
investment" is a specially designed investment. Its performance
is linked to the performance of another investment or security,
such as an option, future, index, currency or commodity. The
Fund can invest in a number of different kinds of "derivative
investments." They are used in some cases for hedging purposes
and in other cases to enhance total return. In the broadest
sense, exchange-traded options and futures contracts (discussed
in "Hedging," below) may be considered "derivative investments."
There are special risks in investing in derivative
investments. The company issuing the instrument may fail to pay
the amount due on the maturity of the instrument. Also, the
underlying investment or security on which the derivative is
based might not perform the way the Manager expected it to
perform. The performance of derivative investments may also be
influenced by interest rate and stock market changes in the U.S.
and abroad. All of this can mean that the Fund may realize less
principal or income from the investment than expected. Certain
derivative investments held by the Fund may trade in the over-
the-counter market and may be illiquid. Please refer to
"Illiquid and Restricted Securities" for an explanation.
Repurchase Agreements. The Fund may enter into
repurchase agreements. In a repurchase transaction, the Fund
buys a security and simultaneously sells it to the vendor for
delivery at a future date. They are used primarily for cash
liquidity purposes.
Repurchase agreements must be fully collateralized.
However, if the vendor fails to pay the resale price on the
delivery date, the Fund may incur costs in disposing of the
collateral and may experience losses if there is any delay in its
ability to do so. The Fund will not enter into a repurchase
agreement that causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven
days. There is no limit on the amount of the Fund's net assets
that may be subject to repurchase agreements of seven days or
less.
Other Investment Techniques and Strategies
The Fund may also use the investment techniques and
strategies described below. These techniques involve certain
risks. The Statement of Additional Information contains more
information about these practices, including limitations on their
use that may help to reduce some of the risks.
Loans of Portfolio Securities. The Fund has entered into
a Securities Lending Agreement and Guaranty with The Bank of New
York. Under that agreement portfolio securities of the Fund may
be loaned to brokers, dealers and other financial institutions.
The Securities Lending Agreement provides that loans must be
adequately collateralized and may be made only in conformity with
the Fund's Securities Lending Guidelines, adopted by the Fund's
Board of Trustees. The value of the securities loaned may not
exceed 25% of the value of the Fund's total assets. The Fund
presently does not intend that the value of the securities loaned
in the current fiscal year will exceed 5% of the value of the
Fund's total assets.
In lending its securities, the Fund has certain risks, such
as a delay in receiving additional collateral, a delay in the
return of the loaned securities or loss of rights in the
collateral if the borrower fails financially. To try to reduce
some of those risks, the Fund is the beneficiary of a guaranty
provided by The Bank of New York. See "Loans of Portfolio
Securities" in the Statement of Additional Information for
further information.
Borrowing for Leverage. The Fund may borrow up to 10% of
the value of its net assets from banks on an unsecured basis to
buy securities. That percentage limit is a fundamental policy.
This is a speculative investment method known as "leverage."
This investing technique may subject the Fund to greater risks
and costs than funds that do not borrow. These risks may include
the possibility that the Fund's net asset value per share will
fluctuate more than funds that don't borrow. Borrowing for
leverage is subject to limits under the Investment Company Act,
described in more detail in "Borrowing for Leverage" in the
Statement of Additional Information.
Warrants and Rights. Warrants basically are options to
purchase stock at set prices that are valid for a limited period
of time. Rights are similar to warrants but normally have a
short duration and are distributed directly by the issuer to its
shareholders. The Fund may invest up to 5% of its total assets
in warrants or rights. That 5% limitation does not apply to
warrants the Fund has acquired as part of units with other
securities or that are attached to other securities. No more
than 2% of the Fund's total assets may be invested in warrants
that are not listed on either The New York Stock Exchange or The
American Stock Exchange. These percentage limitations are
fundamental policies. For further details, see "Warrants and
Rights" in the Statement of Additional Information.
Special Situations. The Fund may invest in securities of
companies that are in "special situations" that the Manager
believes may present opportunities for capital growth. A
"special situation" may be an event such as a proposed merger,
reorganization, or other unusual development that is expected to
occur and which may result in an increase in the value of a
company's securities, regardless of general business conditions
or the movement of prices in the securities market as a whole.
There is a risk that the price of the security may decline if the
anticipated development fails to occur.
Investing In Small, Unseasoned Companies. The Fund may
invest in securities of small, unseasoned companies. These are
companies that have been in operation less than three years,
including the operations of any predecessors. Securities of
these companies may have limited liquidity (which means that the
Fund may have difficulty selling them at an acceptable price when
it wants to) and the price of these securities may be volatile.
See "Investing in Small, Unseasoned Companies" in the Statement
of Additional Information for a further discussion of the risks
involved in such investments.
Illiquid and Restricted Securities. Under the policies
and procedures established by the Fund's Board of Trustees, the
Manager determines the liquidity of certain of the Fund's
investments. Investments may be illiquid because of the absence
of an active trading market, making it difficult to value them or
dispose of them promptly at an acceptable price. A restricted
security is one that has a contractual restriction on its resale
or which cannot be sold publicly until it is registered under the
Securities Act of 1933. The Fund will not invest more than 10% of
its net assets in illiquid or restricted securities (the Board
may increase that limit to 15%). The Fund's percentage limitation
on these investments does not apply to certain restricted
securities that are eligible for resale to qualified
institutional purchasers. The Manager monitors holdings of
illiquid securities on an ongoing basis and at times the Fund may
be required to sell some holdings to maintain adequate liquidity.
See "Restricted and Illiquid Securities" in the Statement of
Additional Information for further details.
Hedging. As described below, the Fund may purchase and
sell certain kinds of futures contracts, put and call options,
forward contracts, and options on futures and broadly-based stock
indices. These are all referred to as "hedging instruments."
The Fund does not use hedging instruments for speculative
purposes, and has limits on the use of them, described below.
The hedging instruments the Fund may use are described below and
in greater detail in "Other Investment Techniques and Strategies"
in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward
contracts for a number of purposes. It may do so to try to
manage its exposure to the possibility that the prices of its
portfolio securities may decline, or to establish a position in
the securities market as a temporary substitute for purchasing
individual securities. Some of these strategies, such as selling
futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations.
Other hedging strategies, such as buying futures and call
options, tend to increase the Fund's exposure to the securities
market. Forward contracts are used to try to manage foreign
currency risks on the Fund's foreign investments. Foreign
currency options are used to try to protect against declines in
the dollar value of foreign securities the Fund owns, or to
protect against an increase in the dollar cost of buying foreign
securities. Writing covered call options may also provide income
to the Fund for liquidity purposes.
Futures. The Fund may buy and sell futures contracts
that relate to (1) broadly-based stock indices (these are
referred to as Stock Index Futures) or (2) foreign currencies
(these are called Forward Contracts and are discussed below).
Put and Call Options. The Fund may buy and sell certain
kinds of put options (puts) and call options (calls). A call or
put option may not be purchased if the value of all of the Fund's
put and call options would exceed 5% of the Fund's total assets.
Calls the Fund buys or sells must be listed on a domestic
securities or commodities exchange, or quoted on the Automated
Quotation System ("NASDAQ") of The Nasdaq Stock Market, Inc. In
the case of puts and calls on foreign currency, they must be
traded on a securities or commodities exchange, or be quoted by
recognized dealers in those options.
The Fund may buy calls only on securities, broadly-based
stock indices, foreign currencies or Stock Index Futures, or to
terminate its obligation on a call the Fund previously wrote.
The Fund may write (that is, sell) call options. Each call
the Fund writes must be "covered" while it is outstanding. That
means the Fund owns the investment on which the call was written
or the Fund owns and segregates liquid assets to satisfy its
obligation if the call is exercised. The Fund may write calls on
futures contracts it owns, but these calls must be covered by
securities or any other liquid assets, including equity and debt
securities of any grade, the Fund owns. When the Fund writes a
call, it receives cash (called a premium). The call gives the
buyer the ability to buy the investment on which the call was
written from the Fund at the call price during the period in
which the call may be exercised. If the value of the investment
does not rise above the call price, it is likely that the call
will lapse without being exercised, while the Fund keeps the cash
premium (and the investment). After the Fund writes a call, not
more than 25% of the Fund's total assets may be subject to calls.
The Fund may purchase put options. Buying a put on an
investment gives the Fund the right to sell the investment at a
set price to a seller of a put on that investment. The Fund can
buy only those puts that relate to securities that the Fund owns,
broadly-based stock indices, foreign currencies or Stock Index
Futures. The Fund can buy a put on a Stock Index Future whether
or not the Fund owns the particular Stock Index Future in its
portfolio.
The Fund may write puts on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures in an amount
up to 50% of its total assets but only if those puts are covered
by segregated liquid assets. In writing puts, there is a risk
that the Fund may be required to buy the underlying security at a
disadvantageous price.
Forward Contracts. Forward contracts are foreign
currency exchange contracts. They are used to buy or sell
foreign currency for future delivery at a fixed price. The Fund
uses them to try to "lock in" the U.S. dollar price of a security
denominated in a foreign currency that the Fund has bought or
sold, or to protect against possible losses from changes in the
relative values of the U.S. dollar and foreign currency. The
Fund limits its net exposure under forward contracts in a
particular foreign currency to the amount of its assets
denominated in that currency or denominated in a closely-
correlated currency.
Hedging Instruments can be volatile investments and may
involve special risks. The use of hedging instruments requires
special skills and knowledge of investment techniques that are
different from what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or
judges market conditions incorrectly, hedging strategies may
reduce the Fund's return. The Fund could also experience losses
if the prices of its futures and options positions were not
correlated with its other investments or if it could not close
out a position because of an illiquid market for the future or
option.
Options trading involves the payment of premiums and has
special tax effects on the Fund. There are also special risks in
particular hedging strategies. If a covered call written by the
Fund is exercised on a security that has increased in value, the
Fund will be required to sell the security at the call price and
will not be able to realize any profit if the security has
increased in value above the call price. The use of forward
contracts may reduce the gain that would otherwise result from a
change in the relationship between the U.S. dollar and a foreign
currency. These risks and the hedging strategies the Fund may
use are described in greater detail in the Statement of
Additional Information.
Short Sales Against-the-Box. In a short sale, the seller
does not own the security that is sold, but normally borrows the
security to fulfill its delivery obligation. The seller later
buys the security to repay the loan, in the expectation that the
price of the security will be lower when the purchase is made,
resulting in a gain. The Fund may not sell securities short
except in collateralized transactions referred to as "short sales
against-the-box," where the Fund owns an equivalent amount of the
securities sold short. This technique is primarily used for tax
purposes. As a fundamental policy, no more than 15% of the
Fund's net assets will be held as collateral for such short sales
at any one time.
Other Investment Restrictions
The Fund has certain investment restrictions that are
fundamental policies. Under these restrictions, the Fund cannot
do any of the following:
Buy securities issued or guaranteed by any one issuer
(except the U.S. Government or any of its agencies or
instrumentalities) if, with respect to 75% of its total assets,
more than 5% of the Fund's total assets would be invested in
securities of that issuer, or the Fund would then own more than
10% of that issuer's voting securities.
Concentrate investments in any particular industry.
Therefore the Fund will not purchase the securities of companies
in any one industry if, thereafter, more than 25% of the value of
the Fund's assets would consist of securities of companies in
that industry.
Unless the Prospectus states that a percentage restriction
applies on an ongoing basis, it applies only at the time the Fund
makes an investment, and the Fund need not sell securities to
meet the percentage limits if the value of the investment
increases in proportion to the size of the Fund. Other
investment restrictions are listed in "Investment Restrictions"
in the Statement of Additional Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated
in Maryland in 1969 and was reorganized in 1986 as a
Massachusetts business trust. The Fund is an open-end,
diversified management investment company, with an unlimited
number of authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is
responsible for protecting the interests of shareholders under
Massachusetts law. The Trustees periodically meet throughout the
year to oversee the Fund's activities, review its performance,
and review the actions of the Manager. "Trustees and Officers of
the Fund" in the Statement of Additional Information names the
Trustees and officers of the Fund and provides more information
about them. Although the Fund will not normally hold annual
meetings of its shareholders, it may hold shareholder meetings
from time to time on important matters, and shareholders have the
right to call a meeting to remove a Trustee or to take other
action described in the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder
approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has
three classes of shares, Class A, Class B and Class C. All
classes invest in the same investment portfolio. Each class has
its own dividends and distributions and pays certain expenses,
which may be different for the different classes. Each class may
have a different net asset value. Each share has one vote at
shareholder meetings, with fractional shares voting
proportionally. Only shares of a particular class vote as a
class on matters that affect that class alone. Shares are freely
transferrable.
The Manager and Its Affiliates. The Fund is managed by the
Manager, OppenheimerFunds, Inc., which is responsible for
selecting the Fund's investments and handles its day-to-day
business. The Manager carries out its duties, subject to the
policies established by the Board of Trustees, under an
Investment Advisory Agreement which states the Manager's
responsibilities. The Investment Advisory Agreement sets forth
the fees paid by the Fund to the Manager and describes the
expenses that the Fund is responsible to pay to conduct its
business.
The Manager has operated as an investment adviser since
1959. The Manager (including a subsidiary) currently manages
investment companies, including other Oppenheimer funds, with
assets of more than $55 billion as of September 30, 1996, and
with more than 3 million shareholder accounts. The Manager is
owned by Oppenheimer Acquisition Corp., a holding company that is
owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company.
Portfolio Manager. The Portfolio Manager of the Fund is
William L. Wilby. He is a Senior Vice President of the Manager.
He has been the person principally responsible for the day-to-day
management of the Fund's portfolio since December, 1992. During
the past five years, Mr. Wilby has also served as an officer and
portfolio manager for other Oppenheimer funds, prior to which he
was an international investment strategist at Brown Brothers,
Harriman & Co. and a Managing Director and Portfolio Manager at
AIG Global Investors.
Fees and Expenses. Under the Investment Advisory
Agreement the Fund pays the Manager the following annual fees,
which decline on additional assets as the Fund grows: 0.80% of
the first $250 million of average annual net assets, 0.77% of the
next $250 million, 0.75% of the next $500 million, 0.69% of the
next $1 billion, and 0.67% of average annual net assets in excess
of $2 billion. The Manager has voluntarily agreed to reduce the
management fee to which it is entitled under the Agreement to
0.65% on assets in excess of $3.5 billion. The Fund's management
fee for its last fiscal year ended September 30, 1996, was .71%
of average annual net assets for both its Class A and Class B
shares and .71% of average annual net assets (annualized) for
Class C shares. The Fund's shareholders have been asked to
approve a proposed investment advisory agreement that would
include the Manager's undertaking as part of its management fee
rate. This Prospectus will not be supplemented if the proposed
agreement is approved, because the fee paid by the Fund would not
change.
The Fund pays expenses related to its daily operations, such
as custodian fees, Trustees' fees, transfer agency fees, legal
fees and auditing costs. Those expenses are paid out of the
Fund's assets and are not paid directly by shareholders.
However, those expenses reduce the net asset value of shares, and
therefore are indirectly borne by shareholders through their
investment. More information about the Investment Advisory
Agreement and the other expenses paid by the Fund is contained in
the Statement of Additional Information.
There is also information about the Fund's brokerage
policies and practices in "Brokerage Policies of the Fund" in the
Statement of Additional Information. That section discusses how
brokers and dealers are selected for the Fund's portfolio
transactions. When deciding which brokers to use, the Manager is
permitted by the Investment Advisory Agreement to consider
whether brokers have sold shares of the Fund or any other funds
for which the Manager serves as investment adviser.
The Distributor. The Fund's shares are sold through
dealers, brokers and other financial institutions that have a
sales agreement with OppenheimerFunds Distributor, Inc., a
subsidiary of the Manager that acts as the Fund's Distributor.
The Distributor also distributes shares of the other Oppenheimer
funds and is sub-distributor for funds managed by a subsidiary of
the Manager.
The Transfer Agent. The Fund's transfer agent is
OppenheimerFunds Services, a division of the Manager, which acts
as the shareholder servicing agent for the Fund on an "at-cost"
basis. It also acts as the shareholder servicing agent for the
other Oppenheimer funds. Shareholders should direct inquiries
about their accounts to the Transfer Agent at the address and
toll-free number shown below in this Prospectus and on the back
cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms
"total return" and "average annual total return" to illustrate
its performance. The performance of each class of shares is
shown separately, because the performance of each class will
usually be different as a result of the different kinds of
expenses each class bears. These returns measure the performance
of a hypothetical account in the Fund over various periods, and
do not show the performance of each shareholder's account (which
will vary if dividends are received in cash, or shares are sold
or purchased). The Fund's performance information may help you
see how well your Fund has done over time and to compare it to
other funds or market indices.
It is important to understand that the Fund's total returns
represent past performance and should not be considered to be
predictions of future returns or performance. More detailed
information about how total returns are calculated is contained
in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over
time, depending on market conditions, the composition of the
portfolio, expenses and which class of shares you purchase.
Total Returns. There are different types of total returns
used to measure the Fund's performance. Total return is the
change in value of a hypothetical investment in the Fund over a
given period, assuming that all dividends and capital gains
distributions are reinvested in additional shares. The
cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total
return shows the average rate of return for each year in a period
that would produce the cumulative total return over the entire
period. However, average annual total returns do not show the
Fund's actual year-by-year performance.
When total returns are quoted for Class A shares, normally
they include the payment of the current maximum initial sales
charge. When total returns are shown for Class B or Class C
shares, normally the contingent deferred sales charge that
applies to the period for which total return is shown has been
deducted. However, total returns may also be quoted "at net asset
value," without considering the effect of the sales charge, and
those returns would be less if sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager
of the Fund's performance during its last fiscal year ended
September 30, 1996, followed by a graphical comparison of the
Fund's performance to an appropriate broad-based market index.
Management's Discussion of Performance. During the
Fund's fiscal year ended September 30, 1996, the U.S. stock
market outperformed the major foreign stock markets. The Manager
utilized the following global theme areas in selecting stocks for
the Fund's portfolio: telecommunications, emerging consumer
markets, infrastructure, capital market development, healthcare,
natural resources, corporate restructuring and efficiency
enhancement. The Fund's performance benefited from appreciation
of oil services companies, selected within the natural resources
theme, as oil prices moved higher in 1996. In healthcare, the
Manager used a sharp decline in the biotechnology sector to add
to the Fund's biotechnology holdings, and also established
holdings of several European banks.
Comparing the Fund's Performance to the Market. The
graphs below show the performance of a hypothetical $10,000
investment in Class A, Class B and Class C shares of the Fund
held until September 30, 1996. In the case of Class A shares,
performance is measured over a ten-year period. In the case of
Class B shares, performance is measured over a one-year period,
and since inception of the Class on August 17, 1993. In the case
of Class C shares performance is measured from the inception of
the Class on October 2, 1995.
The Fund's performance is compared to the performance of the
Morgan Stanley Capital International World Index, an unmanaged
index of issuers listed on the stock exchanges of 20 foreign
countries and the United States. It is widely recognized as a
measure of global stock market performance. Index performance
reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the
data below shows the effect of taxes. Also, the Fund's
performance reflects the deduction of the current maximum sales
charge of 5.75% for Class A shares, the applicable contingent
deferred sales charge on Class B shares, and reinvestment of all
dividends and capital gains distributions, and the effect of Fund
business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must
be noted that the Fund's investments are not limited to the
securities in the Morgan Stanley Capital International World
Index. Moreover, the index performance data does not reflect any
assessment of the risk of the investments included in the index.
Comparison of Change in Value
of $10,000 Hypothetical Investments in: Class A and Class B
Shares of
Oppenheimer Global Fund And
Morgan Stanley Capital International World Index
(Graphs)
Oppenheimer Global Fund
Avg. Annual Total Returns Avg. Annual Total Returns
of Class A Shares of the Fund at of Class B Shares of the
9/30/96(1) Fund at 9/30/96(2)
<TABLE>
<CAPTION>
A Shares 1 Year 5 Year 10 Year B Shares 1 Year Life of Class:
<S> <C> <C> <C> <C> <C> <C>
6.49% 9.33% 12.26% -- 7.07% 13.05%
</TABLE>
Cumulative Total Return
of Class C Shares of the
Fund at 9/30/96 (3)
- ------------------------------
C Shares Life of Class:
- --------- -------
11.34%
_____________________
Total returns and the ending account value in the graph show
change in share value and include reinvestment of all dividends
and capital gains distributions.
(1) Class A returns are shown net of the applicable 5.75% maximum
initial sales charge. The inception date of the Fund (Class A
shares) was 12/22/69.
(2) Class B shares of the Fund were first publicly offered on
8/17/93. Returns are shown net of the applicable 5% and 3%
contingent deferred sales charges, respectively, for the 1-year
period and the Life-of-Class. The ending account value in the
graph is net of the applicable 3% contingent deferred sales
charge.
(3) Class C shares of the Fund were first publicly offered on
10/2/95. The Life-of-Class return is shown net of the applicable
1% contingent deferred sales charge.
Past performance is not predictive of future performance.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors three different
classes of shares. The different classes of shares represent
investments in the same portfolio of securities but are subject
to different expenses and will likely have different share
prices.
Class A Shares. If you buy Class A shares, you may pay
an initial sales charge on investments up to $1 million (up to
$500,000 for purchases by "Retirement Plans," as defined in
"Class A Contingent Deferred Sales Charge" on page ____). If you
purchase Class A shares as part of an investment of at least $1
million ($500,000 for Retirement Plans) in shares of one or more
Oppenheimer funds, you will not pay an initial sales charge, but
if you sell any of those shares within 18 months of buying them,
you may pay a contingent deferred sales charge. The amount of
that sales charge will vary depending on the amount you invested.
Sales charge rates are described in "Buying Class A Shares"
below.
Class B Shares. If you buy Class B shares, you pay no
sales charge at the time of purchase, but if you sell your shares
within six years of buying them, you will normally pay a
contingent deferred sales charge. That sales charge varies
depending on how long you own your shares, as described in
"Buying Class B Shares" below.
Class C Shares. If you buy Class C shares, you pay no
sales charge at the time of purchase, but if you sell your shares
within 12 months of buying them, you will normally pay a
contingent deferred sales charge of 1%, as described in "Buying
Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that
the Fund is an appropriate investment for you, the decision as to
which class of shares is better suited to your needs depends on a
number of factors which you should discuss with your financial
advisor. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on
your investment will vary your investment results over time. The
most important factors to consider are how much you plan to
invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase
additional shares, you should re-evaluate those factors to see if
you should consider another class of shares.
In the following discussion, to help provide you and your
financial advisor with a framework in which to choose a class, we
have made some assumptions using a hypothetical investment in the
Fund. We used the sales charge rates that apply to each class,
considering the effect of the annual asset-based sales charge on
Class B and Class C expenses (which, like all expenses, will
affect your investment return). For the sake of comparison, we
have assumed that there is a 10% rate of appreciation in the
investment each year. Of course, the actual performance of your
investment cannot be predicted and will vary, based on the Fund's
actual investment returns and the operating expenses borne by
each class of shares, and which class of shares you invest in.
The factors discussed below are not intended to be investment
advice or recommendations, because each investor's financial
considerations are different. The discussion below of the
factors to consider in purchasing a particular class of shares
assumes that you will purchase only one class of shares and not a
combination of shares of different classes.
How Long Do You Expect to Hold Your Investment? While
future financial needs cannot be predicted with certainty,
knowing how long you expect to hold your investment will assist
you in selecting the appropriate class of shares. Because of the
effect of class-based expenses, your choice will also depend on
how much you plan to invest. For example, the reduced sales
charges available for larger purchases of Class A shares may,
over time, offset the effect of paying an initial sales charge on
your investment (which reduces the amount of your investment
dollars used to buy shares for your account), compared to the
effect over time of higher class-based expenses on Class B or
Class C shares for which no initial sales charge is paid.
Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not
more than six years), you should probably consider purchasing
Class A or Class C shares rather than Class B shares, because of
the effect of the Class B contingent deferred sales charge if you
redeem in less than 7 years, as well as the effect of the Class B
asset-based sales charge on the investment return for that class
in the short-term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there
is no initial sales charge on Class C shares, and the contingent
deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the
shorter term, then the more you invest and the more your
investment horizon increases toward six years, Class C shares
might not be as advantageous as Class A shares. That is because
the annual asset-based sales charge on Class C shares will have a
greater impact on your account over the longer term than the
reduced front-end sales charge available for larger purchases of
Class A shares. For example, Class A might be more advantageous
than Class C (as well as Class B) for investments of more than
$100,000 expected to be held for 5 or 6 years (or more). For
investments over $250,000 expected to be held 4 to 6 years (or
more), Class A shares may become more advantageous than Class C
(and B). If investing $500,000 or more, Class A may be more
advantageous as your investment horizon approaches 3 years or
more.
And for investors who invest $1 million or more, in most
cases Class A shares will be the most advantageous choice, no
matter how long you intend to hold your shares. For that reason,
the Distributor normally will not accept purchase orders of
$500,000 or more of Class B shares or $1 million or more of Class
C shares from a single investor.
Investing for the Longer Term. If you are investing for
the longer term, for example, for retirement, and do not expect
to need access to your money for seven years or more, Class B
shares may be an appropriate consideration, if you plan to invest
less than $100,000. If you plan to invest more than $100,000 over
the long term, Class A shares will likely be more advantageous
than Class B shares or C shares, as discussed above, because of
the effect of the expected lower expenses for Class A shares and
the reduced initial sales charges available for larger
investments in Class A shares under the Fund's Right of
Accumulation.
Of course, these examples are based on approximations of the
effect of current sales charges and expenses on a hypothetical
investment over time, using the assumed annual performance return
stated above, and therefore you should analyze your options
carefully.
Are There Differences in Account Features That Matter to
You? Because some account features may not be available to Class
B or Class C shareholders, or other features (such as Automatic
Withdrawal Plans) might not be advisable (because of the effect
of the contingent deferred sales charge) in non-retirement
accounts for Class B or Class C shareholders, you should
carefully review how you plan to use your investment account
before deciding which class of shares to buy. Share certificates
are not available for Class B or Class C shares, and if you are
considering using your shares as collateral for a loan, that may
be a factor to consider.
How Does It Affect Payments to My Broker? A salesperson,
such as a broker, or any other person who is entitled to receive
compensation for selling Fund shares may receive different
compensation for selling one class of shares than for selling
another class. It is important that investors understand that
the purpose of the Class B and Class C contingent deferred sales
charges and asset-based sales charges is the same as the purpose
of the front-end sales charge on sales of Class A shares: that
is, to compensate the Distributor for commissions it pays to
dealers and financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a
minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced
minimum investments under special investment plans.
With Asset Builder Plans, Automatic Exchange Plans,
403(b)(7) custodial plans and military allotment plans, you can
make initial and subsequent investments of as little as $25.
Subsequent purchases of at least $25 can be made by telephone
through AccountLink.
Under pension, profit-sharing and 401(k) plans and
Individual Retirement Accounts (IRAs), you can make an initial
investment of as little as $250 (if your IRA is established under
an Asset Builder Plan, the $25 minimum applies), and subsequent
investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other
Oppenheimer funds (a list of them appears in the Statement of
Additional Information, or you can ask your dealer or call the
Transfer Agent), or by reinvesting distributions from unit
investment trusts that have made arrangements with the
Distributor.
How Are Shares Purchased? You can buy shares several ways
- -- through any dealer, broker or financial institution that has a
sales agreement with the Distributor, directly through the
Distributor, or automatically from your bank account through an
Asset Builder Plan under the OppenheimerFunds AccountLink
service. The Distributor may appoint certain servicing agents as
the Distributor's agent to accept purchase (and redemption)
orders. When you buy shares, be sure to specify Class A, Class
B, or Class C shares. If you do not choose, your investment will
be made in Class A shares.
Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a
check payable to "OppenheimerFunds Distributor, Inc." Mail it to
P.O. Box 5270, Denver, Colorado 80217. If you don't list a
dealer on the application, the Distributor will act as your agent
in buying the shares. However, it is recommended that you
discuss your investment first with a financial advisor, to be
sure that it is appropriate for you.
Buying Shares Through OppenheimerFunds AccountLink. You
can use AccountLink to link your Fund account with an account at
a U.S. bank or other financial institution that is an Automated
Clearing House (ACH) member. You can then transmit funds
electronically to purchase shares, to have the Transfer Agent
send redemption proceeds, or to transmit dividends and
distributions to your bank account.
Shares are purchased for your account on AccountLink on the
regular business day the Distributor is instructed by you to
initiate the ACH transfer to buy shares. You can provide those
instructions automatically, under an Asset Builder Plan,
described below, or by telephone instructions using
OppenheimerFunds PhoneLink, also described below. You should
request AccountLink privileges on the application or dealer
settlement instructions used to establish your account. Please
refer to "AccountLink" below for more details.
Asset Builder Plans. You may purchase shares of the Fund
(and up to four other Oppenheimer funds) automatically each month
from your account at a bank or other financial institution under
an Asset Builder Plan with AccountLink. Details are on the
Application and in the Statement of Additional Information.
At What Price Are Shares Sold? Shares are sold at the
public offering price based on the net asset value (and any
initial sales charge that applies) that is next determined after
the Distributor receives the purchase order in Denver, Colorado.
In most cases, to enable you to receive that day's offering
price, the Distributor, or its designated agent, must receive
your order by the time of day The New York Stock Exchange closes,
which is normally 4:00 P.M., New York time, but may be earlier on
some days (all references to time in this Prospectus mean "New
York time"). The net asset value of each class of shares is
determined as of that time on each day The New York Stock
Exchange is open (which is a "regular business day").
If you buy shares through a dealer, the dealer must receive
your order by the close of The New York Stock Exchange, on a
regular business day and transmit it to the Distributor so that
it is received before the Distributor's close of business that
day, which is normally 5:00 P.M. The Distributor may reject any
purchase order for the Fund's shares, in its sole discretion.
Special Sales Charge Arrangements for Certain Persons. Appendix
A to this Prospectus sets forth conditions for the waiver of, or
exemption from, sales charges or the special sales charge rates
that apply to purchases of shares of the Fund (including
purchases by exchange) by a person who was a shareholder of one
of the Former Quest for Value Funds (as defined in that
Appendix).
Buying Class A Shares. Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales
charge. However, in some cases, described below, purchases are
not subject to an initial sales charge, and the offering price
will be the net asset value. In some cases, reduced sales charges
may be available, as described below. Out of the amount you
invest, the Fund receives the net asset value to invest for your
account. The sales charge varies depending on the amount of your
purchase. A portion of the sales charge may be retained by the
Distributor and allocated to your dealer as commission. The
current sales charge rates and commissions paid to dealers and
brokers
are as follows:
<TABLE>
<CAPTION>
Front-End Front-End
Sales Charge Sales Charge Commission
as Percentage as Percentage as Percentage
Amount of of Offering of Amount of Offering
Purchase Price Invested Price
- --------- ------------- ------------- -------------
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
$25,000 or more but
less than $50,000 5.50% 5.82% 4.75%
$50,000 or more but
less than $100,000 4.75% 4.99% 4.00%
$100,000 or more but
less than $250,000 3.75% 3.90% 3.00%
$250,000 or more but
less than $500,000 2.50% 2.56% 2.00%
$500,000 or more but
less than $1 million 2.00% 2.04% 1.60%
</TABLE>
- ---------------------
The Distributor reserves the right to reallow the entire
commission to dealers. If that occurs, the dealer may be
considered an "underwriter" under Federal securities laws.
Class A Contingent Deferred Sales Charge. There is no
initial sales charge on purchases of Class A shares of any one or
more of the Oppenheimer funds in the following cases:
Purchases aggregating $1 million or more;
Purchases by a retirement plan qualified under section
401(a) if the retirement plan has total plan assets of $500,000
or more;
Purchases by an a retirement plan qualified under section
401(a) or 401(k) of the Internal Revenue Code, by a non-qualified
deferred compensation plan (not including Section 457 plans),
employee benefit plan, group retirement plan (see "How to Buy
Shares - Retirement Plans" in the Statement of Additional
Information for further details), an employee's 403(b)(7)
custodial plan account, SEP IRA, SARSEP, or SIMPLE plan (all of
these plans are collectively referred to as "Retirement Plans");
that: (1) buys shares costing $500,000 or more, or (2) has, at
the time of purchase, 100 or more eligible participants, or (3)
certifies that it projects to have annual plan purchases of
$200,000 or more;
Purchases by an OppenheimerFunds Rollover IRA if the
purchases are made (1) through a broker, dealer, bank or
registered investment adviser that has made special arrangements
with the Distributor for these purchases, or (2) by a direct
rollover of a distribution from a qualified retirement plan if
the administrator of that plan has made special arrangements with
the Distributor for those purchases.
The Distributor pays dealers of record commissions on those
purchases in an amount equal to (i) 1.0% for non-Retirement Plan
accounts, and (ii) for Retirement Plan accounts, 1.0% of the
first $2.5 million, plus 0.50% of the next $2.5 million, plus
0.25% of purchases over $5 million. That commission will be paid
only on those purchases that were not previously subject to a
front-end sales charge and dealer commission. No sales
commission will be paid to the dealer, broker or financial
institution on sales of Class A shares purchased with the
redemption proceeds of shares of a mutual fund offered as an
investment option under a special arrangement with the
Distributor if the purchase occurs more than 30 days after the
addition of the Oppenheimer funds as an investment option to the
Retirement Plan.
If you redeem any of those shares within 18 months of the
end of the calendar month of their purchase, a contingent
deferred sales charge (called the "Class A contingent deferred
sales charge") may be deducted from the redemption proceeds.
That sales charge may be equal to 1.0% of either (1) the
aggregate net asset value of the redeemed shares (not including
shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original offering price (which is the
original net asset value) of the redeemed shares. However, the
Class A contingent deferred sales charge will not exceed the
aggregate amount of the commissions the Distributor paid to your
dealer on all Class A shares of all Oppenheimer funds you
purchased subject to the Class A contingent deferred sales
charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject
to the sales charge, including shares purchased by reinvestment
of dividends and capital gains, and then will redeem other shares
in the order that you purchased them. The Class A contingent
deferred sales charge is waived in certain cases described in
"Waivers of Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's exchange privilege
(described below). However, if the shares acquired by exchange
are redeemed within 18 months of the end of the calendar month of
the purchase of the exchanged shares, the sales charge will
apply.
Special Arrangements With Dealers. The Distributor may
advance up to 13 months' commissions to dealers that have
established special arrangements with the Distributor for Asset
Builder Plans for their clients.
Reduced Sales Charges for Class A Share Purchases. You may be
eligible to buy Class A shares at reduced sales charge rates in
one or more of the following ways:
Right of Accumulation. To qualify for the lower sales
charge rates that apply to larger purchases of Class A shares,
you and your spouse can add together Class A and Class B shares
you purchase for your individual accounts, or jointly, or for
trust or custodial accounts on behalf of your children who are
minors. A fiduciary can count all shares purchased for a trust,
estate or other fiduciary account (including one or more employee
benefit plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of
Class A and Class B shares of the Fund and other Oppenheimer
funds to reduce the sales charge rate that applies to current
purchases of Class A shares. You can also include Class A and
Class B shares of Oppenheimer funds you previously purchased
subject to an initial or contingent deferred sales charge to
reduce the sales charge rate for current purchases of Class A
shares, provided that you still hold your investment in one of
the Oppenheimer funds. The value of those shares will be based on
the greater of the amount you paid for the shares or their
current value (at offering price). The Oppenheimer funds are
listed in "Reduced Sales Charges" in the Statement of Additional
Information, or a list can be obtained from the Distributor. The
reduced sales charge will apply only to current purchases and
must be requested when you buy your shares.
Letter of Intent. Under a Letter of Intent, if you
purchase Class A shares or Class A and Class B shares of the Fund
and other Oppenheimer funds during a 13-month period, you can
reduce the sales charge rate that applies to your purchases of
Class A shares. The total amount of your intended purchases of
both Class A and Class B shares will determine the reduced sales
charge rate for the Class A shares purchased during that period.
This can include purchases made up to 90 days before the date of
the Letter. More information is contained in the Application and
in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers of Class A Sales Charges. The Class A sales
charges are not imposed in the circumstances described below.
There is an explanation of this policy in "Reduced Sales Charges"
in the Statement of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following
investors are not subject to any Class A sales charges:
the Manager or its affiliates;
present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced
Sales Charges" in the Statement of Additional Information) of the
Fund, the Manager and its affiliates, and retirement plans
established by them for their employees;
registered management investment companies, or separate
accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or
for retirement plans for their employees;
employees and registered representatives (and their
spouses) of dealers or brokers described above or financial
institutions that have entered into sales arrangements with such
dealers or brokers (and are identified to the Distributor) or
with the Distributor; the purchaser must certify to the
Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's
spouse or minor children);
dealers, brokers or registered investment advisers that
have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular
investment products made available to their clients (those
clients may be charged a transaction fee by their dealer, broker,
bank or adviser for the purchase or sale of Fund shares);
(1) investment advisors and financial planners who charge
an advisory, consulting or other fee for their services and buy
shares for their own account or the account of their clients, (2)
Retirement Plans and deferred compensation plans and trusts used
to fund those Plans (including, for example, plans qualified or
created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a
broker or agent or other financial intermediary that has made
special arrangements with the Distributor for those purchases;
and (3) clients of such investment advisors or financial planners
who buy shares for their own accounts may also purchase shares
without sales charge but only if their accounts are linked to a
master account of their investment advisor or financial planner
on the books and records of the broker, agent or financial
intermediary with which the Distributor has made such special
arrangements (each of these investors may be charged a fee by the
broker, agent or financial intermediary for purchasing shares).
directors, trustees, officers or full-time employees of
OpCap Advisors or its affiliates, their relatives or any trust,
pension, profit sharing or other benefit plan which beneficially
owns shares for those persons;
accounts for which Oppenheimer Capital is the investment
adviser (the Distributor must be advised of this arrangement) and
persons who are directors or trustees of the company or trust
which is the beneficial owner of such accounts;
any unit investment trust that has entered into an
appropriate agreement with the Distributor;
a TRAC-2000 401(k) plan (sponsored by the former Quest
for Value Advisors) whose Class B or Class C shares of a Former
Quest for Value Fund were exchanged for Class A shares of that
Fund due to the termination of the Class B and C TRAC-2000
program on November 24, 1995; or
qualified retirement plans that had agreed with the former
Quest for Value Advisors to purchase shares of any of the Former
Quest for Value Funds at net asset value, with such shares to be
held through DCXchange, a sub-transfer agency mutual fund
clearinghouse, provided that such arrangements are consummated
and share purchases commence by December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain Transactions. Class A shares issued or purchased in the
following transactions are not subject to Class A sales charges:
shares issued in plans of reorganization, such as
mergers, asset acquisitions and exchange offers, to which the
Fund is a party;
shares purchased by the reinvestment of loan repayments
by a participant in a retirement plan for which the Manager or
its affiliates acts as sponsor;
shares purchased by the reinvestment of dividends or
other distributions reinvested from the Fund or other Oppenheimer
funds (other than Oppenheimer Cash Reserves) or unit investment
trusts for which reinvestment arrangements have been made with
the Distributor;
shares purchased and paid for with the proceeds of shares
redeemed in the past 12 months from a mutual fund (other than a
fund managed by the Manager or any of its subsidiaries) on which
an initial sales charge or contingent deferred sales charge was
paid (this waiver also applies to shares purchased by exchange of
shares of Oppenheimer Money Market Fund, Inc. that were purchased
and paid for in this manner); this waiver must be requested when
the purchase order is placed for your shares of the Fund, and the
Distributor may require evidence of your qualification for this
waiver; or
purchased with the proceeds of maturing principal of units
of any Qualified Unit Investment Liquid Trust Series.
Waivers of the Class A Contingent Deferred Sales Charge for
Certain Redemptions . The Class A contingent deferred sales
charge is also waived if shares that would otherwise be subject
to the contingent deferred sales charge are redeemed in the
following cases:
to make Automatic Withdrawal Plan payments that are
limited annually to no more than 12% of the original account
value;
involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder
Account Rules and Policies," below);
if, at the time a purchase order is placed for Class A
shares that would otherwise be subject to the Class A contingent
deferred sales charge, the dealer agrees in writing to accept the
dealer's portion of the commission payable on the sale in
installments of 1/18th of the commission per month (and no
further commission will be payable if the shares are redeemed
within 18 months of purchase); or
for distributions from a TRAC-2000 401(k) plan sponsored
by the Distributor due to the termination of the TRAC-2000
program.
for distributions from Retirement Plans, deferred
compensation plans or other employee benefit plans for any of the
following purposes: (1) following the death or disability (as
defined in the Internal Revenue Code) of the participant or
beneficiary (the death or disability must occur after the
participant's account was established); (2) to return excess
contributions; (3) to return contributions made due to a mistake
of fact; (4) hardship withdrawals, as defined in the plan; (5)
under a Qualified Domestic Relations Order, as defined in the
Internal Revenue Code; (6) to meet the minimum distribution
requirements of the Internal Revenue Code; (7) to establish
"substantially equal periodic payments" as described in Section
72(t) of the Internal Revenue Code; (8) for retirement
distributions or loans to participants or beneficiaries; (9)
separation from service; (10) participant-directed redemptions to
purchase shares of a mutual fund (other than a fund managed by
the Manager or its subsidiary) offered as an investment option in
a Retirement Plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the
Distributor, or (11) plan termination or "in-service
distributions", if the redemption proceeds are rolled over
directly to an OppenheimerFunds IRA.
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for
a portion of its costs incurred in connection with the personal
service and maintenance of shareholder accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that
may not exceed 0.25% of the average annual net assets of Class A
shares of the Fund. The Distributor uses all of those fees to
compensate dealers, brokers, banks and other financial
institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A
shares and to reimburse itself (if the Fund's Board of Trustees
authorizes such reimbursements, which it has not yet done) for
its other expenditures under the Plan.
Services to be provided include, among others, answering
customer inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's investment
plans available and providing other services at the request of
the Fund or the Distributor. Payments are made by the Distributor
quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the
service providers or their customers. The payments under the
Plan increase the annual expenses of Class A shares. For more
details, please refer to "Distribution and Service Plans" in the
Statement of Additional Information.
Buying Class B Shares. Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B
shares are redeemed within 6 years of their purchase, a
contingent deferred sales charge will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the redeemed shares at
the time of redemption or the original offering price (which is
the original net asset value). The contingent deferred sales
charge is not imposed on the amount of your account value
represented by an increase in net asset value over the initial
purchase price. The Class B contingent deferred sales charge is
paid to the Distributor to reimburse its expenses of providing
distribution-related services to the Fund in connection with the
sale of Class B shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held for over 6 years,
and (3) shares held the longest during the 6-year period. The
contingent deferred sales charge is not imposed in the
circumstances described in "Waivers of Class B and Class C Sales
Charges," below.
The amount of the contingent deferred sales charge will
depend on the number of years since you invested and the dollar
amount being redeemed, according to the following schedule:
Contingent Deferred Sales
Charge
Years Since Beginning of Month on Redemptions in that Year
In Which Purchase Order Was (As % of Amount Subject to
Accepted Charge)
0 - 1 5.0%
1 - 2 4.0%
2 - 3 3.0%
3 - 4 3.0%
4 - 5 2.0%
5 - 6 1.0%
6 and following None
In the table, a "year" is a 12-month period. All purchases
are considered to have been made on the first regular business
day of the month in which the purchase was made.
Automatic Conversion of Class B Shares. 72 months after
you purchase Class B shares, those shares will automatically
convert to Class A shares. This conversion feature relieves Class
B shareholders of the asset-based sales charge that applies to
Class B shares under the Class B Distribution and Service Plan,
described below. The conversion is based on the relative net
asset value of the two classes, and no sales load or other charge
is imposed. When Class B shares convert, any other Class B shares
that were acquired by the reinvestment of dividends and
distributions on the converted shares will also convert to Class
A shares. The conversion feature is subject to the continued
availability of a tax ruling described in "Alternative Sales
Arrangements - Class A, Class B and Class C Shares" in the
Statement of Additional Information.
Buying Class C Shares. Class C shares are sold at net asset
value per share without an initial sales charge. However, if
Class C shares are redeemed within 12 months of their purchase, a
contingent deferred sales charge of 1.0% will be deducted from
the redemption proceeds. That sales charge will not apply to
shares purchased by the reinvestment of dividends or capital
gains distributions. The contingent deferred sales charge will
be based on the lesser of the net asset value of the redeemed
shares at the time of redemption or the original offering price
(which is the original net asset value). The contingent deferred
sales charge is not imposed on the amount of your account value
represented by the increase in net asset value over the initial
purchase price. The Class C contingent deferred sales charge is
paid to the Distributor to reimburse its expenses of providing
distribution-related services to the Fund in connection with the
sale of Class C shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and
capital gains distributions, (2) shares held for over 12 months,
and (3) shares held the longest during the 12-month period.
Distribution and Service Plans for Class B and Class C Shares.
The Fund has adopted Distribution and Service Plans for Class B
and Class C shares to compensate the Distributor for its services
and costs in distributing Class B and C shares and servicing
accounts. Under the Plans, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class B
shares that are outstanding for 6 years or less and on Class C
shares. The Distributor also receives a service fee of 0.25% per
year under each Plan.
Under each Plan, both fees are computed on the average of
the net asset value of shares in the respective class, determined
as of the close of each regular business day during the period.
The asset-based sales charge and service fees increase Class B
and Class C expenses by up to 1.00% of the net assets per year of
the respective class.
The Distributor uses the service fees to compensate dealers
for providing personal services for accounts that hold Class B or
C shares. Those services are similar to those provided under the
Class A Service Plan, described above. The Distributor pays the
0.25% service fees to dealers in advance for the first year after
Class B or Class C shares have been sold by the dealer and
retains the service fee paid by the Fund in that year. After the
shares have been held for a year, the Distributor pays the
service fees to dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B
or Class C shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares.
The Fund pays the asset-based sales charges to the Distributor
for its services rendered in distributing Class B and Class C
shares. The services rendered by the Distributor include paying
and financing the payment of sales commissions, service fees and
other costs of distributing and selling Class B and Class C
shares.
The Distributor currently pays sales commissions of 3.75% of
the purchase price of Class B shares to dealers from its own
resources at the time of sale. Including the advance of the
service fee, the total amount paid by the Distributor to the
dealer at the time of sale of Class B shares is therefore 4.00%
of the purchase price. The Distributor retains the Class B
asset-based sales charge.
The Distributor currently pays sales commissions of 0.75% of
the purchase price of Class C shares to dealers from its own
resources at the time of sale. Including the advance of the
service fee, the total amount paid by the Distributor to the
dealer at the time of sale of Class C shares is therefore 1.00%
of the purchase price. Those payments retained by the
Distributor during the first year Class C shares are outstanding.
The Distributor plans to pay the asset-based sales charge as an
ongoing commission to the dealer on Class C shares that have been
outstanding for a year or more.
The Distributor's actual expenses in selling Class B and
Class C shares may be more than the payments it receives from
contingent deferred sales charges collected on redeemed shares
and from the Fund under the Distribution and Service Plan for
Class B and Class C shares. If either Plan is terminated by the
Fund, the Board of Directors may allow the Fund to continue
payments of the asset-based sales charge to the Distributor for
distributing shares before the Plan was terminated. At September
30, 1996, the end of the Class B Plan year, the Distributor had
incurred unreimbursed expenses under the Plan of $16,226,094
(equal to 3.00% of the Fund's net assets represented by Class B
shares on that date), which have been carried over into the
present Plan year. At September 30, 1996, the end of the Class C
Plan year, the Distributor had incurred unreimbursed expenses
under the Plan of $200,447 (equal to 1.15% of the Fund's net
assets represented by Class C shares on that date), which have
been carried over into the present Plan year.
Payments under the Class C Plan are at a fixed rate that is
not related to the Distributor's expenses. The Fund's Board of
Trustees have proposed a new Class B Plan having the same fees as
the current plan, under which payments would also be at a fixed
rate that is not related to the Distributor's expenses. This
Prospectus will not be supplemented if Class B shareholders
approve the new Class B Plan.
Waivers of Class B and Class C Sales Charges. The Class B and
Class C contingent deferred sales charges will not be applied to
shares purchased in certain types of transactions nor will it
apply to Class B and Class C shares redeemed in certain
circumstances as described below. The reasons for this policy
are in "Reduced Sales Charges" in the Statement of Additional
Information.
Waivers for Redemptions in Certain Cases. The Class B and
Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases, if the Transfer
Agent is notified that these conditions apply to the redemption:
distributions to participants or beneficiaries from
Retirement Plans, if the distributions are made (a) under an
Automatic Withdrawal Plan after the participant reaches age 59-
1/2, as long as the payments are no more than 10% of the account
value annually (measured from the date the Transfer Agent
receives the request), or (b) following the death or disability
(as defined in the Internal Revenue Code) of the participant or
beneficiary (the death or disability must have occurred after the
account was established);
redemptions from accounts other than Retirement Plans
following the death or disability of the last surviving
shareholder including a trustee of a "grantor" trust or revocable
living trust for which the trustee is also the sole beneficiary
(the death or disability must have occurred after the account was
established, and for disability you must provide evidence of a
determination of disability by the Social Security
Administration);
returns of excess contributions to Retirement Plans;
distributions from retirement plans to make "substantially
equal periodic payments" as permitted in Section 72(t) of the
Internal Revenue Code that do not exceed 10% of the account value
annually, measured from the date the transfer agent receives the
request;
shares redeemed involuntarily, as described in
"Shareholder Account Rules and Policies," below; or
distributions from OppenheimerFunds prototype 401(k) plans
(1) for hardship withdrawals; (2) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (3) to
meet minimum distribution requirements as defined in the Internal
Revenue Code; (4) to make "substantially equal periodic payments"
as described in Section 72(t) of the Internal Revenue Code; or
(5) for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions.
The contingent deferred sales charge is also waived on Class B
and Class C shares sold or issued in the following cases:
shares sold to the Manager or its affiliates;
shares sold to registered management investment
companies or separate accounts of insurance companies having an
agreement with the Manager or the Distributor for that purpose;
and
shares issued in plans of reorganization to which the
Fund is a party.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund
account to your account at your bank or other financial
institution to enable you to send money electronically between
those accounts to perform a number of types of account
transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink,
described below), automatic investments under Asset Builder
Plans, and sending dividends and distributions or Automatic
Withdrawal Plan payments directly to your bank account. Please
refer to the Application for details or call the Transfer Agent
for more information.
AccountLink privileges should be requested on the
Application you use to buy shares, or on your dealer's settlement
instructions if you buy your shares through your dealer. After
your account is established, you can request AccountLink
privileges by sending signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each
shareholder listed in the registration on your account as well as
to your dealer representative of record unless and until the
Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for
your account, any change of bank account information must be made
by signature-guaranteed instructions to the Transfer Agent signed
by all shareholders who own the account.
Using AccountLink to Buy Shares. Purchases may be made
by telephone only after your account has been established. To
purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1-800-852-8457. The
purchase payment will be debited from your bank account.
PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of
account transactions automatically using a touch-tone phone.
PhoneLink may be used on already-established Fund accounts after
you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number: 1-800-533-3310.
Purchasing Shares. You may purchase shares in amounts up
to $100,000 by phone, by calling 1-800-533-3310. You must have
established AccountLink privileges to link your bank account with
the Fund, to pay for these purchases.
Exchanging Shares. With the OppenheimerFunds Exchange
Privilege, described below, you can exchange shares automatically
by phone from your Fund account to another Oppenheimer funds
account you have already established by calling the special
PhoneLink number. Please refer to "How to Exchange Shares,"
below, for details.
Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will
send the proceeds directly to your AccountLink bank account.
Please refer to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several
plans that enable you to sell shares automatically or exchange
them to another OppenheimerFunds account on a regular basis:
Automatic Withdrawal Plans. If your Fund account is worth
$5,000 or more, you can establish an Automatic Withdrawal Plan to
receive payments of at least $50 on a monthly, quarterly, semi-
annual or annual basis. The checks may be sent to you or sent
automatically to your bank account on AccountLink. You may even
set up certain types of withdrawals of up to $1,500 per month by
telephone. You should consult the Application and Statement of
Additional Information for more details.
Automatic Exchange Plans. You can authorize the Transfer
Agent to exchange automatically an amount you establish in
advance for shares of up to five other Oppenheimer funds on a
monthly, quarterly, semi-annual or annual basis under an
Automatic Exchange Plan. The minimum purchase for each
Oppenheimer funds account is $25. These exchanges are subject to
the terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class
A or Class B shares of the Fund, you have up to 6 months to
reinvest all or part of the redemption proceeds in Class A shares
of the Fund or other Oppenheimer funds without paying a sales
charge. This privilege applies to Class A shares that you
purchased subject to an initial sales charge and to Class A or
Class B shares on which you paid a contingent deferred sales
charge when you redeemed them. This privilege does not apply to
Class C shares. You must be sure to ask the Distributor for this
privilege when you send your payment. Please consult the
Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for
your retirement plans. If you participate in a plan sponsored by
your employer, the plan trustee or administrator must make the
purchase of shares for your retirement plan account. The
Distributor offers a number of different retirement plans that
can be used by individuals and employers:
Individual Retirement Accounts including rollover IRAs,
for individuals and their spouses
403(b)(7) Custodial Plans for employees of eligible tax-
exempt organizations, such as schools, hospitals and charitable
organizations
SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment,
including SAR/SEP-IRAs
Pension and Profit-Sharing Plans for self-employed
persons and other employers
401(k) Prototype Retirement Plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account by selling
(redeeming) some or all of your shares on any regular business
day. Your shares will be sold at the next net asset value
calculated after your order is received and accepted by the
Transfer Agent. The Fund offers you a number of ways to sell
your shares: in writing or by telephone. You can also set up
Automatic Withdrawal Plans to redeem shares on a regular basis,
as described above. If you have questions about any of these
procedures, and especially if you are redeeming shares in a
special situation, such as due to the death of the owner, or from
a retirement plan, please call the Transfer Agent first, at 1-
800-525-7048, for assistance.
Retirement Accounts. To sell shares in an
OppenheimerFunds retirement account in your name, call the
Transfer Agent for a distribution request form. There are special
income tax withholding requirements for distributions from
retirement plans and you must submit a withholding form with your
request to avoid delay. If your retirement plan account is held
for you by your employer, you must arrange for the distribution
request to be sent by the plan administrator or trustee. There
are additional details in the Statement of Additional
Information.
Certain Requests Require a Signature Guarantee. To
protect you and the Fund from fraud, certain redemption requests
must be in writing and must include a signature guarantee in the
following situations (there may be other situations also
requiring a signature guarantee):
You wish to redeem more than $50,000 worth of shares
and receive a check
The redemption check is not payable to all shareholders
listed on the account statement
The redemption check is not sent to the address of
record on your account statement
Shares are being transferred to a Fund account with a
different owner or name
Shares are redeemed by someone other than the owners
(such as an Executor)
Where Can I Have My Signature Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of
financial institutions, including: a U.S. bank, trust company,
credit union or savings association, or by a foreign bank that
has a U.S. correspondent bank, or by a U.S. registered dealer or
broker in securities, municipal securities or government
securities, or by a U.S. national securities exchange, a
registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other
business, or as a fiduciary, you must also include your title in
the signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
Your name
The Fund's name
Your Fund account number (from your account statement)
The dollar amount or number of shares to be redeemed
Any special payment instructions
Any share certificates for the shares you are selling,
The signatures of all registered owners exactly as the
account is registered, and
Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person
asking to sell shares.
Use the following address for requests by mail:
OppenheimerFunds Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
OppenheimerFunds Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative
of record may also sell your shares by telephone. To receive the
redemption price on a regular business day, your call must be
received by the Transfer Agent by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M., but may be
earlier on some days. You may not redeem shares held in an
OppenheimerFunds retirement plan or under a share certificate by
telephone.
To redeem shares through a service representative, call 1-
800-852-8457
To redeem shares automatically on PhoneLink, call 1-800-
533-3310
Whichever method you use, you may have a check sent to the
address on the account statement, or, if you have linked your
Fund account to your bank account on AccountLink, you may have
the proceeds sent to that bank account.
Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone, once in any 7-day period. The check must
be payable to all owners of record of the shares and must be sent
to the address on the account statement. This service is not
available within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink or By Wire.
There are no dollar limits on telephone redemption proceeds sent
to a bank account designated when you establish AccountLink.
Normally the ACH transfer to your bank is initiated on the
business day after the redemption. You do not receive dividends
on the proceeds of the shares you redeemed while they are waiting
to be transferred.
Shareholders may also have the Transfer Agent send
redemption proceeds of $2,500 or more by Federal Funds wire to a
designated commercial bank account. The bank must be a member of
the Federal Reserve wire system. There is a $10 fee for each
Federal Funds wire. To place a wire redemption request, call the
Transfer Agent at 1-800-852-8457. The wire will normally be
transmitted on the next bank business day after the shares are
redeemed. There is a possibility that the wire may be delayed up
to seven days to enable the Fund to sell securities to pay the
redemption proceeds. No dividends are accrued or paid on the
proceeds of shares that have been redeemed and are awaiting
transmittal by wire. To establish wire redemption privileges on
an account that is already established, please contact the
Transfer Agent for instructions.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers
on behalf of their customers. Brokers or dealers may charge for
that service. Please call your dealer for more information about
this procedure. Please refer to "Special Arrangements for
Repurchase of Shares from Dealers and Brokers" in the Statement
of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
Oppenheimer funds at net asset value per share at the time of
exchange, without sales charge. To exchange shares, you must meet
several conditions:
Shares of the fund selected for exchange must be
available for sale in your state of residence
The prospectuses of this Fund and the fund whose shares
you want to buy must offer the exchange privilege
You must hold the shares you buy when you establish
your account for at least 7 days before you can
exchange them; after the account is open 7 days, you
can exchange shares every regular business day
You must meet the minimum purchase requirements for the
fund you purchase by exchange
Before exchanging into a fund, you should obtain and
read its prospectus
Shares of a particular class of the Fund may be exchanged
only for shares of the same class in the other Oppenheimer funds.
For example, you can exchange Class A shares of this Fund only
for Class A shares of another fund. At present, Oppenheimer
Money Market Fund, Inc. offers only one class of shares which are
considered "Class A" shares for this purpose. In some cases,
sales charges may be imposed on exchange transactions. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds
Exchange Request form, signed by all owners of the account. Send
it to the Transfer Agent at the addresses listed in "How to Sell
Shares."
Telephone Exchange Requests. Telephone exchange requests
may be made either by calling a service representative at 1-800-
852-8457 or by using PhoneLink for automated exchanges, by
calling 1-800-533-3310. Telephone exchanges may be made only
between accounts that are registered with the same name(s) and
address. Shares held under certificates may not be exchanged by
telephone.
You can find a list of Oppenheimer funds currently available
for exchanges in the Statement of Additional Information or
obtain one by calling a service representative at 1-800-525-7048.
That list can change from time to time.
There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased
from the other fund in the exchange transaction on the same
regular business day on which the Transfer Agent receives an
exchange request that is in proper form by the close of The New
York Stock Exchange that day, which is normally 4:00 P.M., but
may be earlier on some days. However, either fund may delay the
purchase of shares of the fund you are exchanging into up to
seven days if it determines it would be disadvantaged by a same-
day transfer of the proceeds to buy shares. For example, the
receipt of multiple exchange requests from a dealer in a "market-
timing" strategy might require the sale of portfolio securities
at a time or price disadvantageous to the Fund.
Because excessive trading can hurt fund performance and
harm shareholders, the Fund reserves the right to refuse any
exchange request that will disadvantage it, or to refuse multiple
exchange requests submitted by a shareholder or dealer.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund will attempt to provide
you notice whenever it is reasonably able to do so, it may impose
these changes at any time.
For tax purposes, exchanges of shares involve a
redemption of the shares of the fund you own and a purchase of
shares of the other fund, which may result in a capital gain or
loss. For more information about taxes affecting exchanges,
please refer to "How to Exchange Shares" in the Statement of
Additional Information.
If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares
eligible for exchange will be exchanged.
The Distributor has entered into agreements with certain
dealers and investment advisers permitting them to exchange their
clients' shares by telephone. These privileges are limited under
those agreements and the Distributor has the right to reject or
suspend those privileges. As a result, those exchanges may be
subject to notice requirements, delays and other limitations that
do not apply to shareholders who exchange their shares directly
by calling or writing to the Transfer Agent.
Shareholder Account Rules and Policies
Net Asset Value Per Share is determined for each class of
shares as of the close of The New York Stock Exchange on each day
the Exchange is open by dividing the value of the Fund's net
assets attributable to a class by the number of shares of that
class that are outstanding. The Fund's Board of Trustees has
established procedures to value the Fund's securities to
determine net asset value. In general, securities values are
based on market value. There are special procedures for valuing
illiquid and restricted securities and obligations for which
market values cannot be readily obtained. These procedures are
described more completely in the Statement of Additional
Information.
The offering of shares may be suspended during any period
in which the determination of net asset value is suspended, and
the offering may be suspended by the Board of Trustees at any
time the Board believes it is in the Fund's best interest to do
so.
Telephone Transaction Privileges for purchases,
redemptions or exchanges may be modified, suspended or terminated
by the Fund at any time. If an account has more than one owner,
the Fund and the Transfer Agent may rely on the instructions of
any one owner. Telephone privileges apply to each owner of the
account and the dealer representative of record for the account
unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
The Transfer Agent will record any telephone calls to
verify data concerning transactions and has adopted other
procedures to confirm that telephone instructions are genuine,
by requiring callers to provide tax identification numbers and
other account data or by using PINs, and by confirming such
transactions in writing. If the Transfer Agent does not use
reasonable procedures it may be liable for losses due to
unauthorized transactions, but otherwise neither the Transfer
Agent nor the Fund will be liable for losses or expenses arising
out of telephone instructions reasonably believed to be genuine.
If you are unable to reach the Transfer Agent during periods of
unusual market activity, you may not be able to complete a
telephone transaction and should consider placing your order by
mail.
Redemption or transfer requests will not be honored until
the Transfer Agent receives all required documents in proper
form. From time to time, the Transfer Agent in its discretion may
waive certain of the requirements for redemptions stated in this
Prospectus.
Dealers that can perform account transactions for their
clients by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for obtaining
their clients' permission to perform those transactions and are
responsible to their clients who are shareholders of the Fund if
the dealer performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day
because the values of the securities in the Fund's portfolio
fluctuate, and the redemption price, which is the net asset value
per share, will normally be different for Class A, Class B and
Class C shares. Therefore, the redemption value of your shares
may be more or less than their original cost.
Payment for redeemed shares is made ordinarily in cash
and forwarded by check or through AccountLink (as elected by the
shareholder under the redemption procedures described above)
within 7 days after the Transfer Agent receives redemption
instructions in proper form, except under unusual circumstances
determined by the Securities and Exchange Commission delaying or
suspending such payments. For accounts registered in the name of
a broker/dealer, payment will be forwarded within 3 business
days. The Transfer Agent may delay forwarding a check or
processing a payment via AccountLink for recently purchased
shares, but only until the purchase payment has cleared. That
delay may be as much as 10 days from the date the shares were
purchased. That delay may be avoided if you purchase shares by
certified check or arrange with your bank to provide telephone or
written assurance to the Transfer Agent that your purchase
payment has cleared.
Involuntary redemptions of small accounts may be made by
the Fund if the account value has fallen below $500 for reasons
other than the fact that the market value of shares has dropped,
and in some cases involuntary redemptions may be made to repay
the Distributor for losses from the cancellation of share
purchase orders.
Under unusual circumstances, shares of the Fund may be
redeemed "in kind", which means that the redemption proceeds will
be paid with securities from the Fund's portfolio. Please refer
to "How to Sell Shares" in the Statement of Additional
Information for more details.
"Backup Withholding" of Federal income tax may be applied
at the rate of 31% from taxable dividends, distributions and
redemption proceeds (including exchanges) if you fail to furnish
the Fund a certified Social Security or Employer Identification
Number when you sign your application, or if you violate Internal
Revenue Service regulations on tax reporting of income.
The Fund does not charge a redemption fee, but if your
dealer or broker handles your redemption, they may charge a fee.
That fee can be avoided by redeeming your Fund shares directly
through the Transfer Agent. Under the circumstances described in
"How To Buy Shares," you may be subject to a contingent deferred
sales charge when redeeming certain Class A, Class B and Class C
shares.
To avoid sending duplicate copies of materials to
households, the Fund will mail only one copy of each annual and
semi-annual report to shareholders having the same last name and
address on the Fund's records. However, each shareholder may
call the Transfer Agent at 1-800-525-7048 to ask that copies of
those materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A,
Class B and Class C shares from net investment income, if any, on
an annual basis and normally pays those dividends to shareholders
in December, but the Board of Trustees can change that date. The
Board may also cause the Fund to declare dividends after the
close of the Fund's fiscal year (which ends September 30th).
Because the Fund does not have an objective of seeking current
income, the amounts of dividends it pays, if any, will likely be
small. Dividends paid on Class A shares will generally be higher
than for Class B or Class C shares because expenses allocable to
Class B and Class C shares will generally be higher than for
Class A shares. There is no fixed dividend rate and there can be
no assurance that the Fund will pay any dividends.
Capital Gains. The Fund may make distributions annually in
December out of any net short-term or long-term capital gains,
and the Fund may make supplemental distributions of capital gains
following the end of its fiscal year. Long-term capital gains
will be separately identified in the tax information the Fund
sends you after the end of the year. Short-term capital gains
are treated as dividends for tax purposes. There can be no
assurance that the Fund will pay any capital gains distributions
in a particular year.
Distribution Options. When you open your account, specify on
your application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are
reinvested. For other accounts, you have four options:
Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions
in additional shares of the Fund.
Reinvest Long-Term Capital Gains Only. You can elect to
reinvest long-term capital gains in the Fund while receiving
dividends by check or sent to your bank account on AccountLink.
Receive All Distributions in Cash. You can elect to
receive a check for all dividends and long-term capital gains
distributions or have them sent to your bank on AccountLink.
Reinvest Your Distributions in Another Oppenheimer funds
Account. You can reinvest all distributions in another
Oppenheimer funds account you have established.
Taxes. If your account is not a tax-deferred retirement account,
you should be aware of the following tax implications of
investing in the Fund. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It
does not matter how long you held your shares. Dividends paid
from short-term capital gains and net investment income are
taxable as ordinary income. Distributions are subject to federal
income tax and may be subject to state or local taxes. Your
distributions are taxable when paid, whether you reinvest them in
additional shares or take them in cash. Every year the Fund will
send you and the IRS a statement showing the amount of all
taxable distributions you received in the previous year.
When more than 50% of its assets are invested in foreign
securities at the end of any fiscal year, the Fund may elect
that Section 853 of the Internal Revenue Code will apply to it to
permit shareholders to take a credit (or a deduction) on their
own federal income tax returns for foreign taxes paid by the
Fund. "Dividends, Capital Gains and Taxes" in the Statement of
Additional Information contains further information about this
tax provision.
"Buying a Dividend": When a fund goes ex-dividend, its
share price is reduced by the amount of the distribution. If you
buy shares on or just before the ex-dividend date, or just before
the Fund declares a capital gains distribution, you will pay the
full price for the shares and then receive a portion of the price
back as a taxable dividend or capital gain.
Taxes on Transactions: Share redemptions, including
redemptions for exchanges, are subject to capital gains tax.
Generally speaking, a capital gain or loss is the difference
between the price you paid for the shares and the price you
received when you sold them.
Returns of Capital: In certain cases distributions made
by the Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices
to shareholders. A non-taxable return of capital may reduce your
tax basis in your Fund shares.
This information is only a summary of certain Federal tax
information about your investment. More information is contained
in the Statement of Additional Information, and in addition you
should consult with your tax adviser about the effect of an
investment in the Fund on your particular tax situation.
<PAGE>
APPENDIX A
Special Sales Charge Arrangements for Shareholders of the Fund
Who Were Shareholders of the Former Quest for Value Funds
The initial and contingent deferred sales charge rates and
waivers for Class A, Class B and Class C shares of the Fund
described elsewhere in this Prospectus are modified as described
below for those shareholders of (i) Quest for Value Fund, Inc.,
Quest for Value Growth and Income Fund, Quest for Value
Opportunity Fund, Quest for Value Small Capitalization Fund and
Quest for Value Global Equity Fund, Inc. on November 24, 1995,
when OppenheimerFunds, Inc. became the investment adviser to
those funds, and (ii) Quest for Value U.S. Government Income
Fund, Quest for Value Investment Quality Income Fund, Quest for
Value Global Income Fund, Quest for Value New York Tax-Exempt
Fund, Quest for Value National Tax-Exempt Fund and Quest for
Value California Tax-Exempt Fund when those funds merged into
various Oppenheimer funds on November 24, 1995. The funds listed
above are referred to in this Prospectus as the "Former Quest for
Value Funds." The waivers of initial and contingent deferred
sales charges described in this Appendix apply to shares of the
Fund (i) acquired by such shareholder pursuant to an exchange of
shares of one of the Oppenheimer funds that was one of the Former
Quest for Value Funds or (ii) received by such shareholder
pursuant to the merger of any of the Former Quest for Value Funds
into an Oppenheimer fund on November 24, 1995.
Class A Sales Charges
Reduced Class A Initial Sales Charge Rates for Certain Former
Quest Shareholders
Purchases by Groups, Associations and Certain Qualified
Retirement Plans. The following table sets forth the initial
sales charge rates for Class A shares purchased by a "Qualified
Retirement Plan" through a single broker, dealer or financial
institution, or by members of "Associations" formed for any
purpose other than the purchase of securities if that Qualified
Retirement Plan or that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to
purchase such shares from OCC Distributors prior to November 24,
1995. For this purpose only, a "Qualified Retirement Plan"
includes any 401(k) plan, 403(b) plan, and SEP/IRA or IRA plan
for employees of a single employer.
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
9 or fewer 2.50% 2.56% 2.00%
At least 10 but not
more than 49 2.00% 2.04% 1.60%
For purchases by Qualified Retirement plans and Associations
having 50 or more eligible employees or members, there is no
initial sales charge on purchases of Class A shares, but those
shares are subject to the Class A contingent deferred sales
charge described on pages ___ and ___ of this Prospectus.
Purchases made under this arrangement qualify for the lower
of the sales charge rate in the table based on the number of
eligible employees in a Qualified Retirement Plan or members of
an Association or the sales charge rate that applies under the
Rights of Accumulation described above in the Prospectus. In
addition, purchases by 401(k) plans that are Qualified Retirement
Plans qualify for the waiver of the Class A initial sales charge
if they qualified to purchase shares of any of the Former Quest
For Value Funds by virtue of projected contributions or
investments of $1 million or more each year. Individuals who
qualify under this arrangement for reduced sales charge rates as
members of Associations, or as eligible employees in Qualified
Retirement Plans also may purchase shares for their individual or
custodial accounts at these reduced sales charge rates, upon
request to the Fund's Distributor.
Special Class A Contingent Deferred Sales Charge Rates
Class A shares of the Fund issued in the reorganization on
November 24, 1995 for shares of Quest For Value Global Income
Fund that were subject to a contingent deferred sales charge,
will be subject to a contingent deferred sales charge at the
following rates: if they are redeemed within 18 months of the
end of the calendar month in which they were purchased, at a rate
equal to 1.0% if the redemption occurs within 12 months of their
initial purchase and at a rate of 0.50 of 1.0% if the redemption
occurs in the subsequent six months. This contingent deferred
sales charge rate also applies to shares of the Fund purchased by
exchange of shares of other Oppenheimer funds that were acquired
as a result of the merger of Former Quest for Value Funds into
those Oppenheimer funds, and which shares were subject to a Class
A contingent deferred sales charge prior to November 24, 1995.
Class A shares of any of the Former Quest for Value Funds
purchased without an initial sales charge on or before November
22, 1995 will continue to be subject to the applicable contingent
deferred sales charge in effect as of that date as set forth in
the then-current prospectus for such fund.
Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following investors
are not subject to any Class A initial or contingent deferred
sales charges:
Shareholders of the Fund who were shareholders of the AMA
Family of Funds on February 28, 1991 and who acquired shares of
any of the Former Quest for Value Funds by merger of a portfolio
of the AMA Family of Funds.
Shareholders of the Fund who acquired shares of any Former
Quest for Value Fund by merger of any of the portfolios of the
Unified Funds.
Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions
The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares of the Fund purchased by the
following investors who were shareholders of any Former Quest for
Value Fund:
Investors who purchased Class A shares from a dealer that
is or was not permitted to receive a sales load or redemption fee
imposed on a shareholder with whom that dealer has a fiduciary
relationship under the Employee Retirement Income Security Act of
1974 and regulations adopted under that law.
Participants in Qualified Retirement Plans that purchased
shares of any of the Former Quest For Value Funds pursuant to a
special "strategic alliance" with the distributor of those funds.
The Fund's Distributor will pay a commission to the dealer for
purchases of Fund shares as described above in "Class A
Contingent Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge
Waivers
Waivers for Redemptions of Shares Purchased Prior to March 6,
1995
In the following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, B or C shares of the Fund
acquired by merger of a Former Quest for Value Fund into the Fund
or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged, if those shares
were purchased prior to March 6, 1995: in connection with
(i) distributions to participants or beneficiaries of plans
qualified under Section 401(a) of the Internal Revenue Code or
from custodial accounts under Section 403(b)(7) of the Code,
Individual Retirement Accounts, deferred compensation plans under
Section 457 of the Code, and other employee benefit plans, and
returns of excess contributions made to each type of plan,
(ii) withdrawals under an automatic withdrawal plan holding only
either Class B or C shares if the annual withdrawal does not
exceed 10% of the initial value of the account, and
(iii) liquidation of a shareholder's account if the aggregate net
asset value of shares held in the account is less than the
required minimum value of such accounts.
Waivers for Redemptions of Shares Purchased on or After March
6, 1995 but Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, B or C shares of the Fund
acquired by merger of a Former Quest for Value Fund into the Fund
or by exchange from an Oppenheimer fund that was a Former Quest
For Value Fund or into which such fund merged, if those shares
were purchased on or after March 6, 1995, but prior to November
24, 1995: (1) distributions to participants or beneficiaries
from Individual Retirement Accounts under Section 408(a) of the
Internal Revenue Code or retirement plans under Section 401(a),
401(k), 403(b) and 457 of the Code, if those distributions are
made either (a) to an individual participant as a result of
separation from service or (b) following the death or disability
(as defined in the Code) of the participant or beneficiary;
(2) returns of excess contributions to such retirement plans;
(3) redemptions other than from retirement plans following the
death or disability of the shareholder(s) (as evidenced by a
determination of total disability by the U.S. Social Security
Administration); (4) withdrawals under an automatic withdrawal
plan (but only for Class B or C shares) where the annual
withdrawals do not exceed 10% of the initial value of the
account; and (5) liquidation of a shareholder's account if the
aggregate net asset value of shares held in the account is less
than the required minimum account value. A shareholder's account
will be credited with the amount of any contingent deferred sales
charge paid on the redemption of any Class A, B or C shares of
the Fund described in this section if within 90 days after that
redemption, the proceeds are invested in the same Class of shares
in this Fund or another Oppenheimer fund.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund
to Quest for Value prototype 401(k) plans that were maintained on
the TRAC-2000 recordkeeping system and that were transferred to
an OppenheimerFunds prototype 401(k) plan shall be eligible for
an additional one-time payment by the Distributor of 1% of the
value of the plan assets transferred, but that payment may not
exceed $5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value Fund
to Quest for Value prototype 401(k) plans that were maintained on
the TRAC-2000 recordkeeping system and (i) the shares held by
those plans were exchanged for Class A shares, or (ii) the plan
assets were transferred to an OppenheimerFunds prototype 401(k)
plan, shall be eligible for an additional one-time payment by the
Distributor of 1% of the value of the plan assets transferred,
but that payment may not exceed $5,000. <PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GLOBAL FUND
Graphic material included in Prospectus of Oppenheimer
Global Fund: "Comparison of Change in Value of $10,000
Hypothetical Investments in Class A, Class B and Class C shares
of Oppenheimer Global Fund and the Morgan Stanley Capital
International World Index."
Linear graphs will be included in the Prospectus of
Oppenheimer Global Fund (the "Fund") depicting the initial
subsequent account values of hypothetical $10,000 investments in
(i) Class A shares of the Fund during the past 10 fiscal years,
(ii) Class B shares of the Fund during the period August 17, 1993
(first public offering of Class B shares) to September 30, 1996,
and (iii) Class C shares of the Fund during the period October 2,
1995 (inception of the class); in each case comparing such values
with the same investment over the same time periods in the Morgan
Stanley Capital International World Index. Set forth below are
the relevant data points that will appear on the linear graph.
Additional information with respect to the foregoing, including a
description of the Morgan Stanley Capital International World
Index, is set forth in the Prospectus under "Performance of the
Fund - Management's Discussion of Performance."
Fiscal Year Oppenheimer Morgan Stanley Capital
Ended Global Fund International World Index
----------- ----------- -------------------------
Class A
-------
09/30/86 9,425 10,000
09/30/87 14,388 14,438
09/30/88 10,766 13,581
09/30/89 15,382 17,084
09/30/90 15,503 13,478
09/30/91 19,179 16,884
09/30/92 18,358 16,812
09/30/93 21,602 20,324
09/30/94 25,749 21,964
09/30/95 28,135 25,252
09/30/96 31,788 28,838
Class B
-------
08/17/93 10,000 10,000
09/30/93 10,364 9,817
09/30/94 12,240 10,609
09/30/95 13,261 12,198
09/30/96 14,661 13,929
Class C
-------
10/02/95 10,000 10,000
09/30/96 11,134 11,420
Oppenheimer Global Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been
authorized to give any information or to make any representations
other than those contained in this Prospectus or the Statement of
Additional Information, and if given or made, such information
and representations must not be relied upon as having been
authorized by the Fund, OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc. or any affiliate thereof. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby in any state to any
person to whom it is unlawful to make such an offer in such
state.
PR0330.001.0197 *Printed on recycled paper
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Two World Trade Center, New York, New York 10048
1-800-525-7048
PART B
STATEMENT OF ADDITIONAL INFORMATION
April 14, 1997
___________________________________
This Statement of Additional Information of Oppenheimer
Global Fund consists of this cover page and the following
documents:
1. Statement of Additional Information of Oppenheimer Global
Fund dated January 7, 1997.
2. Prospectus of Oppenheimer Global Emerging Growth Fund dated
January 13, 1997, as supplemented March 7, 1997.
3. Statement of Additional Information of Oppenheimer Global
Emerging Growth Fund dated January 13, 1997.
4. Oppenheimer Global Fund's Annual Report as of September 30,
1996.
5. Oppenheimer Global Emerging Growth Fund's Annual Report as of
September 30, 1996.
This Statement of Additional Information is not a Prospectus.
This Statement of Additional Information should be read in
conjunction with the Proxy Statement and Prospectus, which may be
obtained by written request to OppenheimerFunds Services ("OFS"),
P.O. Box 5270, Denver, Colorado 80217, or by calling OFS at the
toll-free number shown above.
<PAGE>
Oppenheimer Global Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated January 7, 1997
This Statement of Additional Information of Oppenheimer Global
Fund is not a Prospectus. This document contains additional
information about the Fund and supplements information in the
Prospectus dated January 7, 1997. It should be read together with
the Prospectus, which may be obtained by writing to the Fund's
Transfer Agent, OppenheimerFunds Services at P.O. Box 5270, Denver,
Colorado 80217 or by calling the Transfer Agent at the toll-free
number shown above.
Table of Contents
Page
About the Fund
2 Investment Objective and Policies
2 Investment Policies and Stratgegies
2 Other Investment Techniques and Strategies
6 Other Investment Restrictions
15 How the Fund is Managed
16 Organization and History
16 Trustees and Officers of the Fund
17 The Manager and Its Affiates
21 Brokerage Policies of the Fujd
22 Performance of the Fund
24 Distribution and Service Plans
27 About Your Account
29 How to Buy Shares
36 How to Sell Shares
39 How to Exchange Shares
41 Dividends, Capital Gains and Taxes
42 Additional Information About the Fund
Financial Information About the Fund
42 Independent Auditors' Report
43 Financial Statements
A-1 Appendix: Corporate Industry Classification
<PAGE>
About the Fund
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and
policies of the Fund are described in the Prospectus. Set forth
below is supplemental information about those policies and the
types of securities in which the Fund may invest, as well as the
strategies the Fund may use to try to achieve its objective.
Capitalized terms used in this Statement of Additional Information
have the same meanings as those terms have in the Prospectus.
In selecting securities for the Fund's portfolio, the Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager"),
evaluates the merits of securities primarily through the exercise
of its own investment analysis. This may include, among other
things, evaluation of the history of the issuer's operations,
prospects for the industry of which the issuer is part, the
issuer's financial condition, the issuer's pending product
developments and developments by competitors, the effect of general
market and economic conditions on the issuer's business, and
legislative proposals or new laws that might affect the issuer.
Current income is not a consideration in the selection of portfolio
securities for the Fund, whether for appreciation, defensive or
liquidity purposes. The fact that a security has a low yield or
does not pay current income will not be an adverse factor in
selecting securities to try to achieve the Fund's investment
objective of capital appreciation unless the Manager believes that
the lack of yield might adversely affect appreciation
possibilities.
The portion of the Fund's assets allocated to securities
selected for capital appreciation and the investment techniques
used will depend upon the judgment of the Fund's Manager as to the
future movement of the equity securities markets. If the Manager
believes that economic conditions favor a rising market, the Fund
will emphasize securities and investment methods selected for high
capital growth. If the Manager believes that a market decline is
likely, defensive securities and investment methods may be
emphasized.
- Investing in Securities of Growth-Type Companies. The Fund
may emphasize securities of "growth-type" companies. Such issuers
typically are those the goods or services of which have relatively
favorable long-term prospects for increasing demand, or ones which
develop new products, services or markets and normally retain a
relatively large part of their earnings for research, development
and investment in capital assets. They may include companies in
the natural resources fields or those developing industrial
applications for new scientific knowledge having potential for
technological innovation, such as nuclear energy, oceanography,
business services and new customer products.
- - Investing in Small, Unseasoned Companies. The securities of
small, unseasoned companies may have a limited trading market,
which may adversely affect the Fund's ability to sell them and can
reduce the price the Fund might be able to obtain for them. If
other investors holding the same securities as the Fund sell them
when the Fund attempts to dispose of its holdings, the Fund may
receive lower prices than might otherwise be obtained, because of
the thinner market for such securities.
- - Foreign Securities. "Foreign securities" include equity and
debt securities of companies organized under the laws of countries
other than the United States and debt securities of foreign
governments, that are traded on foreign securities exchanges or in
the foreign over-the-counter markets. Securities of foreign
issuers that are represented by American Depository Receipts or
that are listed on a U.S. securities exchange or traded in the U.S.
over-the-counter markets are not considered "foreign securities"
for the purpose of the Fund's investment allocations, because they
are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held
abroad.
Investing in foreign securities offers the Fund potential benefits
not available from investing solely in securities of domestic
issuers, such as the opportunity to invest in foreign issuers that
appear to offer growth potential, or in foreign countries with
economic policies or business cycles different from those of the
U.S., or to reduce fluctuations in portfolio value by taking
advantage of foreign stock markets that do not move in a manner
parallel to U.S. markets. If the Fund's portfolio securities are
held abroad, the countries in which such securities may be held and
the sub-custodians holding them must be approved by the Fund's
Board of Trustees under applicable rules of the Securities and
Exchange Commission. In buying foreign securities, the Fund may
convert U.S. dollars into foreign currency, but only to effect
securities transactions on foreign securities exchanges and not to
hold such currency as an investment.
- - Risks of Foreign Investing. Investing in foreign securities
involves special additional risks and considerations not typically
associated with investing in securities of issuers traded in the
U.S. These include: reduction of income by foreign taxes;
fluctuation in value of foreign portfolio investments due to
changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of
public information about foreign issuers; lack of uniform
accounting, auditing and financial reporting standards comparable
to those applicable to domestic issuers; less volume on foreign
exchanges than on U.S. exchanges; greater volatility and less
liquidity in foreign markets than in the U.S.; less regulation of
foreign issuers, stock exchanges and brokers than in the U.S.;
greater difficulties in commencing lawsuits against foreign
issuers; higher brokerage commission rates than in the U.S.;
increased risks of delays in settlement of portfolio transactions
or loss of certificates for portfolio securities; possibilities in
some countries of expropriation or nationalization of assets,
confiscatory taxation, political, financial or social instability
or adverse diplomatic developments; and unfavorable differences
between the U.S. economy and foreign economies. In the past, U.S.
Government policies have discouraged certain investments abroad by
U.S. investors, through taxation or other restrictions, and it is
possible that such restrictions could be re-imposed.
A number of current significant political demographic and economic
developments may affect investments in foreign securities and in
securities of companies with operations overseas. Such
developments include dramatic political changes in government and
economic policies in several Eastern European countries, Germany
and the republics comprising the former Soviet Union, as well as
unification of the European Economic Community. The course of any
of one or more of these events and the effect on trade barriers,
competition and markets for consumer goods and services is
uncertain. With roughly two-thirds of all outstanding equity
securities now traded outside of the United States the Fund's
global scope enables it to attempt to take advantage of other world
markets and companies and seek to protect itself against declines
in any single economy.
- - Convertible Securities. While convertible securities are a form
of debt security in many cases, their conversion feature (allowing
conversion into equity securities) causes them to be regarded more
as "equity equivalents." As a result, the rating assigned to the
security has less impact on the Manager's investment decision with
respect to convertible securities than in the case of non-
convertible fixed-income securities. To determine whether
convertible securities should be regarded as "equity equivalents,"
the Manager examines the following factors: (1) whether, at the
option of the investor, the convertible security can be exchanged
for a fixed number of shares of common stock of the issuer, (2)
whether the issuer of the convertible securities has restated its
earnings per share of common stock on a fully diluted basis
(considering the effect of converting the convertible securities),
and (3) the extent to which the convertible security may be a
defensive "equity substitute," providing the ability to participate
in any appreciation in the price of the issuer's common stock.
- - Warrants and Rights. Warrants basically are options to purchase
equity securities at specified prices valid for a specific period
of time. Their prices do not necessarily move in a manner parallel
to the prices of the underlying securities. The price paid for a
warrant will be lost unless the warrant is exercised prior to
expiration. Rights are similar to warrants, but normally have a
short duration and are distributed directly by the issuer to its
shareholders. Warrants and rights have no voting rights, receive
no dividends and have no rights with respect to the assets of the
issuer.
- - Illiquid and Restricted Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of
1933, the Fund may have to cause those securities to be registered.
The expenses of registration of restricted securities may be
negotiated by the Fund with the issuer at the time such securities
are purchased by the Fund, if such registration is required before
such securities may be sold publicly. When registration must be
arranged because the Fund wishes to sell the security, a
considerable period may elapse between the time the decision is
made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any
downward price fluctuation during that period. The Fund may also
acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability
to dispose of such securities and might lower the amount realizable
upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by
the Board of Trustees of the Fund or by the Manager under Board-
approved guidelines. Those guidelines take into account the trading
activity for such securities and the availability of reliable
pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's
holding of that security may be deemed to be illiquid.
- - Repurchase Agreements. The Fund may acquire securities subject
to repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales
of Fund shares, or pending the settlement of purchases of portfolio
securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it \to, an approved vendor (a U.S.
commercial bank or the U.S. branch of a foreign bank, or a broker-
dealer which has been designated a primary dealer in U.S.
government securities, which must meet credit requirements set by
the Fund's Board of Trustees from time to time), for delivery on an
agreed-upon future date. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate
effective for the period during which the repurchase agreement is
in effect. The majority of these transactions run from day to day,
and delivery pursuant to the resale typically will occur within one
to five days of the purchase. Repurchase agreements are considered
"loans" under the Investment Company Act of 1940, as amended (the
"Investment Company Act"), collateralized by the underlying
security. The Fund's repurchase agreements require that at all
times while the repurchase agreement is in effect, the value of the
collateral must equal or exceed the repurchase price to fully
collateralize the repayment obligation. Additionally, the Manager
will impose creditworthiness requirements to confirm that the
vendor is financially sound and will continuously monitor the
collateral's value.
- - Loans of Portfolio Securities. The Fund may lend its portfolio
securities pursuant to the Securities Lending Agreement and
Guaranty (the "Securities Lending Agreement") with The Bank of New
York, subject to the restrictions stated in the Prospectus. The
Fund will lend such portfolio securities to attempt to increase the
Fund's income. Under the Securities Lending Agreement and
applicable regulatory requirements (which are subject to change),
the loan collateral must, on each business day, be at least equal
to the value of the loaned securities and must consist of cash,
bank letters of credit or securities of the U.S. Government (or its
agencies or instrumentalities), or other cash equivalents in which
the Fund is permitted to invest. To be acceptable as collateral,
letters of credit must obligate a bank to pay to The Bank of New
York, as agent, amounts demanded by the Fund if the demand meets
the terms of the letter. Such terms of the letter and the issuing
bank must be satisfactory to The Bank of New York and the Fund.
The Fund will receive, pursuant to the Securities Lending
Agreement, 60% of all annual net income from securities lending
transactions. The Bank of New York has agreed, in general, to
guarantee the obligations of borrowers to return loaned securities
and to be responsible for expenses relating to securities lending.
The Fund will be responsible for risks associated with the
investment of cash collateral. The term of the Securities Lending
Agreement is thirty-six months, subject to termination by The Bank
of New York or the Fund. The Fund may incur a termination fee if
it terminates the Securities Lending Agreement during this term.
The terms of the Fund's loans must also meet applicable tests under
the Internal Revenue Code and permit the Fund to reacquire loaned
securities on five business days' notice or in time to vote on any
important matter.
- - Borrowing For Leverage. From time to time, the Fund may
increase its ownership of securities by borrowing from banks on an
unsecured basis and investing the borrowed funds, subject to the
restrictions stated in the Prospectus. Any such borrowing will be
made only from banks, and pursuant to the requirements of the
Investment Company Act, will be made only to the extent that the
value of the Fund's assets, less its liabilities other than
borrowings, is equal to at least 300% of all borrowings including
the proposed borrowing. If the value of the Fund's assets, when
computed in that manner, should fail to meet the 300% asset
coverage requirement, the Fund is required within three days to
reduce its bank debt to the extent necessary to meet that coverage
requirement. To do so, the Fund may have to sell a portion of its
investments at a time when it would otherwise not want to sell the
securities. Interest on money the Fund borrows is an expense the
Fund would not otherwise incur, so that during periods of
substantial borrowings, its expenses may increase more than the
expenses of funds that do not borrow.
Other Investment Techniques and Strategies
- - Hedging With Options and Futures Contracts. The Fund may use
hedging instruments for the purposes described in the Prospectus.
When hedging to attempt to protect against declines in the market
value of the Fund's portfolio, or to permit the Fund to retain
unrealized gains in the value of portfolio securities which have
appreciated, or to facilitate selling securities for investment
reasons, the Fund may: (i) sell Futures, (ii) buy puts on such
Futures or securities, or (iii) write covered calls on securities
or on Futures. When hedging to establish a position in the equity
securities markets as a temporary substitute for the purchase of
individual equity securities the Fund may: (i) buy Futures, or (ii)
buy calls on such Futures or securities held by it. Normally, the
Fund would then purchase the equity securities and terminate the
hedging position.
The Fund's strategy of hedging with Futures and options on Futures
will be incidental to the Fund's investment activities in the
underlying cash market. In the future, the Fund may employ hedging
instruments and strategies that are not presently contemplated but
which may be developed, to the extent such investment methods are
consistent with the Fund's investment objective, and are legally
permissible and disclosed in the Prospectus. Additional
information about the hedging instruments the Fund may use is
provided below.
- - Stock Index Futures, Financial Futures and Interest Rate
Futures. The Fund may buy and sell futures contracts relating to
a securities index ("Financial Futures"), including "Stock Index
Futures," a type of Financial Future for which the index used as
the basis for trading is a broadly-based stock index (including
stocks that are not limited to issuers in a particular industry or
group of industries). A stock index assigns relative values to the
common stocks included in the index and fluctuates with the changes
in the market value of those stocks. Stock indices cannot be
purchased or sold directly. Financial Futures are contracts based
on the future value of the basket of securities that comprise the
underlying index. The contracts obligate the seller to deliver,
and the purchaser to take, cash to settle the futures transaction
or to enter into an offsetting contract. No physical delivery of
the securities underlying the index is made on settling the futures
obligation. No monetary amount is paid or received by the Fund on
the purchase or sale of a Financial Future or Stock Index Future.
The Fund may also buy Futures relating to debt securities
("Interest Rate Futures"). An Interest Rate Future obligates the
seller to deliver and the purchaser to take a specific type of debt
security at a specific future date for a fixed price to settle the
futures transaction, or to enter into an offsetting contract. As
with Financial Futures, no monetary amount is paid or received by
the Fund on the purchase of an Interest Rate Future.
Upon entering into a Futures transaction, the Fund will be required
to deposit an initial margin payment, in cash or U.S. Treasury
bills, with the futures commission merchant (the "futures broker").
Initial margin payments will be deposited with the Fund's Custodian
in an account registered in the futures broker's name; however, the
futures broker can gain access to that account only under certain
specified conditions. As the Future is marked to market (that is,
its value on the Fund's books is changed) to reflect changes in its
market value, subsequent margin payments, called variation margin,
will be paid to or by the futures broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may
elect to close out its position by taking an opposite position, at
which time a final determination of variation margin is made and
additional cash is required to be paid by or released to the Fund.
Any gain or loss is then realized by the Fund on the Future for tax
purposes. Although Financial Futures and Stock Index Futures by
their terms call for settlement by the delivery of cash, and
Interest Rate Futures call for the delivery of a specific debt
security, in most cases the settlement obligation is fulfilled
without such delivery by entering into an offsetting transaction.
All Futures transactions are effected through a clearinghouse
associated with the exchange on which the contracts are traded.
- - Writing Covered Calls. As described in the Prospectus, the Fund
may write covered calls. When the Fund writes a call on an
investment, it receives a premium and agrees to sell the callable
investment to a purchaser of a corresponding call during the call
period (usually not more than 9 months) at a fixed exercise price
(which may differ from the market price of the underlying
investment) regardless of market price changes during the call
period. To terminate its obligation on a call it has written, the
Fund may purchase a corresponding call in a "closing purchase
transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the
premium received on the call the Fund has written is more or less
than the price of the call the Fund subsequently purchased. A
profit may also be realized if the call lapses unexercised, because
the Fund retains the underlying investment and the premium
received. Those profits are considered short-term capital gains
for Federal income tax purposes, as are premiums on lapsed calls,
and when distributed by the Fund are taxable as ordinary income.
If the Fund could not effect a closing purchase transaction due to
the lack of a market, it would have to hold the callable investment
until the call lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures
contract or deliverable securities, provided that at the time the
call is written, the Fund covers the call by segregating in escrow
an equivalent dollar value of deliverable securities or liquid
assets. The Fund will segregate additional liquid assets if the
value of the escrowed assets drops below 100% of the current value
of the Future. In no circumstances would an exercise notice as to
a Future put the Fund in a short futures position.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the
facilities of the Options Clearing Corporation ("OCC"), as to the
investments on which the Fund has written options that are traded
on exchanges, or as to other acceptable escrow securities, so that
no margin will be required from the Fund for such option
transactions. OCC will release the securities covering a call on
the expiration of the call or when the Fund enters into a closing
purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally
higher than on general securities transactions, are payable on
writing or purchasing a call.
- - Purchasing Puts and Calls. The Fund may purchase calls to
protect against the possibility that the Fund's portfolio will not
participate in an anticipated rise in the securities market. When
the Fund purchases a call, it pays a premium (other than in a
closing purchase transaction) and, except as to calls on stock
indices, has the right to buy the underlying investment from a
seller of a corresponding call on the same investment during the
call period at a fixed exercise price. In purchasing a call, the
Fund benefits only if the call is sold at a profit or if, during
the call period, the market price of the underlying investment is
above the sum of the call price, transaction costs, and the premium
paid, and the call is exercised. If the call is not exercised or
sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the
right to purchase the underlying investment. When the Fund
purchases a call on a stock index, it pays a premium, but
settlement is in cash rather than by delivery of the underlying
investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to
puts on stock indices, has the right to sell the underlying
investment to a seller of a corresponding put on the same
investment during the put period at a fixed exercise price. Buying
a put on an investment the Fund owns (a "protective put") enables
the Fund to attempt to protect itself during the put period against
a decline in the value of the underlying investment below the
exercise price by selling the underlying investment at the exercise
price to a seller of a corresponding put. If the market price of
the underlying investment is equal to or above the exercise price
and as a result the put is not exercised or resold, the put will
become worthless at its expiration and the Fund will lose the
premium payment and the right to sell the underlying investment.
However, the put may be sold prior to expiration (whether or not at
a profit).
Puts and calls on broadly-based stock indices or Stock Index
Futures are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price
movements in the stock market generally) rather than on price
movements of individual securities or futures contracts. When the
Fund buys a call on a stock index or Stock Index Future, it pays a
premium. If the Fund exercises the call during the call period, a
seller of a corresponding call on the same investment will pay the
Fund an amount of cash to settle the call if the closing level of
the stock index or Future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to
the difference between the closing price of the call and the
exercise price of the call times a specified multiple (the
"multiplier") which determines the total dollar value for each
point of difference. When the Fund buys a put on a stock index or
Stock Index Future, it pays a premium and has the right during the
put period to require a seller of a corresponding put, upon the
Fund's exercise of its put, to deliver cash to the Fund to settle
the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price
of the put. That cash payment is determined by the multiplier, in
the same manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index
Future not owned by it, the put protects the Fund to the extent
that the index moves in a similar pattern to the securities the
Fund holds. The Fund can either resell the put or, in the case of
a put on a Stock Index Future, buy the underlying investment and
sell it at the exercise price. The resale price of the put will
vary inversely with the price of the underlying investment. If the
market price of the underlying investment is above the exercise
price, and as a result the put is not exercised, the put will
become worthless on the expiration date. In the event of a decline
in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its
loss on its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the
Fund may cause the Fund to sell related portfolio securities, thus
increasing its turnover rate. The exercise by the Fund of puts on
securities will cause the sale of underlying investments,
increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within the Fund's control, holding a put
might cause the Fund to sell the related investments for reasons
that would not exist in the absence of the put. The Fund will pay
a brokerage commission each time it buys or sells a call, put or an
underlying investment in connection with the exercise of a put or
call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value
of the underlying investments and, consequently, put and call
options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being
more sensitive to changes in the value of the underlying
investments.
- - Options on Foreign Currency. The Fund intends to write and
purchase calls on foreign currencies. The Fund may purchase and
write puts and calls on foreign currencies that are traded on a
securities or commodities exchange or over-the-counter markets or
are quoted by major recognized dealers in such options. It does so
to protect against declines in the dollar value of foreign
securities and against increases in the dollar cost of foreign
securities to be acquired. If the Manager anticipates a rise in
the dollar value of a foreign currency in which securities to be
acquired are denominated, the increased cost of such securities may
be partially offset by purchasing calls or writing puts on that
foreign currency. If a decline in the dollar value of a foreign
currency is anticipated, the decline in value of portfolio
securities denominated in that currency may be partially offset by
writing calls or purchasing puts on that foreign currency.
However, in the event of currency rate fluctuations adverse to the
Fund's position, it would lose the premium it paid and transactions
costs.
A call written on a foreign currency by the Fund is covered if the
Fund owns the underlying foreign currency covered by the call or
has an absolute and immediate right to acquire that foreign
currency without additional cash consideration (or for additional
cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other foreign currency held in its
portfolio. A call may be written by the Fund on a foreign currency
to provide a hedge against a decline due to an expected adverse
change in the exchange rate in the U.S. dollar value of a security
which the Fund owns or has the right to acquire and which is
denominated in the currency underlying the option. This is a
cross-hedging strategy. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account
with the Fund's Custodian, cash or U.S. Government Securities in an
amount not less than the value of the underlying foreign currency
in U.S. dollars marked-to-market daily.
- - Forward Contracts. The Fund may enter into foreign currency
exchange contracts ("Forward Contracts"), which obligate the seller
to deliver and the purchaser to take a specific amount of foreign
currency at a specific future date for a fixed price. A Forward
Contract involves bilateral obligations of one party to purchase,
and another party to sell, a specific currency at a future date
(which may be any fixed number of days from the date of the
contract agreed upon by the parties), at a price set at the time
the contract is entered into. These contracts are generally traded
in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. The Fund may
enter into a Forward Contract in order to "lock in" the U.S. dollar
price of a security denominated in a foreign currency which it has
purchased or sold but which has not yet settled, or to protect
against a possible loss resulting from an adverse change in the
relationship between the U.S. dollar and a foreign currency.
There is a risk that use of Forward Contracts may reduce the gain
that would otherwise result from a change in the relationship
between the U.S. dollar and a foreign currency. Forward contracts
include standardized foreign currency futures contracts which are
traded on exchanges and are subject to procedures and regulations
applicable to other Futures. The Fund may also enter into a
forward contract to sell a foreign currency denominated in a
currency other than that in which the underlying security is
denominated. This is done in the expectation that there is a
greater correlation between the foreign currency of the forward
contract and the foreign currency of the underlying investment than
between the U.S. dollar and the foreign currency of the underlying
investment. This technique is referred to as "cross hedging." The
success of cross hedging is dependent on many factors, including
the ability of the Manager to correctly identify and monitor the
correlation between foreign currencies and the U.S. dollar. To the
extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the
cross currency hedge.
The Fund may use Forward Contracts to protect against uncertainty
in the level of future exchange rates. The use of Forward
Contracts does not eliminate fluctuations in the prices of the
underlying securities the Fund owns or intends to acquire, but it
does fix a rate of exchange in advance. In addition, although
Forward Contracts limit the risk of loss due to a decline in the
value of the hedged currencies, at the same time they limit any
potential gain that might result should the value of the currencies
increase.
There is no limitation as to the percentage of the Fund's assets
that may be committed to foreign currency exchange contracts. The
Fund does not enter into such forward contracts or maintain a net
exposure in such contracts to the extent that the Fund would be
obligated to deliver an amount of foreign currency in excess of the
value of the Fund's assets denominated in that currency (or another
currency that is also the subject of the hedge), or enter into a
"cross hedge," unless it is denominated in a currency or currencies
that the Manager believes will have price movements that tend to
correlate closely with the currency in which the investment being
hedged is denominated. See "Tax Aspects of Covered Calls and
Hedging Instruments" below for a discussion of the tax treatment of
foreign currency exchange contracts
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract
for the purchase or sale of a security denominated in a foreign
currency, or when the Fund anticipates receipt of dividend payments
in a foreign currency, the Fund may desire to "lock-in" the U.S.
dollar price of the security or the U.S. dollar equivalent of such
payment by entering into a Forward Contract, for a fixed amount of
U.S. dollars per unit of foreign currency, for the purchase or sale
of the amount of foreign currency involved in the underlying
transaction ("transaction hedge"). The Fund will thereby be able
to protect itself against a possible loss resulting from an adverse
change in the relationship between the currency exchange rates
during the period between the date on which the security is
purchased or sold, or on which the payment is declared, and the
date on which such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions ("position hedge"). In a position
hedge, for example, when the Fund believes that foreign currency
may suffer a substantial decline against the U.S. dollar, it may
enter into a forward sale contract to sell an amount of that
foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in such foreign currency,
or when the Fund believes that the U.S. dollar may suffer a
substantial decline against a foreign currency, it may enter into
a forward purchase contract to buy that foreign currency for a
fixed dollar amount. In this situation the Fund may, in the
alternative, enter into a forward contract to sell a different
foreign currency for a fixed U.S. dollar amount where the Fund
believes that the U.S. dollar value of the currency to be sold
pursuant to the forward contract will fall whenever there is a
decline in the U.S. dollar value of the currency in which portfolio
securities of the Fund are denominated ("cross hedge").
The Fund's Custodian will place cash or U.S. Government securities
or other liquid high-quality debt securities in a separate account
of the Fund having a value equal to the aggregate amount of the
Fund's commitments under forward contracts to cover its short
positions. If the value of the securities placed in the separate
account declines, additional cash or securities will be placed in
the account on a daily basis so that the value of the account will
equal the amount of the Fund's net commitments with respect to
such contracts. As an alternative to maintaining all or part of
the separate account, the Fund may purchase a call option
permitting the Fund to purchase the amount of foreign currency
being hedged by a forward sale contract at a price no higher than
the forward contract price, or the Fund may purchase a put option
permitting the Fund to sell the amount of foreign currency subject
to a forward purchase contract at a price as high or higher than
the forward contract price. Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than
if it had not entered into such contracts.
The precise matching of the Forward Contract amounts and the value
of the securities involved will not generally be possible because
the future value of such securities in foreign currencies will
change as a consequence of market movements in the value of these
securities between the date the Forward Contract is entered into
and the date it is sold. Accordingly, it may be necessary for the
Fund to purchase additional foreign currency on the spot (i.e.,
cash) market (and bear the expense of such purchase), if the market
value of the security is less than the amount of foreign currency
the Fund is obligated to deliver and if a decision is made to sell
the security and make delivery of the foreign currency.
Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio
security if its market value exceeds the amount of foreign currency
the Fund is obligated to deliver. The projection of short-term
currency market movements is extremely difficult, and the
successful execution of a short-term hedging strategy is highly
uncertain. Forward Contracts involve the risk that anticipated
currency movements will not be accurately predicted, causing the
Fund to sustain losses on these contracts and transactions costs.
At or before the maturity of a Forward Contract requiring the Fund
to sell a currency, the Fund may either sell a portfolio security
and use the sale proceeds to make delivery of the currency or
retain the security and offset its contractual obligation to
deliver the currency by purchasing a second contract pursuant to
which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly,
the Fund may close out a Forward Contract requiring it to purchase
a specified currency by entering into a second contract entitling
it to sell the same amount of the same currency on the maturity
date of the first contract. The Fund would realize a gain or loss
as a result of entering into such an offsetting Forward Contract
under either circumstance to the extent the exchange rate or rates
between the currencies involved moved between the execution dates
of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract
period and the market conditions then prevailing. Because Forward
Contracts are usually entered into on a principal basis, no fees or
commissions are involved. Because such contracts are not traded on
an exchange, the Fund must evaluate the credit and performance risk
of each particular counterparty under a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert all of its holdings of foreign
currency deposits into U.S. dollars on a daily basis. The Fund may
convert foreign currency from time to time, and investors should be
aware of the costs of currency conversion. Foreign exchange
dealers do not charge a fee for conversion, but they do seek to
realize a profit based on the difference between the prices at
which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire to resell
that currency to the dealer.
- - Regulatory Aspects of Hedging Instruments. The Fund is required
to operate within certain guidelines and restrictions with respect
to its use of Futures and options on Futures established by the
Commodity Futures Trading Commission ("CFTC"). In particular the
Fund is exempted from registration with the CFTC as a "commodity
pool operator" if the Fund complies with the requirements of Rule
4.5 adopted by the CFTC. The Rule does not limit the percentage of
the Fund's assets that may be used for Futures margin and related
options premiums for a bona fide hedging position. However, under
the Rule the Fund must limit its aggregate initial Futures margin
and related option premiums to no more than 5% of the Fund's total
assets for hedging purposes that are not considered bona fide
hedging strategies under the Rule. Under the Rule, the Fund also
must use short Futures and Futures options positions solely for
"bona fide hedging purposes" within the meaning and intent of the
applicable provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of
options that may be written or held by a single investor or group
of investors acting in concert, regardless of whether the options
were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different
exchanges or through one or more brokers. Thus the number of
options which the Fund may write or hold may be affected by options
written or held by other entities, including other investment
companies having the same adviser as the Fund (or an adviser that
is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits
and may impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Future, the Fund will maintain, in a segregated account
or accounts with its Custodian, cash or readily-marketable, short-
term (maturing in one year or less) debt instruments in an amount
equal to the market value of the securities underlying such Future,
less the margin deposit applicable to it.
- - Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the
Internal Revenue Code (although it reserves the right not to
qualify). That qualification enables the Fund to "pass through"
its income and realized capital gains to shareholders without
having to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders normally will be taxed
on the dividends and capital gains they receive from the Fund
(unless the Fund's shares are held in a retirement account or the
shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that
less than 30% of its gross income must be derived from gains
realized on the sale of securities held for less than three months.
To comply with this 30% cap, the Fund will limit the extent to
which it engages in the following activities, but will not be
precluded from them: (i) selling investments, including Stock Index
Futures, held for less than three months, whether or not they were
purchased on the exercise of a call held by the Fund; (ii)
purchasing options which expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv)
exercising puts or calls held by the Fund for less than three
months; or (v) writing calls on investments held less than three
months.
Certain foreign currency exchange contracts (Forward Contracts) in
which the Fund may invest are treated as "section 1256 contracts."
Gains or losses relating to section 1256 contracts generally are
characterized under the Internal Revenue Code as 60% long-term and
40% short-term capital gains or losses. However, foreign currency
gains or losses arising from certain section 1256 contracts
(including Forward Contracts) generally are treated as ordinary
income or loss. In addition, section 1256 contracts held by the
Fund at the end of each taxable year are "marked-to-market" with
the result that unrealized gains or losses are treated as though
they were realized. These contracts also may be marked-to-market
for purposes of the excise tax applicable to investment company
distributions and for other purposes under rules prescribed
pursuant to the Internal Revenue Code. An election can be made by
the Fund to exempt these transactions from this marked-to-market
treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for Federal income tax purposes. The straddle rules
may affect the character and timing of gains (or losses) recognized
by the Fund on straddle positions. Generally, a loss sustained on
the disposition of a position(s) making up a straddle is allowed
only to the extent such loss exceeds any unrecognized gain in the
offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain
in the offsetting positions making up the straddle, or the
offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time the
Fund accrues interest or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time
the Fund actually collects such receivables or pays such
liabilities generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in
a foreign currency and on disposition of foreign currency forward
contracts, gains or losses attributable to fluctuations in the
value of a foreign currency between the date of acquisition of the
security or contract and the date of disposition also are treated
as an ordinary gain or loss. Currency gains and losses are offset
against market gains and losses on each trade before determining a
net "section 988" gain or loss under the Internal Revenue Code,
which may ultimately increase or decrease the amount of the Fund's
investment company income available for distribution to its
shareholders.
- - Risks of Hedging With Options and Futures. An option position
may be closed out only on a market that provides secondary trading
for options of the same series, and there is no assurance that a
liquid secondary market will exist for any particular option. In
addition to the risks associated with hedging that are discussed in
the Prospectus and above, there is a risk in using short hedging by
(i) selling Stock Index Futures or (ii) purchasing puts on stock
indices or Stock Index Futures to attempt to protect against
declines in the value of the Fund's equity securities. The risk is
that the prices of Stock Index Futures will correlate imperfectly
with the behavior of the cash (i.e., market value) prices of the
Fund's equity securities. The ordinary spreads between prices in
the cash and futures markets are subject to distortions, due to
differences in the natures of those markets. First, all
participants in the futures markets are subject to margin deposit
and maintenance requirements. Rather than meeting additional
margin deposit requirements, investors may close out futures
contracts through offsetting transactions which could distort the
normal relationship between the cash and futures markets. Second,
the liquidity of the futures markets depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take
delivery, liquidity in the futures markets could be reduced, thus
producing distortion. Third, from the point of view of
speculators, the deposit requirements in the futures markets are
less onerous than margin requirements in the securities markets.
Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition of
the Fund's portfolio diverges from the securities included in the
applicable index. To compensate for the imperfect correlation of
movements in the price of the equity securities being hedged and
movements in the price of the hedging instruments, the Fund may use
hedging instruments in a greater dollar amount than the dollar
amount of equity securities being hedged if the historical
volatility of the prices of the equity securities being hedged is
more than the historical volatility of the applicable index. It is
also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity
securities held in the Fund's portfolio may decline. If that
occurred, the Fund would lose money on the hedging instruments and
also experience a decline in value in its portfolio securities.
However, while this could occur for a very brief period or to a
very small degree, over time the value of a diversified portfolio
of equity securities will tend to move in the same direction as the
indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of
individual equity securities (long hedging) by buying Stock Index
Futures and/or calls on such Futures, on securities or on stock
indices, it is possible that the market may decline. If the Fund
then concludes not to invest in equity securities at that time
because of concerns as to a possible further market decline or for
other reasons, the Fund will realize a loss on the hedging
instruments that is not offset by a reduction in the price of the
equity securities purchased.
- - Short Sales Against-the-Box. In this type of short sale, while
the short position is open, the Fund must own an equal amount of
the securities sold short, or by virtue of ownership of other
securities have the right, without payment of further
consideration, to obtain an equal amount of the securities sold
short. Short sales against-the-box may be made to defer, for
Federal income tax purposes, recognition of gain or loss on the
sale of securities "in the box" until the short position is closed
out. They may also be used to protect a gain on the security "in-
the-box" when the Fund does not want to sell it and recognize a
capital gain.
Other Investment Restrictions
The Fund's most significant investment restrictions are described
in the Prospectus. The following are also fundamental policies and
together with the Fund's fundamental policies described in the
Prospectus, cannot be changed without the approval of a "majority"
of the Fund's outstanding voting securities. Under the Investment
Company Act, such a "majority" vote is defined as the vote of the
holders of the lesser of: (i) 67% or more of the shares present or
represented by proxy at a shareholders meeting, if the holders of
more than 50% of the outstanding shares are present or represented
by proxy; or (ii) more than 50% of the outstanding shares.
Under these additional restrictions, the Fund cannot:
- - invest in companies for the primary purpose of acquiring control
or management thereof;
- - invest in commodities or in commodities contracts; other than the
hedging instruments permitted by any of its other fundamental
policies, whether or not any such hedging instrument is considered
to be a commodity or a commodity contract;
- - invest in real estate or in interests in real estate, but may
purchase readily marketable securities of companies holding real
estate or interests therein;
- - purchase securities on margin; however, the Fund may make margin
deposits in connection with any of the hedging instruments
permitted by any of its other fundamental policies;
- - lend money, but the Fund may invest in all or a portion of an
issue of bonds, debentures, commercial paper, or other similar
corporate obligations of the types that are usually purchased by
institutions, whether or not publicly distributed, provided that
such obligations which are not publicly distributed shall be
subject to the limits on the amount set forth in the Prospectus
under the caption "Illiquid and Restricted Securities"; the Fund
may also make loans of portfolio securities, subject to the
restrictions set forth in the Prospectus and above under the
caption "Loans of Portfolio Securities";
- - mortgage or pledge any of its assets; such prohibition against
mortgaging or pledging does not prohibit the escrow arrangements
contemplated by the writing of covered call options or other
collateral or margin arrangements in connection with any of the
Hedging Instruments permitted by any of its other fundamental
policies;
- - underwrite securities of other companies, except insofar as it
might be deemed to be an underwriter for purposes of the Securities
Act of 1933 in the resale of any securities held in its own
portfolio;
- - invest or hold securities of any issuer if those officers and
directors or trustees of the Fund or its adviser owning
individually more than 1/2 of 1% of the securities of such issuer
together own more than 5% of the securities of such issuer; or
- - invest in other open-end investment companies, or invest more
than 5% of its net assets at the time of purchase in closed-end
investment companies, including small business investment
companies, nor make any such investments at commission rates in
excess of normal brokerage commissions. The percentage
restrictions described above and in the Prospectus apply only at
the time of investment and require no action by the Fund as a
result of subsequent changes in relative values.
In connection with the qualification of its shares in certain
states, the Fund has undertaken that in addition to the above, it
will not: (1) invest more than 5% of its assets in securities of
issuers, including their predecessors, which have been in
continuous operation for less than three continuous years; or (2)
invest any part of its assets in oil, gas or other mineral
exploration or development programs. In the event that the Fund's
shares cease to be qualified under such laws or if such
undertaking(s) otherwise cease to be operative, the Fund would not
be subject to such restrictions.
For purposes of the Fund's policy not to concentrate its assets, as
described in "Other Investment Restrictions" in the Prospectus, the
Fund has adopted the corporate industry classifications set forth
in the Appendix to this Statement of Additional Information. This
is not a fundamental policy.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the
Fund is not required to hold, and does not plan to hold, regular
annual meetings of shareholders. The Fund will hold meetings when
required to do so by the Investment Company Act or other applicable
law, or when a shareholder meeting is called by the Trustees or
upon proper request of the shareholders. Shareholders have the
right, upon the declaration in writing or vote of two-thirds of the
outstanding shares of the Fund, to remove a Trustee. The Trustees
will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of
its outstanding shares. In addition, if the Trustees receive a
request from at least 10 shareholders (who have been shareholders
for at least six months) holding shares of the Fund valued at
$25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate
with other shareholders to request a meeting to remove a Trustee,
the Trustees will then either make the Fund's shareholder list
available to the applicants or mail their communication to all
other shareholders at the applicants' expense, or the Trustees may
take such other action as set forth under Section 16(c) of the
Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer
of shareholder or Trustee liability for the Fund's obligations, and
provides for indemnification and reimbursement of expenses out of
its property for any shareholder held personally liable for its
obligations. The Declaration of Trust also provides that the Fund
shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a
shareholder of a business trust (such as the Fund) to be held
personally liable as a "partner" under certain circumstances, the
risk of a Fund shareholder incurring financial loss on account of
shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its
obligations described above. Any person doing business with the
Trust, and any shareholder of the Trust, agrees under the Trust's
Declaration of Trust to look solely to the assets of the Trust for
satisfaction of any claim or demand which may arise out of any
dealings with the Trust, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and
officers and their principal occupations and business affiliations
and occupations during the past five years are set forth below.
The address for each Trustee and officer is Two World Trade Center,
New York, New York 10048-0203, unless another address is listed
below. All of the Trustees are also trustees of Oppenheimer Fund,
Oppenheimer Growth Fund, Oppenheimer Municipal Bond Fund,
Oppenheimer Money Market Fund, Inc., Oppenheimer Capital
Appreciation Fund, Oppenheimer U.S. Government Trust, Oppenheimer
New York Municipal Fund, Oppenheimer California Municipal Fund,
Oppenheimer Multi-State Municipal Trust, Oppenheimer Asset
Allocation Fund, Oppenheimer Developing Markets Fund, Oppenheimer
Gold & Special Minerals Fund, Oppenheimer Discovery Fund,
Oppenheimer Enterprise Fund, Oppenheimer International Growth Fund,
Oppenheimer Series Fund, Inc., Oppenheimer Global Growth & Income
Fund, Oppenheimer Global Emerging Growth Fund, Oppenheimer Multi-
Sector Income Trust and Oppenheimer World Bond Fund (collectively,
the "New York-based Oppenheimer funds"), except that Ms. Macaskill
is not a director of Oppenheimer Money Market Fund, Inc. Ms.
Macaskill and Messrs. Bishop, Bowen, Donohue, Farrar and Zack,
respectively, hold the same offices with the other New York-based
Oppenheimer funds as with the Fund. As of December 13, 1996, the
Trustees and officers of the Fund as a group owned of record or
beneficially less than 1% of each class of shares of the Fund. The
foregoing statement does not reflect ownership of shares held of
record by an employee benefit plan for employees of the Manager
(for which plan a Trustee and an officer listed below, Ms.
Macaskill and Mr. Donohue, respectively, are trustees), other than
the shares beneficially owned under that plan by officers of the
Fund listed below.
Leon Levy, Chairman of the Board of Trustees; Age 71
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Robert G. Galli, Trustee*; Age 63
Vice Chairman of OppenheimerFunds, Inc. (the "Manager");
formerly he held the following positions: Vice President and
Counsel of Oppenheimer Acquisition Corp. ("OAC"), the Manager's
parent holding company; Executive Vice President & General Counsel
and a director of the Manager and OppenheimerFunds Distributor,
Inc. (the "Distributor"), Vice President and a director of
HarbourView Asset Management Corporation ("HarbourView") and
Centennial Asset Management Corporation ("Centennial"), investment
adviser subsidiaries of the Manager, a director of Shareholder
Financial Services, Inc. ("SFSI") and Shareholder Services, Inc.
("SSI"), transfer agent subsidiaries of the Manager and an officer
of other Oppenheimer funds.
Benjamin Lipstein, Trustee; Age 73
591 Breezy Hill Road, Hillsdale, N.Y. 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a director of Sussex
Publishers, Inc (Publishers of Psychology Today and Mother Earth
News) and of Spy Magazine, L.P.
___________________
*A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Bridget A. Macaskill, President and Trustee*; Age 48
President, Chief Executive Officer and a Director of the Manager;
Chairman and a director of SSI, and SFSI; President and a director
of OAC, HarbourView and Oppenheimer Partnership Holdings, Inc., a
holding company subsidiary of the Manager; a director of
Oppenheimer Real Asset Management, Inc.; formerly an Executive
Vice President of the Manager.
Elizabeth B. Moynihan, Trustee; Age 67
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institution), the Institute of Fine Arts (New
York University), National Building Museum; a member of the
Trustees Council, Preservation League of New York State, and of the
Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age 69
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company),
Kemper Corporation (insurance and financial services company),
Fidelity Life Association (mutual life insurance company); formerly
President and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research) and a director of
Lumbermens Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company.
Edward V. Regan, Trustee; Age 66
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New
York, Senior Fellow of Jerome Levy Economic Institute, Bard
College; a member of the U.S. Competitiveness Policy Council, a
director of GranCare Inc. (health care provider), formerly New York
State Comptroller and trustee, New York State and Local Retirement
Fund.
Russell S. Reynolds, Jr., Trustee; Age 65
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directorship Inc. (corporate governance
consulting); a director of Professional Staff Limited (U.K.); a
trustee of Mystic Seaport Museum, International House, Greenwich
Historical Society.
Donald W. Spiro, Vice Chairman and Trustee*; Age 71
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and the Distributor.
Pauline Trigere, Trustee; Age 84
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
___________________
*A Trustee who is an "interested person" of the Fund as defined in
the Investment Company Act.
Clayton K. Yeutter, Trustee; Age 66
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar,
Inc. (machinery), ConAgra, Inc. (food and agricultural products),
Farmers Insurance Company (insurance), FMC Corp. (chemicals and
machinery), IMC Global Inc. (chemicals and animal feed) and Texas
Instruments, Inc. (electronics); formerly (in descending
chronological order) Counsellor to the President (Bush) for
Domestic Policy, Chairman of the Republican National Committee,
Secretary of the U.S. Department of Agriculture, and U.S. Trade
Representative.
Andrew J. Donohue, Secretary; Age 46
Executive Vice President and General Counsel of the Manager and
the Distributor; President and a director of Centennial;
Executive Vice President, General Counsel and a director of
HarbourView, SSI, SFSI, and Oppenheimer Partnership Holdings, Inc.;
President and director of Oppenheimer Real Asset Management, Inc.;
General Counsel of OAC; Executive Vice President, Chief Legal
Officer and a director of MultiSource Services, Inc. (a broker-
dealer); an officer of other Oppenheimer funds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor; Partner in, Kraft & McManimon (a law firm); an officer
of First Investors Corporation (a broker-dealer) and First
Investors Management Company, Inc. (broker-dealer and investment
adviser); director and an officer of First Investors Family of
Funds and First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 60
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Senior Vice President, Treasurer and Secretary of SSI;
Vice President, Treasurer and Secretary of SFSI; Treasurer of OAC;
Vice President and Treasurer of Oppenheimer Real Asset Management,
Inc.; Chief Executive Officer, Treasurer and a director of
MultiSource Services, Inc. (a broker-dealer); an officer of other
Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age 38
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and
Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott T. Farrar, Assistant Treasurer; Age 31
3410 South Galena Street, Denver, Colorado 80231
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager.
Robert G. Zack, Assistant Secretary; Age 48
Senior Vice President and Associate General Counsel of the Manager,
Assistant Secretary of SSI, SFSI; an officer of other Oppenheimer
funds.
William L. Wilby, Vice President and Portfolio Manager; Age 52
Senior Vice President of the Manager and Vice President of
HarbourView; an officer of other Oppenheimer funds; formerly
international investment strategist at Brown Brothers Harriman &
Co., prior to which he was a Managing Director and Portfolio
Manager at AIG Global Investors.
Remuneration of Trustees. The officers of the Fund and
certain Trustees of the Fund (Ms. Macaskill and Messrs. Galli and
Spiro; Ms. Macaskill is also an officer) who are affiliated with
the Manager receive no salary or fees from the Fund. The remaining
Trustees of the Fund received the compensation shown below from the
Fund. The compensation from the Fund was paid during its fiscal
year ended September 30, 1996. The compensation from all of the
New York-based Oppenheimer funds includes the Fund and is
compensation received as a director, trustee or member of a
committee of the Board of those funds during the calendar year
1996.
<TABLE>
<caption Retirement
Benefits Total Compensation
Aggregate Accrued as From All
Compensation Part of New York-based
Name and Position From Fund Fund Expenses Oppenheimer Funds1
<S> <C> <C> <C>
Leon Levy, Chairman $12,011 $16,520 $152,750
and Trustee
Benjamin Lipstein, $ 7,343 $10,100 $ 91,350
Study Committee
Chairman, Audit Committee
Member and Trustee2
Elizabeth B. Moynihan, $ 7,343 $10,100 $ 91,350
Study Committee
Member and Trustee
Kenneth A. Randall, $ 6,679 $ 9,186 $ 83,450
Audit Committee Chairman
and Trustee
Edward V. Regan, $ 5,861 $ 8,061 $ 78,150
Proxy Committee Chairman,
Audit Committee
Member and Trustee
Russell S. Reynolds, Jr., $ 4,438 $ 6,104 $ 58,800
Proxy Committee Member
and Trustee
Pauline Trigere, Trustee $ 4,438 $ 6,104 $ 55,300
Clayton K. Yeutter, Proxy $ 4,438 $ 6,104 $ 58,800
Committee Member and
Trustee
</TABLE>
______________________
1 For the 1996 calendar year.
2 Committee position held during a portion of the period shown.
The Fund has adopted a retirement plan that provides for payment to
a retired Trustee of up to 80% of the average compensation paid
during that Trustee's five years of service in which the highest
compensation was received. A Trustee must serve in that capacity
for any of the New York-based Oppenheimer funds for at least 15
years to be eligible for the maximum payment. Because each
Trustee's retirement benefits will depend on the amount of the
Trustees' future compensation and length of service, the amount of
those benefits cannot be determined at this time, nor can the Fund
estimate the number of years of credited service that will be used
to determine those benefits.
- - Major Shareholders. As of December 13, 1996, no person owned of
record or was known by the Fund to own beneficially 5% or more of
the Fund's outstanding Class A, Class B or Class C shares, except:
(i) Nationwide Insurance Company ("Nationwide"), P.O. Box 182029,
Columbus, Ohio 43218-2029; on that date Nationwide's Qualified Plan
Variable 401(k) owned 6,238,233.633 Class A shares (equal to 9.75%
of the Class A shares then outstanding) and (ii) Merrill Lynch
Pierce Fenner & Smith Inc. ("Merrill Lynch"), 4800 Deer Lake Drive
East, 3rd Floor, Jacksonville, Florida 32246-6484, which was the
record owner of 73,145.600 Class C shares (equal to 13.38% of the
Class C shares then outstanding). The Manager has been advised
that such shares were held by Nationwide and Merrill Lynch for the
benefit of their respective customers.
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled
by Massachusetts Mutual Life Insurance Company. OAC is also owned
in part by certain of the Manager's directors and officers, some of
whom also serve as officers of the Fund, and three of whom (Ms.
Macaskill and Messrs. Spiro and Galli) serve as Trustees of the
Fund.
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees,
including portfolio managers, that would compete with or take
advantage of the Fund's portfolio transactions. Compliance with
the Code of Ethics is carefully monitored and strictly enforced by
the Manager.
- - The Investment Advisory Agreement. A management fee is payable
monthly to the Manager under the terms of the investment advisory
agreement between the Manager and the Fund and is computed on the
aggregate net assets of the Fund as of the close of business each
day. The investment advisory agreement requires the Manager, at
its expense, to provide the Fund with adequate office space,
facilities and equipment, and to provide and supervise the
activities of all administrative and clerical personnel required to
provide effective corporate administration for the Fund, including
the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for
continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributor's
Agreement are paid by the Fund. The advisory agreement lists
examples of expenses paid by the Fund, the major categories of
which relate to interest, taxes, brokerage commissions, fees to
certain Trustees, legal and audit expenses, custodian and transfer
agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation
costs. For the Fund's fiscal years ended September 30, 1994, 1995
and 1996, the management fees paid by the Fund to the Manager were
$11,927,942, $16,152,873 and $19,638,352, respectively.
The Investment Advisory Agreement contains no expense limitation.
However, because of state regulations limiting fund expenses that
previously applied, the Manager had voluntarily undertaken that the
Fund's total expenses in any fiscal year (including the investment
advisory fee but exclusive of taxes, interest, brokerage
commissions, distribution plan payments and any extraordinary non-
recurring expenses, including litigation) would not exceed the most
stringent state regulatory limitation applicable to the Fund. Due
to changes in federal securities laws, such state regulations no
longer apply and the Manager's undertaking is therefore
inapplicable and has been withdrawn. During the Fund's last fiscal
year, the Fund's expenses did not exceed the most stringent state
regulatory limit and the voluntary undertaking was not invoked.
The Fund's shareholders have been asked to approve a proposed
investment advisory agreement that would include the Manager's
undertaking as part of its management fee rate. This Statement of
Additional Information will not be supplemented if the proposed
agreement is approved, because the fee paid by the Fund would not
change.
The Agreement provides that in the absence of willful misfeasance,
bad faith, gross negligence in the performance of its duties, or
reckless disregard for its obligations and duties thereunder, the
Manager is not liable for any loss sustained by reason of good
faith errors or omissions in connection with any matters to which
the Agreement relates. The Agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to
use the name "Oppenheimer" in connection with other investment
companies for which it may act as investment adviser or general
distributor. If the Manager shall no longer act as investment
adviser to the Fund, the right of the Fund to use the name
"Oppenheimer" as part of its name may be withdrawn.
- - The Distributor. Under its General Distributor's Agreement with
the Fund, the Distributor acts as the Fund's principal underwriter
in the continuous public offering of the Fund's Class A, Class B
and Class C shares but is not obligated to sell a specific number
of shares. Expenses normally attributable to sales, (excluding
payments under the Distribution and Service Plans but including
advertising and the cost of printing and mailing prospectuses,
other than those furnished to existing shareholders), are borne by
the Distributor. During the Fund's fiscal years ended September
30, 1994, 1995 and 1996, the aggregate sales charges on sales of
the Fund's Class A shares were $8,458,588, $6,476,502 and
$5,830,983, respectively, of which the Distributor and an
affiliated broker-dealer retained in the aggregate $2,717,037,
$1,984,299 and $1,861,170, in those respective years. During the
Fund's fiscal year ended September 30, 1996, the contingent
deferred sales charges collected on the Fund's Class B shares
totaled $743,491, all of which the Distributor retained. During
the same period, Class C shares contingent deferred sales charges
collected totaled $6,445, all of which was retained by the
Distributor. For additional information about distribution of the
Fund's shares and the payments made by the Fund to the Distributor
in connection with such activities, please refer to "Distribution
and Service Plans," below.
- - The Transfer Agent. OppenheimerFunds Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for
shareholder servicing and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of
the duties of the Manager under the advisory agreement is to
arrange the portfolio transactions for the Fund. The advisory
agreement contains provisions relating to the employment of broker-
dealers ("brokers") to effect the Fund's portfolio transactions.
In doing so, the Manager is authorized by the advisory agreement to
employ broker-dealers, including "affiliated" brokers, as that term
is defined in the Investment Company Act, as may, in its best
judgment based on all relevant factors, implement the policy of the
Fund to obtain, at reasonable expense, the "best execution" (prompt
and reliable execution at the most favorable price obtainable) of
such transactions. The Manager need not seek competitive
commission bidding but is expected to minimize the commissions paid
to the extent consistent with the interest and policies of the Fund
as established by its Board of Trustees. Purchases of securities
from underwriters include a commission or concession paid by the
issuer to the underwriter, and purchases from dealers include a
spread between the bid and asked price.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the
Fund and/or the other accounts over which the Manager or its
affiliates have investment discretion. The commissions paid to
such brokers may be higher than another qualified broker would have
charged if a good faith determination is made by the Manager that
the commission is fair and reasonable in relation to the services
provided. Subject to the foregoing considerations, the Manager may
also consider sales of shares of the Fund and other investment
companies managed by the Manager or its affiliates as a factor in
the selection of brokers for the Fund's portfolio transactions.
Description of Brokerage Practices Followed by the Manager.
Subject to the provisions of the advisory agreement, and the
procedures and rules described above, allocations of brokerage are
generally made by the Manager's portfolio traders based upon
recommendations from the Manager's portfolio managers. In certain
instances, portfolio managers may directly place trades and
allocate brokerage, also subject to the provisions of the advisory
agreement and the procedures and rules described above. In either
case, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those
for which an exchange is the primary market are generally done with
principals or market makers. Brokerage commissions are paid
primarily for effecting transactions in listed securities or for
certain fixed-income agency transactions in the secondary market,
and are otherwise paid only if it appears likely that a better
price or execution can be obtained. When the Fund engages in an
option transaction, ordinarily the same broker will be used for the
purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent
orders to purchase or sell the same security by more than one of
the accounts managed by the Manager or its affiliates are combined.
The transactions effected pursuant to such combined orders are
averaged as to price and allocated in accordance with the purchase
or sale orders actually placed for each account. Option
commissions may be relatively higher than those which would apply
to direct purchases and sales of portfolio securities.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of
those other accounts may be useful both to the Fund and one or more
of such other accounts. Such research, which may be supplied by a
third party at the instance of a broker, includes information and
analyses on particular companies and industries as well as market
or economic trends and portfolio strategy, receipt of market
quotations for portfolio evaluations, information systems, computer
hardware and similar products and services. If a research service
also assists the Manager in a non-research capacity (such as
bookkeeping or other administrative functions), then only the
percentage or component that provides assistance to the Manager in
the investment decision-making process may be paid for in
commission dollars. The Board of Trustees has permitted the
Manager to use concessions on fixed price offerings to obtain
research, in the same manner as is permitted for agency
transactions. The Board has also permitted the Manager to use
stated commissions on secondary fixed-income agency trades to
obtain research where the broker has represented to the Manager
that: (i) the trade is not from or for the broker's own inventory,
(ii) the trade was executed by the broker on an agency basis at the
stated commission, and (iii) the trade is not a riskless principal
transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making
available additional views for consideration and comparisons, and
by enabling the Manager to obtain market information for the
valuation of securities held in the Fund's portfolio or being
considered for purchase. The Board of Trustees, including the
"independent" Trustees of the Fund (those Trustees of the Fund who
are not "interested persons" as defined in the Investment Company
Act, and who have no direct or indirect financial interest in the
operation of the advisory agreement or the Distribution Plans
described below) annually reviews information furnished by the
Manager as to the commissions paid to brokers furnishing such
services so that the Board may ascertain whether the amount of such
commissions was reasonably related to the value or benefit of such
services.
During the Fund's fiscal years ended September 30, 1994, 1995 and
1996, total brokerage commissions paid by the Fund (not including
spreads or concessions on principal transactions on a net trade
basis) were $7,714,396, $10,853,162 and $13,381,857, respectively.
During the fiscal year ended September 30, 1996, $10,127,169 was
paid to brokers as commissions in return for research services; the
aggregate dollar amount of those transactions was $3,411,541,434.
The transactions giving rise to those commissions were allocated in
accordance with the Manager's internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from
time to time the "average annual total return," "cumulative total
return," "average annual total return at net asset value" and
"total return at net asset value" of an investment in a class of
shares of the Fund may be advertised. An explanation of how these
total returns are calculated for each class and the components of
those calculations is set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include
the average annual total returns for each advertised class of
shares of the Fund for the 1, 5, and 10-year periods (or the life
of the class, if less) ending as of the most recently-ended
calendar quarter prior to the publication of the advertisement.
This enables an investor to compare the Fund's performance to the
performance of other funds for the same periods. However, a number
of factors should be considered before using such information as a
basis for comparison with other investments. An investment in the
Fund is not insured; its returns and share prices are not
guaranteed and normally will fluctuate on a daily basis. When
redeemed, an investor's shares may be worth more or less than their
original cost. Returns for any given past period are not a
prediction or representation by the Fund of future returns. The
returns of each class of shares of the Fund are affected by
portfolio quality, the type of investments the Fund holds and its
operating expenses allocated to the particular class.
- - Average Annual Total Returns. The "average annual total return"
of each class is an average annual compounded rate of return for
each year in a specified number of years. It is the rate of return
based on the change in value of a hypothetical initial investment
of $1,000 ("P" in the formula below) held for a number of years
("n") to achieve an Ending Redeemable Value ("ERV") of that
investment, according to the following formula:
( ERV ) 1/n
(-----) -1 = Average Annual Total Return
( P )
- - Cumulative Total Returns. The cumulative "total return"
calculation measures the change in value of a hypothetical
investment of $1,000 over an entire period of years. Its
calculation uses some of the same factors as average annual total
return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:
ERV - P
- ------- = Total Return
P
In calculating total returns for Class A shares, the current
maximum sales charge of 5.75% (as a percentage of the offering
price) is deducted from the initial investment ("P") (unless the
return is shown at net asset value, as described below). For Class
B shares, the payment of the applicable contingent deferred sales
charge (5.0% for the first year, 4.0% for the second year, 3.0% for
the third and fourth years, 2.0% in the fifth year, 1.0% in the
sixth year and none thereafter) is applied to the investment result
for the period shown (unless the total return is shown at net asset
value, as described below). For Class C shares, the payment of the
1.0% contingent deferred sales charge is applied to the investment
result for the one-year period (or less). Total returns also
assume that all dividends and capital gains distributions during
the period are reinvested to buy additional shares at net asset
value per share, and that the investment is redeemed at the end of
the period. The "average annual total returns" on an investment in
Class A shares of the Fund for the one, five and ten year periods
ended September 30, 1996 were 6.49%, 9.33% and 12.26%,
respectively. During a portion of the periods for which total
returns are shown for Class A shares, the Fund's maximum initial
sales charge rate was higher. As a result, performance of an
actual investment during those periods would be less than the
results shown. The cumulative "total return" on Class A shares for
the ten year period ended September 30, 1996 was 217.88%. The
average annual total return on an investment in Class B shares of
the Fund for the 12 months ended September 30, 1996 was 7.07%. The
cumulative total return on Class B shares for the period from
August 17, 1993 (the commencement of the offering of the shares)
through September 30, 1996 was 46.62%. The cumulative total return
at net asset value of the Fund's Class C shares for the period from
October 2, 1995 to September 30, 1996 was 11.34%.
- - Total Returns at Net Asset Value. From time to time the Fund may
also quote an average annual total return at net asset value or a
cumulative total return at net asset value for Class A, Class B, or
Class C shares. Each is based on the difference in net asset value
per share at the beginning and the end of the period for a
hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and
takes into consideration the reinvestment of dividends and capital
gains distributions. The cumulative total return at net asset
value of the Fund's Class A shares for the ten-year period ended
September 30, 1996 was 237.27%. The average annual total returns
at net asset value for the one, five and ten-year periods ended
September 30, 1996, for Class A shares were 12.98%, 10.63% and
12.93%, respectively. The cumulative total return at net asset
value on the Fund's Class B shares for the fiscal period from
August 17, 1993 through September 30, 1996 was 48.62%. The
cumulative total return at net asset value of the Fund's Class C
shares for the period from October 2, 1995 to September 30, 1996
was 12.34%.
Other Performance Comparisons. From time to time the Fund may
publish the ranking of its Class A, Class B or Class C shares by
Lipper Analytical Services, Inc. ("Lipper"), a widely-recognized
independent mutual fund monitoring service. Lipper monitors the
performance of regulated investment companies, including the Fund,
and ranks their performance for various periods based on categories
relating to investment objectives. The performance of the Fund's
classes is ranked against (i) all other funds, (ii) all other
"global" funds and (iii) all other "global" funds in a specific
size category. The Lipper performance rankings are based on total
returns that include the reinvestment of capital gain distributions
and income dividends but do not take sales charges or taxes into
consideration.
From time to time the Fund may publish the star ranking of the
performance of its Class A, Class B and Class C shares by
Morningstar, Inc., an independent mutual fund monitoring service.
Morningstar ranks mutual funds in broad investment categories:
domestic stock funds, international stock funds, taxable bond funds
and municipal bond funds, based on risk-adjusted total investment
returns. The Fund is ranked among international stock funds.
Investment return measures a fund's or class' one, three, five and
ten-year average annual total returns (depending on the inception
of the fund or class) in excess of 90-day U.S. Treasury bill
returns after considering the fund's sales charges and expenses.
Risk measures a fund's or class' performance below 90-day U.S.
Treasury bill returns. Risk and investment return are combined to
produce star rankings reflecting performance relative to the
average fund in the fund's category. Five stars is the "highest"
ranking (top 10%), four stars is "above average" (next 22.5%),
three stars is "average" (next 35%), two stars is "below average"
(next 22.5%) and one star is "lowest" (bottom 10%). The current
star ranking is the fund's or class' 3-year ranking or its combined
3- and 5-year ranking (weighted 60%/40%, respectively, or its
combined 3-, 5- and 10-year ranking (weighted 40%, 30% and 30%,
respectively), depending on the inception of the fund or class.
Rankings are subject to change monthly.
The Fund may also compare its performance to that of other funds in
its Morningstar Category. In addition to its star ranking,
Morningstar also categorizes and compares a fund's 3-year
performance based on Morningstar's classification of the fund's
investments and investment style, rather than how a fund defines
its investment objective. Morningstar's four broad categories
(domestic equity, international equity, municipal bond and taxable
bond) are each further subdivided into categories based on types of
investments and investment styles. Those comparisons by
Morningstar are based on the same risk and return measurements as
its star rankings but do not consider the effect of sales charges.
From time to time, the Fund may include in its advertisements and
sales literature performance information about the Fund cited in
other newspapers and periodicals, such as The New York Times, which
may include performance quotations from other sources, including
Lipper.
The total return on an investment in the Fund's Class A, Class B or
Class C shares may be compared with performance for the same period
of the Morgan Stanley World Index, an unmanaged index of issuers on
the stock exchanges of 20 foreign countries and the United States
and widely recognized as a measure of global stock market
performance. The performance of such Index includes a factor for
the reinvestment of dividends but does not reflect expenses or
taxes. The performance of the Fund's Class A, Class B or Class C
shares may also be compared in publications to (i) the performance
of various market indices or to other investments for which
reliable performance data is available, and (ii) to averages,
performance rankings or other benchmarks prepared by recognized
mutual fund statistical services.
Total return information may be useful to investors in reviewing
the performance of the Fund's Class A, Class B or Class C shares.
However, when comparing total return of an investment in Class A,
Class B or Class C shares of the Fund, a number of factors should
be considered before using such information as a basis for
comparison with other investments. For example, investors may also
wish to compare the Fund's Class A, Class B or Class C return to
the returns on fixed income investments available from banks and
thrift institutions, such as certificates of deposit, ordinary
interest-paying checking and savings accounts, and other forms of
fixed or variable time deposits, and various other instruments such
as Treasury bills. However, the Fund's returns and share price are
not guaranteed by the FDIC or any other agency and will fluctuate
daily, while bank depository obligations may be insured by the FDIC
and may provide fixed rates of return, and Treasury bills are
guaranteed as to principal and interest by the U.S. government.
From time to time, the Fund's Manager may publish rankings or
ratings of the Manager (or Transfer Agent) or the investor services
provided by them to shareholders of the Oppenheimer funds, other
than performance rankings of the Oppenheimer funds themselves.
Those ratings or rankings of shareholder/investor services by third
parties may compare the Oppenheimer funds' services to those of
other mutual fund families selected by the rating or ranking
services and may be based upon the opinions of the rating or
ranking service itself, based on its research or judgment, or based
upon surveys of investors, brokers, shareholders or others.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares of
the Fund under Rule 12b-1 of the Investment Company Act, pursuant
to which the Fund makes payments to the Distributor in connection
with the distribution and/or servicing of the shares of that class,
as described in the Prospectus. Each Plan has been approved by a
vote of (i) the Board of Trustees of the Fund, including a majority
of the Independent Trustees, cast in person at a meeting called for
the purpose of voting on that Plan, and (ii) the holders of a
"majority" (as defined in the Investment Company Act) of the shares
of each class. For the Distribution and Service Plans for Class B
and Class C shares, that vote was cast by the Manager as the sole
initial holder of Class B and Class C shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in
their sole discretion, from time to time may use their own
resources (which, in the case of the Manager, may include profits
from the advisory fee it receives from the Fund) to make payments
to brokers, dealers or other financial institutions (each is
referred to as a "Recipient" under the Plans) for distribution and
administrative services they perform, at no cost to the Fund. The
Distributor and the Manager may, in their sole discretion, increase
or decrease the amount of payments they make to Recipients from
their own resources to Recipients.
Unless terminated as described below, each Plan continues in effect
from year to year but only as long as its continuance is
specifically approved at least annually by the Fund's Board of
Trustees and its Independent Trustees by a vote cast in person at
a meeting called for the purpose of voting on such continuance.
Any Plan may be terminated at any time by the vote of a majority of
the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the
outstanding shares of that class. None of the Plans may be amended
to increase materially the amount of payments to be made unless
such amendment is approved by shareholders of the class affected by
the amendment. In addition, because Class B shares of the Fund
automatically convert into Class A shares after six years, the Fund
is required by a Securities and Exchange Commission rule to obtain
the approval of Class B as well as Class A shareholder for a
proposed amendment to the Class A Plan that would materially
increase the amount to be paid by Class A shares under the Class A
Plan. Such approval must be by a majority of the Class A and
Class B shares (as defined in the Investment Company Act), voting
separately by class. All material amendments must be approved by
the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall
provide separate written reports to the Fund's Board of Trustees at
least quarterly on the amount of all payments made pursuant to each
Plan, the purpose for which each payment was made and the identity
of each Recipient that received any payment. Those reports,
including the allocations on which they are based, will be subject
to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. Each Plan further provides that
while it is in effect, the selection and nomination of those
Trustees of the Fund who are not "interested persons" of the Fund
is committed to the discretion of the Independent Trustees. This
does not prevent the involvement of others in such selection and
nomination if the final decision on selection or nomination is
approved by a majority of the Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by
the Recipient for itself and its customers, did not exceed a
minimum amount, if any, that may be determined from time to time by
a majority of the Fund's Independent Trustees. Initially, the Board
of Trustees has set the fees at the maximum rate and set no minimum
amount of the assets.
For the fiscal year ended September 30, 1996, payments under the
Plan for Class A shares totaled $4,149,778, all of which was paid
by the Distributor to Recipients, including $252,591 paid to MML
Investor Services, Inc., an affiliate of the Distributor. Any
unreimbursed expenses incurred by the Distributor with respect to
Class A shares for any fiscal year may not be recovered in
subsequent years. Payments received by the Distributor under the
Plan for Class A shares will not be used to pay any interest
expense, carrying charge, or other financial costs, or allocation
of overhead by the Distributor.
The Class B Plan and the Class C Plan allow the service fee payment
to be paid by the Distributor to Recipients in advance for the
first year such shares are outstanding, and thereafter on a
quarterly basis, as described in the Prospectus. The advance
payment is based on the net asset value of Class B and Class C
shares sold. An exchange of shares does not entitle the Recipient
to an advance service fee payment. In the event Class B or Class
C shares are redeemed during the first year that the shares are
outstanding, the Recipient will be obligated to repay a pro rata
portion of the advance payment for those shares to the Distributor.
Payments made under the Class B Plan during the fiscal year ended
September 30, 1996, totaled $4,373,990, of which $3,701,675 was
retained by the Distributor and $53,520 was paid to a dealer
affiliated with the Distributor. Payments made under the Class C
Plan during the fiscal year ended September 30, 1996, totaled
$81,790, of which $75,623 was retained by the Distributor.
Although the Class B and Class C Plans permit the Distributor to
retain both the asset-based sales charges and the service fees on
such shares, or to pay Recipients the service fee on a quarterly
basis, without payment in advance, the Distributor presently
intends to pay the service fee to Recipients in the manner
described above. A minimum holding period may be established from
time to time under the Class B Plan and the Class C Plan by the
Board. Initially, the Board has set no minimum holding period.
All payments under the Class B Plan and the Class C Plan are
subject to the limitations imposed by the Conduct Rules of the
National Association of Securities Dealers, Inc., on payments of
asset-based sales charges and service fees.
Asset-based sales charge payments are designed to permit an
investor to purchase shares of the Fund without the assessment of
a front-end sales load and at the same time permit the Distributor
to compensate brokers and dealers in connection with the sale of
Class B and Class C shares of the Fund. The Distributor's actual
distribution expenses for any given year may exceed the aggregate
of payments received pursuant to the Class B Plan and Class C Plan
and from contingent deferred sales charges.
The Class C Plan provides for the distributor to be compensated at
a flat rate, whether the Distributor's distribution expenses are
more or less than the amounts paid by the Fund during that period.
Payments under the Class C and Class B Plans are made in
recognition that the Distributor (i) pays sales commissions to
authorized brokers and dealers at the time of sale and pays service
fees as described in the Prospectus, (ii) may finance such
commissions and/or the advance of the service fee payment to
Recipients under those Plans, or may provide such financing from
its own resources, or from an affiliate, (iii) employs personnel to
support distribution of shares, and (iv) may bear the costs of
sales literature, advertising and prospectuses (other than those
furnished to current shareholders), state "blue sky" registration
fees and certain other distribution expenses. The Fund's Board of
Trustees has also proposed that the Class B Plan provide for the
Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the
amounts paid by the Fund during that period. The Statement of
Additional Information will not be updated if shareholders approve
such a new Class B Plan.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C
Shares. The availability of three classes of shares permits the
individual investor to choose the method of purchasing shares that
is more beneficial to the investor depending on the amount of the
purchase, the length of time the investor expects to hold shares
and other relevant circumstances. Investors should understand that
the purpose and function of the deferred sales charge and asset-
based sales charge with respect to Class B and Class C shares are
the same as those of the initial sales charge with respect to Class
A shares. Any salesperson or other person entitled to receive
compensation for selling Fund shares may receive different
compensation with respect to one class of shares than the other.
The Distributor normally will not accept any order for $500,000 or
$1 million or more of Class B or Class C shares, respectively, on
behalf of a single investor (not including dealer "street name" or
omnibus accounts) because generally it will be more advantageous
for that investor to purchase Class A shares of the Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has
different shareholder privileges and features. The net income
attributable to Class B and Class C shares and the dividends
payable on such shares will be reduced by incremental expenses
borne solely by those classes, including the asset-based sales
charge to which both classes of shares are subject.
The conversion of Class B shares to Class A shares after six years
is subject to the continuing availability of a private letter
ruling from the Internal Revenue Service, or an opinion of counsel
or tax adviser, to the effect that the conversion of Class B shares
does not constitute a taxable event for the holder under Federal
income tax law. If such a revenue ruling or opinion is no longer
available, the automatic conversion feature may be suspended, in
which event no further conversions of Class B shares would occur
while such suspension remained in effect. Although Class B shares
could then be exchanged for Class A shares on the basis of relative
net asset value of the two classes, without the imposition of a
sales charge or fee, such exchange could constitute a taxable event
for the holder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for longer
than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares
recognizes two types of expenses. General expenses that do not
pertain specifically to either class are allocated pro rata to the
shares of each class, based on the percentage of the net assets of
such class to the Fund's total assets, and then equally to each
outstanding share within a given class. Such general expenses
include (a) management fees, (b) legal, bookkeeping and audit fees,
(c) printing and mailing costs of shareholder reports,
Prospectuses, Statements of Additional Information and other
materials for current shareholders, (d) fees to Independent
Trustees, (v) custodian expenses, (vi) share issuance costs, (vii)
organization and start-up costs, (viii) interest, taxes and
brokerage commissions, and (ix) non-recurring expenses, such as
litigation costs. Other expenses that are directly attributable to
a class are allocated equally to each outstanding share within that
class. Such expenses include (a) Distribution Plan fees, (b)
incremental transfer and shareholder servicing agent fees and
expenses, (c) registration fees and (d) shareholder meeting
expenses, to the extent that such expenses pertain to a specific
class rather than to the Fund as a whole.
Determination of Net Asset Values Per Share. The net asset values
per share of Class A, Class B and Class C shares of the Fund are
determined as of the close of business of The New York Stock
Exchange (the "Exchange") on each day that the Exchange is open, by
dividing the value of the Fund's net assets attributable to that
class by the number of shares of that class that are outstanding.
The Exchange normally closes at 4:00 P.M. New York time, but may
close earlier on some days (for example, in case of weather
emergencies or on days falling before a holiday). The Exchange's
most recent annual holiday schedule (which is subject to change)
states that it will close on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. It may also close on other days. The Fund may
invest a substantial portion of its assets in foreign securities
primarily listed on foreign exchanges or in foreign over-the
counter markets that may trade on Saturdays or customary U.S.
business holidays on which the Exchange is closed. Because the
Fund's net asset value will not be calculated on those days, the
Fund's net asset values per share of Class A, Class B and Class C
shares of the Fund may be significantly affected at times when
shareholders cannot purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i)
equity securities traded on a U.S. securities exchange or on the
NASDAQ for which last sale information regularly reported are
valued at the last reported sale prices on their primary exchange
or NASDAQ that day (or, in the absence of sales that day, at values
based on the last sale prices of the preceding trading day, or
closing bid prices that day); (ii) securities traded on a foreign
securities exchange are valued generally at the last sales price
available to the pricing service approved by the Fund's Board of
Trustees or to the Manager as reported by the principal exchange on
which the security is traded, or at the mean between "bid" and
"asked" prices obtained from the principal exchange or two active
market makers in the security on the basis of reasonable inquiry;
(iii) long-term debt securities having a remaining maturity in
excess of 60 days are valued based on the mean between the "bid"
and "asked" prices determined by a portfolio pricing service
approved by the Fund's Board of Trustees or obtained by the Manager
from two active market makers in the security on the basis of
reasonable inquiry; (iv) debt instruments having a maturity of more
than 397 days when issued, and non-money market type instruments
having a maturity of 397 days or less when issued, which have a
remaining maturity of 60 days or less are valued at the mean
between "bid" and "asked" prices determined by a pricing service
approved by the Fund's Board of Trustees or obtained by the Manager
from two active market makers in the security on the basis of
reasonable inquiry; (v) money market debt securities that had a
maturity of less than 397 days when issued that have a remaining
maturity of 60 days or less are valued at cost, adjusted for
amortization of premiums and accretion of discounts; and (vi)
securities (including restricted securities) not having readily-
available market quotations are valued at fair value determined
under the Board's procedures. If the Manager is unable to locate
two market makers willing to give quotes (see (ii), (iii) and (iv)
above), the security may be priced at the mean between the "bid"
and "ask" prices provided by a single active market maker (which in
certain cases may be the bid price if no asked price is available).
In the case of U.S. Government Securities, mortgage-backed
securities, foreign securities and corporate bonds, when last sale
information is not generally available, such pricing procedures may
include "matrix" comparisons to the prices for comparable
instruments on the basis of quality, yield, maturity and other
special factors involved. The Manager may use pricing services
approved by the Board of Trustees to price U.S. Government
Securities, mortgage-backed securities, foreign government
securities and corporate bonds for which last sale information is
not generally available. The Manager will monitor the accuracy of
such pricing services which may include comparing prices used for
portfolio evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in
securities markets that occur between the time their prices are
determined and the close of the NYSE will not be reflected in the
Fund's calculation of net asset value unless the Board of Trustees
or the Manager, under procedures established by the Board of
Trustees, determines that the particular event is likely to effect
a material change in the value of such security. Foreign currency,
including forward contracts, will be valued at the closing price in
the London foreign exchange market that day as provided by a
reliable bank, dealer or pricing service. The values of securities
denominated in foreign currency will be converted to U.S. dollars
at the closing price in the London foreign exchange market that day
as provided by a reliable bank, dealer or pricing service.
Puts, calls and Futures are valued at the last sales price on the
principal exchange on which they are traded, or on NASDAQ, as
applicable, as determined by a pricing service approved by the
Board of Trustees or by the Manager. If there were no sales that
day, value shall be the last sale price on the preceding trading
day if it is within the spread of the closing bid and asked prices
on the principal exchange or on NASDAQ on the valuation date, or,
if not, value shall be the closing bid price on the principal
exchange or on NASDAQ on the valuation date. If the put, call or
future is not traded on an exchange or on NASDAQ, it shall be
valued at the mean between bid and asked prices obtained by the
Manager from two active market makers (which in certain cases may
be the bid price if no asked price is available).
When the Fund writes an option, an amount equal to the premium
received is included in the Fund's Statement of Assets and
Liabilities as an asset, and an equivalent credit is included in
the liability section. The credit is adjusted ("marked-to-market")
to reflect the current market value of the call or put. In
determining the Fund's gain on investments, if a call written by
the Fund is exercised, the proceeds are increased by the premium
received. If a call or put written by the Fund expires, the Fund
has a gain in the amount of the premium; if the Fund enters into a
closing purchase transaction, it will have a gain or loss depending
on whether the premium received was more or less than the cost of
the closing transaction. If the Fund exercises a put it holds, the
amount the Fund receives on its sale of the underlying investment
is reduced by the amount of premium paid by the Fund.
AccountLink. When shares are purchased through AccountLink, each
purchase must be at least $25.00. Shares will be purchased on the
regular business day the Distributor is instructed to initiate the
Automated Clearing House ("ACH") transfer to buy shares. Dividends
will begin to accrue on shares purchased by the proceeds of ACH
transfers on the business day the Fund receives Federal Funds for
the purchase through the ACH system before the close of The New
York Stock Exchange. The Exchange normally closes at 4:00 P.M.,
but may close earlier on certain days. If Federal Funds are
received on a business day after the close of the Exchange, the
shares will be purchased and dividends will begin to accrue on the
next regular business day. The proceeds of ACH transfers are
normally received by the Fund 3 days after the transfers are
initiated. The Distributor and the Fund are not responsible for
any delays in purchasing shares resulting from delays in ACH
transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced
sales charge rate may be obtained for Class A shares under Right of
Accumulation and Letters of Intent because of the economies of
sales efforts and reduction in expenses realized by the
Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in the
Prospectus because the Distributor incurs little or no selling
expenses. The term "immediate family" refers to one's spouse,
children, grandchildren, grandparents, parents, parents-in-law,
brothers and sisters, aunts, uncles, nieces and nephews, sons- and
daughters-in-law, a sibling's spouse and a spouse's siblings.
- - The Oppenheimer Funds. The Oppenheimer funds are those mutual
funds for which the Distributor acts as the distributor or the sub-
distributor and include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Enterprise Fund
Oppenheimer International Growth Fund
Oppenheimer Developing Markets Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Disciplined Value Fund
Oppenheimer LifeSpan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer LifeSpan Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Quest Global Value Fund, Inc.
Oppenheimer Quest Value Fund, Inc.
Oppenheimer Quest Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Rochester Fund Municipals
Bond Fund Series - The Bond Fund for Growth
Rochester Portfolio Series - Limited Term New York Municipal Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the Oppenheimer funds except Money Market Funds (under
certain circumstances described herein, redemption proceeds of
Money Market Fund shares may be subject to a contingent deferred
sales charge). Current shareholders of Rochester Fund Municipals,
The Bond Fund for Growth or Limited Term New York Municipal Fund
(collectively referred to as the "Rochester Funds") may exchange
their shares for the same class of shares in any of the Oppenheimer
funds listed above. However, no exchange of shares of any
Oppenheimer fund for shares of any Rochester Funds is currently
permitted.
Letters of Intent. A Letter of Intent (referred to as a "Letter")
is an investor's statement in writing to the Distributor of the
intention to purchase Class A shares or Class A and Class B shares
of the Fund (and other Oppenheimer funds) during a 13-month period
(the "Letter of Intent period"), which may, at the investor's
request, include purchases made up to 90 days prior to the date of
the Letter. The Letter states the investor's intention to make the
aggregate amount of purchases of shares which, when added to the
investor's holdings of shares of those funds, will equal or exceed
the amount specified in the Letter. Purchases made by reinvestment
of dividends or distributions of capital gains and purchases made
at net asset value without sales charge do not count toward
satisfying the amount of the Letter. A Letter enables an investor
to count the Class A and Class B shares purchased under the Letter
to obtain the reduced sales charge rate on purchases of Class A
shares of the Fund (and other Oppenheimer funds) that applies under
the Right of Accumulation to current purchases of Class A shares.
Each purchase of Class A shares under the Letter will be made at
the public offering price applicable to a single lump-sum purchase
of shares in the amount intended to be purchased as described in
the Prospectus.
In submitting a Letter, the investor makes no commitment to
purchase shares, but if the investor's purchases of shares within
the Letter of Intent period, when added to the value (at offering
price) of the investor's holdings of shares on the last day of that
period, do not equal or exceed the intended purchase amount, the
investor agrees to pay the additional amount of sales charge
applicable to such purchases, as set forth in "Terms of Escrow,"
below (as those terms may be amended from time to time). The
investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be
bound by the terms of the Prospectus, this Statement of Additional
Information and the Application used for such Letter of Intent, and
if such terms are amended, as they may be from time to time by the
Fund, that those amendments will apply automatically to existing
Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent,
the Transfer Agent will not hold shares in escrow. If the intended
purchases amount under the Letter entered into by an
OppenheimerFunds prototype 401(k) plan is not purchased by the plan
by the end of the Letter of Intent period, there will be no
adjustment of commission paid to the broker-dealer or financial
institution of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended purchase amount, the
commissions previously paid to the dealer of record for the account
and the amount of sales charge retained by the Distributor will be
adjusted to the rates applicable to actual purchases. If total
eligible purchases during the Letter of Intent period exceed the
intended purchase amount and exceed the amount needed to qualify
for the next sales charge rate reduction set forth in the
applicable prospectus, the sales charges paid will be adjusted to
the lower rate, but only if and when the dealer returns to the
Distributor the excess of the amount of commissions allowed or paid
to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the
investor's account at the net asset value per share in effect on
the date of such purchase, promptly after the Distributor's receipt
thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the
Letter of Intent period will be deducted. It is the responsibility
of the dealer of record and/or the investor to advise the
Distributor about the Letter in placing any purchase orders for the
investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.
- -- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in
value to 5% of the intended purchase amount specified in the Letter
shall be held in escrow by the Transfer Agent. For example, if the
intended purchase amount is $50,000, the escrow shall be shares
valued in the amount of $2,500 (computed at the public offering
price adjusted for a $50,000 purchase). Any dividends and capital
gains distributions on the escrowed shares will be credited to the
investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the
escrowed shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period
the total purchases pursuant to the Letter are less than the
intended purchase amount specified in the Letter, the investor must
remit to the Distributor an amount equal to the difference between
the dollar amount of sales charges actually paid and the amount of
sales charges which would have been paid if the total amount
purchased had been made at a single time. Such sales charge
adjustment will apply to any shares redeemed prior to the
completion of the Letter. If such difference in sales charges is
not paid within twenty days after a request from the Distributor or
the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares
necessary to realize such difference in sales charges. Full and
fractional shares remaining after such redemption will be released
from escrow. If a request is received to redeem escrowed shares
prior to the payment of such additional sales charge, the sales
charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of a Letter)
include (a) Class A shares sold with a front-end sales charge or
subject to a Class A contingent deferred sales charge, (b) Class B
shares acquired subject to a contingent deferred sales charge, and
(c) Class A or B shares acquired in exchange for either (i) Class
A shares of one of the other Oppenheimer funds that were acquired
subject to a Class A initial or contingent deferred sales charge or
(ii) Class B shares of one of the other Oppenheimer funds that were
acquired subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as
described in the section of the Prospectus entitled "How to
Exchange Shares," and the escrow will be transferred to that other
fund.
Asset Builder Plans. To establish an Asset Builder Plan from a
bank account, a check (minimum $25) for the initial purchase must
accompany the application. Shares purchased by Asset Builder Plan
payments from bank accounts are subject to the redemption
restrictions for recent purchases described in "How To Sell
Shares," in the Prospectus. Asset Builder Plans also enable
shareholders of Oppenheimer Cash Reserves to use those accounts for
monthly automatic purchases of shares of up to four other
Oppenheimer funds.
There is a front-end sales charge on the purchase of certain
Oppenheimer funds, or a contingent deferred sales charge may apply
to shares purchased by Asset Builder payments. An application
should be obtained from the Distributor, completed and returned,
and a prospectus of the selected fund(s) should be obtained from
the Distributor or your financial advisor before initiating Asset
Builder payments. The amount of the Asset Builder investment may
be changed or the automatic investments may be terminated at any
time by writing to the Transfer Agent. A reasonable period
(approximately 15 days) is required after the Transfer Agent's
receipt of such instructions to implement them. The Fund reserves
the right to amend, suspend, or discontinue offering such plans at
any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders
for the Fund's shares (for example, when a purchase check is
returned to the Fund unpaid) causes a loss to be incurred when the
net asset value of the Fund's shares on the cancellation date is
less than on the purchase date. That loss is equal to the amount
of the decline in the net asset value per share multiplied by the
number of shares in the purchase order. The investor is
responsible for that loss. If the investor fails to compensate the
Fund for the loss, the Distributor will do so. The Fund may
reimburse the Distributor for that amount by redeeming shares from
any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.
The term "group retirement plan" means any qualified or non-
qualified retirement plan (including 457 plans, SEPs, SARSEPs,
403(b)) plans, and SIMPLE plans) for employees of a corporation or
a sole proprietorship, members and employees of a partnership or
association or other organized group of persons (the members of
which may include all members of the group participating in the
plan purchase Class A shares of the Fund through a single
investment dealer, broker or other financial institution designated
by the group.
Retirement Plans. In describing certain types of employee benefit
plans that may purchase Class A shares without being subject to the
Class A contingent deferred sales charge, the term "employee
benefit plan" means any plan or arrangement, whether or not
"qualified" under the Internal Revenue Code, including, medical
savings accounts, payroll deduction plans or similar plans in which
Class A shares are purchased by a fiduciary or other person for the
account of participants who are employees of a single employer or
of affiliated employers, if the Fund account is registered in the
name of the fiduciary or other person for the benefit of
participants in the plan.
The term "group retirement plan" means any qualified or non-
qualified retirement plan (including 457 plans, SEPs, SARSEPs,
403(b) plans, and SIMPLE plans) for employees of a corporation or
a sole proprietorship, members and employees of a partnership or
association or other organized group of persons (the members of
which may include other groups), if the group has made special
arrangements with the Distributor and all members of the group
participating in the plan purchase Class A shares of the Fund
through a single investment dealer, broker or other financial
institution designated by the group.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and
conditions for redemptions set forth in the Prospectus.
- - Involuntary Redemptions. The Fund's Board of Trustees has the
right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less
than $500 or such lesser amount as the Board may fix. The Board of
Trustees will not cause the involuntary redemption of shares in an
account if the aggregate net asset value of the shares has fallen
below the stated minimum solely as a result of market fluctuations.
Should the Board elect to exercise this right, it may also fix, in
accordance with the Investment Company Act, the requirements for
any notice to be given to the shareholders in question (not less
than 30 days), or the Board may set requirements for granting
permission to the Shareholder to increase the investment, and set
other terms and conditions so that the shares would not be
involuntarily redeemed.
- - Payments "In Kind". The Prospectus states that payment for
shares tendered for redemption is ordinarily made in cash.
However, the Board of Trustees of the Fund may determine that it
would be detrimental to the best interests of the remaining
shareholders of the Fund to make payment of a redemption order
wholly or partly in cash. In that case the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind"
of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1
under the Investment Company Act, pursuant to which the Fund is
obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day
period for any one shareholder. If shares are redeemed in kind,
the redeeming shareholder might incur brokerage or other costs in
selling the securities for cash. The method of valuing securities
used to make redemptions in kind will be the same as the method the
Fund uses to value its portfolio securities described above under
the "Determination of Net Asset Values Per Share" and that
valuation will be made as of the time the redemption price is
determined.
Reinvestment Privilege. Within six months of a redemption, a
shareholder may reinvest all or part of the redemption proceeds of
(i) Class A shares that you purchased subject to an initial sales
charge, or the Class A contingent deferred sales charge when you
redeemed them or (ii) Class B shares that were subject to the Class
B contingent deferred sales charge when you redeemed them, without
sales charge. This privilege does not apply to Class C shares.
The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other Oppenheimer funds into which
shares of the Fund are exchangeable as described below, at the net
asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Distributor for
that privilege at the time of reinvestment. Any capital gain that
was realized when the shares were redeemed is taxable, and
reinvestment will not alter any capital gains tax payable on that
gain. If there has been a capital loss on the redemption, some or
all of the loss may not be tax deductible, depending on the timing
and amount of the reinvestment. Under the Internal Revenue Code,
if the redemption proceeds of Fund shares on which a sales charge
was paid are reinvested in shares of the Fund or another of the
Oppenheimer funds within 90 days of payment of the sales charge,
the shareholder's basis in the shares of the Fund that were
redeemed may not include the amount of the sales charge paid. That
would reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added
to the basis of the shares acquired by the reinvestment of the
redemption proceeds. The Fund may amend, suspend or cease offering
this reinvestment privilege at any time as to shares redeemed after
the date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge of any class at the time of
transfer to the name of another person or entity (whether the
transfer occurs by absolute assignment, gift or bequest, not
involving, directly or indirectly, a public sale). The transferred
shares will remain subject to the contingent deferred sales charge,
calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the
transferring shareholder. If less than all shares held in an
account are transferred, and some but not all shares in the account
would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, the priorities described in the Prospectus
under "How to Buy Shares" for the imposition of the Class B or the
Class C contingent deferred sales charge will be followed in
determining the order in which shares are transferred.
Distributions From Retirement Plans. Requests for distributions
from OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans,
401(k) plans, or pension or profit-sharing plans should be
addressed to "Trustee, Oppenheimer funds Retirement Plans," c/o the
Transfer Agent at its address listed in "How To Sell Shares" in the
Prospectus or on the back cover of this Statement of Additional
Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if
the distribution is premature; and (iii) conform to the
requirements of the plan and the Fund's other redemption
requirements. Participants (other than self-employed persons
maintaining a plan account in their own name) in OppenheimerFunds-
sponsored prototype pension, profit-sharing plans or 401(k) plans
may not directly redeem or exchange shares held for their accounts
under those plans. The employer or plan administrator must sign
the request. Distributions from pension and profit sharing plans
are subject to special requirements under the Internal Revenue Code
and certain documents (available from the Transfer Agent) must be
completed before the distribution may be made. Distributions from
retirement plans are subject to withholding requirements under the
Internal Revenue Code, and IRS Form W-4P (available from the
Transfer Agent) must be submitted to the Transfer Agent with the
distribution request, or the distribution may be delayed. Unless
the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that
tax be withheld from any distribution even if the shareholder
elects not to have tax withheld. The Fund, the Manager, the
Distributor, the Trustee and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the
conditions of applicable tax laws and will not be responsible for
any tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and
Brokers. The Distributor is the Fund's agent to repurchase its
shares from authorized dealers or brokers on behalf of their
customers. The shareholder should contact the broker or dealer to
arrange this type of redemption. The repurchase price per share
will be the net asset value next computed after the Distributor
receives the order placed by the dealer or broker, except that if
the Distributor receives a repurchase order from a dealer or broker
after the close of The New York Stock Exchange on a regular
business day, it will be processed at that day's net asset value if
the order was received by the dealer or broker from its customers
prior to the time the Exchange closes (normally that is 4:00 P.M.,
but may be earlier some days) and the order was transmitted to and
received by the Distributor prior to its close of business that day
(normally 5:00 P.M.). Ordinarily, for accounts redeemed by a
broker-dealer under this procedure, payment will be made within
three business days after the shares have been redeemed upon the
Distributor's receipt of the required redemption documents in
proper form, with the signature(s) of the registered owners
guaranteed on the redemption document as described in the
Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares
of the Fund valued at $5,000 or more can authorize the Transfer
Agent to redeem shares (minimum $50) automatically on a monthly,
quarterly, semi-annual or annual basis under an Automatic
Withdrawal Plan. Shares will be redeemed three business days prior
to the date requested by the shareholder for receipt of the
payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable
to all shareholders of record and sent to the address of record for
the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on
this basis. Payments are normally made by check, but shareholders
having AccountLink privileges (see "How To Buy Shares") may arrange
to have Automatic Withdrawal Plan payments transferred to the bank
account designated on the OppenheimerFunds New Account Application
or signature-guaranteed instructions. The Fund cannot guarantee
receipt of a payment on the date requested and reserves the right
to amend, suspend or discontinue offering such plans at any time
without prior notice. Because of the sales charge assessed on
Class A share purchases, shareholders should not make regular
additional Class A share purchases while participating in an
Automatic Withdrawal Plan. Class B and Class C shareholders should
not establish withdrawal plans, because of the imposition of the
contingent deferred sales charge on such withdrawals (except where
the Class B or the Class C contingent deferred sales charge is
waived as described in the Prospectus in "Waivers of Class B and
Class C Sales Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such
plans, as stated below and in the provisions of the
OppenheimerFunds Application relating to such Plans, as well as the
Prospectus. These provisions may be amended from time to time by
the Fund and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.
- - Automatic Exchange Plans. Shareholders can authorize the
Transfer Agent (on the OppenheimerFunds Application or signature-
guaranteed instructions) to exchange a pre-determined amount of
shares of the Fund for shares (of the same class) of other
Oppenheimer funds automatically on a monthly, quarterly, semi-
annual or annual basis under an Automatic Exchange Plan. The
minimum amount that may be exchanged to each other fund account is
$25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of
Additional Information.
- - Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a
sales charge will be redeemed first and shares acquired with
reinvested dividends and capital gains distributions will be
redeemed next, followed by shares acquired with a sales charge, to
the extent necessary to make withdrawal payments. Depending upon
the amount withdrawn, the investor's principal may be depleted.
Payments made under withdrawal plans should not be considered as a
yield or income on your investment. It may not be desirable to
purchase additional Class A shares while making automatic
withdrawals because of the sales charges that apply to purchases
when made. Accordingly, a shareholder normally may not maintain an
Automatic Withdrawal Plan while simultaneously making regular
purchases of Class A shares.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the
"Planholder") who executed the Plan authorization and application
submitted to the Transfer Agent. Neither the Fund nor the Transfer
Agent shall incur any liability to the Planholder for any action
taken or omitted by the Transfer Agent in good faith to administer
the Plan. Certificates will not be issued for shares of the Fund
purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the
records of the Fund. Any share certificates held by a Planholder
may be surrendered unendorsed to the Transfer Agent with the Plan
application so that the shares represented by the certificate may
be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions
of capital gains must be reinvested in shares of the Fund, which
will be done at net asset value without a sales charge. Dividends
on shares held in the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be
made at the net asset value per share determined on the redemption
date. Checks or ACH transfer payments of the proceeds of Plan
withdrawals will normally be transmitted three business days prior
to the date selected for receipt of the payment (receipt of payment
on the date selected cannot be guaranteed), according to the choice
specified in writing by the Planholder.
The amount and the interval of disbursement payments and the
address to which checks are to be mailed or AccountLink payments
are to be sent may be changed at any time by the Planholder by
writing to the Transfer Agent. The Planholder should allow at
least two weeks' time in mailing such notification for the
requested change to be put in effect. The Planholder may, at any
time, instruct the Transfer Agent by written notice (in proper form
in accordance with the requirements of the then-current Prospectus
of the Fund) to redeem all, or any part of, the shares held under
the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will
mail a check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time
by the Transfer Agent upon receiving directions to that effect from
the Fund. The Transfer Agent will also terminate a Plan upon
receipt of evidence satisfactory to it of the death or legal
incapacity of the Planholder. Upon termination of a Plan by the
Transfer Agent or the Fund, shares that have not been redeemed from
the account will be held in uncertificated form in the name of the
Planholder, and the account will continue as a dividend-
reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her
executor or guardian, or other authorized person.
To use Class A shares held under the Plan as collateral for a debt,
the Planholder may request issuance of a portion of the Class A
shares in certificated form. Share certificates are not issued for
Class B shares or Class C shares. Upon written request from the
Planholder, the Transfer Agent will determine the number of Class
A shares for which a certificate may be issued without causing the
withdrawal checks to stop because of exhaustion of uncertificated
shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will
terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor
transfer agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
Oppenheimer funds having more than one class of shares may be
exchanged only for shares of the same class of other Oppenheimer
funds. Shares of the Oppenheimer funds that have a single class
without a class designation are deemed "Class A" shares for this
purpose. All Oppenheimer funds offer Class A, Class B and Class C
shares, except Oppenheimer Money Market Fund, Inc., Centennial
Money Market Trust, Centennial Tax-Exempt Trust, Centennial
Government Trust, Centennial New York Tax-Exempt Trust, Centennial
California Tax-Exempt Trust, Centennial America Fund, L.P., and
Daily Cash Accumulation Fund, Inc., which only offer Class A shares
and Oppenheimer Main Street California Municipal Fund, which only
offers Class A and Class B shares (Class B and Class C shares of
Oppenheimer Cash Reserves are generally available only by exchange
from the same class of shares of other Oppenheimer funds or through
OppenheimerFunds sponsored 401(k) plans). A current list showing
which funds offer which classes can be obtained by calling the
Distributor at 1-800-525-7048.
Class A shares of Oppenheimer funds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money
Market Fund purchased without a sales charge may be exchanged for
shares of Oppenheimer funds offered with a sales charge upon
payment of the sales charge (or, if applicable, may be used to
purchase shares of Oppenheimer funds subject to a contingent
deferred sales charge). However, shares of Oppenheimer Money
Market Fund, Inc., purchased with the redemption proceeds of shares
of other mutual funds (other than funds managed by the Manager or
its subsidiaries) redeemed within the 12 months prior to that
purchase may subsequently be exchanged for shares of other
Oppenheimer funds without being subject to an initial or contingent
deferred sales charge, whichever is applicable. To qualify for
this privilege, the investor or the investor's dealer must notify
the Distributor of eligibility for this privilege at the time the
shares of Oppenheimer Money Market Fund, Inc., are purchased, and,
if requested, must supply proof of entitlement to this privilege.
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds except
Oppenheimer Cash Reserves or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor
may be exchanged at net asset value for shares of any of the
Oppenheimer funds. No contingent deferred sales charge is imposed
on exchanges of shares of any class purchased subject to a
contingent deferred sales charge. However, when Class A shares
acquired by exchange of Class A shares of other Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are
redeemed within 18 months of the end of the calendar month of the
initial purchase of the exchanged Class A shares, the Class A
contingent deferred sales charge is imposed on the redeemed shares.
The Class B contingent deferred sales charge is imposed on Class B
shares acquired by exchange if they are redeemed within 6 years of
the initial purchase of the exchanged Class B shares. The Class C
contingent deferred sales charge is imposed on Class C shares
acquired by exchange if they are redeemed within 12 months of the
initial purchase of the exchanged Class C shares.
When Class B shares or Class C shares are redeemed to effect an
exchange, the priorities described in "How To Buy Shares" in the
Prospectus for the imposition of the Class B or the Class C
contingent deferred sales charge will be followed in determining
the order in which the shares are exchanged. Shareholders should
take into account the effect of any exchange on the applicability
and rate of any contingent deferred sales charge that might be
imposed in the subsequent redemption of remaining shares.
Shareholders owning shares of more than one class must specify
whether they intend to exchange Class A, Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one
account. The Fund may accept requests for exchanges of up to 50
accounts per day from representatives of authorized dealers that
qualify for this privilege. In connection with any exchange
request, the number of shares exchanged may be less than the number
requested if the exchange or the number requested would include
shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In
those cases, only the shares available for exchange without
restriction will be exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a
prospectus of, the fund to which the exchange is to be made. For
full or partial exchanges of an account made by telephone, any
special account features such as Asset Builder Plans, Automatic
Withdrawal Plans, and retirement plan contributions will be
switched to the new account unless the Transfer Agent is instructed
otherwise. If all telephone lines are busy (which might occur, for
example, during periods of substantial market fluctuations),
shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be
delayed by either fund up to five business days if it determines
that it would be disadvantaged by an immediate transfer of the
redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it
(for example, if the receipt of multiple exchange requests from a
dealer might require the disposition of portfolio securities at a
time or at a price that might be disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have
different investment objectives, policies and risks, and a
shareholder should assure that the Fund selected is appropriate for
his or her investment and should be aware of the tax consequences
of an exchange. For federal income tax purposes, an exchange
transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and
the Transfer Agent are unable to provide investment, tax or legal
advice to a shareholder in connection with an exchange request or
any other investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal
tax treatment of the Fund's dividends and capital gains
distributions is explained in the Prospectus under the caption
"Dividends, Capital Gains and Taxes." Special provisions of the
Internal Revenue Code govern the eligibility of the Fund's
dividends for the dividends-received deduction for corporate
shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends
paid by the Fund which may qualify for the deduction is limited to
the aggregate amount of qualifying dividends that the Fund derives
from its portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be
eligible for the deduction on dividends paid on Fund shares held
for 45 days or less. To the extent the Fund's dividends are
derived from gross income from option premiums, interest income or
short-term gains from the sale of securities or dividends from
foreign corporations, those dividends will not qualify for the
deduction.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from
January 1 through December 31 of that year and 98% of its capital
gains realized in the period from November 1 of the prior year
through October 31 of the current year, or else the Fund must pay
an excise tax on the amounts not distributed. While it is
presently anticipated that the Fund will meet those requirements,
the Fund's Board of Trustees and the Manager might determine in a
particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the
required levels and to pay the excise tax on the undistributed
amounts. That would reduce the amount of income or capital gains
available for distribution to shareholders.
If the Fund has more than 50% of its total assets invested in
foreign securities at the end of its fiscal year, it may elect the
application of Section 853 of the Internal Revenue Code to permit
shareholders to take a credit (or, at their option, a deduction)
for foreign taxes paid by the Fund. Under Section 853,
shareholders would be entitled to treat the foreign taxes withheld
from interest and dividends paid to the Fund from its foreign
investments as a credit on their federal income taxes. As an
alternative, shareholders could, if to their advantage, treat the
foreign tax withheld as a deduction from gross income in computing
taxable income rather than as a tax credit. In substance, the
Fund's election would enable shareholders to benefit from the same
foreign tax credit or deduction that would be received if they had
been the record owners of the Fund's foreign securities and had
paid foreign taxes on the income received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income
taxes on amounts paid by it as dividends and distributions. The
Fund qualified during its last fiscal year, and intends to qualify
in current and future years, but reserves the right not to do so.
The Internal Revenue Code contains a number of complex tests
relating to such qualification. For example, if the Fund derives
30% or more of its gross income from the sale of securities held
less than three months, it may fail to qualify (see "Tax Aspects of
Covered Calls and Hedging Instruments," above). If it did not so
qualify, the Fund would be treated for tax purposes as an ordinary
corporation and receive no tax deduction for payments made to
shareholders.
The amount of a class's distributions may vary from time to time
depending on market conditions, the composition of the Fund's
portfolio, and expenses borne by the Fund or borne separately by a
class, as described in "Alternative Sales Arrangements -- Class A,
Class B and Class C Shares," above. Dividends are calculated in the
same manner, at the same time and on the same day for shares of
each class. However, dividends on Class B and Class C shares are
expected to be lower than dividends on Class A shares as a result
of the asset-based sales charges on Class B and Class C shares, and
Class B and Class C dividends will also differ in amount as a
consequence of any difference in net asset value between the
classes.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the
Postal Service as undeliverable will be invested in shares of
Oppenheimer Money Market Fund, Inc., as promptly as possible after
the return of such checks to the Transfer Agent to enable the
investor to earn a return on otherwise idle funds.
Dividend Reinvestment in Another Fund. Shareholders of the Fund
may elect to reinvest all dividends and/or capital gains
distributions in shares of the same class of any of the other
Oppenheimer funds listed in "Reduced Sales Charges," above, at net
asset value without sales charge. Class B and Class C shareholders
should be aware that as of the date of this Statement of Additional
Information, not all of the Oppenheimer funds offer Class B and/or
Class C shares. To elect this option, a shareholder must notify
the Transfer Agent in writing and either have an existing account
in the fund selected for reinvestment or must obtain a prospectus
for that fund and an application from the Distributor to establish
an account. The investment will be made at the net asset value per
share in effect at the close of business on the payable date of the
dividend or distribution. Dividends and/or distributions from
shares of other Oppenheimer funds may be invested in shares of this
Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on
the portfolio securities and handling the delivery of such
securities to and from the Fund. The Manager has represented to
the Fund that the banking relationships between the Manager and the
Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian.
It will be the practice of the Fund to deal with the Custodian in
a manner uninfluenced by any banking relationship the Custodian may
have with the Manager and its affiliates. The Fund's cash balances
with the Custodian in excess of $100,000 are not protected by
Federal Deposit insurance. Such uninsured balances at times may be
substantial.
Independent Auditors. The independent auditors of the Fund audit
the Fund's financial statements and perform other related audit
services. They also act as auditors for certain other funds
advised by the Manager and its affiliates.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Global Fund:
We have audited the accompanying statements of investments and
assets and liabilities of Oppenheimer Global Fund as of September
30, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the
years in the two year period then ended and the financial
highlights for each of the years in the five year period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with 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 September 30, 1996, by correspondence with the
custodian and brokers; and where confirmations were not received
from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Oppenheimer Global Fund as of September 30,
1996, the results of its operations for the year then ended, the
changes in its net assets for each of the years in the two year
period then ended, and the financial highlights for each of the
years in the five year period then ended, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
- --------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 21, 1996
<PAGE>
STATEMENT OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
================================================================================================================
================
<S> <C>
<C>
COMMON STOCKS--97.7%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
BASIC MATERIALS--3.3%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CHEMICALS--0.7% Minerals Technologies, Inc. 585,000
$ 21,864,375
- ----------------------------------------------------------------------------------------------------------------
- ----------------
GOLD--1.2% Newmont Mining Corp. 750,000
35,437,500
- ----------------------------------------------------------------------------------------------------------------
- ----------------
METALS--1.4% Cia Vale Do Rio Doce, Preference 692,000
13,724,188
- -----------------------------------------------------------------------------------------------
Cia de Minas Buenaventura SA, Sponsored ADR(1)(2) 285,000
5,486,250
- -----------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 757,500
23,671,875
-------------
42,882,313
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CONSUMER CYCLICALS--12.9%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
AUTOS & HOUSING--1.7% Autobacs Seven Co. Ltd. 140,000
12,356,452
- -----------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA 3,314,458
9,679,456
- -----------------------------------------------------------------------------------------------
Porsche AG, Preference(2) 44,100
30,156,268
-------------
52,192,176
- ----------------------------------------------------------------------------------------------------------------
- ----------------
LEISURE & ENTERTAINMENT--0.4% Resorts World Berhad 2,125,000
12,038,584
- ----------------------------------------------------------------------------------------------------------------
- ----------------
MEDIA--1.1% News Corp. Ltd., ADR(1) 1,000,000
20,875,000
- -----------------------------------------------------------------------------------------------
Reuters Holdings PLC, Series B, ADR 165,500
11,460,875
-------------
32,335,875
- ----------------------------------------------------------------------------------------------------------------
- ----------------
RETAIL: GENERAL--0.6% PT Matahari Putra Prima 3,499,750
3,806,534
- -----------------------------------------------------------------------------------------------
Sonae Investimentos 489,000
14,187,161
-------------
17,993,695
- ----------------------------------------------------------------------------------------------------------------
- ----------------
RETAIL: SPECIALTY--9.1% adidas AG(1) 600,000
54,679,023
- -----------------------------------------------------------------------------------------------
Benetton Group SpA(1) 1,602,100
18,051,977
- -----------------------------------------------------------------------------------------------
Cifra SA de CV, Unsponsored ADR, B Shares(1)(2) 7,500,000
10,807,500
- -----------------------------------------------------------------------------------------------
Circuit City Stores, Inc. 466,300
16,845,087
- -----------------------------------------------------------------------------------------------
FamilyMart Co. 385,000
17,249,380
- -----------------------------------------------------------------------------------------------
Giordano International Ltd. 14,160,000
12,451,542
- -----------------------------------------------------------------------------------------------
Jusco Co. 600,000
18,262,624
- -----------------------------------------------------------------------------------------------
Reebok International Ltd. 900,000
31,275,000
- -----------------------------------------------------------------------------------------------
Wella AG(1) 120,000
72,459,540
- -----------------------------------------------------------------------------------------------
Wolford AG(1) 105,200
26,863,399
-------------
278,945,072
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CONSUMER NON-CYCLICALS--17.5%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
BEVERAGES--2.4% Allied Domecq PLC 1,999,800
14,006,654
- -----------------------------------------------------------------------------------------------
Fomento Economico Mexicano SA, Cl. B,
Sponsored ADR(1)(3) 2,600,000
7,972,121
- -----------------------------------------------------------------------------------------------
Hellenic Bottling Co., SA 230,000
7,826,698
- -----------------------------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 600,000
24,675,000
- -----------------------------------------------------------------------------------------------
South African Breweries Ltd. 681,300
18,171,913
-------------
72,652,386
</TABLE>
<PAGE
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- --------------
<S> <C>
<C>
HEALTHCARE/DRUGS--9.8% Amgen, Inc.(2) 835,000
$ 52,709,375
- ---------------------------------------------------------------------------------------------
Astra AB Free, Series A 397,800
16,798,226
- ---------------------------------------------------------------------------------------------
BioChem Pharma, Inc.(2) 700,000
28,087,500
- ---------------------------------------------------------------------------------------------
Ciba-Geigy AG 20,000
25,591,321
- ---------------------------------------------------------------------------------------------
Eisai Co. Ltd. 800,000
15,227,832
- ---------------------------------------------------------------------------------------------
Genzyme Corp.(1)(2) 1,354,270
34,533,885
- ---------------------------------------------------------------------------------------------
Glaxo Wellcome PLC, Sponsored ADR 2,000,000
62,250,000
- ---------------------------------------------------------------------------------------------
Johnson & Johnson 500,000
25,625,000
- ---------------------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A(2)(4) 376,800
4,474,500
- ---------------------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. B(2)(4) 264,900
3,112,575
- ---------------------------------------------------------------------------------------------
Sanofi SA 400,000
32,798,250
- -------------
301,208,464
- ----------------------------------------------------------------------------------------------------------------
- --------------
HEALTHCARE/SUPPLIES &
SERVICES--4.4% Clinica y Maternidad Suizo Argentino(2)(4)(5) 1,800
15,989,454
- ---------------------------------------------------------------------------------------------
Gehe AG 280,000
18,724,615
- ---------------------------------------------------------------------------------------------
Quintiles Transnational Corp.(2)(5) 486,392
32,065,393
- ---------------------------------------------------------------------------------------------
Rhoen-Klinikum AG, Preference, Non-vtg. 144,688
16,126,352
- ---------------------------------------------------------------------------------------------
United States Surgical Corp. 1,200,000
51,000,000
- -------------
133,905,814
- ----------------------------------------------------------------------------------------------------------------
- --------------
TOBACCO--0.9% B.A.T. Industries PLC 3,005,000
19,990,049
- ---------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 100,000
8,975,000
- -------------
28,965,049
- ----------------------------------------------------------------------------------------------------------------
- --------------
ENERGY--7.2%
- ----------------------------------------------------------------------------------------------------------------
- --------------
ENERGY SERVICES &
PRODUCERS--2.9% Coflexip SA, Sponsored ADR(2)(4) 681,000
14,811,750
- ---------------------------------------------------------------------------------------------
Global Marine, Inc.(2) 1,635,000
25,751,250
- ---------------------------------------------------------------------------------------------
Transocean Offshore, Inc. 501,549
30,719,876
- ---------------------------------------------------------------------------------------------
Western Atlas, Inc.(2) 300,700
18,718,575
- -------------
90,001,451
- ----------------------------------------------------------------------------------------------------------------
- --------------
OIL-INTEGRATED--4.3% British Petroleum Co. PLC, ADR(1) 189,402
23,675,250
- ---------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd.(2) 2,826,000
17,632,848
- ---------------------------------------------------------------------------------------------
Lukoil Oil Co., Sponsored ADR(1) 190,300
6,941,059
- ---------------------------------------------------------------------------------------------
Renaissance Energy Ltd.(2) 285,900
8,384,213
- ---------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 177,100
27,649,737
- ---------------------------------------------------------------------------------------------
Total SA, B Shares 379,627
29,899,413
- ---------------------------------------------------------------------------------------------
Unocal Corp. 454,000
16,344,000
- -------------
130,526,520
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C> <C>
FINANCIAL--16.9%
- ----------------------------------------------------------------------------------------------------------------
- -------------
BANKS--9.2% Banco Bradesco SA, Preference 2,354,116,632 $
19,943,420
- --------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA,
Sponsored ADR(1) 575,000
15,021,875
- --------------------------------------------------------------------------------------------
Banco Latinoamericano de Exportaciones
SA, Cl. E 380,000
21,327,500
- --------------------------------------------------------------------------------------------
Bank of East Asia Ltd.(1) 3,629,000
13,351,197
- --------------------------------------------------------------------------------------------
Barclays PLC 2,025,561
29,767,544
- --------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 300,000
24,037,500
- --------------------------------------------------------------------------------------------
Citicorp 300,000
27,187,500
- --------------------------------------------------------------------------------------------
HSBC Holdings PLC 2,026,155
37,598,935
- --------------------------------------------------------------------------------------------
Industrial Credit & Investment Corp. of
India Ltd. (The), GDR(3) 872,800
9,709,900
- --------------------------------------------------------------------------------------------
Industrial Finance Corp.(4) 4,190,099
17,144,507
- --------------------------------------------------------------------------------------------
Northern Trust Corp. 300,000
19,725,000
- --------------------------------------------------------------------------------------------
Philippine National Bank(2) 750,000
12,364,208
- --------------------------------------------------------------------------------------------
PT Lippo Bank 2,454,000
3,805,470
- --------------------------------------------------------------------------------------------
Standard Chartered Bank PLC 2,884,200
31,406,266
- -------------
282,390,822
- ----------------------------------------------------------------------------------------------------------------
- -------------
DIVERSIFIED FINANCIAL--5.6% ABN Amro Holding NV 300,000
16,639,878
- --------------------------------------------------------------------------------------------
American Express Co. 400,000
18,500,000
- --------------------------------------------------------------------------------------------
Cie Financiere de Paribas, Series A 500,000
32,162,745
- --------------------------------------------------------------------------------------------
First NIS Regional Fund(2)(5) 1,320,000
13,860,000
- --------------------------------------------------------------------------------------------
ING Groep NV 645,947
20,160,478
- --------------------------------------------------------------------------------------------
MBNA Corp. 700,000
24,325,000
- --------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(1) 200,000
13,125,000
- --------------------------------------------------------------------------------------------
Societe Generale 300,000
33,189,628
- -------------
171,962,729
- ----------------------------------------------------------------------------------------------------------------
- -------------
INSURANCE--2.1% American International Group, Inc. 200,000
20,150,000
- --------------------------------------------------------------------------------------------
National Mutual Asia Ltd. 10,000,000
8,793,462
- --------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 2,200,000
6,301,391
- --------------------------------------------------------------------------------------------
Skandia Forsakrings AB 1,000,000
27,674,303
- -------------
62,919,156
- ----------------------------------------------------------------------------------------------------------------
- -------------
INDUSTRIAL--13.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------
ELECTRICAL EQUIPMENT--1.0% FORE Systems, Inc.(2) 250,000
10,343,750
- --------------------------------------------------------------------------------------------
LEM Holdings SA(4) 25,000
5,803,518
- --------------------------------------------------------------------------------------------
Ushio, Inc. 1,200,000
13,683,500
- -------------
29,830,768
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C> <C>
INDUSTRIAL SERVICES--6.6% Adecco SA 100,000 $
27,521,838
- --------------------------------------------------------------------------------------------
Boskalis Westminster 1,255,000
24,499,255
- --------------------------------------------------------------------------------------------
Cordiant PLC(2) 10,070,000
17,632,639
- --------------------------------------------------------------------------------------------
IHC Caland NV 500,000
26,330,401
- --------------------------------------------------------------------------------------------
PT Citra Marga Nusaphala Persada 8,300,000
5,631,057
- --------------------------------------------------------------------------------------------
Rentokil Group PLC 2,500,000
16,337,519
- --------------------------------------------------------------------------------------------
VBH Vereinigter Baubeschlag Handel AG 298,100
7,383,778
- --------------------------------------------------------------------------------------------
WMX Technologies, Inc. 515,000
16,930,625
- --------------------------------------------------------------------------------------------
WPP Group PLC 15,920,000
58,365,435
- -------------
200,632,547
- ----------------------------------------------------------------------------------------------------------------
- -------------
MANUFACTURING--4.1% Bic Corp. 200,000
26,272,700
- --------------------------------------------------------------------------------------------
Bobst Bearers AG 12,830
16,682,940
- --------------------------------------------------------------------------------------------
Bombardier, Inc., Cl. B 1,977,900
28,166,787
- --------------------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 5,001,000
33,628,785
- --------------------------------------------------------------------------------------------
Powerscreen International PLC 2,580,000
22,164,463
- -------------
126,915,675
- ----------------------------------------------------------------------------------------------------------------
- -------------
TRANSPORTATION--1.3% Brambles Industries Ltd.(1) 1,500,000
24,330,457
- --------------------------------------------------------------------------------------------
Guangshen Railway Co. Ltd., Sponsored ADR(2) 750,000
14,250,000
- -------------
38,580,457
- ----------------------------------------------------------------------------------------------------------------
- -------------
TECHNOLOGY--19.6%
- ----------------------------------------------------------------------------------------------------------------
- -------------
AEROSPACE/DEFENSE--1.2% Rolls-Royce PLC 10,000,000
37,424,644
- ----------------------------------------------------------------------------------------------------------------
- -------------
COMPUTER HARDWARE--0.6% Cascade Communications Corp.(2) 69,600
5,672,400
- --------------------------------------------------------------------------------------------
QUALCOMM, Inc.(2) 329,000
13,982,500
- -------------
19,654,900
- ----------------------------------------------------------------------------------------------------------------
- -------------
COMPUTER SOFTWARE--10.1% Cap Gemini SA(2) 400,000
17,515,133
- --------------------------------------------------------------------------------------------
Computer Associates International, Inc. 300,000
17,925,000
- --------------------------------------------------------------------------------------------
First Data Corp. 376,000
30,691,000
- --------------------------------------------------------------------------------------------
Ines Corp.(1) 600,000
10,828,281
- --------------------------------------------------------------------------------------------
Microsoft Corp.(2) 200,000
26,375,000
- --------------------------------------------------------------------------------------------
Misys PLC 1,260,000
17,177,377
- --------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 1,545,900
99,242,949
- --------------------------------------------------------------------------------------------
Oracle Corp.(2) 375,000
15,960,938
- --------------------------------------------------------------------------------------------
SAP AG, Preference 317,500
53,289,101
- --------------------------------------------------------------------------------------------
SAP AG, Sponsored ADR, Series 1996(5) 350,000
19,687,500
- ---------------
308,692,279
</TABLE>
Oppenheimer Global Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C>
<C>
ELECTRONICS--4.1% Advanced Semiconductor Engineering, Inc., GDR 641,580
$ 4,876,008
- --------------------------------------------------------------------------------------------
Intel Corp. 240,000
22,905,000
- --------------------------------------------------------------------------------------------
Keyence Corp. 200,000
24,781,141
- --------------------------------------------------------------------------------------------
Rohm Co. 204,000
12,876,496
- --------------------------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(2) 700,000
33,162,500
- --------------------------------------------------------------------------------------------
Sony Corp.(1) 320,000
20,198,426
- --------------------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co.(5) 3,434,000
6,685,543
- ------------
125,485,114
- ----------------------------------------------------------------------------------------------------------------
- -------------
TELECOMMUNICATIONS- Ascend Communications, Inc.(2) 87,900
5,812,388
TECHNOLOGY--3.6%
- --------------------------------------------------------------------------------------------
Cisco Systems, Inc.(2) 495,400
30,745,763
- --------------------------------------------------------------------------------------------
Korea Mobile Telecommunications Corp. 21,819
25,336,848
- --------------------------------------------------------------------------------------------
Millicom International Cellular SA(2) 600,000
24,225,000
- --------------------------------------------------------------------------------------------
Millicom, Inc.(2) 207,000
--
- --------------------------------------------------------------------------------------------
Telecom Italia Mobile SpA(1) 10,918,200
24,245,927
- -------------
110,365,926
- ----------------------------------------------------------------------------------------------------------------
- -------------
UTILITIES--7.3%
- ----------------------------------------------------------------------------------------------------------------
- -------------
ELECTRIC UTILITIES--2.3% Consolidated Electric Power Asia Ltd., ADS 12,000,000
25,371,724
- --------------------------------------------------------------------------------------------
Empresa Nacional de Electricidad SA 400,000
23,550,482
- --------------------------------------------------------------------------------------------
Veba AG 400,000
20,958,981
- -------------
69,881,187
- ----------------------------------------------------------------------------------------------------------------
- -------------
TELEPHONE UTILITIES--5.0% Cia de Telecommunicaciones de Chile SA,
Sponsored ADR(1) 16,600
1,603,975
- --------------------------------------------------------------------------------------------
CPT Telefonica del Peru SA, Cl. B 11,599,949
26,203,430
- --------------------------------------------------------------------------------------------
PLD Telekom, Inc.(2) 1,136,200
8,237,450
- --------------------------------------------------------------------------------------------
Portugal Telecom SA 777,700
20,005,947
- --------------------------------------------------------------------------------------------
PT Telekomunikasi Indonesia, Sponsored ADR(1) 342,000
10,644,750
- --------------------------------------------------------------------------------------------
Telecom Italia SpA(1) 13,000,000
28,911,662
- --------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Preference 732,452,000
57,854,758
- --------------
153,461,972
- --------------
Total Common Stocks (Cost $2,431,368,922)
2,989,147,450
================================================================================================================
=============
PREFERRED STOCKS--0.5%
- ----------------------------------------------------------------------------------------------------------------
- -------------
Marschollek, Lautenschlaeger und Partner-VO,
Non-vtg. Preferred Stock (Cost $8,842,223) 127,000
15,986,730
</TABLE>
<PAGE>
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS
SEE NOTE 1
================================================================================================================
=============
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ----------------------------------------------------------------------------------------------------------------
- -------------
American Satellite Network, Inc. Wts., Exp. 6/99 51,750
$ --
- ----------------------------------------------------------------------------------------------
PT Matahari Putra Prima Rts., Exp. 11/96 3,499,750
2,298,996
- ------------
Total Rights, Warrants and Certificates (Cost $0)
2,298,996
<CAPTION>
FACE
AMOUNT
================================================================================================================
=============
<S> <C>
<C>
REPURCHASE AGREEMENT--0.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------
Repurchase agreement with Zion First National Bank, 5.62%,
dated 9/30/96, to be repurchased at $20,303,169 on 10/1/96,
collateralized by U.S. Treasury Nts., 5.75%--8.875%,
5/15/97--8/15/04, with a value of $20,717,367 (Cost
$20,300,000) $20,300,000
20,300,000
- ----------------------------------------------------------------------------------------------------------------
- -------------
TOTAL INVESTMENTS, AT VALUE (COST $2,460,511,145) 99.0%
3,027,733,176
- ----------------------------------------------------------------------------------------------------------------
- -------------
OTHER ASSETS NET OF LIABILITIES 1.0
29,867,779
----------
- --------------
NET ASSETS 100.0%
$3,057,600,955
==========
==============
<CAPTION>
Distribution of investments by country of issue, as a percentage of
total investments at value, is as follows:
COUNTRY MARKET VALUE
PERCENT
- ----------------------------------------------------------------------------------------------
<S> <C>
<C>
United States $ 822,042,630
27.1%
- ----------------------------------------------------------------------------------------------
Great Britain 361,658,715
11.9
- ----------------------------------------------------------------------------------------------
Germany 309,451,887
10.2
- ----------------------------------------------------------------------------------------------
Japan 244,707,080
8.1
- ----------------------------------------------------------------------------------------------
France 219,812,119
7.3
- ----------------------------------------------------------------------------------------------
Hong Kong 131,195,646
4.3
- ----------------------------------------------------------------------------------------------
The Netherlands 115,279,750
3.8
- ----------------------------------------------------------------------------------------------
Brazil 91,522,366
3.0
- ----------------------------------------------------------------------------------------------
Canada 82,271,348
2.7
- ----------------------------------------------------------------------------------------------
Switzerland 75,599,617
2.5
- ----------------------------------------------------------------------------------------------
Italy 71,209,566
2.4
- ----------------------------------------------------------------------------------------------
Australia 51,506,848
1.7
- ----------------------------------------------------------------------------------------------
Sweden 44,472,529
1.5
- ----------------------------------------------------------------------------------------------
Mexico 43,454,621
1.4
- ----------------------------------------------------------------------------------------------
Argentina 40,690,785
1.3
- ----------------------------------------------------------------------------------------------
Portugal 34,193,108
1.1
- ----------------------------------------------------------------------------------------------
Peru 31,689,680
1.0
- ----------------------------------------------------------------------------------------------
Russia 29,038,509
1.0
- ----------------------------------------------------------------------------------------------
Austria 26,863,399
0.9
- ----------------------------------------------------------------------------------------------
Indonesia 26,186,807
0.9
- ----------------------------------------------------------------------------------------------
Korea, Republic of (South) 25,336,848
0.8
- ----------------------------------------------------------------------------------------------
Spain 23,550,482
0.8
- ----------------------------------------------------------------------------------------------
Panama 21,327,500
0.7
- ----------------------------------------------------------------------------------------------
South Africa 18,171,913
0.6
- ----------------------------------------------------------------------------------------------
Thailand 17,144,507
0.6
- ----------------------------------------------------------------------------------------------
China 14,250,000
0.5
- ----------------------------------------------------------------------------------------------
Philippines 12,364,208
0.4
- ----------------------------------------------------------------------------------------------
Malaysia 12,038,584
0.4
- ----------------------------------------------------------------------------------------------
Taiwan 11,561,551
0.4
- ----------------------------------------------------------------------------------------------
India 9,709,900
0.3
- ----------------------------------------------------------------------------------------------
Greece 7,826,698
0.3
- ----------------------------------------------------------------------------------------------
Chile 1,603,975
0.1
--------------
------
Total $3,027,733,176
100.0%
==============
======
</TABLE>
<PAGE>
1. Loaned security--See Note 7 of Notes to Financial Statements.
2. Non-income producing security.
3. Represents securities sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. These
securities have been determined to be liquid under guidelines established
by the Board of Trustees. These securities amount to $17,682,021 or 0.58%
of the Fund's net assets, at September 30, 1996.
4. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended September
30, 1996. The aggregate fair value of all securities of affiliated
companies as of September 30, 1996 amounted to $44,191,797. Transactions
during the period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE SEPTEMBER 30, 1995 GROSS ADDITIONS GROSS REDUCTIONS
-------------------------- ------------------
- --------------------
SHARES COST SHARES COST SHARES COST
- ----------------------------------------------------------------------------------------------------------------
- -------
<S> <C> <C> <C> <C> <C> <C>
Clinica y Maternidad Suizo Argentino 1,800 $6,990,000 -- $6,300,000 -- $
--
- ----------------------------------------------------------------------------------------------------------------
- -------
Coflexip SA, Sponsored ADR 681,000 11,809,866 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
Industrial Finance Corp.(6) 5,929,999 9,939,527 1,260,100 4,723,154 3,000,000
6,286,924
- ----------------------------------------------------------------------------------------------------------------
- -------
International de Ceramica--UB 385,000 2,007,953 -- -- 385,000
2,007,953
- ----------------------------------------------------------------------------------------------------------------
- -------
LEM Holdings SA 25,000 5,024,555 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
K-V Pharmaceutical Co., Cl. A 376,800 2,120,350 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
K-V Pharmaceutical Co., Cl. B 264,900 928,721 -- -- --
--
----------- -----------
- ----------
$38,820,972 $11,023,154
$8,294,877
=========== ===========
==========
<CAPTION>
BALANCE SEPTEMBER 30, 1996
-------------------------- DIVIDEND
SHARES COST INCOME
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Clinica y Maternidad Suizo Argentino 1,800 $13,290,000 $ --
- ------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 681,000 11,809,866 --
- ------------------------------------------------------------------------------
Industrial Finance Corp.(6) 4,190,099 8,375,757 --
- ------------------------------------------------------------------------------
International de Ceramica--UB -- -- --
- ------------------------------------------------------------------------------
LEM Holdings SA 25,000 5,024,555 235,753
- ------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A 376,800 2,120,350 --
- ------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. B 264,900 928,721 --
----------- --------
$41,549,249 $235,753
=========== ========
</TABLE>
5. Identifies issues considered to be illiquid--See Note 6 of Notes
to Financial Statements.
6. Not an affiliate as of September 30, 1996.
See accompanying Notes to Financial Statements.
<PAGE>
Statement of Assets and Liabilities September 30, 1996
<TABLE>
================================================================================================================
=============
<S> <C> <C>
ASSETS Investments, at value--see accompanying statement:
Unaffiliated companies (cost $2,427,337,653)
$2,983,541,379
Affiliated companies (cost $33,173,492)
44,191,797
- ----------------------------------------------------------------------------------------------
Cash
5,046,698
- ----------------------------------------------------------------------------------------------
Collateral for securities loaned--Note 7
230,470,279
- ----------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5
16,440,657
- ----------------------------------------------------------------------------------------------
Receivables:
Investments sold
15,197,168
Interest and dividends
6,985,490
Shares of beneficial interest sold
4,508,578
- ----------------------------------------------------------------------------------------------
Other
64,199
- --------------
Total assets
3,306,446,245
================================================================================================================
=============
LIABILITIES Return of collateral for securities loaned--Note 7
230,470,279
- ----------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign currency exchange contracts--Note 5
4,862
- ----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased
10,444,530
Shares of beneficial interest redeemed
4,715,946
Distribution and service plan fees
1,402,720
Transfer and shareholder servicing agent fees
278,435
Trustees' fees
274,972
Other
1,253,546
- --------------
Total liabilities
248,845,290
================================================================================================================
=============
NET ASSETS
$3,057,600,955
==============
================================================================================================================
=============
COMPOSITION OF
NET ASSETS
Paid-in capital
$2,357,134,687
- ----------------------------------------------------------------------------------------------
Undistributed net investment income
19,988,584
- ----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency
transactions
95,703,909
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies
584,773,775
- --------------
Net assets
$3,057,600,955
==============
================================================================================================================
=============
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,498,748,991 and 64,074,825 shares of beneficial interest
outstanding)
$39.00
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)
$41.38
- ----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $541,225,350 and 14,172,475 shares of beneficial interest
outstanding)
$38.19
- ----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $17,626,614 and 455,146 shares of beneficial interest outstanding)
$38.73
See accompanying Notes to Financial Statements.
</TABLE>
14 Oppenheimer Global Fund
<PAGE> 15
Statement of Operations For the Year Ended September 30, 1996
<TABLE>
================================================================================================================
=============
<S> <C>
<C>
INVESTMENT INCOME Interest
$12,222,133
- ----------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $2,646,317)
37,079,276
Affiliated companies (net of foreign withholding taxes of $41,604)
235,753
- --------------
Total income
49,537,162
================================================================================================================
=============
EXPENSES Management fees--Note 4
19,638,352
- ----------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A
4,149,778
Class B
4,373,990
Class C
81,790
- ----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4
4,246,782
- ----------------------------------------------------------------------------------------------
Custodian fees and expenses
1,789,474
- ----------------------------------------------------------------------------------------------
Shareholder reports
1,104,222
- ----------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1
174,654
- ----------------------------------------------------------------------------------------------
Registration and filing fees:
Class A
34,685
Class B
49,648
Class C
5,682
- ----------------------------------------------------------------------------------------------
Legal and auditing fees
85,064
- ----------------------------------------------------------------------------------------------
Insurance expenses
35,117
- ----------------------------------------------------------------------------------------------
Other
249,885
- --------------
Total expenses
36,019,123
================================================================================================================
=============
NET INVESTMENT INCOME
13,518,039
================================================================================================================
=============
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss) on:
Investments:
Unaffiliated companies
130,775,299
Affiliated companies
586,139
Foreign currency transactions
(5,377,602)
- --------------
Net realized gain
125,983,836
- ----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments
220,550,346
Translation of assets and liabilities denominated in foreign currencies
(26,103,773)
- --------------
Net change
194,446,573
- --------------
Net realized and unrealized gain
320,430,409
================================================================================================================
=============
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$333,948,448
==============
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Global Fund
<PAGE> 16
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended
September 30,
1996
1995
================================================================================================================
=============
<S> <C> <C>
<C>
OPERATIONS Net investment income $13,518,039
$18,111,834
- ----------------------------------------------------------------------------------------------
Net realized gain 125,983,836
118,657,828
- ----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 194,446,573
76,284,116
-----------
- -----------
Net increase in net assets resulting from operations 333,948,448
213,053,778
================================================================================================================
=============
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (14,009,023)
--
Class B (3,568)
--
Class C (7,369)
--
- ----------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (120,623,278)
(194,601,466)
Class B (20,905,412)
(22,711,659)
Class C (131,770)
--
================================================================================================================
=============
BENEFICIAL INTEREST
TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions--Note 2:
Class A 165,278,694
273,668,816
Class B 170,668,404
150,133,375
Class C 16,731,958
--
================================================================================================================
=============
NET ASSETS Total increase 530,947,084
419,542,844
- ----------------------------------------------------------------------------------------------
Beginning of period 2,526,653,871
2,107,111,027
--------------
- -------------
End of period (including undistributed net investment
income of $19,988,584 and $13,182,028, respectively) $3,057,600,955
$2,526,653,871
==============
==============
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------------
- ------------------------------------
Year Ended September 30, Year Ended September 30,
1996 1995 1994 1993 1992 1996 1995 1994
1993(2)
================================================================================================================
===============
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.84 $37.69 $35.04 $30.03 $32.05 $36.16 $37.36 $34.99
$33.33
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Income (loss) from investment operations:
Net investment income (loss) .23 .31 .17 .26 .17 (.05) .06
.08 .03
Net realized and unrealized
gain (loss) 4.22 2.59 6.10 4.99 (1.50) 4.13 2.49 5.83
1.63
Total income (loss) from ---- ---- ---- ---- ----- ---- ---- ----
----
investment operations 4.45 2.90 6.27 5.25 (1.33) 4.08 2.55 5.91
1.66
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.24) -- (.25) (.12) (.11) -- -- (.18)
--
Distributions from net realized gain (2.05) (3.75) (3.37) (.12) (.58) (2.05) (3.75) (3.36)
--
Total dividends and distributions ---- ---- ---- ---- ----- ---- ---- ----
----
to shareholders (2.29) (3.75) (3.62) (.24) (.69) (2.05) (3.75) (3.54)
--
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Net asset value, end of period $39.00 $36.84 $37.69 $35.04 $30.03 $38.19 $36.16 $37.36
$34.99
====== ====== ====== ====== ====== ====== ====== ======
======
================================================================================================================
===============
TOTAL RETURN, AT NET ASSET VALUE(3) 12.98% 9.26% 19.19% 17.67% (4.23)% 12.07% 8.34% 18.10%
3.64%
================================================================================================================
===============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $2,499 $2,186 $1,921 $1,389 $1,215 $541 $340 $187
$6
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average net assets (in millions) $2,309 $1,979 $1,711 $1,213 $1,194 $438 $258 $
88 $3
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Amount of debt outstanding at end
of period (in thousands) N/A N/A N/A N/A $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A N/A N/A $18,247 $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average number of shares outstanding
throughout each period
(in thousands) N/A N/A N/A 39,853 37,435 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt per share
outstanding throughout each period N/A N/A N/A $0.46 $1.60 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Ratios to average net assets:
Net investment income (loss) 0.62% 0.90% 0.38% 0.84% 0.55% (0.17)% 0.09% (0.30)%
1.52%(4)
Expenses 1.17% 1.20% 1.15% 1.18% 1.36% 2.00% 2.03% 2.08%
2.40%(4)
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Portfolio turnover rate(5) 102.9% 84.4% 78.3% 86.9% 18.0% 102.9% 84.4% 78.3%
86.9%
Average brokerage
commission rate(6) $0.0071 -- -- -- -- $0.0071 --
- -- --
<CAPTION>
Class C
-------
Period
Ended
Sept. 30,
1996(1)
==========================================================
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.67
- ----------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .09
Net realized and unrealized
gain (loss) 4.13
Total income (loss) from ----
investment operations 4.22
- ----------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.11)
Distributions from net realized gain (2.05)
Total dividends and distributions ------
to shareholders (2.16)
- ----------------------------------------------------------
Net asset value, end of period $38.73
======
==========================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.34%
==========================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $18
- ----------------------------------------------------------
Average net assets (in millions) $8
- ----------------------------------------------------------
Amount of debt outstanding at end
of period (in thousands) N/A
- ----------------------------------------------------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average number of shares outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average amount of debt per share
outstanding throughout each period N/A
- ----------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.04%(4)
Expenses 1.99%(4)
- ----------------------------------------------------------
Portfolio turnover rate(5) 102.9%
Average brokerage
commission rate(6) $0.0071
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to
September 30, 1996.
2. For the period from August 17, 1993 (inception of offering) to
September 30, 1993.
3. Assumes a hypothetical initial investment on the business day
before the first day of the fiscal period (or inception of
offering), with all dividends and distributions reinvested in
additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a
period, divided by the monthly average of the market value of
portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year
or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term
securities) for the period ended September 30, 1996 were
$2,961,733,794 and $2,678,446,475, respectively.
6. Total brokerage commissions paid on applicable purchases and
sales of portfolio securities for the period divided by the total
number of related shares purchased and sold.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Global Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's investment
objective is capital appreciation. The Fund invests primarily in
common stocks of U.S. and foreign companies. The Fund's investment
adviser 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 three 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 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.
Forward foreign currency exchange contracts are valued based on the
closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable
bank or dealer.
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 rates of
exchange prevailing on the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising
from changes in market values of securities held and reported with
all other foreign currency gains and losses in the Fund's Statement
of Operations.
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book
Entry System or to have segregated within the custodian's vault,
all securities held as collateral for repurchase agreements. The
market value of the underlying securities is required to be at
least 102% of the resale price at the time of purchase. If the
seller of the agreement defaults and the value of the collateral
declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be
delayed or limited.
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income,
expenses (other than those attributable to a specific class) and
gains and losses are allocated daily to each class of shares based
upon the relative proportion of net assets represented by such
class. Operating expenses directly attributable to a specific class
are charged against the operations of that class.
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal income or excise
tax provision is required.
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded
retirement plan for the Fund's independent trustees. Benefits are
based on years of service and fees paid to each trustee during the
years of service. During the year ended September 30, 1996, a
provision of $101,127 was made for the Fund's projected benefit
obligations and payments of $7,479 were made to retired trustees,
resulting in an accumulated liability of $262,675 at September 30,
1996.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
<PAGE>
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial
statement and tax purposes. The character of the distributions made
during the year from net investment income or net realized gains
may differ from 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 September 30, 1996, the Fund adjusted the
classification of distributions to shareholders to reflect the
differences between the financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, during the year ended September 30, 1996, amounts have
been reclassified to reflect a decrease in undistributed net
investment income and an increase in accumulated net realized gain
on investments of $367,527. In addition, to properly reflect
foreign currency gain in the components of capital, $7,676,004 of
foreign exchange gain determined according to U.S. federal income
tax rules has been reclassified from net realized gain to net
investment income.
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income
is recorded on the ex-dividend date. Realized gains and losses on
investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares
of beneficial interest of each class. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1996(1) Year Ended September 30, 1995
-------------------------------- ------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 13,445,573 $494,129,386 14,970,471 $515,346,870
Dividends and distributions reinvested 3,791,424 129,022,228 5,837,688 185,638,506
Redeemed (12,511,334) (457,872,920) (12,413,877) (427,316,560)
----------- ------------ ----------- ------------
Net increase 4,725,663 $165,278,694 8,394,282 $273,668,816
=========== ============ =========== ============
- -------------------------------------------------------------------------------------------------------------------
Class B:
Sold 6,760,563 $244,252,699 5,628,673 $192,633,540
Dividends and distributions reinvested 596,683 20,012,734 687,798 21,610,609
Redeemed (2,599,758) (93,597,029) (1,894,767) (64,110,774)
----------- ------------ ----------- ------------
Net increase 4,757,488 $170,668,404 4,421,704 $150,133,375
=========== ============ =========== ============
- -------------------------------------------------------------------------------------------------------------------
Class C:
Sold 549,240 $20,205,091 -- $
- --
Dividends and distributions reinvested 4,029 137,151 --
- --
Redeemed (98,123) (3,610,284) --
- --
----------- ------------ ----------- ------------
Net increase 455,146 $16,731,958 -- $
- --
=========== ============ =========== ============
</TABLE>
1. For the year ended September 30, 1996 for Class A and
Class B shares, and for the period from October 2, 1995 (inception
of offering) to September 30, 1996 for Class C shares.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At September 30, 1996, net unrealized appreciation on investments
of $567,222,031 was composed of gross appreciation of $597,401,994,
and gross depreciation of $30,179,963.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a
fee of 0.80% on the first $250 million of net assets, 0.77% on the
next $250 million, 0.75% on the next $500 million, 0.69% on the
next $1 billion and 0.67% on net assets in excess of $2 billion.
The Manager has voluntarily agreed to reduce the management fee to
which it is entitled under the Agreement to 0.65% on net assets in
excess of $3.5 billion. The Manager has agreed to reimburse the
Fund if aggregate expenses (with specified exceptions) exceed the
most stringent applicable regulatory limit on Fund expenses.
For the year ended September 30, 1996, commissions (sales charges
paid by investors) on sales of Class A shares totaled $5,830,983,
of which $1,861,170 was retained by OppenheimerFunds Distributor,
Inc. (OFDI), a subsidiary of the Manager, as general distributor,
and by an affiliated broker/dealer. Sales charges advanced to
broker/dealers by OFDI on sales of the Fund's Class B and Class C
shares totaled $6,952,591 and $156,720, of which $413,273 and
$2,797, respectively, was paid to an affiliated broker/dealer.
During the year ended September 30, 1996, OFDI received contingent
deferred sales charges of $743,491 and $6,445, respectively, upon
redemption of Class B and Class C shares, as reimbursement for
sales commissions advanced by OFDI at the time of sale of such
shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for
other registered investment companies. OFS's total costs of
providing such services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may
not exceed 0.25% of the average annual net assets of Class A shares
of the Fund. OFDI uses the service fee to reimburse brokers,
dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their
customers that hold Class A shares. During the year ended September
30, 1996,
OFDI paid $252,591 to an affiliated broker/dealer as reimbursement
for Class A personal service and maintenance expenses.
The Fund has adopted a reimbursement type Distribution and Service
Plan for Class B shares to reimburse OFDI for its services and
costs in distributing Class B shares and servicing accounts. Under
the Plan, the Fund pays OFDI an annual asset-based sales charge of
0.75% per year on Class B shares.
OFDI also receives a service fee of 0.25% per year to reimburse
dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual net
assets of Class B shares, determined as of the close of each
regular business day. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to OFDI for certain expenses it incurred
before the Plan was terminated. During the year ended September 30,
1996, OFDI paid $53,520 to an affiliated broker/dealer as
reimbursement for Class B personal service and maintenance expenses
and retained $3,701,675 as reimbursement for Class B sales
commissions and service fee advances, as well as financing costs.
As of September 30, 1996, OFDI had incurred unreimbursed expenses
of $16,226,094 for Class B.
The Fund has adopted a compensation type Distribution and Service
Plan for Class C shares to compensate OFDI for its services and
costs in distributing Class C shares and servicing accounts. Under
the Plan, the Fund pays OFDI an annual asset-based sales charge of
0.75% per year on Class C shares. OFDI also receives a service fee
of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class C shares. Both fees are
computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. If the
Plan is terminated by the Fund, the Board of Trustees may allow the
Fund to continue payments of the asset-based sales charge to OFDI
for certain expenses it incurred before the Plan was terminated.
During the year September 30, 1996, OFDI retained $75,623 as
compensation for Class C sales commissions and service fee
advances, as well as financing costs. As of September 30, 1996,
OFDI had incurred unreimbursed expenses of $200,447 for Class C.
Oppenheimer Global Fund
<PAGE>
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract) is
a commitment to purchase or sell a foreign currency at a future
date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency
risk. The Fund generally enters into forward contracts as a hedge
upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such contracts as a
hedge against changes in foreign currency exchange rates on
portfolio positions.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange
markets on a daily basis as provided by a reliable bank or dealer.
The Fund will realize a gain or loss upon the closing or settlement
of the forward transaction.
Securities held in segregated accounts to cover net exposure on
outstanding forward contracts are noted in the Statement of
Investments where applicable. Unrealized appreciation or
depreciation on forward contracts is reported in the Statement of
Assets and Liabilities. Realized gains and losses are reported with
all other foreign currency gains and losses in the Fund's Statement
of Operations.
Risks include the potential inability of the counterparty to meet
the terms of the contract and unanticipated movements in the value
of a foreign currency relative to the U.S. dollar.
At September 30, 1996, the Fund had outstanding forward contracts
to purchase and sell currencies as follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF UNREALIZED
UNREALIZED
CONTRACTS TO PURCHASE EXCHANGE DATE (000S) SEPT. 30, 1996 APPRECIATION
DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------
- ------------
<S> <C> <C> <C> <C>
German Deutsche Mark (DEM) 10/1/96--10/2/96 5,025 DEM $3,294,412 $ --
$4,862
========== ---------
------
CONTRACTS TO SELL
- ----------------------------------------------------------------------------------------------------------------
- ------------
Swiss Franc (CHF) 10/8/96 114,690 CHF $91,561,452 $8,438,548
$ --
- ----------------------------------------------------------------------------------------------------------------
- ------------
Italian Lira (ITL) 10/1/96 2,250,167 ITL 1,478,379 5,313
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
German Deutsche Mark (DEM) 10/1/96--1/8/97 149,342 DEM 98,494,144 5,431,912
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
Indonesian Rupiah (IDR) 10/1/96--10/2/96 393,913 IDR 169,680 35
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
Japanese Yen (JPY) 10/7/96 15,382,499 JPY 138,205,862 2,564,849
--
------------ -----------
-------
$329,909,517 16,440,657
--
============ ===========
-------
Total Unrealized Appreciation and Depreciation $16,440,657
$4,862
===========
=======
</TABLE>
6. ILLIQUID AND RESTRICTED SECURITIES
At September 30, 1996, investments in securities included issues
that are illiquid or restricted. Restricted securities are often
purchased in private placement transactions, are not registered
under the Securities Act of 1933, may have contractual restrictions
on resale, and are valued under methods approved by the Board of
Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily-available market or if
its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase and reviewed from time to time)
in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional
investors, are not subject to that limit. The aggregate value of
illiquid or restricted securities subject to this limitation at
September 30, 1996 was $88,287,890, which represents 2.89% of the
Fund's net assets. Information concerning restricted securities is
as follows:
<TABLE>
<CAPTION>
VALUATION PER
UNIT AS
SECURITY ACQUISITION DATE COST PER UNIT OF SEPT. 30,
1996
- ----------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C>
Quintiles Transnational Corp. 8/2/93 $ 8.64 $ 65.93
- ----------------------------------------------------------------------------------------------------------------
- -----------
Clinica y Maternidad Suizo Argentino 5/16/94 7,383.33 8,883.03
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain
unregistered securities are determined to be liquid and are not
included within the 10% limitation specified above.
<PAGE>
Notes to Financial Statements (Continued)
7. SECURITIES LOANED
The Fund has entered into a securities lending arrangement with the
custodian. Under the terms of the agreement, the Fund receives 60%
of the annual net income from lending transactions. In exchange for
such fees, the custodian is authorized to loan securities on behalf
of the Fund, against receipt of collateral at least equal in value
to the value of the securities loaned. Cash collateral is invested
by the custodian in money market instruments approved by the
Manager.
As of September 30, 1996, the Fund had on loan securities valued at
$223,463,921. Cash of $187,481,049 was received as collateral for
the loans, and has been invested in the approved instruments
identified below. U.S. Treasury Bills, Notes and Bonds valued at
$42,989,230 were also received as collateral. The Fund bears the
risk of any deficiency in the amount of collateral available for
return to a borrower due to a loss in an approved investment.
<TABLE>
<CAPTION>
VALUATION
AS OF
SECURITY SEPTEMBER
30, 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Repurchase agreement with CS First Boston Corp., 5.975%, dated 9/30/96 and maturing
12/31/96, collateralized by Federal Home Loan Mortgage Corp., 7%--9.50%,
5/15/17--7/1/26, with a value of $117,360,046, and by Federal National Mortgage Assn.,
0%, 6/1/23, with a value of $46,110,000
$160,470,046
- ----------------------------------------------------------------------------------------------------------
Repurchase agreement with Goldman, Sachs & Co., 5.75%, dated 9/30/96 and maturing
10/1/96, collateralized by Federal Mortgage Acceptance Corp., 7.31%, 8/7/01, with a
value of $10,068,530, and by Federal Home Loan Bank, 5.60%, 7/24/97, with a value of
$10,001,710, and by Federal National Mortgage Assn., 7.15%, 6/26/01, with a value of
$6,940,763
27,011,003
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 1/2/97--5/29/97
1,083,519
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 5.125%--8.50%, 11/30/97--3/31/00
25,925,761
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 6.25%, 8/15/23
15,979,950
- ------------
$230,470,279
============
</TABLE>
Appendix
Corporate Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Transmission*
Gas Utilities*
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
____________________________
* For purposes of the Fund's policy not to concentrate in
securities of issuers in the same industry, gas utilities and gas
transmission utilities will each be considered a separate industry.
<PAGE>
Investment Adviser
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Supplement dated March 7, 1997 to the
Prospectus dated January 13, 1997
The Prospectus is amended by adding the following paragraph at the
end of "How the Fund is Managed" on page 17:
The Board of Trustees of Oppenheimer Global Emerging Growth Fund
(referred to as "Global Emerging Growth Fund" or the "Fund") has
determined that it is in the best interest of the Fund's
shareholders that the Fund reorganize with and into Oppenheimer
Global Fund ("Global Fund"). The Board unanimously approved the
terms of an agreement and plan of reorganization to be entered into
between these funds (the "reorganization plan") and the
transactions contemplated (the transactions are referred to as the
"reorganization"). The Board further determined that the
reorganization should be submitted to the Fund's shareholders for
approval, and recommended that shareholders approve the
reorganization.
Pursuant to the reorganization plan, (i) substantially all of the
assets of the Fund would be exchanged for shares of Global Fund,
(ii) these shares of Global Fund would be distributed to the
shareholders of the Fund, (iii) the Fund would be liquidated, and
(iv) the outstanding shares of the Fund would be cancelled. It is
expected that the reorganization will be tax-free, pursuant to
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended,
and the Fund will request an opinion of tax counsel to that effect.
A meeting of the shareholders of the Fund is scheduled for June 17,
1997 to vote on the reorganization. Approval of the reorganization
requires the affirmative vote of a majority of the outstanding
shares of the Fund (the term "majority" is defined in the
Investment Company Act as a special majority. It is also explained
in the Statement of Additional Information). There is no assurance
that the Fund's shareholders will approve the reorganization.
Details about the proposed reorganization will be contained in a
proxy statement and other soliciting materials which will be mailed
to the Fund's shareholders of record on April 11, 1997. Persons
who became shareholders of the Fund after the record date for the
shareholder meeting will not be entitled to vote on the
reorganization.
March 7, 1997 PS0750.012
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Supplement dated January 13, 1997 to the
Prospectus dated January 13, 1997
The Prospectus is changed as follows:
In addition to paying dealers the regular commission for (1)
sales of Class A shares stated in the sales charge table in "Buying
Class A Shares" on page 27, (2) sales of Class B shares described
in the fifth paragraph in "Distribution and Service Plans for Class
B Shares" on page 34, and (3) sales of Class C shares described in
the fifth paragraph in "Distribution and Service Plans for Class C
Shares" on page 34, the Distributor will pay additional commission
to each broker, dealer and financial institution that has a sales
agreement with the Distributor and agrees to accept that additional
commission (these are referred to as "participating firms") for
Class A, Class B and Class C shares of the Fund sold in "qualifying
transactions" (the "promotion"). The additional commission will be
1.00% of the offering price of shares of the Fund sold by a
registered representative or sales representative of a
participating firm during the promotion. If the additional
commission is paid on the sale of Class A shares of $500,000 or
more or the sale of Class A shares to a SEP IRA with 100 or more
eligible participants and those shares are redeemed within 13
months from the end of the month in which they were purchased, the
participating firm will be required to return the additional
commission.
"Qualifying transactions" are aggregate sales of $150,000 or
more of Class A, Class B and/or Class C shares of any one or more
of the Oppenheimer funds (except money market funds and municipal
bond funds) for rollovers or trustee-to-trustee transfers from
another retirement plan trustee, of IRA assets or other employee
benefit plan assets from an account or investment other than an
account or investment in the Oppenheimer funds to (1) IRAs,
rollover IRAs, SEP IRAs and SAR-SEP IRAs, using the
OppenheimerFunds, Inc. prototype IRA agreement, if the rollover
contribution is received during the period from January 1, 1997
through April 15, 1997 (the "promotion period"), or the acceptance
of a direct rollover or trustee-to-trustee transfer is acknowledged
by the trustee of the OppenheimerFunds prototype IRA during the
promotion period, and (2) IRAs, rollover IRAs, SEP IRAs and SAR-
SEP IRAs using the A.G. Edwards & Sons, Inc. prototype IRA
agreement, if the rollover contribution or trustee-to-trustee
payment is received during the promotion period. "Qualifying
transactions" do not include (1) purchases of Class A shares
intended but not yet made under a Letter of Intent, and (2)
purchases of Class A, Class B and/or Class C shares with the
redemption proceeds from an existing Oppenheimer funds account.
January 13, 1997 PS0750.011
<PAGE>
<PAGE>
OPPENHEIMER
Global Emerging Growth Fund
Prospectus dated January 13, 1997
Oppenheimer Global Emerging Growth Fund is a mutual fund that
aggressively seeks capital appreciation as its investment
objective. Current income is not an objective of the Fund.
In seeking its objective, the Fund emphasizes investments in
emerging growth companies in the U.S. and foreign countries that
offer the potential for growth of earnings or capital. In an
uncertain investment environment, the Fund may stress defensive
investment methods. The Fund may also use "hedging" instruments.
As a "global" fund, the Fund normally invests in the U.S. and at
least three foreign countries and may have a substantial portion of
its assets invested in foreign securities.
Some investment techniques the Fund uses may be considered to
be speculative investment methods that may increase the risks of
investing in the Fund and may also increase the Fund's operating
costs. You should carefully review the risks associated with an
investment in the Fund. The Fund is designed for investors who are
willing to accept greater risks of loss in the hopes of greater
gains. Please refer to "Investment Policies and Strategies" for
more information about the types of securities the Fund invests in,
its investment methods and the risks of investing in the Fund.
This Prospectus explains concisely what you should know before
investing in the Fund. Please read this Prospectus carefully and
keep it for future reference. You can find more detailed
information about the Fund in the January 13, 1997, Statement of
Additional Information. For a free copy, call OppenheimerFunds
Services, the Fund's Transfer Agent, at 1-800-525-7048, or write to
the Transfer Agent at the address on the back cover. The Statement
of Additional Information has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by
reference (which means that it is legally part of this Prospectus).
(OppenheimerFunds logo)
Shares of the Fund are not deposits or obligations of any bank, are
not guaranteed by any bank, are not insured by the F.D.I.C. or any
other agency, and involve investment risks, including the possible
loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
Contents
ABOUT THE FUND
3 Expenses
5 A Brief Overview of the Fund
7 Financial Highlights
10 Investment Objective and Policies
17 How the Fund is Managed
19 Performance of the Fund
ABOUT YOUR ACCOUNT
22 How to Buy Shares
Class A Shares
Class B Shares
Class C Shares
35 Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
37 How to Sell Shares
By Mail
By Telephone
38 How to Exchange Shares
40 Shareholder Account Rules and Policies
42 Dividends, Capital Gains and Taxes
A-1 Appendix: Special Sales Charge Arrangements<PAGE>
A B O U T T H E F U N D
Expenses
The Fund pays a variety of expenses directly for management of
its assets, administration, distribution of its shares and other
services, and those expenses are subtracted from the Fund's assets
to calculate the Fund's net asset value per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other
expenses directly, such as sales charges and account transaction
charges. The following tables are provided to help you understand
your direct expenses of investing in the Fund and your share of the
Fund's business operating expenses that you will bear indirectly.
The numbers below are based on the Fund's expenses during its last
fiscal year ended September 30, 1996.
Shareholder Transaction Expenses are charges you pay when
you buy or sell shares of the Fund. Please refer to "About Your
Account," starting on page ___ for an explanation of how and when
these charges apply.
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
<S> <C> <C> <C>
- ------------------------------------------------------------------
Maximum Sales Charge 5.75% None None
on Purchases (as a %
of offering price)
- ------------------------------------------------------------------
Maximum Deferred Sales None(1) 5% in the first 1% if shares are
Charge (as a % of the year, declining redeemed within
lower of the original to 1% in the 12 months of
purchase price or sixth year and purchase(2)
redemption proceeds) eliminated
thereafter(2)
- -------------------------------------------------------------------------
Maximum Sales Charge on None None None
Reinvested Dividends
- -------------------------------------------------------------------------
Exchange Fee None None None
- -------------------------------------------------------------------------
Redemption Fee None None None
</TABLE>
(1) If you invest $1 million or more ($500,000 or more for
purchases by "Retirement Plans," as defined in "Class A Contingent
Deferred Sales Charge" on page ___) in Class A shares, you may have
to pay a sales charge of up to 1.0% if you sell your shares within
18 calendar months from the end of the calendar month during which
you purchased those shares. See "How to Buy Shares - Class A
Shares," below.
(2) See "How to Buy Shares - Class B Shares" and "How to Buy Shares
- - Class C Shares," below for more information on contingent
deferred sales charges.
Annual Fund Operating Expenses are paid out of the Fund's
assets and represent the Fund's expenses in operating its business.
For example, the Fund pays management fees to its investment
advisor, OppenheimerFunds, Inc. (referred to in this Prospectus as
the "Manager"). The rates of the Manager's fees are set forth in
"How the Fund is Managed," below. The Fund has other regular
expenses for services, such as transfer agent fees, custodial fees
paid to the bank that holds its portfolio securities, audit fees
and legal expenses. Those expenses are detailed in the Fund's
Financial Statements in the Statement of Additional Information.
Annual Fund Operating Expenses
(as a Percentage of Average Net Assets)
Class A Class B Class C
Shares Shares Shares
- -------------------------------------------------------------------
Management Fees 0.83% 0.83% 0.83%
- -------------------------------------------------------------------
12b-1 Distribution 0.24% 1.00% 1.00%
Plan Fees
- -------------------------------------------------------------------
Other Expenses 0.80% 0.73% 0.71%
- -------------------------------------------------------------------
Total Fund 1.87% 2.56% 2.54%
Operating Expenses
The numbers for Class A, Class B and Class C shares in the
table above are based on the Fund's expenses in its last fiscal
year. These amounts are shown as a percentage of the average net
assets of each class of the Fund's shares for that year. Class B
and Class C shares were not publicly offered before November 1,
1995. Therefore, the Annual Fund Operating Expenses shown for
Class B and Class C are based on expenses for the period from
November 1, 1995 until September 30, 1996. The actual expenses
for each class of shares in future years may be more or less than
the numbers in the table, depending on a number of factors,
including the actual value of the Fund's assets represented by each
class of shares.
The "12b-1 Distribution Plan Fees" for Class A Shares are
Service Plan Fees (the maximum fee is 0.25% of average annual net
assets of that class). For Class B and Class C shares, the
Distribution and Service Plan Fees are service fees (the fee is
0.25% of average annual net assets of that class) and the asset-
based sales charge of 0.75%. These Plans are described in greater
detail in "How to Buy Shares."
Examples. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical examples
shown below. Assume that you make a $1,000 investment in each class
of shares of the Fund, that the Fund's annual return is 5%, and
that its operating expenses for each class are the ones shown in
the Annual Fund Operating Expenses chart above. If you were to
redeem your shares at the end of each period shown below, your
investment would incur the following expenses by the end of 1, 3,
5 and 10 years:
1 year 3 years 5 years 10 years*
- -------------------------------------------------------------------
Class A Shares $75 $113 $153 $264
Class B Shares $76 $110 $156 $257
Class C Shares $36 $ 79 $135 $288
If you did not redeem your investment, it would incur the
following expenses:
1 year 3 years 5 years 10 years*
- -------------------------------------------------------------------
Class A Shares $75 $113 $153 $264
Class B Shares $26 $ 80 $136 $257
Class C Shares $26 $ 79 $135 $288
*In the first example, expenses include the Class A initial sales
charge and the applicable Class B or Class C contingent deferred
sales charge. In the second example, Class A expenses include the
initial sales charge, but Class B and Class C expenses do not
include contingent deferred sales charges. The Class B expenses in
years 7 through 10 are based on the Class A expenses shown above,
because the Fund automatically converts your Class B shares into
Class A shares after 6 years. Because of the effect of the asset-
based sales charge and contingent deferred sales charge, long-term
Class B and Class C shareholders could pay the economic equivalent
of an amount greater than the maximum front-end sales charge
allowed under applicable regulations. For Class B shareholders, the
automatic conversion of Class B shares to Class A shares is
designed to minimize the likelihood that this will occur. Please
refer to "How to Buy Shares - Buying Class B Shares" and "How to
Buy Shares - Buying Class C Shares" beginning on pages __ and __,
respectively, for more information.
These examples show the effect of expenses on an investment,
but are not meant to state or predict actual or expected costs or
investment returns of the Fund, all of which may be more or less
than the amounts shown.
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below,
with references to the section of this Prospectus where more
complete information can be found. You should carefully read the
entire Prospectus before making a decision about investing in the
Fund. Keep the Prospectus for reference after you invest,
particularly for information about your account, such as how to
sell or exchange shares.
What Is The Fund's Investment Objective? The Fund's
investment objective is to aggressively seek capital appreciation
(that is, growth in the value of its shares). It does not invest
to earn current income to pay to shareholders.
What Does the Fund Invest In? The Fund emphasizes
investment in common stocks or other equity securities, including
convertible securities, of emerging growth companies located in the
United States and foreign countries. The Fund may have a
substantial amount of its investments in foreign securities. The
Fund may hold warrants and rights. The Fund may also use hedging
instruments and some derivative investments to try to manage
investment risks. These investments are more fully explained in
"Investment Objective and Policies," starting on page 10.
Who Manages the Fund? The Fund's investment advisor (the
"Manager") is OppenheimerFunds, Inc. The Manager (including a
subsidiary) manages investment company portfolios having over $62
billion in assets at December 31, 1996. The Manager is paid an
advisory fee by the Fund, based on its net assets. The Fund's
portfolio managers, who are employed by the Manager and are
primarily responsible for the selection of the Fund's securities,
are George Evans and Jay W. Tracey, III. The Fund's Board of
Trustees, elected by shareholders, oversees the investment advisor
and the portfolio managers. Please refer to "How the Fund is
Managed," starting on page ___ for more information about the
Manager and its fees.
How Risky is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is an aggressive
growth fund designed for long-term investing and is not designed
for investors seeking income or conservation of capital. The
Fund's investments in stocks are subject to changes in their value
from a number of factors such as changes in general bond and stock
market movements, or the change in value of particular stocks
because of an event affecting the issuer.
The Fund's investments in foreign securities are subject to
additional risks associated with investing abroad, such as the
effect of currency rate changes on stock values. These changes
affect the value of the Fund's investments and its price per share.
In the Oppenheimer funds spectrum, the Fund is generally
expected to be more volatile than the other stock funds, the income
and growth funds, and the more conservative income funds. While
the Manager tries to reduce risks by diversifying investments, by
carefully researching securities before they are purchased for the
portfolio, and in some cases by using hedging techniques, there is
no guarantee of success in achieving the Fund's objective and your
shares may be worth more or less than their original cost when you
redeem them. Please refer to "Investment Objective and Policies"
starting on page __ for a more complete discussion of the Fund's
investment risks.
How Can I Buy Shares? You can buy shares through your
dealer or financial institution, or you can purchase shares
directly through the Distributor by completing an Application or by
using an Automatic Investment Plan under AccountLink. Please refer
to "How to Buy Shares" starting on page ___ for more details.
Will I Pay a Sales Charge to Buy Shares? The Fund offers
the individual investor three classes of shares. All classes have
the same investment portfolio but different expenses. Class A
shares are offered with a front-end sales charge, starting at 5.75%
and reduced for larger purchases. Class B and Class C shares are
offered without a front-end sales charge, but may be subject to a
contingent deferred sales charge if redeemed within 6 years or 12
months of purchase, respectively. There is also an annual asset-
based sales charge on Class B and Class C shares. Please review
"How to Buy Shares" starting on page ___ for more details,
including a discussion about factors you and your financial advisor
should consider in determining which class may be appropriate for
you.
How Can I Sell My Shares? Shares can be redeemed by mail or
by a telephone call to the Transfer Agent on any business day, or
through your dealer. Please refer to "How to Sell Shares" on page
____. The Fund also offers exchange privileges to other
Oppenheimer funds, described in "How to Exchange Shares" on page
___.
How Has the Fund Performed? The Fund measures its
performance by quoting its average annual total return and
cumulative total return, which measure historical performance.
Those returns can be compared to the returns (over similar periods)
of other funds. Of course, other funds may have different
objectives, investments, and levels of risk. The Fund's
performance can also be compared to a broad-based market index,
which we have done on pages ____ and ____. Please remember that
past performance does not guarantee future results.
Financial Highlights
The table on the following pages presents selected financial
information about the Fund, including per share data, expense
ratios and other data based on the Fund's average net assets. This
information has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors, whose report on the Fund's financial
statements for the fiscal year ended September 30, 1996, is
included in the Statement of Additional Information.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
CLASS A
- ----------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1996 1995 1994 1993 1992
1991(3)
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 18.03 $ 19.35 $ 21.64 $ 20.25 $ 26.90
$ 11.81
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) .01 (.01) (.10) (.17)
(.03)
Net realized and unrealized gain (loss) 2.96 (1.33) (2.11) 1.69 (6.47)
15.12
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Total income (loss) from investment
operations 2.93 (1.32) (2.12) 1.59 (6.64)
15.09
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- -- -- -- (.01)
--
Distributions from net realized gain -- -- (.17) (.20) --
--
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Total dividends and distributions
to shareholders -- -- (.17) (.20) (.01)
--
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Net asset value, end of period $ 20.96 $ 18.03 $ 19.35 $ 21.64 $ 20.25
$ 26.90
====================================================================================
- ----------------------------------------------------------------------------------------------------------------
- ------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 16.25% (6.82)% (9.91)% 7.79% (24.70)%
127.78%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 154,082 $ 139,823 $ 163,295 $ 199,697 $ 129,634
$ 103,352
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Average net assets (in thousands) $ 142,045 $ 148,378 $ 190,984 $ 194,184 $ 166,144
$ 50,989
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Ratios to average net assets:
Net investment income (loss) (0.15)% 0.07% (1.05)% (0.80)% (0.71)%
(0.18)%
Expenses 1.87% 1.76% 1.77% 1.59% 1.39%
1.50%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Portfolio turnover rate(6) 125.9% 160.3% 54.7% 41.0% 2.6%
11.2%
Average brokerage commission rate(7) $ 0.0030 -- -- -- --
--
<CAPTION>
CLASS A CLASS B CLASS
C
------------------------------------ --------------
- ---------------
PERIOD ENDED PERIOD
ENDED
SEPTEMBER 30, SEPTEMBER
30
1990 1989 1988(2) 1996(1)
1996(1)
- ----------------------------------------------------------------------------------------------------------------
- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 12.09 $ 10.63 $ 10.00 $ 17.43 $
17.43
- ----------------------------------------------------------------------------------------------------------------
- ----------
Income (loss) from investment operations:
Net investment income (loss) (.02) (.10) .14 (.01)
(.01)
Net realized and unrealized gain (loss) (.26) 1.69 .49 3.36
3.37
- ----------------------------------------------------------------------------------------------------------------
- ----------
Total income (loss) from investment
operations (.28) 1.59 .63 3.35
3.36
- ----------------------------------------------------------------------------------------------------------------
- ----------
Dividends and distributions to shareholders:
Dividends from net investment income -- (.10) -- --
- --
Distributions from net realized gain -- (.03) -- --
- --
- ----------------------------------------------------------------------------------------------------------------
- ----------
Total dividends and distributions
to shareholders -- (.13) -- --
- --
- ----------------------------------------------------------------------------------------------------------------
- ----------
Net asset value, end of period $ 11.81 $ 12.09 $ 10.63 20.78
20.79
============================================================================
- ----------------------------------------------------------------------------------------------------------------
- ----------
TOTAL RETURN, AT NET ASSET VALUE(4) (2.32)% 15.21% 6.30% 19.22%
19.28%
- ----------------------------------------------------------------------------------------------------------------
- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $ 16,217 $ 3,872 $ 1,921 $ 10,855 $
3,269
- ----------------------------------------------------------------------------------------------------------------
- ----------
Average net assets (in thousands) $ 8,716 $ 2,343 $ 1,394 $ 4,675 $
1,599
- ----------------------------------------------------------------------------------------------------------------
- ----------
Ratios to average net assets:
Net investment income (loss) (0.37)% (0.70)% 1.41%(5) (0.42)%(5)
(0.45)%(5)
Expenses 1.78% 2.40% 2.06%(5) 2.56%(5)
2.54%(5)
- ----------------------------------------------------------------------------------------------------------------
- ----------
Portfolio turnover rate(6) 16.6% 17.1% 1.7% 125.9%
125.9%
Average brokerage commission rate(7) -- -- -- $ 0.0030 $
0.0030
</TABLE>
1. For the period from November 1, 1995 (inception of offering) to
September 30, 1996.
2. For the period from December 30, 1987 (commencement of operations) to
September 30, 1988. Per share amounts calculated based on the weighted
average number of shares outstanding during the period.
3. Per share amounts calculated based on the weighted average number of
shares outstanding during the period.
4. Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the
reinvestment date, and redemption at the net asset value calculated on
the last business day of the fiscal period. Sales charges are not
reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
5. Annualized.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio
securities owned during the period. Securities with a maturity or
expiration date at the time of acquisition of one year or less are
excluded from the calculation. Purchases and sales of investment
securities (excluding short-term securities) for the period ended
September 30, 1996 were $182,488,843 and $175,044,184, respectively.
7. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of
related shares purchased and sold.
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to aggressively seek capital
appreciation.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investment in common stocks or other
equity securities, including securities that are convertible into
common stock. The Fund may hold warrants and rights. These
securities may be traded on securities exchanges or in over-the-
counter markets.
Under normal market conditions, the Fund invests at least 65%
of its total assets in securities of emerging growth companies
located in the United States and at least three foreign countries.
The Fund may invest a substantial amount of its assets in foreign
securities, discussed below. There is also an explanation of
"emerging growth" companies below.
The Fund's portfolio managers currently use an investment
strategy in selecting foreign and domestic securities that examines
the effects of worldwide trends on the growth of various business
sectors. These trends, or "global themes," currently include
telecommunications expansion, emerging consumer markets,
infrastructure development, natural resource use and development,
corporate restructuring, capital market development in foreign
countries, healthcare expansion and global integration. These
trends, which may affect the growth of companies having businesses
in these sectors or that are affected by their development, may
suggest opportunities for investing the Fund's assets. The Manager
does not invest a fixed amount of the Fund's assets in any one
sector, and these themes and this approach may change over time.
When investing the Fund's assets, the Manager considers many
factors, including general economic conditions abroad relative to
those in the U.S. and the trends in foreign and domestic stock
markets. The Fund may try to hedge against losses in the value of
its portfolio of securities by using hedging strategies or
derivative investments, described below.
The Fund may also seek to take advantage of changes in the
business cycle by investing in companies that are sensitive to
those changes, if the Manager believes they present opportunities
for growth. For example, when the economy of a country is
expanding, companies in the financial services and consumer
products industries may be in a position to benefit from changes in
the business cycle and may present long-term growth opportunities.
When market or economic conditions are unstable, the Fund may
invest substantial amounts of its assets in debt securities, such
as money market instruments or government securities, for temporary
defensive purposes, as described below. The Fund's portfolio
managers may employ special investment techniques in selecting
securities for the Fund. These are also described below.
Additional information may be found about them under the same
headings in the Statement of Additional Information.
Because of the types of companies in which the Fund invests
and the investment techniques the Fund uses, some of which may be
speculative, the Fund is designed for investors who are investing
for the long-term and who are willing to accept greater risks of
loss of their capital in the hope of achieving greater capital
appreciation. Investing for capital appreciation entails the risk
of loss of all or part of your investment.
What Are "Emerging Growth" Companies? The Fund emphasizes
investments in companies that offer the potential for accelerated
earnings or revenues growth. These are "emerging growth companies,"
which tend to be newer, smaller companies that are developing new
products or services or that are expanding into new markets for
their products. However, emerging growth companies can be any size
and can be in any industry, and may include established companies
entering a new growth cycle. Emerging growth companies normally
retain a large part of their earnings for research, development and
investment in capital assets. Therefore, they tend not to emphasize
the payment of dividends.
Can the Fund's Investment Objective and Policies Change?
The Fund has an investment objective, described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and
strategies in carrying out those investment policies. The Fund's
investment policies and techniques are not "fundamental" unless
this Prospectus or the Statement of Additional Information says
that a particular policy is "fundamental." The Fund's investment
objective is a fundamental policy.
Fundamental policies are those that cannot be changed without
the approval of a "majority" of the Fund's outstanding voting
shares. The term "majority" is defined in the Investment Company
Act to be a particular percentage of outstanding voting shares (and
this term is explained in the Statement of Additional Information).
The Fund's Board of Trustees may change non-fundamental policies
without shareholder approval, although significant changes will be
described in amendments to this Prospectus.
Stock Investment Risks. Because the Fund may invest a
substantial portion of its assets in stocks, the value of the
Fund's portfolio will be affected by changes in the stock markets.
At times, the stock markets can be volatile, and stock prices can
change substantially. This market risk will affect the Fund's net
asset values per share, which will fluctuate as the values of the
Fund's portfolio securities change. Not all stock prices change
uniformly or at the same time, not all stock markets move in the
same direction at the same time, and other factors can affect a
particular stock's prices (for example, poor earnings reports by an
issuer, loss of major customers, major litigation against an
issuer, and changes in government regulations affecting an
industry). Not all of these factors can be predicted.
The Fund attempts to limit market risks by diversifying its
investments, that is, by not holding a substantial amount of the
stock of any one company and by not investing too great a
percentage of the Fund's assets in any one company. Expanding the
Fund's investment policies to emphasize investments in emerging
growth companies worldwide serves to diversify the Fund's
investments across a number of sectors. Because changes in market
prices can occur at any time, there is no assurance that the Fund
will achieve its investment objective, and when you redeem your
shares, they may be worth more or less than what you paid for them.
Foreign Securities. The Fund may invest a substantial amount
of its assets in foreign securities. The Fund may purchase
securities issued or guaranteed by foreign companies or foreign
governments, including foreign government agencies. The Fund may
buy securities of companies in any country, developed or
underdeveloped. Other than the requirement that the Fund will
normally invest at least 65% of its total assets in emerging growth
companies located in the U.S. and at least three foreign countries,
there is no limit on the amount of the Fund's assets that may be
invested in foreign securities. The Fund will hold foreign currency
only in connection with the purchase or sale of foreign securities.
Foreign securities have special risks. There are special
risks in investing in foreign securities. Because the Fund may buy
securities denominated in foreign currencies or traded primarily in
foreign markets, a change in the value of a foreign currency
against the U.S. dollar will result in a change in the U.S. dollar
value of securities denominated in that foreign currency.
Investments in securities of issuers in non-industrialized
countries generally involve more risk and may be considered to be
highly speculative. Foreign issuers are not subject to the same
accounting and disclosure requirements that U.S. companies are
subject to. The value of foreign investments may be affected by
other factors, including exchange control regulations,
expropriation or nationalization of a company's assets, foreign
taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or
other political and economic factors.
In addition, it is generally more difficult to obtain court
judgments outside the U.S. if the Fund were to sue a foreign issuer
or broker. Additional costs may be incurred because foreign
brokerage commissions are generally higher than U.S. rates, and
there are additional custodial costs associated with holding
securities abroad. More information about the risks and potential
rewards of investing in foreign securities is contained in the
Statement of Additional Information.
Warrants and Rights. Warrants basically are options to
purchase stock at set prices that are valid for a limited period of
time. Rights are options to purchase securities, normally granted
to current stockholders by the issuer. The Fund may invest up to
5% of its net assets in warrants or rights. That 5% does not apply
to warrants or rights the Fund has acquired as part of units with
other securities or that were attached to other securities. No
more than 2% of the Fund's net assets may be invested in warrants
that are not listed on either the New York or American Stock
Exchanges. For further details about these investments, please
refer to "Warrants and Rights" in the Statement of Additional
Information.
Portfolio Turnover. A change in the securities held by the
Fund is known as "portfolio turnover." The Fund ordinarily does not
engage in short-term trading to try to achieve its objective. The
"Financial Highlights," above, show the Fund's portfolio turnover
rate during past fiscal years. High turnover and short-term
trading may cause the Fund to have relatively larger commission
expenses and transaction costs than funds that do not engage in
short-term trading. Additionally, high portfolio turnover may
affect the ability of the Fund to qualify as a "regulated
investment company" under the Internal Revenue Code for tax
deductions for dividends and capital gain distributions the Fund
pays to shareholders. The Fund qualified in its last fiscal year
and intends to do so in the coming year, although it reserves the
right not to qualify.
Other Investment Techniques and Strategies. The Fund may also use
the investment techniques and strategies described below. These
techniques involve certain risks. The Statement of Additional
Information contains more information about these practices,
including limitations on their use that are designed to reduce some
of the risks.
Borrowing for Leverage. The Fund may borrow up to 10% of
the value of its net assets from banks on an unsecured basis to buy
securities. This is a speculative investment method known as
"leverage." This technique may subject the Fund to greater risks
and costs than funds that do not borrow. These risks may include
the possibility that the Fund's net asset value per share will
fluctuate more than funds that don't borrow. Borrowing is subject
to regulatory limits under the Investment Company Act.
Investing in Small, Unseasoned Companies. The Fund may
invest in securities of small, unseasoned companies. These are
companies that have been in operation for less than three years,
counting the operations of any predecessors. Securities of these
companies may have limited liquidity (which means that the Fund may
have difficulty selling them at an acceptable price when it wants
to) and the prices of these securities may be volatile. The Fund
currently intends to invest no more than 10% of its total assets in
securities of small, unseasoned issuers, while reserving the right
to invest up to 25% of its total assets in these issuers.
Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, forward
contracts, and options on futures and broadly-based stock indices.
These are all referred to as "hedging instruments." The Fund does
not use hedging instruments for speculative purposes, and has
limits on the use of them, described below. The hedging
instruments the Fund may use are described below and in greater
detail in "Other Investment Techniques and Strategies" in the
Statement of Additional Information.
The Fund may buy and sell options, futures and forward
contracts for a number of purposes. It may do so to try to manage
its exposure to the possibility that the prices of its portfolio
securities may decline, or to establish a position in the
securities market as a temporary substitute for purchasing
individual securities. It may do so to try to manage its exposure
to changing interest rates. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the
Fund's portfolio against price fluctuations. Other hedging
strategies, such as buying futures and call options, tend to
increase the Fund's exposure to the securities market.
Forward contracts are used to try to manage foreign currency
risks on the Fund's foreign investments. Foreign currency options
are used to try to protect against declines in the dollar value of
foreign securities the Fund owns, or to protect against an increase
in the dollar cost of buying foreign securities. Writing covered
call options may also provide income to the Fund for liquidity
purposes or to raise cash to distribute to shareholders.
Futures. The Fund may buy and sell futures contracts that
relate to broadly-based stock indices (these are referred to as
Stock Index Futures) or foreign currencies (these are called
Forward Contracts and are discussed below).
Put and Call Options. The Fund may buy and sell certain
kinds of put options (puts) and call options (calls). Calls the
Fund buys or sells must be listed on a securities or commodities
exchange, or quoted on the Automated Quotation System ("NASDAQ") of
The Nasdaq Stock Market, Inc., or traded in the over-the-counter
market. In the case of puts and calls on a foreign currency, they
must be traded on a securities or commodities exchange or in the
over-the-counter market, or must be quoted by recognized dealers in
those options. A call or put option may not be purchased by the
Fund if the value of all of the Fund's put and call options would
exceed 5% of the Fund's total assets.
The Fund may buy calls only on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures. The Fund may
buy calls to terminate its obligation on a call the Fund previously
wrote.
The Fund may write (that is, sell) covered call options. Each
call the Fund writes must be "covered" while it is outstanding.
That means the Fund must own the investment on which the call was
written while the call is outstanding or the Fund owns and
segregates liquid assets to satisfy its obligations if the call is
exercised. The Fund may write calls on Futures contracts it owns,
but these calls must be covered by securities or other liquid
assets the Fund owns and segregated to enable it to satisfy its
obligations if the call is exercised. After the Fund writes a
call, not more than 25% of the Fund's assets may be subject to
calls. When the Fund writes a call, it receives cash (called a
premium). The call gives the buyer the ability to buy the
investment on which the call was written from the Fund at the call
price during the period in which the call may be exercised. If the
value of the investment does not rise above the call price, it is
likely that the call will lapse without being exercised, while the
Fund keeps the cash premium (and the investment).
The Fund may purchase and sell put options. Buying a put on
an investment gives the Fund the right to sell the investment at a
set price to a seller of a put on that investment. The Fund can
buy only those puts that relate to securities that the Fund owns,
broadly-based stock indices, foreign currencies or Stock Index
Futures. The Fund can buy a put on a Stock Index Future whether or
not the Fund owns the particular Stock Index Future in its
portfolio.
The Fund may write puts on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures, but only if
those puts are covered by segregated liquid assets. The Fund will
not write a put if it will require more than 25% of the Fund's
total assets to be segregated.
Forward Contracts. Forward contracts are foreign currency
exchange contracts. They are used to buy or sell foreign currency
for future delivery at a fixed price. The Fund uses them to try to
"lock in" the U.S. dollar price of a security denominated in a
foreign currency that the Fund has bought or sold, or to protect
against possible losses from changes in the relative values of the
U.S. dollar and foreign currency. The Fund limits its exposure in
foreign currency exchange contracts in a particular foreign
currency to the amount of its assets denominated in that currency
or in a closely-correlated currency.
Hedging instruments can be volatile investments and may
involve special risks. The use of hedging instruments requires
special skills and knowledge of investment techniques that are
different from what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or
judges market conditions incorrectly, hedging strategies may reduce
the Fund's return. The Fund could also experience losses if the
prices of its futures and options positions were not correlated
with its other investments or if it could not close out a position
because of an illiquid market for the future or option.
Options trading involves the payment of premiums and has
special tax effects on the Fund. There are also special risks in
particular hedging strategies. If a covered call written by the
Fund is exercised on an investment that has increased in value, the
Fund will be required to sell the investment at the call price and
will not be able to realize any profit if the investment has
increased in value above the call price. In writing a put, there
is a risk that the Fund may be required to buy the underlying
security at a disadvantageous price. The use of forward contracts
may reduce the gain that would otherwise result from a change in
the relationship between the U.S. dollar and a foreign currency.
These risks are described in greater detail in the Statement of
Additional Information.
Derivative Investments. In general, a "derivative
investment" is a specially-designed investment. Its performance is
linked to the performance of another investment or security such as
an option, future, index or currency. The Fund can invest in a
number of different kinds of "derivative investments." They are
used in some cases for hedging purposes, and in others because they
offer the potential for increased income and principal value. In
the broadest sense, exchange-traded options and futures contracts
(please refer to "Hedging," above) may be considered "derivative"
investments.
There are special risks in investing in derivative
investments. The company issuing the investment might not pay the
amount due on the maturity of the instrument. Also, the underlying
investment or security on which the derivative is based might not
perform the way the Manager expected it to perform. These risks
mean that the Fund can lose part of the value of its investments,
which will affect the Fund's share price. Certain derivative
investments held by the Fund may trade in the over-the-counter
markets and may be "illiquid." If that is the case, the Fund's
investment in them will be limited, as discussed in "Illiquid and
Restricted Securities," below.
Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments.
Investments may be illiquid because of the absence of an active
trading market, making it difficult to value them or dispose of
them promptly at an acceptable price. A restricted security is one
that has a contractual restriction on its resale or which cannot be
sold publicly until it is registered under the Securities Act of
1933.
The Fund will not invest more than 10% of its net assets in
illiquid or restricted securities (the Board may increase that
limit to 15%). The Fund's percentage limitation on these
investments does not apply to certain restricted securities that
are eligible for resale to qualified institutional purchasers. The
Manager monitors holdings of illiquid securities on an ongoing
basis and at times the Fund may be required to sell some holdings
to maintain adequate liquidity.
Loans of Portfolio Investments. To raise cash for liquidity
purposes, the Fund may lend its portfolio investments to brokers,
dealers and other financial institutions. The Fund must receive
collateral for such loans. As a fundamental policy, these loans are
limited to not more than 25% of the value of the Fund's total
assets and are subject to other conditions described in the
Statement of Additional Information. The Fund presently does not
intend to lend its portfolio securities, but if it does, the value
of securities loaned is not expected to exceed 5% of the value of
the Fund's total assets in the current year.
Repurchase Agreements. The Fund may enter into repurchase
agreements. They are used primarily for liquidity purposes. In a
repurchase transaction, the Fund buys a security and simultaneously
sells it to the vendor for delivery at a future date.
Repurchase agreements must be fully collateralized. However,
if the vendor fails to pay the resale price on the delivery date,
the Fund may incur costs in disposing of the collateral and may
experience losses if there is any delay in its ability to do so.
The Fund will not enter into a repurchase agreement that causes
more than 10% of its net assets to be subject to repurchase
agreements having a maturity beyond seven days. There is no limit
on the amount of the Fund's net assets that may be subject to
repurchase agreements of seven days or less.
Short Sales "Against-the-Box." In a short sale, the seller
does not own the security that is sold, but normally borrows the
security to fulfill its delivery obligation. The seller later buys
the security to repay the loan, in the expectation that the price
of the security will be lower when the purchase is made, resulting
in a gain. The Fund may not sell securities short except in
collateralized transactions referred to as short sales "against-
the-box," where the Fund owns an equivalent amount of the
securities sold short. This technique is primarily used for tax
purposes. No more than 15% of the Fund's net assets will be held
as collateral for such short sales at any one time.
Temporary Defensive Investments. When stock market prices
are falling, or in other unusual economic, political or business
circumstances, the Fund may invest all or a portion of its assets
in defensive securities. Securities selected for defensive purposes
may include debt securities. These may be rated or unrated bonds
and debentures, preferred stocks, cash or cash equivalents (such as
U.S. Treasury bills and other short-term obligations of the U.S.
Government, its agencies or instrumentalities) or commercial paper
rated "A-1" or better by Standard & Poor's Corporation or "P-1" or
better by Moody's Investors Service, Inc. Generally, short-term
debt securities (which are securities maturing in one year or less
from the date of purchase) will be emphasized for defensive
purposes.
Other Investment Restrictions. The Fund has other investment
restrictions which are fundamental policies. Under these
fundamental policies, the Fund cannot do any of the following:
Invest in securities of any one issuer (other than the U.S.
Government or its agencies or instrumentalities) if immediately
thereafter more than 5% of the Fund's assets would be invested in
securities of that issuer.
With respect to 75% of its assets, invest in securities of
any one issuer (other than the U.S. Government or its agencies or
instrumentalities) if the Fund would then own more than 10% of the
voting securities or 10% of any class of securities of that issuer.
All debt and all preferred stock of an issuer are respectively
considered single classes for this purpose.
Borrow money in excess of 10% of the value of its net
assets.
Deviate from the percentage restrictions listed under
"Borrowing for Leverage", "Warrants and Rights," "Loans of
Portfolio Investments" and "Short Sales Against-the-Box" or from
the restrictions under "Foreign Securities" as to what foreign
securities may be purchased.
Unless the Prospectus states that a percentage restriction
applies on an ongoing basis, it applies only at the time the Fund
makes an investment and the Fund need not sell securities to meet
the percentage limits if the value of the investment increases in
proportion to the size of the Fund. Other investment restrictions
are listed in "Investment Restrictions" in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1987 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of
authorized shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is
responsible, under Massachusetts law, for protecting the interests
of shareholders. The Trustees periodically meet throughout the year
to oversee the Fund's activities, review its performance, and
review the actions of the Manager. "Trustees and Officers of the
Fund" in the Statement of Additional Information names the Trustees
and officers of the Fund and provides more information about them.
Although the Fund will not normally hold annual meetings of its
shareholders, it may hold shareholder meetings from time to time on
important matters, and shareholders have the right to call a
meeting to remove a Trustee or to take other action described in
the Fund's Declaration of Trust.
The Board of Trustees has the power, without shareholder
approval, to divide unissued shares of the Fund into two or more
classes. The Board has done so, and the Fund currently has three
classes of shares, Class A, Class B and Class C. All three classes
invest in the same investment portfolio. Each class has its own
dividends and distributions and pays certain expenses which may be
different for the different classes. Each class may have a
different net asset value. Each share has one vote at shareholder
meetings, with fractional shares voting proportionally. Only
shares of a particular class vote as a class on matters that affect
that class alone. Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
OppenheimerFunds, Inc., which is responsible for selecting the
Fund's investments and handles its day-to-day business. The
Manager carries out its duties, subject to the policies established
by the Board of Trustees, under an Investment Advisory Agreement
which states the Manager's responsibilities. The Agreement
establishes the fees paid by the Fund to the Manager, and describes
the expenses that the Fund pays to conduct its business.
The Manager has operated as an investment advisor since 1959.
The Manager (and its affiliates) currently manages investment
companies, including other Oppenheimer funds, with assets of more
than $62 billion as of December 31, 1996, and with more than 3
million shareholder accounts. The Manager is owned by Oppenheimer
Acquisition Corp., a holding company that is owned in part by
senior officers of the Manager and controlled by Massachusetts
Mutual Life Insurance Company.
Portfolio Managers. The Portfolio Managers of the Fund are
George Evans and Jay W. Tracey, III. Mr. Evans and Mr. Tracey are
both a Vice President of the Manager. They have been the
individuals principally responsible for the day-to-day management
of the Fund's portfolio since December 4, 1995. During the past
five years, Mr. Evans has also served as an officer and portfolio
manager for other Oppenheimer funds and formerly served as an
international securities portfolio manager/analyst with Brown
Brothers Harriman & Co. Inc. In his most recent previous position,
Mr. Tracey was a managing director of Buckingham Capital
Management. Prior to initially joining the Manager, he was a
Senior Vice President of Founders Asset Management, Inc. (a mutual
fund advisor), prior to which he was a securities analyst and
portfolio manager for Berger Associates, Inc. (investment advisor).
During the past five years, Mr. Tracey has also served as an
officer and portfolio manager for other Oppenheimer funds.
Fees and Expenses. Under the investment advisory agreement,
the Fund pays the Manager the following annual fees, which decline
on additional assets as the Fund grows: 1.0% of the first $50
million of average annual net assets; 0.75% of the next $150
million; 0.72% of the next $200 million; 0.69% of the next $200
million; 0.66% of the next $200 million; and 0.60% of average
annual net assets in excess of $800 million. The Fund's management
fee for its last fiscal year ended September 30, 1996 was 0.83% of
average annual net assets for Class A shares and for Class B and
Class C shares (on an annualized basis).
The Fund pays expenses related to its daily operations, such
as custodian fees, Trustees' fees, transfer agency fees, legal fees
and auditing costs. Those expenses are paid out of the Fund's
assets and are not paid directly by shareholders. However, those
expenses reduce the net asset value of shares, and therefore are
indirectly borne by shareholders through their investment. More
information about the Investment Advisory Agreement and the other
expenses paid by the Fund is contained in the Statement of
Additional Information.
There is also information about the Fund's brokerage policies
and practices in "Brokerage Policies of the Fund" in the Statement
of Additional Information. That section discusses how brokers and
dealers are selected for the Fund's portfolio transactions. When
deciding which brokers to use, the Manager is permitted by the
Investment Advisory Agreement to consider whether brokers have sold
shares of the Fund or any other funds for which the Manager serves
as investment advisor.
The Distributor. The Fund's shares are sold through
dealers, brokers and other financial institutions that have a sales
agreement with OppenheimerFunds Distributor, Inc., a subsidiary of
the Manager that acts as the Fund's Distributor. The Distributor
also distributes the shares of the other Oppenheimer funds and is
sub-distributor for funds managed by a subsidiary of the Manager.
The Transfer Agent. The Fund's transfer agent is
OppenheimerFunds Services, a division of the Manager, which acts as
the shareholder servicing agent for the Fund on an "at-cost" basis.
It also acts as the shareholder serving agent for the other
Oppenheimer funds. Shareholders should direct inquiries about
their accounts to the Transfer Agent at the address and toll-free
number shown below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms
"total return" and "average annual total return" to illustrate its
performance. The performance of each class of shares is shown
separately, because the performance of each class will usually be
different as a result of the different kinds of expenses each class
bears. These returns measure the performance of a hypothetical
account in the Fund over various periods, and do not show the
performance of each shareholder's account (which will vary if any
dividends are received in cash or shares are sold or purchased).
This performance information may be useful to help you see how your
investment has done and to compare it to other funds or to a market
index, as we have done below.
It is important to understand that the Fund's total returns
represent past performance and should not be considered to be
predictions of future returns or performance. This performance
data is described below, but more detailed information about how
total returns are calculated is contained in the Statement of
Additional Information, which also contains information about other
ways to measure and compare the Fund's performance. The Fund's
investment performance will vary over time, depending on market
conditions, the composition of the portfolio and expenses and which
class of shares you purchase.
Total Returns. There are different types of total returns
used to measure the Fund's performance. Total return is the change
in value of a hypothetical investment in the Fund over a given
period, assuming that all dividends and capital gains distributions
are reinvested in additional shares. The cumulative total return
measures the change in value over the entire period (for example,
ten years). An average annual total return shows the average rate
of return for each year in a period that would produce the
cumulative total return over the entire period. However, average
annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for Class A shares, normally the
current maximum initial sales charge has been deducted. When total
returns are shown for Class B or Class C shares, normally the
contingent deferred sales charge that applies to the period for
which total return is shown has been deducted. However, total
returns may also be quoted "at net asset value," without
considering the effect of the sales charge, and those returns would
be less if sales charges were deducted.
How Has the Fund Performed? Below is a discussion by the Manager of
the Fund's performance during its fiscal year ended September 30,
1996, followed by a graphical comparison of the Fund's performance
to an appropriate broad-based market index.
Management's Discussion of Performance. During the Fund's
fiscal year ended September 30, 1996, the U.S. stock market
outperformed the major foreign stock markets, and in the U.S. stock
market, exchange-listed issues performed better than NASDAQ-listed
issues overall. The Manager utilized the following global theme
areas in selecting stocks for the Fund's portfolio: technology,
banking, insurance and financial services and the emerging consumer
market sector. Securities within these sectors were selected that
might capitalize on the growing need for efficiency-advancing
technology and in the anticipated increase in spending power of
consumers in developing countries, and a growing demand for natural
resources.
Comparing the Fund's Performance to the Market. The graphs
below show the performance of a hypothetical $10,000 investment in
Class A, Class B and Class C shares of the Fund held at September
30, 1996. In the case of Class A shares, performance is measured
from the inception of the Class on December 30, 1987. In the case
of Class B and Class C shares, performance is measured since the
inception of both Classes on November 1, 1995.
Because of the Fund's global investment focus, the Fund's
performance is compared to the performance of the Morgan Stanley
Capital International World Index, an unmanaged index of issuers
listed on the stock exchanges of 20 foreign countries and the
United States. It is widely recognized as a measure of global
stock market performance. Index performance reflects the
reinvestment of dividends but does not consider the effect of
capital gains or transaction costs, and none of the data below
shows the effect of taxes. Also, the Fund's performance reflects
the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not
limited to the securities in any one index and that index data does
not reflect any assessment of the risk of the investments included
in the index.
Comparison of a Change in Value of $10,000 Hypothetical Investments
in:
Oppenheimer Global Emerging Growth Fund (Class A) and Morgan
Stanley Capital International World Index
[GRAPH]
Average Annual Total Returns of Class A Shares of the Fund at
9/30/96
1-Year 5-Year Life1
- ---------------------------------------------
9.57% (5.68)% 8.45%
[GRAPH]
Cumulative Total Return of Class B Shares of the Fund at 9/30/96
Life (2)
----------------------
14.22%
[GRAPH]
Cumulative Total Return of Class C Shares of the Fund at 9/30/96
Life (3)
----------------------
18.28%
______________
Total returns and the ending account value in the graph show change
in share value and include reinvestment of all dividends and
capital gains distributions.
1Class A returns are shown net of the applicable 5.75% maximum
initial sales charge. The inception date of the Fund (Class A
shares) was 12/30/87. The performance information in the graph for
the Morgan Stanley Capital International World Index begins on
12/31/87.
2Class B shares of the Fund were first publicly offered on 11/1/95.
The Life-of-Class return is shown net of the applicable 5%
contingent deferred sales charge. The performance information in
the graph for the Morgan Stanley Capital International World Index
begins on 10/1/95.
3Class C shares of the Fund were first publicly offered on 11/1/95.
The Life-of-Class return is shown net of the applicable 1%
contingent deferred sales charge.
Past performance is not predicative of future performance.
Graphs may not be drawn to same scale.
A B O U T Y O U R A C C O U N T
How to Buy Shares
Classes of Shares. The Fund offers investors three different
classes of shares. The different classes of shares represent
investments in the same portfolio of securities but are subject to
different expenses and will likely have different share prices.
Class A Shares. If you buy Class A shares, you may pay an
initial sales charge on investments up to $1 million (up to
$500,000 for purchases by "Retirement Plans," as defined in "Class
A Contingent Deferred Sales Charge" on page ___. If you purchase
Class A shares as part of an investment of at least $1 million
($500,000 for Retirement Plans) in shares of one or more
Oppenheimer funds, you will not pay an initial sales charge, but if
you sell any of those shares within 18 months of buying them, you
may pay a contingent deferred sales charge. Sales charge rates are
described in "Buying Class A Shares," below.
Class B Shares. If you buy Class B shares, you pay no sales
charge at the time of purchase, but if you sell your shares within
six years of buying them, you will normally pay a contingent
deferred sales charge. That sales charge varies depending on how
long you own your shares, as described in "Buying Class B Shares"
below.
Class C Shares. If you buy Class C shares, you pay no sales
charge
at the time of purchase, but if you sell your shares within 12
months of buying them, you will normally pay a contingent deferred
sales charge of 1%, as discussed in "Buying Class C Shares" below.
Which Class of Shares Should You Choose? Once you decide that the
Fund is an appropriate investment for you, the decision as to which
class of shares is better suited to your needs depends on a number
of factors which you should discuss with your financial advisor.
The Fund's operating costs that apply to a class of shares and the
effect of the different types of sales charges on your investment
will vary your investment results over time. The most important
factors are how much you plan to invest and how long you plan to
hold your investment. If your goals and objectives change over
time and you plan to purchase additional shares, you should re-
evaluate those factors to see if you should consider another class
of shares.
In the following discussion, to help provide you and your
financial advisor with a framework in which to choose a class, we
have made some assumptions using a hypothetical investment in the
Fund. We used the sales charge rates that apply to each class, and
considered the effect of the annual asset-based sales charge on
Class B and Class C expenses (which, like all expenses, will affect
your investment return). For the sake of comparison, we have
assumed that there is a 10% rate of appreciation in the investment
each year. Of course, the actual performance of your investment
cannot be predicted and will vary, based on the Fund's actual
investment returns and the operating expenses borne by each class
of shares, and which class you invest in. The factors discussed
below are not intended to be investment advice or recommendations,
because each investor's financial considerations are different.
The discussion below of the factors to consider in purchasing a
particular class of shares assumes that you will purchase only one
class of shares and not a combination of shares of different
classes.
How Long Do You Expect to Hold Your Investment? The Fund is
designed for long-term investment. While future financial needs
cannot be predicted with certainty, knowing how long you expect to
hold your investment will assist you in selecting the appropriate
class of shares. The effect of the sales charge over time, using
our assumptions, will generally depend on the amount invested.
Because of the effect of class-based expenses, your choice will
also depend on how much you plan to invest. For example, the
reduced sales charges available for larger purchases of Class A
shares may, over time, offset the effect of paying an initial sales
charge on your investment (which reduces the amount of your
investment dollars used to buy shares for your account) compared to
the effect over time of higher class-based expenses on Class B or
Class C shares, for which no initial sales charge is paid.
Investing for the Short Term. If you have a short-term
investment horizon (that is, you plan to hold your shares for not
more than six years), you should probably consider purchasing Class
A or Class C shares rather than Class B shares, because of the
effect of the Class B contingent deferred sales charge if you
redeem in less than 7 years, as well as the effect of the Class B
asset-based sales charge on the investment return for that class in
the short-term. Class C shares might be the appropriate choice
(especially for investments of less than $100,000), because there
is no initial sales charge on Class C shares, and the contingent
deferred sales charge does not apply to amounts you sell after
holding them one year.
However, if you plan to invest more than $100,000 for the
shorter term, then the more you invest and the more your investment
horizon increases toward six years, Class C shares might not be as
advantageous as Class A shares. That is because the annual asset-
based sales charge on Class C shares will have a greater economic
impact on your account over the longer term than the reduced front-
end sales charge available for larger purchases of Class A shares.
For example, Class A might be more advantageous than Class C (as
well as Class B) for investments of more than $100,000 expected to
be held for 5 or 6 years (or more). For investments over $250,000
expected to be held 4 to 6 years (or more), Class A shares may
become more advantageous than Class C (and B). If investing
$500,000 or more, Class A may be more advantageous as your
investment horizon approaches 3 years or more.
And for investors who invest $1 million or more, in most cases
Class A shares will be the most advantageous choice, no matter how
long you intend to hold your shares. For that reason, the
Distributor normally will not accept purchase orders of $500,000 or
more of Class B shares or $1 million or more of Class C shares from
a single investor.
Investing for the Longer Term. If you are investing for the
longer term, for example, for retirement, and do not expect to need
access to your money for seven years or more, Class B shares may be
an appropriate consideration, if you plan to invest less than
$100,000. If you plan to invest more than $100,000 over the long
term, Class A shares will likely be more advantageous than Class B
shares or C shares, as discussed above, because of the effect of
the expected lower expenses for Class A shares and the reduced
initial sales charge available for larger investments in Class A
shares under the Fund's Right of Accumulation.
Of course, these examples are based on approximations of the
effect of current sales charges and expenses on a hypothetical
investment over time, using the assumptions stated above and
therefore, you should analyze your options carefully.
Are There Differences in Account Features That Matter to
You? Because some account features may not be available to Class
B or Class C shareholders, or other features (such as Automatic
Withdrawal Plans) might not be advisable (because of the effect of
the contingent deferred sales charge) for Class B or Class C
shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares to buy.
For example, share certificates are not available for Class B or
Class C shares, and if you are considering using your shares as
collateral for a loan, that may be a factor to consider.
Additionally, the dividends payable to Class B and Class C
shareholders will be reduced by the additional expenses borne
solely by those classes, such as the asset-based sales charge to
which Class B and Class C shares are subject, as described below
and in the Statement of Additional Information.
How Does It Affect Payments to My Broker? A salesperson,
such as a broker, or any other person who is entitled to receive
compensation for selling Fund shares may receive different
compensation for selling one class rather than another class. It
is important that investors understand that the purpose of the
contingent deferred sales charges and asset-based sales charges for
Class B and Class C shares are the same as the purpose of the
front-end sales charge on sales of Class A shares: that is, to
compensate the Distributor for commissions it pays to dealers and
financial institutions for selling shares.
How Much Must You Invest? You can open a Fund account with a
minimum initial investment of $1,000 and make additional
investments at any time with as little as $25. There are reduced
minimum investments under special investment plans.
With Asset Builder Plans, Automatic Exchange Plans,
403(b)(7) custodial plans and military allotment plans, you can
make initial and subsequent investments of as little as $25.
Subsequent purchases of at least $25 can be made by telephone
through AccountLink.
Under pension, profit-sharing plans and 401(k) plans and
Individual Retirement Accounts (IRAs), you can make an initial
investment of as little as $250 (if your IRA is established under
an Asset Builder Plan, the $25 minimum applies), and subsequent
investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other Oppenheimer
funds (a list of them appears in the Statement of Additional
Information, or you can ask your dealer or call the Transfer
Agent), or by reinvesting distributions from unit investment trusts
that have made arrangements with the Distributor.
How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a
sales agreement with the Distributor, or directly through the
Distributor, or automatically from your bank account through an
Asset Builder Plan under the OppenheimerFunds AccountLink service.
The Distributor may appoint certain servicing agents as the
Distributor's agent to accept purchase (and redemption) orders.
When you buy shares, be sure to specify Class A, Class B or Class
C shares. If you do not choose, your investment will be made in
Class A shares.
Buying Shares Through Your Dealer. Your dealer will place
your order with the Distributor on your behalf.
Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box
5270, Denver, Colorado 80217. If you don't list a dealer on the
application, the Distributor will act as your agent in buying the
shares. However, it is recommended that you discuss your
investment first with a financial advisor, to be sure it is
appropriate for you.
Buying Shares Through OppenheimerFunds AccountLink. You can
use AccountLink to link your Fund account with an account at a U.S.
bank or other financial institution that is an Automated Clearing
House (ACH) member. You can then transmit funds electronically to
purchase shares, to have the Transfer Agent send redemption
proceeds, or to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the
regular business day the Distributor is instructed by you to
initiate the ACH transfer to buy shares. You can provide those
instructions automatically, under an Asset Builder Plan, described
below, or by telephone instructions using OppenheimerFunds
PhoneLink, also described below. You should request AccountLink
privileges on the application or dealer settlement instructions
used to establish your account. Please refer to "AccountLink" below
for more details.
Asset Builder Plans. You may purchase shares of the Fund
(and up to four other Oppenheimer funds) automatically each month
from your account at a bank or other financial institution under an
Asset Builder Plan with AccountLink. Details are on the
Application and in the Statement of Additional Information.
At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales
charge that applies) that is next determined after the Distributor
receives the purchase order in Denver, Colorado. In most cases, to
enable you to receive that day's offering price, the Distributor or
its designated agent must receive your order by the time of day The
New York Stock Exchange closes, which is normally 4:00 P.M., but
may be earlier on some days (all references to time in this
Prospectus mean "New York time"). The net asset value of each class
of shares is determined as of that time on each day the New York
Stock Exchange is open (which is a "regular business day").
If you buy shares through a dealer, the dealer must receive
your order by the close of The New York Stock Exchange on a regular
business day and transmit it to the Distributor so that it is
received before the Distributor's close of business that day, which
is normally 5:00 P.M. The Distributor, in its sole discretion, may
reject any purchase order for the Fund's shares.
Special Sales Charge Arrangements for Certain Persons. The
Appendix to this Prospectus sets forth conditions for the waiver
of, or exemption from, sales charges or the special sales charge
rates that apply to purchases of shares of the Fund (including
purchases by exchange) by a person who was a shareholder of one of
the Former Quest for Value Funds (as defined in that Appendix).
Buying Class A Shares. Class A shares are sold at their offering
price which is normally net asset value plus an initial sales
charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be
the net asset value. In some cases, reduced sales charges may be
available, as described below. Out of the amount you invest, the
Fund receives the net asset value to invest for your account. The
sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor and
allocated to your dealer as commission. The current sales charge
rates and commissions paid to dealers and brokers are as follows:
<TABLE>
<CAPTION>
Front-End Front-End
Sales Charge Sales Charge Commission
As Percentage As Percentage As Percentage
of Offering of Amount of Offering
Amount of Purchase Price Invested Price
<S> <C> <C> <C>
- ----------------------------------------------------------------------
Less than $25,000 5.75% 6.10% 4.75%
- ----------------------------------------------------------------------
$25,000 or more 5.50% 5.82% 4.75%
but less than $50,000
- ----------------------------------------------------------------------
$50,000 or more 4.75% 4.99% 4.00%
but less than $100,000
- ----------------------------------------------------------------------
$100,000 or more 3.75% 3.90% 3.00%
but less than $250,000
- ----------------------------------------------------------------------
$250,000 or more 2.50% 2.56% 2.00%
but less than $500,000
- ----------------------------------------------------------------------
$500,000 or more 2.00% 2.04% 1.60%
but less than $1 million
</TABLE>
The Distributor reserves the right to reallow the entire
commission to dealers. If that occurs, the dealer may be
considered an "underwriter" under Federal securities laws.
Class A Contingent Deferred Sales Charge. There is no
initial sales charge on purchases of Class A shares of any one or
more of the Oppenheimer funds in the following cases:
Purchases aggregating $1 million or more;
Purchases by a retirement plan qualified under section
401(a) if the retirement plan has total plan assets of $500,000 or
more;
Purchases by a retirement plan qualified under sections
401(a) or 401(k) of the Internal Revenue Code, by a non-qualified
deferred compensation plan (not including Section 457 plans),
employee benefit plan, group retirement plan (see "How to Buy
Shares - Retirement Plans" in the Statement of Additional
Information for further details), an employee's 403(b)(7) custodial
plan account, SEP IRA, SARSEP, or SIMPLE plan (all of these plans
are collectively referred to as "Retirement Plans"); that: (1) buys
shares costing $500,000 or more or (2) has, at the time of
purchase, 100 or more eligible participants, or (3) certifies that
it projects to have annual plan purchases of $200,000 or more; or
Purchases by an OppenheimerFunds Rollover IRA if the
purchases are made (1) through a broker, dealer, bank or registered
investment advisor that has made special arrangements with the
Distributor for these purchases, or (2) by a direct rollover of a
distribution from a qualified retirement plan if the administrator
of that plan has made special arrangements with the Distributor for
those purchases.
The Distributor pays dealers of record commissions on those
purchases in an amount equal to (i) 1.0% for non-Retirement Plan
accounts, and (ii) for Retirement Plan accounts, 1.0% of the first
$2.5 million, plus 0.50% of the next $2.5 million, plus 0.25% of
purchases over $5 million. That commission will be paid only on
those purchases that were not previously subject to a front-end
sales charge and dealer commission. No sales commission will be
paid to the dealer, broker or financial institution on sales of
Class A shares purchased with the redemption proceeds of shares of
a mutual fund offered as an investment option in a Retirement Plan
in which Oppenheimer funds are also offered as investment options
under a special arrangement with the Distributor if the purchase
occurs more than 30 days after the addition of the Oppenheimer
funds as an investment option to the Retirement Plan.
If you redeem any of those shares within 18 months of the end
of the calendar month of their purchase, a contingent deferred
sales charge (called the "Class A contingent deferred sales
charge") will be deducted from the redemption proceeds. That sales
charge may be equal to 1.0% of the lesser of (1) the aggregate net
asset value of the redeemed shares (not including shares purchased
by reinvestment of dividends or capital gain distributions), or (2)
the original offering price (which is the original net asset value)
of the redeemed shares. However, the Class A contingent deferred
sales charge will not exceed the aggregate amount of the
commissions the Distributor paid to your dealer on all Class A
shares of all Oppenheimer funds you purchased subject to the Class
A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is
payable, the Fund will first redeem shares that are not subject to
the sales charge, including shares purchased by reinvestment of
dividends and capital gains, and then will redeem other shares in
the order that you purchased them. The Class A contingent deferred
sales charge is waived in certain cases described in "Waivers of
Class A Sales Charges" below.
No Class A contingent deferred sales charge is charged on
exchanges of shares under the Fund's exchange privilege (described
below). However, if the shares acquired by exchange are redeemed
within 18 months of the end of the calendar month of the purchase
of the exchanged shares, the sales charge will apply.
Special Arrangements With Dealers. The Distributor may
advance up to 13 months' commissions to dealers that have
established special arrangements with the Distributor for Asset
Builder Plans for their clients.
Reduced Sales Charges for Class A Share Purchases. You may be
eligible to buy Class A shares of the Fund at reduced sales charge
rates in one or more of the following ways:
Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and
your spouse can add together Class A and Class B shares you
purchase for your individual accounts, or jointly, or for trust or
custodial accounts on behalf of your children who are minors. A
fiduciary can count all shares purchased for a trust, estate or
other fiduciary account (including one or more employee benefit
plans of the same employer) that has multiple accounts.
Additionally, you can add together current purchases of Class
A and Class B shares of the Fund and other Oppenheimer funds to
reduce the sales charge rate that applies to current purchases of
Class A shares. You can also include Class A and Class B shares of
other Oppenheimer funds you previously purchased subject to an
initial or contingent deferred sales charge to reduce the sales
charge rate for current purchases of Class A shares, provided that
you still hold your investment in one of the Oppenheimer funds. The
value of those shares will be based on the greater of the amount
you paid for the shares or their current value (at offering price).
The Oppenheimer funds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from
the Distributor. The reduced sales charge will apply only to
current purchases and must be requested when you buy your shares.
Letter of Intent. Under a Letter of Intent, if you purchase
Class A shares or Class A and Class B shares of the Fund and other
Oppenheimer funds during a 13-month period, you can reduce the
sales charge rate that applies to your purchases of Class A shares.
The total amount of your intended purchases of both Class A and
Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. This can include
purchases made up to 90 days before the date of the Letter. More
information is contained in the Application and in "Reduced Sales
Charges" in the Statement of Additional Information.
Waivers of Class A Sales Charges. The Class A sales charges
are not imposed in the circumstances described below. There is an
explanation of this policy in "Reduced Sales Charges" in the
Statement of Additional Information.
Waivers of Initial and Contingent Deferred Sales Charges for
Certain Purchasers. Class A shares purchased by the following
investors are not subject to any Class A sales charges:
the Manager or its affiliates;
present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced
Sales Charges" in the Statement of Additional Information) of the
Fund, the Manager and its affiliates, and retirement plans
established by them for their employees;
registered management investment companies, or separate
accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose;
dealers or brokers that have a sales agreement with the
Distributor, if they purchase shares for their own accounts or for
retirement plans for their employees;
employees and registered representatives (and their spouses)
of dealers or brokers described above or financial institutions
that have entered into sales arrangements with such dealers or
brokers (and are identified to the Distributor) or with the
Distributor; the purchaser must certify to the Distributor at the
time of purchase that the purchase is for the purchaser's own
account (or for the benefit of such employee's spouse or minor
children);
dealers, brokers or registered investment advisors that have
entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular
investment products made available to their clients (those clients
may be charged a transaction fee by their dealer, broker or advisor
for the purchase or sale of Fund);
(1) investment advisors and financial planners who
charge an advisory, consulting or other fee for their services and
buy shares for their own accounts or the accounts of their clients,
(2) Retirement Plans and deferred compensation plans and trusts
used to fund those Plans (including, for example, plans qualified
or created under sections 401(a), 403(b) or 457 of the Internal
Revenue Code), and "rabbi trusts" that buy shares for their own
accounts, in each case if those purchases are made through a broker
or agent or other financial intermediary that has made special
arrangements with the Distributor for those purchases; and (3)
clients of such investment advisors or financial planners who buy
shares for their own accounts may also purchase shares without
sales charge but only if their accounts are linked to a master
account of their investment advisor or financial planner on the
books and records of the broker, agent or financial intermediary
with which the Distributor has made such special arrangements (each
of these investors may be charged a fee by the broker, agent or
financial intermediary for purchasing shares).
directors, trustees, officers or full-time employees of
OpCap Advisors or its affiliates, their relatives or any trust,
pension, profit sharing or other benefit plan which beneficially
owns shares for those persons;
accounts for which Oppenheimer Capital is the investment
advisor (the Distributor must be advised of this arrangement) and
persons who are directors or trustees of the company or trust which
is the beneficial owner of such accounts;
any unit investment trust that has entered into an
appropriate agreement with the Distributor;
a TRAC-2000 401(k) plan (sponsored by the former Quest
for Value Advisors) whose Class B or Class C shares of a Former
Quest for Value Fund were exchanged for Class A shares of that Fund
due to the termination of the Class B and C TRAC-2000 program on
November 24, 1995; or
qualified retirement plans that had agreed with the
former Quest for Value Advisors to purchase shares of any of the
Former Quest for Value Funds at net asset value, with such shares
to be held through DCXchange, a sub-transfer agency mutual fund
clearinghouse, provided that such arrangements are consummated and
share purchases commence by December 31, 1996.
Waivers of Initial and Contingent Deferred Sales Charges in
Certain Transactions. Class A shares issued or purchased in the
following transactions are not subject to Class A sales charges:
shares issued in plans of reorganization, such as mergers,
asset acquisitions and exchange offers, to which the Fund is a
party;
shares purchased by the reinvestment of loan repayments by
a participant in a retirement plan for which the Manager or its
affiliates acts as sponsor;
shares purchased by the reinvestment of dividends or other
distributions reinvested from the Fund or other Oppenheimer funds
(other than Oppenheimer Cash Reserves) or unit investment trusts
for which reinvestment arrangements have been made with the
Distributor;
shares purchased and paid for with the proceeds of shares
redeemed in the prior 12 months from a mutual fund (other than a
fund managed by the Manager or any of its subsidiaries) on which an
initial sales charge or contingent deferred sales charge was paid
(this waiver also applies to shares purchased by exchange of shares
of Oppenheimer Money Market Fund, Inc. that were purchased and paid
for in this manner); this waiver must be requested when the
purchase order is placed for your shares of the Fund, and the
Distributor may require evidence of your qualification for this
waiver.
shares purchased with the proceeds of maturing principal
of units of any Qualified Unit Investment Liquid Trust Series;
Waivers of the Class A Contingent Deferred Sales Charge for
Certain Redemptions. The Class A contingent deferred sales charge
is also waived if shares that would otherwise be subject to the
contingent deferred sales charge are redeemed in the following
cases:
to make Automatic Withdrawal Plan payments that are limited
annually to no more than 12% of the original account value;
involuntary redemptions of shares by operation of law or
involuntary redemptions of small accounts (see "Shareholder Account
Rules and Policies," below);
if, at the time a purchase order is placed for Class A
shares that would otherwise be subject to the Class A contingent
deferred sales charge, the dealer agrees in writing to accept the
dealer's portion of the commission payable on the sale in
installments of 1/18th of the commission per month ( and no further
commission will be payable if the shares are redeemed within 18
months of purchase);
for distributions from a TRAC-2000 401(k) plan sponsored by
the Distributor due to the termination of the TRAC-2000 program.
for distributions from Retirement Plans, deferred
compensation plans or other employee benefit plans for any of the
following purposes: (1) following the death or disability (as
defined in the Internal Revenue Code) of the participant or
beneficiary (the death or disability must occur after the
participant's account was established); (2) to return excess
contributions; (3) to return contributions made due to a mistake of
fact; (4) hardship withdrawals, as defined in the plan; (5) under
a Qualified Domestic Relations Order, as defined in the Internal
Revenue Code; (6) to meet the minimum distribution requirements of
the Internal Revenue Code; (7) to establish "substantially equal
periodic payments" as described in Section 72(t) of the Internal
Revenue Code; (8) for retirement distributions or loans to
participants or beneficiaries; (9) separation from service; (10)
participant-directed redemptions to purchase shares of a mutual
fund (other than a fund managed by the Manager or its subsidiary)
offered as an investment option in a Retirement Plan in which
Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor; or (11) plan termination
or "in-service distributions", if the redemption proceeds are
rolled over directly to an OppenheimerFunds IRA.
Service Plan for Class A Shares. The Fund has adopted a
Service Plan for Class A shares to reimburse the Distributor for a
portion of its costs incurred in connection with the personal
service and maintenance of shareholder accounts that hold Class A
shares of the Fund. Reimbursement is made quarterly at an annual
rate that may not exceed 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor uses all of those fees
to compensate dealers, brokers, banks and other financial
institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A shares
and to reimburse itself for its other expenditures under the Plan
(if the Fund's Board of Trustees authorizes such reimbursements,
which it has not yet done) for its other expenditures under the
Plan.
Services to be provided include, among others, answering
customer inquiries about the Fund, assisting in establishing and
maintaining accounts in the Fund, making the Fund's investment
plans available and providing other services at the request of the
Fund or the Distributor. Payments are made by the Distributor
quarterly at an annual rate not to exceed 0.25% of the average
annual net assets of Class A shares held in accounts of the service
providers or their customers. The payments under the Plan increase
the annual expenses of Class A shares. For more details, please
refer to "Distribution and Service Plans" in the Statement of
Additional Information.
Buying Class B Shares. Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B
shares are redeemed within 6 years of their purchase, a contingent
deferred sales charge will be deducted from the redemption
proceeds. That sales charge will not apply to shares purchased by
the reinvestment of dividends or capital gains distributions. The
contingent deferred sales charge will be based on the lesser of the
net asset value of the shares at the time of redemption or the
original offering price (which is the original net asset value).
The contingent deferred sales charge is not imposed on the amount
of your account value represented by the increase in net asset
value over the initial purchase price. The Class B contingent
deferred sales charge is paid to the Distributor to reimburse its
expenses of providing distribution-related services to the Fund in
connection with the sale of Class B shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and capital
gains distributions, (2) shares held for over 6 years, and (3)
shares held the longest during the 6-year period. The contingent
deferred sales charge is not imposed in the circumstances described
in "Waivers of Class B and Class C Sales Charges" below.
The amount of the contingent deferred sales charge will depend
on the number of years since you invested and the dollar amount
being redeemed, according to the following schedule:
Contingent Deferred Sales Charge
Years Since Beginning of on Redemptions in that Year
Month In Which Purchase (As % of Amount Subject
Order Was Accepted to Charge)
0 - 1 5.0%
- ------------------------------------------------------------------
1 - 2 4.0%
- ------------------------------------------------------------------
2 - 3 3.0%
- ------------------------------------------------------------------
3 - 4 3.0%
- -------------------------------------------------------------------
4 - 5 2.0%
- -------------------------------------------------------------------
5 - 6 1.0%
- -------------------------------------------------------------------
6 and following None
- -------------------------------------------------------------------
In the table, a "year" is a 12-month period. All purchases are
considered to have been made on the first regular business day of
the month in which the purchase was made.
Automatic Conversion of Class B Shares. 72 months after you
purchase Class B shares, those shares will automatically convert to
Class A shares. This conversion feature relieves Class B
shareholders of the asset-based sales charge that applies to Class
B shares under the Class B Distribution and Service Plan, described
below. The conversion is based on the relative net asset value of
the two classes, and no sales load or other charge is imposed. When
Class B shares convert, any other Class B shares that were acquired
by the reinvestment of dividends and distributions on the converted
shares will also convert to Class A shares. The conversion feature
is subject to the continued availability of a tax ruling described
in "Alternative Sales Arrangements - Class A, Class B, and Class C
Shares" in the Statement of Additional Information.
Buying Class C Shares. Class C shares are sold at net asset value
per share without an initial sales charge. However, if Class C
shares are redeemed within 12 months of their purchase, a
contingent deferred sales charge of 1.0% will be deducted from the
redemption proceeds. That sales charge will not apply to shares
purchased by the reinvestment of dividends or capital gains
distributions. The contingent deferred sales charge will be based
on the lesser of the net asset value of the redeemed shares at the
time of redemption or the original purchase price (which is the
original net asset value). The contingent deferred sales charge is
not imposed on the amount of your account value represented by the
increase in net asset value over the initial purchase price. The
Class C contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.
To determine whether the contingent deferred sales charge
applies to a redemption, the Fund redeems shares in the following
order: (1) shares acquired by reinvestment of dividends and capital
gains distributions, (2) shares held for over 12 months, and (3)
shares held the longest during the 12-month period.
Distribution and Service Plans for Class B and Class C Shares. The
Fund has adopted Distribution and Service Plans for Class B and
Class C shares to compensate the Distributor for its costs in
distributing Class B and Class C shares and servicing accounts.
Under the Plans, the Fund pays the Distributor an annual
"asset-based sales charge" of 0.75% per year on Class B shares that
are outstanding for six years or less and on Class C shares. The
Distributor also receives a service fee of 0.25% per year under
each Plan.
Under each Plan, both fees are computed on the average of the
net asset value of shares in the respective class, determined as of
the close of each regular business day during the period. The
asset-based sales charge and service fees increase Class B and
Class C expenses by up to 1.00% of the net assets per year of the
respective class.
The Distributor uses the service fees to compensate dealers
for providing personal services for accounts that hold Class B or
Class C shares. Those services are similar to those provided under
the Class A Service Plan, described above. The Distributor pays the
0.25% service fees to dealers in advance for the first year after
Class B or Class C shares have been sold by the dealer and retains
the service fee paid by the Fund in that year. After the shares
have been held for a year, the Distributor pays the service fees to
dealers on a quarterly basis.
The asset-based sales charge allows investors to buy Class B
or Class C shares without a front-end sales charge while allowing
the Distributor to compensate dealers that sell those shares. The
Fund pays the asset-based sales charges to the Distributor for its
services rendered in distributing Class B and Class C shares. Those
payments are at a fixed rate that is not related to the
Distributor's expenses. The services rendered by the Distributor
include paying and financing the payment of sales commissions,
service fees and other costs of distributing and selling Class B
and Class C shares.
The Distributor currently pays sales commissions of 3.75% of
the purchase price of Class B shares to dealers from its own
resources at the time of sale. Including the advance of the service
fee, the total amount paid by the Distributor to the dealer at the
time of sale of Class B shares is therefore 4.00% of the purchase
price. The Distributor retains the Class B asset-based sales
charge.
The Distributor currently pays sales commissions of 0.75% of
the purchase price of Class C shares to dealers from its own
resources at the time of sale. Including the advance of the service
fee, the total amount paid by the Distributor to the dealer at the
time of sale of Class C shares is therefore 1.00% of the purchase
price. The Distributor plans to pay the asset-based sales charge as
an ongoing commission to the dealer on Class C shares that have
been outstanding for a year or more.
The Distributor's actual expenses in selling Class B and C
shares may be more than the payments it receives from contingent
deferred sales charges collected on redeemed shares and from the
Fund under the Distribution and Service Plans for Class B and C
shares. Therefore, those expenses may be carried over and paid in
future years. At September 30, 1996, the end of the Class B and
Class C Plan year, the Distributor had incurred unreimbursed
expenses under the Plan of $284,933 for Class B shares and $48,241
for Class C shares, equal to 2.65% and 1.49% of the Fund's assets
represented by Class B shares and Class C shares, respectively, on
that date, which have been carried over into the present Plan year.
If the Fund terminates either Plan, the Board of Directors may
allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the Plan was
terminated.
Waivers of Class B and Class C Sales Charges. The Class B and Class
C contingent deferred sales charges will not be applied to shares
purchased in certain types of transactions nor will it apply to
Class B and Class C shares redeemed in certain circumstances as
described below. The reasons for this policy are in "Reduced Sales
Charges" in the Statement of Additional Information.
Waivers for Redemptions in Certain Cases. The Class B and
Class C contingent deferred sales charges will be waived for
redemptions of shares in the following cases, if the Transfer Agent
is notified that these conditions apply to the redemption:
distributions to participants or beneficiaries from
Retirement Plans, if the distributions are made (a) under an
Automatic Withdrawal Plan after the participant reaches age 59-1/2,
as long as the payments are no more than 10% of the account value
annually (measured from the date the Transfer Agent receives the
request), or (b) following the death or disability (as defined in
the Internal Revenue Code) of the participant or beneficiary (the
death or disability must have occurred after the account was
established);
redemptions from accounts other than Retirement Plans
following the death or disability of the last surviving shareholder
including a trustee of a "grantor" trust or revocable living trust
for which the trustee is also the sole beneficiary (the death or
disability must have occurred after the account was established,
and for disability you must provide evidence of a determination of
disability by the Social Security Administration);
shares redeemed involuntarily, as described in "Shareholder
Account Rules and Policies," below; or
distributions from OppenheimerFunds prototype 401(k) plans
(1) for hardship withdrawals; (2) under a Qualified Domestic
Relations Order, as defined in the Internal Revenue Code; (3) to
meet minimum distribution requirements as defined in the Internal
Revenue Code; (4) to make "substantially equal periodic payments"
as described in Section 72(t) of the Internal Revenue Code; or (5)
for separation from service.
Waivers for Shares Sold or Issued in Certain Transactions. The
contingent deferred sales charge is also waived on Class B and
Class C shares sold or issued in the following cases:
shares sold to the Manager or its affiliates;
shares sold to registered management investment companies
or separate accounts of insurance companies having an agreement
with the Manager or the Distributor for that purpose; and
shares issued in plans of reorganization to which the Fund
is a party.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account
to your account at your bank or other financial institution to
enable you to send money electronically between those accounts to
perform a number of types of account transactions. These include
purchases of shares by telephone (either through a service
representative or by PhoneLink, described below), automatic
investments under Asset Builder Plans, and sending dividends and
distributions or Automatic Withdrawal Plan payments directly to
your bank account. Please refer to the Application for details or
call the Transfer Agent for more information.
AccountLink privileges should be requested on the Application
you use to buy shares, or on your dealer's settlement instructions
if you buy your shares through your dealer. After your account is
established, you can request AccountLink privileges by sending
signature-guaranteed instructions to the Transfer Agent.
AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent
receives written instructions terminating or changing those
privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-
guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.
Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase
shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1-800-852-8457. The
purchase payment will be debited from your bank account.
PhoneLink. PhoneLink is the OppenheimerFunds automated
telephone system that enables shareholders to perform a number of
account transactions automatically using a touch-tone phone.
PhoneLink may be used on already-established Fund accounts after
you obtain a Personal Identification Number (PIN), by calling the
special PhoneLink number: 1-800-533-3310.
Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have
established AccountLink privileges to link your bank account with
the Fund, to pay for these purchases.
Exchanging Shares. With the OppenheimerFunds exchange
privilege, described below, you can exchange shares automatically
by phone from your Fund account to another Oppenheimer fund account
you have already established by calling the special PhoneLink
number. Please refer to "How to Exchange Shares," below, for
details.
Selling Shares. You can redeem shares by telephone
automatically by calling the PhoneLink number and the Fund will
send the proceeds directly to your AccountLink bank account.
Please refer to "How to Sell Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several
plans that enable you to sell shares automatically or exchange them
to another Oppenheimer fund account on a regular basis:
Automatic Withdrawal Plans. If your Fund account is worth
$5,000 or more, you can establish an Automatic Withdrawal Plan to
receive payments of at least $50 on a monthly, quarterly, semi-
annual or annual basis. Automatic withdrawal Plans are not
advisable for Class B and Class C shares subject to a contingent
deferred sales charge ("CDSC") unless waivers of the CDSC apply.
The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of
withdrawals of up to $1,500 per month by telephone. You should
consult the Application and Statement of Additional Information for
more details.
Automatic Exchange Plans. You can authorize the Transfer
Agent to exchange automatically an amount you establish in advance
for shares of up to five other Oppenheimer funds on a monthly,
quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum purchase for each Oppenheimer funds account is
$25. These exchanges are subject to the terms of the exchange
privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Class A
or Class B shares of the Fund, you have up to 6 months to reinvest
all or part of the redemption proceeds in Class A shares of the
Fund or other Oppenheimer funds without paying a sales charge.
This privilege applies only to Class A shares that you purchased
subject to an initial sales charge and to Class A or Class B shares
on which you paid a contingent deferred sales charge when you
redeemed them. It does not apply to Class C shares. You must be
sure to ask the Distributor for this privilege when you send your
payment. Please consult the Statement of Additional Information for
more details.
Retirement Plans. Fund shares are available as an investment for
your retirement plans. If you participate in a plan sponsored by
your employer, the plan trustee or administrator must make the
purchase of shares for your retirement plan account. The
Distributor offers a number of different retirement plans that can
be used by individuals and employers:
Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
403(b)(7) Custodial Plans for employees of eligible tax-
exempt organizations, such as schools, hospitals and charitable
organizations
SEP-IRAs (Simplified Employee Pension Plans) for small
business owners or people with income from self-employment,
including SARSEP-IRAs
Pension and Profit-Sharing Plans for self-employed persons
and other employers
401(k) prototype retirement plans for businesses
Please call the Distributor for the OppenheimerFunds plan
documents, which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular
business day by selling (redeeming) some or all of your shares.
Your shares will be sold at the next net asset value calculated
after your order is received and accepted by the Transfer Agent.
The Fund offers you a number of ways to sell your shares, in
writing or by telephone. You can also set up an Automatic
Withdrawal Plan to redeem shares on a regular basis, as described
above. If you have questions about any of these procedures, and
especially if you are redeeming shares in a special situation, such
as due to the death of the owner, or from a retirement plan, please
call the Transfer Agent first, at 1-800-525-7048, for assistance.
Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must
submit a withholding form with your request to avoid delay. If your
retirement plan account is held for you by your employer, you must
arrange for the distribution request to be sent by the plan
administrator or trustee. There are additional details in the
Statement of Additional Information.
Certain Requests Require a Signature Guarantee. To protect
you and the Fund from fraud, certain redemption requests must be in
writing and must include a signature guarantee in the following
situations (there may be other situations also requiring a
signature guarantee):
You wish to redeem more than $50,000 worth of shares and
receive a check
The redemption check is not payable to all shareholders
listed on the account statement
The redemption check is not sent to the address of record on
your account statement
Shares are being transferred to a Fund account with a
different owner or name
Shares are redeemed by someone other than the owners (such
as an Executor)
Where Can I Have My Signature Guaranteed? The Transfer
Agent will accept a guarantee of your signature by a number of
financial institutions, including: a U.S. bank, trust company,
credit union or savings association, or by a foreign bank that has
a U.S. correspondent bank, or by a U.S. registered dealer or broker
in securities, municipal securities or government securities, or by
a U.S. national securities exchange, a registered securities
association or a clearing agency. If you are signing on behalf of
a corporation, partnership or other business, or as a fiduciary,
you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that
includes:
Your name
The Fund's name
Your Fund account number (from your account statement)
The dollar amount or number of shares to be redeemed
Any special payment instructions
Any share certificates for the shares you are selling
The signatures of all registered owners exactly as the
account is registered, and
Any special requirements or documents requested by the
Transfer Agent to assure proper authorization of the person asking
to sell shares.
Use the following address for requests by mail:
OppenheimerFunds Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
OppenheimerFunds Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of
record may also sell your shares by telephone. To receive the
redemption price on a regular business day, your call must be
received by the Transfer Agent by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M., but may be earlier
on some days. You may not redeem shares held in an
OppenheimerFunds retirement plan or under a share certificate by
telephone.
To redeem shares through a service representative, call
1-800-852-8457
To redeem shares automatically on PhoneLink, call 1-800-533-
3310
Whichever method you use, you may have a check sent to the
address on the account statement, or, if you have linked your Fund
account to your bank account on AccountLink, you may have the
proceeds wired to that bank account.
Telephone Redemptions Paid by Check. Up to $50,000 may be
redeemed by telephone in any 7-day period. The check must be
payable to all owners of record of the shares and must be sent to
the address on the account statement. This service is not
available within 30 days of changing the address on an account.
Telephone Redemptions Through AccountLink. There are no
dollar limits on telephone redemption proceeds sent to a bank
account designated when you establish AccountLink. Normally the ACH
wire to your bank is initiated on the business day after the
redemption. You do not receive dividends on the proceeds of the
shares you redeemed while they are waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made
arrangements to repurchase Fund shares from dealers and brokers on
behalf of their customers. Brokers or dealers may charge for that
service. Please call your dealer for more information about this
procedure. Please refer to "Special Arrangements for Repurchase of
Shares from Dealers and Brokers" in the Statement of Additional
Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
Oppenheimer funds at net asset value per share at the time of
exchange, without sales charge. To exchange shares, you must meet
several conditions:
Shares of the fund selected for exchange must be available
for sale in your state of residence
The prospectuses of this Fund and the fund whose shares you
want to buy must offer the exchange privilege
You must hold the shares you buy when you establish your
account for at least 7 days before you can exchange them; after the
account is open 7 days, you can exchange shares every regular
business day
You must meet the minimum purchase requirements for the fund
you purchase by exchange
Before exchanging into a fund, you should obtain and read
its prospectus
Shares of a particular class of the Fund may be exchanged only
for shares of the same class in the other Oppenheimer funds. For
example, you can exchange Class A shares of this Fund only for
Class A shares of another fund. At present, Oppenheimer Money
Market Fund, Inc. offers only one class of shares, which are
considered to be Class A shares for this purpose. In some cases,
sales charges may be imposed on exchange transactions. Please
refer to "How to Exchange Shares" in the Statement of Additional
Information for more details.
Exchanges may be requested in writing or by telephone:
Written Exchange Requests. Submit an OppenheimerFunds
Exchange Request form, signed by all owners of the account. Send
it to the Transfer Agent at one of the addresses listed in "How to
Sell Shares."
Telephone Exchange Requests. Telephone exchange requests may
be made either by calling a service representative at 1-800-852-
8457 or by using PhoneLink for automated exchanges, by calling 1-
800-533-3310. Telephone exchanges may be made only between accounts
that are registered with the same name(s) and address. Shares held
under certificates may not be exchanged by telephone.
You can find a list of Oppenheimer funds currently available
for exchanges in the Statement of Additional Information or obtain
one by calling a service representative at 1-800-525-7048. The
list can change from time to time.
There are certain exchange policies you should be aware of:
Shares are normally redeemed from one fund and purchased
from the other fund in the exchange transaction on the same regular
business day on which the Transfer Agent receives an exchange
request that is in proper form by the close of The New York Stock
Exchange that day, which is normally 4:00 P.M., but may be earlier
on some days. However, either fund may delay the purchase of
shares of the fund you are exchanging into up to seven days if it
determines it would be disadvantaged by a same-day transfer of the
proceeds to buy shares. For example, the receipt of multiple
exchange requests from a dealer in a "market-timing" strategy might
require the disposition of portfolio securities at a time or price
disadvantageous to the Fund.
Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange
request that will disadvantage it, or to refuse multiple exchange
requests submitted by a shareholder or dealer.
The Fund may amend, suspend or terminate the exchange
privilege at any time. Although the Fund will attempt to provide
you notice whenever it is reasonably able to do so, it may impose
these changes at any time.
For tax purposes, exchanges of shares involve a redemption
of the shares of the Fund you own and a purchase of the shares of
the other fund, which may result in a capital gain or loss. For
more information about taxes affecting exchanges, please refer to
"How to Exchange Shares" in the Statement of Additional
Information.
If the Transfer Agent cannot exchange all the shares you
request because of a restriction cited above, only the shares
eligible for exchange will be exchanged.
Shareholder Account Rules and Policies
Net Asset Value Per Share is determined for each class of
shares as of the close of The New York Stock Exchange, which is
normally 4:00 P.M., but may be earlier on some days, on each day
the Exchange is open by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that
are outstanding. The Fund's Board of Trustees has established
procedures to value the Fund's securities to determine net asset
value. In general, securities values are based on market value.
There are special procedures for valuing illiquid and restricted
securities and obligations for which market values cannot be
readily obtained. These procedures are described more completely
in the Statement of Additional Information.
The offering of shares may be suspended during any period in
which the determination of net asset value is suspended, and the
offering may be suspended by the Board of Trustees at any time the
Board believes it is in the Fund's best interest to do so.
Telephone Transaction Privileges for purchases, redemptions
or exchanges may be modified, suspended or terminated by the Fund
at any time. If an account has more than one owner, the Fund and
the Transfer Agent may rely on the instructions of any one owner.
Telephone privileges apply to each owner of the account and the
dealer representative of record for the account unless and until
the Transfer Agent receives cancellation instructions from an owner
of the account.
The Transfer Agent will record any telephone calls to verify
data concerning transactions and has adopted other procedures to
confirm that telephone instructions are genuine, by requiring
callers to provide tax identification numbers and other account
data or by using PINs, and by confirming such transactions in
writing. If the Transfer Agent does not use reasonable procedures
it may be liable for losses due to unauthorized transactions, but
otherwise neither it nor the Fund will be liable for losses or
expenses arising out of telephone instructions reasonably believed
to be genuine. If you are unable to reach the Transfer Agent
during periods of unusual market activity, you may not be able to
complete a telephone transaction and should consider placing your
order by mail.
Redemption or transfer requests will not be honored until
the Transfer Agent receives all required documents in proper form.
From time to time, the Transfer Agent in its discretion may waive
certain of the requirements for redemptions stated in this
Prospectus.
Dealers that can perform account transactions for their
clients by participating in NETWORKING through the National
Securities Clearing Corporation are responsible for obtaining their
clients' permission to perform those transactions and are
responsible to their clients who are shareholders of the Fund if
the dealer performs any transaction erroneously or improperly.
The redemption price for shares will vary from day to day
because the values of the securities in the Fund's portfolio
fluctuate and the redemption price, which is the net asset value
per share, will normally be different for Class A, Class B and
Class C shares. Therefore, the redemption value of your shares may
be more or less than their original cost.
Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the
shareholder under the redemption procedures described above) within
7 days after the Transfer Agent receives redemption instructions in
proper form, except under unusual circumstances determined by the
Securities and Exchange Commission delaying or suspending such
payments. For accounts registered in the name of a broker/dealer,
payment will be forwarded within 3 business days. The Transfer
Agent may delay forwarding a check or processing a payment via
AccountLink for recently purchased shares, but only until the
purchase payment has cleared. That delay may be as much as 10 days
from the date the shares were purchased. That delay may be avoided
if you purchase shares by certified check or arrange with your bank
to provide telephone or written assurance to the Transfer Agent
that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the
Fund if the account value has fallen below $200 for reasons other
than the fact that the market value of shares has dropped, and in
some cases involuntary redemptions may be made to repay the
Distributor for losses from the cancellation of share purchase
orders.
Under unusual circumstances, shares of the Fund may be
redeemed "in kind," which means that the redemption proceeds will
be paid with securities from the Fund's portfolio. Please refer to
"How to Sell Shares" in the Statement of Additional Information for
more details.
"Backup Withholding" of Federal income tax may be applied at
the rate of 31% from dividends, distributions and redemption
proceeds (including exchanges) if you fail to furnish the Fund a
certified Social Security or Employer Identification Number when
you sign your application, or if you violate Internal Revenue
Service regulations on tax reporting of income.
The Fund does not charge a redemption fee, but if your
dealer or broker handles your redemption, they may charge a fee.
That fee can be avoided by redeeming your Fund shares directly
through the Transfer Agent. Under the circumstances described in
"How to Buy Shares," you may be subject to a contingent deferred
sales charges when redeeming certain Class A, Class B and Class C
shares.
To avoid sending duplicate copies of materials to
households, the Fund will mail only one copy of each annual and
semi-annual report to shareholders having the same last name and
address on the Fund's records. However, each shareholder may call
the Transfer Agent at 1-800-525-7048 to ask that copies of those
materials be sent personally to that shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends separately for Class A,
Class B and Class C shares from net investment income on an annual
basis and normally pays those dividends to shareholders in
December, but the Board of Trustees can change that date. The
Board may also cause the Fund to declare dividends after the close
of the Fund's fiscal year (which ends September 30th). Because the
Fund does not have an objective of seeking current income, the
amounts of dividends it pays, if any, will likely be small.
Dividends paid with respect to Class A shares will generally be
higher than for Class B and Class C shares because expenses
allocable to Class B and Class C shares will generally be higher
than for Class A shares. There is no fixed dividend rate and there
can be no assurance as to the payment of any dividends.
Capital Gains. The Fund may make distributions annually in December
out of any net short-term or long-term capital gains and the Fund
may make supplemental distributions of capital gains following the
end of its fiscal year. Short-term capital gains are treated as
dividends for tax purposes. Long-term capital gains will be
separately identified in the tax information the Fund sends you
after the end of the year. There can be no assurance that the Fund
will pay any capital gains distributions in a particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are
reinvested. For other accounts, you have four options:
Reinvest All Distributions in the Fund. You can elect to
reinvest all dividends and long-term capital gains distributions in
additional shares of the Fund.
Reinvest Long-Term Capital Gains Only. You can elect to
reinvest long-term capital gains in the Fund while receiving
dividends by check or sent to your bank account on AccountLink.
Receive All Distributions in Cash. You can elect to receive
a check for all dividends and long-term capital gains distributions
or have them sent to your bank on AccountLink.
Reinvest Your Distributions in Another Oppenheimer Fund
Account. You can reinvest all distributions in another Oppenheimer
fund account you have established.
Taxes. If your account is not a tax-deferred retirement account,
you should be aware of the following tax implications of investing
in the Fund. Long-term capital gains are taxable as long-term
capital gains when distributed to shareholders. It does not matter
how long you have held your shares. Dividends paid from short-term
capital gains and net investment income are taxable as ordinary
income. Distributions are subject to federal income tax and may be
subject to state or local taxes. Your distributions are taxable
when paid, whether you reinvest them in additional shares or take
them in cash. Every year the Fund will send you and the IRS a
statement showing the amount of each taxable distribution you
received in the previous year.
When more than 50% of its assets are invested in foreign
securities at the end of any fiscal year, the Fund may elect that
Section 853 of the Internal Revenue Code will apply to it to permit
shareholders to take a credit (or a deduction) on their own federal
income tax returns for foreign income taxes paid by the Fund. The
Statement of Additional Information contains further discussion of
this tax provision.
"Buying a Dividend". When a fund goes ex-dividend, its
share price is reduced by the amount of the distribution. If you
buy shares on or just before the ex-dividend date, or just before
the Fund declares a capital gains distribution, you will pay the
full price for the shares and then receive a portion of the price
back as a taxable dividend or capital gain.
Taxes on Transactions. Share redemptions, including
redemptions for exchanges, are subject to capital gains tax.
Generally speaking, a capital gain or loss is the difference
between the price you paid for the shares and the price you
received when you sold them.
Returns of Capital. In certain cases distributions made by
the Fund may be considered a non-taxable return of capital to
shareholders. If that occurs, it will be identified in notices to
shareholders. A non-taxable return of capital may reduce your tax
basis in your Fund shares.
This information is only a summary of certain federal tax
information about your investment. More information is contained
in the Statement of Additional Information, and in addition you
should consult with your tax advisor about the effect of an
investment in the Fund on your particular tax situation.
APPENDIX
Special Sales Charge Arrangements for Shareholders of the Fund
Who Were Shareholders of the Former Quest for Value Funds
The initial and contingent sales charge rates and waivers for
Class A, Class B and Class C shares of the Fund described elsewhere
in this Prospectus are modified as described below for those
shareholders of (i) Quest for Value Fund, Inc., Quest for Value
Growth and Income Fund, Quest for Value Opportunity Fund, Quest for
Value Small Capitalization Fund and Quest for Value Global Equity
Fund, Inc. on November 24, 1995, when OppenheimerFunds, Inc. became
the investment advisor to those funds, and (ii) Quest for Value
U.S. Government Income Fund, Quest for Value Investment Quality
Income Fund, Quest for Value Global Income Fund, Quest for Value
New York Tax-Exempt Fund, Quest for Value National Tax-Exempt Fund
and Quest for Value California Tax-Exempt Fund when those funds
merged into various Oppenheimer funds on November 24, 1995. The
funds listed above are referred to in this Prospectus as the
"Former Quest for Value Funds." The waivers of initial and
contingent deferred sales charges described in this Appendix apply
to shares of the Fund (i) acquired by such shareholder pursuant to
an exchange of shares of one of the Oppenheimer funds that was one
of the Former Quest for Value Funds or (ii) received by such
shareholder pursuant to the merger of any of the Former Quest for
Value Funds into an Oppenheimer fund on November 24, 1995.
Class A Sales Charges
Reduced Class A Initial Sales Charge Rates for Certain
Former Quest Shareholders
Purchases by Groups, Associations and Certain Qualified
Retirement Plans. The following table sets forth the initial sales
charge rates for Class A shares purchased by a "Qualified
Retirement Plan" through a single broker, dealer or financial
institution, or by members of "Associations" formed for any purpose
other than the purchase of securities if that Qualified Retirement
Plan or that Association purchased shares of any of the Former
Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995. For this
purpose only, a "Qualified Retirement Plan" includes any 401(k)
plan, 403(b) plan, and SEP/IRA or IRA plan for employees of a
single employer.
<TABLE>
<CAPTION>
Front-End Front-End
Sales Sales Commission
Charge Charge as
as a as a Percentage
Number of Percentage Percentage of
Eligible Employees of Offering of Amount Offering
or Members Price Invested Price
<S> <C> <C> <C>
9 or fewer 2.50% 2.56% 2.00%
At least 10 but not
more than 49 2.00% 2.04% 1.60%
</TABLE>
For purchases by Qualified Retirement plans and Associations
having 50 or more eligible employees or members, there is no
initial sales charge on purchases of Class A shares, but those
shares are subject to the Class A contingent deferred sales charge
described on pages 26 to 28 of this Prospectus.
Purchases made under this arrangement qualify for the lower of
the sales charge rates in the table based on the number of eligible
employees in a Qualified Retirement Plan or members of an
Association or the sales charge rate that applies under the Rights
of Accumulation described above in the Prospectus. In addition,
purchases by 401(k) plans that are Qualified Retirement Plans
qualify for the waiver of the Class A initial sales charge if they
qualified to purchase shares of any of the Former Quest For Value
Funds by virtue of projected contributions or investments of $1
million or more each year. Individuals who qualify under this
arrangement for reduced sales charge rates as members of
Associations, or as eligible employees in Qualified Retirement
Plans also may purchase shares for their individual or custodial
accounts at these reduced sales charge rates, upon request to the
Fund's Distributor.
Special Class A Contingent Deferred Sales Charge Rates
Class A shares of the Fund issued in the reorganization on November
24, 1995 for shares of Quest For Value Investment Quality Income
Fund that were subject to a contingent deferred sales charge, will
be subject to a contingent deferred sales charge at the following
rates: if they are redeemed within 18 months of the end of the
calendar month in which they were purchased, at a rate equal to
1.0% if the redemption occurs within 12 months of their initial
purchase and at a rate of 0.50 of 1.0% if the redemption occurs in
the subsequent six months. This contingent deferred sales charge
rate also applies to shares of the Fund purchased by exchange of
shares of other Oppenheimer funds that were acquired as a result of
the merger of Former Quest for Value Funds into those Oppenheimer
funds, and which shares were subject to a Class A contingent
deferred sales charge prior to November 24, 1995. Class A shares
of any of the Former Quest Fund for Value Funds purchased without
an initial sales charge on or before November 22, 1995 will
continue to be subject to the applicable contingent deferred sales
charge in effect as of that date as set forth in the then-current
prospectus for such fund.
Waiver of Class A Sales Charges for Certain Shareholders
Class A shares of the Fund purchased by the following investors are
not subject to any Class A initial or contingent deferred sales
charges:
Shareholders of the Fund who were shareholders of the AMA
Family of Funds on February 28, 1991 and who acquired shares of any
of the Former Quest for Value Funds by merger of a portfolio of the
AMA Family of Funds.
Shareholders of the Fund who acquired shares of any Former
Quest for Value Fund by merger of any of the portfolios of the
Unified Funds.
Waiver of Class A Contingent Deferred Sales Charge in
Certain Transactions
The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares of the Fund purchased by the
following investors who were shareholders of any Former Quest for
Value Fund:
Investors who purchased Class A shares from a dealer that is
or was not permitted to receive a sales load or redemption fee
imposed on a shareholder with whom that dealer has a fiduciary
relationship under the Employee Retirement Income Security Act of
1974 and regulations adopted under that law.
Participants in Qualified Retirement Plans that purchased
shares of any of the Former Quest For Value Funds pursuant to a
special "strategic alliance" with the distributor of those funds.
The Fund's Distributor will pay a commission to the dealer for
purchases of Fund shares as described above in "Class A Contingent
Deferred Sales Charge."
Class A, Class B and Class C Contingent Deferred Sales Charge
Waivers
Waivers for Redemptions of Shares Purchased Prior to March
6, 1995
In the following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, B or C shares of the Fund
acquired by merger of a Former Quest for Value Fund into the Fund
or by exchange from an Oppenheimer fund that was a Former Quest for
Value Fund or into which such fund merged, if those shares were
purchased prior to March 6, 1995: in connection with
(i) distributions to participants or beneficiaries of plans
qualified under Section 401(a) of the Internal Revenue Code or from
custodial accounts under Section 403(b)(7) of the Code, Individual
Retirement Accounts, deferred compensation plans under Section 457
of the Code, and other employee benefit plans, and returns of
excess contributions made to each type of plan, (ii) withdrawals
under an automatic withdrawal plan holding only either Class B or
C shares if the annual withdrawal does not exceed 10% of the
initial value of the account, and (iii) liquidation of a
shareholder's account if the aggregate net asset value of shares
held in the account is less than the required minimum value of such
accounts.
Waivers for Redemptions of Shares Purchased on or After
March 6, 1995 but Prior to November 24, 1995.
In the following cases, the contingent deferred sales charge will
be waived for redemptions of Class A, B or C shares of the Fund
acquired by merger of a Former Quest for Value Fund into the Fund
or by exchange from an Oppenheimer fund that was a Former Quest For
Value Fund or into which such fund merged, if those shares were
purchased on or after March 6, 1995, but prior to November 24,
1995: (1) distributions to participants or beneficiaries from
Individual Retirement Accounts under Section 408(a) of the Internal
Revenue Code or retirement plans under Section 401(a), 401(k),
403(b) and 457 of the Code, if those distributions are made either
(a) to an individual participant as a result of separation from
service or (b) following the death or disability (as defined in the
Code) of the participant or beneficiary; (2) returns of excess
contributions to such retirement plans; (3) redemptions other than
from retirement plans following the death or disability of the
shareholder(s) (as evidenced by a determination of total disability
by the U.S. Social Security Administration); (4) withdrawals under
an automatic withdrawal plan (but only for Class B or C shares)
where the annual withdrawals do not exceed 10% of the initial value
of the account; and (5) liquidation of a shareholder's account if
the aggregate net asset value of shares held in the account is less
than the required minimum account value. A shareholder's account
will be credited with the amount of any contingent deferred sales
charge paid on the redemption of any Class A, B or C shares of the
Fund described in this section if within 90 days after that
redemption, the proceeds are invested in the same Class of shares
in this Fund or another Oppenheimer fund.
Special Dealer Arrangements
Dealers who sold Class B shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the
TRAC-2000 recordkeeping system and that were transferred to an
OppenheimerFunds prototype 401(k) plan shall be eligible for an
additional one-time payment by the Distributor of 1% of the value
of the plan assets transferred, but that payment may not exceed
$5,000 as to any one plan.
Dealers who sold Class C shares of a Former Quest for Value Fund to
Quest for Value prototype 401(k) plans that were maintained on the
TRAC-2000 recordkeeping system and (i) the shares held by those
plans were exchanged for Class A shares, or (ii) the plan assets
were transferred to an OppenheimerFunds prototype 401(k) plan,
shall be eligible for an additional one-time payment by the
Distributor of 1% of the value of the plan assets transferred, but
that payment may not exceed $5,000.
<PAGE>
APPENDIX B TO PROSPECTUS OF
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Graphic material included in Prospectus of Oppenheimer Global
Emerging Growth Fund: "Comparison of Total Return of Oppenheimer
Global Emerging Growth Fund with the Morgan Stanley World Index -
Change in Value of a $10,000 Hypothetical Investment."
Linear graphs will be included in the Prospectus of
Oppenheimer Global Emerging Growth Fund (the "Fund") depicting the
initial account value and subsequent account value of a
hypothetical $10,000 investment in each class of shares of the
Fund. In the case of Class A shares that graph will cover the
period from 12/30/87 (inception of the Fund) through 9/30/96. In
the case of Class B shares that graph will cover the period from
11/1/95 (inception of the class) through 9/30/96. In the case of
Class C shares that graph will cover the period from 11/1/95
(inception of the class) through 9/30/96. The graphs will compare
such values with a hypothetical $10,000 investment over the same
time periods in the Morgan Stanley World Index. Set forth below
are the relevant data points that will appear on each linear graph.
Additional information with respect to the foregoing, including a
description of the Morgan Stanley World Index, is set forth in the
Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
Oppenheimer Morgan
Fiscal Year Global Emerging Stanley
(Period Ended) Growth Fund: World Index
Class A
12/30/87 $ 9,425 $10,000
09/30/88 $10,019 $11,124
09/30/89 $11,542 $13,994
09/30/90 $11,275 $11,039
09/30/91 $25,681 $13,829
09/30/92 $19,340 $13,770
09/30/93 $20,846 $16,647
09/30/94 $18,780 $17,991
09/30/95 $17,499 $20,684
09/30/96 $20,343 $23,621
Class B
11/01/95 $10,000 $10,000
09/30/96 $11,422 $11,600
Class C
11/01/95 $10,000 $10,000
09/30/96 $11,828 $11,600
<PAGE>
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person has been
authorized to give any information or to make any representations
other than those contained in this Prospectus or the Statement of
Additional Information and, if given or made, such information and
representations must not be relied upon as having been authorized
by the Fund, OppenheimerFunds, Inc., OppenheimerFunds Distributor,
Inc. or any affiliate thereof. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any state to any person to whom it is
unlawful to make such an offer in such state.
PR0750.001.0197 Printed on recycled paper
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated January 13, 1997
This Statement of Additional Information of Oppenheimer Global
Emerging Growth Fund is not a Prospectus. This document contains
additional information about the Fund and supplements information
in the Prospectus dated January 13, 1997. It should be read
together with the Prospectus, which may be obtained by writing to
the Fund's Transfer Agent, OppenheimerFunds Services, at P.O. Box
5270, Denver, Colorado 80217 or by calling the Transfer Agent at
the toll-free number shown above.
Contents
Page
About the Fund
Investment Objective and Policies. . . . . . . . . . . . . . . . . . . . .
Investment Policies and Strategies. . . . . . . . . . . . . . . . . .
Other Investment Techniques and Strategies. . . . . . . . . . . . . .
Other Investment Restrictions . . . . . . . . . . . . . . . . . . . .
How the Fund is Managed. . . . . . . . . . . . . . . . . . . . . . . . . .
Organization and History. . . . . . . . . . . . . . . . . . . . . . .
Trustees and Officers of the Fund . . . . . . . . . . . . . . . . . .
The Manager and Its Affiliates. . . . . . . . . . . . . . . . . . . .
Brokerage Policies of the Fund . . . . . . . . . . . . . . . . . . . . . .
Performance of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution and Service Plans . . . . . . . . . . . . . . . . . . . . . .
About Your Account
How To Buy Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Sell Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How To Exchange Shares . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends, Capital Gains and Taxes . . . . . . . . . . . . . . . . . . . .
Additional Information About the Fund. . . . . . . . . . . . . . . . . . .
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix A: Industry Classifications . . . . . . . . . . . . . . . . . .A-1
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and
policies of the Fund are described in the Prospectus. Set forth
below is supplemental information about those policies and the
types of securities in which the Fund may invest, as well as the
strategies the Fund may use to try to achieve its objective.
Capitalized terms used in this Statement of Additional Information
have the same meaning as those terms have in the Prospectus.
In selecting securities for the Fund's portfolio, the Fund's
investment advisor, OppenheimerFunds, Inc. (the "Manager"),
evaluates the merits of securities primarily through the exercise
of its own investment analysis. This may include, among other
things, evaluation of the history of the issuer's operations,
prospects for the industry of which the issuer is part, the
issuer's financial condition, the issuer's pending product
developments and developments by competitors, the effect of general
market and economic conditions on the issuer's business, and
legislative proposals or new laws that might affect the issuer.
Current income is not a consideration in the selection of portfolio
securities for the Fund, whether for appreciation, defensive or
liquidity purposes. The fact that a security has a low yield or
does not pay current income will not be an adverse factor in
selecting securities to try to achieve the Fund's investment
objective of capital appreciation unless the Manager believes that
the lack of yield might adversely affect appreciation
possibilities.
The portion of the Fund's assets allocated to securities
selected for capital appreciation and the investment techniques
used will depend upon the judgment of the Fund's Manager as to the
future movement of the equity securities markets. If the Manager
believes that economic conditions favor a rising market, the Fund
will emphasize securities and investment methods selected for high
capital growth. If the Manager believes that a market decline is
likely, defensive securities and investment methods may be
emphasized (See "Temporary Defensive Investments," below).
Emerging Growth Companies. The Manager uses a global "theme
oriented approach" in managing the Fund. This "theme oriented
approach" seeks to capitalize on important global trends that the
Manager believes offers the most promising areas for long-term
growth. Examples currently include, among others,
telecommunications, developing capital markets, emerging consumer
markets, the environment and biotechnology. These sectors may
change from time to time as the Manager reviews important global
trends. The Manager also considers performance and growth rates of
foreign companies relative to domestic companies in selecting
investments for the Fund's portfolio.
Warrants and Rights. The prices of warrants do not
necessarily move in a manner parallel to the prices of the
underlying securities. The price the Fund pays for a warrant will
be lost unless the warrant is exercised prior to its expiration.
Rights are similar to warrants, but normally have a short duration
and are distributed directly by the issuer to its shareholders.
Rights and warrants have no voting rights, receive no dividends and
have no rights with respect to the assets of the issuer.
Investing in Small, Unseasoned Companies. The securities of
small, unseasoned companies may have a limited trading market,
which may adversely affect the Fund's ability to sell them and can
reduce the price the Fund might be able to obtain for them. If
other investment companies and investors trade the same securities
when the Fund attempts to dispose of its holdings, the Fund may
receive lower prices than might otherwise be obtained, because of
the thinner market for such securities.
Foreign Securities. "Foreign securities" include equity and
debt securities of companies organized under the laws of countries
other than the United States and debt securities of foreign
governments that are traded on foreign securities exchanges or in
the foreign over-the-counter markets. Securities of foreign
issuers that are represented by American Depository Receipts or
that are listed on a U.S. securities exchange or traded in the U.S.
over-the-counter markets are not considered "foreign securities"
for the purpose of the Fund's investment allocations, because they
are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held
abroad.
Investing in foreign securities offer potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear
to offer growth potential, or in foreign countries with economic
policies or business cycles different from those of the U.S., or to
reduce fluctuations in portfolio value by taking advantage of
foreign stock markets that do not move in a manner parallel to U.S.
markets. If the Fund's portfolio securities are held abroad, the
sub-custodians or depositaries holding them must be approved by the
Fund's Board of Trustees to the extent that approval is required
under applicable rules of the Securities and Exchange Commission.
Risks of Foreign Investing. Investments in foreign
securities present special additional risks and considerations not
typically associated with investments in domestic securities:
reduction of income by foreign taxes; fluctuation in value of
foreign portfolio investments due to changes in currency rates and
control regulations (e.g., currency blockage); transaction charges
for currency exchange; lack of public information about foreign
issuers; lack of uniform accounting, auditing and financial
reporting standards comparable to those applicable to domestic
issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in
the U.S.; less regulation of foreign issuers, stock exchanges and
brokers than in the U.S.; greater difficulties in commencing
lawsuits; higher brokerage commission rates than in the U.S.;
increased risks of delays in settlement of portfolio transactions
or loss of certificates for portfolio securities; possibilities in
some countries of expropriation, confiscatory taxation, political,
financial or social instability or adverse diplomatic developments;
and unfavorable differences between the U.S. economy and foreign
economies. In the past, U.S. Government policies have discouraged
certain investments abroad by U.S. investors, through taxation or
other restrictions, and it is possible that such restrictions could
be re-imposed.
Temporary Defensive Investments. When the equity markets in
general are declining, the Fund may commit an increasing portion of
its assets to defensive securities. These may include the types of
securities described in the Prospectus. When investing for
defensive purposes, the Fund will normally emphasize investment in
short-term debt securities (that is, securities maturing in one
year or less from the date of purchase), since those types of
securities are generally more liquid and usually may be disposed of
quickly without significant gains or losses so that the Manager may
have liquid assets when it wishes to make investments in securities
for appreciation possibilities.
Other Investment Techniques and Strategies
Illiquid and Restricted Securities. To enable the Fund to
sell restricted securities not registered under the Securities Act
of 1933, the Fund may have to cause those securities to be
registered. The expenses of registration of restricted securities
may be negotiated by the Fund with the issuer at the time such
securities are purchased by the Fund, if such registration is
required before such securities may be sold publicly. When
registration must be arranged because the Fund wishes to sell the
security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would
be permitted to sell them. The Fund would bear the risks of any
downward price fluctuation during that period. The Fund may also
acquire, through private placements, securities having contractual
restrictions on their resale, which might limit the Fund's ability
to dispose of such securities and might lower the amount realizable
upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those
percentage restrictions do not limit purchases of restricted
securities that are eligible for sale to qualified institutional
purchasers pursuant to Rule 144A under the Securities Act of 1933,
provided that those securities have been determined to be liquid by
the Board of Trustees of the Fund or by the Manager under Board-
approved guidelines. Those guidelines take into account the trading
activity for such securities and the availability of reliable
pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's
holding of that security may be deemed to be illiquid.
Loans of Portfolio Securities. The Fund may lend its
portfolio securities subject to the restrictions stated in the
Prospectus. Under applicable regulatory requirements (which are
subject to change), the loan collateral must, on each business day
be at least equal to the value of the loaned securities and must
consist of cash, bank letters of credit, securities of the U.S.
Government or its agencies or instrumentalities or other cash
equivalents in which the Fund is permitted to invest. To be
acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of
the letter. Such terms and the issuing bank must be satisfactory
to the Fund. In a securities lending transaction, the Fund
receives from the borrower an amount equal to the interest paid or
the dividends declared on the loaned securities during the term of
the loan as well as the interest on the collateral securities less
any finders', administrative or other fees the Fund pays in
connection with the loan. In connection with securities lending,
the Fund might experience risks or delay in receiving additional
collateral, or risks of delay in recovery of securities, or loss of
rights in the collateral should the borrower fail financially. The
terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important
matter.
Repurchase Agreements. The Fund may acquire securities
subject to repurchase agreements for liquidity purposes to meet
anticipated redemptions, or pending the investment of the proceeds
from sales of Fund shares, or pending the settlement of purchases
of portfolio securities.
In a repurchase transaction, the Fund acquires a security
from, and simultaneously resells it to, an approved vendor (a U.S.
commercial bank, the U.S. branch of a foreign bank or a broker-
dealer which has been designated a primary dealer in government
securities, which must meet the credit requirements set by the
Fund's Board of Trustees from time to time), for delivery on an
agreed upon future date. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate
effective for the period during which the repurchase agreement is
in effect. The majority of these transactions run from day to day,
and delivery pursuant to resale typically will occur within one to
five days of the purchase. Repurchase agreements are considered
"loans" under the Investment Company Act, collateralized by the
underlying security. The Fund's repurchase agreements require that
at all times while the repurchase agreement is in effect, the
collateral's value must equal or exceed the repurchase price to
fully collateralize the repayment obligation. Additionally, the
Manager will impose creditworthiness requirements to confirm that
the vendor is financially sound and will continuously monitor the
collateral's value.
When-Issued and Delayed Delivery Transactions. The Fund may
purchase securities on a "when-issued" basis, and may purchase or
sell such securities on a "delayed delivery" basis. Although the
Fund will enter into such transactions for the purpose of acquiring
securities for its portfolio or for delivery pursuant to options
contracts it has entered into, the Fund may dispose of a commitment
prior to settlement. "When-issued" or "delayed delivery" refers to
securities whose terms and indenture are available and for which a
market exists, but which are not available for immediate delivery.
When such transactions are negotiated, the price (which is
generally expressed in yield terms) is fixed at the time the
commitment is made, but delivery and payment for the securities
take place at a later date. The Fund does not intend to make such
purchases for speculative purposes. The commitment to purchase a
security for which payment will be made on a future date may be
deemed a separate security and involve a risk of loss if the value
of the security declines prior to the settlement date. During the
period between commitment by the Fund and settlement (generally
within two months but not to exceed 120 days), no payment is made
for the securities purchased by the purchaser, and no interest
accrues to the purchaser from the transaction. Such securities are
subject to market fluctuation; the value at delivery may be less
than the purchase price. The Fund's Custodian will identify and
segregate liquid assets of the Fund having a value at least equal
to the value of purchase commitments until payment is made.
The Fund will engage in when-issued transactions in order to
secure what is considered to be an advantageous price and yield at
the time of entering into the obligation. When the Fund engages in
when-issued or delayed delivery transaction, it relies on the buyer
or seller, as the case may be, to consummate the transaction.
Failure of the buyer or seller to do so may result in the Fund
losing the opportunity to obtain a price and yield considered to be
advantageous. At the time the Fund makes a commitment to purchase
or sell a security on a when-issued or forward commitment basis, it
records the transaction and reflects the value of the security
purchased, or if sale, the proceeds to be received, in determining
its net asset value. If the Fund chooses to (i) dispose of the
right to acquire a when-issued security prior to its acquisition or
(ii) dispose of its right to deliver or receive against a forward
commitment, it may incur a gain or loss.
To the extent the Fund engages in when-issued and delayed
delivery transactions, it will do so for the purpose of acquiring
or selling securities consistent with its investment objective and
policies and not for the purposes of investment leverage. The Fund
enters into such transactions only with the intention of actually
receiving a delivering the securities, although (as noted above),
when-issued securities and forward commitments may be sold prior to
settlement date. In addition, changes in interest rates before
settlement in a direction other than that expected by the Manager
will affect the value of such securities and may cause a loss to
the Fund.
When-issued transactions and forward commitments can be used
by the Fund as a defensive technique to use against anticipated
changes in interest rates and prices. For instance, in periods of
rising interest rates and falling prices, the Fund might sell
securities in its portfolio on a forward commitment basis to
attempt to limit its exposure to anticipated falling prices. In
periods of falling interest rates and rising prices, the Fund might
sell portfolio securities and purchase the same or similar
securities on a when-issued or forward commitment basis, thereby
obtaining the benefit of currently higher cash yields.
Hedging With Options and Futures Contracts. The Fund may
employ one or more types of Hedging Instruments for the purposes
described in the Prospectus. When hedging to attempt to protect
against declines in the market value of the Fund's portfolio, or to
permit the Fund to retain unrealized gains in the value of
portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (i) sell
Stock Index Futures, (ii) buy puts, or (iii) write covered calls on
securities held by it or on Stock Index Futures (as described in
the Prospectus). When hedging to establish a position in the
equity securities markets as a temporary substitute for the
purchase of individual equity securities the Fund may: (i) buy
Stock Index Futures, or (ii) buy calls on Stock Index Futures or
securities. Normally, the Fund would then purchase the equity
securities and terminate the hedging portion.
The Fund's strategy of hedging with Futures and options on
Futures will be incidental to the Fund's investment activities in
the underlying cash market. In the future, the Fund may employ
hedging instruments and strategies that are not presently
contemplated but which may be subsequently developed, to the extent
such investment methods are consistent with the Fund's investment
objective, and are legally permissible and disclosed in the
Prospectus. Additional information about the hedging instruments
the Fund may use is provided below.
Stock Index Futures and Financial Futures. The Fund may
buy and sell futures contracts relating to a securities index
("Financial Futures"), including "Stock Index Futures," a type of
Financial Future for which the index used as the basis for trading
is a broadly-based stock index (including stocks that are not
limited to issuers in a particular industry or group of
industries). A stock index assigns relative values to the common
stocks included in the index and fluctuates with the changes in the
market value of those stocks. Stock indices cannot be purchased or
sold directly. Financial Futures are contracts based on the future
value of the basket of securities that comprise the underlying
index. The contracts obligate the seller to deliver, and the
purchaser to take, cash to settle the futures transaction or to
enter into an offsetting contract. No physical delivery of the
securities underlying the index is made on settling the futures
obligation. No monetary amount is paid or received by the Fund on
the purchase or sale of a Financial Future or Stock Index Future.
Upon entering into a Futures transaction, the Fund will be
required to deposit an initial margin payment, in cash or U.S.
Treasury bills, with the futures commission merchant (the "futures
broker"). Initial margin payments will be deposited with the
Fund's Custodian in an account registered in the futures broker's
name; however, the futures broker can gain access to that account
only under certain specified conditions. As the Future is marked
to market (that is, its value on the Fund's books is changed) to
reflect changes in its market value, subsequent margin payments,
called variation margin, will be paid to or by the futures broker
on a daily basis.
At any time prior to the expiration of the Future, the Fund
may elect to close out its position by taking an opposite position,
at which time a final determination of variation margin is made and
additional cash is required to be paid by or released to the Fund.
Any gain or loss is then realized by the Fund on the Future for tax
purposes. Although Financial Futures and Stock Index Futures by
their terms call for settlement by the delivery of cash, and
Interest Rate Futures call for the delivery of a specific debt
security, in most cases the settlement obligation is fulfilled
without such delivery by entering into an offsetting transaction.
All Futures transactions are effected through a clearinghouse
associated with the exchange on which the contracts are traded.
Writing Covered Calls. As described in the Prospectus, the
Fund may write covered calls. When the Fund writes a call on an
investment, it receives a premium and agrees to sell the callable
investment to a purchaser of a corresponding call during the call
period (usually not more than 9 months) at a fixed exercise price
(which may differ from the market price of the underlying
investment) regardless of market price changes during the call
period. To terminate its obligation on a call it has written, the
Fund may purchase a corresponding call in a "closing purchase
transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the
premium received on the call the Fund has written is more or less
than the price of the call the Fund subsequently purchased. A
profit may also be realized if the call lapses unexercised because
the Fund retains the underlying investment and the premium
received. Those profits are considered short-term capital gains
for Federal income tax purposes, as are premiums on lapsed calls,
and when distributed by the Fund are taxable as ordinary income.
If the Fund could not effect a closing purchase transaction due to
the lack of a market, it would have to hold the callable investment
until the call lapsed or was exercised.
The Fund may also write calls on Futures without owning a
futures contract or deliverable securities, provided that at the
time the call is written, the Fund covers the call by segregating
in escrow an equivalent dollar value of deliverable securities or
liquid assets. The Fund will segregate additional liquid assets if
the value of the escrowed assets drops below 100% of the current
value of the Future. In no circumstances would an exercise notice
as to a Future put the Fund in a short futures position.
The Fund's Custodian, or a securities depository acting for
the Custodian, will act as the Fund's escrow agent, through the
facilities of the Options Clearing Corporation ("OCC"), as to the
investments on which the Fund has written options that are traded
on exchanges, or as to other acceptable escrow securities, so that
no margin will be required from the Fund for such option
transactions. OCC will release the securities covering a call on
the expiration of the call or when the Fund enters into a closing
purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally
higher than on general securities transactions, are payable on
writing or purchasing a call.
Writing Put Options. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy,
the underlying investment at the exercise price during the option
period. Writing a put covered by segregated liquid assets equal to
the exercise price of the put has the same economic effect to the
Fund as writing a covered call. The premium the Fund receives from
writing a put option represents a profit, as long as the price of
the underlying investment remains above the exercise price.
However, the Fund has also assumed the obligation during the option
period to buy the underlying investment from the buyer of the put
at the exercise price, even though the value of the investment may
fall below the exercise price. If the put expires unexercised, the
Fund (as the writer of the put) realizes a gain in the amount of
the premium less transaction costs. If the put is exercised, the
Fund must fulfill its obligation to purchase the underlying
investment at the exercise price, which will usually exceed the
market value of the investment at that time. In that case, the
Fund may incur a loss, equal to the sum of the sale price of the
underlying investment and the premium received minus the sum of the
exercise price and any transaction costs incurred.
When writing put options on securities or on foreign
currencies, to secure its obligation to pay for the underlying
security, the Fund will deposit in escrow liquid assets with a
value equal to or greater than the exercise price of the underlying
securities. The Fund therefore forgoes the opportunity of
investing the segregated assets or writing calls against those
assets. As long as the obligation of the Fund as the put writer
continues, it may be assigned an exercise notice by the exchange or
broker-dealer through whom such option was sold, requiring the Fund
to exchange currency at the specified rate of exchange or to take
delivery of the underlying security against payment of the exercise
price. The Fund may have no control over when it may be required
to purchase the underlying security, since it may be assigned an
exercise notice at any time prior to the termination of its
obligation as the writer of the put. This obligation terminates
upon expiration of the put, or such earlier time at which the Fund
effects a closing purchase transaction by purchasing a put of the
same series as that previously sold. Once the Fund has been
assigned an exercise notice, it is thereafter not allowed to effect
a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize
a profit on an outstanding put option it has written or to prevent
an underlying security from being put. Furthermore, effecting such
a closing purchase transaction will permit the Fund to write
another put option to the extent that the exercise price thereof is
secured by the deposited assets, or to utilize the proceeds from
the sale of such assets for other investments by the Fund. The
Fund will realize a profit or loss from a closing purchase
transaction if the cost of the transaction is less or more than the
premium received from writing the option. As above for writing
covered calls, any and all such profits described herein from
writing puts are considered short-term capital gains for Federal
tax purposes, and when distributed by the Fund, are taxable as
ordinary income.
The Trustees have adopted a non-fundamental policy that the
Fund may write covered call options or write covered put options
with respect to not more than 5% of the value of its net assets.
Similarly, the Fund may only purchase call options and put options
with a value of up to 5% of its net assets.
Purchasing Puts and Calls. The Fund may purchase calls to
protect against the possibility that the Fund's portfolio will not
participate in an anticipated rise in the securities market. When
the Fund purchases a call (other than in a closing purchase
transaction), it pays a premium and, except as to calls on stock
indices, has the right to buy the underlying investment from a
seller of a corresponding call on the same investment during the
call period at a fixed exercise price. In purchasing a call, the
Fund benefits only if the call is sold at a profit or if, during
the call period, the market price of the underlying investment is
above the sum of the exercise price, transaction costs, and the
premium paid, and the call is exercised. If the call is not
exercised or sold (whether or not at a profit), it will become
worthless at its expiration date and the Fund will lose its premium
payment and the right to purchase the underlying investment. When
the Fund purchases a call on a stock index, it pays a premium, but
settlement is in cash rather than by delivery of the underlying
investment to the Fund.
When the Fund purchases a put, it pays a premium and, except
as to puts on stock indices, has the right to sell the underlying
investment to a seller of a corresponding put on the same
investment during the put period at a fixed exercise price. Buying
a put on an investment the Fund owns (a "protective put") enables
the Fund to attempt to protect itself during the put period against
a decline in the value of the underlying investment below the
exercise price by selling the underlying investment at the exercise
price to a seller of a corresponding put. If the market price of
the underlying investment is equal to or above the exercise price
and as a result the put is not exercised or resold, the put will
become worthless at its expiration and the Fund will lose the
premium payment and the right to sell the underlying investment.
However, the put may be sold prior to expiration (whether or not at
a profit).
Puts and calls on broadly-based stock indices or Stock Index
Futures are similar to puts and calls on securities or futures
contracts except that all settlements are in cash and gain or loss
depends on changes in the index in question (and thus on price
movements in the stock market generally) rather than on price
movements of individual securities or futures contracts. When the
Fund buys a call on a stock index or Stock Index Future, it pays a
premium. If the Fund exercises the call during the call period, a
seller of a corresponding call on the same investment will pay the
Fund an amount of cash to settle the call if the closing level of
the stock index or Future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to
the difference between the closing price of the call and the
exercise price of the call times a specified multiple (the
"multiplier") which determines the total dollar value for each
point of difference. When the Fund buys a put on a stock index or
Stock Index Future, it pays a premium and has the right during the
put period to require a seller of a corresponding put, upon the
Fund's exercise of its put, to deliver cash to the Fund to settle
the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price
of the put. That cash payment is determined by the multiplier, in
the same manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock
Index Future not owned by it, the put protects the Fund to the
extent that the index moves in a similar pattern to the securities
the Fund holds. The Fund can either resell the put or, in the case
of a put on a Stock Index Future, buy the underlying investment and
sell it at the exercise price. The resale price of the put will
vary inversely with the price of the underlying investment. If the
market price of the underlying investment is above the exercise
price, and as a result the put is not exercised, the put will
become worthless on the expiration date. In the event of a decline
in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its
loss on its portfolio securities.
The Fund's option activities may affect its portfolio turnover
rate and brokerage commissions. The exercise of calls written by
the Fund may cause the Fund to sell related portfolio securities,
thus increasing its turnover rate. The exercise by the Fund of
puts on securities will cause the sale of underlying investments,
increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within the Fund's control, holding a put
might cause the Fund to sell the related investments for reasons
that would not exist in the absence of the put. The Fund will pay
a brokerage commission each time it buys or sells a call, put or an
underlying investment in connection with the exercise of a put or
call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market
value of the underlying investments and, consequently, put and call
options offer large amounts of leverage. The leverage offered by
trading in options could result in the Fund's net asset value being
more sensitive to changes in the value of the underlying
investments.
Options on Foreign Currencies. The Fund intends to write
and purchase puts and calls on foreign currencies that are traded
on a securities or commodities exchange or over-the-counter markets
or are quoted by major recognized dealers in such options. It does
so to protect against declines in the dollar value of foreign
securities and against increases in the dollar cost of foreign
securities to be acquired. If a rise is anticipated in the dollar
value of a foreign currency in which securities to be acquired are
denominated, the increased cost of such securities may be partially
offset by purchasing calls or writing puts on that foreign
currency. If a decline in the dollar value of a foreign currency
is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by writing
calls or purchasing puts on that foreign currency. However, in the
event of currency rate fluctuations adverse to the Fund's position,
it would lose the premium it paid and transactions costs.
A call written on a foreign currency by the Fund is covered if
the Fund owns the underlying foreign currency covered by the call
or has an absolute and immediate right to acquire that foreign
currency without additional cash consideration (or for additional
cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other foreign currency held in its
portfolio. A call may be written by the Fund on a foreign currency
to provide a hedge against a decline due to an expected adverse
change in the exchange rate in the U.S. dollar value of a security
which the Fund owns or has the right to acquire and which is
denominated in the currency underlying the option. This is a
cross-hedging strategy. In such circumstances, the Fund
collateralizes the option by maintaining in a segregated account
with the Fund's custodian, cash or U.S. Government Securities in an
amount not less than the value of the underlying foreign currency
in U.S. dollars marked-to-market daily.
Forward Contracts. A Forward Contract involves bilateral
obligations of one party to purchase, and another party to sell, a
specific currency at a future date (which may be any fixed number
of days from the date of the contract agreed upon by the parties),
at a price set at the time the contract is entered into. These
contracts are generally traded in the interbank market conducted
directly between currency traders (usually large commercial banks)
and their customers. Some forward contracts are standardized
foreign currency futures contracts that are traded on exchanges and
are subject to procedures and regulations applicable to other
Futures.
The Fund may use Forward Contracts to protect against
uncertainty in the level of future exchange rates. The use of
Forward Contracts does not eliminate fluctuations in the prices of
the underlying securities the Fund owns or intends to acquire, but
it does fix a rate of exchange in advance. In addition, although
Forward Contracts limit the risk of loss due to a decline in the
value of the hedged currencies, at the same time they limit any
potential gain that might result should the value of the currencies
increase. To attempt to limit its exposure to loss under forward
contracts in a particular foreign currency, the Fund's assets
denominated in that currency or denominated in a closely-
denominated foreign currency will at least equal the difference
between the market value and the cost of the forward contracts in
that particular foreign currency.
The Fund may enter into Forward Contracts with respect to
specific transactions. For example, when the Fund enters into a
contract for the purchase or sale of a security denominated in a
foreign currency, or when the Fund anticipates receipt of dividend
payments in a foreign currency, the Fund may desire to "lock-in"
the U.S. dollar price of the security or the U.S. dollar equivalent
of such payment by entering into a Forward Contract, for a fixed
amount of U.S. dollars per unit of foreign currency, for the
purchase or sale of the amount of foreign currency involved in the
underlying transaction (this is called a "transaction hedge"). The
Fund will thereby be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the
currency exchange rates during the period between the date on which
the security is purchased or sold, or on which the payment is
declared, and the date on which such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S.
dollar value of portfolio positions (a "position hedge"). In a
position hedge, for example, when the Fund believes that foreign
currency may suffer a substantial decline against the U.S. dollar,
it may enter into a forward sale contract to sell an amount of each
foreign currency approximating the value of some or all of the
Fund's portfolio securities denominated in that foreign currency,
or when the Fund believes that the U.S. dollar may suffer a
substantial decline against a foreign currency, it may enter into
a forward purchase contract to buy that foreign currency for a
fixed dollar amount. In this situation the Fund may, in the
alternative, also enter into a forward contract to sell a different
foreign currency for a fixed U.S. dollar amount where the Fund
believes that the U.S. dollar value of the currency to be sold
pursuant to the forward contract will fall whenever there is a
decline in the U.S. dollar value of the currency in which portfolio
securities of the Fund are denominated (this is known as a "cross-
hedge"). The Fund will not enter into a "cross-hedge" unless it is
denominated in a currency or currencies that the Manager believes
will have price movements that tend to correlate closely with the
currency in which the investment being hedged is denominated. The
success of cross hedging depends on many factors, including the
ability of the Manager to correctly identify and monitor the
correlation between foreign currencies and the U.S. dollar. To the
extent that the correlation is not identical, the Fund may
experience losses or gains on both the underlying security and the
cross-hedge.
The Fund will not enter into Forward Contracts or maintain a
net exposure in such contracts to the extent that the Fund would be
obligated to deliver an amount of foreign currency in excess of the
value of the Fund's portfolio securities denominated in that
currency or another currency that is also the subject of the hedge,
unless such net exposure is covered by segregated liquid assets.
The Fund's custodian will place cash or U.S. Government securities
or other liquid high-quality debt securities in a separate account
having a value equal to the net exposure. If the value of the
securities placed in the separate account declines, additional cash
or securities will be placed in the account on a daily basis so
that the account value will equal the Fund's net exposure. As an
alternative, the Fund may purchase a call option permitting the
Fund to purchase the amount of foreign currency being hedged by a
forward sale contract at a price no higher than the Forward
Contract price, or the Fund may purchase a put option permitting
the Fund to sell the amount of foreign currency subject to a
forward purchase contract at a price as high or higher than the
Forward Contract price. Unanticipated changes in currency prices
may result in poorer overall performance for the Fund than if it
had not entered into such contracts.
At or before the maturity of a Forward Contract requiring the
Fund to sell a currency, the Fund may either sell a portfolio
security and use the sale proceeds to make delivery of the currency
or retain the security and offset its contractual obligation to
deliver the currency by purchasing a second contract pursuant to
which the Fund will obtain, on the same maturity date, the same
amount of the currency that it is obligated to deliver. Similarly,
the Fund may close out a Forward Contract requiring it to purchase
a specified currency by entering into a second contract entitling
it to sell the same amount of the same currency on the maturity
date of the first contract. The Fund would realize a gain or loss
as a result of entering into such an offsetting Forward Contract
under either circumstance to the extent the exchange rate or rates
between the currencies involved moved between the execution dates
of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies
with factors such as the currencies involved, the length of the
contract period and the market conditions then prevailing. Because
Forward Contracts are usually entered into on a principal basis, no
fees or commissions are involved. Because such contracts are not
traded on an exchange, the Fund must evaluate the credit and
performance risk of each particular counterparty under a Forward
Contract.
Although the Fund values its assets daily in terms of U.S.
dollars, it does not intend to convert its holdings of foreign
currencies into U.S. dollars on a daily basis. The Fund may
convert foreign currency from time to time, and investors should be
aware of the costs of currency conversion. Foreign exchange
dealers do not charge a fee for conversion, but they do seek to
realize a profit based on the difference between the prices at
which they buy and sell various currencies. Thus, a dealer may
offer to sell a foreign currency to the Fund at one rate, while
offering a lesser rate of exchange should the Fund desire to resell
that currency to the dealer.
Regulatory Aspects of Hedging Instruments. The Fund is
required to operate within certain guidelines and restrictions with
respect to its use of futures and options thereon as established by
the Commodities Futures Trading Commission ("CFTC"). In
particular, the Fund is excluded from registration as a "commodity
pool operator" if it complies with the requirements of Rule 4.5
adopted by the CFTC. The Rule does not limit the percentage of the
Fund's assets that may be used for Futures margin and related
options premium for a bona fide hedging position. However, under
the Rule the Fund must limit its aggregate initial futures margin
and related option premiums to no more than 5% of the Fund's total
assets for hedging strategies that are not considered bona fide
hedging strategies under the Rule. Under the Rule, the Fund also
must use short Futures and options on Futures positions solely for
"bona fide hedging purposes" within the meaning and intent of the
applicable provisions of the Commodity Exchange Act.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of
options that may be written or held by a single investor or group
of investors acting in concert, regardless of whether the options
were written or purchased on the same or different exchanges or are
held in one or more accounts or through one or more different
exchanges or through one or more brokers. Thus the number of
options which the Fund may write or hold may be affected by options
written or held by other entities, including other investment
companies having the same adviser as the Fund (or an adviser that
is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits
and may impose certain other sanctions.
Due to requirements under the Investment Company Act, when the
Fund purchases a Stock Index Future, the Fund will maintain, in a
segregated account or accounts with its custodian, cash or readily-
marketable, short-term (maturing in one year or less) debt
instruments in an amount equal to the market value of the
securities underlying such Future, less the margin deposit
applicable to it.
Additional Information About Hedging Instruments and Their
Use. The Fund's Custodian, or a securities depository acting for
the Custodian, will act as the Fund's escrow agent, through the
facilities of the Options Clearing Corporation ("OCC"), as to the
investments on which the Fund has written options traded on
exchanges or as to other acceptable escrow securities, so that no
margin will be required for such transactions. OCC will release
the securities on the expiration of the option or upon the Fund's
entering into a closing transaction. An option position may be
closed out only on a market which provides secondary trading for
options of the same series, and there is no assurance that a liquid
secondary market will exist for any particular option.
When the Fund writes an over-the-counter("OTC") option, it
will enter into an arrangement with a primary U.S. Government
securities dealer, which would establish a formula price at which
the Fund would have the absolute right to repurchase that OTC
option. That formula price would generally be based on a multiple
of the premium received for the option, plus the amount by which
the option is exercisable below the market price of the underlying
security (that is, the extent to which the option is "in-the-
money"). When option the Fund writes an OTC option, it will treat
as illiquid (for purposes of the limit on its assets that may be
invested in the illiquid securities, stated in the Prospectus) the
mark-to-market value of any OTC option held by it. The Securities
and Exchange Commission ("SEC") is evaluating whether OTC options
should be considered liquid securities, and the procedure described
above could be affected by the outcome of that evaluation.
The Fund's option activities may affect its turnover rate and
brokerage commissions. The exercise by the Fund of puts on
securities will cause the sale of related investments, increasing
portfolio turnover. Although such exercise is within the Fund's
control, holding a put might cause the Fund to sell the related
investments for reasons which would not exist in the absence of the
put. The Fund will pay a brokerage commission each time it buys a
put or call, sells a cal, or buys or sells an underlying investment
in connection with the exercise of a put or call. Such commissions
may be higher than those which would apply to direct purchases or
sales of such underlying investments. Premiums paid for options
are small in relation to the market value of the related
investments, and consequently, put and call options offer large
amounts of leverage. The leverage offered by trading options could
result in the Fund's net asset value being more sensitive to
changes in the value of the underlying investments.
Tax Aspects of Covered Calls and Hedging Instruments. The
Fund intends to qualify as a "regulated investment company" under
the Internal Revenue Code (although it reserves the right not to
qualify). That qualification enables the Fund to "pass through"
its income and realized capital gains to shareholders without
having to pay tax on them. This avoids a "double tax" on that
income and capital gains, since shareholders normally will be taxed
on the dividends and capital gains they receive from the Fund
(unless the Fund's shares are held in a retirement account or the
shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that
less than 30% of its gross income must be derived from gains
realized on the sale of securities held for less than three months.
To comply with this 30% cap, the Fund will limit the extent to
which it engages in the following activities, but will not be
precluded from them: (i) selling investments, including Stock Index
Futures, held for less than three months, whether or not they were
purchased on the exercise of a call held by the Fund; (ii)
purchasing options which expire in less than three months; (iii)
effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv)
exercising puts or calls held by the Fund for less than three
months; or (v) writing calls on investments held less than three
months.
Certain foreign currency exchange contracts ("Forward
Contracts") in which the Fund may invest are treated as "section
1256 contracts." Gains or losses relating to section 1256
contracts generally are characterized under the Internal Revenue
Code as 60% long-term and 40% short-term capital gains or losses.
However, foreign currency gains or losses arising from certain
section 1256 contracts (including Forward Contracts) generally are
treated as ordinary income or loss. In addition, section 1256
contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses
are treated as though they were realized. These contracts also may
be marked-to-market for purposes of the excise tax applicable to
investment company distributions and for other purposes under rules
prescribed pursuant to the Internal Revenue Code. An election can
be made by the Fund to exempt these transactions from this marked-
to-market treatment.
Certain Forward Contracts entered into by the Fund may result
in "straddles" for Federal income tax purposes. The straddle rules
may affect the character and timing of gains (or losses) recognized
by the Fund on straddle positions. Generally, a loss sustained on
the disposition of a position making up a straddle is allowed only
to the extent such loss exceeds any unrecognized gain in the
offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain
in the offsetting positions making up the straddle, or the
offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable
to fluctuations in exchange rates that occur between the time the
Fund accrues interest or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time
the Fund actually collects such receivables or pays such
liabilities generally are treated as ordinary income or ordinary
loss. Similarly, on disposition of debt securities denominated in
a foreign currency and on disposition foreign currency forward
contracts, gains or losses attributable to fluctuations in the
value of a foreign currency between the date of acquisition of the
security or contract and the date of the disposition also are
treated as an ordinary gain or loss. Currency gains and losses are
offset against market gains and losses on each trade before
determining a net "section 988" gain or loss under the Internal
Revenue Code, which may ultimately increase or decrease the amount
of the Fund's investment company income available for distribution
to its shareholders.
Possible Risk Factors in Hedging. In addition to the risks
with respect to options discussed in the Prospectus and above,
there is a risk in using short hedging by (i) selling Stock Index
Futures or (ii) purchasing puts on stock indices or Stock Index
Futures to attempt to protect against declines in the value of the
Fund's equity securities. The risk is that the prices of Stock
Index Futures will correlate imperfectly with the behavior of the
cash (i.e., market value) prices of the Fund's equity securities.
The ordinary spreads between prices in the cash and futures markets
are subject to distortions, due to differences in the natures of
those markets. First, all participants in the futures markets are
subject to margin deposit and maintenance requirements. Rather
than meeting additional margin deposit requirements, investors may
close out futures contracts through offsetting transactions which
could distort the normal relationship between the cash and futures
markets. Second, the liquidity of the futures markets depends on
participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to
make or take delivery, liquidity in the futures markets could be
reduced, thus producing distortion. Third, from the point of view
of speculators, the deposit requirements in the futures markets are
less onerous than margin requirements in the securities markets.
Therefore, increased participation by speculators in the futures
markets may cause temporary price distortions.
The risk of imperfect correlation increases as the composition
of the Fund's portfolio diverges from the securities included in
the applicable index. To compensate for the imperfect correlation
of movements in the price of the equity securities being hedged and
movements in the price of the hedging instruments, the Fund may use
hedging instruments in a greater dollar amount than the dollar
amount of equity securities being hedged if the historical
volatility of the prices of the equity securities being hedged is
more than the historical volatility of the applicable index. It is
also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity
securities held in the Fund's portfolio may decline. If that
occurred, the Fund would lose money on the hedging instruments and
also experience a decline in value in its portfolio securities.
However, while this could occur for a very brief period or to a
very small degree, over time the value of a diversified portfolio
of equity securities will tend to move in the same direction as the
indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position
in the equities markets as a temporary substitute for the purchase
of individual equity securities (long hedging) by buying Stock
Index Futures and/or calls on such Futures, on securities or on
stock indices, it is possible that the market may decline. If the
Fund then concludes not to invest in equity securities at that time
because of concerns as to a possible further market decline or for
other reasons, the Fund will realize a loss on the hedging
instruments that is not offset by a reduction in the price of the
equity securities purchased.
Short Sales Against-the-Box. In this type of short sale,
while the short position is open, the Fund must own an equal amount
of the securities sold short, or by virtue of ownership of other
securities have the right, without payment of further
consideration, to obtain an equal amount of the securities sold
short. Short sales against-the-box may be made to defer, for
Federal income tax purposes, recognition of gain or loss on the
sale of securities "in the box" until the short position is closed
out. They may also be used to protect a gain on the security "in-
the-box" when the Fund does not want to sell it and recognize a
capital gain. No more than 15% of the Fund's net assets may be
held as collateral for these short sales.
Other Investment Restrictions
The Fund's most significant investment restrictions are set
forth in the Prospectus. There are additional investment
restrictions that the Fund must follow that are also fundamental
policies. Fundamental policies and the Fund's investment objective
cannot be changed without the vote of a "majority" of the Fund's
outstanding voting securities. Under the Investment Company Act,
such "majority" vote is defined as the vote of the holders of the
lesser of: (1) 67% or more of the shares present or represented by
proxy at a shareholder meeting, if the holders of more than 50% of
the outstanding shares are present, or (2) more than 50% of the
outstanding shares of the Fund.
Under these additional restrictions, the Fund cannot:
invest in companies for the primary purpose of acquiring
control or management thereof;
invest in commodities or commodity contracts; however, the
Fund may buy and sell any of the hedging instruments permitted
by any of its other non-fundamental policies, whether or not
any such hedging instrument is considered to be a commodity or
a commodity contract;
invest in real estate or in interests in real estate, but
may purchase readily marketable securities of companies
holding real estate or interests therein;
purchase securities on margin, except that the Fund may make
margin deposits in connection with any of the hedging
instruments permitted by any of its other non-fundamental
policies;
mortgage or pledge any of its assets; however, this does not
prohibit the escrow arrangements contemplated in the use of
hedging instruments;
underwrite securities of any issuer, except insofar as it
might be deemed an underwriter under the Securities Act of
1933 in the resale of any securities held in its own
portfolio;
invest or hold securities of any issuer if those officers
and Trustees or directors of the Fund or the Manager owning
individually more than 0.5% of the securities of such issuer
together own more than 5% of the securities of such issuer;
invest in other open-end investment companies except in a
merger, consolidation, reorganization or acquisition of
assets.
invest in oil or gas exploration or development programs or
in mineral-related programs or leases; or
lend money, but the Fund may purchase all or a portion of an
issue of bonds, debentures, commercial paper, or other similar
corporate obligations of the types that are usually purchased
by institutions, whether or not publicly distributed.
For purposes of the Fund's policy not to concentrate its
investments, the Fund has adopted the industry classifications set
forth in the Appendix to this Statement of Additional Information.
How the Fund is Managed
Organization and History. As a Massachusetts business trust, the
Fund is not required to hold, and does not plan to hold, regular
annual meetings of shareholders. The Fund will hold meetings when
required to do so by the Investment Company Act or other applicable
law, or when a shareholder meeting is called by the Trustees or
upon proper request of the shareholders. Shareholders have the
right, upon the declaration in writing or vote of two-thirds of the
outstanding shares of the Fund, to remove a Trustee. The Trustees
will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of at least
10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund
valued at $25,000 or more or holding at least 1% of the Fund's
outstanding shares, whichever is less, stating that they wish to
communicate with other shareholders to request a meeting to remove
a Trustee, the Trustees will then either make the Fund's
shareholder list available to the applicants or mail their
communication to all other shareholders at the applicant's expense,
or the Trustees may take such other action as set forth under
Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer
of shareholder or Trustee liability for the Fund's obligations, and
provides for indemnification and reimbursement of expenses out of
its property for any shareholder held personally liable for its
obligations. The Declaration of Trust also provides that the Fund
shall, upon request, assume the defense of any claim made against
any shareholder for any act or obligation of the Fund and satisfy
any judgment thereon. Thus, while Massachusetts law permits a
shareholder of a business trust (such as the Fund) to be held
personally liable as a "partner" under certain circumstances, the
risk of a Fund shareholder incurring financial loss on account of
shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its
obligations described above. Any person doing business with the
Fund, and any shareholder of the Fund, agrees under the Fund's
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand which may arise out of any
dealings with the Fund, and the Trustees shall have no personal
liability to any such person, to the extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers
and their principal occupations and business affiliations during
the past five years are listed below. The address of each Trustee
and officer is Two World Trade Center, New York, New York 10048-
0203, unless another address is listed below. All of the Trustees
are also trustees or directors of Oppenheimer Money Market Fund,
Inc., Oppenheimer Fund, Oppenheimer International Growth Fund,
Oppenheimer Global Fund, Oppenheimer Growth Fund, Oppenheimer
Discovery Fund, Oppenheimer Capital Appreciation Fund, Oppenheimer
Global Growth & Income Fund, Oppenheimer Gold & Special Minerals
Fund, Oppenheimer Municipal Bond Fund, Oppenheimer New York
Municipal Fund, Oppenheimer California Municipal Fund, Oppenheimer
Multi-State Municipal Trust, Oppenheimer Asset Allocation Fund,
Oppenheimer Enterprise Fund, Oppenheimer U.S. Government Trust,
Oppenheimer Series Fund, Inc., Oppenheimer Multi-Sector Income
Trust and Oppenheimer World Bond Fund (the "New York-based
Oppenheimer funds") except that Ms. Macaskill is not a director of
Oppenheimer Money Market Fund, Inc. Ms. Macaskill and Messrs.
Bishop, Bowen, Donohue, Farrar and Zack respectively hold the same
offices with the other New York-based Oppenheimer funds as with the
Fund. As of December 31, 1996, the Trustees and officers of the
Fund as a group owned less than 1% of the outstanding Class A
shares of the Fund. The statement does not include ownership of
shares held of record by an employee benefit plan for employees of
the Manager (one of the Trustees of the Fund listed below, Ms.
Macaskill, and one of the officers, Mr. Donohue, are trustees of
that plan), other than the shares beneficially owned under that
plan by officers of the Fund listed below.
Leon Levy, Chairman of the Board of Trustees; Age 71
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Robert G. Galli, Trustee*; Age 63
Vice Chairman of OppenheimerFunds, Inc. (the "Manager");
formerly he held the following positions: Vice President and
Counsel of Oppenheimer Acquisition Corp. ("OAC"), the Manager's
parent holding company; Executive Vice President & General Counsel
and a director of the Manager and OppenheimerFunds Distributor,
Inc. (the "Distributor"), Vice President and a director of
HarbourView Asset Management Corporation ("HarbourView") and
Centennial Asset Management Corporation ("Centennial"), investment
adviser subsidiaries of the Manager, a director of Shareholder
Financial Services, Inc. ("SFSI") and Shareholder Services, Inc.
("SSI"), transfer agent subsidiaries of the Manager and an officer
of other Oppenheimer funds.
Benjamin Lipstein, Trustee; Age 73
591 Breezy Hill Road, Hillsdale, N.Y. 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; a director of Sussex
Publishers, Inc (Publishers of Psychology Today and Mother Earth
News) and of Spy Magazine, L.P.
Bridget A. Macaskill, President and Trustee*; Age 48
President, Chief Executive Officer and a Director of the Manager;
Chairman and a director of SSI, and SFSI; President and a director
of OAC, HarbourView and Oppenheimer Partnership Holdings, Inc., a
holding company subsidiary of the Manager; a director of
Oppenheimer Real Asset Management, Inc.; formerly an Executive
Vice President of the Manager.
Elizabeth B. Moynihan, Trustee; Age 67
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institution), the Institute of Fine Arts (New
York University), National Building Museum; a member of the
Trustees Council, Preservation League of New York State, and of the
Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age 69
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company),
Kemper Corporation (insurance and financial services company),
Fidelity Life Association (mutual life insurance company); formerly
President and Chief Executive Officer of The Conference Board, Inc.
(international economic and business research) and a director of
Lumbermens Mutual Casualty Company, American Motorists Insurance
Company and American Manufacturers Mutual Insurance Company.
Edward V. Regan, Trustee; Age 66
40 Park Avenue, New York, New York 10016
Chairman of Municipal Assistance Corporation for the City of New
York; Senior Fellow of Jerome Levy Economics Institute, Bard
College; a member of the U.S. Competitiveness Policy Council; a
director of GranCare, Inc. (health care provider); formerly New
York State Comptroller and trustee, New York State and Local
Retirement Fund.
Russell S. Reynolds Jr., Trustee; Age 65
200 Park Avenue, New York, New York 10166
Founder Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directorship Inc. (corporate governance
consulting); a director of Professional Staff Limited (U.K.); a
trustee of Mystic Seaport Museum, International House and Greenwich
Historical Society.
Donald W. Spiro, Vice Chairman and Trustee*; Age 71
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and the Distributor.
Pauline Trigere, Trustee; Age 84
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton Yeutter, Trustee; Age 66
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar,
Inc. (machinery), ConAgra, Inc. (food and agricultural products),
Farmers Insurance Company (insurance), FMC Corp. (chemicals and
machinery), IMC Global Inc. (chemicals and animal feed) and Texas
Instruments, Inc. (electronics); formerly (in descending
chronological order) Counsellor to the President (Bush) for
Domestic Policy, Chairman of the Republican National Committee,
Secretary of the U.S. Department of Agriculture, and U.S. Trade
Representative.
Andrew J. Donohue, Secretary; Age 46
Executive Vice President and General Counsel of the Manager and
the Distributor; President and a director of Centennial;
Executive Vice President, General Counsel and a director of
HarbourView, SSI, SFSI, and Oppenheimer Partnership Holdings, Inc.;
President and director of Oppenheimer Real Asset Management, Inc.;
General Counsel of OAC; Executive Vice President, Chief Legal
Officer and a
director of MultiSource Services, Inc. (a broker-dealer); an
officer of other Oppenheimer funds; formerly Senior Vice President
and Associate General Counsel of the Manager and the Distributor;
Partner in, Kraft & McManimon (a law firm); an officer of First
Investors Corporation (a broker-dealer) and First Investors
Management Company, Inc. (broker-dealer and investment adviser);
director and an officer of First Investors Family of Funds and
First Investors Life Insurance Company.
George C. Bowen, Treasurer; Age 60
6803 South Tucson Way, Englewood, CO 80012
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Senior Vice President, Treasurer and Secretary of SSI;
Vice President, Treasurer and Secretary of SFSI; Treasurer of OAC;
Vice President and Treasurer of Oppenheimer Real Asset Management,
Inc.; Chief Executive Officer, Treasurer and a director of
MultiSource Services, Inc. (a broker-dealer); an officer of other
Oppenheimer funds.
Robert J. Bishop, Assistant Treasurer; Age 38
6803 South Tucson Way, Englewood, CO 80012
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager, prior to which he was an Accountant for Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and
Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott T. Farrar, Assistant Treasurer; Age 31
6803 South Tucson Way, Englewood, CO 80012
Vice President of the Manager/Mutual Fund Accounting; an officer of
other Oppenheimer funds; formerly a Fund Controller for the
Manager.
Robert G. Zack, Assistant Secretary; Age 48
Senior Vice President and Associate General Counsel of the Manager,
Assistant Secretary of SSI, SFSI; an officer of other Oppenheimer
funds.
Jay W. Tracy III, Vice President and Portfolio Manager; Age 43
Vice President of the Manager; Vice President and Portfolio Manager
of other Oppenheimer funds; from February 1994 through September
1994, he was a Managing Director of Buckingham Capital Management,
prior to which he was Portfolio Manager and Vice President of the
Fund and other Oppenheimer funds and a Vice President of the
Manager. Before that, he was Senior Vice President of Founders
Asset Management, Inc. (a mutual fund adviser), prior to which he
was a securities analyst and portfolio manager for Berger
Associates, Inc. (investment adviser).
George Evans, Vice President and Portfolio Manager; Age 37
Vice President of the Manager; formerly an International Equities
Portfolio Manager/Analyst with Brown Brothers Harriman & Co.
Remuneration of Trustees. The officers of the Fund and
certain Trustees of the Fund (Ms. Macaskill and Messrs. Galli and
Spiro; Ms. Macaskill is also an officer) who are affiliated with
the Manager receive no salary or fees from the Fund. The remaining
Trustees of the Fund received the compensation shown below from the
Fund. The compensation from the Fund was paid during the fiscal
year ended September 30, 1996. The compensation from all of the
New York-based Oppenheimer funds includes the Fund and is
compensation received as a director, trustee or member of a
committee of the Board of those funds during the calendar year
1996.
<TABLE>
<CAPTION>
Retirement
Benefits Total Compensation
Aggregate Accrued as From All
Compensation Part of New York-based
Name and Position From Fund Fund Expenses Oppenheimer funds1
<S> <C> <C> <C>
Leon Levy $4,170 $6,651 $152,750
Chairman and Trustee
Benjamin Lipstein $2,549 $4,066 $ 91,350
Study Committee Chairman,
Audit Committee Member
and Trustee 2
Elizabeth B. Moynihan $2,549 $4,066 $ 91,350
Study Committee
Member and Trustee
Kenneth A. Randall $2,318 $3,698 $ 83,450
Audit Committee
Chairman and Trustee
Edward V. Regan $2,035 $3,245 $ 78,150
Proxy Committee Chairman,
Audit Committee
Member and Trustee
Russell S. Reynolds, Jr. $1,541 $2,457 $ 58,800
Trustee
Pauline Trigere $1,541 $2,457 $ 55,300
Trustee
Clayton K. Yeutter $1,541 $2,457 $ 58,800
Proxy Committee Member
and Trustee
</TABLE>
______________________
1For the 1996 calendar year.
2Committee position held during a portion of the period shown.
The Fund has adopted a retirement plan that provides for payment to a retired
Trustee of up to 80% of the average compensation paid during that Trustee's
five years of service in which the highest compensation was received. A
Trustee must serve in that capacity for any of the New York-based Oppenheimer
funds for at least 15 years to be eligible for the maximum payment. Because
each Trustee's retirement benefits will depend on the amount of the Trustee's
future compensation and length of service, the amount of those benefits
cannot be determined at this time, nor can the Fund estimate the number of
years of credited service that will be used to determine those benefits.
Major Shareholders. As of December 31, 1996, no person owned of
record or was known by the Fund to own beneficially 5% or more of the Fund's
outstanding Class A, Class B or Class C shares, except Merrill Lynch Pierce
Fenner & Smith Inc., 4800 Deer Lake Drive East, 3rd Floor, Jacksonville,
Florida 32246-6484, which was the record owner of 11,484.000 Class C shares
(equal to 6.31% of the Class C shares then outstanding).
The Manager and Its Affiliates. The Manager is wholly-owned by Oppenheimer
Acquisition Corp. ("OAC"), a holding company controlled by Massachusetts
Mutual Life Insurance Company. OAC is also owned in part by certain of the
Manager's directors and officers, some of whom may also serve as officers of
the Fund, and three of whom (Ms. Macaskill and Messrs. Galli and Spiro)
serve as Trustees of the Fund.
The Manager and the Fund have a Code of Ethics. It is designed to
detect and prevent improper personal trading by certain employees, including
Portfolio Managers, that would compete with or take advantage of the Fund's
portfolio transactions. Compliance with the Code of Ethics is carefully
monitored and strictly enforced by the Manager.
The Investment Advisory Agreement. A management fee is payable
monthly to the Manager under the terms of the investment advisory agreement
between the Fund and the Manager and is computed on the aggregate net assets
of the Fund as of the close of business each day. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all administrative
and clerical personnel required to provide effective corporate administration
for the Fund, including the compilation and maintenance of records with
respect to its operations, the preparation and filing of specified reports,
and composition of proxy materials and registration statements for continuous
public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributor's Agreement are
paid by the Fund. The advisory agreement lists examples of expenses paid by
the Fund, the major categories of which relate to interest, taxes, brokerage
commissions, fees to certain Trustees, legal and audit expenses, custodian
and transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation costs.
For the Fund's fiscal years ended September 30, 1994, 1995 and 1996, the
management fees paid by the Fund to the Manager were $1,555,894, $1,238,423
and $1,233,678, respectively.
The Investment Advisory Agreement contains no expense limitation.
However, because of state regulations limiting fund expenses that previously
applied, the Manager had voluntarily undertaken that the Fund's total
expenses in any fiscal year (including the investment advisory fee but
exclusive of taxes, interest, brokerage commissions, distribution plan
payments and any extraordinary non-recurring expenses, including litigation)
would not exceed the most stringent state regulatory limitation applicable to
the Fund. Due to changes in federal securities laws, such state regulations
no longer apply and the Manger's undertaking is therefore inapplicable and
has been withdrawn. During the Fund's last fiscal year, the Fund's expenses
did not exceed the most srtringent state regulatory limit and the voluntary
undertaking was not invoked.
The advisory agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or reckless disregard for its obligations and duties under the advisory
agreement, the Manager is not liable for any loss resulting from a good faith
error or omission on its part with respect to any of its duties thereunder.
The advisory agreement permits the Manager to act as investment adviser for
any other person, firm or corporation and to use the name "Oppenheimer" in
connection with one or more companies for which it may act as investment
adviser or general distributor. If the Manager shall no longer act as
investment adviser to the Fund, the right of the Fund to use the name
"Oppenheimer" as part of its name may be withdrawn.
The Distributor. Under the General Distributor's Agreement with the
Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of the Fund's Class A, Class B and Class C shares
but is not obligated to sell a specific number of shares. Expenses normally
attributable to sales (other than those paid under Class A, Class B and Class
C Distribution and Service Plans, including advertising and the cost of
printing and mailing prospectuses) other than those furnished to existing
shareholders), are borne by the Distributor. During the Fund's fiscal years
ended September 30, 1994, 1995, and 1996, the aggregate amount of sales
charges on sales of the Fund's Class A shares was $1,033,737, $398,139 and
$547,341, respectively, of which the Distributor retained in the aggregate
amounts of $262,284, $114,956 and $159,815, in those respective years.
During the Fund's fiscal year ended September 30, 1996, the contingent
deferred sales charges collected on the Fund's Class B and Class C shares
totaled $8,208 and $1,057, respectively, all of which the Distributor
retained. For additional information about distribution of the Fund's shares
and expenses connected with such activities, please refer to "Distribution
and Service Plans," below.
The Transfer Agent. The Fund's Transfer Agent is OppenheimerFunds
Services, a division of the Manager, which acts as the shareholder servicing
agent for the Fund on an "at-cost" basis. It also acts as the shareholder
servicing agent for the other Oppenheimer funds.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreements. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to effect
the Fund's portfolio transactions. In doing so, the Manager is authorized by
the advisory agreement to employ broker-dealers, including "affiliated"
brokers, as that term is defined in the Investment Company Act, as may, in
its best judgment based on all relevant factors, implement the policy of the
Fund to obtain, at reasonable expense, the "best execution" (prompt and
reliable execution at the most favorable price obtainable) of such
transactions. The Manager need not seek competitive commission bidding or
base its selection on "posted" rates, but is expected to beware of the
current sales rates of eligible brokers to minimize the commissions paid to
the extent consistent with the provisions of the advisory agreement and the
interests and policies of the Fund as established by its Board of Trustees.
Purchases of securities from underwriters include a commission of concession
paid by the issuer to the underwriter and purchases from dealers include a
spread between the bid and asked price.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund and/or
the other accounts over which the Manager or its affiliates have investment
discretion. The commissions paid to such brokers may be higher than another
qualified broker would have charged if a good faith determination is made by
the Manager and the commission is fair and reasonable in relation to the
services provided. Subject to the foregoing considerations, the Manager may
also consider sales of shares of the Fund and other investment companies
managed by the Manager or its affiliates as a factor in the selection of
brokers for the Fund's portfolio transactions.
Description of Brokerage Practices Followed by the Manager. Subject to the
provisions of the advisory agreement, the procedures and rules described
above, allocations of brokerage are generally made by the Manager's portfolio
traders based upon new recommendations from the Manager's portfolio managers.
In certain instances, portfolio managers may directly place trades and
allocate brokerage, also subject to the provisions of the advisory agreement
and the procedures and rules described above. In either case, brokerage is
allocated under the supervision of the Manager's executive officers and the
Manager. Transactions in securities other than those for which an exchange
is the primary market are generally done with principals or market makers.
Brokerage commissions are paid primarily for effecting transactions in listed
securities or for certain fixed-income agency transactions in the secondary
market and are otherwise paid only if it appears likely that a better price
or execution can be obtained. When the Fund engages in an option
transaction, ordinarily the same broker will be used for the purchase or sale
of the option and any transaction in the securities to which the option
relates. When possible, concurrent orders to purchase or sell the same
security by more than one of the accounts managed by the Manager or its
affiliates are combined. The transactions effected pursuant to such combined
orders are averaged as to price and allocated in accordance with the purchase
or sale orders actually placed for each account.
The research services provided by a particular broker may be useful only
to one or more of the advisory accounts of the Manager and its affiliates,
and investment research received for the commissions of those other accounts
may be useful both to the Fund and one or more of such other accounts. Such
research, which may be supplied by a third party at the instance of a broker,
includes information and analyses on particular companies and industries as
well as market or economic trends and portfolio strategy, receipt of market
quotations for portfolio evaluations, information systems, computer hardware
and similar products and services. If a research service also assists the
Manager in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that
provides assistance to the Manager in the investment decision-making process
may be paid in commission dollars. The Board of Trustees has permitted the
Manager to use concessions on fixed-price offerings to obtain research, in
the same manner as is permitted for agency transactions. The Board has also
permitted the Manager to use stated commissions on secondary fixed-income
agency trades to obtain research where the broker has represented to Manager
that: (i) the trade is not from or for the broker's own inventory, (ii) the
trade was not executed by the broker on an agency basis at the stated
commission, and (iii) the trade is not a riskless principal transaction.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and enabling the Manager
to obtain market information for the valuation of securities held in the
Fund's portfolio or being considered for purchase. The Board of Trustees,
including the "independent" Trustees of the Fund (those Trustees of the Fund
who are not "interested persons" as defined in the Investment Company Act,
and who have no direct or indirect financial interest in the operation of the
advisory agreement or the Distribution Plans described below) annually
reviews information furnished by the Manager as to the commissions paid to
brokers furnishing such services so that the Board may ascertain whether the
amount of such commissions was reasonably related to the value or benefit of
such services.
During the Fund's fiscal years ended September 30, 1994, 1995 and 1996,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $858,996,
$1,698,126 and $987,876, respectively. During the fiscal year ended
September 30, 1996, $853,423 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those transactions was
$185,064,419. The transactions giving rise to those commissions were
allocated in accordance with the Manager's internal allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to time
the "average annual total return," "cumulative total return," "average
annual total return at net asset value" and "total return at net asset value"
of an investment in each class of Fund shares may be advertised. An
explanation of how total returns are calculated for each class and the
components of those calculations is set forth below.
The Fund's advertisement of its performance data must, under applicable
SEC rules, include the average annual total returns for each advertised class
of shares of the Fund for the 1, 5, and 10-year periods (or the life of the
class, if less) ending as of the most recently-ended calendar quarter prior
to the publication of the advertisement. This enables an investor to compare
the Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using such
information as a basis for comparison with other investments. An investment
in the Fund is not insured; its returns and share prices are not guaranteed
and normally will fluctuate on a daily basis. When redeemed, an investor's
shares may be worth more or less than their original cost. Returns for any
given past period are not a prediction or representation by the Fund of
future returns on its shares. The returns of each class of shares of the
Fund are affected by portfolio quality, portfolio maturity, the type of
investments the Fund holds and its operating expenses allocated to the
particular class.
Average Annual Total Returns. The Fund's "average annual total return"
of each class is an average annual compounded rate of return for each year in
a specified number of years. It is the rate of return based on the change in
value of a hypothetical initial investment of $1,000 ("P" in the formula
below) held for a number of years ("n") to achieve an Ending Redeemable Value
("ERV"), according to the following formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
Cumulative Total Returns. The cumulative "total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:
ERV - P
------- = Total Return
P
In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted
from the initial investment ("P") (unless the return is shown at net asset
value, as described below). For Class B shares, the payment of the
applicable contingent deferred sales charge (of 5.0% for the first year, 4.0%
for the second year, 3.0% for the third and fourth years, 2.0% for the fifth
year, 1.0% in the sixth year and none thereafter) is applied as described in
the Prospectus. For Class C shares, the payment of the 1% contingent
deferred sales charge is applied to the investment result for the one-year
period (or less). Total returns also assume that all dividends and capital
gains distributions during the period are reinvested to buy additional shares
at net asset value per share, and that the investment is redeemed at the end
of the period. The "average annual total returns" on an investment in Class
A shares of the Fund for the one and five year periods ended September 30,
1996 and for the period December 30, 1987 (commencement of operations) to
September 30, 1996 were 9.57%, (5.68%) and 8.45%, respectively. The
cumulative "total return" on Class A shares for the period December 30, 1987
(commencement of operations) to September 30, 1996 was 103.43%. The
cumulative total returns on Class B and Class C shares of the Fund since
inception of the classes on November 1, 1995, through the fiscal year ended
Spetember 30, 1996, were 14.22% and 18.28%, respectively.
Total Returns at Net Asset Value. From time to time the Fund may also
quote an average annual total return at net asset value or a cumulative
"total return at net asset value" for Class A, Class B or Class C shares.
Each is based on the difference in net asset value per share at the beginning
and the end of the period for a hypothetical investment in that class of
shares (without considering front-end or contingent deferred sales charges)
and takes into consideration the reinvestment of dividends and capital gains
distributions. The average annual total return at net asset value for the
Fund's Class A shares for the one year period ended September 30, 1996 was
16.25%. The cumulative total return at net asset value for the period
December 30, 1987 (commencement of operations) to September 30, 1996 was
115.84%. The cumulative total returns at net asset value on Class B and
Class C shares of the Fund since inception of the classes on 11/1/95, through
the fiscal year ended September 30, 1996, were 19.22% and 19.28%,
respectively.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A or Class B shares. However, when comparing
total return of an investment in Class A or Class B shares of the Fund, a
number of factors should be considered before using such information as a
basis for comparison with other investments.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its Class A, Class B Class C shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent mutual fund
monitoring service. Lipper monitors the performance of regulated investment
companies, including the Fund, and ranks their performance for various
periods based on categories relating to investment objectives. The
performance of the Fund's classes is ranked against (i) all other funds,
excluding money market funds, and (ii) all other emerging growth funds. The
Lipper performance rankings are based on total return that include the
reinvestment of capital gain distributions and income dividends but does not
take sales charges or taxes into consideration. From time to time the Fund
may include in advertisement and sales literature performance information
about the Fund cited in other newspapers and periodicals such as the New York
Times, which may include performance quotations from other sources including
Lipper and Morningstar.
From time to time the Fund may publish the ranking of the performance of
its Class A, Class B or Class C shares by Morningstar, Inc., an independent
mutual fund monitoring service that ranks mutual funds, including the Fund,
monthly in broad investment categories (domestic stock, international stock,
taxable bond, municipal bond and hybrid) based upon risk-adjusted investment
return. Investment return measures a fund's or Class' three, five and ten-
year average annual total returns (when available) in excess of 90-day U.S.
Treasury bill returns after considering sales charges and expenses. Risk
measures fund performance below 90-day U.S. Treasury bill monthly returns.
Risk and return are combined to produce star rankings reflecting performance
relative to the average fund in a given fund's category. Five stars is the
"highest" ranking (top 10%), four stars is "above average" (next 22.5%),
three stars is "average" (next 35%), two stars is "below average" (next
22.5%) and one star is "lowest" (bottom 10%). The current ranking is a
weighted average of 3, 5 and 10 year rankings (if available). Morningstar
ranks the Class A, Class B and Class C shares of the Fund in relation to
other equity funds. Rankings are subject to change.
The total return on an investment in the Fund's Class A, Class B or
Class C shares may be compared with performance for the same period of the
Morgan Stanley World Index, an unmanaged index of issuers on the stock
exchanges of 20 foreign countries and the United States and widely recognized
as a measure of global stock market performance. The performance of such
Index includes a factor for the reinvestment of dividends but does not
reflect expenses or taxes. The performance of the Fund's Class A, Class B or
Class C shares may also be compared in publications to (i) the performance of
various market indices or to other investments for which reliable performance
data is available, and (ii) to averages, performance rankings or other
benchmarks prepared by recognized mutual fund statistical services.
From time to time, the Fund's Manager may publish rankings or ratings of
the Manager (or the Transfer Agent), by independent third-parties, on the
investor services provided by them to shareholders of the Oppenheimer funds,
other than the performance rankings of the Oppenheimer funds themselves.
These ratings or rankings of shareholder/investor services may compare the
Oppenheimer funds' services to those of other mutual fund families selected
by the rating or ranking services, and may be based upon the opinions of the
rating or ranking service itself, using its own research or judgment, or
based upon surveys of investors, brokers, shareholders or others. in relation
to other equity funds.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares, and Distribution
and Service Plans for Class B and Class C shares under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund makes payments to the
Distributor in connection with the distribution and/or servicing of the
shares of that class, as described in the Prospectus. Each Plan has been
approved by a vote of (i) the Board of Trustees of the Fund, including a
majority of the Independent Trustees, cast in person at a meeting called for
the purpose of voting on that Plan, and (ii) the holders of a "majority" (as
defined in the Investment Company Act) of the Fund's shares of each class.
For the Class B and Class C Distribution and Service Plans, that vote was
cast by the Manager as the sole initial shareholder of Class B and Class C
shares of the Fund.
In addition, under the Plans the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in the
case of the Manager, may include profits from the advisory fee it receives
from the Fund) to make payments to brokers, dealers or other financial
institutions (each is referred to as a "Recipient" under the Plans) for
distribution and administrative services they perform. The Distributor and
the Manager may, in their sole discretion, increase or decrease the amount of
payments they make from their own resources to Recipients.
Unless terminated as described below, each Plan continues in effect from
year to year but only as long as such continuance is specifically approved at
least annually by the Fund's Board of Trustees and its Independent Trustees
by a vote cast in person at a meeting called for the purpose of voting on
such continuance. Any Plan may be terminated at any time by the vote of a
majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding
shares of that class. Neither Plan may not be amended to increase materially
the amount of payments to be made unless such amendment is approved by
shareholders of the class affected by the amendment. In addition, because
Class B shares automatically convert into Class A shares after six years, the
Fund is required to obtain the approval of Class B as well as Class A
shareholders for a proposed material amendment to the Class A Plan that would
materially increase payments under the Plan. Such approval must be by a
"majority" of the Class A and Class B shares (as defined in the Investment
Company Act, voting separately by class. All material amendments must be
approved by the Independent Trustees.
While the Plans are in effect, the Treasurer of the Fund shall provide
separate written reports to the Fund's Board of Trustees at least quarterly
on the amount of all payments made pursuant to each Plan, the purpose for
which each payment was made and the identity of each Recipient that received
any such payment. Those reports, including the allocations on which they
are based, will be subject to the review and approval of the Independent
Trustees in the exercise of their fiduciary duty. Each Plan further provides
that while it is in effect, the selection and nomination of those Trustees of
the Fund who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final decision
on any such selection or nomination is approved by a majority of such
Independent Trustees.
Under the Plans, no payment will be made to any Recipient in any quarter
if the aggregate net asset value of all Fund shares held by the Recipient for
itself and its customers, did not exceed a minimum amount, if any, that may
be determined from time to time by a majority of the Fund's Independent
Trustees. Initially, the Board of Trustees has set the maximum rate allowed
under the Plans and set no minimum amount. For the fiscal year ended
September 30, 1996, payments under the Class A Plan totalled $340,899, all of
which was paid by the Distributor to Recipients, including $17,351 paid to
MML Investor Services, Inc., an affiliate of the Distributor.
Any unreimbursed expenses incurred by the Distributor with respect to
Class A shares for any fiscal year may not be recovered in subsequent fiscal
years. Payments received by the Distributor under the Plan for Class A
shares will not be used to pay any interest expense, carrying charges, or
other financial costs, or allocation of overhead by the Distributor.
The Class B and Class C Plans allow the service fee payments to be paid
by the Distributor to Recipients in advance for the first year Class B and
Class C shares are outstanding, and thereafter on a quarterly basis, as
described in the Prospectus. The services rendered by Recipients in
connection with personal services and the maintenance of shareholder accounts
may include but shall not be limited to, the following: answering routine
inquiries from the Recipient's customers concerning the Fund, assisting in
the establishment and maintenance of accounts or sub-accounts in the Fund and
processing share redemption transactions, making the Fund's investment plans
and dividend payment options available, and providing such other information
and services in connection with the rendering of personal services and/or the
maintenance of accounts, as the Distributor or the Fund may reasonably
request. The advance payment is based on the net asset value of the Class B
and Class C shares sold. An exchange of shares does not entitle the
Recipient to an advance service fee payment. In the event Class B or Class
C shares are redeemed during the first year that the shares are outstanding,
the Recipient will be obligated to repay a pro rata portion of the advance
payment for those shares to the Distributor. Payments made under the Class
B Plan during the fiscal year ended September 30, 1996, totaled $42,516, of
which $38,764 was retained by the Distributor. Payments made under the Class
C Plan during the fiscal year ended September 30, 1996, totaled $14,558, of
which $12,877 was retained by the Distributor.
Although the Class B and Class C Plans permit the Distributor to retain
both the asset-based sales charge and the service fee on Class B shares, or
to pay Recipients the service fee on a quarterly basis without payment in
advance, the Distributor intends to pay the service fee to Recipients in the
manner described above. A minimum holding period may be established from
time to time under the Class B or Class C Plan by the Board. Initially, the
Board has set no minimum holding period. All payments under the Class B and
Class C Plans are subject to the limitations imposed by the Conduct Rules of
the National Association of Securities Dealers, Inc. on payments of asset-
based sales charges and service fees. The Distributor anticipates that it
will take a number of years for it to recoup (from the Fund's payments to the
Distributor under the Class B Plan and recoveries of the contingent deferred
sales charge collected on redeemed Class B shares) the Class B sales
commissions paid to authorized brokers or dealers.
Asset-based sales charge payments are designed to permit an investor to
purchase shares of the Fund without paying a front-end sales load and at the
same time permit the Distributor to compensate Recipients in connection with
the sale of Class B and Class C shares of the Fund. The Distributor retains
the asset-based sales charge on Class B shares. As to Class C shares, the
Distributor retains the asset-based sales charge during the first year shares
are outstanding, and pays the asset-based sales charge as an ongoing
commission to the dealer on Class C shares outstanding for a year or more.
Under the Class B and Class C Plans, the asset-based sales charge is paid to
compensate the Distributor for its services, described below, to the Fund.
Under the Class B and Class C Plans, the distribution assistance and
administrative support services rendered by the Distributor in connection
with the distribution of Class B and Class C shares may include: (i) paying
service fees and sales commissions to any broker, dealer, bank or other
person or entity that sells and services the Fund's Class B or Class C
shares, (ii) paying compensation to and expenses of personnel of the
Distributor who support distribution of Class B or Class C shares by
Recipients, (iii) obtaining financing or providing such financing from its
own resources, or from an affiliate, for interest and other borrowing costs
of the Distributor's unreimbursed expenses incurred in rendering distribution
assistance for Class B or Class C shares, and (iv) paying certain other
distribution expenses.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A, Class B and Class C Shares. The
availability of three classes of shares permits the individual investor to
choose the method of purchasing shares that is more beneficial to the
investor depending on the amount of the purchase, the length of time the
investor expects to hold shares and other relevant circumstances. Investors
should understand that the purpose and function of the deferred sales charge
and asset-based sales charge with respect to Class B and Class C shares are
the same as those of the initial sales charge with respect to Class A shares.
Any salesperson or other person entitled to receive compensation for selling
Fund shares may receive different compensation with respect to one class of
shares than the other. The Distributor normally will not accept any order
for $500,000 or $1 million or more of Class B or Class C shares,
respectively, on behalf of a single investor (not including dealer "street
name" or omnibus accounts) because generally it will be more advantageous for
that investor to purchase Class A shares of the Fund instead.
The three classes of shares each represent an interest in the same
portfolio investments of the Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class B
and Class C shares and the dividends payable on such shares will be reduced
by incremental expenses borne solely by those classes, including the asset-
based sales charge to which both classes of shares are subject.
The conversion of Class B shares to Class A shares after six years is
subject to the continuing availability of a private letter ruling from the
Internal Revenue Service, or an opinion of counsel or tax advisor, to the
effect that the conversion of Class B shares does not constitute a taxable
event for the holder under Federal income tax law. If such a revenue ruling
or opinion is no longer available, the automatic conversion feature may be
suspended, in which event no further conversions of Class B shares would
occur while such suspension remained in effect. Although Class B shares
could then be exchanged for Class A shares on the basis of relative net asset
value of the two classes, without the imposition of a sales charge or fee,
such exchange could constitute a taxable event for the holder, and absent
such exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A, Class B and Class C shares recognizes
two types of expenses. General expenses that do not pertain specifically to
a class are allocated pro rata to the shares of each class, based on the
percentage of the net assets of such class to the Fund's total assets, and
then equally to each outstanding share within a given class. Such general
expenses include (i) management fees, (ii) legal, bookkeeping and audit fees,
(iii) printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, (iv) fees to unaffiliated Trustees, (v) custodian expenses,
(vi) share issuance costs, (vii) organization and start-up costs, (viii)
interest, taxes and brokerage commissions, and (ix) non-recurring expenses,
such as litigation costs. Other expenses that are directly attributable to
a class are allocated equally to each outstanding share within that class.
Such expenses include (a) Distribution and Service Plan fees, (b) incremental
transfer and shareholder servicing agent fees and expenses, (c) registration
fees and (d) shareholder meeting expenses, to the extent that such expenses
pertain to a specific class rather than to the Fund as a whole.
Determination of Net Asset Value Per Share. The net asset values per share
of Class A, Class B and Class C shares of the Fund are determined as of the
close of business of The New York Stock Exchange (the "Exchange") on each day
the Exchange is open, by dividing the value of the Fund's net assets
attributable to a class by the total number of shares of that class that are
outstanding. The Exchange normally closes at 4:00 P.M., New York time, but
may close earlier on some days (for example, in case of weather emergencies
or on days falling before a holiday). The Exchange's most recent annual
holiday schedule states that it will close on New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. It may also close on other days. Trading in (debt)
securities and foreign securities at times when the New York Stock Exchange
is closed, including weekends and holidays, or after the close of the
Exchange on a regular business day. The Fund may invest a substantial
portion of its assets in foreign securities primarily listed on foreign
exchanges or foreign over-the-counter markets that may trade on Saturdays or
customary U.S. business holidays on which the Exchange is closed. Because
the Fund's net asset values will not be calculated on those days, the Fund's
net asset values per share may be significantly affected on such days when
shareholders cannot purchase or redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a U.S. securities exchange or on NASDAQ for which last
sale information is regularly reported are valued at the last reported sale
price on their primary exchange or NASDAQ that day (or, in the absence of
sales that day, at values based on the last sale prices of the preceding
trading day or closing "bid" prices that day); (ii) securities traded on a
foreign securities exchange are valued generally at the last sales price
available to the pricing service approved by the Fund's Board of Trustees or
to the Manager as reported by the principal exchange on which the security is
traded at its last trading session on or immediately preceding the valuation
date, or at the mean between "bid" and "ask" prices obtained from the
principal exchange or two active market makers in the security on the basis
of reasonable inquiry; (iii) long-term debt securities having a remaining
maturity in excess of 60 days are valued based on the mean between the "bid"
and "ask" prices determined by a portfolio pricing service approved by the
Fund's Board of Trustees or obtained by the Manager from two active market
makers in the security on the basis of reasonable inquiry; (iv) debt
instruments having a maturity of more than 397 days when issued, and non-
money market type instruments having a maturity of 397 days or less when
issued, which have a remaining maturity of 60 days or less are valued at the
mean between the "bid" and "ask" prices determined by a pricing service
approved by the Fund's Board of Trustees or obtained by the Manager from two
active market makers in the security on the basis of reasonable inquiry; (v)
money market debt securities that had a maturity of less than 397 days when
issued that have a remaining maturity of 60 days or less are valued at cost,
adjusted for amortization of premiums and accretion of discounts; and (vi)
securities (including restricted securities) not having readily-available
market quotations are valued at fair value determined under the Board's
procedures. If the Manager is unable to locate two market makers willing to
give quotes (see (ii), (iii) and (iv) above), the security may be priced at
the mean between the "bid" and "ask" prices provided by a single active
market maker (which in certain cases may be the "bid" price if no "ask" price
is available).
In the case of U.S. Government Securities and mortgage-backed
securities, where last sale information is not generally available, such
pricing procedures may include "matrix" comparisons to the prices for
comparable instruments on the basis of quality, yield, maturity and other
special factors involved. The Manager may use pricing services approved by
the Board of Trustees to price U.S. Government Securities for which last sale
information is not generally available. The Manager will monitor the accuracy
of such pricing services, which may include comparing prices used for
portfolio evaluation to actual sales prices of selected securities.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the New York Stock
Exchange. Events affecting the values of foreign securities traded in
securities markets that occur between the time their prices are determined
and the close of the New York Stock Exchange will not be reflected in the
Fund's calculation of net asset value unless the Board of Trustees or the
Manager, under procedures established by the Board of Trustees, determines
that the particular event is likely to effect a material change in the value
of such security. Foreign currency, including forward contracts, will be
valued at the closing price in the London foreign exchange market that day as
provided by a reliable bank, dealer or pricing service. The values of
securities denominated in foreign currency will be converted to U.S. dollars
at the closing price in the London foreign exchange market that day as
provided by a reliable bank, dealer or pricing service.
Puts, calls and Futures are valued at the last sales price on the
principal exchange on which they are traded or on NASDAQ, as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager. If there were no sales that day, value shall be the last sale price
on the preceding trading day if it is within the spread of the closing "bid"
and "ask" prices on the principal exchange or on NASDAQ on the valuation
date, or, if not, value shall be the closing "bid" price on the principal
exchange or on NASDAQ on the valuation date. If the put, call or future is
not traded on an exchange or on NASDAQ, it shall be valued at the mean
between "bid" and "ask" prices obtained by the Manager from two active market
makers (which in certain cases may be the "bid" price if no "ask" price is
available).
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy shares. Dividends will begin to accrue on shares
purchased by the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of the Exchange. The Exchange normally closes at 4:00 P.M. but may
close earlier on certain days. If the Federal Funds are received on a
business day after the close of the Exchange, the shares will be purchased
and dividends will begin to accrue on the next regular business day. The
proceeds of ACH transfers are normally received by the Fund 3 days after the
transfers are initiated. The Distributor and the Fund are not responsible
for any delays in purchasing shares resulting from delays in ACH
transmissions.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and reduction
of expenses realized by the Distributor, dealers and brokers making such
sales. No sales charge is imposed in certain circumstances described in the
Prospectus because the Distributor or dealer or broker incurs little or no
selling expenses. The term "immediate family" refers to one's spouse,
children, grandchildren, grandparents, parents, parents-in-law, aunts,
uncles, nieces and nephews, siblings, a sibling's spouse and a spouse's
siblings.
The Oppenheimer Funds. The Oppenheimer funds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor and
include the following:
Oppenheimer Municipal Bond Fund
Oppenheimer New York Municipal Fund
Oppenheimer California Municipal Fund
Oppenheimer Intermediate Municipal Fund
Oppenheimer Insured Municipal Fund
Oppenheimer Main Street California Municipal Fund
Oppenheimer Florida Municipal Fund
Oppenheimer Pennsylvania Municipal Fund
Oppenheimer New Jersey Municipal Fund
Oppenheimer Fund
Oppenheimer Developing Markets Fund
Oppenheimer International Growth Fund
Oppenheimer Discovery Fund
Oppenheimer Capital Appreciation Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Champion Income Fund
Oppenheimer Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer International Bond Fund
Oppenheimer Enterprise Fund
Oppenheimer Quest Growth & Income Value Fund
Oppenheimer Quest Officers Value Fund
Oppenheimer Quest Value Opportunity Value Fund
Oppenheimer Quest Small Cap Value Fund
Oppenheimer Quest Global Value Fund, Inc.
Rochester Fund Municipals*
Rochester Fund Series - The Bond Fund For Growth
Rochester Portfolio Series - Limited-Term New York Municipal Fund*
Oppenheimer International Growth Fund
Oppenheimer Disciplined Value Fund
Oppenheimer Disciplined Allocation Fund
Oppenheimer Lifespan Balanced Fund
Oppenheimer LifeSpan Income Fund
Oppenheimer LifeSpan Growth Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
_______________________
*Shares of the Fund are not presently exchangeable for shares of these funds.
There is an initial sales charge on the purchase of Class A shares of
each of the Oppenheimer funds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
Letters of Intent. A Letter of Intent (referred to as a "Letter") is
an investor's statement in writing to the Distributor of the intention to
purchase Class A shares or Class A and Class B shares of the Fund and of
other Oppenheimer funds during a 13-month period from the investor's first
purchase pursuant to the Letter (the "Letter of Intent period"), which may,
at the investor's request, include purchases made up to 90 days prior to the
date of the Letter. The Letter states the investor's intention to make the
aggregate amount of purchases of shares which, when added to the investor's
holdings of shares of those funds, will equal or exceed the amount specified
in the Letter. Purchases made by reinvestment of dividends or distributions
of capital gains and purchases made at net asset value without sales charge
do not count toward satisfying the amount of the Letter. A Letter enables an
investor to count the Class A and Class B shares purchased under the Letter
to obtain the reduced sales charge rate on purchases of Class A shares of the
Fund (and other Oppenheimer funds) that applies under the Right of
Accumulation to current purchases of Class A shares. Each purchase of Class
A shares under the Letter will be made at the public offering price
(including the sales charge) that applies to a single lump-sum purchase of
shares in the amount intended to be purchased under the Letter. Each
purchase under the Letter will be made at the public offering price
applicable to a single lump-sum purchase of shares in the intended purchase
amount, as described in the Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of Intent
period, when added to the value (at offering price) of the investor's
holdings of shares on the last day of that period, do not equal or exceed the
intended purchase amount, the investor agrees to pay the additional amount of
sales charge applicable to such purchases, as set forth in "Terms of Escrow,"
below (as those terms may be amended from time to time). The investor agrees
that shares equal in value to 5% of the intended purchase amount will be held
in escrow by the Transfer Agent subject to the Terms of Escrow. Also, the
investor agrees to be bound by the terms of the Prospectus, this Statement of
Additional Information and the Application used for such Letter of Intent,
and if such terms are amended, as they may be from time to time by the Fund,
that those amendments will apply automatically to existing Letters of Intent.
For purchases of shares of the Fund and other Oppenheimer funds by
OppenheimerFunds prototype 401(k) plans under a Letter of Intent, the
Transfer Agent will not hold shares in escrow. If the intended purchase
amount under the Letter entered into by an OppenheimerFunds prototype 401(k)
plan is not purchased by the plan by the end of the Letter of Intent period,
there will be no adjustment of commissions paid to the broker-dealer or
financial institution of record for accounts held in the name of that plan.
If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the commissions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual total purchases. If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set forth
in the applicable prospectus, the sales charges paid will be adjusted to the
lower rate, but only if and when the dealer returns to the Distributor the
excess of the amount of commissions allowed or paid to the dealer over the
amount of commissions that apply to the actual amount of purchases. The
excess commissions returned to the Distributor will be used to purchase
additional shares for the investor's account at the net asset value per share
in effect on the date of such purchase, promptly after the Distributor's
receipt thereof.
In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent
period will be deducted. It is the responsibility of the dealer of record
and/or the investor to advise the Distributor about the Letter in placing any
purchase orders for the investor during the Letter of Intent period. All of
such purchases must be made through the Distributor.
Terms of Escrow that Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value to 5% of the
intended purchase amount specified in the Letter shall be held in escrow by
the Transfer Agent. For example, if the intended purchase amount specified
under the Letter is $50,000, the escrow shall be shares valued in the amount
of $2,500 (computed at the public offering price adjusted for a $50,000
purchase). Any dividends and capital gains distributions on the escrowed
shares will be credited to the investor's account.
2. If the total minimum investment specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor an
amount equal to the difference between the dollar amount of sales charges
actually paid and the amount of sales charges which would have been paid if
the total amount purchased had been made at a single time. Such sales charge
adjustment will apply to any shares redeemed prior to the completion of the
Letter. If such difference in sales charges is not paid within twenty days
after a request from the Distributor or the dealer, the Distributor will,
within sixty days of the expiration of the Letter, redeem the number of
escrowed shares necessary to realize such difference in sales charges. Full
and fractional shares remaining after such redemption will be released from
escrow. If a request is received to redeem escrowed shares prior to the
payment of such additional sales charge, the sales charge will be withheld
from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption
any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the holding
of which may be counted toward completion of a Letter) include (a) Class A
shares sold with a front-end sales charge or subject to a Class A contingent
deferred sales charge, (b) Class B shares acquired subject to a contingent
deferred sales charge, and (c) Class A or Class B shares acquired by
reinvestment of dividends and distributions or acquired in exchange for
either (i) Class A shares of one of the other Oppenheimer funds that were
acquired subject to a Class A initial or contingent deferred sales charge or
(ii) Class B shares of one of the other Oppenheimer funds that were acquired
subject to a contingent deferred sales charge.
6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares," and the escrow
will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank account,
a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those accounts
for monthly automatic purchases of shares of up to four other Oppenheimer
funds.
There is a front-end sales charge on the purchase of certain Oppenheimer
funds, or a contingent deferred sales charge may apply to shares purchased by
Asset Builder payments. An application should be obtained from the
Distributor, completed and returned, and a prospectus of the selected fund(s)
should be obtained from the Distributor or your financial advisor before
initiating Asset Builder payments. The amount of the Asset Builder
investment may be changed or the automatic investments may be terminated at
any time by writing to the Transfer Agent. A reasonable period
(approximately 15 days) is required after the Transfer Agent's receipt of
such instructions to implement them. The Fund reserves the right to amend,
suspend, or discontinue offering such plans at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the Fund's
shares on the cancellation date is less than on the purchase date. That loss
is equal to the amount of the decline in the net asset value per share
multiplied by the number of shares in the purchase order. The investor is
responsible for that loss. If the investor fails to compensate the Fund for
the loss, the Distributor will do so. The Fund may reimburse the Distributor
for that amount by redeeming shares from any account registered in that
investor's name, or the Fund or the Distributor may seek other redress.
Retirement Plans. In describing certain types of employee benefit plans that
may purchase Class A shares without being subject to the Class A contingent
deferred sales charge, the term "employee benefit plan" means any plan or
arrangement, whether or not "qualified" under the Internal Revenue Code,
including, medical savings accounts, payroll deduction plans or similar plans
in which Class A shares are purchased by a fiduciary or other person for the
account of participants who are employees of a single employer or of
affiliated employers, if the Fund account is registered in the name of the
fiduciary or other person for the benefit of participants in the plan.
The term "group retirement plan" means any qualified or non-qualified
retirement plan (including 457 plans, SEPs, SARSEPs, 403(b) plans, and SIMPLE
plans) for employees of a corporation or a sole proprietorship, members and
employees of a partnership or association or other organized group of persons
(the members of which may include other groups), if the group has made
special arrangements with the Distributor and all members of the group
participating in the plan purchase Class A shares of the Fund through a
single investment dealer, broker or other financial institution designated by
the group.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund determines that it would be detrimental to the best
interests of the remaining shareholders of the Fund to make payment of a
redemption order wholly or partly in cash. In that case the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind" of
securities from the portfolio of the Fund, in lieu of cash, in conformity
with applicable rules of the Securities and Exchange Commission. The Fund
has elected to be governed by Rule 18f-1 under the Investment Company Act,
pursuant to which the Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the net assets of the Fund during any 90-day
period for any one shareholder. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage or other costs in selling the
securities for cash. The method of valuing securities used to make
redemptions in kind will be the same as the method the Fund uses to value it
portfolio securities described above under "Determination of Net Asset Value
Per Share" and that valuation will be made as of the time the redemption
price is determined.
Involuntary Redemptions. The Fund's Board of Trustees has the right to
cause the involuntary redemption of the shares held in any account if the
aggregate net asset value of those shares is less than $200 or such lesser
amount as the Board may fix. The Board of Trustees will not cause the
involuntary redemption of shares in an account if the aggregate net asset
value of the shares has fallen below the stated minimum solely as a result of
market fluctuations. Should the Board elect to exercise this right, it may
also fix, in accordance with the Investment Company Act, the requirements for
any notice to be given to the shareholders in question (not less than 30
days), or the Board may set requirements for the shareholder to increase the
investment, and set other terms and conditions so that the shares would not
be involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of Class A shares or Class B
shares of the Fund that you purchased by reinvesting dividends or
distributions or on which you paid a contingent deferred sales charge when
you redeemed them. The reinvestment privilege does not apply to Class C
shares. The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other Oppenheimer funds into which shares of
the Fund are exchangeable as described below, at the net asset value next
computed after the Transfer Agent receives the reinvestment order. The
shareholder must ask the Distributor for that privilege at the time of
reinvestment. Any capital gain that was realized when the shares were
redeemed is taxable, and reinvestment will not alter any capital gains tax
payable on that gain. If there has been a capital loss on the redemption,
some or all of the loss may not be tax deductible, depending on the timing
and amount of the reinvestment. Under the Internal Revenue Code, if the
redemption proceeds of Fund shares on which a sales charge was paid are
reinvested in shares of the Fund or another of the Oppenheimer funds within
90 days of payment of the sales charge, the shareholder's basis in the shares
of the Fund that were redeemed may not include the amount of the sales charge
paid. That would reduce the loss or increase the gain recognized from the
redemption. However, in that case the sales charge would be added to the
basis of the shares acquired by the reinvestment of the redemption proceeds.
The Fund may amend, suspend or cease offering this reinvestment privilege at
any time as to shares redeemed after the date of such amendment, suspension
or cessation.
Transfers of Shares. Shares are not subject to the payment of a contingent
deferred sales charge of any class at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute assignment,
gift or bequest, not involving, directly or indirectly, a public sale). The
transferred shares will remain subject to the contingent deferred sales
charge, calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the
transferring shareholder. If less than all shares held in an account are
transferred, and some but not all shares in the account would be subject to
a contingent deferred sales charge if redeemed at the time of transfer, the
proprieties described in the Prospectus under "How to Buy Shares" for the
imposition of Class B or Class C contingent deferred sales charge, will be
followed in determining the order in which shares are transferred.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, 401(k) plans or
pension or profit-sharing plans should be addressed to "Trustee,
OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its address
listed in "How to Sell Shares" in the Prospectus or on the back cover of this
Statement of Additional Information. The request must: (i) state the reason
for the distribution; (ii) state the owner's awareness of tax penalties if
the distribution is premature; and (iii) conform to the requirements of the
plan and the Fund's other redemption requirements. Participants (other than
self-employed persons maintaining a plan account in their own name) in
OppenheimerFunds-sponsored prototype pension, profit-sharing or 401(k) plans
may not directly redeem or exchange shares held for their account under those
plans. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed before the distribution may be
made. Distributions from retirement plans are subject to withholding
requirements under the Internal Revenue Code, and IRS Form W-4P (available
from the Transfer Agent) must be submitted to the Transfer Agent with the
distribution request, or the distribution may be delayed. Unless the
shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have tax
withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a distribution
satisfies the conditions of applicable tax laws and will not be responsible
for any tax penalties assessed in connection with a distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is the Fund's agent to repurchase its shares from authorized
dealers or brokers on behalf of their customers. The shareholder should
contact the broker or dealer to arrange this type of redemption. The
repurchase price per share will be the net asset value next computed after
the Distributor receives the order placed by such dealer or broker, except
that if the Distributor receives a repurchase order from a dealer or broker
after the close of the New York Stock Exchange on a regular business day, it
will be processed at that day's net asset value if the order was received by
the dealer or broker from its customers prior to the time the Exchange closed
(normally that is 4:00 P.M., but may be earlier on some days) and the order
was transmitted to and received by the Distributor prior to its close of
business that day (normally 5:00 P.M.). Ordinarily, for accounts redeemed by
a broker-dealer under this procedure, payment will be made within three
business days after the shares have been redeemed upon the Distributor's
receipt of the required redemption documents in proper form, with the
signature(s) of the registered owners guaranteed on the redemption document
as described in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(minimum $50) automatically on a monthly, quarterly, semi-annual or annual
basis under an Automatic Withdrawal Plan. Shares will be redeemed three
business days prior to the date requested by the shareholder for receipt of
the payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable to all
shareholders of record and sent to the address of record for the account (and
if the address has not been changed within the prior 30 days). Required
minimum distributions from OppenheimerFunds-sponsored retirement plans may
not be arranged on this basis. Payments are normally made by check, but
shareholders having AccountLink privileges (see "How To Buy Shares") may
arrange to have Automatic Withdrawal Plan payments transferred to the bank
account designated on the OppenheimerFunds New Account Application or
signature-guaranteed instructions. The Fund cannot guarantee receipt of a
payment on the date requested and reserves the right to amend, suspend or
discontinue offering such plans at any time without prior notice. Because of
the sales charge assessed on Class A share purchases, shareholders should not
make regular additional Class A share purchases while participating in an
Automatic Withdrawal Plan. Class B and Class C shareholders should not
establish withdrawal plans that would require the redemption of shares
purchased subject to a contingent deferred sales charge and held less than 6
years or 12 months, respectively, because of the imposition of the Class B or
Class C contingent deferred sales charge on such withdrawals (except where
the Class B or Class C contingent deferred sales charge is waived as
described in the Prospectus under "Waivers of Class B and Class C Sales
Charges").
By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions applicable to such plans, as stated below
and in the provisions of the OppenheimerFunds Application relating to such
Plans, as well as the Prospectus. These provisions may be amended from time
to time by the Fund and/or the Distributor. When adopted, such amendments
will automatically apply to existing Plans.
Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund for
shares (of the same class) of other Oppenheimer funds automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum amount that may be exchanged to each other fund account is
$25. Exchanges made under these plans are subject to the restrictions that
apply to exchanges as set forth in "How to Exchange Shares" in the Prospectus
and below in this Statement of Additional Information.
Automatic Withdrawal Plans. Fund shares will be redeemed as necessary
to meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first and thereafter shares acquired with reinvested dividends and
capital gains distributions will be redeemed next, followed by shares
acquired with a sales charge, to the extent necessary to make withdrawal
payments. Depending upon the amount withdrawn, the investor's principal may
be depleted. Payments made under withdrawal plans should not be considered
as a yield or income on your investment. It may not be desirable to purchase
additional Class A shares while making withdrawals because of sales charges
that apply to purchases when made. Accordingly, a shareholder normally may
not maintain an automatic withdrawal plan while simultaneously making regular
purchases of Class A shares.
The Transfer Agent will administer the investor's Automatic Withdrawal
Plan (the "Plan") as agent for the investor (the "Planholder") who executed
the Plan authorization and application submitted to the Transfer Agent. The
Transfer Agent and the Fund shall incur no liability to the Planholder for
any action taken or omitted by the Transfer Agent in good faith to administer
the Plan. Certificates will not be issued for shares of the Fund purchased
for and held under the Plan, but the Transfer Agent will credit all such
shares to the account of the Planholder on the records of the Fund. Any
share certificates held by a Planholder may be surrendered unendorsed to the
Transfer Agent with the Plan application so that the shares represented by
the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the
account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made at
the net asset value per share determined on the redemption date. Checks or
AccountLink payments of the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment (the receipt of payment on the date selected cannot be guaranteed),
according to the choice specified in writing by the Planholder.
The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time in mailing such notification
for the requested change to be put in effect. The Planholder may, at any
time, instruct the Transfer Agent by written notice (in proper form in
accordance with the requirements of the then-current Prospectus of the Fund)
to redeem all, or any part of, the shares held under the Plan. In that case,
the Transfer Agent will redeem the number of shares requested at the net
asset value per share in effect in accordance with the Fund's usual
redemption procedures and will mail a check for the proceeds to the
Planholder.
The Plan may be terminated at any time by the Planholder by writing to
the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund. The
Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder. Upon
termination of a Plan by the Transfer Agent or the Fund, shares that have not
been redeemed from the account will be held in uncertificated form in the
name of the Planholder, and the account will continue as a dividend-
reinvestment, uncertificated account unless and until proper instructions are
received from the Planholder or his or her executor or guardian, or other
authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued without
causing the withdrawal checks to stop because of exhaustion of uncertificated
shares needed to continue payments. However, should such uncertificated
shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to
act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of Oppenheimer
funds having more than one class of shares may be exchanged only for shares
of the same class of other Oppenheimer funds. Shares of the Oppenheimer
funds that have a single class without a class designation are deemed "Class
A" shares for this purpose. All of the Oppenheimer funds offer Class A, B
and C shares except Oppenheimer Money Market Fund, Inc., Centennial Tax
Exempt Trust, Centennial Government Trust, Centennial New York Tax Exempt
Trust, Centennial California Tax Exempt Trust, Centennial America Fund, L.P.
and Daily Cash Accumulation Fund Inc., which only offer Class A shares and
Oppenheimer Main Street California Tax Exempt Fund which only offers Class A
and Class B shares (Class B and Class C shares of Oppenheimer Cash Reserves
are generally available only by exchange from the same class of shares of
other Oppenheimer funds or through OppenheimerFunds sponsored 401 (k) plans).
A list of funds showing which funds offer which classes can be obtained by
calling the Distributor at 1-800-525-7048.
Class A shares of Oppenheimer funds may be exchanged at net asset value
for shares of any Money Market Fund. Shares of any Money Market Fund
purchased without a sales charge may be exchanged for shares of Oppenheimer
funds offered with a sales charge upon payment of the sales charge (or, if
applicable, may be used to purchase shares of Oppenheimer funds subject to a
contingent deferred sales charge).
Shares of this Fund acquired by reinvestment of dividends or
distributions from any other of the Oppenheimer funds except Oppenheimer Cash
Reserves, or from any unit investment trust for which reinvestment
arrangements have been made with the Distributor may be exchanged at net
asset value for Class A shares of any of the Oppenheimer funds. No
contingent deferred sales charge is imposed on exchanges of shares purchased
subject to a contingent deferred sales charge. However, shares of
Oppenheimer Money Market Fund, Inc. purchased with the redemption proceeds of
shares of other mutual funds (other than funds managed by the Manager or its
subsidiaries) redeemed within the 12 months prior to that purchase may
subsequently be exchanged for shares of other Oppenheimer funds without being
subject to an initial or contingent deferred sales charge, whichever is
applicable. To qualify for that privilege, the investor or the investor's
dealer must notify the Distributor of eligibility for this privilege at the
time the shares of Oppenheimer Money Market Fund, Inc. are purchased, and, if
requested, must supply proof of entitlement to this privilege. No contingent
deferred sales charge is imposed on exchanges of shares of either class
purchased subject to a contingent deferred sales charge. However, when Class
A shares acquired by exchange of Class A shares of other Oppenheimer funds
purchased subject to a Class A contingent deferred sales charge are redeemed
within 18 months of the end of the calendar month of the initial purchase of
the exchanged Class A shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares (see "Class A Contingent Deferred Sales
Charge" in the Prospectus). The Class B contingent deferred sales charge is
imposed on Class B shares acquired by exchange if they are redeemed within 6
years of the initial purchase of the exchanged Class B shares. The Class C
contingent deferred sales charge is imposed on Class C shares acquired by
exchange if they are redeemed within 12 months of the initial purchase of the
exchanged Class C shares.
When Class B or Class C shares are redeemed to effect an exchange, the
priorities described in "How To Buy Shares" in the Prospectus for the
imposition of the Class B or Class C contingent deferred sales charge will be
followed in determining the order in which the shares are exchanged.
Shareholders should take into account the effect of any exchange on the
applicability and rate of any contingent deferred sales charge that might be
imposed in the subsequent redemption of remaining shares. Shareholders
should take into account the effect of any exchange on the applicability and
rate of any contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares. Shareholders owning shares of
more than one class must specify whether they intend to exchange Class A,
Class B or Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of more than one account. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may be
less than the number requested if the exchange or the number requested would
include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information or shares covered by a share certificate
that is not tendered with the request. In those cases, only the shares
available for exchange without restriction will be exchanged.
When exchanging shares by telephone, the shareholder must either have an
existing account in, or obtain, open an account in, and acknowledge receipt
of a prospectus of, the fund to which the exchange is to be made. For full
or partial exchanges of an account made by telephone, any special account
features such as Asset Builder Plans, Automatic Withdrawal Plans and
retirement plan contributions will be switched to the new account unless the
Transfer Agent is instructed otherwise. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the "Redemption
Date"). Normally, shares of the fund to be acquired are purchased on the
Redemption Date, but such purchases may be delayed by either fund up to five
business days if it determines that it would be disadvantaged by an immediate
transfer of the redemption proceeds. The Fund reserves the right, in its
discretion, to refuse any exchange request that may disadvantage it (for
example, if the receipt of multiple exchange requests from a dealer might
require the disposition of portfolio securities at a time or at a price that
might be disadvantageous to the Fund).
The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of one
fund and a purchase of shares of another. "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of redemption proceeds
in such cases. The Fund, the Distributor, and the Transfer Agent are unable
to provide investment, tax or legal advice to a shareholder in connection
with an exchange request or any other investment transaction.
Dividends, Capital Gains and Taxes
Dividends and Distributions. Dividends will be payable on shares held of
record at the time of the previous determination of net asset value, or as
otherwise described in "How to Buy Shares." Daily dividends on newly
purchased shares will not be declared or paid until such time as Federal
Funds (funds credited to a member bank's account at the Federal Reserve Bank)
are available from the purchase payment for such shares. Normally, purchase
checks received from investors are converted to Federal Funds on the next
business day. Shares purchased through dealers or brokers normally are paid
for by the third business day following the placement of the purchase order.
Shares redeemed through the regular redemption procedure will be paid
dividends through and including the day on which the redemption request is
received by the Transfer Agent in proper form. Dividends will be declared on
shares repurchased by a dealer or broker for four business days following the
trade date (i.e., to and including the day prior to settlement of the
repurchase). If all shares in an account are redeemed, all dividends accrued
on shares of the same class in the account will be paid together with the
redemption proceeds.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money
Market Fund, Inc., as promptly as possible after the return of such checks to
the Transfer Agent, to enable the investor to earn a return on otherwise idle
funds.
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains and
Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction for
corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by the
Fund that may qualify for the deduction is limited to the aggregate amount of
qualifying dividends that the Fund derives from its portfolio investments
that the Fund has held for a minimum period, usually 46 days. A corporate
shareholder will not be eligible for the deduction on dividends paid on
shares held for 45 days or less. To the extent the Fund's dividends are
derived from its gross income from option premiums, interest income or short-
term gains from the sale of securities or dividends from foreign
corporations, its dividends will not qualify for the deduction. It is
expected that for the most part the Fund's dividends will not qualify,
because of the investments held by the Fund in its portfolio.
The amount of a class's distributions may vary from time to time
depending on market conditions, the composition of the Fund's portfolio, and
expenses borne by the Fund or borne separately by a class, as described in
"Alternative Sales Arrangements -- Class A, Class B and Class C," above.
Dividends are calculated in the same manner, at the same time and on the same
day for shares of each class. However, dividends on Class B and Class C
shares are expected to be lower as a result of the asset-based sales charge
on Class B and Class C shares, and Class B and Class C dividends will also
differ in amount as a consequence of any difference in net asset value
between Class A, Class B and Class C shares.
Under the Internal Revenue Code, by December 31 each year, the Fund must
distribute 98% of its taxable investment income earned from January 1 through
December 31 of that year and 98% of its capital gains realized in the period
from November 1 of the prior year through October 31 of the current year, or
else the Fund must pay an excise tax on the amounts not distributed. While
it is presently anticipated that the Fund will meet those requirements, the
Fund's Board of Trustees and the Manager might determine in a particular year
that it would be in the best interest of shareholders for the Fund not to
make such distributions at the required levels and to pay the excise tax on
the undistributed amounts. That would reduce the amount of income or capital
gains available for distribution to shareholders.
If the Fund has more than 50% of its total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take a
credit (or, at their option, a deduction) for foreign taxes paid by the Fund.
Under Section 853, shareholders would be entitled to treat the foreign taxes
withheld from interest and dividends paid to the Fund from its foreign
investments as a credit on their federal income taxes. As an alternative,
shareholders could, if to their advantage, treat the foreign tax withheld as
a deduction from gross income in computing taxable income rather than as a
tax credit. In substance, the Fund's election would enable shareholders to
benefit from the same foreign tax credit or deduction that would be received
if they had been the record owners of the Fund's foreign securities and had
paid foreign taxes on the income received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on
amounts paid by it as dividends and distributions. The Fund qualified as a
regulated investment company during its last fiscal year, and intends to
qualify in current and future years, but reserves the right not to do so.
The Internal Revenue Code contains a number of complex tests relating to such
qualification to determine whether the Fund will qualify, and the Fund might
not meet those tests in a particular year. For example, the Fund derives 30%
or more of its gross income from the sale of securities held less than three
months, it may fail to qualify (see "Investment Objective and Policies-Tax
Aspects of Hedging Instruments" in the Statement of Additional Information).
If it did not so qualify, the Fund would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments of dividends
and distributions made to shareholders.
The Fund had an unused capital loss carryover of approximately
$29,567,000 at September 30, 1996. It will expire between 1998 and 2004.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds listed in "Reduced Sales
Charges," above, at net asset value without sales charge. To elect this
option, a shareholder must notify the Transfer Agent in writing and either
have an existing account in the fund selected for reinvestment or must obtain
a prospectus for that fund and an application from the Distributor to
establish an account. The investment will be made at the net asset value per
share in effect at the close of business on the payable date of the dividend
or distribution. Dividends and/or distributions from shares of other
Oppenheimer funds may be invested in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's assets.
The Custodian's responsibilities include safeguarding and controlling the
Fund's portfolio securities collecting income on the portfolio securities and
handling the delivery of such securities to and from the Fund. The Manager
has represented to the Fund that the banking relationships between the
Manager and the Custodian have been and will continue to be unrelated to and
unaffected by the relationship between the Fund and the Custodian. It will
be the practice of the Fund to deal with the Custodian in a manner
uninfluenced by any banking relationship the Custodian may have with the
Manager and its affiliates. The Fund's cash balance in excess of $100,000
are not protected by Federal Deposit Insurance. Such uninsured balances may
at times be substantial.
Independent Auditors. The independent auditors of the Fund audit the Fund's
financial statements and perform other related audit services. They also act
as auditors for certain other funds advised by the Manager and its
affiliates.
<PAGE>
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INDEPENDENT AUDITORS' REPORT
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The Board of Trustees and Shareholders of Oppenheimer
Global Emerging Growth Fund:
We have audited the accompanying statements of
investments and assets and liabilities of Oppenheimer
Global Emerging Growth Fund as of September 30, 1996,
and the related statement of operations for the year
then ended, the statements of changes in net assets for
each of the years in the two year period then ended and
the financial highlights for each of the years in the
five year period then ended. These financial statements
and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an
opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with
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
September 30, 1996 by correspondence with the custodian
and brokers; and where confirmations were not received
from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and
financial highlights referred to above present fairly,
in all material respects, the financial position of
Oppenheimer Global Emerging Growth Fund as of September
30, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of
the years in the two year period then ended, and the
financial highlights for each of the years in the five
year period then ended, in conformity with generally
accepted accounting principles.
KPMG PEAT MARWICK LLP
/s/ KPMG Peat Marwick LLP
-----------------------
Denver, Colorado
October 21, 1996
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- ------------------
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
COMMON STOCKS--95.0%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
BASIC MATERIALS--3.7%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
CHEMICALS--1.1% Saes Getters SpA 120,000
$ 1,785,749
- ----------------------------------------------------------------------------------------------------------------
- ------------------
GOLD--1.0% Cambior, Inc. 75,000
1,029,519
- -------------------------------------------------------------------------------------------------------
Dayton Mining Corp.(1) 100,000
682,676
----------
1,712,195
- ----------------------------------------------------------------------------------------------------------------
- ------------------
METALS--1.6% Boehler-Uddeholm AG 10,000
799,617
- -------------------------------------------------------------------------------------------------------
Cia de Minas Buenaventura SA, Sponsored ADR(1) 100,000
1,925,000
----------
2,724,617
- ----------------------------------------------------------------------------------------------------------------
- ------------------
CONSUMER CYCLICALS--22.8%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
AUTOS & HOUSING--5.7% Alrenco, Inc.(1) 30,000
630,000
- -------------------------------------------------------------------------------------------------------
Belmont Homes, Inc.(1) 70,000
1,767,500
- -------------------------------------------------------------------------------------------------------
Ciadea SA 219,997
1,045,120
- -------------------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA 257,201
751,123
- -------------------------------------------------------------------------------------------------------
Orbital Engine Corp. Ltd.(1) 1,100,000
983,504
- -------------------------------------------------------------------------------------------------------
Porsche AG, Preference(1) 5,500
3,760,986
- -------------------------------------------------------------------------------------------------------
Thai Stanley Electric Co. Ltd. 150,000
708,174
----------
9,646,407
- ----------------------------------------------------------------------------------------------------------------
- ------------------
LEISURE &
ENTERTAINMENT--6.9% Applebee's International, Inc. 30,000
795,000
- -------------------------------------------------------------------------------------------------------
Casa Ole Restaurants, Inc.(1) 61,700
794,387
- -------------------------------------------------------------------------------------------------------
China Hong Kong Photo Products Holdings Ltd. 1,500,000
547,975
- -------------------------------------------------------------------------------------------------------
Cinar Films, Inc., Cl. B(1) 60,000
1,563,750
- -------------------------------------------------------------------------------------------------------
CKE Restaurants, Inc. 40,000
1,230,000
- -------------------------------------------------------------------------------------------------------
Coach USA, Inc.(1) 30,000
802,500
- -------------------------------------------------------------------------------------------------------
Galoob (Lewis) Toys, Inc.(1) 30,000
877,500
- -------------------------------------------------------------------------------------------------------
Longhorn Steaks, Inc.(1) 40,000
610,000
- -------------------------------------------------------------------------------------------------------
Lusomundo SGPS SA(1) 200,000
2,043,776
- -------------------------------------------------------------------------------------------------------
Metromedia International Group, Inc.(1) 65,000
690,625
- -------------------------------------------------------------------------------------------------------
Quality Dining, Inc.(1) 30,000
855,000
- -------------------------------------------------------------------------------------------------------
Square Co. Ltd. 15,000
861,953
----------
11,672,466
- ----------------------------------------------------------------------------------------------------------------
- ------------------
MEDIA--2.0% Capital Radio PLC 85,000
794,676
- -------------------------------------------------------------------------------------------------------
Dorling Kindersley Holdings PLC 90,000
686,645
- -------------------------------------------------------------------------------------------------------
NRJ SA 6,500
774,522
- -------------------------------------------------------------------------------------------------------
Wireless One, Inc.(1) 70,000
1,032,500
----------
3,288,343
- ----------------------------------------------------------------------------------------------------------------
- ------------------
RETAIL: GENERAL--3.4% Galeries Lafayette(1) 4,201
1,217,669
- -------------------------------------------------------------------------------------------------------
Lojas Americanas SA, Preference 19,000,000
321,925
- -------------------------------------------------------------------------------------------------------
Nautica Enterprises, Inc.(1) 20,000
645,000
</TABLE>
6 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
RETAIL: GENERAL PT Matahari Putra Prima 400,000
$ 435,064
(CONTINUED)
- -------------------------------------------------------------------------------------------------------
PT Ramayana Lestari Sentosa(1) 835,000
1,402,757
- -------------------------------------------------------------------------------------------------------
Vans, Inc.(1) 40,000
765,000
- -------------------------------------------------------------------------------------------------------
Wolverine World Wide, Inc. 36,000
999,000
----------
5,786,415
- ----------------------------------------------------------------------------------------------------------------
- ------------------
RETAIL: SPECIALTY--4.8% Giordano International Ltd. 1,000,000
879,346
- -------------------------------------------------------------------------------------------------------
Maruko Co. Ltd. 12,100
793,086
- -------------------------------------------------------------------------------------------------------
Moebel Walther AG, Preference 40,000
2,438,920
- -------------------------------------------------------------------------------------------------------
Moovies, Inc.(1) 60,000
330,000
- -------------------------------------------------------------------------------------------------------
Party City Corp.(1) 50,000
937,500
- -------------------------------------------------------------------------------------------------------
Ryohin Keikaku Co. Ltd. 13,000
1,101,863
- -------------------------------------------------------------------------------------------------------
Wolford AG 6,000
1,532,133
----------
8,012,848
- ----------------------------------------------------------------------------------------------------------------
- ------------------
CONSUMER NON-CYCLICALS--23.4%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
BEVERAGES--2.7% Hellenic Bottling Co., SA 40,000
1,361,165
- -------------------------------------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 20,000
822,500
- -------------------------------------------------------------------------------------------------------
Remy Cointreau 65,469
1,654,087
- -------------------------------------------------------------------------------------------------------
Serm Suk Public Co. Ltd. 25,000
767,188
----------
4,604,940
- ----------------------------------------------------------------------------------------------------------------
- ------------------
EDUCATION--0.8% National Education Corp.(1) 70,000
1,338,750
- ----------------------------------------------------------------------------------------------------------------
- ------------------
FOOD--4.9% Disco SA, Sponsored ADR(1) 51,800
1,016,575
- -------------------------------------------------------------------------------------------------------
Hokuto Corp. 19,000
812,031
- -------------------------------------------------------------------------------------------------------
Lindt & Spruengli AG, Participation Certificates 1,000
1,659,288
- -------------------------------------------------------------------------------------------------------
Molinos Rio de la Plata SA, Cl. B 437,499
1,435,180
- -------------------------------------------------------------------------------------------------------
Perdigao SA, Comercio e Industria, Preference 240,000,000
378,436
- -------------------------------------------------------------------------------------------------------
Performance Food Group Co.(1) 42,000
693,000
- -------------------------------------------------------------------------------------------------------
Raision Tehtaat Oy 32,000
1,926,637
- -------------------------------------------------------------------------------------------------------
Universal Robina Corp. 667,000
336,869
----------
8,258,016
- ----------------------------------------------------------------------------------------------------------------
- ------------------
HEALTHCARE/DRUGS--6.9% Alpha-Beta Technology, Inc.(1) 40,000
430,000
- -------------------------------------------------------------------------------------------------------
Biocompatibles International PLC(1) 297,500
2,502,298
- -------------------------------------------------------------------------------------------------------
Dura Pharmaceuticals, Inc.(1) 40,000
1,475,000
- -------------------------------------------------------------------------------------------------------
Marseille-Kliniken AG 35,000
1,262,076
- -------------------------------------------------------------------------------------------------------
Norland Medical Systems, Inc.(1) 50,000
1,062,500
- -------------------------------------------------------------------------------------------------------
Rohto Pharmaceutical Co. 60,000
635,690
- -------------------------------------------------------------------------------------------------------
SangStat Medical Corp.(1) 50,000
1,275,000
- -------------------------------------------------------------------------------------------------------
Teikoku Hormone Manufacturing Co. Ltd. 50,000
673,401
- -------------------------------------------------------------------------------------------------------
Tiger Medicals Ltd. 493,000
808,743
- -------------------------------------------------------------------------------------------------------
Torii Pharmaceutical Co. Ltd. 70,000
1,489,562
----------
11,614,270
</TABLE>
7 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
HEALTHCARE/SUPPLIES & Althin Medical AB, B Shares 60,000
$ 1,266,835
SERVICES--7.6%
- -------------------------------------------------------------------------------------------------------
AmeriSource Health Corp., Cl. A(1) 30,000
1,335,000
- -------------------------------------------------------------------------------------------------------
Capstone Pharmacy Services, Inc.(1) 60,000
742,500
- -------------------------------------------------------------------------------------------------------
Egis RT(1) 20,000
1,408,132
- -------------------------------------------------------------------------------------------------------
Elekta AB, B Shares 15,000
506,734
- -------------------------------------------------------------------------------------------------------
Gulf South Medical Supply, Inc.(1) 30,000
772,500
- -------------------------------------------------------------------------------------------------------
Nichii Gakkan Co. 27,000
1,367,273
- -------------------------------------------------------------------------------------------------------
OccuSystems, Inc.(1) 30,000
900,000
- -------------------------------------------------------------------------------------------------------
Omnicare, Inc. 26,000
793,000
- -------------------------------------------------------------------------------------------------------
Pediatrix Medical Group, Inc.(1) 13,500
676,687
- -------------------------------------------------------------------------------------------------------
PhyCor, Inc.(1) 25,000
951,562
- -------------------------------------------------------------------------------------------------------
Rural/Metro Corp.(1) 15,000
547,500
- -------------------------------------------------------------------------------------------------------
Serologicals Corp.(1) 20,000
695,000
- -------------------------------------------------------------------------------------------------------
Total Renal Care Holdings, Inc.(1) 20,000
795,000
----------
12,757,723
- ----------------------------------------------------------------------------------------------------------------
- ------------------
HOUSEHOLD GOODS--0.5% Srithai Superware Co. Ltd. 175,000
757,353
- ----------------------------------------------------------------------------------------------------------------
- ------------------
ENERGY--4.7%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
ENERGY SERVICES & Cie Generale de Geophysique SA(1) 37,500
2,492,128
PRODUCERS--3.5%
- -------------------------------------------------------------------------------------------------------
Newfield Exploration Co.(1) 20,000
900,000
- -------------------------------------------------------------------------------------------------------
Smedvig AS 100,000
2,061,052
- -------------------------------------------------------------------------------------------------------
Smedvig AS, Series B(1) 25,000
463,352
----------
5,916,532
- ----------------------------------------------------------------------------------------------------------------
- ------------------
OIL-INTEGRATED--1.2% Expro International Group PLC 210,100
1,231,763
- -------------------------------------------------------------------------------------------------------
Forasol-Foramer NV(1) 60,000
727,500
----------
1,959,263
- ----------------------------------------------------------------------------------------------------------------
- ------------------
FINANCIAL--7.8%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
BANKS--0.8% Industrial Credit & Investment Corp. of India Ltd. (The), GDR(1)(2) 92,900
1,033,512
- -------------------------------------------------------------------------------------------------------
PT Lippo Bank 209,500
324,876
----------
1,358,388
- ----------------------------------------------------------------------------------------------------------------
- ------------------
DIVERSIFIED
FINANCIAL--3.2% Credicorp Ltd. 47,000
893,000
- -------------------------------------------------------------------------------------------------------
Egypt Investment Co.(1) 96,500
1,145,937
- -------------------------------------------------------------------------------------------------------
Green Tree Financial Corp. 30,000
1,177,500
- -------------------------------------------------------------------------------------------------------
Manhattan Card Co. Ltd. 2,500,000
1,236,581
- -------------------------------------------------------------------------------------------------------
Wing Hang Bank Ltd. 250,000
937,538
----------
5,390,556
- ----------------------------------------------------------------------------------------------------------------
- ------------------
INSURANCE--3.8% CapMAC Holdings, Inc. 30,000
997,500
- -------------------------------------------------------------------------------------------------------
Ockham Holdings PLC 1,200,000
1,791,655
- -------------------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 1,250,000
3,580,336
----------
6,369,491
</TABLE>
8 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
INDUSTRIAL--20.2%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
ELECTRICAL EQUIPMENT--0.8% Crompton Greaves Ltd., GDR(1) 70,000
$ 346,500
- -------------------------------------------------------------------------------------------------------
LEM Holdings SA 4,300
998,205
----------
1,344,705
- ----------------------------------------------------------------------------------------------------------------
- ------------------
INDUSTRIAL MATERIALS--0.5% HI Cement Corp.(1)(2) 2,592,000
869,434
- ----------------------------------------------------------------------------------------------------------------
- ------------------
INDUSTRIAL SERVICES--11.2% Affiliated Computer Services, Inc., Cl. A(1) 17,000
998,750
- -------------------------------------------------------------------------------------------------------
Boskalis Westminster 152,000
2,967,240
- -------------------------------------------------------------------------------------------------------
Cordiant PLC(1) 1,010,000
1,768,517
- -------------------------------------------------------------------------------------------------------
Daisytek International Corp.(1) 25,000
1,081,250
- -------------------------------------------------------------------------------------------------------
DecisionOne Holdings Corp.(1) 35,000
490,000
- -------------------------------------------------------------------------------------------------------
Fugro NV 100,000
1,537,158
- -------------------------------------------------------------------------------------------------------
KCI Konecranes International Corp.(1) 80,000
2,224,390
- -------------------------------------------------------------------------------------------------------
May & Speh, Inc.(1) 50,000
1,000,000
- -------------------------------------------------------------------------------------------------------
MRC Allied Industries, Inc.(1) 8,000,000
975,796
- -------------------------------------------------------------------------------------------------------
PT Citra Marga Nusaphala Persada 2,331,000
1,581,445
- -------------------------------------------------------------------------------------------------------
Rent-Way, Inc.(1) 10,000
126,250
- -------------------------------------------------------------------------------------------------------
Serco Group PLC 100,000
953,673
- -------------------------------------------------------------------------------------------------------
Transaction Systems Architects, Inc., Cl. A(1) 20,000
845,000
- -------------------------------------------------------------------------------------------------------
VBH Vereinigter Baubeschlag Handel AG 70,000
1,733,863
- -------------------------------------------------------------------------------------------------------
Walsh International, Inc.(1) 60,000
600,000
----------
18,883,332
- ----------------------------------------------------------------------------------------------------------------
- ------------------
MANUFACTURING--5.8% Bucher Holding AG, B Shares 2,000
1,499,741
- -------------------------------------------------------------------------------------------------------
First Philippine Holdings Corp., B Shares 700,000
1,520,869
- -------------------------------------------------------------------------------------------------------
Legris Industries SA 20,000
759,506
- -------------------------------------------------------------------------------------------------------
Powerscreen International PLC 200,000
1,718,175
- -------------------------------------------------------------------------------------------------------
Toolex Alpha NV(1) 65,000
1,462,500
- -------------------------------------------------------------------------------------------------------
U.S. Filter Corp.(1) 60,000
2,047,500
- -------------------------------------------------------------------------------------------------------
Wai Kee Holdings Ltd. 3,500,000
792,058
----------
9,800,349
- ----------------------------------------------------------------------------------------------------------------
- ------------------
TRANSPORTATION--1.9% Guangshen Railway Co. Ltd., Sponsored ADR(1) 39,000
741,000
- -------------------------------------------------------------------------------------------------------
Koninklijke Van Ommeren NV 30,000
1,174,786
- -------------------------------------------------------------------------------------------------------
Lisnave-Estaleiros Navais de Lisboa SA(1) 467,400
1,205,377
----------
3,121,163
- ----------------------------------------------------------------------------------------------------------------
- ------------------
TECHNOLOGY--12.4%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
COMPUTER HARDWARE--1.8% PT Multipolar Corp.(3) 6,349,200
3,083,413
- ----------------------------------------------------------------------------------------------------------------
- ------------------
COMPUTER SOFTWARE--6.1% Business Objects SA, Sponsored ADR(1) 25,000
481,250
- -------------------------------------------------------------------------------------------------------
Engineering Animation, Inc.(1) 41,800
1,003,200
- -------------------------------------------------------------------------------------------------------
Global DirectMail Corp.(1) 20,000
955,000
- -------------------------------------------------------------------------------------------------------
Ines Corp. 40,000
721,885
</TABLE>
9 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
COMPUTER SOFTWARE Integrated Measurement Systems, Inc.(1) 40,000
$ 660,000
(CONTINUED)
- -------------------------------------------------------------------------------------------------------
McAfee Associates, Inc.(1) 15,000
1,035,000
- -------------------------------------------------------------------------------------------------------
Misys PLC 201,833
2,751,556
- -------------------------------------------------------------------------------------------------------
National Instruments Corp.(1) 30,000
795,000
- -------------------------------------------------------------------------------------------------------
PLATINUM Technology, Inc.(1) 60,000
757,500
- -------------------------------------------------------------------------------------------------------
Technology Modeling Associates, Inc.(1) 32,500
422,500
- -------------------------------------------------------------------------------------------------------
Versant Object Technology Corp.(1) 30,000
712,500
------------
10,295,391
- ----------------------------------------------------------------------------------------------------------------
- ------------------
ELECTRONICS--2.3% Gold Peak Industries (Holdings) Ltd. 1,600,000
987,971
- -------------------------------------------------------------------------------------------------------
Medasys Digital Systems(1) 50,000
547,348
- -------------------------------------------------------------------------------------------------------
Pittway Corp., Cl. A 20,000
892,500
- -------------------------------------------------------------------------------------------------------
SDL, Inc.(1) 30,000
615,000
- -------------------------------------------------------------------------------------------------------
Shinmei Electric Co. 35,000
741,638
------------
3,784,457
- ----------------------------------------------------------------------------------------------------------------
- ------------------
TELECOMMUNICATIONS- Amper SA(1) 120,000
1,495,269
TECHNOLOGY--2.2%
- -------------------------------------------------------------------------------------------------------
LCI International, Inc.(1) 36,000
1,134,000
- -------------------------------------------------------------------------------------------------------
Tel-Save Holdings, Inc.(1) 20,000
575,000
- -------------------------------------------------------------------------------------------------------
Teltrend, Inc.(1) 10,000
425,000
------------
3,629,269
------------
Total Common Stocks (Cost $142,869,934)
159,765,835
- ----------------------------------------------------------------------------------------------------------------
- ------------------
- ----------------------------------------------------------------------------------------------------------------
- ------------------
PREFERRED STOCKS--1.5%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Marschollek, Lautenschlaeger und Partner-VO,
Non-vtg. Preferred Stock (Cost $1,127,145) 20,000
2,517,595
UNITS
- ----------------------------------------------------------------------------------------------------------------
- ------------------
- ----------------------------------------------------------------------------------------------------------------
- ------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Biocompatibles International PLC Wts., Exp. 2/97 42,500
41,196
- -------------------------------------------------------------------------------------------------------
PerSeptive Biosystems, Inc., Cl. A Wts., Exp. 12/97 40,110
--
- -------------------------------------------------------------------------------------------------------
PT Matahari Putra Prima Rts., Exp. 11/96 400,000
262,761
------------
Total Rights, Warrants and Certificates (Cost $283,984)
303,957
FACE
AMOUNT
- ----------------------------------------------------------------------------------------------------------------
- ------------------
- ----------------------------------------------------------------------------------------------------------------
- ------------------
REPURCHASE AGREEMENT--3.4%
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Repurchase agreement with Goldman, Sachs & Co., 5.62%,
dated 9/30/96, to be repurchased at $5,700,890 on 10/1/96,
collateralized by U.S. Treasury Bonds, 8.875%--11.125%,
8/15/03--8/15/17, with a value of $5,820,580 (Cost $5,700,000) $5,700,000
5,700,000
- ----------------------------------------------------------------------------------------------------------------
- ------------------
TOTAL INVESTMENTS, AT VALUE (COST $149,981,063) 100.0%
168,287,387
- ----------------------------------------------------------------------------------------------------------------
- ------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.0)
(81,030)
----------
------------
NET ASSETS 100.0%
$168,206,357
----------
------------
----------
------------
</TABLE>
10 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Distribution of investments by country of issue, as a percentage of total investments
at value, is as
follows:
COUNTRY MARKET VALUE
PERCENT
- ----------------------------------------------------------------------------------------------------------------
- ------------------
<S> <C>
<C>
United States $55,336,400
32.9%
- -------------------------------------------------------------------------------------------------------
Great Britain 14,240,155
8.5
- -------------------------------------------------------------------------------------------------------
Germany 11,713,440
7.0
- -------------------------------------------------------------------------------------------------------
Japan 9,198,383
5.5
- -------------------------------------------------------------------------------------------------------
France 8,654,010
5.1
- -------------------------------------------------------------------------------------------------------
The Netherlands 7,141,684
4.2
- -------------------------------------------------------------------------------------------------------
Indonesia 7,090,315
4.2
- -------------------------------------------------------------------------------------------------------
Hong Kong 5,381,469
3.2
- -------------------------------------------------------------------------------------------------------
Australia 4,563,840
2.7
- -------------------------------------------------------------------------------------------------------
Argentina 4,247,998
2.5
- -------------------------------------------------------------------------------------------------------
Switzerland 4,157,233
2.5
- -------------------------------------------------------------------------------------------------------
Finland 4,151,026
2.5
- -------------------------------------------------------------------------------------------------------
Philippines 3,702,967
2.2
- -------------------------------------------------------------------------------------------------------
Canada 3,275,944
1.9
- -------------------------------------------------------------------------------------------------------
Portugal 3,249,153
1.9
- -------------------------------------------------------------------------------------------------------
Peru 2,818,000
1.7
- -------------------------------------------------------------------------------------------------------
Norway 2,524,404
1.5
- -------------------------------------------------------------------------------------------------------
Austria 2,331,750
1.4
- -------------------------------------------------------------------------------------------------------
Thailand 2,232,715
1.3
- -------------------------------------------------------------------------------------------------------
Italy 1,785,749
1.1
- -------------------------------------------------------------------------------------------------------
Sweden 1,773,568
1.1
- -------------------------------------------------------------------------------------------------------
Spain 1,495,269
0.9
- -------------------------------------------------------------------------------------------------------
Hungary 1,408,132
0.8
- -------------------------------------------------------------------------------------------------------
India 1,380,013
0.8
- -------------------------------------------------------------------------------------------------------
Greece 1,361,165
0.8
- -------------------------------------------------------------------------------------------------------
Mexico 822,500
0.5
- -------------------------------------------------------------------------------------------------------
Singapore 808,743
0.5
- -------------------------------------------------------------------------------------------------------
China 741,000
0.4
- -------------------------------------------------------------------------------------------------------
Brazil 700,362
0.4
------------
------------
Total $168,287,387
100.0%
------------
------------
------------
------------
1. Non-income producing security.
2. 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 $1,902,946 or 1.13% of the Fund's net
assets, at September
30, 1996.
3. Affiliated company. Represents ownership of at least 5% of the voting securities of
the issuer and is
or was an affiliate, as defined in the Investment Company Act of 1940, at or during the
period ended
September 30, 1996. The aggregate fair value of all securities of affiliated companies
as of September
30, 1996 amounted to $3,083,413. Transactions during the period in which the issuer was
an affiliate are
as follows:
BALANCE BALANCE
SEPTEMBER 30, 1995 GROSS ADDITIONS GROSS REDUCTIONS
SEPTEMBER 30, 1996
------------------ --------------------- ---------------------
- ---------------------
SHARES COST SHARES COST SHARES COST SHARES
COST
- ----------------------------------------------------------------------------------------------------------------
- ------------------
Cambridge Antibody
Technology Ltd., CV. 100,000 $3,300,000 -- $ -- 100,000 $3,300,000
-- $ --
- ----------------------------------------------------------------------------------------------------------------
- ------------------
PT Multipolar Corp. -- -- 6,349,200 3,947,959 -- --
6,349,200 3,947,959
---------- ---------- ----------
----------
$3,300,000 $3,947,959 $3,300,000
$3,947,959
---------- ---------- ----------
----------
---------- ---------- ----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value--see accompanying statement:
Unaffiliated companies (cost $146,033,104) $165,203,974
Affiliated companies (cost $3,947,959) 3,083,413
----------------------------------------------------------------
Cash 298,216
----------------------------------------------------------------
Unrealized appreciation on forward foreign
currency exchange contracts--Note 5 112,867
----------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 422,037
Investments sold 332,151
Interest and dividends 203,369
----------------------------------------------------------------
Other 10,507
------------
Total assets 169,666,534
- -------------------------------------------------------------------------------------------
LIABILITIES Unrealized depreciation on forward foreign
currency exchange contracts--Note 5 12,948
----------------------------------------------------------------
Payables and other liabilities:
Investments purchased 546,537
Shares of beneficial interest redeemed 432,158
Shareholder reports 130,516
Trustees' fees 106,873
Distribution and service plan fees 99,748
Transfer and shareholder servicing agent fees 55,505
Custodian fees 41,301
Other 34,591
------------
Total liabilities 1,460,177
- -------------------------------------------------------------------------------------------
NET ASSETS $168,206,357
------------
------------
- -------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $170,369,937
NET ASSETS ----------------------------------------------------------------
Accumulated net investment loss (266,679)
----------------------------------------------------------------
Accumulated net realized loss on investments
and foreign currency transactions (20,303,931)
----------------------------------------------------------------
Net unrealized appreciation on investments
and translation of assets and liabilities
denominated in foreign currencies 18,407,030
------------
Net assets $168,206,357
------------
------------
- -------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share
(based on net assets of $154,081,998 and 7,351,701
shares of beneficial interest outstanding) $20.96
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $22.24
----------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering
price per share (based on net assets of
$10,854,911 and 522,496 shares of beneficial
interest outstanding) $20.78
----------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $3,269,448
and 157,283 shares of beneficial interest
outstanding) $20.79
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME Dividends (net of foreign withholding
taxes of $66,338) $1,980,310
----------------------------------------------------------------
Interest 585,187
----------
Total income 2,565,497
- -------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 4 1,233,678
----------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 603,641
----------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 340,899
Class B 42,516
Class C 14,558
----------------------------------------------------------------
Shareholder reports 230,027
----------------------------------------------------------------
Custodian fees and expenses 175,262
----------------------------------------------------------------
Trustees' fees and expenses--Note 1 66,235
----------------------------------------------------------------
Legal and auditing fees 38,828
----------------------------------------------------------------
Registration and filing fees:
Class A 774
Class B 3,643
Class C 1,103
----------------------------------------------------------------
Other 49,448
----------
Total expenses 2,800,612
- -------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (235,115)
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain (loss) on:
GAIN (LOSS) Investments:
Unaffiliated companies 21,952,395
Affiliated companies (135,000)
Foreign currency transactions (691,072)
----------
Net realized gain 21,126,323
----------------------------------------------------------------
Net change in unrealized appreciation or
depreciation on:
Investments 491,725
Translation of assets and liabilities denominated
in foreign currencies (824,768)
----------
Net change (333,043)
----------
Net realized and unrealized gain 20,793,280
- -------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $20,558,165
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1996 1995
- ----------------------------------------------------------------------------------------------------------------
- --------
<S> <C> <C> <C>
OPERATIONS Net investment income (loss) $ (235,115) $
107,231
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) 21,126,323
(40,930,783)
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (333,043)
27,445,462
------------
- ------------
Net increase (decrease) in net assets resulting from operations 20,558,165
(13,378,090)
- -------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from beneficial
TRANSACTIONS interest transactions--Note 2:
Class A (6,010,385)
(10,093,708)
Class B 10,625,564
--
Class C 3,210,027
--
- ----------------------------------------------------------------------------------------------------------------
- --------
NET ASSETS Total increase (decrease) 28,383,371
(23,471,798)
- -------------------------------------------------------------------------------------------------
Beginning of period 139,822,986
163,294,784
------------
- ------------
End of period (including accumulated net investment losses
of $266,679 and $130,131, respectively) $168,206,357
$139,822,986
------------
- ------------
------------
- ------------
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Global Emerging Growth Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS
C
------------------------------------------------ ---------
- ---------
PERIOD PERIOD
ENDED ENDED
YEAR ENDED SEPTEMBER 30, SEPT. 30, SEPT.
30,
1996 1995 1994 1993 1992 1996(1)
1996(1)
- ----------------------------------------------------------------------------------------------------------------
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $18.03 $19.35 $21.64 $20.25 $26.90 $17.43 $17.43
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment
operations:
Net investment income (loss) (.03) .01 (.01) (.10) (.17) (.01)
(.01)
Net realized and unrealized
gain (loss) 2.96 (1.33) (2.11) 1.69 (6.47) 3.36 3.37
------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations 2.93 (1.32) (2.12) 1.59 (6.64) 3.35 3.36
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income -- -- -- -- (.01) --
- --
Distributions from net
realized gain -- -- (.17) (.20) -- --
- --
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders -- -- (.17) (.20) (.01) --
- --
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $20.96 $18.03 $19.35 $21.64 $20.25 $20.78 $20.79
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 16.25% (6.82)% (9.91)% 7.79% (24.70)% 19.22%
19.28%
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $154,082 $139,823 $163,295 $199,697 $129,634 $10,855 $3,269
- --------------------------------------------------------------------------------------------------------------------
Average net assets
(in thousands) $142,045 $148,378 $190,984 $194,184 $166,144 $4,675 $1,599
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.15)% 0.07% (1.05)% (0.80)% (0.71)% (0.42)%(3)
(0.45)%(3)
Expenses 1.87% 1.76% 1.77% 1.59% 1.39% 2.56%(3)
2.54%(3)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 125.9% 160.3% 54.7% 41.0% 2.6% 125.9% 125.9%
Average brokerage
commission rate(5) $0.0030 -- -- -- -- $0.0030 $0.0030
</TABLE>
1.For the period from November 1, 1995 (inception of offering) to September 30,
1996.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1996 were $182,488,843 and $175,044,184, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
15 Oppenheimer Global Emerging Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ------
1. SIGNIFICANT Oppenheimer Global Emerging Growth Fund (the Fund) is
ACCOUNTING POLICIES registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management
investment company. The Fund's investment objective is
to aggressively seek capital appreciation from equity
securities. In seeking its objective, the Fund
emphasizes investments in emerging growth companies in
the U.S. and foreign countries that offer the potential
for growth of earnings or capital. The Fund's
investment adviser 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 three 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 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. Forward foreign
currency exchange contracts are valued based on the
closing prices of the forward currency contract rates
in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer.
-------------------------------------------------------
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
rates of exchange prevailing on the respective dates of
such transactions.
The effect of changes in foreign currency
exchange rates on investments is separately identified
from fluctuations arising from changes in market values
of securities held and reported with all other foreign
currency gains and losses in the Fund's Statement of
Operations.
-------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian
to take possession, to have legally segregated in the
Federal Reserve Book Entry System or to have segregated
within the custodian's vault, all securities held as
collateral for repurchase agreements. The market value
of the underlying securities is required to be at least
102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an
insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
-------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a specific
class are charged against the operations of that class.
-------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply
with provisions of the Internal Revenue Code applicable
to regulated investment companies and to distribute all
of its taxable income, including any net realized gain
on investments not offset by loss carryovers, to
shareholders. Therefore, no federal income or excise
tax provision is required. At September 30, 1996, the
Fund had available for federal income tax purposes an
unused capital loss carryover of approximately
$29,567,000, which expires between 1998 and 2004.
-------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a
nonfunded retirement plan for the Fund's independent
trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service.
During the year ended September 30, 1996, a provision
of $40,711 was made for the Fund's projected benefit
obligations and payments of $4,045 were made to retired
trustees, resulting in an accumulated liability of
$100,657 at September 30, 1996.
16 Oppenheimer Global Emerging Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
1. SIGNIFICANT DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
ACCOUNTING POLICIES distributions to shareholders are recorded on the ex-
(CONTINUED) dividend date.
-------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net
investment income (loss) and net realized gain (loss)
may differ for financial statement and tax purposes.
The character of the distributions made during the year
from net investment income or net realized gains may
differ from 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 September 30, 1996, the
Fund adjusted the classification of investment income
and capital gain (loss) to shareholders to reflect the
differences between the financial statement amounts and
those determined in accordance with income tax
regulations. Accordingly, during the year ended
September 30, 1996, amounts have been reclassified to
reflect a decrease in undistributed net investment
income of $312,755, a decrease in accumulated net
realized loss on investments of $460,650, and a
decrease in paid-in capital of $147,895. In addition,
to properly reflect foreign currency gain in the
components of capital, $411,322 of foreign exchange
gain determined according to U.S. federal income tax
rules has been reclassified from net realized gain to
net investment loss.
-------------------------------------------------------
OTHER. Investment transactions are accounted for on the
date the investments are purchased or sold (trade date)
and dividend income is recorded on the ex-dividend
date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and
the reported amounts of income and expenses during the
reporting period. Actual results could differ from
those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL INTEREST value shares of beneficial interest. Transactions in
shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1996(1) YEAR ENDED SEPTEMBER
30, 1995
--------------------------------
- ------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 3,277,006 $ 65,681,449 1,148,488 $
19,774,392
Issued in connection with the
acquisition of Oppenheimer Global
Environment Fund--Note 6 -- -- 1,540,515
27,636,869
Redeemed (3,681,446) (71,691,834) (3,370,269)
(57,504,969)
---------- ----------- ----------
- -----------
Net decrease (404,440) $ (6,010,385) (681,266)
$(10,093,708)
---------- ----------- ----------
- -----------
---------- ----------- ----------
- -----------
- ----------------------------------------------------------------------------------------------------
Class B:
Sold 722,783 $ 14,601,668 -- $
--
Redeemed (200,287) (3,976,104) --
--
---------- ----------- ----------
- -----------
Net increase 522,496 $ 10,625,564 -- $
--
---------- ----------- ----------
- -----------
---------- ----------- ----------
- -----------
- ----------------------------------------------------------------------------------------------------
Class C:
Sold 244,882 $ 4,972,628 -- $
--
Redeemed (87,599) (1,762,601) --
--
---------- ----------- ----------
- -----------
Net increase 157,283 $ 3,210,027 -- $
--
---------- ----------- ----------
- -----------
---------- ----------- ----------
- -----------
</TABLE>
1. For the year ended September 30, 1996 for Class A
shares and for the period from November 1, 1995
(inception of offering) to September 30, 1996 for Class
B and Class C shares.
17 Oppenheimer Global Emerging Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At September 30, 1996, net unrealized appreciation on
LOSSES ON INVESTMENTS investments of $18,306,324 was composed of gross
appreciation of $26,458,740, and gross depreciation of
$8,152,416.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER TRANSACTIONS with the investment advisory agreement with the Fund
WITH AFFILIATES which provides for a fee of 1% of the first $50 million
of average annual net assets, 0.75% of the next $150
million; 0.72% of the next 200 million; 0.69% of the
next $200 million; 0.66% of the next $200 million; and
0.60% of 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 applicable regulatory limit on Fund expenses.
For the year ended September 30, 1996,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $547,341, of which $159,815
was retained by OppenheimerFunds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of
the Fund's Class B and Class C shares totaled $280,291
and $29,431 of which $15,404 was paid to an affiliated
broker/dealer for Class B. During the period ended
September 30, 1996, OFDI received contingent deferred
sales charges of $8,208 and $1,057, respectively, upon
redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at
the time of sale of such shares.
OppenheimerFunds Services (OFS), a division
of the Manager, is the transfer and shareholder
servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing
such services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class
A shares to reimburse OFDI for a portion of its costs
incurred in connection with the personal service and
maintenance of accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate that
may not exceed 0.25% of the average annual net assets
of Class A shares of the Fund. OFDI uses the service
fee to reimburse brokers, dealers, banks and other
financial institutions quarterly for providing personal
service and maintenance of accounts of their customers
that hold Class A shares. During the year ended
September 30, 1996, OFDI paid $17,351 to an affiliated
broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
The Fund has adopted compensation type
Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing
accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B
shares and on Class C shares, as compensation for sales
commissions paid from its own resources at the time of
sale and associated financing costs. If the Plans are
terminated by the Fund, the Board of Trustees may allow
the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before
the Plans were terminated. OFDI also receives a service
fee of 0.25% per year as compensation 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 financial institutions. Both fees are computed on
the average annual net assets of Class B and Class C
shares, determined as of the close of each regular
business day. During the year ended September 30, 1996,
OFDI retained $38,764 and $12,877, respectively, as
compensation for Class B and Class C sales commissions
and service fee advances, as well as financing costs.
At September 30, 1996, OFDI had incurred unreimbursed
expenses of $284,933 for Class B and $48,241 for Class
C.
18 Oppenheimer Global Emerging Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS A forward foreign currency exchange contract (forward
contract) is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to
manage foreign currency risks. They may also be used to
tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon
the purchase or sale of a security denominated in a
foreign currency. In addition, the Fund may enter into
such contracts as a hedge against changes in foreign
currency exchange rates on portfolio positions.
Forward contracts are valued based on the
closing prices of the forward currency contract rates
in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will
realize a gain or loss upon the closing or settlement
of the forward transaction.
Securities held in segregated accounts to
cover net exposure on outstanding forward contracts are
noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward
contracts is reported in the Statement of Assets and
Liabilities. Realized gains and losses are reported
with all other foreign currency gains and losses in the
Fund's Statement of Operations.
Risks include the potential inability of the
counterparty to meet the terms of the contract and
unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At September 30, 1996, the Fund had outstanding forward
contracts to purchase and sell foreign currencies as
follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF UNREALIZED
UNREALIZED
CONTRACTS TO PURCHASE EXPIRATION DATE (000'S) SEPTEMBER 30, 1996 APPRECIATION
DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C> <C> <C>
British Pound Sterling (GBP) 10/2/96 38 GBP $ 59,629 $ 34
$ --
- ----------------------------------------------------------------------------------------------------------------
- -----------
Japanese Yen (JPY) 10/1/96 343,940 JPY 3,088,125 --
12,948
---------- --------
- --------
$3,147,754 34
12,948
---------- --------
- --------
---------- --------
- --------
CONTRACTS TO SELL
- ----------------------------------------------------------------------------------------------------------------
- -----------
Indonesian Rupiah (IDR) 10/1/96--10/2/96 33,562 IDR $ 14,457 $ 3
$ --
- ----------------------------------------------------------------------------------------------------------------
- -----------
Japanese Yen (JPY) 10/1/96--10/6/96 687,880 JPY 6,216,417 112,830
--
---------- --------
- --------
$6,230,874 112,833
--
---------- --------
- --------
----------
Total Unrealized Appreciation and Depreciation $112,867
$ 12,948
--------
- --------
--------
- --------
- ----------------------------------------------------------------------------------------------------------------
- -----------
</TABLE>
6. ACQUISITION OF On November 18, 1994, the Fund acquired all of the net
OPPENHEIMER GLOBAL assets of Oppenheimer Global Environment Fund, pursuant
ENVIRONMENT FUND to an Agreement and Plan of Reorganization approved by
the Oppenheimer Global Environment Fund shareholders on
November 4, 1994. The Fund issued 1,540,515 Class A
shares of beneficial interest, valued at $27,636,869,
in exchange for the net assets, resulting in combined
Class A net assets of $174,971,153 on November 18,
1994. The net assets acquired included net unrealized
appreciation of $2,684,431. The exchange qualifies as a
tax-free reorganization for federal income tax
purposes.
<PAGE>
Appendix A
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
<PAGE>
Food
Gas Transmission
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking<PAGE>
Investment Advisor
OppenheimerFunds, Inc.
Two World Trade Center
New York, New York 10048-0203
Distributor
OppenheimerFunds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, New York 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
OPPENHEIMER GLOBAL FUND
ANNUAL REPORT SEPTEMBER 30, 1996
[PHOTO]
"We have ambitious
long-term goals,
so we need our
investments
to grow over
time."
[OPPENHEIMER LOGO]
<PAGE> 2
NEWS
BEAT THE AVERAGE
Cumulative Total Return for the
3-Year Period Ended 9/30/96:
Oppenheimer Global Fund
Class A (at net asset value)(1)
47.15%
Lipper Global Funds Average for 75
Funds for the 3-Year Period Ended 9/30/96(3)
36.90%
THIS FUND IS FOR PEOPLE WHO WANT TO TAKE ADVANTAGE OF OUTSTANDING
GROWTH OPPORTUNITIES THE WORLD OVER.
HOW YOUR FUND IS MANAGED
Oppenheimer Global Fund looks for outstanding growth opportunities
around the world. The Fund's managers search out companies that
stand to benefit from one or more key global trends, such as
telecommunications expansion, emerging consumer markets,
infrastructure development, and global integration. The Fund has
the flexibility to invest in companies in developed markets as well
as those in emerging markets that hold huge potential demand for
goods and services of the industrialized world.
PERFORMANCE
Total returns at net asset value for the 12 months ended 9/30/96
were 12.98% for Class A shares and 12.07% for Class B shares.
Cumulative total return at net asset value for Class C shares since
inception on 10/2/95 was 12.34%.
(1) Your Fund's average annual total returns at maximum offering
price for Class A shares for the 1-, 5- and 10-year periods ended
9/30/96 were 6.49%, 9.33% and 12.26%, respectively. For Class B
shares, average annual total returns for the 1-year period ended
9/30/96 and since inception on 8/17/93 were 7.07% and 13.05%,
respectively. For Class C shares, cumulative total return since
inception on 10/2/95 was 11.34%.
(2) OUTLOOK
"Although it is difficult to forecast investment performance over
short periods of time, we are quite optimistic over the next few
years. We think that as the world evolves towards a truly global
stock market, a bottom-up, global theme-oriented investment style,
such as that employed by this Fund, should do very well."
Bill Wilby, Portfolio Manager
September 30, 1996
Total returns include change in share price and reinvestment of
dividends and capital gains distributions. In reviewing the notes
that follow on performance and rankings, please be aware that past
performance does not guarantee future results. Investment return
and principal value of an investment in the Fund will fluctuate so
that an investor's shares, when redeemed, may be worth more or less
than the original cost.
1. Based on the change in net asset value per share for the period
shown, without deducting any sales charges. Such performance would
have been lower if sales charges were taken into account.
2. Class A returns show results of hypothetical investments on
9/30/95, 9/30/91 and 9/30/86, after deducting the current maximum
initial sales charge of 5.75%. Class A shares were first publicly
offered on 12/22/69. The Fund's maximum sales charge rate for Class
A shares was higher during a portion of some of the periods shown,
and actual investment results will be different as a result of the
change. Class B returns show results of hypothetical investments on
9/30/95 and 8/17/93 (inception of class), after the deduction of
the applicable contingent deferred sales charge of 5% (1-year) and
3% (since inception). Class C returns show results of a
hypothetical investment on 10/2/95 (inception of class), after the
deduction of the 1% contingent deferred sales charge. An
explanation of the different total returns is in the Fund's
prospectus.
3. Source: Lipper Analytical Services. The average is shown for
comparative purposes only. Oppenheimer Global Fund is characterized
by Lipper as a global fund. Lipper performance does not take sales
charges into consideration. The Fund was not managed or offered as
a "global" fund prior to 1987, but held foreign securities in its
portfolio prior to becoming a global fund.
2 Oppenheimer Global Fund
<PAGE> 3
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Global Fund
DEAR SHAREHOLDER,
While most of the world's markets have lagged the amazing growth of
domestic stocks this year, we believe the time is right for them to
catch up. This belief, coupled with the strong though at times
unpredictable performance of the U.S. market over the period, makes
a compelling case for global funds, which typically invest in a
combination of domestic and foreign securities.
Over the past six months, the U.S. stock market has shown investors
just how resilient it can be. During this summer, the Dow declined
nearly 10%, only to soar to record highs in the fall. As a result,
stock valuations are now high, indicating that this bull market
could be nearing the top of the mountain. However, due to solid
corporate profits, low inflation, and stabilized interest rates, we
remain optimistic that this market has enough strength to advance
through 1997.
While we've been pleased with earnings in the U.S. market, we
believe now is the time to focus on good opportunities abroad. Why?
Analysts estimate earnings in North America for 1996 will be up
about 8% by the end of this year. Across the rest of the globe,
however, they predict corporate earnings will increase by almost
40%, with the potential for an additional 17% gain in 1997. In
fact, particularly in Europe, we're seeing a trend in corporate
restructuring, including downsizing, outsourcing and spinoffs.
As for economic growth in developing countries, Brazil has emerged
as a dominant player in 1996, and we believe it has great potential
for the coming years. In general, the spending power of the
population in developing countries keeps growing. For the first
time, a substantial number of individuals are buying consumer
products, including motorcycles, TVs and cars.
Additionally, there has been a turnabout in Japan. After a
five-year recession, the Japanese economy recently began to
recover, unearthing numerous investment opportunities. Furthermore,
around the world, there has been a significant move toward
capitalism. Right now, the wealth of the world is built on the
combined spending power of 700 million people. However, as the 4.5
billion people who live in developing countries become more
capitalistic, we will undoubtedly see a chain reaction which may
revitalize a number of industries that cater to the consumer.
Despite this pickup in global economic growth, inflation
has remained low. Moreover, many European governments are now
concentrating on balancing their budgets in anticipation of a
European monetary union. So, it is reasonable to expect global
interest rates to remain low into 1997. In the end, all these
changes bode well for global stock markets and economies.
Because investing abroad involves greater risk and expenses,
including political and economic uncertainties, currency rate
fluctuations and liquidity restrictions, it should be undertaken
with a long-term approach in mind. That said, we're confident that
by diversifying your investments throughout the world, you should
be well positioned to participate in any economic environment.
Your portfolio managers discuss the outlook for your Fund
in light of these broad issues on the following pages. Thank you
for your confidence in OppenheimerFunds. We look forward to helping
you reach your investment goals in the future.
/s/ BRIDGET A. MACASKILL
- --------------------------
Bridget A. Macaskill
October 21, 1996
3 Oppenheimer Global Fund
<PAGE> 4
Q WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
Q+A
[PHOTO]
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW HAS THE FUND PERFORMED OVER THE PERIOD?
The past six months have been difficult for foreign markets in
general. However,despite many uncertainties around the world, many
foreign markets have shown signs of improvement. As a result,
Global Fund was ranked 59th out of 151 funds in its category rated
by Lipper Analytical Services for the 1-year period ended
9/30/96.(1)
[PHOTO]
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
Our stock selection has been good overall in our global theme
areas, which are telecommunications, emerging consumer markets,
infrastructure, capital market development, health care, natural
resources, corporate restructuring and efficiency enhancement.
In particular, we did well with many of our holdings within
our natural resources theme--specifically, oil services companies.
For example, we had large positions in energy-related companies as
oil prices moved higher this year. This rise was due to a simple
matter of supply and demand. Heating oil inven-tories have been
seasonally low in the U.S., while demand has been stronger than
anticipated. Meanwhile, overseas emerging economies' demand for oil
continues to grow inexorably while non-OPEC production has
slowed.(2)
[PHOTO]
DID ANY INVESTMENTS NOT PERFORM AS YOU HAD EXPECTED?
Though we were pleased with the majority of our holdings, we did
have a few disappointments. Some of them centered around our
expectations for Japanese stocks. For example, we correctly
anticipated the economic recovery in Japan, and more important, the
positive impact it would have on corporate earnings there. We also
predicted that Japanese interest rates would remain low, which is
good news for a depressed economy. Normally these two conditions
translate
1. Source: Lipper Analytical Services, 9/30/96. Oppenheimer Global
Fund is characterized by Lipper as a global fund. Lipper does not
take sales charges into consideration.
2. The Fund's portfolio is subject to change.
4 Oppenheimer Global Fund
<PAGE> 5
FACING PAGE
Top left: Bill Wilby, Portfolio Manager
Top right:Frank Jennings, Member
of Global Investments Team
Bottom: Robert Doll, Executive VP,
Director of Equity Investments
THIS PAGE
Top: George Evans, Member
of Global Investments Team
Bottom: Shanquan Li, Member
of Global Investments Team
A WE DID WELL WITH MANY OF OUR HOLDINGS WITHIN OUR NATURAL
RESOURCE THEME.
into high stock price performance, which we were poised to enjoy;
however, in this case it didn't, and the Japanese market declined.
Another disappointment stemmed from our investment in gold
stocks. We believed the price of gold would increase this period
for two reasons. First, easier monetary policy in China and Japan
should have translated into increased Asian demand for gold.
Second, producer forward selling should have exhausted the supply
of gold to the market. However, European central banks sold
considerably more of their gold holdings than anticipated, which
bridged the gap between supply and demand. As a result, the price
of gold actually declined.
[PHOTO]
WHAT AREAS ARE YOU CURRENTLY TARGETING?
We continue to focus on selecting companies among our eight global
themes; however, there are some particular areas about which we are
very confident. In health care, we recently used the sharp decline
in the biotechnology sector to add to our biotech holdings in the
portfolio. We're focusing on companies that have strong earnings
profiles, as well as good R & D pipelines.
We have also established positions in several European
banks, which we feel are at giveaway levels relative to their
future earnings potential. We believe European banks are at similar
stages in their development as were U.S. banks in 1990-91. By
streamlining their operations, as U.S. banks did during that
period, they too should benefit. Although restructuring efforts
will be more difficult in the highly regulated European
environment, we have recently seen concrete signs of movement in
that direction.
[PHOTO]
WHAT IS YOUR OUTLOOK FOR THE FUND?
Although it is difficult to forecast investment performance over
short periods of time, we are quite optimistic over the next few
years. We think that as the world evolves towards a truly global
stock market, a bottom-up, global theme-oriented investment style,
such as that employed by this Fund, should do very well. As
national economic and financial conditions converge,
company-focused stock picking from a global perspective should
thrive.
5 Oppenheimer Global Fund
<PAGE> 6
FINANCIALS
- --------------------------------------------------
CONTENTS
- --------------------------------------------------
<TABLE>
<S> <C>
Statement of Investments 7
Statement of Assets and Liabilities 14
Statement of Operations 15
Statements of Changes in Net Assets 16
Financial Highlights 17
Notes to Financial Statements 18
Independent Auditors' Report 23
Federal Income Tax Information 24
</TABLE>
6 Oppenheimer Global Fund
<PAGE> 7
STATEMENT OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
================================================================================================================
================
<S> <C>
<C>
COMMON STOCKS--97.7%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
BASIC MATERIALS--3.3%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CHEMICALS--0.7% Minerals Technologies, Inc. 585,000
$ 21,864,375
- ----------------------------------------------------------------------------------------------------------------
- ----------------
GOLD--1.2% Newmont Mining Corp. 750,000
35,437,500
- ----------------------------------------------------------------------------------------------------------------
- ----------------
METALS--1.4% Cia Vale Do Rio Doce, Preference 692,000
13,724,188
- -----------------------------------------------------------------------------------------------
Cia de Minas Buenaventura SA, Sponsored ADR(1)(2) 285,000
5,486,250
- -----------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B 757,500
23,671,875
-------------
42,882,313
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CONSUMER CYCLICALS--12.9%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
AUTOS & HOUSING--1.7% Autobacs Seven Co. Ltd. 140,000
12,356,452
- -----------------------------------------------------------------------------------------------
IRSA Inversiones y Representaciones, SA 3,314,458
9,679,456
- -----------------------------------------------------------------------------------------------
Porsche AG, Preference(2) 44,100
30,156,268
-------------
52,192,176
- ----------------------------------------------------------------------------------------------------------------
- ----------------
LEISURE & ENTERTAINMENT--0.4% Resorts World Berhad 2,125,000
12,038,584
- ----------------------------------------------------------------------------------------------------------------
- ----------------
MEDIA--1.1% News Corp. Ltd., ADR(1) 1,000,000
20,875,000
- -----------------------------------------------------------------------------------------------
Reuters Holdings PLC, Series B, ADR 165,500
11,460,875
-------------
32,335,875
- ----------------------------------------------------------------------------------------------------------------
- ----------------
RETAIL: GENERAL--0.6% PT Matahari Putra Prima 3,499,750
3,806,534
- -----------------------------------------------------------------------------------------------
Sonae Investimentos 489,000
14,187,161
-------------
17,993,695
- ----------------------------------------------------------------------------------------------------------------
- ----------------
RETAIL: SPECIALTY--9.1% adidas AG(1) 600,000
54,679,023
- -----------------------------------------------------------------------------------------------
Benetton Group SpA(1) 1,602,100
18,051,977
- -----------------------------------------------------------------------------------------------
Cifra SA de CV, Unsponsored ADR, B Shares(1)(2) 7,500,000
10,807,500
- -----------------------------------------------------------------------------------------------
Circuit City Stores, Inc. 466,300
16,845,087
- -----------------------------------------------------------------------------------------------
FamilyMart Co. 385,000
17,249,380
- -----------------------------------------------------------------------------------------------
Giordano International Ltd. 14,160,000
12,451,542
- -----------------------------------------------------------------------------------------------
Jusco Co. 600,000
18,262,624
- -----------------------------------------------------------------------------------------------
Reebok International Ltd. 900,000
31,275,000
- -----------------------------------------------------------------------------------------------
Wella AG(1) 120,000
72,459,540
- -----------------------------------------------------------------------------------------------
Wolford AG(1) 105,200
26,863,399
-------------
278,945,072
- ----------------------------------------------------------------------------------------------------------------
- ----------------
CONSUMER NON-CYCLICALS--17.5%
- ----------------------------------------------------------------------------------------------------------------
- ----------------
BEVERAGES--2.4% Allied Domecq PLC 1,999,800
14,006,654
- -----------------------------------------------------------------------------------------------
Fomento Economico Mexicano SA, Cl. B,
Sponsored ADR(1)(3) 2,600,000
7,972,121
- -----------------------------------------------------------------------------------------------
Hellenic Bottling Co., SA 230,000
7,826,698
- -----------------------------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 600,000
24,675,000
- -----------------------------------------------------------------------------------------------
South African Breweries Ltd. 681,300
18,171,913
-------------
72,652,386
</TABLE>
7 Oppenheimer Global Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- --------------
<S> <C>
<C>
HEALTHCARE/DRUGS--9.8% Amgen, Inc.(2) 835,000
$ 52,709,375
- ---------------------------------------------------------------------------------------------
Astra AB Free, Series A 397,800
16,798,226
- ---------------------------------------------------------------------------------------------
BioChem Pharma, Inc.(2) 700,000
28,087,500
- ---------------------------------------------------------------------------------------------
Ciba-Geigy AG 20,000
25,591,321
- ---------------------------------------------------------------------------------------------
Eisai Co. Ltd. 800,000
15,227,832
- ---------------------------------------------------------------------------------------------
Genzyme Corp.(1)(2) 1,354,270
34,533,885
- ---------------------------------------------------------------------------------------------
Glaxo Wellcome PLC, Sponsored ADR 2,000,000
62,250,000
- ---------------------------------------------------------------------------------------------
Johnson & Johnson 500,000
25,625,000
- ---------------------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A(2)(4) 376,800
4,474,500
- ---------------------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. B(2)(4) 264,900
3,112,575
- ---------------------------------------------------------------------------------------------
Sanofi SA 400,000
32,798,250
- -------------
301,208,464
- ----------------------------------------------------------------------------------------------------------------
- --------------
HEALTHCARE/SUPPLIES &
SERVICES--4.4% Clinica y Maternidad Suizo Argentino(2)(4)(5) 1,800
15,989,454
- ---------------------------------------------------------------------------------------------
Gehe AG 280,000
18,724,615
- ---------------------------------------------------------------------------------------------
Quintiles Transnational Corp.(2)(5) 486,392
32,065,393
- ---------------------------------------------------------------------------------------------
Rhoen-Klinikum AG, Preference, Non-vtg. 144,688
16,126,352
- ---------------------------------------------------------------------------------------------
United States Surgical Corp. 1,200,000
51,000,000
- -------------
133,905,814
- ----------------------------------------------------------------------------------------------------------------
- --------------
TOBACCO--0.9% B.A.T. Industries PLC 3,005,000
19,990,049
- ---------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 100,000
8,975,000
- -------------
28,965,049
- ----------------------------------------------------------------------------------------------------------------
- --------------
ENERGY--7.2%
- ----------------------------------------------------------------------------------------------------------------
- --------------
ENERGY SERVICES &
PRODUCERS--2.9% Coflexip SA, Sponsored ADR(2)(4) 681,000
14,811,750
- ---------------------------------------------------------------------------------------------
Global Marine, Inc.(2) 1,635,000
25,751,250
- ---------------------------------------------------------------------------------------------
Transocean Offshore, Inc. 501,549
30,719,876
- ---------------------------------------------------------------------------------------------
Western Atlas, Inc.(2) 300,700
18,718,575
- -------------
90,001,451
- ----------------------------------------------------------------------------------------------------------------
- --------------
OIL-INTEGRATED--4.3% British Petroleum Co. PLC, ADR(1) 189,402
23,675,250
- ---------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd.(2) 2,826,000
17,632,848
- ---------------------------------------------------------------------------------------------
Lukoil Oil Co., Sponsored ADR(1) 190,300
6,941,059
- ---------------------------------------------------------------------------------------------
Renaissance Energy Ltd.(2) 285,900
8,384,213
- ---------------------------------------------------------------------------------------------
Royal Dutch Petroleum Co. 177,100
27,649,737
- ---------------------------------------------------------------------------------------------
Total SA, B Shares 379,627
29,899,413
- ---------------------------------------------------------------------------------------------
Unocal Corp. 454,000
16,344,000
- -------------
130,526,520
</TABLE>
8 Oppenheimer Global Fund
<PAGE> 9
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C> <C>
FINANCIAL--16.9%
- ----------------------------------------------------------------------------------------------------------------
- -------------
BANKS--9.2% Banco Bradesco SA, Preference 2,354,116,632 $
19,943,420
- --------------------------------------------------------------------------------------------
Banco Frances del Rio de la Plata SA,
Sponsored ADR(1) 575,000
15,021,875
- --------------------------------------------------------------------------------------------
Banco Latinoamericano de Exportaciones
SA, Cl. E 380,000
21,327,500
- --------------------------------------------------------------------------------------------
Bank of East Asia Ltd.(1) 3,629,000
13,351,197
- --------------------------------------------------------------------------------------------
Barclays PLC 2,025,561
29,767,544
- --------------------------------------------------------------------------------------------
Chase Manhattan Corp. (New) 300,000
24,037,500
- --------------------------------------------------------------------------------------------
Citicorp 300,000
27,187,500
- --------------------------------------------------------------------------------------------
HSBC Holdings PLC 2,026,155
37,598,935
- --------------------------------------------------------------------------------------------
Industrial Credit & Investment Corp. of
India Ltd. (The), GDR(3) 872,800
9,709,900
- --------------------------------------------------------------------------------------------
Industrial Finance Corp.(4) 4,190,099
17,144,507
- --------------------------------------------------------------------------------------------
Northern Trust Corp. 300,000
19,725,000
- --------------------------------------------------------------------------------------------
Philippine National Bank(2) 750,000
12,364,208
- --------------------------------------------------------------------------------------------
PT Lippo Bank 2,454,000
3,805,470
- --------------------------------------------------------------------------------------------
Standard Chartered Bank PLC 2,884,200
31,406,266
- -------------
282,390,822
- ----------------------------------------------------------------------------------------------------------------
- -------------
DIVERSIFIED FINANCIAL--5.6% ABN Amro Holding NV 300,000
16,639,878
- --------------------------------------------------------------------------------------------
American Express Co. 400,000
18,500,000
- --------------------------------------------------------------------------------------------
Cie Financiere de Paribas, Series A 500,000
32,162,745
- --------------------------------------------------------------------------------------------
First NIS Regional Fund(2)(5) 1,320,000
13,860,000
- --------------------------------------------------------------------------------------------
ING Groep NV 645,947
20,160,478
- --------------------------------------------------------------------------------------------
MBNA Corp. 700,000
24,325,000
- --------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(1) 200,000
13,125,000
- --------------------------------------------------------------------------------------------
Societe Generale 300,000
33,189,628
- -------------
171,962,729
- ----------------------------------------------------------------------------------------------------------------
- -------------
INSURANCE--2.1% American International Group, Inc. 200,000
20,150,000
- --------------------------------------------------------------------------------------------
National Mutual Asia Ltd. 10,000,000
8,793,462
- --------------------------------------------------------------------------------------------
Reinsurance Australia Corp. Ltd. 2,200,000
6,301,391
- --------------------------------------------------------------------------------------------
Skandia Forsakrings AB 1,000,000
27,674,303
- -------------
62,919,156
- ----------------------------------------------------------------------------------------------------------------
- -------------
INDUSTRIAL--13.0%
- ----------------------------------------------------------------------------------------------------------------
- -------------
ELECTRICAL EQUIPMENT--1.0% FORE Systems, Inc.(2) 250,000
10,343,750
- --------------------------------------------------------------------------------------------
LEM Holdings SA(4) 25,000
5,803,518
- --------------------------------------------------------------------------------------------
Ushio, Inc. 1,200,000
13,683,500
- -------------
29,830,768
</TABLE>
9 Oppenheimer Global Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE
NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C> <C>
INDUSTRIAL SERVICES--6.6% Adecco SA 100,000 $
27,521,838
- --------------------------------------------------------------------------------------------
Boskalis Westminster 1,255,000
24,499,255
- --------------------------------------------------------------------------------------------
Cordiant PLC(2) 10,070,000
17,632,639
- --------------------------------------------------------------------------------------------
IHC Caland NV 500,000
26,330,401
- --------------------------------------------------------------------------------------------
PT Citra Marga Nusaphala Persada 8,300,000
5,631,057
- --------------------------------------------------------------------------------------------
Rentokil Group PLC 2,500,000
16,337,519
- --------------------------------------------------------------------------------------------
VBH Vereinigter Baubeschlag Handel AG 298,100
7,383,778
- --------------------------------------------------------------------------------------------
WMX Technologies, Inc. 515,000
16,930,625
- --------------------------------------------------------------------------------------------
WPP Group PLC 15,920,000
58,365,435
- -------------
200,632,547
- ----------------------------------------------------------------------------------------------------------------
- -------------
MANUFACTURING--4.1% Bic Corp. 200,000
26,272,700
- --------------------------------------------------------------------------------------------
Bobst Bearers AG 12,830
16,682,940
- --------------------------------------------------------------------------------------------
Bombardier, Inc., Cl. B 1,977,900
28,166,787
- --------------------------------------------------------------------------------------------
Hutchison Whampoa Ltd. 5,001,000
33,628,785
- --------------------------------------------------------------------------------------------
Powerscreen International PLC 2,580,000
22,164,463
- -------------
126,915,675
- ----------------------------------------------------------------------------------------------------------------
- -------------
TRANSPORTATION--1.3% Brambles Industries Ltd.(1) 1,500,000
24,330,457
- --------------------------------------------------------------------------------------------
Guangshen Railway Co. Ltd., Sponsored ADR(2) 750,000
14,250,000
- -------------
38,580,457
- ----------------------------------------------------------------------------------------------------------------
- -------------
TECHNOLOGY--19.6%
- ----------------------------------------------------------------------------------------------------------------
- -------------
AEROSPACE/DEFENSE--1.2% Rolls-Royce PLC 10,000,000
37,424,644
- ----------------------------------------------------------------------------------------------------------------
- -------------
COMPUTER HARDWARE--0.6% Cascade Communications Corp.(2) 69,600
5,672,400
- --------------------------------------------------------------------------------------------
QUALCOMM, Inc.(2) 329,000
13,982,500
- -------------
19,654,900
- ----------------------------------------------------------------------------------------------------------------
- -------------
COMPUTER SOFTWARE--10.1% Cap Gemini SA(2) 400,000
17,515,133
- --------------------------------------------------------------------------------------------
Computer Associates International, Inc. 300,000
17,925,000
- --------------------------------------------------------------------------------------------
First Data Corp. 376,000
30,691,000
- --------------------------------------------------------------------------------------------
Ines Corp.(1) 600,000
10,828,281
- --------------------------------------------------------------------------------------------
Microsoft Corp.(2) 200,000
26,375,000
- --------------------------------------------------------------------------------------------
Misys PLC 1,260,000
17,177,377
- --------------------------------------------------------------------------------------------
Nintendo Co. Ltd. 1,545,900
99,242,949
- --------------------------------------------------------------------------------------------
Oracle Corp.(2) 375,000
15,960,938
- --------------------------------------------------------------------------------------------
SAP AG, Preference 317,500
53,289,101
- --------------------------------------------------------------------------------------------
SAP AG, Sponsored ADR, Series 1996(5) 350,000
19,687,500
- ---------------
308,692,279
</TABLE>
10 Oppenheimer Global Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES
SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
- -------------
<S> <C>
<C>
ELECTRONICS--4.1% Advanced Semiconductor Engineering, Inc., GDR 641,580
$ 4,876,008
- --------------------------------------------------------------------------------------------
Intel Corp. 240,000
22,905,000
- --------------------------------------------------------------------------------------------
Keyence Corp. 200,000
24,781,141
- --------------------------------------------------------------------------------------------
Rohm Co. 204,000
12,876,496
- --------------------------------------------------------------------------------------------
SGS-Thomson Microelectronics NV(2) 700,000
33,162,500
- --------------------------------------------------------------------------------------------
Sony Corp.(1) 320,000
20,198,426
- --------------------------------------------------------------------------------------------
Taiwan Semiconductor Manufacturing Co.(5) 3,434,000
6,685,543
- ------------
125,485,114
- ----------------------------------------------------------------------------------------------------------------
- -------------
TELECOMMUNICATIONS- Ascend Communications, Inc.(2) 87,900
5,812,388
TECHNOLOGY--3.6%
- --------------------------------------------------------------------------------------------
Cisco Systems, Inc.(2) 495,400
30,745,763
- --------------------------------------------------------------------------------------------
Korea Mobile Telecommunications Corp. 21,819
25,336,848
- --------------------------------------------------------------------------------------------
Millicom International Cellular SA(2) 600,000
24,225,000
- --------------------------------------------------------------------------------------------
Millicom, Inc.(2) 207,000
--
- --------------------------------------------------------------------------------------------
Telecom Italia Mobile SpA(1) 10,918,200
24,245,927
- -------------
110,365,926
- ----------------------------------------------------------------------------------------------------------------
- -------------
UTILITIES--7.3%
- ----------------------------------------------------------------------------------------------------------------
- -------------
ELECTRIC UTILITIES--2.3% Consolidated Electric Power Asia Ltd., ADS 12,000,000
25,371,724
- --------------------------------------------------------------------------------------------
Empresa Nacional de Electricidad SA 400,000
23,550,482
- --------------------------------------------------------------------------------------------
Veba AG 400,000
20,958,981
- -------------
69,881,187
- ----------------------------------------------------------------------------------------------------------------
- -------------
TELEPHONE UTILITIES--5.0% Cia de Telecommunicaciones de Chile SA,
Sponsored ADR(1) 16,600
1,603,975
- --------------------------------------------------------------------------------------------
CPT Telefonica del Peru SA, Cl. B 11,599,949
26,203,430
- --------------------------------------------------------------------------------------------
PLD Telekom, Inc.(2) 1,136,200
8,237,450
- --------------------------------------------------------------------------------------------
Portugal Telecom SA 777,700
20,005,947
- --------------------------------------------------------------------------------------------
PT Telekomunikasi Indonesia, Sponsored ADR(1) 342,000
10,644,750
- --------------------------------------------------------------------------------------------
Telecom Italia SpA(1) 13,000,000
28,911,662
- --------------------------------------------------------------------------------------------
Telecomunicacoes Brasileiras SA, Preference 732,452,000
57,854,758
- --------------
153,461,972
- --------------
Total Common Stocks (Cost $2,431,368,922)
2,989,147,450
================================================================================================================
=============
PREFERRED STOCKS--0.5%
- ----------------------------------------------------------------------------------------------------------------
- -------------
Marschollek, Lautenschlaeger und Partner-VO,
Non-vtg. Preferred Stock (Cost $8,842,223) 127,000
15,986,730
</TABLE>
11 Oppenheimer Global Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
UNITS
SEE NOTE 1
================================================================================================================
=============
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ----------------------------------------------------------------------------------------------------------------
- -------------
American Satellite Network, Inc. Wts., Exp. 6/99 51,750
$ --
- ----------------------------------------------------------------------------------------------
PT Matahari Putra Prima Rts., Exp. 11/96 3,499,750
2,298,996
- ------------
Total Rights, Warrants and Certificates (Cost $0)
2,298,996
<CAPTION>
FACE
AMOUNT
================================================================================================================
=============
<S> <C>
<C>
REPURCHASE AGREEMENT--0.7%
- ----------------------------------------------------------------------------------------------------------------
- -------------
Repurchase agreement with Zion First National Bank, 5.62%,
dated 9/30/96, to be repurchased at $20,303,169 on 10/1/96,
collateralized by U.S. Treasury Nts., 5.75%--8.875%,
5/15/97--8/15/04, with a value of $20,717,367 (Cost
$20,300,000) $20,300,000
20,300,000
- ----------------------------------------------------------------------------------------------------------------
- -------------
TOTAL INVESTMENTS, AT VALUE (COST $2,460,511,145) 99.0%
3,027,733,176
- ----------------------------------------------------------------------------------------------------------------
- -------------
OTHER ASSETS NET OF LIABILITIES 1.0
29,867,779
----------
- --------------
NET ASSETS 100.0%
$3,057,600,955
==========
==============
<CAPTION>
Distribution of investments by country of issue, as a percentage of
total investments at value, is as follows:
COUNTRY MARKET VALUE
PERCENT
- ----------------------------------------------------------------------------------------------
<S> <C>
<C>
United States $ 822,042,630
27.1%
- ----------------------------------------------------------------------------------------------
Great Britain 361,658,715
11.9
- ----------------------------------------------------------------------------------------------
Germany 309,451,887
10.2
- ----------------------------------------------------------------------------------------------
Japan 244,707,080
8.1
- ----------------------------------------------------------------------------------------------
France 219,812,119
7.3
- ----------------------------------------------------------------------------------------------
Hong Kong 131,195,646
4.3
- ----------------------------------------------------------------------------------------------
The Netherlands 115,279,750
3.8
- ----------------------------------------------------------------------------------------------
Brazil 91,522,366
3.0
- ----------------------------------------------------------------------------------------------
Canada 82,271,348
2.7
- ----------------------------------------------------------------------------------------------
Switzerland 75,599,617
2.5
- ----------------------------------------------------------------------------------------------
Italy 71,209,566
2.4
- ----------------------------------------------------------------------------------------------
Australia 51,506,848
1.7
- ----------------------------------------------------------------------------------------------
Sweden 44,472,529
1.5
- ----------------------------------------------------------------------------------------------
Mexico 43,454,621
1.4
- ----------------------------------------------------------------------------------------------
Argentina 40,690,785
1.3
- ----------------------------------------------------------------------------------------------
Portugal 34,193,108
1.1
- ----------------------------------------------------------------------------------------------
Peru 31,689,680
1.0
- ----------------------------------------------------------------------------------------------
Russia 29,038,509
1.0
- ----------------------------------------------------------------------------------------------
Austria 26,863,399
0.9
- ----------------------------------------------------------------------------------------------
Indonesia 26,186,807
0.9
- ----------------------------------------------------------------------------------------------
Korea, Republic of (South) 25,336,848
0.8
- ----------------------------------------------------------------------------------------------
Spain 23,550,482
0.8
- ----------------------------------------------------------------------------------------------
Panama 21,327,500
0.7
- ----------------------------------------------------------------------------------------------
South Africa 18,171,913
0.6
- ----------------------------------------------------------------------------------------------
Thailand 17,144,507
0.6
- ----------------------------------------------------------------------------------------------
China 14,250,000
0.5
- ----------------------------------------------------------------------------------------------
Philippines 12,364,208
0.4
- ----------------------------------------------------------------------------------------------
Malaysia 12,038,584
0.4
- ----------------------------------------------------------------------------------------------
Taiwan 11,561,551
0.4
- ----------------------------------------------------------------------------------------------
India 9,709,900
0.3
- ----------------------------------------------------------------------------------------------
Greece 7,826,698
0.3
- ----------------------------------------------------------------------------------------------
Chile 1,603,975
0.1
--------------
------
Total $3,027,733,176
100.0%
==============
======
</TABLE>
12 Oppenheimer Global Fund
<PAGE> 13
1. Loaned security--See Note 7 of Notes to Financial Statements.
2. Non-income producing security.
3. Represents securities sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $17,682,021 or 0.58% of the Fund's net
assets, at September 30, 1996.
4. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended September 30,
1996. The aggregate fair value of all securities of affiliated companies as of
September 30, 1996 amounted to $44,191,797. Transactions during the period in
which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE SEPTEMBER 30, 1995 GROSS ADDITIONS GROSS REDUCTIONS
-------------------------- ------------------
- --------------------
SHARES COST SHARES COST SHARES COST
- ----------------------------------------------------------------------------------------------------------------
- -------
<S> <C> <C> <C> <C> <C> <C>
Clinica y Maternidad Suizo Argentino 1,800 $6,990,000 -- $6,300,000 -- $
--
- ----------------------------------------------------------------------------------------------------------------
- -------
Coflexip SA, Sponsored ADR 681,000 11,809,866 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
Industrial Finance Corp.(6) 5,929,999 9,939,527 1,260,100 4,723,154 3,000,000
6,286,924
- ----------------------------------------------------------------------------------------------------------------
- -------
International de Ceramica--UB 385,000 2,007,953 -- -- 385,000
2,007,953
- ----------------------------------------------------------------------------------------------------------------
- -------
LEM Holdings SA 25,000 5,024,555 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
K-V Pharmaceutical Co., Cl. A 376,800 2,120,350 -- -- --
--
- ----------------------------------------------------------------------------------------------------------------
- -------
K-V Pharmaceutical Co., Cl. B 264,900 928,721 -- -- --
--
----------- -----------
- ----------
$38,820,972 $11,023,154
$8,294,877
=========== ===========
==========
<CAPTION>
BALANCE SEPTEMBER 30, 1996
-------------------------- DIVIDEND
SHARES COST INCOME
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Clinica y Maternidad Suizo Argentino 1,800 $13,290,000 $ --
- ------------------------------------------------------------------------------
Coflexip SA, Sponsored ADR 681,000 11,809,866 --
- ------------------------------------------------------------------------------
Industrial Finance Corp.(6) 4,190,099 8,375,757 --
- ------------------------------------------------------------------------------
International de Ceramica--UB -- -- --
- ------------------------------------------------------------------------------
LEM Holdings SA 25,000 5,024,555 235,753
- ------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A 376,800 2,120,350 --
- ------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. B 264,900 928,721 --
----------- --------
$41,549,249 $235,753
=========== ========
</TABLE>
5. Identifies issues considered to be illiquid--See Note 6 of Notes to
Financial Statements.
6. Not an affiliate as of September 30, 1996.
See accompanying Notes to Financial Statements.
13 Oppenheimer Global Fund
<PAGE> 14
Statement of Assets and Liabilities September 30, 1996
<TABLE>
================================================================================================================
=============
<S> <C> <C>
ASSETS Investments, at value--see accompanying statement:
Unaffiliated companies (cost $2,427,337,653)
$2,983,541,379
Affiliated companies (cost $33,173,492)
44,191,797
- ----------------------------------------------------------------------------------------------
Cash
5,046,698
- ----------------------------------------------------------------------------------------------
Collateral for securities loaned--Note 7
230,470,279
- ----------------------------------------------------------------------------------------------
Unrealized appreciation on forward foreign currency exchange contracts--Note 5
16,440,657
- ----------------------------------------------------------------------------------------------
Receivables:
Investments sold
15,197,168
Interest and dividends
6,985,490
Shares of beneficial interest sold
4,508,578
- ----------------------------------------------------------------------------------------------
Other
64,199
- --------------
Total assets
3,306,446,245
================================================================================================================
=============
LIABILITIES Return of collateral for securities loaned--Note 7
230,470,279
- ----------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign currency exchange contracts--Note 5
4,862
- ----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased
10,444,530
Shares of beneficial interest redeemed
4,715,946
Distribution and service plan fees
1,402,720
Transfer and shareholder servicing agent fees
278,435
Trustees' fees
274,972
Other
1,253,546
- --------------
Total liabilities
248,845,290
================================================================================================================
=============
NET ASSETS
$3,057,600,955
==============
================================================================================================================
=============
COMPOSITION OF
NET ASSETS
Paid-in capital
$2,357,134,687
- ----------------------------------------------------------------------------------------------
Undistributed net investment income
19,988,584
- ----------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign currency
transactions
95,703,909
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of assets
and liabilities denominated in foreign currencies
584,773,775
- --------------
Net assets
$3,057,600,955
==============
================================================================================================================
=============
NET ASSET VALUE
PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,498,748,991 and 64,074,825 shares of beneficial interest
outstanding)
$39.00
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)
$41.38
- ----------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based
on net assets of $541,225,350 and 14,172,475 shares of beneficial interest
outstanding)
$38.19
- ----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $17,626,614 and 455,146 shares of beneficial interest outstanding)
$38.73
See accompanying Notes to Financial Statements.
</TABLE>
14 Oppenheimer Global Fund
<PAGE> 15
Statement of Operations For the Year Ended September 30, 1996
<TABLE>
================================================================================================================
=============
<S> <C>
<C>
INVESTMENT INCOME Interest
$12,222,133
- ----------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies (net of foreign withholding taxes of $2,646,317)
37,079,276
Affiliated companies (net of foreign withholding taxes of $41,604)
235,753
- --------------
Total income
49,537,162
================================================================================================================
=============
EXPENSES Management fees--Note 4
19,638,352
- ----------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A
4,149,778
Class B
4,373,990
Class C
81,790
- ----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4
4,246,782
- ----------------------------------------------------------------------------------------------
Custodian fees and expenses
1,789,474
- ----------------------------------------------------------------------------------------------
Shareholder reports
1,104,222
- ----------------------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1
174,654
- ----------------------------------------------------------------------------------------------
Registration and filing fees:
Class A
34,685
Class B
49,648
Class C
5,682
- ----------------------------------------------------------------------------------------------
Legal and auditing fees
85,064
- ----------------------------------------------------------------------------------------------
Insurance expenses
35,117
- ----------------------------------------------------------------------------------------------
Other
249,885
- --------------
Total expenses
36,019,123
================================================================================================================
=============
NET INVESTMENT INCOME
13,518,039
================================================================================================================
=============
REALIZED AND UNREALIZED
GAIN (LOSS)
Net realized gain (loss) on:
Investments:
Unaffiliated companies
130,775,299
Affiliated companies
586,139
Foreign currency transactions
(5,377,602)
- --------------
Net realized gain
125,983,836
- ----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments
220,550,346
Translation of assets and liabilities denominated in foreign currencies
(26,103,773)
- --------------
Net change
194,446,573
- --------------
Net realized and unrealized gain
320,430,409
================================================================================================================
=============
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$333,948,448
==============
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Global Fund
<PAGE> 16
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended
September 30,
1996
1995
================================================================================================================
=============
<S> <C> <C>
<C>
OPERATIONS Net investment income $13,518,039
$18,111,834
- ----------------------------------------------------------------------------------------------
Net realized gain 125,983,836
118,657,828
- ----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 194,446,573
76,284,116
-----------
- -----------
Net increase in net assets resulting from operations 333,948,448
213,053,778
================================================================================================================
=============
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
Dividends from net investment income:
Class A (14,009,023)
--
Class B (3,568)
--
Class C (7,369)
--
- ----------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (120,623,278)
(194,601,466)
Class B (20,905,412)
(22,711,659)
Class C (131,770)
--
================================================================================================================
=============
BENEFICIAL INTEREST
TRANSACTIONS
Net increase in net assets resulting from beneficial interest
transactions--Note 2:
Class A 165,278,694
273,668,816
Class B 170,668,404
150,133,375
Class C 16,731,958
--
================================================================================================================
=============
NET ASSETS Total increase 530,947,084
419,542,844
- ----------------------------------------------------------------------------------------------
Beginning of period 2,526,653,871
2,107,111,027
--------------
- -------------
End of period (including undistributed net investment
income of $19,988,584 and $13,182,028, respectively) $3,057,600,955
$2,526,653,871
==============
==============
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Global Fund
<PAGE> 17
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
-------------------------------------------
- ------------------------------------
Year Ended September 30, Year Ended September 30,
1996 1995 1994 1993 1992 1996 1995 1994
1993(2)
================================================================================================================
===============
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.84 $37.69 $35.04 $30.03 $32.05 $36.16 $37.36 $34.99
$33.33
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Income (loss) from investment operations:
Net investment income (loss) .23 .31 .17 .26 .17 (.05) .06
.08 .03
Net realized and unrealized
gain (loss) 4.22 2.59 6.10 4.99 (1.50) 4.13 2.49 5.83
1.63
Total income (loss) from ---- ---- ---- ---- ----- ---- ---- ----
----
investment operations 4.45 2.90 6.27 5.25 (1.33) 4.08 2.55 5.91
1.66
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.24) -- (.25) (.12) (.11) -- -- (.18)
--
Distributions from net realized gain (2.05) (3.75) (3.37) (.12) (.58) (2.05) (3.75) (3.36)
--
Total dividends and distributions ---- ---- ---- ---- ----- ---- ---- ----
----
to shareholders (2.29) (3.75) (3.62) (.24) (.69) (2.05) (3.75) (3.54)
--
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Net asset value, end of period $39.00 $36.84 $37.69 $35.04 $30.03 $38.19 $36.16 $37.36
$34.99
====== ====== ====== ====== ====== ====== ====== ======
======
================================================================================================================
===============
TOTAL RETURN, AT NET ASSET VALUE(3) 12.98% 9.26% 19.19% 17.67% (4.23)% 12.07% 8.34% 18.10%
3.64%
================================================================================================================
===============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $2,499 $2,186 $1,921 $1,389 $1,215 $541 $340 $187
$6
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average net assets (in millions) $2,309 $1,979 $1,711 $1,213 $1,194 $438 $258 $
88 $3
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Amount of debt outstanding at end
of period (in thousands) N/A N/A N/A N/A $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A N/A N/A $18,247 $60,000 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average number of shares outstanding
throughout each period
(in thousands) N/A N/A N/A 39,853 37,435 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Average amount of debt per share
outstanding throughout each period N/A N/A N/A $0.46 $1.60 N/A N/A
N/A N/A
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Ratios to average net assets:
Net investment income (loss) 0.62% 0.90% 0.38% 0.84% 0.55% (0.17)% 0.09% (0.30)%
1.52%(4)
Expenses 1.17% 1.20% 1.15% 1.18% 1.36% 2.00% 2.03% 2.08%
2.40%(4)
- ----------------------------------------------------------------------------------------------------------------
- ---------------
Portfolio turnover rate(5) 102.9% 84.4% 78.3% 86.9% 18.0% 102.9% 84.4% 78.3%
86.9%
Average brokerage
commission rate(6) $0.0071 -- -- -- -- $0.0071 --
- -- --
<CAPTION>
Class C
-------
Period
Ended
Sept. 30,
1996(1)
==========================================================
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $36.67
- ----------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .09
Net realized and unrealized
gain (loss) 4.13
Total income (loss) from ----
investment operations 4.22
- ----------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income (.11)
Distributions from net realized gain (2.05)
Total dividends and distributions ------
to shareholders (2.16)
- ----------------------------------------------------------
Net asset value, end of period $38.73
======
==========================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 12.34%
==========================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $18
- ----------------------------------------------------------
Average net assets (in millions) $8
- ----------------------------------------------------------
Amount of debt outstanding at end
of period (in thousands) N/A
- ----------------------------------------------------------
Average amount of debt outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average number of shares outstanding
throughout each period
(in thousands) N/A
- ----------------------------------------------------------
Average amount of debt per share
outstanding throughout each period N/A
- ----------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.04%(4)
Expenses 1.99%(4)
- ----------------------------------------------------------
Portfolio turnover rate(5) 102.9%
Average brokerage
commission rate(6) $0.0071
</TABLE>
1. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
2. For the period from August 17, 1993 (inception of offering) to September 30,
1993.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended September 30, 1996 were $2,961,733,794 and $2,678,446,475,
respectively.
6. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
17 Oppenheimer Global Fund
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Global Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified,
open-end management investment company. The Fund's investment
objective is capital appreciation. The Fund invests primarily in
common stocks of U.S. and foreign companies. The Fund's investment
adviser 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 three 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 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. Forward foreign currency
exchange contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange
markets on a daily basis as provided by a reliable bank or dealer.
---------------------------------------------------------------------
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 rates of
exchange prevailing on the respective dates of such transactions.
The effect of changes in foreign currency exchange rates
on investments is separately identified from the fluctuations
arising from changes in market values of securities held and
reported with all other foreign currency gains and losses in the
Fund's Statement of Operations.
---------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book
Entry System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market
value of the underlying securities is required to be at least 102%
of the resale price at the time of purchase. If the seller of the
agreement defaults and the value of the collateral declines, or if
the seller enters an insolvency proceeding, realization of the value
of the collateral by the Fund may be delayed or limited.
---------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income,
expenses (other than those attributable to a specific class) and
gains and losses are allocated daily to each class of shares based
upon the relative proportion of net assets represented by such
class. Operating expenses directly attributable to a specific class
are charged against the operations of that class.
---------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income,
including any net realized gain on investments not offset by loss
carryovers, to shareholders. Therefore, no federal income or excise
tax provision is required.
---------------------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a nonfunded
retirement plan for the Fund's independent trustees. Benefits are
based on years of service and fees paid to each trustee during the
years of service. During the year ended September 30, 1996, a
provision of $101,127 was made for the Fund's projected benefit
obligations and payments of $7,479 were made to retired trustees,
resulting in an accumulated liability of $262,675 at September 30,
1996.
---------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders are recorded on the ex-dividend date.
18 Oppenheimer Global Fund
<PAGE> 19
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment
income (loss) and net realized gain (loss) may differ for financial
statement and tax purposes. The character of the distributions made
during the year from net investment income or net realized gains may
differ from 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 September 30, 1996, the Fund
adjusted the classification of distributions to shareholders to
reflect the differences between the financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, during the year ended September 30, 1996, amounts have
been reclassified to reflect a decrease in undistributed net
investment income and an increase in accumulated net realized gain
on investments of $367,527. In addition, to properly reflect foreign
currency gain in the components of capital, $7,676,004 of foreign
exchange gain determined according to U.S. federal income tax rules
has been reclassified from net realized gain to net investment
income.
---------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income
is recorded on the ex-dividend date. Realized gains and losses on
investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used
for federal income tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results
could differ from those estimates.
================================================================================
2. SHARES OF
BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares
of beneficial interest of each class. Transactions in shares of
beneficial interest were as follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1996(1) Year Ended September 30, 1995
-------------------------------- ------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 13,445,573 $494,129,386 14,970,471 $515,346,870
Dividends and distributions reinvested 3,791,424 129,022,228 5,837,688 185,638,506
Redeemed (12,511,334) (457,872,920) (12,413,877) (427,316,560)
----------- ------------ ----------- ------------
Net increase 4,725,663 $165,278,694 8,394,282 $273,668,816
=========== ============ =========== ============
- -------------------------------------------------------------------------------------------------------------------
Class B:
Sold 6,760,563 $244,252,699 5,628,673 $192,633,540
Dividends and distributions reinvested 596,683 20,012,734 687,798 21,610,609
Redeemed (2,599,758) (93,597,029) (1,894,767) (64,110,774)
----------- ------------ ----------- ------------
Net increase 4,757,488 $170,668,404 4,421,704 $150,133,375
=========== ============ =========== ============
- -------------------------------------------------------------------------------------------------------------------
Class C:
Sold 549,240 $20,205,091 -- $
- --
Dividends and distributions reinvested 4,029 137,151 --
- --
Redeemed (98,123) (3,610,284) --
- --
----------- ------------ ----------- ------------
Net increase 455,146 $16,731,958 -- $
- --
=========== ============ =========== ============
</TABLE>
1. For the year ended September 30, 1996 for Class A and Class B
shares, and for the period from October 2, 1995 (inception of
offering) to September 30, 1996 for Class C shares.
================================================================================
3. UNREALIZED GAINS AND
LOSSES ON INVESTMENTS
At September 30, 1996, net unrealized appreciation on investments of
$567,222,031 was composed of gross appreciation of $597,401,994, and
gross depreciation of $30,179,963.
19 Oppenheimer Global Fund
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for
a fee of 0.80% on the first $250 million of net assets, 0.77%
on the next $250 million, 0.75% on the next $500 million, 0.69%
on the next $1 billion and 0.67% on net assets in excess of $2
billion. The Manager has voluntarily agreed to reduce the
management fee to which it is entitled under the Agreement to
0.65% on net assets in excess of $3.5 billion. The Manager has
agreed to reimburse the Fund if aggregate expenses (with
specified exceptions) exceed the most stringent applicable
regulatory limit on Fund expenses.
For the year ended September 30, 1996, commissions (sales
charges paid by investors) on sales of Class A shares totaled
$5,830,983, of which $1,861,170 was retained by
OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI
on sales of the Fund's Class B and Class C shares totaled
$6,952,591 and $156,720, of which $413,273 and $2,797,
respectively, was paid to an affiliated broker/dealer. During
the year ended September 30, 1996, OFDI received contingent
deferred sales charges of $743,491 and $6,445, respectively,
upon redemption of Class B and Class C shares, as reimbursement
for sales commissions advanced by OFDI at the time of sale of
such shares.
OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for
the Fund, and for other registered investment companies. OFS's
total costs of providing such services are allocated ratably to
these companies.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in
connection with the personal service and maintenance of
accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.25% of the
average annual net assets of Class A shares of the Fund. OFDI
uses the service fee to reimburse brokers, dealers, banks and
other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that
hold Class A shares. During the year ended September 30, 1996,
OFDI paid $252,591 to an affiliated broker/dealer as
reimbursement for Class A personal service and maintenance
expenses.
The Fund has adopted a reimbursement type Distribution and
Service Plan for Class B shares to reimburse OFDI for its
services and costs in distributing Class B shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B shares.
OFDI also receives a service fee of 0.25% per year to reimburse
dealers for providing personal services for accounts that hold
Class B shares. Both fees are computed on the average annual
net assets of Class B shares, determined as of the close of
each regular business day. If the Plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plan was terminated. During the
year ended September 30, 1996, OFDI paid $53,520 to an
affiliated broker/dealer as reimbursement for Class B personal
service and maintenance expenses and retained $3,701,675 as
reimbursement for Class B sales commissions and service fee
advances, as well as financing costs. As of September 30, 1996,
OFDI had incurred unreimbursed expenses of $16,226,094 for
Class B.
The Fund has adopted a compensation type Distribution and
Service Plan for Class C shares to compensate OFDI for its
services and costs in distributing Class C shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class C shares.
OFDI also receives a service fee of 0.25% per year to
compensate dealers for providing personal services for accounts
that hold Class C shares. Both fees are computed on the average
annual net assets of Class C shares, determined as of the close
of each regular business day. If the Plan is terminated by the
Fund, the Board of Trustees may allow the Fund to continue
payments of the asset-based sales charge to OFDI for certain
expenses it incurred before the Plan was terminated. During the
year September 30, 1996, OFDI retained $75,623 as compensation
for Class C sales commissions and service fee advances, as well
as financing costs. As of September 30, 1996, OFDI had incurred
unreimbursed expenses of $200,447 for Class C.
20 Oppenheimer Global Fund
<PAGE> 21
================================================================================
5. FORWARD CONTRACTS
A forward foreign currency exchange contract (forward contract)
is a commitment to purchase or sell a foreign currency at a
future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign
currency risks. They may also be used to tactically shift
portfolio currency risk. The Fund generally enters into forward
contracts as a hedge upon the purchase or sale of a security
denominated in a foreign currency. In addition, the Fund may
enter into such contracts as a hedge against changes in foreign
currency exchange rates on portfolio positions.
Forward contracts are valued based on the closing prices
of the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable
bank or dealer. The Fund will realize a gain or loss upon the
closing or settlement of the forward transaction.
Securities held in segregated accounts to cover net
exposure on outstanding forward contracts are noted in the
Statement of Investments where applicable. Unrealized
appreciation or depreciation on forward contracts is reported
in the Statement of Assets and Liabilities. Realized gains and
losses are reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
Risks include the potential inability of the counterparty
to meet the terms of the contract and unanticipated movements
in the value of a foreign currency relative to the U.S. dollar.
At September 30, 1996, the Fund had outstanding forward
contracts to purchase and sell currencies as follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF UNREALIZED
UNREALIZED
CONTRACTS TO PURCHASE EXCHANGE DATE (000S) SEPT. 30, 1996 APPRECIATION
DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------
- ------------
<S> <C> <C> <C> <C>
German Deutsche Mark (DEM) 10/1/96--10/2/96 5,025 DEM $3,294,412 $ --
$4,862
========== ---------
------
CONTRACTS TO SELL
- ----------------------------------------------------------------------------------------------------------------
- ------------
Swiss Franc (CHF) 10/8/96 114,690 CHF $91,561,452 $8,438,548
$ --
- ----------------------------------------------------------------------------------------------------------------
- ------------
Italian Lira (ITL) 10/1/96 2,250,167 ITL 1,478,379 5,313
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
German Deutsche Mark (DEM) 10/1/96--1/8/97 149,342 DEM 98,494,144 5,431,912
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
Indonesian Rupiah (IDR) 10/1/96--10/2/96 393,913 IDR 169,680 35
--
- ----------------------------------------------------------------------------------------------------------------
- ------------
Japanese Yen (JPY) 10/7/96 15,382,499 JPY 138,205,862 2,564,849
--
------------ -----------
-------
$329,909,517 16,440,657
--
============ ===========
-------
Total Unrealized Appreciation and Depreciation $16,440,657
$4,862
===========
=======
</TABLE>
6. ILLIQUID AND
RESTRICTED SECURITIES
At September 30, 1996, investments in securities included
issues that are illiquid or restricted. Restricted securities
are often purchased in private placement transactions, are not
registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under
methods approved by the Board of Trustees as reflecting fair
value. A security may also be considered illiquid if it lacks a
readily-available market or if its valuation has not changed
for a certain period of time. The Fund intends to invest no
more than 10% of its net assets (determined at the time of
purchase and reviewed from time to time) in illiquid or
restricted securities. Certain restricted securities, eligible
for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or
restricted securities subject to this limitation at September
30, 1996 was $88,287,890, which represents 2.89% of the Fund's
net assets. Information concerning restricted securities is as
follows:
<TABLE>
<CAPTION>
VALUATION PER
UNIT AS
SECURITY ACQUISITION DATE COST PER UNIT OF SEPT. 30,
1996
- ----------------------------------------------------------------------------------------------------------------
- -----------
<S> <C> <C> <C>
Quintiles Transnational Corp. 8/2/93 $ 8.64 $ 65.93
- ----------------------------------------------------------------------------------------------------------------
- -----------
Clinica y Maternidad Suizo Argentino 5/16/94 7,383.33 8,883.03
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees,
certain unregistered securities are determined to be liquid and
are not included within the 10% limitation specified above.
21 Oppenheimer Global Fund
<PAGE> 22
Notes to Financial Statements (Continued)
7. SECURITIES LOANED
The Fund has entered into a securities lending arrangement with
the custodian. Under the terms of the agreement, the Fund
receives 60% of the annual net income from lending
transactions. In exchange for such fees, the custodian is
authorized to loan securities on behalf of the Fund, against
receipt of collateral at least equal in value to the value of
the securities loaned. Cash collateral is invested by the
custodian in money market instruments approved by the Manager.
As of September 30, 1996, the Fund had on loan securities
valued at $223,463,921. Cash of $187,481,049 was received as
collateral for the loans, and has been invested in the approved
instruments identified below. U.S. Treasury Bills, Notes and
Bonds valued at $42,989,230 were also received as collateral.
The Fund bears the risk of any deficiency in the amount of
collateral available for return to a borrower due to a loss in
an approved investment.
<TABLE>
<CAPTION>
VALUATION
AS OF
SECURITY SEPTEMBER
30, 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C>
Repurchase agreement with CS First Boston Corp., 5.975%, dated 9/30/96 and maturing
12/31/96, collateralized by Federal Home Loan Mortgage Corp., 7%--9.50%,
5/15/17--7/1/26, with a value of $117,360,046, and by Federal National Mortgage Assn.,
0%, 6/1/23, with a value of $46,110,000
$160,470,046
- ----------------------------------------------------------------------------------------------------------
Repurchase agreement with Goldman, Sachs & Co., 5.75%, dated 9/30/96 and maturing
10/1/96, collateralized by Federal Mortgage Acceptance Corp., 7.31%, 8/7/01, with a
value of $10,068,530, and by Federal Home Loan Bank, 5.60%, 7/24/97, with a value of
$10,001,710, and by Federal National Mortgage Assn., 7.15%, 6/26/01, with a value of
$6,940,763
27,011,003
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Bills, 1/2/97--5/29/97
1,083,519
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 5.125%--8.50%, 11/30/97--3/31/00
25,925,761
- ----------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 6.25%, 8/15/23
15,979,950
- ------------
$230,470,279
============
</TABLE>
22 Oppenheimer Global Fund
<PAGE> 23
INDEPENDENT AUDITORS' REPORT
================================================================================
The Board of Trustees and Shareholders of Oppenheimer Global
Fund:
We have audited the accompanying statements of investments and
assets and liabilities of Oppenheimer Global Fund as of
September 30, 1996, and the related statement of operations for
the year then ended, the statements of changes in net assets
for each of the years in the two year period then ended and the
financial highlights for each of the years in the five year
period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with 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 September 30, 1996, by
correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed
other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Oppenheimer Global Fund as
of September 30, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the
years in the two year period then ended, and the financial
highlights for each of the years in the five year period then
ended, in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwik LLP
-------------------------
KPMG Peat Marwick LLP
Denver, Colorado
October 21, 1996
23 Oppenheimer Global Fund
<PAGE> 24
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
================================================================================
In early 1997, shareholders will receive information regarding
all dividends and distributions paid to them by the Fund during
calendar year 1996. Regulations of the U.S. Treasury Department
require the Fund to report this information to the Internal
Revenue Service.
Distributions of $2.2892, $2.051 and $2.1657 per share
were paid to Class A, Class B and Class C shareholders,
respectively, on December 19, 1995, of which $2.051 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
September 30, 1996 which are not designated as capital gain
distributions should be multiplied by 17.73% to arrive at the
net amount eligible for the corporate dividend-received
deduction.
The Fund has elected the application of Section 853 of
the Internal Revenue Code to permit shareholders to take a
federal income tax credit or deduction, at their option, on a
per share basis for an aggregate amount of $2,687,921 of
foreign income taxes paid by the Fund during the fiscal year
ended September 30, 1996. A separate notice will be mailed to
each shareholder in January of 1997, which will reflect the
proportionate share of such foreign taxes (as well as the
dividend expected to be paid by the Fund in December of 1996)
which must be treated by shareholders as gross income for
federal income tax purposes.
The foregoing information is presented to assist
shareholders in reporting distributions received from the Fund
to the Internal Revenue Service. Because of the complexity of
the federal regulations which may affect your individual tax
return and the many variations in state and local tax
regulations, we recommend that you consult your tax adviser for
specific guidance.
24 Oppenheimer Global Fund
<PAGE> 25
OPPENHEIMER GLOBAL FUND
================================================================================
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of
Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
William L. Wilby, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISER OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
================================================================================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Global Fund. This report must be preceded
or accompanied by a Prospectus of Oppenheimer Global
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.
25 Oppenheimer Global Fund
<PAGE> 26
OPPENHEIMERFUNDS FAMILY
================================================================================
OppenheimerFunds offers over 50 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 3 million
shareholder accounts and more than $55 billion under
OppenheimerFunds' 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
adviser 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(2) Global Fund
International Growth Fund Quest Global Value Fund
Discovery Fund Disciplined 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 Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
===========================================================================================================
BOND FUNDS International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
===========================================================================================================
MUNICIPAL FUNDS California Municipal Fund(3) Insured Municipal Fund
Florida Municipal Fund(3) Intermediate Municipal Fund
New Jersey Municipal Fund(3)
New York Municipal Fund(3) Rochester Division
Pennsylvania Municipal Fund(3) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
===========================================================================================================
Money Market Funds(4) Money Market Fund Cash Reserves
===========================================================================================================
LIFESPAN Growth Fund Income Fund
Balanced Fund
</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. Effective 4/1/96, the Fund is closed to new investors.
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share. 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.
26 Oppenheimer Global Fund
<PAGE> 27
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 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
RA0330.001.0996 November 30, 1996
[PHOTO]
Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing
simple.
And when you need help, our Customer Service Representatives are only
a toll-free phone call away. They can provide information about your account
and handle administrative requests. You can reach them at our General
Information number.
When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. 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]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- ----------------
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
- ----------------
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Annual Report September 30, 1996
[Picture of Gardening Pic]
"We want to
go after
HIGH
long-term
GROWTH."
[Oppenheimer Logo]
<PAGE>
This Fund is for people who want to take part in the TREMENDOUS POTENTIAL for
growth offered by EMERGING businesses throughout the world.
NEWS
BEAT THE AVERAGE
Cumulative Total Return for the 1-Year Period Ended 9/30/96:
Oppenheimer Global Emerging Growth Fund Class A (at net asset value)(1)
16.25%
Lipper Global Small Company Average for 23 Funds for the 1-Year Period Ended
9/30/96(3)
13.09%
HOW YOUR FUND IS MANAGED
Oppenheimer Global Emerging Growth Fund aggressively seeks capital
appreciation by investing in emerging businesses throughout the world. These
companies tend to be smaller in size and are expected to be active in
developing new products and services or expanding into new markets. In
searching for companies with the best potential for growth, the Fund's
managers use a theme-oriented approach, focusing on such themes as
telecommunications expansion, emerging consumer markets, infrastructure
development, and efficiency enhancing technology, among others, to capitalize
on key global growth trends.
PERFORMANCE
Total return at net asset value for the 12 months ended 9/30/96 for Class A
shares was 16.25%. Cumulative total returns at net asset value for Class B
and C shares since inception on 11/1/95 were 19.22% and 19.28%,
respectively.(1)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 9/30/96 and since
inception on 12/30/87 were 9.57%, (5.68)% and 8.45%, respectively. For Class
B and C shares, cumulative total returns since inception on 11/1/95 were
14.22% and 18.28%, respectively.(2)
OUTLOOK
"We think the outlook for the Fund is extremely positive, and that it is
well-positioned for growth over the next six months. Overall, we are
convinced that international growth will be greater over the next few years
than that of the domestic market."
George Evans, Portfolio Manager
September 30,
1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. In reviewing the notes that follow on
performance and rankings, please be aware that past performance does not
guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost.
1. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower
if sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 9/30/95,
9/30/91 and 12/30/87 (inception of class), after deducting the current
maximum initial sales charge of 5.75%. Class B and C returns show results of
hypothetical investments on 11/1/95 (inception of classes), after the
deduction of the applicable contingent deferred sales charge of 5% for Class
B shares and 1% for Class C shares. An explanation of the different total
returns is in the Fund's prospectus.
3. Source: Lipper Analytical Services, 9/30/96, an independent mutual fund
monitoring service. The average is shown for comparative purposes only.
Oppenheimer Global Emerging Growth Fund is characterized by Lipper as a
global small company fund. Lipper performance does not take sales charges
into consideration.
2 Oppenheimer Global Emerging Growth Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Global Emerging
Growth Fund
DEAR SHAREHOLDER,
While most of the world's markets have lagged the amazing growth of domestic
stocks this year, we believe the time is right for them to catch up. This
belief, coupled with the strong though at times unpredictable performance of
the U.S. market over the period, makes a compelling case for global funds,
which typically invest in a combination of domestic and foreign securities.
Over the past six months, the U.S. stock market has shown investors just
how resilient it can be. During this summer, the Dow declined nearly 10%,
only to soar to record highs in the fall. As a result, stock valuations are
now high, indicating that this bull market could be nearing the top of the
mountain. However, due to solid corporate profits, low inflation, and
stabilized interest rates, we remain optimistic that this market has enough
strength to advance through 1997.
While we've been pleased with earnings in the U.S. market, we believe now
is the time to focus on good opportunities abroad. Why? Analysts estimate
earnings in North America for 1996 will be up about 8% by the end of this
year. Across the rest of the globe, however, they predict corporate earnings
will increase by almost 40%, with the potential for an additional 17% gain in
1997. In fact, particularly in Europe, we're seeing a trend in corporate
restructuring, including downsizing, outsourcing and spinoffs.
As for economic growth in developing countries, Brazil has emerged as a
dominant player in 1996, and we believe it has great potential for the coming
years. In general, the spending power of the population in developing
countries keeps growing. For the first time, a substantial number of
individuals are buying consumer products, including motorcycles, TVs and
cars.
Additionally, there has been a turnabout in Japan. After a five-year
recession, the Japanese economy recently began to recover, unearthing
numerous investment opportunities. Furthermore, around the world, there has
been a significant move toward capitalism. Right now, the wealth of the world
is built on the combined spending power of 700 million people. However, as
the 4.5 billion people who live in developing countries become more
capitalistic, we will undoubtedly see a chain reaction which may revitalize
a number of industries that cater to the consumer.
Despite this pickup in global economic growth, inflation has remained low.
Moreover, many European governments are now concentrating on balancing their
budgets in anticipation of a European monetary union. So, it is reasonable to
expect global interest rates to remain low into 1997. In the end, all these
changes bode well for global stock markets and economies.
Because investing abroad involves greater risk and expenses, including
political and economic uncertainties, currency rate fluctuations and
liquidity restrictions, it should be undertaken with a long-term approach in
mind. That said, we're confident that by diversifying your investments
throughout the world, you should be well positioned to participate in any
economic environment.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals
in the future.
/s/ Bridget A. Macaskill
Bridget A. Macaskill
October 21, 1996
3 Oppenheimer Global Emerging Growth Fund
<PAGE>
Q + A
[PHOTO]
[LOGO]
What
areas are
we currently
TARGETING?
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
The Fund has performed well over the past year, despite volatility
in the foreign and domestic markets. The Fund weathered this
summer's pullback in the NASDAQ, as well as the slow market
activity throughout the world with only minor upset to its
performance. Much of this was thanks to a healthy jump in the value
of the U.S. portion of the Fund.
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
We've had very good returns in our theme areas from individual
stocks all over the world. Within the technology sector, in
particular, we had excellent earnings from a company that
customizes databases to individual user and client needs, thus
increasing their efficiency. We've also been pleased with our
investment in a company that develops application software
specifically for the banking, insurance and financial services
industries. These two examples illustrate the growing need for
efficiency-enhancing technology in today's world. And as businesses
become more dependent on computers, we believe we'll see even
greater growth in this area.
Another top-performing investment was in our emerging consumer
markets theme. We've done particularly well with a Finnish
agricultural company that produces a margarine additive which is
expected to actually reduce a person's cholesterol by 10 to 15%. As
word about this product spreads, we expect the stock price to
benefit even more.(1) DID ANY INVESTMENTS NOT PERFORM AS YOU'D
EXPECTED?
We didn't have any individual investments that disappointed us.
However, over the period, small-cap stocks didn't perform
1. The Fund's portfolio is subject to change.
<PAGE>
FACING PAGE
Top left: George Evans, Portfolio Manager
Top right: Bill Wilby, Senior VP, Director of Global Investments
Bottom: Robert Doll, Executive VP, Director of Equity Investments
THIS PAGE
Top: Frank Jennings, Member of Global Investments Team
Bottom: Shanquan Li, Member of Global Investments Team
[LOGO]
WE SEE SOME GOOD VALUES IN COMPANIES SELLING CONSUMER PRODUCTS IN
DEVELOPING COUNTRIES.
exceptionally well, since investors were focusing on large-cap
domestic stocks. Over time, however, we believe investment values
around the world, particularly in emerging economies, will again be
recognized by investors, helping emerging growth stocks to reach
their full potential.
WHAT AREAS ARE YOU CURRENTLY TARGETING?
Right now, we see some good values in companies selling consumer
products in developing countries. In fact, in these countries,
there is an explosion of consumerism, as the spending power of
these populations increases. For the first time, large numbers of
people are buying motorcycles, TVs, cars and a multitude of other
consumer products, including luxury items. This consumption should
be reflected in higher stock prices for many multinational consumer
product companies.
In addition, because we anticipate a growing demand for many
natural resources, we are also looking at certain companies that we
believe will benefit from this trend. For example, we think the
price of oil will go up due to an increase in demand from Asia and
the emerging growth countries. So, we'll be looking to invest in
the types of natural resource companies that will benefit from this
increase in volume, such as drilling companies.
WHAT IS YOUR OUTLOOK FOR THE FUND?
We think the outlook for the Fund is extremely positive, and that
it is well-positioned for growth over the next six months. We are
pleased with the strength the European companies currently in the
portfolio have exhibited, while we also have high expectations for
our Latin American investments. And, in small caps we believe we're
poised to benefit from owning a good mix of growth and value
stocks. Overall, we are convinced that international growth will be
greater over the next few years than that of the domestic market.
5 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1996
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
- ---------------------------------
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
COMMON STOCKS--95.0%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
BASIC MATERIALS--3.7%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
CHEMICALS--1.1% Saes Getters SpA
120,000 $ 1,785,749
- -------------------------------------------------------------------------------------------------
- ---------------------------------
GOLD--1.0% Cambior, Inc.
75,000 1,029,519
- -------------------------------------------------------------------------------------------------
- ------
Dayton Mining Corp.(1)
100,000 682,676
----------
1,712,195
- -------------------------------------------------------------------------------------------------
- ---------------------------------
METALS--1.6% Boehler-Uddeholm AG
10,000 799,617
- -------------------------------------------------------------------------------------------------
- ------
Cia de Minas Buenaventura SA, Sponsored ADR(1)
100,000 1,925,000
----------
2,724,617
- -------------------------------------------------------------------------------------------------
- ---------------------------------
CONSUMER CYCLICALS--22.8%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
AUTOS & HOUSING--5.7% Alrenco, Inc.(1)
30,000 630,000
- -------------------------------------------------------------------------------------------------
- ------
Belmont Homes, Inc.(1)
70,000 1,767,500
- -------------------------------------------------------------------------------------------------
- ------
Ciadea SA
219,997 1,045,120
- -------------------------------------------------------------------------------------------------
- ------
IRSA Inversiones y Representaciones, SA
257,201 751,123
- -------------------------------------------------------------------------------------------------
- ------
Orbital Engine Corp. Ltd.(1)
1,100,000 983,504
- -------------------------------------------------------------------------------------------------
- ------
Porsche AG, Preference(1)
5,500 3,760,986
- -------------------------------------------------------------------------------------------------
- ------
Thai Stanley Electric Co. Ltd.
150,000 708,174
----------
9,646,407
- -------------------------------------------------------------------------------------------------
- ---------------------------------
LEISURE &
ENTERTAINMENT--6.9% Applebee's International, Inc.
30,000 795,000
- -------------------------------------------------------------------------------------------------
- ------
Casa Ole Restaurants, Inc.(1)
61,700 794,387
- -------------------------------------------------------------------------------------------------
- ------
China Hong Kong Photo Products Holdings Ltd.
1,500,000 547,975
- -------------------------------------------------------------------------------------------------
- ------
Cinar Films, Inc., Cl. B(1)
60,000 1,563,750
- -------------------------------------------------------------------------------------------------
- ------
CKE Restaurants, Inc.
40,000 1,230,000
- -------------------------------------------------------------------------------------------------
- ------
Coach USA, Inc.(1)
30,000 802,500
- -------------------------------------------------------------------------------------------------
- ------
Galoob (Lewis) Toys, Inc.(1)
30,000 877,500
- -------------------------------------------------------------------------------------------------
- ------
Longhorn Steaks, Inc.(1)
40,000 610,000
- -------------------------------------------------------------------------------------------------
- ------
Lusomundo SGPS SA(1)
200,000 2,043,776
- -------------------------------------------------------------------------------------------------
- ------
Metromedia International Group, Inc.(1)
65,000 690,625
- -------------------------------------------------------------------------------------------------
- ------
Quality Dining, Inc.(1)
30,000 855,000
- -------------------------------------------------------------------------------------------------
- ------
Square Co. Ltd.
15,000 861,953
----------
11,672,466
- -------------------------------------------------------------------------------------------------
- ---------------------------------
MEDIA--2.0% Capital Radio PLC
85,000 794,676
- -------------------------------------------------------------------------------------------------
- ------
Dorling Kindersley Holdings PLC
90,000 686,645
- -------------------------------------------------------------------------------------------------
- ------
NRJ SA
6,500 774,522
- -------------------------------------------------------------------------------------------------------
Wireless One, Inc.(1)
70,000 1,032,500
----------
3,288,343
- -------------------------------------------------------------------------------------------------
- ---------------------------------
RETAIL: GENERAL--3.4% Galeries Lafayette(1)
4,201 1,217,669
- -------------------------------------------------------------------------------------------------
- ------
Lojas Americanas SA, Preference
19,000,000 321,925
- -------------------------------------------------------------------------------------------------
- ------
Nautica Enterprises, Inc.(1)
20,000 645,000
</TABLE>
6 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
RETAIL: GENERAL PT Matahari Putra Prima
400,000 $ 435,064
(CONTINUED)
- -------------------------------------------------------------------------------------------------
- ------
PT Ramayana Lestari Sentosa(1)
835,000 1,402,757
- -------------------------------------------------------------------------------------------------
- ------
Vans, Inc.(1)
40,000 765,000
- -------------------------------------------------------------------------------------------------
- ------
Wolverine World Wide, Inc.
36,000 999,000
----------
5,786,415
- -------------------------------------------------------------------------------------------------
- ---------------------------------
RETAIL: SPECIALTY--4.8% Giordano International Ltd.
1,000,000 879,346
- -------------------------------------------------------------------------------------------------
- ------
Maruko Co. Ltd.
12,100 793,086
- -------------------------------------------------------------------------------------------------
- ------
Moebel Walther AG, Preference
40,000 2,438,920
- -------------------------------------------------------------------------------------------------
- ------
Moovies, Inc.(1)
60,000 330,000
- -------------------------------------------------------------------------------------------------
- ------
Party City Corp.(1)
50,000 937,500
- -------------------------------------------------------------------------------------------------
- ------
Ryohin Keikaku Co. Ltd.
13,000 1,101,863
- -------------------------------------------------------------------------------------------------
- ------
Wolford AG
6,000 1,532,133
----------
8,012,848
- -------------------------------------------------------------------------------------------------
- ---------------------------------
CONSUMER NON-CYCLICALS--23.4%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
BEVERAGES--2.7% Hellenic Bottling Co., SA
40,000 1,361,165
- -------------------------------------------------------------------------------------------------
- ------
Panamerican Beverages, Inc., Cl. A
20,000 822,500
- -------------------------------------------------------------------------------------------------
- ------
Remy Cointreau
65,469 1,654,087
- -------------------------------------------------------------------------------------------------
- ------
Serm Suk Public Co. Ltd.
25,000 767,188
----------
4,604,940
- -------------------------------------------------------------------------------------------------
- ---------------------------------
EDUCATION--0.8% National Education Corp.(1)
70,000 1,338,750
- -------------------------------------------------------------------------------------------------
- ---------------------------------
FOOD--4.9% Disco SA, Sponsored ADR(1)
51,800 1,016,575
- -------------------------------------------------------------------------------------------------
- ------
Hokuto Corp.
19,000 812,031
- -------------------------------------------------------------------------------------------------
- ------
Lindt & Spruengli AG, Participation Certificates
1,000 1,659,288
- -------------------------------------------------------------------------------------------------
- ------
Molinos Rio de la Plata SA, Cl. B
437,499 1,435,180
- -------------------------------------------------------------------------------------------------
- ------
Perdigao SA, Comercio e Industria, Preference
240,000,000 378,436
- -------------------------------------------------------------------------------------------------
- ------
Performance Food Group Co.(1)
42,000 693,000
- -------------------------------------------------------------------------------------------------
- ------
Raision Tehtaat Oy
32,000 1,926,637
- -------------------------------------------------------------------------------------------------
- ------
Universal Robina Corp.
667,000 336,869
----------
8,258,016
- -------------------------------------------------------------------------------------------------
- ---------------------------------
HEALTHCARE/DRUGS--6.9% Alpha-Beta Technology, Inc.(1)
40,000 430,000
- -------------------------------------------------------------------------------------------------
- ------
Biocompatibles International PLC(1)
297,500 2,502,298
- -------------------------------------------------------------------------------------------------
- ------
Dura Pharmaceuticals, Inc.(1)
40,000 1,475,000
- -------------------------------------------------------------------------------------------------
- ------
Marseille-Kliniken AG
35,000 1,262,076
- -------------------------------------------------------------------------------------------------
- ------
Norland Medical Systems, Inc.(1)
50,000 1,062,500
- -------------------------------------------------------------------------------------------------
- ------
Rohto Pharmaceutical Co.
60,000 635,690
- -------------------------------------------------------------------------------------------------
- ------
SangStat Medical Corp.(1)
50,000 1,275,000
- -------------------------------------------------------------------------------------------------
- ------
Teikoku Hormone Manufacturing Co. Ltd.
50,000 673,401
- -------------------------------------------------------------------------------------------------
- ------
Tiger Medicals Ltd.
493,000 808,743
- -------------------------------------------------------------------------------------------------
- ------
Torii Pharmaceutical Co. Ltd.
70,000 1,489,562
----------
11,614,270
</TABLE>
7 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
HEALTHCARE/SUPPLIES & Althin Medical AB, B Shares
60,000 $ 1,266,835
SERVICES--7.6%
- -------------------------------------------------------------------------------------------------
- ------
AmeriSource Health Corp., Cl. A(1)
30,000 1,335,000
- -------------------------------------------------------------------------------------------------
- ------
Capstone Pharmacy Services, Inc.(1)
60,000 742,500
- -------------------------------------------------------------------------------------------------
- ------
Egis RT(1)
20,000 1,408,132
- -------------------------------------------------------------------------------------------------
- ------
Elekta AB, B Shares
15,000 506,734
- -------------------------------------------------------------------------------------------------
- ------
Gulf South Medical Supply, Inc.(1)
30,000 772,500
- -------------------------------------------------------------------------------------------------
- ------
Nichii Gakkan Co.
27,000 1,367,273
- -------------------------------------------------------------------------------------------------
- ------
OccuSystems, Inc.(1)
30,000 900,000
- -------------------------------------------------------------------------------------------------
- ------
Omnicare, Inc.
26,000 793,000
- -------------------------------------------------------------------------------------------------
- ------
Pediatrix Medical Group, Inc.(1)
13,500 676,687
- -------------------------------------------------------------------------------------------------
- ------
PhyCor, Inc.(1)
25,000 951,562
- -------------------------------------------------------------------------------------------------
- ------
Rural/Metro Corp.(1)
15,000 547,500
- -------------------------------------------------------------------------------------------------
- ------
Serologicals Corp.(1)
20,000 695,000
- -------------------------------------------------------------------------------------------------
- ------
Total Renal Care Holdings, Inc.(1)
20,000 795,000
----------
12,757,723
- -------------------------------------------------------------------------------------------------
- ---------------------------------
HOUSEHOLD GOODS--0.5% Srithai Superware Co. Ltd.
175,000 757,353
- -------------------------------------------------------------------------------------------------
- ---------------------------------
ENERGY--4.7%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
ENERGY SERVICES & Cie Generale de Geophysique SA(1)
37,500 2,492,128
PRODUCERS--3.5%
- -------------------------------------------------------------------------------------------------
- ------
Newfield Exploration Co.(1)
20,000 900,000
- -------------------------------------------------------------------------------------------------
- ------
Smedvig AS
100,000 2,061,052
- -------------------------------------------------------------------------------------------------
- ------
Smedvig AS, Series B(1)
25,000 463,352
----------
5,916,532
- -------------------------------------------------------------------------------------------------
- ---------------------------------
OIL-INTEGRATED--1.2% Expro International Group PLC
210,100 1,231,763
- -------------------------------------------------------------------------------------------------
- ------
Forasol-Foramer NV(1)
60,000 727,500
----------
1,959,263
- -------------------------------------------------------------------------------------------------
- ---------------------------------
FINANCIAL--7.8%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
BANKS--0.8% Industrial Credit & Investment Corp. of India Ltd. (The), GDR(1)(2)
92,900 1,033,512
- -------------------------------------------------------------------------------------------------
- ------
PT Lippo Bank
209,500 324,876
----------
1,358,388
- -------------------------------------------------------------------------------------------------
- ---------------------------------
DIVERSIFIED
FINANCIAL--3.2% Credicorp Ltd.
47,000 893,000
- -------------------------------------------------------------------------------------------------
- ------
Egypt Investment Co.(1)
96,500 1,145,937
- -------------------------------------------------------------------------------------------------
- ------
Green Tree Financial Corp.
30,000 1,177,500
- -------------------------------------------------------------------------------------------------
- ------
Manhattan Card Co. Ltd.
2,500,000 1,236,581
- -------------------------------------------------------------------------------------------------
- ------
Wing Hang Bank Ltd.
250,000 937,538
----------
5,390,556
- -------------------------------------------------------------------------------------------------
- ---------------------------------
INSURANCE--3.8% CapMAC Holdings, Inc.
30,000 997,500
- -------------------------------------------------------------------------------------------------
- ------
Ockham Holdings PLC
1,200,000 1,791,655
- -------------------------------------------------------------------------------------------------
- ------
Reinsurance Australia Corp. Ltd.
1,250,000 3,580,336
----------
6,369,491
</TABLE>
8 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
INDUSTRIAL--20.2%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
ELECTRICAL EQUIPMENT--0.8% Crompton Greaves Ltd., GDR(1)
70,000 $ 346,500
- -------------------------------------------------------------------------------------------------
- ------
LEM Holdings SA
4,300 998,205
----------
1,344,705
- -------------------------------------------------------------------------------------------------
- ---------------------------------
INDUSTRIAL MATERIALS--0.5% HI Cement Corp.(1)(2)
2,592,000 869,434
- -------------------------------------------------------------------------------------------------
- ---------------------------------
INDUSTRIAL SERVICES--11.2% Affiliated Computer Services, Inc., Cl. A(1)
17,000 998,750
- -------------------------------------------------------------------------------------------------
- ------
Boskalis Westminster
152,000 2,967,240
- -------------------------------------------------------------------------------------------------
- ------
Cordiant PLC(1)
1,010,000 1,768,517
- -------------------------------------------------------------------------------------------------
- ------
Daisytek International Corp.(1)
25,000 1,081,250
- -------------------------------------------------------------------------------------------------
- ------
DecisionOne Holdings Corp.(1)
35,000 490,000
- -------------------------------------------------------------------------------------------------
- ------
Fugro NV
100,000 1,537,158
- -------------------------------------------------------------------------------------------------
- ------
KCI Konecranes International Corp.(1)
80,000 2,224,390
- -------------------------------------------------------------------------------------------------
- ------
May & Speh, Inc.(1)
50,000 1,000,000
- -------------------------------------------------------------------------------------------------
- ------
MRC Allied Industries, Inc.(1)
8,000,000 975,796
- -------------------------------------------------------------------------------------------------
- ------
PT Citra Marga Nusaphala Persada
2,331,000 1,581,445
- -------------------------------------------------------------------------------------------------
- ------
Rent-Way, Inc.(1)
10,000 126,250
- -------------------------------------------------------------------------------------------------------
Serco Group PLC
100,000 953,673
- -------------------------------------------------------------------------------------------------
- ------
Transaction Systems Architects, Inc., Cl. A(1)
20,000 845,000
- -------------------------------------------------------------------------------------------------
- ------
VBH Vereinigter Baubeschlag Handel AG
70,000 1,733,863
- -------------------------------------------------------------------------------------------------
- ------
Walsh International, Inc.(1)
60,000 600,000
----------
18,883,332
- -------------------------------------------------------------------------------------------------
- ---------------------------------
MANUFACTURING--5.8% Bucher Holding AG, B Shares
2,000 1,499,741
- -------------------------------------------------------------------------------------------------
- ------
First Philippine Holdings Corp., B Shares
700,000 1,520,869
- -------------------------------------------------------------------------------------------------
- ------
Legris Industries SA
20,000 759,506
- -------------------------------------------------------------------------------------------------
- ------
Powerscreen International PLC
200,000 1,718,175
- -------------------------------------------------------------------------------------------------
- ------
Toolex Alpha NV(1)
65,000 1,462,500
- -------------------------------------------------------------------------------------------------
- ------
U.S. Filter Corp.(1)
60,000 2,047,500
- -------------------------------------------------------------------------------------------------
- ------
Wai Kee Holdings Ltd.
3,500,000 792,058
----------
9,800,349
- -------------------------------------------------------------------------------------------------
- ---------------------------------
TRANSPORTATION--1.9% Guangshen Railway Co. Ltd., Sponsored ADR(1)
39,000 741,000
- -------------------------------------------------------------------------------------------------
- ------
Koninklijke Van Ommeren NV
30,000 1,174,786
- -------------------------------------------------------------------------------------------------
- ------
Lisnave-Estaleiros Navais de Lisboa SA(1)
467,400 1,205,377
----------
3,121,163
- -------------------------------------------------------------------------------------------------
- ---------------------------------
TECHNOLOGY--12.4%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
COMPUTER HARDWARE--1.8% PT Multipolar Corp.(3)
6,349,200 3,083,413
- -------------------------------------------------------------------------------------------------
- ---------------------------------
COMPUTER SOFTWARE--6.1% Business Objects SA, Sponsored ADR(1)
25,000 481,250
- -------------------------------------------------------------------------------------------------
- ------
Engineering Animation, Inc.(1)
41,800 1,003,200
- -------------------------------------------------------------------------------------------------
- ------
Global DirectMail Corp.(1)
20,000 955,000
- -------------------------------------------------------------------------------------------------
- ------
Ines Corp.
40,000 721,885
</TABLE>
9 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
COMPUTER SOFTWARE Integrated Measurement Systems, Inc.(1)
40,000 $ 660,000
(CONTINUED)
- -------------------------------------------------------------------------------------------------
- ------
McAfee Associates, Inc.(1)
15,000 1,035,000
- -------------------------------------------------------------------------------------------------
- ------
Misys PLC
201,833 2,751,556
- -------------------------------------------------------------------------------------------------
- ------
National Instruments Corp.(1)
30,000 795,000
- -------------------------------------------------------------------------------------------------
- ------
PLATINUM Technology, Inc.(1)
60,000 757,500
- -------------------------------------------------------------------------------------------------
- ------
Technology Modeling Associates, Inc.(1)
32,500 422,500
- -------------------------------------------------------------------------------------------------
- ------
Versant Object Technology Corp.(1)
30,000 712,500
------------
10,295,391
- -------------------------------------------------------------------------------------------------
- ---------------------------------
ELECTRONICS--2.3% Gold Peak Industries (Holdings) Ltd.
1,600,000 987,971
- -------------------------------------------------------------------------------------------------
- ------
Medasys Digital Systems(1)
50,000 547,348
- -------------------------------------------------------------------------------------------------------
Pittway Corp., Cl. A
20,000 892,500
- -------------------------------------------------------------------------------------------------
- ------
SDL, Inc.(1)
30,000 615,000
- -------------------------------------------------------------------------------------------------
- ------
Shinmei Electric Co.
35,000 741,638
------------
3,784,457
- -------------------------------------------------------------------------------------------------
- ---------------------------------
TELECOMMUNICATIONS- Amper SA(1)
120,000 1,495,269
TECHNOLOGY--2.2%
- -------------------------------------------------------------------------------------------------
- ------
LCI International, Inc.(1)
36,000 1,134,000
- -------------------------------------------------------------------------------------------------
- ------
Tel-Save Holdings, Inc.(1)
20,000 575,000
- -------------------------------------------------------------------------------------------------
- ------
Teltrend, Inc.(1)
10,000 425,000
------------
3,629,269
------------
Total Common Stocks (Cost $142,869,934)
159,765,835
- -------------------------------------------------------------------------------------------------
- ---------------------------------
- -------------------------------------------------------------------------------------------------
- ---------------------------------
PREFERRED STOCKS--1.5%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
Marschollek, Lautenschlaeger und Partner-VO,
Non-vtg. Preferred Stock (Cost $1,127,145)
20,000 2,517,595
UNITS
- -------------------------------------------------------------------------------------------------
- ---------------------------------
- -------------------------------------------------------------------------------------------------
- ---------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
Biocompatibles International PLC Wts., Exp. 2/97
42,500 41,196
- -------------------------------------------------------------------------------------------------
- ------
PerSeptive Biosystems, Inc., Cl. A Wts., Exp. 12/97
40,110 --
- -------------------------------------------------------------------------------------------------
- ------
PT Matahari Putra Prima Rts., Exp. 11/96
400,000 262,761
------------
Total Rights, Warrants and Certificates (Cost $283,984)
303,957
FACE
AMOUNT
- -------------------------------------------------------------------------------------------------
- ---------------------------------
- -------------------------------------------------------------------------------------------------
- ---------------------------------
REPURCHASE AGREEMENT--3.4%
- -------------------------------------------------------------------------------------------------
- ---------------------------------
Repurchase agreement with Goldman, Sachs & Co., 5.62%,
dated 9/30/96, to be repurchased at $5,700,890 on 10/1/96,
collateralized by U.S. Treasury Bonds, 8.875%--11.125%,
8/15/03--8/15/17, with a value of $5,820,580 (Cost $5,700,000)
$5,700,000 5,700,000
- -------------------------------------------------------------------------------------------------
- ---------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $149,981,063)
100.0% 168,287,387
- -------------------------------------------------------------------------------------------------
- ---------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS
(0.0) (81,030)
---------- ------------
NET ASSETS
100.0% $168,206,357
---------- ------------
---------- ------------
</TABLE>
10 Oppenheimer Global Emerging Growth Fund
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
- ---------------------------------
Distribution of investments by country of issue, as a percentage of total
investments at value, is as
follows:
COUNTRY
MARKET VALUE PERCENT
- -------------------------------------------------------------------------------------------------
- ---------------------------------
<S>
<C> <C>
United States
$55,336,400 32.9%
- -------------------------------------------------------------------------------------------------
- ------
Great Britain
14,240,155 8.5
- -------------------------------------------------------------------------------------------------
- ------
Germany
11,713,440 7.0
- -------------------------------------------------------------------------------------------------
- ------
Japan
9,198,383 5.5
- -------------------------------------------------------------------------------------------------
- ------
France
8,654,010 5.1
- -------------------------------------------------------------------------------------------------
- ------
The Netherlands
7,141,684 4.2
- -------------------------------------------------------------------------------------------------
- ------
Indonesia
7,090,315 4.2
- -------------------------------------------------------------------------------------------------
- ------
Hong Kong
5,381,469 3.2
- -------------------------------------------------------------------------------------------------
- ------
Australia
4,563,840 2.7
- -------------------------------------------------------------------------------------------------
- ------
Argentina
4,247,998 2.5
- -------------------------------------------------------------------------------------------------
- ------
Switzerland
4,157,233 2.5
- -------------------------------------------------------------------------------------------------
- ------
Finland
4,151,026 2.5
- -------------------------------------------------------------------------------------------------
- ------
Philippines
3,702,967 2.2
- -------------------------------------------------------------------------------------------------
- ------
Canada
3,275,944 1.9
- -------------------------------------------------------------------------------------------------
- ------
Portugal
3,249,153 1.9
- -------------------------------------------------------------------------------------------------
- ------
Peru
2,818,000 1.7
- -------------------------------------------------------------------------------------------------
- ------
Norway
2,524,404 1.5
- -------------------------------------------------------------------------------------------------
- ------
Austria
2,331,750 1.4
- -------------------------------------------------------------------------------------------------
- ------
Thailand
2,232,715 1.3
- -------------------------------------------------------------------------------------------------
- ------
Italy
1,785,749 1.1
- -------------------------------------------------------------------------------------------------
- ------
Sweden
1,773,568 1.1
- -------------------------------------------------------------------------------------------------
- ------
Spain
1,495,269 0.9
- -------------------------------------------------------------------------------------------------
- ------
Hungary
1,408,132 0.8
- -------------------------------------------------------------------------------------------------
- ------
India
1,380,013 0.8
- -------------------------------------------------------------------------------------------------
- ------
Greece
1,361,165 0.8
- -------------------------------------------------------------------------------------------------
- ------
Mexico
822,500 0.5
- -------------------------------------------------------------------------------------------------
- ------
Singapore
808,743 0.5
- -------------------------------------------------------------------------------------------------
- ------
China
741,000 0.4
- -------------------------------------------------------------------------------------------------
- ------
Brazil
700,362 0.4
------------ ------------
Total
$168,287,387 100.0%
------------ ------------
------------ ------------
1. Non-income producing security.
2. 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 $1,902,946 or 1.13% of the
Fund's net assets, at September
30, 1996.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is
or was an affiliate, as defined in the Investment Company Act of 1940,
at or during the period ended
September 30, 1996. The aggregate fair value of all securities of
affiliated companies as of September
30, 1996 amounted to $3,083,413. Transactions during the period in which
the issuer was an affiliate are
as follows:
BALANCE
BALANCE
SEPTEMBER 30, 1995 GROSS ADDITIONS GROSS REDUCTIONS
SEPTEMBER 30, 1996
------------------ ---------------------
- --------------------- ---------------------
SHARES COST SHARES COST SHARES
COST SHARES COST
- -------------------------------------------------------------------------------------------------
- ---------------------------------
Cambridge Antibody
Technology Ltd., CV. 100,000 $3,300,000 -- $ -- 100,000
$3,300,000 -- $ --
- -------------------------------------------------------------------------------------------------
- ---------------------------------
PT Multipolar Corp. -- -- 6,349,200 3,947,959 --
-- 6,349,200 3,947,959
---------- ----------
- ---------- ----------
$3,300,000 $3,947,959
$3,300,000 $3,947,959
---------- ----------
- ---------- ----------
---------- ----------
- ---------- ----------
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1996
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value--see accompanying statement:
Unaffiliated companies (cost $146,033,104) $165,203,974
Affiliated companies (cost $3,947,959) 3,083,413
----------------------------------------------------------------
Cash 298,216
----------------------------------------------------------------
Unrealized appreciation on forward foreign
currency exchange contracts--Note 5 112,867
----------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 422,037
Investments sold 332,151
Interest and dividends 203,369
----------------------------------------------------------------
Other 10,507
------------
Total assets 169,666,534
- -------------------------------------------------------------------------------------------
LIABILITIES Unrealized depreciation on forward foreign
currency exchange contracts--Note 5 12,948
----------------------------------------------------------------
Payables and other liabilities:
Investments purchased 546,537
Shares of beneficial interest redeemed 432,158
Shareholder reports 130,516
Trustees' fees 106,873
Distribution and service plan fees 99,748
Transfer and shareholder servicing agent fees 55,505
Custodian fees 41,301
Other 34,591
------------
Total liabilities 1,460,177
- -------------------------------------------------------------------------------------------
NET ASSETS $168,206,357
------------
------------
- -------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $170,369,937
NET ASSETS ----------------------------------------------------------------
Accumulated net investment loss (266,679)
----------------------------------------------------------------
Accumulated net realized loss on investments
and foreign currency transactions (20,303,931)
----------------------------------------------------------------
Net unrealized appreciation on investments
and translation of assets and liabilities
denominated in foreign currencies 18,407,030
------------
Net assets $168,206,357
------------
------------
- -------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share
(based on net assets of $154,081,998 and 7,351,701
shares of beneficial interest outstanding) $20.96
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $22.24
----------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering
price per share (based on net assets of
$10,854,911 and 522,496 shares of beneficial
interest outstanding) $20.78
----------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering
price per share (based on net assets of $3,269,448
and 157,283 shares of beneficial interest
outstanding) $20.79
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
- -------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME Dividends (net of foreign withholding
taxes of $66,338) $1,980,310
----------------------------------------------------------------
Interest 585,187
----------
Total income 2,565,497
- -------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 4 1,233,678
----------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 603,641
----------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 340,899
Class B 42,516
Class C 14,558
----------------------------------------------------------------
Shareholder reports 230,027
----------------------------------------------------------------
Custodian fees and expenses 175,262
----------------------------------------------------------------
Trustees' fees and expenses--Note 1 66,235
----------------------------------------------------------------
Legal and auditing fees 38,828
----------------------------------------------------------------
Registration and filing fees:
Class A 774
Class B 3,643
Class C 1,103
----------------------------------------------------------------
Other 49,448
----------
Total expenses 2,800,612
- -------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (235,115)
- -------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain (loss) on:
GAIN (LOSS) Investments:
Unaffiliated companies 21,952,395
Affiliated companies (135,000)
Foreign currency transactions (691,072)
----------
Net realized gain 21,126,323
----------------------------------------------------------------
Net change in unrealized appreciation or
depreciation on:
Investments 491,725
Translation of assets and liabilities denominated
in foreign currencies (824,768)
----------
Net change (333,043)
----------
Net realized and unrealized gain 20,793,280
- -------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $20,558,165
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Global Emerging Growth Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
1996
1995
- -------------------------------------------------------------------------------------------------
- -----------------------
<S> <C> <C>
<C>
OPERATIONS Net investment income (loss) $
(235,115) $ 107,231
- -------------------------------------------------------------------------------------------------
Net realized gain (loss)
21,126,323 (40,930,783)
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
(333,043) 27,445,462
- ------------ ------------
Net increase (decrease) in net assets resulting from operations
20,558,165 (13,378,090)
- -------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from beneficial
TRANSACTIONS interest transactions--Note 2:
Class A
(6,010,385) (10,093,708)
Class B
10,625,564 --
Class C
3,210,027 --
- -------------------------------------------------------------------------------------------------
- -----------------------
NET ASSETS Total increase (decrease)
28,383,371 (23,471,798)
- -------------------------------------------------------------------------------------------------
Beginning of period
139,822,986 163,294,784
- ------------ ------------
End of period (including accumulated net investment losses
of $266,679 and $130,131, respectively)
$168,206,357 $139,822,986
- ------------ ------------
- ------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Global Emerging Growth Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
CLASS B CLASS C
------------------------------------------------
- --------- ---------
PERIOD PERIOD
ENDED ENDED
YEAR ENDED SEPTEMBER 30,
SEPT. 30, SEPT. 30,
1996 1995 1994 1993 1992
1996(1) 1996(1)
- -------------------------------------------------------------------------------------------------
- ----------------------
<S> <C> <C> <C> <C> <C> <C>
<C>
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $18.03 $19.35 $21.64 $20.25 $26.90
$17.43 $17.43
- -------------------------------------------------------------------------------------------------
- -------------------
Income (loss) from investment
operations:
Net investment income (loss) (.03) .01 (.01) (.10) (.17)
(.01) (.01)
Net realized and unrealized
gain (loss) 2.96 (1.33) (2.11) 1.69 (6.47)
3.36 3.37
------ ------ ------ ------ ------
- ------ ------
Total income (loss) from
investment operations 2.93 (1.32) (2.12) 1.59 (6.64)
3.35 3.36
- -------------------------------------------------------------------------------------------------
- -------------------
Dividends and distributions to
shareholders:
Dividends from net investment
income -- -- -- -- (.01)
-- --
Distributions from net
realized gain -- -- (.17) (.20) --
-- --
------ ------ ------ ------ ------
- ------ ------
Total dividends and distributions
to shareholders -- -- (.17) (.20) (.01)
-- --
- -------------------------------------------------------------------------------------------------
- -------------------
Net asset value, end of period $20.96 $18.03 $19.35 $21.64 $20.25
$20.78 $20.79
------ ------ ------ ------ ------
- ------ ------
------ ------ ------ ------ ------
- ------ ------
- -------------------------------------------------------------------------------------------------
- -------------------
TOTAL RETURN, AT NET ASSET VALUE(2) 16.25% (6.82)% (9.91)% 7.79% (24.70)%
19.22% 19.28%
- -------------------------------------------------------------------------------------------------
- -------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $154,082 $139,823 $163,295 $199,697 $129,634
$10,855 $3,269
- -------------------------------------------------------------------------------------------------
- -------------------
Average net assets
(in thousands) $142,045 $148,378 $190,984 $194,184 $166,144
$4,675 $1,599
- -------------------------------------------------------------------------------------------------
- -------------------
Ratios to average net assets:
Net investment income (loss) (0.15)% 0.07% (1.05)% (0.80)% (0.71)%
(0.42)%(3) (0.45)%(3)
Expenses 1.87% 1.76% 1.77% 1.59% 1.39%
2.56%(3) 2.54%(3)
- -------------------------------------------------------------------------------------------------
- -------------------
Portfolio turnover rate(4) 125.9% 160.3% 54.7% 41.0% 2.6%
125.9% 125.9%
Average brokerage
commission rate(5) $0.0030 -- -- -- --
$0.0030 $0.0030
</TABLE>
1.For the period from November 1, 1995 (inception of offering) to September 30,
1996.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1996 were $182,488,843 and $175,044,184, respectively.
5. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
15 Oppenheimer Global Emerging Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- ------
1. SIGNIFICANT Oppenheimer Global Emerging Growth Fund (the Fund) is
ACCOUNTING POLICIES registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management
investment company. The Fund's investment objective is
to aggressively seek capital appreciation from equity
securities. In seeking its objective, the Fund
emphasizes investments in emerging growth companies in
the U.S. and foreign countries that offer the potential
for growth of earnings or capital. The Fund's
investment adviser 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 three 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 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. Forward foreign
currency exchange contracts are valued based on the
closing prices of the forward currency contract rates
in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer.
-------------------------------------------------------
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
rates of exchange prevailing on the respective dates of
such transactions.
The effect of changes in foreign currency
exchange rates on investments is separately identified
from fluctuations arising from changes in market values
of securities held and reported with all other foreign
currency gains and losses in the Fund's Statement of
Operations.
-------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian
to take possession, to have legally segregated in the
Federal Reserve Book Entry System or to have segregated
within the custodian's vault, all securities held as
collateral for repurchase agreements. The market value
of the underlying securities is required to be at least
102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an
insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
-------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated
daily to each class of shares based upon the relative
proportion of net assets represented by such class.
Operating expenses directly attributable to a specific
class are charged against the operations of that class.
-------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply
with provisions of the Internal Revenue Code applicable
to regulated investment companies and to distribute all
of its taxable income, including any net realized gain
on investments not offset by loss carryovers, to
shareholders. Therefore, no federal income or excise
tax provision is required. At September 30, 1996, the
Fund had available for federal income tax purposes an
unused capital loss carryover of approximately
$29,567,000, which expires between 1998 and 2004.
-------------------------------------------------------
TRUSTEES' FEES AND EXPENSES. The Fund has adopted a
nonfunded retirement plan for the Fund's independent
trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service.
During the year ended September 30, 1996, a provision
of $40,711 was made for the Fund's projected benefit
obligations and payments of $4,045 were made to retired
trustees, resulting in an accumulated liability of
$100,657 at September 30, 1996.
16 Oppenheimer Global Emerging Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
1. SIGNIFICANT DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
ACCOUNTING POLICIES distributions to shareholders are recorded on the ex-
(CONTINUED) dividend date.
-------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net
investment income (loss) and net realized gain (loss)
may differ for financial statement and tax purposes.
The character of the distributions made during the year
from net investment income or net realized gains may
differ from 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 September 30, 1996, the
Fund adjusted the classification of investment income
and capital gain (loss) to shareholders to reflect the
differences between the financial statement amounts and
those determined in accordance with income tax
regulations. Accordingly, during the year ended
September 30, 1996, amounts have been reclassified to
reflect a decrease in undistributed net investment
income of $312,755, a decrease in accumulated net
realized loss on investments of $460,650, and a
decrease in paid-in capital of $147,895. In addition,
to properly reflect foreign currency gain in the
components of capital, $411,322 of foreign exchange
gain determined according to U.S. federal income tax
rules has been reclassified from net realized gain to
net investment loss.
-------------------------------------------------------
OTHER. Investment transactions are accounted for on the
date the investments are purchased or sold (trade date)
and dividend income is recorded on the ex-dividend
date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis
used for federal income tax purposes.
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and
the reported amounts of income and expenses during the
reporting period. Actual results could differ from
those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number of no par
BENEFICIAL INTEREST value shares of beneficial interest. Transactions in
shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1996(1) YEAR
ENDED SEPTEMBER 30, 1995
--------------------------------
- ------------------------------
SHARES AMOUNT SHARES
AMOUNT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
<C>
Class A:
Sold 3,277,006 $ 65,681,449
1,148,488 $ 19,774,392
Issued in connection with the
acquisition of Oppenheimer Global
Environment Fund--Note 6 -- --
1,540,515 27,636,869
Redeemed (3,681,446) (71,691,834)
(3,370,269) (57,504,969)
---------- -----------
- ---------- -----------
Net decrease (404,440) $ (6,010,385)
(681,266) $(10,093,708)
---------- -----------
- ---------- -----------
---------- -----------
- ---------- -----------
- ----------------------------------------------------------------------------------------------------
Class B:
Sold 722,783 $ 14,601,668
-- $ --
Redeemed (200,287) (3,976,104)
-- --
---------- -----------
- ---------- -----------
Net increase 522,496 $ 10,625,564
-- $ --
---------- -----------
- ---------- -----------
---------- -----------
- ---------- -----------
- ----------------------------------------------------------------------------------------------------
Class C:
Sold 244,882 $ 4,972,628
-- $ --
Redeemed (87,599) (1,762,601)
-- --
---------- -----------
- ---------- -----------
Net increase 157,283 $ 3,210,027
-- $ --
---------- -----------
- ---------- -----------
---------- -----------
- ---------- -----------
</TABLE>
1. For the year ended September 30, 1996 for Class A
shares and for the period from November 1, 1995
(inception of offering) to September 30, 1996 for Class
B and Class C shares.
17 Oppenheimer Global Emerging Growth Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At September 30, 1996, net unrealized appreciation on
LOSSES ON INVESTMENTS investments of $18,306,324 was composed of gross
appreciation of $26,458,740, and gross depreciation of
$8,152,416.
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER TRANSACTIONS with the investment advisory agreement with the Fund
WITH AFFILIATES which provides for a fee of 1% of the first $50 million
of average annual net assets, 0.75% of the next $150
million; 0.72% of the next 200 million; 0.69% of the
next $200 million; 0.66% of the next $200 million; and
0.60% of 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 applicable regulatory limit on Fund expenses.
For the year ended September 30, 1996,
commissions (sales charges paid by investors) on sales
of Class A shares totaled $547,341, of which $159,815
was retained by OppenheimerFunds Distributor, Inc.
(OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of
the Fund's Class B and Class C shares totaled $280,291
and $29,431 of which $15,404 was paid to an affiliated
broker/dealer for Class B. During the period ended
September 30, 1996, OFDI received contingent deferred
sales charges of $8,208 and $1,057, respectively, upon
redemption of Class B and Class C shares as
reimbursement for sales commissions advanced by OFDI at
the time of sale of such shares.
OppenheimerFunds Services (OFS), a division
of the Manager, is the transfer and shareholder
servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing
such services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class
A shares to reimburse OFDI for a portion of its costs
incurred in connection with the personal service and
maintenance of accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate that
may not exceed 0.25% of the average annual net assets
of Class A shares of the Fund. OFDI uses the service
fee to reimburse brokers, dealers, banks and other
financial institutions quarterly for providing personal
service and maintenance of accounts of their customers
that hold Class A shares. During the year ended
September 30, 1996, OFDI paid $17,351 to an affiliated
broker/dealer as reimbursement for Class A personal
service and maintenance expenses.
The Fund has adopted compensation type
Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing
accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B
shares and on Class C shares, as compensation for sales
commissions paid from its own resources at the time of
sale and associated financing costs. If the Plans are
terminated by the Fund, the Board of Trustees may allow
the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before
the Plans were terminated. OFDI also receives a service
fee of 0.25% per year as compensation 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 financial institutions. Both fees are computed on
the average annual net assets of Class B and Class C
shares, determined as of the close of each regular
business day. During the year ended September 30, 1996,
OFDI retained $38,764 and $12,877, respectively, as
compensation for Class B and Class C sales commissions
and service fee advances, as well as financing costs.
At September 30, 1996, OFDI had incurred unreimbursed
expenses of $284,933 for Class B and $48,241 for Class
C.
18 Oppenheimer Global Emerging Growth Fund
<PAGE>
- --------------------------------------------------------------------------------
5. FORWARD CONTRACTS A forward foreign currency exchange contract (forward
contract) is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to
manage foreign currency risks. They may also be used to
tactically shift portfolio currency risk. The Fund
generally enters into forward contracts as a hedge upon
the purchase or sale of a security denominated in a
foreign currency. In addition, the Fund may enter into
such contracts as a hedge against changes in foreign
currency exchange rates on portfolio positions.
Forward contracts are valued based on the
closing prices of the forward currency contract rates
in the London foreign exchange markets on a daily basis
as provided by a reliable bank or dealer. The Fund will
realize a gain or loss upon the closing or settlement
of the forward transaction.
Securities held in segregated accounts to
cover net exposure on outstanding forward contracts are
noted in the Statement of Investments where applicable.
Unrealized appreciation or depreciation on forward
contracts is reported in the Statement of Assets and
Liabilities. Realized gains and losses are reported
with all other foreign currency gains and losses in the
Fund's Statement of Operations.
Risks include the potential inability of the
counterparty to meet the terms of the contract and
unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At September 30, 1996, the Fund had outstanding forward
contracts to purchase and sell foreign currencies as
follows:
<TABLE>
<CAPTION>
CONTRACT AMOUNT VALUATION AS OF
UNREALIZED UNREALIZED
CONTRACTS TO PURCHASE EXPIRATION DATE (000'S) SEPTEMBER 30, 1996
APPRECIATION DEPRECIATION
- -------------------------------------------------------------------------------------------------
- --------------------------
<S> <C> <C> <C> <C>
<C>
British Pound Sterling (GBP) 10/2/96 38 GBP $ 59,629 $
34 $ --
- -------------------------------------------------------------------------------------------------
- --------------------------
Japanese Yen (JPY) 10/1/96 343,940 JPY 3,088,125
-- 12,948
----------
- -------- --------
$3,147,754
34 12,948
----------
- -------- --------
----------
- -------- --------
CONTRACTS TO SELL
- -------------------------------------------------------------------------------------------------
- --------------------------
Indonesian Rupiah (IDR) 10/1/96--10/2/96 33,562 IDR $ 14,457 $
3 $ --
- -------------------------------------------------------------------------------------------------
- --------------------------
Japanese Yen (JPY) 10/1/96--10/6/96 687,880 JPY 6,216,417
112,830 --
----------
- -------- --------
$6,230,874
112,833 --
----------
- -------- --------
----------
Total Unrealized Appreciation and Depreciation
$112,867 $ 12,948
- -------- --------
- -------- --------
- -------------------------------------------------------------------------------------------------
- --------------------------
</TABLE>
6. ACQUISITION OF On November 18, 1994, the Fund acquired all of the net
OPPENHEIMER GLOBAL assets of Oppenheimer Global Environment Fund, pursuant
ENVIRONMENT FUND to an Agreement and Plan of Reorganization approved by
the Oppenheimer Global Environment Fund shareholders on
November 4, 1994. The Fund issued 1,540,515 Class A
shares of beneficial interest, valued at $27,636,869,
in exchange for the net assets, resulting in combined
Class A net assets of $174,971,153 on November 18,
1994. The net assets acquired included net unrealized
appreciation of $2,684,431. The exchange qualifies as a
tax-free reorganization for federal income tax
purposes.
19 Oppenheimer Global Emerging Growth Fund
<PAGE>
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Oppenheimer
Global Emerging Growth Fund:
We have audited the accompanying statements of
investments and assets and liabilities of Oppenheimer
Global Emerging Growth Fund as of September 30, 1996,
and the related statement of operations for the year
then ended, the statements of changes in net assets for
each of the years in the two year period then ended and
the financial highlights for each of the years in the
five year period then ended. These financial statements
and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an
opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with
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
September 30, 1996 by correspondence with the custodian
and brokers; and where confirmations were not received
from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and
financial highlights referred to above present fairly,
in all material respects, the financial position of
Oppenheimer Global Emerging Growth Fund as of September
30, 1996, the results of its operations for the year
then ended, the changes in its net assets for each of
the years in the two year period then ended, and the
financial highlights for each of the years in the five
year period then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Denver, Colorado
October 21, 1996
20 Oppenheimer Global Emerging Growth Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
In early 1997 shareholders will receive information
regarding all dividends and distributions paid to them
by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report
this information to the Internal Revenue Service.
The foregoing information is presented to
assist shareholders in reporting distributions received
from the Fund to the Internal Revenue Service. Because
of the complexity of the federal regulations which may
affect your individual tax return and the many
variations in state and local tax regulations, we
recommend that you consult your tax adviser for
specific guidance.
21 Oppenheimer Global Emerging Growth Fund
<PAGE>
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
George Evans, Vice President
Jay Tracey, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- --------------------------------------------------------------------------------
INVESTMENT ADVISER OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
- --------------------------------------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
- --------------------------------------------------------------------------------
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Global Emerging Growth Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Global Emerging Growth 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.
22 Oppenheimer Global Emerging Growth Fund
<PAGE>
OPPENHEIMERFUNDS FAMILY
- --------------------------------------------------------------------------------
OppenheimerFunds offers over 50 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 3 million shareholder accounts
and more than $55 billion under OppenheimerFunds'
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
adviser 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>
<CAPTION>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
STOCK FUNDS Global Emerging Growth Fund Growth Fund
Enterprise Fund(2) Global Fund
International Growth Fund Quest Global Value Fund
Discovery Fund Disciplined 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 Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Asset Allocation Fund
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
- ----------------------------------------------------------------------------------------------------
BOND FUNDS International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
- ----------------------------------------------------------------------------------------------------
MUNICIPAL FUNDS California Municipal Fund(3) Insured Municipal Fund
Florida Municipal Fund(3) Intermediate Municipal Fund
New Jersey Municipal Fund(3)
New York Municipal Fund(3) ROCHESTER DIVISION
Pennsylvania Municipal Fund(3) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
- ----------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS(4) Money Market Fund Cash Reserves
- ----------------------------------------------------------------------------------------------------
LIFESPAN Growth Fund Income Fund
Balanced Fund
</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.Effective 4/1/96, the Fund is closed to new
investors.
3. Available only to investors in certain states.
4. An investment in money market funds is neither
insured nor guaranteed by the U.S. government and there
can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per
share.
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.
23 Oppenheimer Global Emerging Growth Fund
<PAGE>
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 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
RA0750.001.0996 November 30, 1996
[PHOTO]
Customer Service Representative
OppenheimerFunds Services
"HOW MAY I HELP YOU?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
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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
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For added convenience, you can get automated information with
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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.
- --------------------------------------------------------------------------------
[LOGO] --------------
Bulk Rate
OppenheimerFunds Distributor, Inc. U.S. Postage
P.O. Box 5270 PAID
Denver, CO 80217-5270 Permit No. 469
Denver, CO
--------------
<PAGE>
OPPENHEIMER GLOBAL FUND
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification
Reference is made to Article IV of Registrant's Declaration of
Trust filed as Exhibit 24(b)(1) to Registrant's Registration
Statement and incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and
controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid
by a trustee, officer or controlling person of Registrant in the
successful defense of any action, suit or proceeding) is asserted
by such trustee, officer or controlling person, Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust dated as of August
1, 1995: Previously filed with Registrant's Post-Effective
Amendment No. 65, 7/27/95, and incorporated herein by reference.
(2) By-Laws (amended as of 8/6/87): Previously filed with
Registrant's Post-Effective Amendment No. 63, 12/1/94 and
incorporated herein by reference.
(3) Not applicable.
(4) Agreement and Plan of Reorganization: See Exhibit A to Part A
of this Registration Statement
(5) (i)Specimen Share Certificate for Registrant's Class A Shares:
Previously filed with Registrant's Post-Effective Amendment
No. 68, 1/7/97, and incorporated herein by reference.
(ii) Specimen Share Certificate for Registrant's Class B
Shares: Previously filed with Registrant's Post-Effective Amendment
No. 68, 1/7/97, and incorporated herein by reference.
(iii) Specimen Share Certificate for Registrant's Class C
Shares: Previously filed with Registrant's Post-Effective Amendment
No. 68, 1/7/97, and incorporated herein by reference.
(6) Investment Advisory Agreement dated as of 6/27/94: Previously
filed with Registrant's Post-Effective Amendment No. 63, 12/1/94,
and incorporated herein by reference.
(7) (i) General Distributor's Agreement dated December 10,
1992: Previously filed with Post-Effective Amendment No. 59 to
Registrant's Registration Statement, 1/29/93, refiled with
Registrant's Post-Effective Amendment No. 63, 12/1/94, pursuant to
Item 102 of Regulation S-T, and incorporated herein by reference.
(ii) Form of Oppenheimer Funds Distributor, Inc. Dealer
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc. (Reg.
No. 33-17850), 9/30/94, and incorporated herein by reference.
(iii) Form of Oppenheimer Funds Distributor, Inc. Broker
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(iv) Form of Oppenheimer Funds Distributor, Inc. Agency
Agreement: Filed with Post-Effective Amendment No. 14 to the
Registration Statement of Oppenheimer Main Street Funds, Inc.
(Reg. No. 33-17850), 9/30/94, and incorporated herein by
reference.
(v) Broker Agreement between Oppenheimer Fund Management,
Inc. and Newbridge Securities dated 10/1/86: Filed with Post-
Effective Amendment No. 25 to Oppenheimer Growth Fund's
Registration Statement (Reg. No. 2-45272), 11/1/86, refiled with
Post-Effective Amendment No. 45 to Oppenheimer Growth Fund's
Registration Statement (Reg. No. 2-45272), 8/22/94, pursuant to
Item 102 of Regulation S-T, and incorporated herein by
reference.
(8) Not Applicable.
(9) Amended and Restated Custody Agreement dated 11/12/92 between
Registrant and The Bank of New York: Filed with Registrant's Post-
Effective Amendment No. 59, 1/29/93, refiled with Registrant's
Post-Effective Amendment No. 63, 12/1/94, pursuant to Item 102 of
Regulation S-T, and incorporated herein by reference.
(10) (i) Class A Service Plan and Agreement dated June 10, 1993,
pursuant to Rule 12b-1 under the Investment Company Act:
Previously filed with Post-Effective Amendment No. 60 to
Registrant's Registration Statement, 11/24/93, and incorporated
herein by reference.
(ii) Class B Distribution and Service Plan and Agreement
dated February 10, 1994: Previously filed with Post-Effective
Amendment No. 63 to Registrant's Registration Statement,
12/1/94, pursuant to Rule 12b-1 under the Investment Company Act,
and incorporated herein by reference.
(iii) Class C Distribution and Service Plan: Previously filed
with Registrant's Post-Effective Amendment No. 66, 9/29/95,
pursuant to Rule 12b-1 under the Investment Company Act, and
incorporated herein by reference.
(11) Opinion and Consent of Counsel dated 3/2/87: Previously filed
with Post-Effective Amendment No. 52 to Registrant's Registration
Statement, 1/27/89, refiled with Post-Effective Amendment No. 63 of
Registrant's Registration Statement, 12/1/94, pursuant to Item 102
of Regulation S-T, and incorporated herein by reference.
(12) Tax Opinion Relating to the Reorganization: Draft Opinion
filed herewith.
(13) Not applicable.
(14) Consent of KPMG Peat Marwick LLP: Filed herewith.
(15) Not applicable.
(16) Powers of Attorney signed by Registrant's Trustees and
Certified Board Resolutions: Previously filed with Post-Effective
Amendment No. 60 to Registrant's Registration Statement, 11/24/93,
and incorporated herein by reference.
Power of Attorney for Bridget A. Macaskill, Trustee: Filed
with Registrant's Post-Effective Amendment No. 67, 1/24/96, and
incorporated herein by reference.
(17)(i) Declaration of Registrant's Predecessor under Rule 24f-2:
Filed herewith.
(ii)(a) Financial Data Schedules of Registrant: Filed
herewith.
(b) Financial Data Schedules of Global Emerging Growth
Fund: Filed herewith. <PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or
the Investment Company Act of 1940, the Registrant certifies that
it meets all the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York and State of New York on the 7th day of
March, 1997.
OPPENHEIMER GLOBAL FUND
BY: /s/ Bridget A. Macaskill*
Bridget A. Macaskill, President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signatures Title Date
_______________ ______ ____________
<S> <C> <C>
/s/ Leon Levy Chairman of the March 7, 1997
Leon Levy* Board of Trustees
/s/ George Bowen Chief Financial March 7, 1997
George Bowen* and Accounting
Officer and Treasurer
/s/ Bridget A. Macaskill Principal Executive March 7, 1997
Bridget A. Macaskill* Officer, President
and Trustee
/s/ Robert G. Galli Trustee March 7, 1997
Robert G. Galli*
/s/ Benjamin Lipstein Trustee March 7, 1997
Benjamin Lipstein*
/s/ Elizabeth B. Lipstein Trustee March 7, 1997
Elizabeth B. Moynihan*
/s/ Kenneth A. Randall Trustee March 7, 1997
Kenneth A. Randall*
/s/ Edward V. Regan Trustee March 7, 1997
Edward V. Regan*
/s/ Russell S. Reynolds Trustee March 7, 1997
Russell S. Reynolds, Jr.*
/s/ Donald W. Spiro Trustee March 7, 1997
Donald W. Spiro*
/s/ Pauline Trigere Trustee March 7, 1997
Pauline Trigere*
/s/ Clayton K. Yeutter Trustee March 7, 1997
Clayton K. Yeutter*
*By:
/s/ Robert G. Zack
Robert G. Zack, Attorney-in-Fact
</TABLE>
<PAGE>
OPPENHEIMER GLOBAL FUND
Index to Exhibits
-----------------
Exhibit No. Description
- ----------- -----------
16(12) Draft Tax Opinion Relating to the Reorganization
16(14) Independent Auditors' Consent
16(17)(i) Declaration of Registrant's Predecessor
Under Rule 24f-2
16(17)(ii)(a) Financial Data Schedules of Registrant
16(17)(ii)(b) Financial Data Schedules of Global Emerging Growth
Fund
DRAFT
[Letterhead of KPMG Peat Marwick LLP]
______________, 1997
Oppenheimer Global Emerging Growth Fund
Two World Trade Center 34th floor
New York, New York 10048-0203
Oppenheimer Global Fund
Two World Trade Center 34th floor
New York, New York 10048-0203
Dear Sirs:
We have reviewed the Agreement and Plan of Reorganization between
Oppenheimer Global Emerging Growth Fund (the "Fund") and
Oppenheimer Global Fund ("Global") which is attached as Exhibit A
to the Proxy Statement and Prospectus of the Fund included as part
of Global's Registration Statement on Form N-14 filed under the
Securities Act of 1933, as amended, with the Securities and
Exchange Commission on ________, 1997 (the "Agreement"), concerning
the acquisition by Global of substantially all of the assets of the
Fund solely for voting shares of beneficial interest in Global,
followed by the distribution of Global shares to the shareholders
of the Fund in complete liquidation of the Fund.
In connection with the rendering of this opinion, we have reviewed
the Agreement, the most recent audited financial statements and
related documents and other materials as we deemed relevant to the
rendering of this opinion. Based upon all of the foregoing and the
representations made by the Fund and Global, attached hereto, in
our opinion, the federal tax consequences of the transaction will
be as follows:
1. The transactions contemplated by the Agreement will qualify as
a tax-free "reorganization" within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. The Fund and Global will each qualify as a "party to a
reorganization" within the meaning of Section 368(b)(2) of the
Code.
3. No gain or loss will be recognized by the shareholders of the
Fund upon the distribution of shares of beneficial interest in
Global to the shareholders of the Fund, pursuant to Section
354 of the Code.
4. Under Section 361(a) of the Code no gain or loss will be
recognized by the Fund by reason of the transfer of its assets
solely in exchange for Class A, Class B and Class C shares of
Global, respectively.
5. Under Section 1032 of the Code no gain or loss will be
recognized by Global by reason of the transfer of the Fund's
assets solely in exchange for Class A, Class B and Class C
shares of Global, respectively.
6. The stockholders of the Fund will have the same tax basis and
holding period for the shares of beneficial interest in Global
that they receive as they had for the stock of the Fund that
they previously held, pursuant to Sections 358(a) and 1223(1),
respectively, of the Code.
7. The securities transferred by the Fund to Global will have the
same tax basis and holding period in the hands of Global as
they had for the Fund, pursuant to Sections 362(b) and
1223(1), respectively, of the Code.
Very truly yours
Independent Auditors' Consent
Oppenheimer Global Fund:
We consent to the incorporation by reference in this registration
statement on Form N-14 of our report dated October 21, 1996,
appearing in the Annual Report of Oppenheimer Global Fund, our
report dated October 21, 1996, appearing in the Annual Report of
Global Emerging Growth Fund and to the reference to our Firm under
the headings "Tax Consequences of the Reorganization" and "Tax
Aspects of the Reorganization" in the registration statement.
/s/ KPMG Peat Mawick LLP
- ---------------------------------------
KPMG PEAT MARWICK LLP
Denver, Colorado
March 14, 1997
Registration No.
EXHIBIT 16(17)(i)
- --------------------------------------------------------------
- --------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM N-1
REGISTRATION STATEMENT /x/
under
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. / /
Post-Effective Amendment No. / /
and
REGISTRATION STATEMENT /x/
under
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. / /
------------
OPPENHEIMER A.I.M. FUND, INC.
(Exact Name of Registrant as Specified in Charter)
Two Broadway
New York, NY 10004
(Address of principal executive office)
Registrant's Telephone Number, Including Area Code:
(212) 668-5000
ALBERT D. JORDAN, ESQ. ROBERT G. GALLI, ESQ.
Cole & Deitz Oppenheimer Management Corporation
40 Wall Street Two Broadway
New York, New York 10005 New York, New York 10004
(Name and Address of Agents for Service)
Approximate Date of Proposed Offering: As soon as practicable
after the effective date of this Registration Statement,
and thereafter from day to day.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
The Registrant elects to register an indefinite number of
shares of beneficial interest pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The amount of the Registration Fee
is $500.
---------------------------------
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the Registrant shall file another amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to
Section 8(a), shall determine.
merge\330n1
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NET-CHANGE-FROM-OPS> 333,948,448
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<INVESTMENTS-AT-VALUE> 3,027,733,176
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<OTHER-ITEMS-ASSETS> 251,957,634
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<DISTRIBUTIONS-OF-GAINS> 131,770
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ACCUMULATED-NII-CURRENT> (266,679)
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<INTEREST-INCOME> 585,187
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<EXPENSES-NET> 2,800,612
<NET-INVESTMENT-INCOME> (235,115)
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<NET-CHANGE-FROM-OPS> 20,558,165
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,233,678
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,800,612
<AVERAGE-NET-ASSETS> 142,045,000
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 824610
<NAME> Oppenheimer Global Emerging Growth - Class C
<S> <C>
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