Registration No. 2-14586
File No. 811-847
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
PRE-EFFECTIVE AMENDMENT NO. ___ / /
POST-EFFECTIVE AMENDMENT NO. 108 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
AMENDMENT NO. 26 / X /
OPPENHEIMER FUND
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(Exact Name of Registrant as Specified in Charter)
Two World Trade Center
New York, New York 10048-0203
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(Address of Principal Executive Offices)
(212) 323-0200
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(Registrant's Telephone Number)
ANDREW J. DONOHUE, ESQ.
Oppenheimer Management Corporation
Two World Trade Center, New York, New York 10048-0203
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box):
/ / immediately upon filing pursuant to paragraph (b)
/ x / on October 21, 1994, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(i)
/ / on -----------------, pursuant to paragraph (a) (i)
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on ---------- pursuant to paragraph (a)(ii)
of Rule (485)
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The Registrant has registered an indefinite number of shares under the
Securities Act of 1933 pursuant to Rule 24f-2 promulgated under the
Investment Company Act of 1940. A Rule 24f-2 Notice for the Registrant's
fiscal year ended June 30, 1994, was filed on August 30, 1994.
<PAGE>
FORM N-1A
OPPENHEIMER FUND
Cross Reference Sheet
Part A of
Form N-1A
Item No. Prospectus Heading
1 Front Cover Page
2 Expenses
3 Financial Highlights; Performance of the Fund
4 Front Cover Page; Investment Objective and Policies
5 How the Fund is Managed; Expenses; Back Cover
5A Performance of the Fund
6 Dividends, Capital Gains and Taxes
7 How to Buy Shares; How to Exchange Shares; Special Investor
Services; Service Plan For Class A Shares; Distribution and
Service Plan For Class C Shares; How to Sell Shares
8 How to Sell Shares
9 *
Part B of
Form N-1A
Item No. Heading in Statement of Additional Information
10 Cover Page
11 Cover Page
12 *
13 Investment Objectives and Policies; Other Investment
Techniques and Strategies; Additional Investment Restrictions
14 How the Fund is Managed - Trustees and Officers of the Fund
15 How the Fund is Managed - Major Shareholders
16 How the Fund is Managed - Distribution and Service Plans
17 Brokerage Policies of the Fund
18 Additional Information About the Fund
19 Your Investment Account -- How to Buy Shares; How to Sell
Shares; How to Exchange Shares
20 Dividends, Capital Gains and Taxes
21 How the Fund is Managed; Brokerage Policies of the Fund
22 Performance of the Fund
23 Financial Statements
__________________________
*Not applicable or negative answer.
<PAGE>
Oppenheimer Fund
Prospectus dated October 21, 1994
Oppenheimer Fund is a mutual fund with the primary investment objective
of seeking capital appreciation. Its secondary objective is to achieve
income consistent with growth in capital.
The Fund attempts to achieve its objectives through investment in
common stocks that offer growth possibilities while retaining a flexible
approach to investment. In its operations, the Fund may utilize the
following special techniques when such use appears appropriate: hedging,
short-term trading, investment in foreign securities, and investment of
up to 10% of the Fund's assets in restricted 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. 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.
The Fund offers two classes of shares: (1) Class A shares, which are
sold at a public offering price that includes a front-end sales charge,
and (2) Class C shares,which are sold without a front-end sales charge,
although you may pay a sales charge when you redeem your shares, depending
on how long you hold them. A contingent deferred sales charge is imposed
on most Class C shares redeemed within 12 months of purchase. Class C
shares are also subject to an annual "asset-based sales charge." Each
class of shares bears different expenses. In deciding which class of
shares to buy, you should consider how much you plan to purchase, how long
you plan to keep your shares, and other factors discussed in "How to Buy
Shares" starting on page ___.
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 October 21, 1994, Statement of Additional Information. For a
free copy, call Oppenheimer Shareholder 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).
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of
principal.
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
Expenses
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
ABOUT YOUR ACCOUNT
How to Buy Shares
Class A Shares
Class C Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange
Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
<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 reflected in the Fund's net asset value per share. As
a shareholder, you pay those expenses indirectly. Shareholders pay other
expenses directly, such as sales 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 operating expenses that you might expect
to bear indirectly. The calculations are based on the Fund's expenses
during its fiscal year ended June 30, 1994.
- Shareholder Transaction Expenses are charges you pay when you buy
or sell shares of the Fund. Please refer to pages ----- through --- for
an explanation of how and when these charges apply.
Class A Shares Class C Shares
Maximum Sales Charge on Purchases
(as a % of offering price) 5.75% None
Sales Charge on Reinvested Dividends None None
Deferred Sales Charge
(as a % of the lower of the original
purchase price or redemption proceeds None(1) 1.0%(2)
Exchange Fee $5.00(3) $5.00(3)
(1) If you invest more than $1 million 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," below.
(2) If you redeem Class C shares within 12 months of buying them, you may
have to pay a 1.0% contingent deferred sales charge. See "How to Buy
Shares," below.
(3) Fee is waived for automated exchanges, as described in "How to
Exchange Shares."
- 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, Oppenheimer
Management Corporation (the "Manager"), and 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 and other
expenses. The following numbers are projections of the Fund's business
expenses 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. The "12b-1 Distribution Plan Fees" for
Class A shares are the Service Plan Fees (which are a maximum of 0.25% of
average annual net assets of that class), and for Class C shares are the
Distribution and Service Plan Fee (maximum of 0.25% for the service fee)
and the asset-based sales charge of 0.75%. The actual expenses for each
class of shares in future years may be more or less, depending on a number
of factors, including the actual amount of the assets represented by each
class of shares.
A Service Plan for the Fund's Class A shares took effect July 1,
1994, that applies to all Class A shares of the Fund, regardless of the
date on which the shares were purchased. "12b-1 Distribution Plan Fees"
are based on expenses that would have been incurred if that Plan had been
in effect during the Fund's fiscal year ended June 30, 1994. Class C
shares were not publicly sold before December 1, 1993. Therefore the
Annual Fund Operating Expenses shown for Class C shares are based on
expenses for the period from December 1, 1993 through June 30, 1994.
Class A Shares Class C Shares
Management Fees .75% .75%
12b-1 Distribution Plan
Fees (restated) .07%* 1.00%**
Other Expenses .34% .69%
Total Fund Operating Expenses 1.16% 2.44%
*Service Plan fees only
**Includes Service Plan Fee and
asset-based sales charge
- 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, and that the Fund's annual return is 5%, and that its
operating expenses for each class 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:
1 year 3 years 5 years 10 years(1)
Class A Shares $69 $92 $118 $190
Class C Shares $35 $76 $130 $278
If you did not redeem your investment, it would incur the following
expenses:
Class A Shares $69 $92 $118 $190
Class C Shares $25 $76 $130 $278
(1) Because of the asset-based sales charge imposed on Class C shares of
the Fund, long-term shareholders of Class C shares could bear
expenses that would be the economic equivalent of an amount greater
than the maximum front-end sales charges permitted under applicable
regulatory requirements.
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 will vary.
<PAGE>
Financial Highlights
The table on this page presents selected financial information about the
Fund, including per share data and 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 June 30, 1994, is
included in the Statement of Additional Information. Class C shares were
publicly offered only during a portion of that period, commencing December
1, 1993.
<TABLE>
<CAPTION>
CLASS A
- -------------------------------------------------------------
YEAR ENDED JUNE 30,
1994 1993 1992 1991
1990 1989
<S> <C> <C> <C> <C>
<C> <C>
=======================================================================
=====================
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $10.41 $9.72 $9.31 $9.06
$9.17 $8.36
- -----------------------------------------------------------------------
- ---------------------
Income (loss) from
investment operations:
Net investment income .07 .11 .16 .26
.32 .21
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions .55 1.15 .84 .69
.23 .82
------ ------ ------ ------
------ ------
Total income (loss) from
investment operations .62 1.26 1.00 .95
.55 1.03
- -----------------------------------------------------------------------
- ---------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.03) (.10) (.32) (.22)
(.25) (.17)
Distributions from net
realized gain on investments,
options written and foreign
currency transactions (.45) (.47) (.27) (.48)
(.41) (.05)
------ ------ ------ ------
------ ------
Total dividends and
distributions to
shareholders (.48) (.57) (.59) (.70)
(.66) (.22)
- -----------------------------------------------------------------------
- ---------------------
Net asset value, end
of period $10.55 $10.41 $9.72 $9.31
$9.06 $9.17
------ ------ ------ ------
------ ------
=======================================================================
=====================
TOTAL RETURN, AT NET
ASSET VALUE(2) 5.84% 13.33% 11.22% 11.65%
6.04% 12.60%
=======================================================================
=====================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $237,281 $216,180 $209,495 $202,509
$196,076 $208,166
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- ---------------------
Average net assets
(in thousands) $229,976 $212,660 $221,369 $189,994
$206,259 $201,556
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- ---------------------
Number of shares
outstanding
at end of period
(in thousands) 22,485 20,769 21,555 21,748
21,639 22,705
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- ---------------------
Ratios to average
net assets:
Net investment income .69% 1.05% 1.71% 2.91%
3.36% 2.49%
Expenses 1.16% 1.10% 1.09% 1.07%
1.04% 1.07%
- -----------------------------------------------------------------------
- ---------------------
Portfolio turnover rate(4) 41.6% 35.6% 58.2% 105.8%
79.5% 96.6%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS
C
- ----------------------------------------------
PERIOD
ENDED
YEAR ENDED JUNE 30, JUNE
30,
1988 1987 1986 1985 1994
<S> <C> <C> <C> <C> <C>
=======================================================================
=======
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $12.16 12.48 $9.69 $7.89
$11.08
- -----------------------------------------------------------------------
- -------
Income (loss) from
investment operations:
Net investment income .13 .06 .11 .20
.02
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions (1.40) .79 2.88 1.76
(.14)
------ ------ ------ ------
- ------
Total income (loss) from
investment operations (1.27) .85 2.99 1.96
(.12)
- -----------------------------------------------------------------------
- -------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.17) (.02) (.20) (.16)
(.02)
Distributions from net
realized gain on investments,
options written and foreign
currency transactions (2.36) (1.15) -- --
(.45)
------ ------ ------ ------
- ------
Total dividends and
distributions to
shareholders (2.53) (1.17) (.20) (.16)
(.47)
- -----------------------------------------------------------------------
- -------
Net asset value, end
of period $8.36 $12.16 $12.48 $9.69
$10.49
------ ------ ------ ------
- ------
=======================================================================
=======
TOTAL RETURN, AT NET
ASSET VALUE(2) (12.30)% 8.44% 31.24% 25.16%
(1.24)%
=======================================================================
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $213,301 $273,756 $284,604 $265,759
$294
- -----------------------------------------------------------------------
- -------
Average net assets
(in thousands) $224,367 $261,686 $268,929 $251,603
$108
- -----------------------------------------------------------------------
- -------
Number of shares
outstanding
at end of period
(in thousands) 25,514 22,518 22,802 27,418
28
- -----------------------------------------------------------------------
- -------
Ratios to average
net assets:
Net investment income 1.51% .52% .89% 2.26%
.05%(3)
Expenses 1.04% .99% 1.01% .98%
1.42%(3)
- -----------------------------------------------------------------------
- -------
Portfolio turnover rate(4) 118.8% 59.1% 43.8% 86.2%
41.6%
</TABLE>
(1) For the period from December 1, 1993 (inception of offering) to June
30, 1994.
(2) Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(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 year ended June 30, 1994 were $91,410,578 and
$88,090,494.
<PAGE>
Investment Objective and Policies
Objective. The Fund's primary objective is to seek capital
appreciation. Its secondary objective is to achieve income consistent
with growth in capital.
Investment Policies and Strategies. In seeking its primary investment
objective of capital appreciation, the Fund invests principally in common
stocks that, in the judgment of the Fund's investment adviser, Oppenheimer
Management Corporation (the "Manager"), offer growth possibilities.
However, the Manager follows a flexible approach to investment at all
times. Investments may also include preferred stocks, convertible
securities, and rights or warrants. The Fund will not invest more than
5% of its total assets in securities of issuers that have operated less
than three years, including the operation of predecessors. To achieve its
secondary objective of income consistent with capital growth, the Fund
seeks investments in dividend-paying common stocks consistent with its
primary objective of capital appreciation, and may also invest in
corporate debt securities and obligations of U.S. and foreign governments
(see "Foreign Securities," below) and may engage in certain special
investment methods to enhance income, such as writing covered call options
(described below).
- Investment Risks. 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 those 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 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 principal. Because there is no assurance that the Fund will
achieve its investment objective, when you redeem your shares, they may
be worth more or less than what you paid for them.
- 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 policies. The Fund's investment policies and
practices are not "fundamental" unless the Prospectus or Statement of
Additional Information says that a particular policy is "fundamental."
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
investment objective is a fundamental policy. 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.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below, which involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations designed to
reduce some of the risks.
- Concentration of Investments. The Fund reserves the right to
concentrate up to 50% of its assets in any one industry and may do so when
the Manager deems it appropriate to achieve the Fund's investment
objectives. Such concentration would possibly occur only when trends in
the market as a whole were considered unfavorable but at the same time a
particular industry was believed to afford better-than-average prospects.
Except in that case, it is not the intention of the Fund to concentrate
more than 25% of the value of its total assets in any one industry.
- Writing Covered Calls. The Fund may write (that is, sell) covered
call options ("calls") to raise cash for liquidity purposes (for example,
to meet redemption requirements) or for defensive reasons. The Fund
receives cash (called a premium) when it writes a call. The call gives
the buyer the ability to buy the security from the Fund at the call price
during the period in which the call may be exercised. If the value of the
security 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 security).
The Fund may write calls only if certain conditions are met: (1) after
writing any call, not more than 25% of the Fund's total assets may be
subject to calls; (2) the calls must be listed on a domestic securities
exchange or quoted on the Automated Quotation System of the National
Association of Securities Dealers, Inc.; and (3) each call must be
"covered" while it is outstanding; that is, the Fund must own the
securities on which the call is written or it must own other securities
that are acceptable for the escrow arrangements required for calls.
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 on the security
above the call price.
- Hedging with Options and Futures Contracts. The Fund may buy and
sell options and futures contracts to try to manage its exposure to
declining prices on its portfolio securities or to establish a position
in the equity 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
buying call options, tend to increase the Fund's exposure to the market.
The Fund may buy and sell futures contracts only if they relate to
broadly-based stock indices (these are referred to as "Stock Index
Futures"), as described in the Statement of Additional Information. The
Fund may purchase certain kinds of put and call options, Stock Index
Futures (described below), financial futures and options on Stock Index
Futures and on broadly-based stock indices, and engage in interest rate
transactions. These are all referred to as "hedging instruments." The
Fund does not use hedging instruments for speculative purposes. 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 purchase put options ("puts"). Buying a put on an
investment gives the Fund the right to sell the investment to a seller of
a put on that investment at a set price. The Fund can buy only puts that
relate to (1) securities that the Fund owns, (2) Stock Index Futures,
whether or not the Fund owns the particular Stock Index Future in its
portfolio, or (3) broadly-based stock indices. The Fund may not sell a
put other than a put that it previously purchased, nor may the Fund
purchase puts on securities it does not own. The Fund may purchase calls
only on securities, broadly-based stock indices or Stock Index Futures,
or to terminate its obligation on a call the Fund previously wrote. A
call or put 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.
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 than 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. For example, in writing puts, there is a risk that the Fund
may be required to buy the underlying security at a disadvantageous price.
These risks and the hedging strategies the Fund may use are described in
greater detail in the Statement of Additional Information.
- Derivative Investments. The Fund can invest in a number of
different kinds of "derivative investments." 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 or currency. In the broadest sense, derivative investments
include exchange-traded options and futures contracts (see "Writing
Covered Calls" and "Hedging with Options and Futures Contracts"). The
risks of investing in derivative investments include not only the ability
of the company issuing the instrument to pay the amount due on the
maturity of the instrument, but also the risk that the underlying
investment or security 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 this
can mean that the Fund will realize less income than expected. Certain
derivative investments held by the Fund may trade in the over-the-counter
markets and may be illiquid. See "Illiquid and Restricted Securities."
Examples of derivative investments the Fund may invest in include, among
others, "index-linked" notes. These are debt securities of companies that
call for payment on the maturity of the note in different terms than the
typical note where the borrower agrees to pay a fixed sum on the maturity
of the note. The payment on maturity of an index-linked note depends on
the performance of one or more market indices, such as the S & P 500
Index. Further examples of derivative investments the Fund may invest in
include "debt exchangeable for common stock" of an issuer or "equity-
linked debt securities" of an issuer. At maturity, the principal amount
of the debt security is exchanged for common stock of the issuer or is
payable in an amount based on the issuer's common stock price at the time
of maturity. In either case there is a risk that the amount payable at
maturity will be less than the principal amount of the debt.
Other examples of derivative investments the Fund may invest in are
currency-indexed securities. These are typically short-term or
intermediate-term debt securities who maturity values or interest rates
are determined by reference to one or more specified foreign currencies.
Certain currency-indexed securities purchased by the Fund may have a
payout factor tied to a multiple of the movement of the U.S. dollar (or
the foreign currency in which the security is denominated) against the
movement in the U.S. dollar, the foreign currency, another currency, or
an index. Such securities may be subject to increased principal risk and
increased volatility than comparable securities without a payout factor
in excess of one, but the Manager believes the increased yield justifies
the increased risk.
- 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 by the issuer to its shareholders. The Fund may invest up to
5% of its total assets in warrants and rights. That 5% excludes warrants
the Fund has acquired in units 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 the New York or American Stock Exchanges. For
further details about these investments, see "Warrants and Rights" in the
Additional Statement.
- Special Situations. The Fund may invest in securities of companies
that are in "special situations" that the Manager believes 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. Although the Fund may invest in companies for the purpose
of influencing their managerial policy, the Fund has not made any such
investment, and has no present intention of doing so.
- Portfolio Turnover. A change in the securities held by the Fund is
known as "portfolio turnover." The Fund may engage frequently in short-
term trading to try to achieve its objective. As a result, the Fund's
portfolio turnover may be higher than other mutual funds, although it 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.
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 for tax deductions for payments
made to shareholders as a "regulated investment company" under the
Internal Revenue Code. 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.
- 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
in any country, developed or underdeveloped. There is no limit on the
amount of the Fund's assets that may be invested in foreign securities.
Foreign currency will be held by the Fund 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. For example, 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 changes in foreign currency rates, 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. More information about the risks and potential rewards of
investing in foreign securities is contained in the Statement of
Additional Information.
- Illiquid and Restricted Securities. Under the policies 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 (that limit may increase to 15% if certain state
laws are changed or the Fund's shares are no longer sold in those states).
Certain restricted securities, eligible for resale to qualified
institutional purchasers, are not subject to that limit.
- Loans of Portfolio Securities. To raise cash for liquidity purposes,
the Fund may lend its portfolio securities to certain types of eligible
borrowers approved by the Board of Trustees. Each loan must be
collateralized in accordance with applicable regulatory requirements.
After any loan, the value of the securities loaned must not exceed 25% of
the value of the Fund's net assets. There are some risks in connection
with securities lending. The Fund might experience a delay in receiving
additional collateral to secure a loan, or a delay in recovery of the
loaned securities. The Fund presently does not intend to engage in loans
of securities that will exceed 5% of the value of the Fund's total assets
in the coming year.
- Temporary Defensive Investments. When stock market prices are
falling or in other unusual economic 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,
such as rated or unrated bonds and debentures, and 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.
- Repurchase Agreements. The Fund may enter into repurchase
agreements. 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. Repurchase
agreements must be fully collateralized. However, if the vendor of the
securities under a repurchase agreement 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 which causes more than
10% of its net assets to be subject to repurchase agreements having a
maturity beyond seven days.
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: (1) 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; or (2) deviate from the restrictions
listed under "Concentration of Investments."
All of the percentage restrictions described above and elsewhere in this
Prospectus apply only at the time the Fund purchases a security, and the
Fund need not dispose of a security merely because the Fund's assets have
changed or the security has increased in value relative to the size of the
Fund. There are other fundamental policies discussed in the Statement of
Additional Information.
How the Fund is Managed
Organization and History. The Fund was originally incorporated in New
York in 1958 but was reorganized in 1985 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 meet periodically 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 provides more information about them
and the officers of the Fund. Although the Fund is not required by law
to hold annual meetings, 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 two classes of shares, Class A and
Class C. 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 together on matters that affect that
class alone. Shares are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager, which
chooses 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 and its fees, and describes the expenses that
the Fund pays to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $28 billion as
of June 30, 1994, and with more than 1.8 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, a mutual life insurance
company.
- Portfolio Manager. The Portfolio Manager of the Fund is Richard H.
Rubinstein. He has been the person principally responsible for the day-
to-day management of the Fund's portfolio since June, 1990. Mr.
Rubinstein is a Vice President of the Manager and the Fund, and also
serves as an officer of other OppenheimerFunds. During the past five
years, Mr. Rubinstein was a Vice President and Portfolio
Manager/Securities Analyst for Oppenheimer Capital Corp. (an investment
adviser).
- 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: 0.75% of the first $200 million of aggregate net
assets, 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 aggregate net assets over $800
million. The Fund's management fee for its last fiscal year was 0.75% of
average annual net assets for both Class A shares and for Class C shares,
which may be higher than the rate paid by some other mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal 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 and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Distributor. The
Distributor also distributes the shares of other mutual funds managed by
the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses certain terms to
illustrate its performance: "total return" and "average annual total
return." These terms are used to show the performance of each class of
shares separately, because the performance of each class of shares will
usually be different, as a result of the different kinds of expenses each
class bears. This performance information may be useful to help you see
how well your investment has done and to compare it to other funds or
market indices, 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, 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, they reflect the
payment of the maximum initial sales charge. Total returns may also be
quoted "at net asset value," without considering the effect of the sales
charge, and those returns would be reduced if sales charges were deducted.
When total returns are shown for the entire period Class C shares have
been offered, they reflect the effect of the contingent deferred sales
charge. They may also be shown based on the change in net asset value,
without considering the effect of the contingent deferred sales charge.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended June 30, 1994,
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 past
fiscal year, the Manager continued to broadly diversify the Fund's
portfolio among industry sectors and global markets. The broad market
correction that followed moves by the Federal Reserve Board to raise
interest rates was used as an opportunity to add to the growth stock
portion of the Fund's portfolio. The portfolio contains a variety of
international holdings, including companies expected to benefit from
strengthening European economies. The Fund's Manager also focused on the
financial services sector and allocated a portion of the Fund's portfolio
to economically sensitive stocks and value stocks, notably those that have
temporarily fallen out of the markets' favor.
- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in each Class
of shares of the Fund held until June 30, 1994; in the case of Class A
shares, over a ten-year period, and in the case of Class C shares, from
the inception of the Class on December 1, 1993, with all dividends and
capital gains distributions reinvested in additional shares. The graph
reflects the deduction of the 5.75% maximum initial sales charge on Class
A shares and the 1.0% contingent deferred sales charge on Class C shares.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a
general measurement of the performance of the U.S. equity securities
market. 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 the S&P 500 index, which tend to be securities of
larger, well-capitalized companies. Moreover, the index 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 Investment in:
Oppenheimer Fund and the
S&P 500 Index
(Graph)
Past performance is not predictive of future performance.
Average Annual Total Returns of the Fund at 6/30/94
1-Year 5-Year 10-Year
Class A: -0.24% 8.28% 10.11%
Cumulative Total Return of the Fund at 6/30/94
Life*
Class C: -1.78%
* Class C shares of the Fund first publicly sold on 12/1/93.
ABOUT YOUR ACCOUNT
How to Buy Shares
Classes of Shares. The Fund offers investors two 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. When you buy Class A shares, you pay an initial
sales charge (on investments up to $1 million). If you purchase Class A
shares as part of an investment of at least $1 million in shares of one
or more OppenheimerFunds, and you sell any of those shares within 18
months after your purchase, you may pay a contingent deferred sales
charge, which will vary depending on the amount you invested.
- 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%.
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 advisors:
- How Much Do You Plan to Invest? If you plan to invest a
substantial amount over the long term, the reduced sales charges available
for larger purchases of Class A shares may be more beneficial to you than
purchasing Class C shares, because of the higher annual expenses Class C
shares will likely bear. For purchases over $1 million, the contingent
deferred sales charge on Class A shares may be more beneficial. The
Distributor will not accept any order for $1 million or more for Class C
shares on behalf of a single investor for that reason.
- How Long Do You Expect to Hold Your Investment? While future
financial needs cannot be predicted with certainty, investors who prefer
not to pay an initial sales charge and who plan to hold their shares for
more than one year might consider Class C shares. Investors who plan to
redeem shares within a year might consider whether the front-end sales
charge on Class A shares would result in higher net expenses after
redemption.
- Are There Differences in Account Features That Matter to You?
Because some account features may not be available for Class C
shareholders, you should carefully review how you plan to use your
investment account before deciding which class of shares is better for
you. Additionally, the dividends payable to Class C shareholders will be
reduced by the additional expenses borne solely by that class, such as the
asset-based sales charge to which 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 or any
other person who is entitled to receive compensation for selling Fund
shares may receive different compensation for selling one class than for
selling another class. It is important that investors understand that the
purpose of the contingent deferred sales charge and asset-based sales
charge for Class C shares is the same as the purpose of the front-end
sales charge on sales of Class A 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; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing 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 OppenheimerFunds (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. When you buy shares, be sure to
specify Class A 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 "Oppenheimer
Funds 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.
- 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, to transmit funds electronically to purchase shares, to send
redemption proceeds, and to transmit dividends and distributions. Shares
are purchased for your account 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 must 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 OppenheimerFunds) 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 that is next determined after
the Distributor receives the purchase order in Denver. In most cases, to
enable you to receive that day's offering price, the Distributor must
receive your order by 4:00 P.M., New York time (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 4:00 P.M., 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.
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, where purchases are not subject to an initial
sales charge, the offering price may be 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. The current sales charge rates
and commissions paid to dealers and brokers are as follows:
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
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%
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 OppenheimerFunds
aggregating $1 million or more. However, the Distributor pays dealers of
record commissions on such purchases in an amount equal to the sum of 1.0%
of the first $2.5 million, plus 0.50% of the next $2.5 million, plus 0.25%
of share purchases over $5 million. That commission will be paid only on
the amount of those purchases in excess of $1 million that were not
previously subject to a front-end sales charge and dealer commission.
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 will be equal to 1.0% of
the aggregate net asset value of either (1) the redeemed shares (not
including shares purchased by reinvestment of dividends or capital gain
distributions) or (2) the original cost of the shares, whichever is less.
However, the Class A contingent deferred sales charge will not exceed the
aggregate commissions the Distributor paid to your dealer on all Class A
shares of all OppenheimerFunds 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. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
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. You and your spouse can cumulate Class A
shares you purchase for your own accounts, or jointly, or on behalf of
your children who are minors, under trust or custodial accounts. A
fiduciary can cumulate 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 cumulate current purchases of Class A shares of
the Fund and other OppenheimerFunds with Class A shares of
OppenheimerFunds you previously purchased subject to a sales charge,
provided that you still hold your investment in one of the
OppenheimerFunds. 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 OppenheimerFunds are listed in "Reduced Sales Charges" in the
Statement of Additional Information, or a list can be obtained from the
Transfer Agent. 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, you may purchase Class
A shares of the Fund and other OppenheimerFunds during a 13-month period
at the reduced sales charge rate that applies to the aggregate amount of
the intended purchases, including 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. No sales charge is imposed on
sales of Class A shares to the following investors: (1) the Manager or its
affiliates; (2) 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; (3) registered management investment companies, or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (4) 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; (5)
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); (6) 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; (7) dealers, brokers or
registered investment advisers that have entered into an agreement with
the Distributor to sell shares to defined contribution employee retirement
plans for which the dealer, broker or investment adviser provides
administrative services.
Additionally, no sales charge is imposed on shares that are (a) issued
in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, (c) purchased by the
reinvestment of dividends or other distributions reinvested from the Fund
or other OppenheimerFunds (other than Oppenheimer Cash Reserves) or unit
investment trusts for which reinvestment arrangements have been made with
the Distributor or (d) sold to unit investment trusts as an investment for
previously purchased and unexpired investment plans or annuity contracts
permitting additional periodic purchases. There is a further discussion
of this policy in "Reduced Sales Charges" in the Statement of Additional
Information.
The Class A contingent deferred sales charge does not apply to purchases
of Class A shares at net asset value described above and is also waived
if shares are redeemed in the following cases: (1) retirement
distributions or loans to participants or beneficiaries from qualified
retirement plans, deferred compensation plans or other employee benefit
plans ("Retirement Plans"), (2) returns of excess contributions made to
Retirement Plans, (3) Automatic Withdrawal Plan payments that are limited
to no more than 12% of the original account value annually, (4)
involuntary redemptions of shares by operation of law or under the
procedures set forth in the Fund's Declaration of Trust or adopted by the
Board of Trustees and (5) if, at the time an order is placed for Class A
shares that would otherwise be subject to the Class A contingent deferred
sales charge, the dealer agrees to accept the dealer's portion of the
commission payable on the sale in installments of 1/18th of the commission
per month (with no further commission payable if the shares are redeemed
within 18 months of purchase).
- 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
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 dealer or its 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.
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 charge will be assessed on the lesser of
the net asset value of the shares at the time of redemption or the
original purchase price. 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 (including increases
due to the reinvestment of dividends and capital gains distributions). 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.
- Waivers of Class C Sales Charge. The Class C contingent deferred
sales charge will be waived if the shareholder requests it for any of the
following redemptions: (1) 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; (2) redemptions from accounts
other than Retirement Plans following the death or disability of the
shareholder (you must provide evidence of a determination of disability
by the Social Security Administration); (3) returns of excess
contributions to Retirement Plans; and (4) distributions from IRAs
(including SEP-IRAs and SAR /SEP accounts) before the participant is age
59-1/2, and distributions from 403(b)(7) custodial plans or pension or
profit sharing plans before the participant is age 59-1/2 but only after
the participant has separated from service, if the distributions are made
in substantially equal periodic payments over the life (or life
expectancy) of the participant or the joint lives (or joint life and last
survivor expectancy) of the participant and the participant's designated
beneficiary (and the distributions must comply with other requirements for
such distributions under the Internal Revenue Code and may not exceed 10%
of the account value annually, measured from the date the Transfer Agent
receives the request).
The contingent deferred sales charge is also waived on Class C shares
in the following cases: (i) shares sold to the Manager or its affiliates;
(ii) 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; (iii) shares issued in plans of
reorganization to which the Fund is a party; and (iv) shares redeemed in
involuntary redemptions as described above. Further details about this
policy are contained in "Reduced Sales Charges" in the Statement of
Additional Information.
- Distribution and Service Plan for Class C Shares. The Fund has
adopted a Distribution and Service Plan for Class C shares to compensate
the Distributor for its services and costs in distributing Class C shares
and servicing accounts. Under the Plan, the Fund pays the Distributor an
annual "asset-based sales charge" of 0.75% per year on Class C shares.
The Distributor also receives a service fee of 0.25% per year. Both fees
are computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. The asset-based
sales charge allows investors to buy Class C shares without a front-end
sales charge while allowing the Distributor to compensate dealers that
sell Class C shares.
The Distributor uses the service fee to compensate dealers for providing
personal services for accounts that hold Class C shares. Those services
are similar to those provided under
r the Class A Service Plan, described above. The asset-based sales charge
and service fees increase Class C expenses by up to 1.00% of average net
assets per year.
The Distributor pays the 0.25% service fee to dealers in advance for the
first year after Class C shares have been sold by the dealer. After the
shares have been held for a year, the Distributor pays the fee on a
quarterly basis. The Distributor pays sales commissions of 0.75% of the
purchase price to dealers from its own resources at the time of sale. The
Distributor retains the asset-based sales charge during the first year
shares are outstanding to recoup the sales commissions it pays, the
advances of service fee payments it makes, and its financing costs. 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.
Because the Distributor's actual expenses in selling 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 C shares, those expenses may be
carried over and paid in future years. At June 30, 1994, the end of the
Plan year, the Distributor had incurred unreimbursed expenses under the
Plan of $7,410 (equal to 2.5% of the Fund's net assets represented by
Class C shares on that date), which have been carried over into the
present Plan year. 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 the Distributor for certain expenses it incurred before the Plan
was terminated.
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, including 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 must 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 on 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 OppenheimerFunds 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 $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 an amount you establish in advance automatically for shares of
up to five other OppenheimerFunds on a monthly, quarterly, semi-annual or
annual basis under an Automatic Exchange Plan. The minimum purchase for
each other OppenheimerFunds 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 Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in Class A shares of the Fund or other OppenheimerFunds without paying
sales charge. This privilege applies to Fund shares that you purchased
with an initial sales charge or on which you paid a contingent deferred
sales charge when you redeemed them. 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 small
business owners
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 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 check is not payable to all shareholders listed on the account
statement
- The check is not sent to the address of record on your 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 as a fiduciary or on behalf of a corporation, partnership or
other business, 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 statement)
- The dollar amount or number of shares to be redeemed
- Any special payment instructions
- Any share certificates for the shares you are selling, 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:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder 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 4:00 P.M. 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, or, if you have linked your Fund account to your bank account
on AccountLink, you may have the proceeds wired to that account.
- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone, once in each 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. 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.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges made by brokers on Fund/SERV and
for automated exchanges between already established accounts on PhoneLink,
described below. 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 may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
Class A shares of this Fund only for Class A shares of another fund. At
present, not all of the OppenheimerFunds offer the same classes of shares.
If a fund has only one class of shares that does not have a class
designation, they are "Class A" shares for exchange purposes. In some
cases, sales charges may be imposed on exchange transactions. Certain
OppenheimerFunds offer Class A shares and either Class B or Class C
shares, and a list can be obtained by calling the Distributor at 1-800-
525-7048. 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 OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling a
service representative at 1-800-525-7048. Exchanges of shares involve a
redemption of the shares of the fund you own and a purchase of shares of
the other fund.
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 by 4:00 P.M. that
is in proper form, but either fund may delay the purchase of shares of the
fund you are exchanging into 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 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.
- 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 4:00 P.M. each day The New York Stock 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, obligations for which market values cannot be readily
obtained, and call options and hedging instruments. 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 it will not 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.
- The redemption price for shares will vary from day to day because the
value of the securities in the Fund's portfolio fluctuates, and the
redemption price, which is the net asset value per share, will normally
be different for Class A 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. 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 15 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 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
taxpayer identification number when you sign your application, or if you
violate Internal Revenue Service regulations on tax reporting of
dividends.
- 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 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 and
updated prospectus to shareholders having the same surname 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 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 June 30). Because
the Fund does not have an objective of seeking current income, the amounts
of dividends it pays, if any, will likely be small. Also, dividends paid
on Class A shares generally are expected to be higher than for Class C
shares because expenses allocable to Class C shares will generally be
higher.
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 dividends and 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 assurances 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 OppenheimerFunds Account. You
can reinvest all distributions in another OppenheimerFunds 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. 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.
- "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. 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.
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 TO PROSPECTUS OF
OPPENHEIMER FUND
Graphic material included in Prospectus of Oppenheimer Fund: "Comparison
of Total Return of Oppenheimer Fund and the S&P 500 Index - Change in
Value of a $10,000 Hypothetical Investment."
A linear graph will be included in the Prospectus of Oppenheimer Fund
(the "Fund") depicting the initial account value and subsequent account
value of a hypothetical $10,000 investment in the Fund. In the case of
the Fund's Class A shares, that graph will cover each of the Fund's last
ten fiscal years from 6/30/84 through 6/30/94 and in the case of the
Fund's Class C shares will cover the period from inception of the class
(December 1, 1993) through 6/30/94. The graph will compare such values
with hypothetical $10,000 investments over the same time periods in the
S&P 500 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 S&P 500 Index, is set forth in the
Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
Fiscal Year Oppenheimer
Ended Fund A S&P 500 Index
06/30/84 $ 9,425 $10,000
06/30/85 $11,796 $13,096
06/30/86 $15,470 $17,787
06/30/87 $16,790 $22,262
06/30/88 $14,724 $20,719
06/30/89 $16,579 $24,971
06/30/90 $17,580 $29,079
06/30/91 $19,629 $31,222
06/30/92 $21,832 $35,403
06/30/93 $24,742 $40,221
06/30/94 $26,188 $40,783
Fiscal Period Oppenheimer
Ended Fund C S&P 500 Index
11/30/93(1) $10,000 $10,000
06/30/94 $ 9,822 $ 9,778
(1) Class C shares of the Fund were first publicly offered on December
1, 1993.
<PAGE>
Oppenheimer Fund
Two World Trade Center
New York, NY 10048-0203
1-800-525-7048
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent
Oppenheimer Shareholder 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 Additional Statement, and if given or
made, such information and representations must not be relied upon as
having been authorized by the Fund, Oppenheimer Management Corporation,
Oppenheimer Funds 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.
PR401.1094.R * Printed on recycled paper
<PAGE>
Oppenheimer Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated October 21, 1994
This Statement of Additional Information of Oppenheimer Fund is not a
Prospectus. This document contains additional information about the Fund
and supplements information in the Prospectus dated October 21, 1994. It
should be read together with the Prospectus, which may be obtained by
writing to the Fund's Transfer Agent, Oppenheimer Shareholder 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 2
Investment Objective and Policies 2
Investment Policies and Strategies 2
Other Investment Techniques and Strategies 2
Other Investment Restrictions 10
How the Fund is Managed 10
Organization and History 10
Trustees and Officers of the Fund 11
The Manager and Its Affiliates 15
Brokerage Policies of the Fund 16
Performance of the Fund 18
Distribution and Service Plans 20
About Your Account 22
How To Buy Shares 22
How To Sell Shares 28
How To Exchange Shares 32
Dividends, Capital Gains and Taxes 33
Additional Information About the Fund 34
Financial Information About the Fund 35
Independent Auditors' Report 35
Financial Statements 36
<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 invests, 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, Oppenheimer Management Corporation (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 and methods
selected for capital appreciation 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 will be emphasized
(See "Temporary Defensive Investments," below).
- 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 and warrants have no voting
rights, receive no dividends and have no rights with respect to the assets
of the issuer.
Other Investment Techniques and Strategies
- 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 option transaction costs and the premium received on the
call written was more or less than the price of the call subsequently
purchased. A profit may also be realized if the call lapses unexercised,
because the Fund retains the related investments and the premium received.
If the Fund could not effect a closing purchase transaction due to the
lack of a market, it would have to hold the callable investments 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 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.
- 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, 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 or on
Stock Index Futures (as described in the Prospectus). When hedging to
permit the Fund to establish a position in the equities market as a
temporary substitute for purchasing particular equity securities (which
the Fund will normally purchase, and then terminate that hedging
position), the Fund may: (i) buy Stock Index Futures, or (ii) buy calls
on such Futures or on 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 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. As described in the Prospectus, the Fund may
invest in Stock Index Futures only if they relate to broadly-based stock
indices. A stock index is considered to be broadly-based if it includes
stocks that are not limited to issuers in any 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.
Stock index futures are contracts based on the future value of the
basket of securities that comprise the underlying stock 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 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 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. Although Stock Index Futures by their terms call for settlement
by the delivery of cash, in most cases the obligation is fulfilled by
entering into an offsetting transaction. All futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
- 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 or Stock Index Futures, 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. When the Fund purchases a call on a stock index or Stock Index
Future, settlement is in cash rather than by delivery of the underlying
investment to the Fund. 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 plus the transaction costs
and premium paid for the call 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 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 such 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 date, and the Fund will lose its 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 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
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 call, or buys or sells an underlying
investment in connection with the exercise of a put or call. Such
commissions may be higher on a relative basis than those which would apply
to direct purchases or sales of such underlying investments. Premiums
paid for options as to underlying investments are small in relation to the
market value of such 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.
- Interest Rate Swap Transactions. Swap agreements entail both
interest rate risk and credit risk. There is a risk that, based on
movements of interest rates in the future, the payments made by the Fund
under a swap agreement will have been greater than those received by it.
Credit risk arises from the possibility that the counterparty will
default. If the counterparty to an interest rate swap defaults, the
Fund's loss will consist of the net amount of contractual interest
payments that the Fund has not yet received. The Manager will monitor the
creditworthiness of counterparties to the Fund's interest rate swap
transactions on an ongoing basis. The Fund will enter into swap
transactions with appropriate counterparties pursuant to master netting
agreements. A master netting agreement provides that all swaps done
between the Fund and that counterparty under the master agreement shall
be regarded as parts of an integral agreement. If on any date amounts are
payable in the same currency in respect of one or more swap transactions,
the net amount payable on that date in that currency shall be paid. In
addition, the master netting agreement may provide that if one party
defaults generally or on one swap, the counterparty may terminate the
swaps with that party. Under such agreements, if there is a default
resulting in a loss to one party, the measure of that party's damages is
calculated by reference to the average cost of a replacement swap with
respect to each swap (i.e., the mark-to-market value at the time of the
termination of each swap). The gains and losses on all swaps are then
netted, and the result is the counterparty's gain or loss on termination.
The termination of all swaps and the netting of gains and losses on
termination is generally referred to as "aggregation." The Fund will not
subject more than 25% of its total assets to interest rate swaps.
- Regulatory Aspects of Hedging Instruments. The Fund must operate
within certain restrictions as to its positions in Futures and options
thereon under a rule ("CFTC Rule") adopted by the Commodity Futures
Trading Commission ("CFTC") under the Commodity Exchange Act (the "CEA"),
which exempts the Fund from registration with the CFTC as a "commodity
pool operator" (as defined under the CEA) if it complies with the CFTC
Rule. Under these restrictions, the Fund will not, as to any positions,
whether short, long or a combination thereof, enter into Futures and
options thereon for which the aggregate initial margins and premiums
exceed 5% of the fair market value of its net assets, with certain
exclusions as defined in the CFTC Rule. Under the restrictions, the Fund
also must, as to its short positions, use Futures and options thereon
solely for bona fide hedging purposes within the meaning and intent of the
applicable provisions of the CEA.
Transactions in options by the Fund are subject to limitations
established by each of the exchanges governing the maximum number of
options which 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 futures
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 or an affiliated investment
adviser. Position limits also apply to Futures. 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.
- 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.
- 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
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 that
the prices of the Futures or applicable index (thus the prices of the
Hedging Instruments) 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 off-setting 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 such equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that where 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 this occurred, the Fund
would lose money on the Hedging Instruments and also experience a decline
in value in its equity 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 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 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.
- - 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 countries in which they 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.
-- 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
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 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
because of the lesser speed and reliability of mail service between the
U.S. and foreign countries than within the U.S.; possibilities in some
countries of expropriation or nationalization of assets, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and differences (which may be favorable or unfavorable)
between the U.S. economy and foreign economies. From time to time, 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. If the Fund's 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 SEC rules.
- Restricted and Illiquid 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 on each business day must at least equal 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).
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.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finder's, custodian and administrative fees.
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. An "approved vendor"
is a commercial bank or 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 credit requirements set by the Fund's Board of Trustees
from time to time. 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,
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.
- 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 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 objectives, cannot be changed without the vote
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 such meeting, if the holders of more
than 50% of the outstanding shares are present, or (ii) more than 50% of
the outstanding shares. Under these additional restrictions, the Fund
cannot: (1) make short sales; (2) invest in commodities or 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 commodity contract; (3) invest in real
estate or in interests in real estate, but may purchase readily marketable
securities of companies holding real estate or interests therein; (4)
purchase or sell 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; (5) mortgage, hypothecate or pledge
any of its assets; however, this 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; (6) borrow money in
excess of 5% of its gross assets taken at current value, and then only as
a temporary measure for extraordinary or emergency purposes; (7) invest
in or acquire shares of any other investment company or trust except in
connection with a plan of merger, consolidation or reorganization;
however, this policy shall not prevent the Fund from investing in the
securities issued by a real estate investment trust, provided that such
trust is not permitted to invest in real estate or interests in real
estate other than mortgages or other security interests; (8) underwrite
securities of other companies except insofar as it might be deemed to be
an underwriter in the resale of any securities held in its own portfolio;
or (9) purchase or retain the securities of any issuer if those officers,
trustees and directors of the Fund or the Manager who beneficially own
individually more than .5% of the securities of such issuer together own
more than 5% of the securities of such issuer.
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 during the past five
years are set forth below. The address for each, except as noted, is Two
World Trade Center, New York, New York 10048-0203. All of the Trustees
are also Trustees or Directors of Oppenheimer Global Fund, Oppenheimer
Time Fund, Oppenheimer Special Fund, Oppenheimer Money Market Fund, Inc.,
Oppenheimer Target Fund, Oppenheimer Tax-Free Bond Fund, Oppenheimer New
York Tax-Exempt Fund, Oppenheimer California Tax-Exempt Fund, Oppenheimer
Multi-State Tax-Exempt Trust, Oppenheimer Asset Allocation Fund,
Oppenheimer Global Emerging Growth Fund, Oppenheimer Global Growth &
Income Fund, Oppenheimer Gold & Special Minerals Fund, Oppenheimer
Discovery Fund, Oppenheimer U.S. Government Trust, Oppenheimer Mortgage
Income Fund, Oppenheimer Multi-Government Trust and Oppenheimer Multi-
Sector Income Trust (collectively, the "New York-based OppenheimerFunds").
As of October 1, 1994, all of the Fund's Trustees and officers as a group
beneficially owned less than 1% of the Fund's outstanding shares.
LEON LEVY, Chairman of the Board of Trustees
General Partner of Odyssey Partners, L.P. (investment partnership) and
Chairman of Avatar Holdings, Inc. (real estate development).
LEO CHERNE, Trustee
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee (philanthropic
organization); formerly Executive Director of The Research Institute of
America.
ROBERT G. GALLI, Trustee*
Vice Chairman of the Manager and Vice President and Counsel of Oppenheimer
Acquisition Corp. ("OAC") the Manager's parent holding company; formerly
he held the following positions: a director of the Manager and Oppenheimer
Funds 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, an officer of other OppenheimerFunds and
Executive Vice President and General Counsel of the Manager and the
Distributor.
BENJAMIN LIPSTEIN, Trustee
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University.
ELIZABETH B. MOYNIHAN, Trustee
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004
Author and architectural historian; a trustee of the American Schools of
Oriental Research, the Freer Gallery of Art (Smithsonian Institution), the
Institute of Fine Arts (New York University) and Preservation League of
New York State; a member of the Indo-U.S. Sub-Commissions on Education and
Culture.
KENNETH A. RANDALL, Trustee
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Northeast Bancorp, Inc. (bank holding company), Dominion
Resources, Inc. (electric utility holding company), and Kemper Corporation
(insurance and financial services company); formerly Chairman of the Board
of ICL Inc. (information systems).
EDWARD V. REGAN, Trustee
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute, 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.
- ----------------------------
* A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
RUSSELL S. REYNOLDS, JR., Trustee
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Historical Society and Greenwich Hospital.
SIDNEY M. ROBBINS, Trustee
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions, Graduate
School of Business, Columbia University; Visiting Professor of Finance,
University of Hawaii; a director of The Korea Fund, Inc. and The Malaysia
Fund, Inc. (closed-end investment companies); a member of the Board of
Advisors, Olympus Private Placement Fund, L.P.; Professor Emeritus of
Finance, Adelphi University.
DONALD W. SPIRO, President and Trustee*
Chairman Emeritus and a director of the Manager; formerly Chairman of the
Manager and Oppenheimer Funds Distributor, Inc. (the "Distributor").
PAULINE TRIGERE, Trustee
550 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and sale of
women's fashions).
CLAYTON K. YEUTTER, Trustee
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), FMC Corp. (chemicals and
machinery), Lindsay Manufacturing Co. (irrigation equipment), Texas
Instruments, Inc. (electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order) Deputy
Chairman, Bush/Quayle Presidential Campaign, 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.
RICHARD H. RUBINSTEIN, Vice President and Portfolio Manager
Vice President of the Manager; an officer of other OppenheimerFunds;
formerly Vice President and Portfolio Manager/Security Analyst for
Oppenheimer Capital Corp., an investment adviser.
ANDREW J. DONOHUE, Secretary
Executive Vice President and General Counsel of Oppenheimer Management
Corporation ("OMC") (the "Manager") and Oppenheimer Funds Distributor,
Inc. (the "Distributor"); an officer of other OppenheimerFunds; formerly
Senior Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a 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
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; Vice
President, Treasurer and Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
ROBERT BISHOP, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other OppenheimerFunds; 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 FARRAR, Assistant Treasurer
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an officer
of other OppenheimerFunds; formerly a Fund Controller for the Manager,
prior to which he was an International Mutual Fund Supervisor for Brown
Brothers Harriman & Co., a bank, and previously a Senior Fund Accountant
for State Street Bank & Trust Company, before which he was a sales
representative for Central Colorado Planning.
ROBERT G. ZACK, Assistant Secretary
Senior Vice President and Associate General Counsel of the Manager,
Assistant Secretary of SSI, SFSI; an officer of other OppenheimerFunds.
- - Remuneration of Trustees. The officers of the Fund are affiliated with
the Manager; they and the Trustees of the Fund who are affiliated with the
Manager (Mr. Galli and Mr. Spiro, who is both an officer and Trustee)
receive no salary or fee from the Fund. During the fiscal year ended June
30, 1994, the remuneration (including expense reimbursements) paid by the
Fund to all Trustees of the Fund (excluding Mr. Spiro and Mr. Galli) as
a group for services as Trustees and as members of one or more committees
totaled $30,952. 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 OppenheimerFunds for at least 15 years to be
eligible for the maximum payment. No Trustee has retired since the
adoption of the plan and no payments have been made by the Fund under the
plan as of June 30, 1994. The accumulated liability for the Fund's
projected benefit obligations was $70,659 as of that date.
Major Shareholders. As of October 1, 1994, no person owned of record or
was known by the Fund to own beneficially 5% or more of the Fund's
outstanding shares.
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 two of whom (Messrs. Spiro and Galli)
serve as Trustees of the Fund.
- - The Investment Advisory Agreement. 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 administration for the Fund,
including the compilation and maintenance of records with respect to its
operations, the preparation and filing of specified reports, and the
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, certain insurance premiums, 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. For the Fund's fiscal years
ended June 30, 1992, 1993 and 1994, the management fees paid by the Fund
to the Manager were $1,654,391, $1,591,554 and $1,715,675, respectively.
The advisory agreement contains no expense limitation. However,
independently of the advisory agreement, the Manager has voluntarily
undertaken that the total expenses of the Fund in any fiscal year
(including the management fee but excluding taxes, interest, brokerage
fees, distribution plan payments, and extraordinary non-recurring
expenses, such as litigation costs) shall not exceed the most stringent
expense limitation imposed under state law applicable to the Fund.
Pursuant to the undertaking, the Manager's fee will be reduced at the end
of a month so that there will not be any accrued but unpaid liability
under this undertaking. Currently, the most stringent state expense
limitation is imposed by California, and limits the Fund's expenses (with
specified exclusions) to 2.5% of the first $30 million of average net
assets, 2.0% of the next $70 million of average net assets, and 1.5% of
average net assets in excess of $100 million. The Manager reserves the
right to terminate or amend the undertaking at any time. Any assumption
of the Fund's expenses under this limitation would lower the Fund's
overall expense ratio and increase its total return during any period for
which expenses are limited.
The advisory agreement provides that so long as it has acted with due
care and in good faith, the Manager shall not be liable for any loss
sustained by reason of any investment, the adoption of any investment
policy, or the purchase, sale or retention of securities, irrespective of
whether the determinations of the Manager relative thereto shall have been
based, wholly or partly, upon the investigation or research of any other
individual, firm or corporation believed by it to be reliable. However,
the advisory agreement does not protect the Manager against liability by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties or its reckless disregard of its obligations and
duties under the advisory agreement. 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 its other
investment activities. 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 corporate 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 and Class C shares but
is not obligated to sell a specific number of shares. Expenses normally
attributable to sales, 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 June
30, 1992, 1993 and 1994, the aggregate amount of sales charge on sales of
the Fund's Class A shares was $153,636, $153,936 and $537,507,
respectively, of which the Distributor and an affiliated broker-dealer
retained $58,827, $64,652 and $140,880 in those respective years. For the
period December 1, 1993 through June 30, 1994, the contingent deferred
sales charge collected by the Distributor on the redemption of Class C
shares totalled $32.00. For additional information about distribution of
the Fund's shares and the expenses connected with such activities, please
refer to "Distribution and Service Plans," below.
- - The Transfer Agent. Oppenheimer Shareholder 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 interests and policies of the Fund as
established by its Board of Trustees.
Under the advisory agreement, the Manager is authorized to select
brokers which 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 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 made by portfolio managers
of the Manager 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 and otherwise 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 transactions in the securities to which the
option relates. Where 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.
Most purchases of money market instruments and debt obligations are
principal transactions at net prices. For those transactions, instead of
using a broker the Fund normally deals directly with the selling or
purchasing principal or market maker unless it is determined that a better
price or execution can be obtained by using a broker. Purchases of these
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. The Fund seeks to obtain prompt
execution of such orders at the most favorable net price.
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 for the commissions of these 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 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, annually reviews
information furnished by the Manager as to the commissions paid to brokers
furnishing such services in an effort to ascertain that the amount of such
commissions was reasonably related to the value or benefit of such
services.
During the Fund's fiscal years ended June 30, 1992, 1993 and 1994,
total brokerage commissions paid by the Fund (not including spreads or
concessions on principal transactions on a net trade basis) were $510,684,
$399,597 and $406,111, respectively. During the fiscal year ended June
30, 1994, $95,394 was paid to brokers as commissions in return for
research services; the aggregate dollar amount of those transactions was
$48,793,105. The transactions giving rise to those commissions were
allocated in accordance with the internal allocation procedures described
above.
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 shares of the Fund may be
advertised. An explanation of how these total returns and 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 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 Class A and
Class C 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 factors
which include 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 C shares, 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 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 (using the method described above) for the one, five
and ten-year periods ended June 30, 1994, were -.24%, 9.57% and 10.11%,
respectively. The Fund's "cumulative total return" for the ten-year
period ended June 30, 1994, was 161.87%. During a portion of the periods
for which total returns are shown, the Fund's maximum sales charge rate
was higher; as a result, performance returns on actual investments during
those periods may be lower than the results shown. The cumulative total
return on Class C shares for the period December 1, 1993 (the commencement
of the offering of the shares) through June 30, 1994 was -1.78%
- - 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 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 June 30,
1994, was 177.85%. The average annual total returns at net asset value
for the one, five and ten-year periods ended June 30, 1994 for Class A
shares were 5.84%, 8.28% and 10.76%, respectively.
Total return information may be useful to investors in reviewing the
performance of the Fund's Class A or Class C shares. However, when
comparing total return of an investment in Class A or Class C shares of
the Fund with that of other alternatives, investors should understand that
as the Fund is an equity fund seeking capital appreciation, its shares are
subject to greater market risks and volatility than shares of funds having
other investment objectives.
- - Other Performance Comparisons. From time to time the Fund may publish
the ranking of its Class A or Class C shares by Lipper Analytical
Services, Inc. ("Lipper"), a widely-recognized independent service, which
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 growth funds and
(iii) all other growth funds in a specific size category. The Lipper
performance analysis includes 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 publish the ranking of the performance
of its Class A or Class C shares by Morningstar, Inc., an independent
mutual fund monitoring service, that ranks various mutual funds, including
the Fund, monthly in broad investment categories (equity, taxable bond,
municipal bond and hybrid) based on a risk-adjusted investment return.
Investment return measures a fund's 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 reflects
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 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%). Morningstar ranks the Fund
in relation to other rated equity funds. Rankings are subject to change.
The total return on an investment made in shares of the Fund may be
compared with performance for the same period of either the Dow Jones
Industrial Average ("Dow") or the Standard & Poor's 500 Index ("S&P 500"),
both of which are widely recognized indices of stock market performance.
Both indices consist of unmanaged groups of common stocks; the Dow
consists of thirty such issues. The performance of both indices includes
a factor for the reinvestment of income dividends. Neither index reflects
reinvestment of capital gains or takes sales charges into consideration,
as these items are into applicable to indices.
Investors may also wish to compare the Fund's Class A 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.
Distribution and Service Plans
The Fund has adopted a Service Plan for Class A shares and a
Distribution and Service Plan for Class C shares under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund will reimburse the
Distributor for all or a portion of its costs incurred 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 Plan for the Class C shares, that vote was cast by the Manager
as the sole initial holder of 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. Either 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 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. 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 the payment was made and the identity of each Recipient
that received any such payment. The report for the Class C Plan shall
also include the distribution costs for that quarter, and such costs for
previous fiscal periods that are carried forward, as explained in the
Prospectus and below. 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 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
fee at the maximum rate and set no minimum amount.
For the year period ended June 30, 1994, payments under a predecessor
Class A Plan totaled $172,788, all of which was paid by the Distributor
to Recipients, including $1,783.00 paid to an affiliate of the
Distributor. Unlike the current Class A Plan, which took effect July 1,
1994, the predecessor plan did not apply to Class A shares purchased prior
to April 1, 1991. For the fiscal period December 1, 1993 through June 30,
1994, payments under the Class C Plan totalled $725.
Any unreimbursed expenses incurred with respect to Class A shares for
any fiscal quarter by the Distributor may not be recovered under the Class
A Plan in subsequent fiscal quarters. Payments received by the
Distributor under the Class A Plan will not be used to pay any interest
expense, carrying charges, or other financial costs, or allocation of
overhead by the Distributor. The Class C Plan allows the service fee
payment to be paid by the Distributor to Recipients in advance for the
first year Class C shares are outstanding, and thereafter on a quarterly
basis, as described in the Prospectus. The advance payment is based on
the net assets of the Class C shares sold. An exchange of shares does not
entitle the Recipient to an advance service fee payment. In the event
Class C shares are redeemed during the first year such shares are
outstanding, the Recipient will be obligated to repay a pro rata portion
of such advance payment to the Distributor.
Although the Class C Plan permits the Distributor to retain both the
asset-based sales charges and the service fee on Class C 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 C Plan by the Board. Initially, the
Board has set no minimum holding period. All payments under the Class C
Plan are subject to the limitations imposed by the Rule of Fair Practice
of the National Association of Securities Dealers, Inc.
The Class C Plan allows for the carry-forward of distribution expenses,
to be recovered from asset-based sales charges in subsequent fiscal
periods, as described in the Prospectus. The asset-based sales charge
paid to the Distributor by the Fund under the Class C Plan is intended to
allow the Distributor to recoup the cost of sales commissions paid to
authorized brokers and dealers at the time of sale, plus financing costs,
as described in the Prospectus. Such payments may also be used to pay for
the following expenses in connection with the distribution of Class C
shares: (i) financing the advance of the service fee payment to Recipients
under the Class C Plan, (ii) compensation and expenses of personnel
employed by the Distributor to support distribution of Class C shares, and
(iii) costs of sales literature, advertising and prospectuses (other than
those furnished to current shareholders) and state "blue sky" registration
fees.
ABOUT YOUR ACCOUNT
How To Buy Shares
Alternative Sales Arrangements - Class A and Class C Shares. The
availability of two classes of shares permits an 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 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 will not accept any order for
$1 million or more of Class C shares 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 two 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
C shares and the dividends payable on Class C shares will be reduced by
incremental expenses borne solely by that class, including the asset-based
sales charge to which Class C shares are subject.
The methodology for calculating the net asset value, dividends and
distributions of the Fund's Class A 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 net
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, Additional Statements 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 (i) Distribution Plan fees, (ii)
incremental transfer and shareholder servicing agent fees and expenses,
(iii) registration fees and (iv) 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 and Class C shares of the Fund is determined as of 4:00
P.M. each day The New York Stock Exchange (the "NYSE") is open, as of 4:00
P.M., New York time, that day, by dividing the value of the Fund's net
assets attributable to that class by the total number of Fund shares of
that class outstanding. The NYSE's most recent annual announcement (which
is subject to change) states that it will close on New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. It may also close on other days.
Dealers may conduct trading at times when the NYSE is closed (including
weekends and holidays). Because the Fund's net asset values will not be
calculated on those days, the Fund's net asset value per share may be
significantly affected on such days when shareholders may not 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 securities exchange or on the NASDAQ National
Market System ("NASDAQ") 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 and asked prices); (ii) NASDAQ and other unlisted
equity securities for which last sales prices are not regularly reported
but for which over-the-counter market quotations are readily available are
valued at the highest closing bid price at the time of valuation, or, if
no closing bid price is reported, on the basis of a closing bid price
obtained from a dealer who maintains an active market in that security;
(iii) securities (including restricted securities) not having readily-
available market quotations are valued at fair value under the Board's
procedures; (iv) long-term debt securities having a remaining maturity in
excess of 60 days are valued at the mean between the asked and bid prices
determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained from active market maker in the security; (v) short-
term debt securities (having a remaining maturity of 60 days or less) are
valued at cost, adjusted for amortization of premiums and accretion of
discounts; (vi) securities traded on foreign exchanges are valued at the
closing or last reported sales prices or, if none, at the mean between
closing bid and asked prices and reflecting prevailing rates of exchange
taken from the closing price on the London foreign exchange market on that
day.
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 such 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 its net asset
value unless the Board of Trustees or the Manager, under procedures
established by the Board, determines that the particular event would
materially affect the Fund's net asset values, in which case an adjustment
would be made. Foreign currency will be valued as close to the time fixed
for the valuation date as is reasonably practicable. The values of
securities denominated in foreign currency will be converted to U.S.
dollars at the prevailing rates of exchange at the time of valuation. In
the case of U.S. government securities and corporate bonds, 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 Trustees will monitor the accuracy of pricing services by comparing
prices used for portfolio evaluation to actual sales prices of selected
securities.
Puts, calls and Futures are valued at the last sales price on the
principal exchanges on which they are traded or on NASDAQ, as applicable,
or, if there are no sales that day, in accordance with (i) above. When
the Fund writes an option, an amount equal to the premium received by the
Fund is included in the Fund's Statement of Assets and Liabilities as an
asset, and an equivalent deferred credit is included in the liability
section. The deferred credit is adjusted ("marked-to-market") to reflect
the current market value of the option. If a call written by the Fund is
exercised, the proceeds are increased by the premium received.
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
transfer to buy shares. Dividends will begin to accrue on such shares on
the day the Fund receives Federal Funds for such purchase through the ACH
system before 4:00 P.M., which is normally 3 days after the ACH transfer
is initiated. The Distributor and the Fund are not responsible for any
delays. If the Federal Funds are received after 4:00 P.M., dividends will
begin to accrue on the next regular business day after such Federal Funds
are received.
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
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, parents, grandparents, parents-in-law,
brothers and sisters, sons-and daughters-in-law, siblings, a sibling's
spouse and a spouse's siblings.
- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Time Fund
Oppenheimer Target 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 High Yield Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Investment Grade Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Global Fund
Oppenheimer Global Emerging Growth Fund
Oppenheimer Global Environment Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Diversified Income 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 OppenheimerFunds 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 ("Letter") is the investor's
statement of intention to purchase Class A shares of the Fund (and other
eligible OppenheimerFunds) sold with a front-end sales charge during the
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 (excluding any purchases made by reinvestments of dividends or
distributions or purchases made at net asset value without sales charge),
which together with the investor's holdings of such funds (calculated at
their respective public offering prices calculated on the date of the
Letter) will equal or exceed the amount specified in the Letter. This
enables the investor to obtain the reduced sales charge rate (as set forth
in the Prospectus) applicable to purchases of shares in that amount (the
"intended purchase amount"). 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.
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 the Letter) do not include
any shares sold without a front-end sales charge or without being subject
to a Class A contingent deferred sales charge unless (for the purpose of
determining completion of the obligation to purchase shares under the
Letter) the shares were acquired in exchange for shares of one of the
OppenheimerFunds whose shares were acquired by payment of a 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 "Exchange Privilege," 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
OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, 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.
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 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 it portfolio securities described above under
"Determination of Net Asset Values 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 granting
permission to 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 (i) Class A shares,
or (ii) Class C shares that were subject to the Class C contingent
deferred sales charge when redeemed. The reinvestment may be made without
sales charge only in Class A shares of the Fund or any of the other
OppenheimerFunds 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 OppenheimerFunds 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 either 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 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, 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) in OppenheimerFunds-sponsored pension or
profit-sharing plans may not directly request redemption of their
accounts. 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. The repurchase price will be the net asset
value next computed after the receipt of an order placed by such dealer
or broker, except that orders received from dealers or brokers after 4:00
P.M. on a regular business day will be processed at that day's net asset
value if such orders were received by the dealer or broker from its
customers prior to 4:00 P.M., and were transmitted to and received by the
Distributor prior to its close of business that day (normally 5:00 P.M.).
Payment ordinarily will be made within seven days after the Distributor's
receipt of the required redemption documents, with signature(s) guaranteed
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 C shareholders should not establish withdrawal
plans that would require the redemption of shares held less than 12
months, because of the imposition of the Class C contingent deferred sales
charge on such withdrawals (except where the Class C contingent deferred
sales charge is waived as described in the Prospectus under "Class C
Contingent Deferred Sales Charge").
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 OppenheimerFunds 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.
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 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 (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
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
OppenheimerFunds that have a single class without a class designation are
deemed "Class A" shares for this purpose. All of the OppenheimerFunds
offer Class A shares (except for Oppenheimer Strategic Diversified Income
Fund), but only the following other OppenheimerFunds (referred to as
"Advisors Portfolio" funds) offer Class C shares:
Oppenheimer Target Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Champion High Yield Fund
Oppenheimer U.S. Government Trust
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Main Street Income & Growth Fund
Oppenheimer Cash Reserves (Class C and B shares are available
only by exchange)
Oppenheimer Strategic Diversified Income Fund
Class A shares of OppenheimerFunds 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
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds 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 OppenheimerFunds.
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 OppenheimerFunds 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
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 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 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 both classes must specify whether they intend to exchange Class A or
Class C shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. 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 OppenheimerFunds 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 (generally dividends from domestic
corporations) which the Fund derives from its portfolio investments held
for a minimum period, usually 46 days. A corporate shareholder will not
be eligible for the deduction on dividends paid on shares held by the
shareholder for 45 days or less. To the extent the Fund derives a
significant portion of its gross income from option premiums, interest
income or short-term capital gains from the sale of securities, or
dividends from foreign corporations, its dividends will not qualify for
the deduction. It is expected that only a portion of dividends paid by
the Fund will 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 1st of the prior year through October 31 of that
year or else must pay an excise tax on the amounts not distributed. While
it is presently anticipated that the Fund's distributions will meet those
requirements, the Manager might determine that in a particular year that
it might be in the best interests of shareholders not to distribute income
or capital gains at the mandated levels and to pay the excise tax on the
undistributed amounts, which would reduce the amount available for
distribution to shareholders.
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 OppenheimerFunds listed in "Reduced
Sales Charges," above, at net asset value without sales charge. Class C
shareholders should be aware that as of the date of this Additional
Statement, not all OppenheimerFunds offer Class C shares. To elect this
option, the shareholder must notify OSS in writing and either must have
an existing account in the fund selected for reinvestment or must obtain
a prospectus for that fund and an application from the Transfer Agent 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 certain of
the OppenheimerFunds 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 and handling the delivery of
such securities to and from the Fund. The Manager has represented to the
Fund that its banking relationships with 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.
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 Fund:
We have audited the accompanying statements of investments and assets
and liabilities of Oppenheimer Fund as of June 30, 1994, 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 ten-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 and financial highlights. Our
procedures included confirmation of securities owned as of June 30, 1994,
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 Fund as of June 30, 1994, 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 ten-year period then ended, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Denver, Colorado
July 22, 1994
<PAGE>
STATEMENT OF INVESTMENTS JUNE 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==========================================================
==========================================================
==============
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--10.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with The First Boston Corp., 4.135%,
dated 6/30/94, to be repurchased at $25,402,910 on 7/1/94,
collateralized by U.S. Treasury Nts., 4%, 1/31/96, with a value
of $25,937,805 (Cost $25,400,000) $25,400,000 $25,400,000
==========================================================
==========================================================
==============
CORPORATE BONDS AND NOTES--0.6%
- ----------------------------------------------------------------------------------------------------------------------------------
Mediq, Inc., 7.50%, Exch. Sub. Debs., 7/15/03 (Cost $1,719,580) 1,850,000 1,498,500
SHARES
==========================================================
==========================================================
==============
PREFERRED STOCKS--1.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Alumax, Inc., $4.00 Cv., Series A 7,333 843,295
-------------------------------------------------------------------------------------------------
Chiquita Brands International, Inc., $1.28 Depositary Shares 45,000 618,750
-------------------------------------------------------------------------------------------------
Cyprus Amax Minerals Co., $4.00 Cv., Series A 14,666 988,112
-------------------------------------------------------------------------------------------------
Delta Airlines, Inc., $3.50 Cv. Depositary Shares, Series C 36,300 1,642,575
-------------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $3,658,370) 4,092,732
==========================================================
==========================================================
==============
COMMON STOCKS--86.9%
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--7.5%
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--1.7% biosys(1) 40,000 250,000
-------------------------------------------------------------------------------------------------
Great Lakes Chemical Corp. 6,200 335,575
-------------------------------------------------------------------------------------------------
IMC Fertilizer Group, Inc.(1) 31,000 1,073,375
-------------------------------------------------------------------------------------------------
Praxair, Inc. 62,500 1,218,750
-------------------------------------------------------------------------------------------------
Sybron Chemicals, Inc.(1) 47,000 1,128,000
-----------
4,005,700
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS: DIVERSIFIED--2.3% ARCO Chemical Co. 38,800
1,760,550
-------------------------------------------------------------------------------------------------
Bayer AG, ADR 17,000 3,679,981
-----------
5,440,531
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS: SPECIALTY--0.3% Goldschmidt (T.H.) AG 1,875
824,721
- ----------------------------------------------------------------------------------------------------------------------------------
METALS: MISCELLANEOUS--1.0% Brush Wellman, Inc. 151,400
2,403,475
- ----------------------------------------------------------------------------------------------------------------------------------
PAPER AND FOREST Louisiana-Pacific Corp. 31,300 954,650
PRODUCTS--0.8% -------------------------------------------------------------------------------------------------
Macmillan Bloedel, Ltd. 68,200 861,025
-----------
1,815,675
- ----------------------------------------------------------------------------------------------------------------------------------
STEEL--1.4% Allegheny Ludlum Corp. 40,000 740,000
-------------------------------------------------------------------------------------------------
Inland Steel Industries, Inc.(1) 72,000 2,511,000
-----------
3,251,000
</TABLE>
<PAGE>
Oppenheimer Fund
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSUMER CYCLICALS--16.3%
- -------------------------------------------------------------------------------------------------------------------------
AUTOMOBILES--0.5% Fiat SpA(1) 320,000 $1,285,618
- -------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--1.6% Comcast Corp., Cl. A Special 110,150 1,982,700
----------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR(2)(3) 17,000 862,750
----------------------------------------------------------------------------------------
SFX Broadcasting, Inc., Cl. A(1) 77,000 1,058,750
-----------
3,904,200
- -------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--2.2% Disney (Walt) Co.(3) 31,500 1,311,188
----------------------------------------------------------------------------------------
King World Productions, Inc.(1)(3) 56,500 2,252,938
----------------------------------------------------------------------------------------
MGM Grand, Inc.(1) 35,000 818,125
----------------------------------------------------------------------------------------
WMS Industries, Inc.(1) 50,700 963,300
-----------
5,345,551
- -------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD FURNISHINGS AND Chromcraft Revington, Inc.(1) 50,000 962,500
APPLIANCES--0.4%
- -------------------------------------------------------------------------------------------------------------------------
LEISURE TIME--1.1% Caesar's World, Inc.(1) 38,600 1,399,250
----------------------------------------------------------------------------------------
Eastman Kodak Co. 23,200 1,116,500
-----------
2,515,750
- -------------------------------------------------------------------------------------------------------------------------
PUBLISHING--1.8% Bowne & Co., Inc. 35,000 726,250
----------------------------------------------------------------------------------------
Time Warner, Inc.(3) 53,100 1,865,138
----------------------------------------------------------------------------------------
Wolters Kluwer NV 27,450 1,622,423
-----------
4,213,811
- -------------------------------------------------------------------------------------------------------------------------
RESTAURANTS--0.5% Quantum Restaurant Group, Inc.(1) 137,500 1,151,563
- -------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: DEPARTMENT Dillard Department Stores, Inc., Cl. A 26,300 812,013
STORES--0.3%
- -------------------------------------------------------------------------------------------------------------------------
RETAIL STORES: GENERAL Price/Costco, Inc.(1) 65,000 970,938
MERCHANDISE CHAINS--0.7% ----------------------------------------------------------------------------------------
Waban, Inc.(1) 44,000 731,500
-----------
1,702,438
- -------------------------------------------------------------------------------------------------------------------------
RETAIL: SPECIALTY--2.7% Blockbuster Entertainment Corp.(3) 40,000 1,035,000
----------------------------------------------------------------------------------------
CML Group, Inc. 76,400 897,700
----------------------------------------------------------------------------------------
CompUSA, Inc.(1) 66,000 585,750
----------------------------------------------------------------------------------------
Inacom Corp.(1) 80,800 656,500
----------------------------------------------------------------------------------------
Toys 'R' Us, Inc.(1) 42,000 1,375,500
----------------------------------------------------------------------------------------
Venture Stores, Inc. 90,100 1,779,475
-----------
6,329,925
- -------------------------------------------------------------------------------------------------------------------------
SHOES--1.0% Baker (J.), Inc. 127,800 2,476,125
- -------------------------------------------------------------------------------------------------------------------------
TEXTILES: APPAREL Authentic Fitness Corp.(1) 90,000 1,260,000
MANUFACTURERS--1.4% ----------------------------------------------------------------------------------------
Cone Mills Corp.(1) 1,200 15,450
----------------------------------------------------------------------------------------
Fruit of the Loom, Inc., Cl. A(1) 31,500 822,938
----------------------------------------------------------------------------------------
Warnaco Group, Inc. (The), Cl. A(1) 44,000 1,292,500
-----------
3,390,888
</TABLE>
<PAGE>
Oppenheimer Fund
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOYS--2.1% Mattel, Inc. 134,500 $ 3,412,938
-----------------------------------------------------------------------------------------------
Nintendo Co. 14,000 1,013,363
-----------------------------------------------------------------------------------------------
SLM International, Inc.(1) 51,100 562,100
-----------
4,988,401
- --------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--17.9%
- --------------------------------------------------------------------------------------------------------------------------------
BEVERAGES: ALCOHOLIC--0.5% Guinness PLC 182,000 1,227,608
- --------------------------------------------------------------------------------------------------------------------------------
BEVERAGES: SOFT DRINKS--0.7% Whitman Corp. 104,300 1,616,650
- --------------------------------------------------------------------------------------------------------------------------------
COSMETICS--0.7% Avon Products, Inc.(3) 26,200 1,542,525
- --------------------------------------------------------------------------------------------------------------------------------
DRUGS--3.3% Agouron Pharmaceuticals, Inc.(1) 24,500 275,625
-----------------------------------------------------------------------------------------------
Astra AB Free, Series A 37,250 751,352
-----------------------------------------------------------------------------------------------
Ciba-Geigy AG 2,025 1,194,174
-----------------------------------------------------------------------------------------------
Lilly (Eli) & Co. 24,000 1,365,000
-----------------------------------------------------------------------------------------------
Medeva PLC 205,000 424,000
-----------------------------------------------------------------------------------------------
Mylan Laboratories, Inc. 52,800 1,122,000
-----------------------------------------------------------------------------------------------
Nature's Bounty, Inc.(1) 95,000 760,000
-----------------------------------------------------------------------------------------------
Sandoz AG 1,500 778,066
-----------------------------------------------------------------------------------------------
Upjohn Co. 36,700 1,068,888
-----------
7,739,105
- --------------------------------------------------------------------------------------------------------------------------------
FOOD PROCESSING--2.5% CP Pokphand Co. 1,855,000 503,994
-----------------------------------------------------------------------------------------------
Chiquita Brands International, Inc. 1,039 12,988
-----------------------------------------------------------------------------------------------
Nestle SA, Sponsored ADR 81,000 3,399,383
-----------------------------------------------------------------------------------------------
Sanfilippo (John B.) & Son, Inc. 90,000 888,750
-----------------------------------------------------------------------------------------------
Sara Lee Corp. 56,100 1,192,125
-----------
5,997,240
- --------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: DIVERSIFIED--2.3% Abbott Laboratories 30,700 890,300
-----------------------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 48,000 2,574,000
-----------------------------------------------------------------------------------------------
Carter-Wallace, Inc. 37,000 689,125
-----------------------------------------------------------------------------------------------
Schering AG 2,050 1,227,593
-----------
5,381,018
- --------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: MISCELLANEOUS--4.9%
- --------------------------------------------------------------------------------------------------------------------------------
Amgen, Inc.(1)(3) 42,000 1,800,750
-----------------------------------------------------------------------------------------------
Chiron Corp.(1) 12,300 673,425
-----------------------------------------------------------------------------------------------
FHP International Corp.(1) 90,000 2,160,000
-----------------------------------------------------------------------------------------------
Genzyme Corp.(1) 34,000 888,250
-----------------------------------------------------------------------------------------------
Manor Care, Inc. 56,370 1,416,296
-----------------------------------------------------------------------------------------------
Protein Design Labs, Inc.(1) 19,000 346,750
-----------------------------------------------------------------------------------------------
U.S. Healthcare, Inc.(3) 116,700 4,317,900
-----------
11,603,371
</TABLE>
<PAGE>
Oppenheimer Fund
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HOSPITAL MANAGEMENT--0.5% Medical Care America, Inc.(1) 46,300
$1,255,888
- --------------------------------------------------------------------------------------------------------------------------------
MEDICAL PRODUCTS--1.3% Medtronic, Inc.(3) 14,000 1,121,750
-----------------------------------------------------------------------------------------------
Mitek Surgical Products, Inc.(1) 60,000 1,050,000
-----------------------------------------------------------------------------------------------
Nellcor, Inc.(1)(3) 38,000 1,016,500
-----------
3,188,250
- --------------------------------------------------------------------------------------------------------------------------------
TOBACCO--1.2% Philip Morris Cos., Inc.(3) 55,100 2,837,650
- --------------------------------------------------------------------------------------------------------------------------------
ENERGY--4.5%
- --------------------------------------------------------------------------------------------------------------------------------
COAL--0.5% Ashland Coal, Inc. 41,200 1,102,100
- --------------------------------------------------------------------------------------------------------------------------------
OIL AND GAS DRILLING--0.4% Santa Fe Energy Resources, Inc. 89,700 840,938
- --------------------------------------------------------------------------------------------------------------------------------
OIL: EXPLORATION AND Burlington Resources, Inc. 45,700 1,890,838
PRODUCTION--0.8%
- --------------------------------------------------------------------------------------------------------------------------------
OIL: INTEGRATED DOMESTIC--1.1% Unocal Corp. 88,000 2,519,000
- --------------------------------------------------------------------------------------------------------------------------------
OIL: INTEGRATED Royal Dutch Petroleum Co. 10,000 1,046,250
INTERNATIONAL--1.4% -----------------------------------------------------------------------------------------------
Saga Petroleum AS, Cl. B 82,000 950,548
-----------------------------------------------------------------------------------------------
Total SA, Sponsored ADR 45,213 1,299,874
-----------
3,296,672
- --------------------------------------------------------------------------------------------------------------------------------
OIL WELL SERVICES AND Schlumberger, Ltd. 14,000 827,750
EQUIPMENT--0.3%
FINANCIAL--7.7%
- --------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES: American Express Co. 42,000 1,081,500
MISCELLANEOUS--1.6% -----------------------------------------------------------------------------------------------
H & R Block Incorporated 20,900 820,325
-----------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.(3) 36,400 1,274,000
-----------------------------------------------------------------------------------------------
Peregrine Investment Holdings, Ltd.(1) 400,000 657,243
-----------
3,833,068
- --------------------------------------------------------------------------------------------------------------------------------
INSURANCE: LIFE--0.4% Bankers Life Holding Corp. 50,800 1,022,350
- --------------------------------------------------------------------------------------------------------------------------------
INSURANCE: MULTI-LINE--1.0% American International Group, Inc. 13,000
1,126,125
-----------------------------------------------------------------------------------------------
American Re Corp.(1) 42,000 1,296,750
-----------
2,422,875
- --------------------------------------------------------------------------------------------------------------------------------
MAJOR BANKS: OTHER--1.1% Deutsche Bank AG, ADR 6,000
2,578,784
- --------------------------------------------------------------------------------------------------------------------------------
MAJOR BANKS: REGIONAL--1.3% Banc One Corp. 23,900 818,575
-----------------------------------------------------------------------------------------------
NationsBank Corp. 46,100 2,368,388
-----------
3,186,963
</TABLE>
<PAGE>
Oppenheimer Fund
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MONEY CENTER BANKS--1.4% Bankers Trust New York Corp. 28,100 $
1,872,163
-----------------------------------------------------------------------------------------------
Chemical Banking Corp. 37,000 1,424,500
-----------
3,296,663
- --------------------------------------------------------------------------------------------------------------------------------
SAVINGS AND LOANS: Golden West Financial Corp.(3) 53,000 2,047,125
HOLDING COS.--0.9%
- --------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--13.9%
- --------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS GROUP--1.3% Masco Corp. 28,000 770,000
-----------------------------------------------------------------------------------------------
Owens-Corning Fiberglass Corp.(1) 72,600 2,259,675
-----------
3,029,675
- --------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--0.4% Sylvan Learning Sys., Inc.(1) 55,000 866,250
- --------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATES--1.8% Jardine Matheson Holdings, Ltd. 100,000 769,803
-----------------------------------------------------------------------------------------------
Tenneco, Inc. 58,800 2,726,850
-----------------------------------------------------------------------------------------------
Wharf Holdings(1) 233,000 859,139
-----------
4,355,792
- --------------------------------------------------------------------------------------------------------------------------------
CONTAINERS: Interpool, Inc.(1) 31,800 365,700
METAL AND GLASS--0.2%
- --------------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.1% C-Cube Microsystems, Inc.(1) 35,000
551,250
-----------------------------------------------------------------------------------------------
General Electric Co. 44,000 2,051,500
-----------
2,602,750
- --------------------------------------------------------------------------------------------------------------------------------
ENGINEERING AND Empresas ICA Sociedad Controladora S.A. de C.V. 35,000
840,000
CONSTRUCTION--0.8% -----------------------------------------------------------------------------------------------
Huarte SA 89,650 1,158,086
-----------
1,998,086
- --------------------------------------------------------------------------------------------------------------------------------
HEAVY DUTY TRUCKS Spartan Motors, Inc.(3) 54,750 698,063
AND PARTS--0.3%
- --------------------------------------------------------------------------------------------------------------------------------
MACHINERY TOOLS--0.5% FANUC Ltd. 22,500 1,081,184
- --------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING: DIVERSIFIED Mannesmann AG 9,775
2,478,380
-----------------------------------------------------------------------------------------------
INDUSTRIALS--2.1% Olin Corp. 20,000 1,077,500
-----------------------------------------------------------------------------------------------
Siemens AG, ADR 19,000 1,542,494
-----------
5,098,374
- --------------------------------------------------------------------------------------------------------------------------------
POLLUTION CONTROL: WMX Technologies, Inc. 50,000 1,325,000
SOLID WASTE--0.6%
- --------------------------------------------------------------------------------------------------------------------------------
RAILROADS--2.1% Burlington Northern, Inc.(3) 70,400 3,757,600
-----------------------------------------------------------------------------------------------
Chicago & North Western Holdings Corp.(1) 50,000 1,156,250
-----------
4,913,850
</TABLE>
<PAGE>
Oppenheimer Fund
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TRANSPORTATION: DS AF 1912 B 100 $ 1,976,118
MISCELLANEOUS--2.4% -----------------------------------------------------------------------------------------------
OMI Corp.(1) 220,500 1,323,000
-----------------------------------------------------------------------------------------------
Stolt Tankers & Terminals Holdings SA 134,700 2,298,319
-----------
5,597,437
- --------------------------------------------------------------------------------------------------------------------------------
TRUCKERS--0.3% Roadway Services, Inc. 12,100 762,300
- --------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--15.3%
- --------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.3% General Dynamics Corp. 44,800 1,831,200
-----------------------------------------------------------------------------------------------
McDonnell Douglas Corp.(3) 11,000 1,287,000
-----------
3,118,200
- --------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE BMC Software, Inc.(1) 25,400 1,111,250
AND SERVICES--5.0% -----------------------------------------------------------------------------------------------
Computer Associates International, Inc.(3) 39,700 1,588,000
-----------------------------------------------------------------------------------------------
Electronic Arts, Inc.(1) 58,500 819,000
-----------------------------------------------------------------------------------------------
Lotus Development Corp.(1)(3) 24,400 896,700
-----------------------------------------------------------------------------------------------
Marcam Corp.(1) 71,600 805,500
-----------------------------------------------------------------------------------------------
Microsoft Corp.(1)(3) 29,400 1,514,100
-----------------------------------------------------------------------------------------------
Novell, Inc.(1) 83,000 1,390,250
-----------------------------------------------------------------------------------------------
Pyxis Corp.(1) 57,600 1,094,400
-----------------------------------------------------------------------------------------------
Sap AG Preference 1,000 2,007,606
-----------------------------------------------------------------------------------------------
Sierra On-Line, Inc.(1) 33,000 544,500
-----------
11,771,306
- --------------------------------------------------------------------------------------------------------------------------------
COMPUTER SYSTEMS--1.6% Cabletron Systems, Inc.(1) 5,000 483,125
-----------------------------------------------------------------------------------------------
Radius, Inc.(1) 87,000 424,125
-----------------------------------------------------------------------------------------------
Sun Microsystems, Inc.(1) 35,900 740,438
-----------------------------------------------------------------------------------------------
Synoptics Communications, Inc.(1) 71,600 975,550
-----------------------------------------------------------------------------------------------
Tandem Computers, Inc.(1) 106,700 1,200,375
-----------
3,823,613
- --------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: Hewlett-Packard Co.(3) 29,000 2,185,875
INSTRUMENTATION--0.9%
- --------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: Intel Corp. 74,700 4,369,950
SEMICONDUCTORS--1.8%
- --------------------------------------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT Xerox Corp.(3) 37,000 3,616,750
AND SUPPLIES--1.5%
- --------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--3.2% Airtouch Communications, Inc.(1) 45,500
1,074,938
-----------------------------------------------------------------------------------------------
American Telephone & Telegraph Co. 24,000 1,305,000
-----------------------------------------------------------------------------------------------
MCI Communications Corp. 108,000 2,389,500
-----------------------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A(1)(3) 25,400 768,350
-----------------------------------------------------------------------------------------------
Rogers Cantel Mobile Communications, Inc., Cl. B, Sub.(1) 86,100 2,087,925
-----------
7,625,713
</TABLE>
<PAGE>
Oppenheimer Fund
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UTILITIES--3.8%
- --------------------------------------------------------------------------------------------------------------------------------
ELECTRIC COMPANIES--1.0% Korea Electric Power Co.(1) 30,000 $ 998,728
-----------------------------------------------------------------------------------------------
Verbund Oest Electriz 25,200 1,439,274
-----------
2,438,002
- --------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS--0.5% Hong Kong & China Gas 619,200 1,185,646
- --------------------------------------------------------------------------------------------------------------------------------
TELEPHONE--2.3% BCE, Inc. 34,000 1,100,750
-----------------------------------------------------------------------------------------------
Pacific Telesis Group 33,000 1,018,875
-----------------------------------------------------------------------------------------------
US West Communications, Inc. 78,900 3,303,938
-----------
5,423,563
-----------
Total Common Stocks (Cost $169,183,524) 206,327,395
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $199,961,474) 99.9%
237,318,627
- --------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES .1 256,490
-------- ------------
NET ASSETS 100.0% $237,575,117
======== ============
(1) Non-income producing security.
(2) Restricted security--See Note 6 of Notes to Financial Statements.
(3) Securities with an aggregate market value of $11,581,676 are held in escrow to cover outstanding call options, as follows:
</TABLE>
<TABLE>
<CAPTION>
SHARES EXPIRATION EXERCISE PREMIUM MARKET
VALUE
SUBJECT TO CALL DATE PRICE RECEIVED SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Amgen, Inc. 10,000 10/94 $50.00 $ 28,449 $ 11,250
- ------------------------------------------------------------------------------------------------------------------------------
Avon Products, Inc. 11,400 10/94 60.00 48,106 33,488
- ------------------------------------------------------------------------------------------------------------------------------
Blockbuster Entertainment Corp. 40,000 9/94 25.00 111,296 87,500
- ------------------------------------------------------------------------------------------------------------------------------
Burlington Northern, Inc. 11,600 7/94 65.00 27,201 2,175
- ------------------------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 8,000 10/94 45.00 19,759 16,000
- ------------------------------------------------------------------------------------------------------------------------------
Disney (Walt) Co. 6,300 10/94 40.00 30,522 23,625
- ------------------------------------------------------------------------------------------------------------------------------
Golden West Financial Corp. 7,500 11/94 40.00 22,274 15,938
- ------------------------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR 8,500 10/94 55.00 45,431 24,438
- ------------------------------------------------------------------------------------------------------------------------------
Grupo Televisa SA, Sponsored ADR 8,500 10/94 60.00 28,432 12,750
- ------------------------------------------------------------------------------------------------------------------------------
Hewlett-Packard Co. 6,000 11/94 95.00 14,070 5,250
- ------------------------------------------------------------------------------------------------------------------------------
King World Productions, Inc. 11,200 8/94 40.00 22,063 30,800
- ------------------------------------------------------------------------------------------------------------------------------
King World Productions, Inc. 11,200 8/94 45.00 22,063 15,400
- ------------------------------------------------------------------------------------------------------------------------------
King World Productions, Inc. 11,200 11/94 45.00 38,863 30,800
- ------------------------------------------------------------------------------------------------------------------------------
Lotus Development Corp. 7,600 10/94 60.00 60,570 2,375
- ------------------------------------------------------------------------------------------------------------------------------
McDonnell Douglas Corp. 2,000 8/94 120.00 13,941 7,000
- ------------------------------------------------------------------------------------------------------------------------------
Medtronic, Inc. 2,800 8/94 90.00 11,116 1,750
- ------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 9,000 7/94 47.50 16,604 562
- ------------------------------------------------------------------------------------------------------------------------------
Microsoft Corp. 5,600 10/94 47.50 9,016 36,400
- ------------------------------------------------------------------------------------------------------------------------------
Nellcor, Inc. 7,000 7/94 30.00 15,539 2,187
- ------------------------------------------------------------------------------------------------------------------------------
Nellcor, Inc. 7,600 10/94 30.00 13,254 7,125
- ------------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc. 5,000 11/94 45.00 6,725 3,125
- ------------------------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 10,000 12/94 60.00 20,880 8,750
- ------------------------------------------------------------------------------------------------------------------------------
Spartan Motors, Inc. 22,900 12/94 22.50 39,387 7,155
- ------------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc. 12,000 9/94 45.00 17,639 2,250
- ------------------------------------------------------------------------------------------------------------------------------
US Healthcare, Inc. 17,700 7/94 43.38 79,293 6,638
- ------------------------------------------------------------------------------------------------------------------------------
US Healthcare, Inc. 17,700 7/94 46.63 52,744 2,213
- ------------------------------------------------------------------------------------------------------------------------------
Xerox Corp. 9,000 7/94 95.00 33,479 38,250
-------- --------
$848,716 $435,194
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Oppenheimer Fund
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994
<TABLE>
<S> <C> <C>
==========================================================
===========================================================
ASSETS Investments, at value (cost $199,961,474)--see accompanying statement $237,318,627
-----------------------------------------------------------------------------------------------
Cash 73,973
-----------------------------------------------------------------------------------------------
Receivables
Investments sold and options written 4,364,898
Shares of beneficial interest sold 593,002
Dividends and interest 536,447
-----------------------------------------------------------------------------------------------
Other 199,236
------------
Total assets 243,086,183
==========================================================
===========================================================
LIABILITIES Options written, at value (premiums received $848,716)--
see accompanying statement--Note 4 435,194
-----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 3,675,893
Shares of beneficial interest redeemed 1,143,298
Distribution and service plan fees--Note 5 41,962
Other 214,719
------------
Total liabilities 5,511,066
==========================================================
===========================================================
NET ASSETS $237,575,117
============
==========================================================
===========================================================
COMPOSITION OF Paid-in capital $178,940,150
NET ASSETS -----------------------------------------------------------------------------------------------
Undistributed net investment income 1,028,422
-----------------------------------------------------------------------------------------------
Undistributed net realized gain from investments,
written options and foreign currency transactions 19,835,261
-----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments, options written and
translation of assets and liabilities denominated in foreign currencies 37,771,284
----------
Net assets $237,575,117
============
==========================================================
===========================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $237,280,749 and 22,485,115 shares of beneficial interest outstanding) $10.55
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $11.19
-----------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $294,368 and 28,050 shares of beneficial
interest outstanding) $10.49
See accompanying Notes to Financial Statements.
</TABLE>
STATEMENT OF OPERATIONS For The Year Ended June 30, 1994
<TABLE>
<S> <C> <C>
==========================================================
============================================================
INVESTMENT INCOME Dividends (net of withholding taxes of $158,103) $ 3,477,304
-----------------------------------------------------------------------------------------------
Interest 782,888
-----------
Total income 4,260,192
==========================================================
============================================================
EXPENSES Management fees--Note 5 1,715,675
-----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 381,029
-----------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 172,788
Class C--Note 5 725
-----------------------------------------------------------------------------------------------
Shareholder reports 117,821
-----------------------------------------------------------------------------------------------
Custodian fees and expenses 97,660
-----------------------------------------------------------------------------------------------
Legal and auditing fees 81,662
-----------------------------------------------------------------------------------------------
Trustees' fees and expenses 42,001
-----------------------------------------------------------------------------------------------
Other 59,812
-----------
Total expenses 2,669,173
==========================================================
============================================================
NET INVESTMENT
INCOME 1,591,019
==========================================================
============================================================
REALIZED AND Net realized gain (loss) from:
UNREALIZED GAINS Investments and options written (including premiums on options exercised) 16,772,211
(LOSS) ON Closing and expiration of option contracts written--Note 4 1,357,174
INVESTMENTS, OPTIONS Foreign currency transactions (100,491)
WRITTEN AND
FOREIGN CURRENCY
TRANSACTIONS
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (8,069,602)
Translation of assets and liabilities denominated in foreign currencies 334,858
Net realized and unrealized gain on investments,
options written and foreign currency transactions 10,294,150
==========================================================
============================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$11,885,169
-----------
See accompanying Notes to Financial Statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30,
1994 1993
==========================================================
==========================================================
========
<S> <C> <C>
OPERATIONS Net investment income $ 1,591,019 $ 2,226,781
------------------------------------------------------------------------------------------------
Net realized gain on investments, options written and
foreign currency transactions 18,028,894 7,786,728
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments, options written and translation of assets
and liabilities denominated in foreign currencies (7,734,744) 16,573,062
------------- ------------
Net increase in net assets resulting from operations 11,885,169 26,586,571
==========================================================
==========================================================
========
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.033 and $.104 per share, respectively) (665,882) (2,190,272)
SHAREHOLDERS Class C ($.02 per share) (2) --
------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments,
options written and foreign currency transactions:
Class A ($.4495 and $.466 per share, respectively) (9,068,819) (9,716,817)
Class C ($.4495 per share) (41) --
==========================================================
==========================================================
========
BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions--Note 2 18,939,597 (7,993,951)
------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C
beneficial interest transactions--Note 2 304,968 --
==========================================================
==========================================================
========
NET ASSETS Total increase 21,394,990 6,685,531
------------------------------------------------------------------------------------------------
Beginning of year 216,180,127 209,494,596
------------ ------------
End of year (including undistributed net investment
income of $1,028,422 and $239,931, respectively) $237,575,117 $216,180,127
============
============
See accompanying Notes to Financial Statements.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------
YEAR ENDED JUNE 30,
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
==========================================================
==================================
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $10.41 $9.72 $9.31 $9.06 $9.17 $8.36
- --------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .07 .11 .16 .26 .32 .21
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions .55 1.15 .84 .69 .23 .82
------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations .62 1.26 1.00 .95 .55 1.03
- --------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.03) (.10) (.32) (.22) (.25) (.17)
Distributions from net
realized gain on investments,
options written and foreign
currency transactions (.45) (.47) (.27) (.48) (.41) (.05)
------ ------ ------ ------ ------ ------
Total dividends and
distributions to
shareholders (.48) (.57) (.59) (.70) (.66) (.22)
- --------------------------------------------------------------------------------------------
Net asset value, end
of period $10.55 $10.41 $9.72 $9.31 $9.06 $9.17
------ ------ ------ ------ ------ ------
==========================================================
==================================
TOTAL RETURN, AT NET
ASSET VALUE(2) 5.84% 13.33% 11.22% 11.65% 6.04% 12.60%
==========================================================
==================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $237,281 $216,180 $209,495 $202,509 $196,076 $208,166
- --------------------------------------------------------------------------------------------
Average net assets
(in thousands) $229,976 $212,660 $221,369 $189,994 $206,259 $201,556
- --------------------------------------------------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 22,485 20,769 21,555 21,748 21,639 22,705
- --------------------------------------------------------------------------------------------
Ratios to average
net assets:
Net investment income .69% 1.05% 1.71% 2.91% 3.36% 2.49%
Expenses 1.16% 1.10% 1.09% 1.07% 1.04% 1.07%
- --------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 41.6% 35.6% 58.2% 105.8% 79.5% 96.6%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS C
----------------------------------------------
PERIOD
ENDED
YEAR ENDED JUNE 30, JUNE 30,
1988 1987 1986 1985 1994
<S> <C> <C> <C> <C> <C>
==========================================================
====================
PER SHARE OPERATING DATA:
Net asset value, beginning
of period $12.16 12.48 $9.69 $7.89 $11.08
- ------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income .13 .06 .11 .20 .02
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions (1.40) .79 2.88 1.76 (.14)
------ ------ ------ ------ ------
Total income (loss) from
investment operations (1.27) .85 2.99 1.96 (.12)
- ------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income (.17) (.02) (.20) (.16) (.02)
Distributions from net
realized gain on investments,
options written and foreign
currency transactions (2.36) (1.15) -- -- (.45)
------ ------ ------ ------ ------
Total dividends and
distributions to
shareholders (2.53) (1.17) (.20) (.16) (.47)
- ------------------------------------------------------------------------------
Net asset value, end
of period $8.36 $12.16 $12.48 $9.69 $10.49
------ ------ ------ ------ ------
==========================================================
====================
TOTAL RETURN, AT NET
ASSET VALUE(2) (12.30)% 8.44% 31.24% 25.16% (1.24)%
==========================================================
====================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $213,301 $273,756 $284,604 $265,759 $294
- ------------------------------------------------------------------------------
Average net assets
(in thousands) $224,367 $261,686 $268,929 $251,603 $108
- ------------------------------------------------------------------------------
Number of shares
outstanding
at end of period
(in thousands) 25,514 22,518 22,802 27,418 28
- ------------------------------------------------------------------------------
Ratios to average
net assets:
Net investment income 1.51% .52% .89% 2.26% .05%(3)
Expenses 1.04% .99% 1.01% .98% 1.42%(3)
- ------------------------------------------------------------------------------
Portfolio turnover rate(4) 118.8% 59.1% 43.8% 86.2% 41.6%
</TABLE>
(1) For the period from December 1, 1993 (inception of offering) to June
30, 1994.
(2) Assumes a hypothetical initial investment on the business day before
the first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption
at the net asset value calculated on the last business day of the fiscal
period. Sales charges are not reflected in the total returns.
(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 year ended June 30, 1994 were $91,410,578 and
$88,090,494.
See accompanying Notes to Financial Statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer 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 advisor is Oppenheimer Management
Corporation (the Manager). The Fund offers both Class A and Class C
shares. Class A shares are sold with a front-end sales charge. Class C
shares may be subject to a contingent deferred sales charge. Both classes
of shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution plan, expenses directly
attributable to a particular class and exclusive voting rights with
respect to matters affecting a single class. The following is a summary
of significant accounting policies consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at 4:00 p.m. (New
York time) on each trading day. Listed and unlisted securities for which
such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid
or asked price or the last sale price on the prior trading day. Long-term
debt securities are valued by a portfolio pricing service approved by the
Board of Trustees. Long-term debt securities which cannot be valued by the
approved portfolio pricing service are valued by averaging the mean
between the bid and asked prices obtained from two active market makers
in such securities. Short-term 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.
Securities for which market quotes are not readily available are valued
under procedures established by the Board of Trustees to determine fair
value in good faith. A call option is valued based upon the last sales
price on the principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based upon the sale on
the prior trading date if it is within the spread between the closing bid
and asked prices. If the last sale price is outside the spread, the
closing bid or asked price closest to the last reported sale price
is used.
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are
maintained in U.S. dollars. Prices of securities denominated in foreign
currencies are translated into U.S. dollars at the closing rates of
exchange.
Amounts related to the purchase and sale of securities and investment
income are translated at the rates of exchange prevailing on the
respective dates of such transactions.
The Fund generally enters into forward currency exchange contracts as a
hedge, upon the purchase or sale of a security denominated in a foreign
currency. Risks may arise from the potential inability of
the counterparty to meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
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 results 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. 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.
CALL OPTIONS WRITTEN. The Fund may write covered call options. When an
option is written, the Fund receives a premium and becomes obligated to
sell the underlying security at a fixed price, upon exercise of the
option. In writing an option, the Fund bears the market risk of an
unfavorable change in the price of the security underlying the written
option. Exercise of an option written by the Fund could result in the Fund
selling a security at a price different from the current market value. All
securities covering call options written are held in escrow by the
custodian bank.
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 INCOME 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 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. The
accumulated liability for the Fund's projected benefit obligations was
$70,659 at June 30, 1994. No payments have been made under the plan.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective July 1,
1993, the Fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the Fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, subsequent to June 30, 1993, amounts have been reclassified
to reflect a decrease in paid-in capital of $373,921, a decrease in
undistributed net investment income of $36,153, and an increase in
undistributed capital gain on investments of $410,074. During the year
ended June 30, 1994, Oppenheimer Fund recorded a loss due to foreign
currency transactions. As a result, in accordance with Statement of
Position 93-2, undistributed net investment income was decreased by
$100,491 and undistributed capital gain on investments was increased by
the same amount. Classes A and C were impacted by $100,438 and $53,
respectively.
OTHER. Investment transactions are accounted for on the date the
investments are purchased or sold (trade date) and dividend income is
recorded on the ex-dividend date. Discount on securities purchased
is amortized over the life of the respective securities, in accordance
with federal income tax requirements. Realized gains and losses on
investments and unrealized appreciation and depreciation are determined
on an identified cost basis, which is the same basis used for federal
income tax purposes.
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 JUNE 30, 1994(1) YEAR ENDED JUNE 30, 1993
--------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 3,600,642 $39,529,238 910,822 $ 9,151,109
Dividends and
distributions reinvested 816,887 8,879,570 1,103,139 10,873,362
Redeemed (2,701,648) (29,469,211) (2,799,972) (28,018,422)
---------- ----------- ---------- -----------
Net increase (decrease) 1,715,881 $18,939,597 (786,011) $(7,993,951)
---------- ----------- ---------- -----------
----------------------------------------------------------------------------------------------------
Class C:
Sold 29,766 $ 323,590 -- $ --
Dividends and distributions
reinvested -- -- -- --
Redeemed (1,716) (18,622) -- --
---------- ----------- ---------- ----------
Net increase 28,050 $ ,304,968 -- $ --
------ ----------- ---------- ----------
</TABLE>
(1) For the year ended June 30, 1994 for Class A shares and for the period
from December 1, 1993 (inception of offering) to June 30, 1994 for Class
C shares.
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS AND OPTIONS WRITTEN
At June 30, 1994, net unrealized appreciation on investments and options
written of $37,770,675 was composed of gross appreciation of $45,877,036,
and gross depreciation of $8,106,361.
4. CALL OPTION ACTIVITY
Call option activity for the year ended June 30, 1994 was as follows:
<TABLE>
<CAPTION>
NUMBER AMOUNT OF
OF OPTIONS PREMIUMS
---------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at June 30, 1993 4,547 $1,200,680
Options written 10,791 3,221,067
Options canceled in closing purchase transactions (4,138) (1,270,703)
Options expired prior to exercise (4,702) (1,143,228)
Options exercised (3,771) (1,159,100)
------ ----------
Options outstanding at June 30, 1994 2,727 $ 848,716
------ ---------
</TABLE>
5. 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 an annual fee of .75%
on the first $200 million of net assets with a reduction of .03% on each
$200 million thereafter to $800 million, and .60% on net assets in excess
of $800 million. The Manager has agreed to reimburse the Fund if
aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended June 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $537,507, of which $140,880
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary
of the Manager, as general distributor, and by an affiliated
broker/dealer. During the period ended June 30, 1994, OFDI received
contingent deferred sales charges of $42 upon redemption of Class C
shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other
registered investment companies. OSS's total costs of providing such
services are allocated ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net
assets annually to reimburse OFDI for costs incurred in connection with
the personal service and maintenance of accounts that hold shares of the
Fund (prior to July 1, 1994, reimbursements were made with respect to
Class A shares sold subsequent to March 31, 1991), including amounts paid
to brokers, dealers, banks and other institutions. In addition, Class C
shares are subject to an asset-based sales charge of .75% of net assets
annually, to reimburse OFDI for sales commissions paid from its own
resources at the time of sale and associated financing costs. In
the event of termination or discontinuance of the Class C plan, the Board
of Trustees may allow the Fund to continue payment of the asset-based
sales charge to OFDI for distribution expenses incurred on Class C shares
sold prior to termination or discontinuance of the plan. During the
year ended June 30, 1994, OFDI paid $1,783 to an affiliated broker/dealer
as reimbursement for Class A personal service and maintenance expenses and
retained $725 as reimbursement for Class C sales commissions and service
fee advances, as well as financing costs.
6. RESTRICTED SECURITIES
The Fund owns securities purchased in private placement transactions,
without registration under the Securities Act of 1933 (the Act). The
securities are valued under methods approved by the Board of Trustees as
reflecting fair value. The Fund intends to invest no more than 10%
of its net assets (determined at the time of purchase) in restricted and
illiquid securities, excluding securities eligible for resale pursuant to
Rule 144A of the Act that are determined to be liquid by the Board of
Trustees or by the Manager under Board-approved guidelines.
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT JUNE 30, 1994
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
Grupo Televisa SA,
Sponsored ADR (1) 8/20/92-8/26/92 $27.69 $50.75
(1) Transferable under Rule 144A of the Act.
</TABLE>
<PAGE>
Oppenheimer Fund
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder 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 FUND
FORM N-1A
PART C
OTHER INFORMATION
ITEM 24 Financial Statements and Exhibits
(a) Financial Statements
(1) Financial Highlights (See Part A, Prospectus and Part B,
Statement of Additional Information): Filed herewith.
(2) Independent Auditors' Report (see Part B, Statement of
Additional Information): Filed herewith.
(3) Statement of Investments (see Part B, Statement of Additional
Information): Filed herewith.
(4) Statement of Assets and Liabilities, (see Part B, Statement of
Additional Information): Filed herewith.
(5) Statement of Operations (see Part B, Statement of Additional
Information): Filed herewith.
(6) Statements of Changes in Net Assets (see Part B, Statement of
Additional Information): Filed herewith.
(7) Notes to Financial Statements (see Part B, Statement of
Additional Information): Filed herewith.
(8) Independent Auditors' Consent: Filed herewith.
(b) Exhibits
Exhibit
Number Description
(1) Amended and Restated Declaration of Trust dated 5/12/94: Filed
with Registrant's Post-Effective Amendment No. 107, 8/19/94, and
incorporated herein by reference.
(2) By-Laws amended through 8/6/87: Previously filed with Post-
Effective Amendment No. 93 to Registrant's Registration Statement,
10/28/88, refiled pursuant to Item 102 of Regulation S-T with Registrant's
Post-Effective Amendment No. 107, 8/19/94, and incorporated herein by
reference.
(3) Not applicable.
(4)(i) Specimen Class A Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 107, 8/19/94, and incorporated
herein by reference.
(ii) Specimen Class C Share Certificate: Filed with Registrant's
Post-Effective Amendment No. 107, 8/19/94, and incorporated
herein by reference.
(5) Investment Advisory Agreement dated 6/20/91: Previously filed
with Post-Effective Amendment No. 99 to Registrant's
Registration Statement, 8/23/91, refiled pursuant to Item 102
of Regulation S-T with Registrant's Post-Effective Amendment
No. 107, 8/19/94, and incorporated herein by reference.
(6)(a) General Distributor's Agreement dated 12/10/92: Filed with
Post-Effective Amendment No. 104 to Registrant's Registration
Statement, 8/25/93, and incorporated herein by reference.
(b) Form of Dealer Agreement of Oppenheimer Funds Distributor, Inc.
- Filed with Post-Effective Amendment No. 14 of Oppenheimer
Main Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(c) Form of Oppenheimer Funds Distributor, Inc. Broker Agreement -
Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(d) Form of Oppenheimer Funds Distributor, Inc. Agency Agreement -
Filed with Post-Effective Amendment No. 14 of Oppenheimer Main
Street Funds, Inc. (Reg. No. 33-17850), 9/30/94, and
incorporated herein by reference.
(e) Broker Agreement between Oppenheimer Funds Distributor, Inc.
and Newbridge Securities dated 10/1/86: Previously filed with
Post-Effective Amendment No. 25 of Oppenheimer Special Fund
(Reg. No. 2-45272), 11/1/86, refiled with Post-Effective
Amendment No. 45 of Oppenheimer Special Fund (Reg. No. 2-
45272), 8/22/94, pursuant to Item 102 of Regulation S-T, and
incorporated herein by reference.
(7) Retirement Plan for Non-Interested Trustees or Directors
(adopted by Registrant 6/7/90): Previously filed with Post-
Effective Amendment No. 97 to Registrant's Registration
Statement, 8/30/90, and incorporated herein by reference.
(8) Custody Agreement dated 8/5/92: Filed with Post-Effective
Amendment No. 103, of Registrant's Registration Statement,
10/28/92, refiled pursuant to Item 102 of Regulation S-T with
Registrant's Post-Effective Amendment No. 107, 8/19/94, and
incorporated herein by reference.
(9) Agreement and Plan of Reorganization and Liquidation dated
10/10/85 by and between Registrant and Oppenheimer Fund, Inc.:
Previously filed with Post-Effective Amendment No. 86 to
Registrant's Registration Statement, 10/16/85, refiled pursuant
to Item 102 of Regulation S-T with Registrant's Post-Effective
Amendment No. 107, 8/19/94, and incorporated herein by
reference.
(10) Opinion and Consent of Counsel dated 10/4/85: Previously filed
with Post-Effective Amendment No. 86, 10/16/85 to Registrant's
Registration Statement, refiled pursuant to Item 102 of
Regulation S-T with Registrant's Post-Effective Amendment No.
107, 8/19/94, and incorporated herein by reference.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Form of prototype Standardized and Non-Standardized
Profit-Sharing Plan and Money Purchase Pension Plan for
self-employed persons and corporations: Previously filed
with Post-Effective Amendment No. 3 of Oppenheimer Global
Growth & Income Fund (Reg. No. 33-33799), January 31,
1992, and incorporated herein by reference.
(b) Form of Individual Retirement Account Trust Agreement:
Previously filed with Post-Effective Amendment No. 21 of
Oppenheimer U.S. Government Trust (Reg. No. 2-76645),
8/25/93, and incorporated herein by reference.
(c) Form of Tax Sheltered Retirement Plan and Custody
Agreement for employees of public schools and tax-exempt
organizations: Previously filed with Post-Effective
Amendment No. 22 of Oppenheimer Directors Fund (Reg. No.
2-62240), 2/1/90, and incorporated herein by reference.
(d) Form of Simplified Employee Pension IRA: Previously filed
with Post-Effective Amendment No. 36 of Oppenheimer Equity
Income Fund (Reg. No. 2-33043), 10/23/91, and incorporated
herein by reference.
(e) Form of SAR-SEP Simplified Employee Pension IRA: Filed
with Post-Effective Amendment No. 19 to the Registration
Statement of Oppenheimer Integrity Funds (File No. 2-
76547), 3/1/94, and incorporated herein by reference.
(15) (a) Service Plan and Agreement dated 6/10/93 for Class A shares
under Rule 12b-1 of the Investment Company Act of 1940: Filed
with Registrant's Post-Effective Amendment No. 107, 8/19/94,
and incorporated herein by reference.
(b) Distribution and Service Plan and Agreement dated December 1,
1993 for Class C shares under Rule 12b-1 of the Investment
Company Act of 1940: Filed with Registrant's Post-Effective
Amendment No. 107, 8/19/94, and incorporated herein by
reference.
(16) Performance Data Computation Schedule: Filed herewith.
(17)(a) Financial Data Schedule for Class A shares: Filed herewith.
(b) Financial Data Schedule for Class C shares: Filed herewith.
- -- Powers of Attorney: Filed with Post-Effective Amendment No. 104
of Registrant's Registration Statement, 8/25/93, and
incorporated herein by reference.
ITEM 25 Persons Controlled by or Under Common Control with
Registrant
None
ITEM 26 Number of Holders of Securities
Number of Record
Holders as of
Title of Class September 30, 1994
Shares of Beneficial Interest,
Class A shares 30,858
Shares of Beneficial Interest,
Class C shares 117
ITEM 27 Indemnification
Reference is made to paragraphs (c) through (g) of Section 12 of Article
SEVENTH of Registrant's Declaration of Trust filed as Exhibit 24(b)(1) to
this Registration Statement.
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 28 Business and Other Connections of Investment Adviser
(a) Oppenheimer Management Corporation is the investment adviser of
the Registrant; it and certain subsidiaries and affiliates act in
the same capacity to other registered investment companies as
described in Parts A and B hereof.
(b) For information as to the business, profession, vocation or
employment of a substantial nature of each of the officers and
directors of Oppenheimer Management Corporation, reference is
made to Parts A and B of this Registration Statement and to the
registration on Form ADV filed under the Investment Advisers Act
of 1940 by Oppenheimer Management Corporation, which is
incorporated herein by reference.
ITEM 29 Principal Underwriter
(a) Oppenheimer Funds Distributor, Inc. is the General Distributor of
Registrant's shares and is also the general distributor of
certain of the other open-end registered investment companies for
which Oppenheimer Management Corporation is the investment
adviser, as described in Parts A and B of this Registration
Statement.
(b) The information contained in the registration on Form BD of
Oppenheimer Funds Distributor, Inc., filed under the Securities
Exchange Act of 1934, is incorporated herein by reference.
(c) Not applicable.
ITEM 30 Location of Accounts and Records
The accounts, books and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the
Investment Company Act of 1940 and rules promulgated
thereunder are in the possession of Oppenheimer Management
Corporation, at its offices at 3410 South Galena Street,
Denver, Colorado 80231.
ITEM 31 Management Services
Not applicable.
ITEM 32 Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Trustees
Oppenheimer Fund:
We consent to the use of our report dated July 22, 1994 included herein
and to the reference to our firm under the heading "Financial Highlights"
in the prospectus.
/s/ KPMG Peat Marwick LLP
------------------------------
KPMG PEAT MARWICK LLP
Denver, Colorado
October 20, 1994
<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 17th day of October, 1994.
OPPENHEIMER FUND
By: /s/ Donald W. Spiro*
----------------------------------------
Donald W. Spiro, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Leon Levy* Chairman of the
- -------------- Board of Trustees October 17, 1994
Leon Levy
/s/ Donald W. Spiro* President, Chief
- -------------------- Executive Officer
Donald W. Spiro and Trustee October 17, 1994
/s/ George Bowen* Treasurer and Chief
- ----------------- Financial and
George Bowen Accounting Officer October 17, 1994
/s/ Leo Cherne* Trustee October 17, 1994
- ---------------
Leo Cherne
/s/ Robert G. Galli* Trustee October 17, 1994
- -------------------
Robert G. Galli
/s/ Benjamin Lipstein* Trustee October 17, 1994
- ----------------------
Benjamin Lipstein
/s/ Elizabeth B. Moynihan* Trustee October 17, 1994
- --------------------------
Elizabeth B. Moynihan
/s/ Kenneth A. Randall* Trustee October 17, 1994
- -----------------------
Kenneth A. Randall
/s/ Edward V. Regan* Trustee October 17, 1994
- --------------------
Edward V. Regan
/s/ Russell S. Reynolds, Jr.* Trustee October 17, 1994
- -----------------------------
Russell S. Reynolds, Jr.
/s/ Sidney M. Robbins* Trustee October 17, 1994
- ----------------------
Sidney M. Robbins
/s/ Pauline Trigere* Trustee October 17, 1994
- --------------------
Pauline Trigere
/s/ Clayton K. Yeutter* Trustee October 17, 1994
- -----------------------
Clayton K. Yeutter
*By: /s/ Robert G. Zack
- --------------------------------
Robert G. Zack, Attorney-in-Fact
<PAGE>
OPPENHEIMER FUND
Exhibit Index
- -------------
Exhibit No. Description
- ----------- -----------
24(b)(16) Performance Data Computation Schedule
24(b)(17)(a) Financial Data Schedule for Class A Shares
24(b)(17)(b) Financial Data Schedule for Class C Shares
Oppenheimer Management Corporation
2 World Trade Center - Suite 3400
New York, NY 10048-0203
October 21, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oppenheimer Asset Allocation Fund - Reg. No. 2-86903,
File No. 811-3864
Oppenheimer California Tax-Exempt Fund - Reg. No. 33-23566
File No. 811-5586
Oppenheimer Discovery Fund - Reg. No. 33-371, File No. 811-4410
Oppenheimer Global Emerging Growth Fund - Reg. No. 33-18285,
File No. 811-5381
Oppenheimer Global Environment Fund - Reg. No. 33-32270,
File No. 811-5966
Oppenheimer Global Fund - Reg. No. 2-31661, File No. 811-1810
Oppenheimer Global Growth & Income Fund - Reg. No. 33-33799
File No. 811-6001
Oppenheimer Gold & Special Minerals Fund - Reg. No. 2-82590,
File No. 811-3694
Oppenheimer Growth Fund - Reg. No. 2-45272, File No. 811-2306
Oppenheimer Money Market Fund, Inc. - Reg. No. 2-49887,
File No. 811-2454
Oppenheimer Mortgage Income Fund - Reg. No. 33-6614,
File No. 811-4712
Oppenheimer Multi-Government Trust - Reg. No. 33-24885,
File No. 811-5670
Oppenheimer Multi-Sector Income Trust - Reg. No. 33-20191
File No. 811-5473
Oppenheimer Multi-State Tax-Exempt Trust - Reg. No. 33-30198
File No. 811-5867
Oppenheimer New York Tax-Exempt Fund - Reg. No. 2-91683,
File No. 811-4054
Oppenheimer Fund - Reg. No. 2-14586, File No. 811-847
Oppenheimer Target Fund - Reg. No. 2-69719, File No. 811-3105
Oppenheimer Time Fund - Reg. No. 2-39461, File No. 811-02171
Oppenheimer Tax-Free Bond Fund - Reg. No. 2-57116,
File No. 811-2668
Oppenheimer U.S. Government Trust - Reg. No. 2-76645,
File No. 811-3430
To the Securities and Exchange Commission:
Each of the above-captioned registered investment companies (the
"Registrants") hereby represents to the Securities and Exchange
Commission, pursuant to Rule 485(b)(2)(iv) under the Securities Act of
1933, as amended, and in connection with an amendment on Form N-1A to that
Registrant's Registration Statement under the Investment Company Act of
1940, that the resignation of Edmund T. Delaney as a Trustee of the
Registrants as of October 17, 1994, was not due to disagreement with any
Registrant as to any matter relating to any Registrant's operations,
policies or practices.
OPPENHEIMER ASSET ALLOCATION FUND
OPPENHEIMER CALIFORNIA TAX-EXEMPT FUND
OPPENHEIMER DISCOVERY FUND
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
OPPENHEIMER GLOBAL ENVIRONMENT FUND
OPPENHEIMER GLOBAL FUND
OPPENHEIMER GLOBAL GROWTH & INCOME FUND
OPPENHEIMER GOLD & SPECIAL MINERALS FUND
OPPENHEIMER GROWTH FUND
OPPENHEIMER MONEY MARKET FUND, INC.
OPPENHEIMER MORTGAGE INCOME FUND
OPPENHEIMER MULTI-GOVERNMENT TRUST
OPPENHEIMER MULTI-SECTOR INCOME TRUST
OPPENHEIMER MULTI-STATE TAX-EXEMPT TRUST
OPPENHEIMER NEW YORK TAX-EXEMPT FUND
OPPENHEIMER FUND
OPPENHEIMER TARGET FUND
OPPENHEIMER TIME FUND
OPPENHEIMER TAX-FREE BOND FUND
OPPENHEIMER U.S. GOVERNMENT TRUST
By: /s/ Andrew J. Donohue
--------------------------------
Andrew J. Donohue, Secretary
Oppenheimer Fund
Exhibit 24(b)(16) to Form N-1A
Performance Data Computation Schedule
The Fund's average annual total returns and total returns are calculated
as described below, on the basis of the Fund's distributions, for the past
10 years which are as follows:
Distribution Amount from Amount from
Reinvestment Ordinary Long and Short-Term Reinvestment
(Ex) Date Income Capital Gains Price
Class A Shares
07/30/84 $0.0400 $0.0000 $ 7.660
10/29/84 0.0400 0.0000 8.150
01/28/85 0.0400 0.0000 8.920
04/30/85 0.0400 0.0000 9.230
07/29/85 0.0500 0.0000 9.810
10/28/85 0.0500 0.0000 9.710
01/26/86 0.0500 0.0000 10.630
04/28/86 0.0500 0.0000 12.530
07/28/86 0.0000 1.0200 10.420
10/27/86 0.0200 0.0300 10.110
01/26/86 0.0000 0.0500 11.000
04/27/87 0.0000 0.0500 11.820
07/31/87 0.0000 1.8400 10.840
10/23/87 0.0500 0.0000 7.670
12/24/87 0.0400 0.5100 7.690
03/25/88 0.0400 0.0100 7.930
06/24/88 0.0400 0.0000 8.390
09/23/88 0.0400 0.0000 7.970
12/23/88 0.0500 0.0460 7.870
03/23/89 0.0400 0.0000 8.280
06/23/89 0.0400 0.0000 9.470
09/22/89 0.0400 0.0000 9.750
12/22/89 0.1250 0.4100 9.000
03/23/90 0.0400 0.0000 8.960
06/22/90 0.0400 0.0000 9.050
09/21/90 0.0400 0.0000 8.220
12/21/90 0.0950 0.4830 8.020
03/22/91 0.0400 0.0000 9.140
06/21/91 0.0400 0.0000 9.520
09/20/91 0.0400 0.0000 9.720
12/20/91 0.1980 0.2720 9.000
03/27/92 0.0400 0.0000 9.780
06/26/92 0.0400 0.0000 9.560
09/25/92 0.0400 0.0000 9.730
12/28/92 0.0440 0.4660 9.860
03/26/93 0.0200 0.0000 10.020
12/27/93 0.0330 0.4495 10.870
Class C Shares
12/27/93 0.0200 0.4495 10.870
<PAGE>
1. AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 06/30/94:
The formula for calculating average annual total return is as
follows:
1 ERV n
- -------- = n (--------) - 1 = avg. annual total return
number of years P
Where: ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the period.
P = hypothetical initial investment of $1,000
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$997.57 1 $1,488.70 0.2
(-------) -1 = -0.24% (----------) -1 = 8.28%
$1,000.00 $1,000.00
Ten Year
$2,618.73 01
(--------) -1 = 10.11%
$1,000
Class C Shares
Examples, assuming a maximum contingent deferred sales charge of 1.00% for
the first year:
Inception
$982.20 1.7136
(--------------) -1 = -3.03%
$1,000.00
Examples at NAV:
Class A Shares
One Year Five Year
$1,058.43 1 $1,579.53 0.2
(----------) -1 =5.84% (--------) -1 =9.57%
$1,000.00 $1,000.00
Ten Year
$2,778.49 01
(-------) -1 = 10.76%
$1,000.00
Class C Shares
Inception
$992.12 1.7136
(------------) -1 = -1.35%
$1,000.00
<PAGE>
2. CUMULATIVE TOTAL RETURNS FOR THE PERIODS ENDED 06/30/94:
The formula for calculating average annual total return is as
follows:
ERV - P
--------------- = Cumulative Total Return
P
Class A Shares
Examples, assuming a maximum sales charge of 5.75%:
One Year Five Year
$997.57 - 1,000 $1,488.70 - 1,000
- --------------- =-0.24% ---------------- =57.95%
$1,000.00 $1,000.00
Ten Year
$2,618.73 - 1,000
- ----------------- = 161.87%
$1,000.00
Class C Shares
Examples, assuming a maximum contingent deferred sales charge of 5.00% for
the first year:
Inception
$982.20 - 1,000
- ---------------- =-1.78%
$1,000.00
Examples at NAV:
Class A Shares
One Year Five Year
$1,058.43 - 1,000 $1,488.70 - 1,000
- -------------- =5.84% ---------------- =48.87%
$1,000.00 $1,000.00
Ten Year
$2,778.49 - 1,000
- ---------------- = 177.85%
$1,000.00
Class C Shares
Inception
$992.12 - 1,000
- ----------------- =-0.79%
$1,000.00
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000074661
<NAME> OPPENHEIMER FUND
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<NAME> CLASS A SHARES
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<PERIOD-START> JUL-01-1993
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<INVESTMENTS-AT-VALUE> 237318627
<RECEIVABLES> 5494347
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<OTHER-ITEMS-ASSETS> 73973
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<ACCUM-APPREC-OR-DEPREC> 37771284
<NET-ASSETS> 237280749
<DIVIDEND-INCOME> 3477304
<INTEREST-INCOME> 782888
<OTHER-INCOME> 0
<EXPENSES-NET> 2669173
<NET-INVESTMENT-INCOME> 1591019
<REALIZED-GAINS-CURRENT> 18028894
<APPREC-INCREASE-CURRENT> (7734744)
<NET-CHANGE-FROM-OPS> 11885169
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 665882
<DISTRIBUTIONS-OF-GAINS> 9068819
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3600642
<NUMBER-OF-SHARES-REDEEMED> 2701648
<SHARES-REINVESTED> 816887
<NET-CHANGE-IN-ASSETS> 21394990
<ACCUMULATED-NII-PRIOR> 239931
<ACCUMULATED-GAINS-PRIOR> 10364617
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1715675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2669173
<AVERAGE-NET-ASSETS> 229976000
<PER-SHARE-NAV-BEGIN> 10.41
<PER-SHARE-NII> .07
<PER-SHARE-GAIN-APPREC> .55
<PER-SHARE-DIVIDEND> .03
<PER-SHARE-DISTRIBUTIONS> .45
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.55
<EXPENSE-RATIO> 116
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000074661
<NAME> OPPENHEIMER FUND
<SERIES>
<NUMBER> 3
<NAME> CLASS C SHARES
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> DEC-01-1993
<PERIOD-END> JUN-30-1994
<INVESTMENTS-AT-COST> 199961474
<INVESTMENTS-AT-VALUE> 237318627
<RECEIVABLES> 5494347
<ASSETS-OTHER> 199236
<OTHER-ITEMS-ASSETS> 73973
<TOTAL-ASSETS> 243086183
<PAYABLE-FOR-SECURITIES> 3675893
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1835173
<TOTAL-LIABILITIES> 5511066
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 178940150
<SHARES-COMMON-STOCK> 28050
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 1028422
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 19835261
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 37771284
<NET-ASSETS> 294368
<DIVIDEND-INCOME> 3477304
<INTEREST-INCOME> 782888
<OTHER-INCOME> 0
<EXPENSES-NET> 2669173
<NET-INVESTMENT-INCOME> 1591019
<REALIZED-GAINS-CURRENT> 18028894
<APPREC-INCREASE-CURRENT> (7734744)
<NET-CHANGE-FROM-OPS> 11885169
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2
<DISTRIBUTIONS-OF-GAINS> 41
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 29766
<NUMBER-OF-SHARES-REDEEMED> 1716
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 21394990
<ACCUMULATED-NII-PRIOR> 239931
<ACCUMULATED-GAINS-PRIOR> 10364617
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1715675
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2669173
<AVERAGE-NET-ASSETS> 108000
<PER-SHARE-NAV-BEGIN> 11.08
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> .14
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> .45
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.49
<EXPENSE-RATIO> 244
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
