[photo of mountain peaks]
Semiannual Report March 31, 2000
Oppenheimer
Discovery Fund
[logo]
OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
As interest rates rose, investors increasingly focused on companies in the
fastest growing sectors of the economy.
During the period, technology, the Fund's largest investment sector, performed
strongly, as did investments in such diverse sectors as biotechnology, power
generation and Internet-based media.
We believe stocks of smaller companies show potential to continue outperforming
larger ones, as they did during the reporting period.
Contents
1 President's Letter
3 An Interview
with Your Fund's
Manager
10 Financial
Statements
35 Officers and Trustees
Cumulative
Total Returns
For the 6-Month Period
Ended 3/31/00*
Class A
Without With
Sales Chg. Sales Chg.
-----------------------
83.26% 72.72%
Class B
Without With
Sales Chg. Sales Chg.
-----------------------
82.60% 77.60%
Class C
Without With
Sales Chg. Sales Chg.
-----------------------
82.57% 81.57%
Class Y
Without With
Sales Chg. Sales Chg.
-----------------------
83.45% 83.45%
*See Notes, page 8, for further details.
<PAGE>
PRESIDENT'S LETTER
[photo]
Bridget A. Macaskill
President
Oppenheimer
Discovery Fund
Dear Shareholder,
For many years, we have encouraged investors to consider whether they could
tolerate more risk in their long-term investments by participating in the stock
market, which has historically provided higher long-term returns than any other
asset class. Today, however, we have a very different concern: some investors
may be assuming too much risk by concentrating their investments in just a
handful of stocks or sectors or by "chasing performance."
Alan Greenspan, the Chairman of the Federal Reserve Board, has stated his
view that the recent spectacular returns of some sectors of the market are
partly responsible for pushing our economy to growth rates that could lead to
higher inflation. The dramatic rise in the prices of a narrow segment of the
market has created enormous wealth for some investors. In turn, those investors
are spending at a rate that the Fed believes may threaten the healthy growth of
our economy.
That's why the Fed has been raising interest rates steadily and decisively
over the past year. By making borrowing more expensive, the Fed is attempting to
slow economic growth. It is a precarious balancing act: too much tightening
creates the risk of recession, while too little opens the door to inflation.
The implications are clear: investors must be prepared for near-term market
volatility. In the bond market, higher interest rates usually lead to lower bond
prices. In the stock market, slower economic growth could reduce corporate
earnings and put downward pressure on stock prices. Highly valued stocks may be
particularly vulnerable to a correction. The Securities and Exchange Commission
Chairman, Arthur Levitt, has cautioned investors against the expectation that
the types of returns seen in the recent bull market will last forever. We agree.
1 | OPPENHEIMER DISCOVERY FUND
<PAGE>
PRESIDENT'S LETTER
Because of the prospect of continued market volatility, we encourage you to
consider diversifying your investments. Indeed, diversification may help you
mitigate the effects of sharp declines in any one area. It may also help you
better position your portfolio to seek greater returns over the long run.
While "new economy" stocks have risen since our last report to you, many "old
economy" stocks are selling at unusually low prices. In the bond market, higher
interest rates over the short term may reduce inflation concerns, which should
be beneficial over the long term. By buying out-of-favor investments, you may be
able to profit when and if they return to favor in the future. Of course, there
is no assurance that value investing will return to favor in the market, but it
may be a diversification strategy to consider for part of your portfolio.
What specific investments should you consider today so that you are prepared
for tomorrow? The answer depends on your individual investing goals, risk
tolerance and financial circumstances. We urge you to talk with your financial
advisor about ways to diversify your portfolio. This may include considering
global diversification as part of your strategy. While investing abroad has
special risks, such as the effects of foreign currency fluctuation, it also
offers opportunities to participate in global economic growth and to hedge
against the volatility in U.S. markets.
We thank you for your continued confidence in OppenheimerFunds, The Right Way
to Invest.
Sincerely,
/S/ Bridget A. Macaskill
Bridget A. Macaskill
April 24, 2000
2 | OPPENHEIMER DISCOVERY FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[photo]
Portfolio Management
Team (l to r)
Jay Tracey
Jayne Stevlingsom
(Portfolio Manager)
Q How would you characterize the Fund's performance during the six-month period
that ended March 31, 2000?
A. We are very pleased with Oppenheimer Discovery Fund's performance during the
six month reporting period. In addition, the Fund's one-year return performed
very well. The Fund's Class A shares generated a 95.21% average annual total
return, without sales charge, for the period that ended March 31, 2000,
outperforming its benchmarks for the same one-year time period. The Russell 2000
Index produced a 37.29% return, and the S&P 500 produced a 17.94% return.(1) We
attribute this outstanding performance to an investing environment that favored
the kinds of small-cap growth stocks on which the Fund focuses, and to the
success of our disciplined portfolio management strategy.
What made this such a favorable environment for small-cap growth stocks?
The recent reporting period marked an extraordinary milestone: the longest
peacetime economic expansion in U.S. history. Equity markets were supported by
continued strength in the U.S. economy, low rates of inflation, growing evidence
of global economic recovery and diminishing fears of Y2K-related problems. These
factors drove most broad market indices sharply higher during the last few
months of 1999. Small-cap stocks fared particularly well, because most
fast-growing small companies were attractively valued relative to their
large-cap counterparts at the beginning of the period.
1. The Russell 2000 Index is a capitalization-weighted index of 2,000 U.S.
issuers whose common stocks are traded on the New York and American Stock
Exchanges and NASDAQ, and is widely recognized as a measure of the performance
of Omid-capitalizationO stocks. The S&P 500 Index is a broad-based index of
equity securities widely regarded as a general measure of the performance of the
U.S. equity securities market. The Fund's returns at 3/31/00 include results for
periods of exceptional market performance that are not typical of historical
results. You should not expect those growth rates to continue.
3 | OPPENHEIMER DISCOVERY FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
As the new year began, the threat of rising inflation remained the most serious
factor facing the markets. Although measurable inflation remained low, high
levels of consumer spending fueled a rate of economic growth that many observers
considered unsustainable. The Federal Reserve Board raised interest rates in an
effort to slow the rate of economic growth and thereby head off inflation. As
interest rates rose, investors increasingly focused on companies in the fastest
growing sectors of the economy. Technology, telecommunications and biotech
stocks were the biggest winners in this environment, with many rising to new
all-time highs early in 2000.
How did the Fund take advantage of these conditions?
It's true that the investment environment over the past six months was certainly
advantageous for the Fund. However, it's important for shareholders to realize
that the small-cap market, particularly the technology sector, can experience
tremendous volatility over a short time period. As professional money managers,
our goal is to maximize the Fund's performance over the long term while
carefully managing risk. It really comes down to utilizing a disciplined
investment strategy. That's why we thoroughly evaluate each company that meets
our basic investment criteria, looking for those with superior fundamentals, a
strong competitive position and the proven ability to carry out their business
plans.
[callout]
"Our investment strategy enabled us to discover quality investment opportunities
in a wide range of sectors, from biotechnology to power generation to media."
4 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Technology stocks represented the Fund's largest investment sector and
contributed significantly to our positive performance.(3) Within technology, we
focused on companies at the forefront of emerging industries, such as video on
demand, video conferencing, business-to-business Internet services, and
Internet-based music and radio delivery. Many of our holdings within these
industries performed well, including a global provider of eCommerce solutions
for businesses. We also scored notable successes with investments in
semiconductor makers and equipment manufacturers that benefited from explosive
demand for cell phones and other hand-held and consumer electronic devices.
Furthermore, our investment strategy enabled us to discover investment
opportunities in a wide range of sectors in addition to technology, from
biotechnology to power generation to media. Three of our best performers were
innovative biotech companies involved in genetics and pharmaceutical
development. Companies at the forefront of the development of new power
generation technologies, such as superconductors and fuel cells, also provided a
strong boost to returns, as did investments in unconventional, Internet-based
media companies.
Average Annual
Total Returns
For the Periods Ended 3/31/00(2)
Class A
1-Year 5-Year 10-Year
.......................
83.99% 21.32% 18.26%
Class B Since
1-Year 5-Year Inception
.......................
88.79% 21.65% 18.49%
Class C Since
1-Year 5-Year Inception
.......................
92.73% N/A 19.23%
Class Y Since
1-Year 5-Year Inception
.......................
95.74% 23.08% 20.92%
-----------------------
The Fund's returns at 3/31/00 include results for periods of exceptional market
performance that are not typical of historical results. You should not expect
those growth rates to continue. Because of ongoing market volatility, the Fund's
performance since 3/31/00 has been subject to substantial short-term
fluctuations and current performance may be less than the results shown.
2. See notes on page 8 for further details.
3. Portfolio is subject to change.
5 | OPPENHEIMER DISCOVERY FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
What is your outlook for the Fund and the small-cap market over the coming
months?
The prices of some of our strongest performing holdings have risen so rapidly in
the past six months that we have grown concerned about their current levels of
valuation. Such concerns led us to trim some of our biotech positions late in
the recent period. Nevertheless, we believe that the current investment
environment continues to favor stocks of fast-growing companies that are both
benefiting from and driving the nation's ongoing economic expansion.
We also believe that although small companies generally outperformed
larger ones during the reporting period, many small companies remain
attractively valued compared to today's industrial giants. The accelerating pace
of change--evident in the growth of the Internet, the expansion of global
telecommunications services and developments in biotechnology--is creating vast
new opportunities for small companies to grow rapidly into large ones. That's
why we remain dedicated to our strategy of disciplined small company investing,
and why we believe Oppenheimer Discovery Fund remains an important part of The
Right Way to Invest.
6 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Top Ten Common Stock Holdings(5)
----------------------------------------------------------
Asyst Technologies, Inc. 1.7%
----------------------------------------------------------
Business Objects SA, Sponsored ADR 1.6
----------------------------------------------------------
Credence Systems Corp. 1.4
----------------------------------------------------------
Documentum, Inc. 1.4
----------------------------------------------------------
Vishay Intertechnology, Inc. 1.2
----------------------------------------------------------
TSI International Software Ltd. 1.2
----------------------------------------------------------
Kemet Corp. 1.1
----------------------------------------------------------
ATMI, Inc. 1.1
----------------------------------------------------------
S3, Inc. 1.1
----------------------------------------------------------
Saga Systems, Inc. 1.1
Top Five Common Stock Industries(6)
----------------------------------------------------------
Electronics 17.8%
----------------------------------------------------------
Computer Software 16.1
----------------------------------------------------------
Healthcare/Drugs 7.6
----------------------------------------------------------
Communications Equipment 7.1
----------------------------------------------------------
Industrial Services 6.4
Sector Allocation(4)
[pie chart]
Technology 51.8%
Capital Goods 15.4
Healthcare 11.5
Communication
Services 5.1
Consumer Staples 4.1
Energy 3.9
Consumer
Cyclicals 3.6
Financial 3.0
Basic Materials 1.3
Utilities 0.3
4. Portfolio is subject to change. Percentages are as of March 31, 2000, and are
based on total market value of common stock investments.
5. Portfolio is subject to change. Percentages are as of March 31, 2000, and are
based on total market value of investments.
6. Portfolio is subject to change. Percentages are as of March 31, 2000, and are
based on net assets.
7 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. For quarterly
updates on the Fund's performance, please contact your financial advisor, call
us at 1.800.525.7048 or visit our website at www.oppenheimerfunds.com.
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A shares were first publicly offered on 9/11/86. Unless otherwise noted,
Class A returns include the current maximum initial sales charge of 5.75%. The
Fund's maximum sales charge for Class A shares was lower prior to 4/4/91, so
actual performance may have been higher.
Class B shares of the Fund were first publicly offered on 4/4/94. Unless
otherwise noted, Class B returns include the applicable contingent deferred
sales charge of 5% (1-year) and 1% (since inception). Class B shares are subject
to an annual 0.75% asset-based sales charge.
Class C shares of the Fund were first publicly offered on 10/2/95. Unless
otherwise noted, Class C returns include the contingent deferred sales charge of
1% for the 1-year period. Class C shares are subject to an annual 0.75%
asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 6/1/94. Class Y shares
are offered only to certain institutional investors under special agreement with
the Distributor.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
8 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Financials
9 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF INVESTMENTS March 31, 2000 / Unaudited
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
===================================================================================
<S> <C> <C>
Common Stocks--94.6%
-----------------------------------------------------------------------------------
Basic Materials--1.3%
-----------------------------------------------------------------------------------
Chemicals--0.9%
AMCOL International Corp. 310,000 $ 4,766,250
-----------------------------------------------------------------------------------
Cabot Corp. 200,000 6,100,000
-----------------------------------------------------------------------------------
Georgia Gulf Corp. 160,000 4,160,000
-----------------------------------------------------------------------------------
Symyx Technologies, Inc.(1) 56,100 2,419,312
------------
17,445,562
-----------------------------------------------------------------------------------
Metals--0.4%
Shaw Group, Inc. (The)(1) 235,500 8,301,375
-----------------------------------------------------------------------------------
Capital Goods--14.5%
-----------------------------------------------------------------------------------
Electrical Equipment--4.2%
American Superconductor Corp.(1) 375,000 16,687,500
-----------------------------------------------------------------------------------
Kemet Corp.(1) 352,000 22,264,000
-----------------------------------------------------------------------------------
S3, Inc.(1) 1,055,000 22,155,000
-----------------------------------------------------------------------------------
Vishay Intertechnology, Inc.(1) 440,000 24,475,000
-----------------------------------------------------------------------------------
85,581,500
-----------------------------------------------------------------------------------
Industrial Services--6.4%
Electroglas, Inc.(1) 325,000 11,131,250
-----------------------------------------------------------------------------------
Forrester Research, Inc.(1) 300,000 16,275,000
-----------------------------------------------------------------------------------
HADCO Corp.(1) 200,000 12,925,000
-----------------------------------------------------------------------------------
Insituform Technologies, Cl. A(1) 150,000 4,593,750
-----------------------------------------------------------------------------------
Iron Mountain, Inc. 320,000 10,900,000
-----------------------------------------------------------------------------------
Keynote Systems, Inc.(1) 9,500 971,375
-----------------------------------------------------------------------------------
LHS Group, Inc.(1) 75,000 3,375,000
-----------------------------------------------------------------------------------
MSC Industrial Direct Co., Inc., Cl. A(1) 550,000 9,900,000
-----------------------------------------------------------------------------------
Net Perceptions, Inc.(1) 200,000 7,387,500
-----------------------------------------------------------------------------------
Planar Systems, Inc.(1) 195,000 2,291,250
-----------------------------------------------------------------------------------
QRS Corp.(1) 180,000 13,545,000
-----------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A 600,000 16,200,000
-----------------------------------------------------------------------------------
SatCon Technology Corp.(1) 255,000 6,645,937
-----------------------------------------------------------------------------------
Sensormatic Electronics Corp.(1) 500,000 11,218,750
-----------------------------------------------------------------------------------
SpeedFam-IPEC, Inc.(1) 120,000 2,385,000
------------
129,744,812
10 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Manufacturing--3.9%
Arkansas Best Corp.(1) 9,500 $ 99,750
-----------------------------------------------------------------------------------
Asyst Technologies, Inc.(1) 564,000 32,994,000
-----------------------------------------------------------------------------------
FSI International, Inc.(1) 250,000 5,125,000
-----------------------------------------------------------------------------------
Millipore Corp. 150,000 8,465,625
-----------------------------------------------------------------------------------
Silicon Valley Group, Inc.(1) 562,500 15,468,750
-----------------------------------------------------------------------------------
Three-Five Systems, Inc.(1) 200,000 12,000,000
-----------------------------------------------------------------------------------
Zygo Corp.(1) 111,000 5,355,750
-----------
79,508,875
-----------------------------------------------------------------------------------
Communication Services--4.8%
-----------------------------------------------------------------------------------
Telecommunications: Long Distance--2.3%
Advanced Radio Telecom Corp.(1) 150,000 4,968,750
-----------------------------------------------------------------------------------
Clarent Corp.(1) 95,000 8,567,812
-----------------------------------------------------------------------------------
Net2000 Communications, Inc.(1) 48,100 1,142,375
-----------------------------------------------------------------------------------
Network Plus Corp.(1) 375,000 15,187,500
-----------------------------------------------------------------------------------
Tut Systems, Inc.(1) 215,000 12,805,937
-----------------------------------------------------------------------------------
World Access, Inc.(1) 200,000 3,825,000
-----------
46,497,374
-----------------------------------------------------------------------------------
Telephone Utilities--0.9%
OCI Communications, Inc., Cl. B(1) 247,000 3,232,539
-----------------------------------------------------------------------------------
Primus Telecommunications Group, Inc.(1) 300,000 15,506,250
-----------
18,738,789
-----------------------------------------------------------------------------------
Telecommunications: Wireless--1.6%
AirNet Communications(1,2) 4,630 145,585
-----------------------------------------------------------------------------------
MDSI Mobile Data Solutions, Inc.(1) 195,500 9,261,812
-----------------------------------------------------------------------------------
Millicom International Cellular SA(1) 95,000 5,420,937
-----------------------------------------------------------------------------------
Pinnacle Holdings, Inc.(1) 173,000 9,558,250
-----------------------------------------------------------------------------------
Proxim, Inc.(1) 65,000 7,779,687
-----------
32,166,271
-----------------------------------------------------------------------------------
Consumer Cyclicals--3.5%
-----------------------------------------------------------------------------------
Consumer Services--0.5%
Getty Images, Inc.(1) 215,000 7,726,562
-----------------------------------------------------------------------------------
Telescan, Inc.(1) 100,000 2,362,500
-----------
10,089,062
11 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Media--1.6%
Eloquent, Inc.(1) 50,000 $ 1,018,750
-----------------------------------------------------------------------------------
Launch Media, Inc.(1) 215,000 3,359,375
-----------------------------------------------------------------------------------
Lifeminders.com, Inc.(1) 272,300 18,482,362
-----------------------------------------------------------------------------------
True North Communications, Inc. 240,000 9,435,000
-----------
32,295,487
-----------------------------------------------------------------------------------
Retail: General--0.3%
Damark International, Inc.(1) 150,000 5,718,750
-----------------------------------------------------------------------------------
Retail: Specialty--0.6%
American Eagle Outfitters, Inc.(1) 300,000 11,381,250
-----------------------------------------------------------------------------------
Textile/Apparel & Home Furnishings--0.5%
Kenneth Cole Productions, Inc., Cl. A(1) 105,900 4,156,575
-----------------------------------------------------------------------------------
Polo Ralph Lauren Corp.(1) 114,000 2,130,375
-----------------------------------------------------------------------------------
Too, Inc.(1) 100,000 3,156,250
-----------
9,443,200
-----------------------------------------------------------------------------------
Consumer Staples--3.8%
-----------------------------------------------------------------------------------
Broadcasting--2.5%
Cogeco, Inc. 430,000 12,439,730
-----------------------------------------------------------------------------------
InterVU, Inc.(1) 100,000 9,000,000
-----------------------------------------------------------------------------------
Pegasus Communications Corp.(1) 125,000 17,593,750
-----------------------------------------------------------------------------------
ValueVision International, Inc., Cl. A(1) 300,000 12,412,500
-----------
51,445,980
-----------------------------------------------------------------------------------
Education--0.1%
DigitalThink, Inc.(1) 42,700 1,681,980
-----------------------------------------------------------------------------------
Entertainment--0.8%
3DO Co. (The)(1) 400,000 3,875,000
-----------------------------------------------------------------------------------
SportsLine USA, Inc.(1) 430,000 12,658,125
-----------
16,533,125
-----------------------------------------------------------------------------------
Food--0.4%
Hain Food Group, Inc. (The)(1) 150,000 4,246,875
-----------------------------------------------------------------------------------
NBTY, Inc.(1) 300,000 4,106,250
-----------
8,353,125
12 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Energy--3.7%
-----------------------------------------------------------------------------------
Energy Services--1.7%
Core Laboratories NV(1) 386,400 $11,229,750
-----------------------------------------------------------------------------------
Dril-Quip, Inc.(1) 369,400 17,407,975
-----------------------------------------------------------------------------------
Stolt Comex Seaway SA(1) 426,200 5,966,800
-----------
34,604,525
-----------------------------------------------------------------------------------
Oil: Domestic--1.4%
Devon Energy Corp. 280,000 13,597,500
-----------------------------------------------------------------------------------
Frontier Oil Corp.(1) 450,000 3,375,000
-----------------------------------------------------------------------------------
Noble Affiliates, Inc. 332,000 10,893,750
-----------
27,866,250
-----------------------------------------------------------------------------------
Oil: International--0.6%
Precision Drilling Corp.(1) 150,000 5,006,250
-----------------------------------------------------------------------------------
Rio Alto Exploration Ltd.(1) 225,000 3,959,740
-----------------------------------------------------------------------------------
Talisman Energy, Inc. 135,000 3,845,054
-----------
12,811,044
-----------------------------------------------------------------------------------
Financial--2.8%
-----------------------------------------------------------------------------------
Banks--0.4%
Investors Financial Services Corp. 150,000 8,831,250
-----------------------------------------------------------------------------------
Diversified Financial--1.9%
Affiliated Managers Group, Inc.(1) 300,000 14,250,000
-----------------------------------------------------------------------------------
ChoicePoint, Inc.(1) 260,000 9,717,500
-----------------------------------------------------------------------------------
CompuCredit Corp.(1) 215,000 7,780,312
-----------------------------------------------------------------------------------
eSPEED, Inc., Cl. A(1) 130,500 6,834,937
-----------
38,582,749
-----------------------------------------------------------------------------------
Insurance--0.5%
Annuity & Life RE Holdings Ltd. 425,000 11,050,000
13 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Healthcare--10.9%
-----------------------------------------------------------------------------------
Healthcare/Drugs--7.6%
Aclara Biosciences, Inc.(1) 42,400 $ 1,672,150
-----------------------------------------------------------------------------------
Alexion Pharmaceuticals, Inc.(1) 117,500 8,195,625
-----------------------------------------------------------------------------------
Celgene Corp.(1) 200,000 19,912,500
-----------------------------------------------------------------------------------
Coventry Health Care, Inc.(1) 38,000 323,000
-----------------------------------------------------------------------------------
CuraGen Corp.(1) 260,000 12,155,000
-----------------------------------------------------------------------------------
CV Therapeutics, Inc.(1) 205,000 10,288,438
-----------------------------------------------------------------------------------
Gilead Sciences, Inc.(1) 50,000 3,168,750
-----------------------------------------------------------------------------------
IDEC Pharmaceuticals Corp.(1) 75,000 7,368,750
-----------------------------------------------------------------------------------
ILEX Oncology, Inc.(1) 151,000 6,342,000
-----------------------------------------------------------------------------------
Inhale Therapeutic Systems, Inc.(1) 155,000 11,547,500
-----------------------------------------------------------------------------------
K-V Pharmaceutical Co., Cl. A(1) 290,000 7,793,750
-----------------------------------------------------------------------------------
Luminex Corp.(1) 84,900 1,835,963
-----------------------------------------------------------------------------------
Medarex, Inc.(1) 35,000 1,758,750
-----------------------------------------------------------------------------------
Neose Technologies, Inc.(1) 75,000 2,414,063
-----------------------------------------------------------------------------------
Nuerocrine Biosciences, Inc.(1) 120,000 2,790,000
-----------------------------------------------------------------------------------
Pharmacopeia, Inc.(1) 150,000 7,350,000
-----------------------------------------------------------------------------------
Progenics Pharmaceuticals, Inc.(1) 153,000 10,710,000
-----------------------------------------------------------------------------------
Protein Design Labs, Inc.(1) 205,000 16,297,500
-----------------------------------------------------------------------------------
Regeneron Pharmaceuticals, Inc.(1) 150,000 4,434,375
-----------------------------------------------------------------------------------
Sequenom, Inc.(1) 41,900 1,649,813
-----------------------------------------------------------------------------------
Shire Pharmaceuticals Group plc, ADR(1) 218,000 11,172,500
-----------------------------------------------------------------------------------
SurModics, Inc.(1) 198,800 5,467,000
------------
154,647,427
-----------------------------------------------------------------------------------
Healthcare/Supplies & Services--3.3%
Allscripts, Inc.(1) 50,000 3,006,250
-----------------------------------------------------------------------------------
Aspect Medical Systems, Inc.(1) 220,000 7,892,500
-----------------------------------------------------------------------------------
Cytyc Corp.(1) 165,000 7,961,250
-----------------------------------------------------------------------------------
ResMed, Inc.(1) 303,000 21,626,625
-----------------------------------------------------------------------------------
SciQuest.com, Inc.(1) 19,600 504,700
-----------------------------------------------------------------------------------
SonoSite, Inc.(1) 312,700 10,397,275
-----------------------------------------------------------------------------------
Zoll Medical Corp.(1) 288,500 14,785,625
------------
66,174,225
14 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Technology--49.0%
-----------------------------------------------------------------------------------
Computer Hardware--3.1%
ArrowPoint Communications, Inc.(1) 17,000 $ 2,014,234
-----------------------------------------------------------------------------------
Blue Wave Systems, Inc.(1) 300,000 4,800,000
-----------------------------------------------------------------------------------
Integral Systems, Inc.(1) 100,000 4,500,000
-----------------------------------------------------------------------------------
Maxtor Corp.(1) 500,000 6,468,750
-----------------------------------------------------------------------------------
PictureTel Corp.(1) 1,625,000 14,218,750
-----------------------------------------------------------------------------------
Pinnacle Systems, Inc. 621,000 20,648,250
-----------------------------------------------------------------------------------
Silicon Storage Technology, Inc.(1) 148,000 10,933,500
------------
63,583,484
-----------------------------------------------------------------------------------
Computer Services--4.9%
C-COR.net Corp.(1) 260,000 12,740,000
-----------------------------------------------------------------------------------
Critical Path, Inc.(1) 140,000 11,900,000
-----------------------------------------------------------------------------------
Datastream Systems, Inc.(1) 225,000 6,525,000
-----------------------------------------------------------------------------------
DBT Online, Inc.(1) 131,500 2,440,969
-----------------------------------------------------------------------------------
Harbinger Corp.(1) 450,000 13,106,250
-----------------------------------------------------------------------------------
HNC Software, Inc.(1) 120,000 8,647,500
-----------------------------------------------------------------------------------
Online Resources & Communications Corp.(1) 400,000 6,875,000
-----------------------------------------------------------------------------------
Safeguard Scientifics, Inc.(1) 140,000 9,843,750
-----------------------------------------------------------------------------------
SmartForce plc, Sponsored ADR(1) 210,000 9,633,750
-----------------------------------------------------------------------------------
Universal Access, Inc.(1) 85,800 2,874,300
-----------------------------------------------------------------------------------
WebTrends Corp.(1) 200,000 14,400,000
------------
98,986,519
-----------------------------------------------------------------------------------
Computer Software--16.1%
Allaire Corp.(1) 140,000 10,587,500
-----------------------------------------------------------------------------------
Aspect Development, Inc.(1) 250,000 16,093,750
-----------------------------------------------------------------------------------
Aspen Technologies, Inc.(1) 360,000 14,535,000
-----------------------------------------------------------------------------------
Avid Technology, Inc.(1) 340,000 6,077,500
-----------------------------------------------------------------------------------
AXENT Technologies, Inc.(1) 300,000 5,643,750
-----------------------------------------------------------------------------------
BindView Development Corp.(1) 196,000 6,088,250
-----------------------------------------------------------------------------------
Blaze Software, Inc.(1) 56,700 1,615,950
-----------------------------------------------------------------------------------
Business Objects SA, Sponsored ADR(1) 320,000 31,840,000
-----------------------------------------------------------------------------------
Caldera Systems, Inc.(1) 78,700 1,849,450
-----------------------------------------------------------------------------------
Caminus Corp.(1) 315,700 6,314,000
-----------------------------------------------------------------------------------
Documentum, Inc.(1) 350,000 27,300,000
-----------------------------------------------------------------------------------
eGain Communications Corp.(1) 235,000 9,165,000
-----------------------------------------------------------------------------------
Entrust Technologies, Inc.(1) 125,000 10,634,766
-----------------------------------------------------------------------------------
HearMe(1) 495,000 12,498,750
15 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Computer Software Continued
Inso Corp.(1) 50,000 $ 675,000
-----------------------------------------------------------------------------------
Interleaf, Inc.(1) 110,000 5,170,000
-----------------------------------------------------------------------------------
Manugistics Group, Inc.(1) 320,000 16,320,000
-----------------------------------------------------------------------------------
Mercury Interactive Corp. 80,000 6,340,000
-----------------------------------------------------------------------------------
Niku Corp.(1) 34,100 1,613,356
-----------------------------------------------------------------------------------
Project Software & Development, Inc.(1) 100,000 5,650,000
-----------------------------------------------------------------------------------
Quest Software, Inc.(1) 47,500 5,355,625
-----------------------------------------------------------------------------------
Remedy Corp.(1) 150,000 6,318,750
-----------------------------------------------------------------------------------
Saga Systems, Inc.(1) 617,500 22,075,625
-----------------------------------------------------------------------------------
SalesLogix Corp.(1) 320,000 8,660,000
-----------------------------------------------------------------------------------
SeaChange International, Inc.(1) 325,000 20,028,125
-----------------------------------------------------------------------------------
SonicWALL, Inc.(1) 184,000 12,259,000
-----------------------------------------------------------------------------------
Spyglass, Inc.(1) 100,000 7,754,688
-----------------------------------------------------------------------------------
Teleocity, Inc.(1) 270,600 3,348,675
-----------------------------------------------------------------------------------
TSI International Software Ltd.(1) 285,000 23,672,813
-----------------------------------------------------------------------------------
Verity, Inc.(1) 200,000 8,150,000
-----------------------------------------------------------------------------------
Versata, Inc.(1) 28,700 1,727,381
-----------------------------------------------------------------------------------
VIA NET.WORKS, Inc.(1) 63,000 1,673,438
-----------------------------------------------------------------------------------
White Pine Software, Inc.(1) 195,000 7,020,000
-----------------------------------------------------------------------------------
Wind River Systems, Inc.(1) 100,000 3,625,000
------------
327,681,142
-----------------------------------------------------------------------------------
Communications Equipment--7.1%
Advanced Fibre Communications, Inc.(1) 260,000 16,298,750
-----------------------------------------------------------------------------------
Aspect Communications Corp.(1) 300,000 11,118,750
-----------------------------------------------------------------------------------
Audiocodes Ltd.(1) 77,000 7,728,875
-----------------------------------------------------------------------------------
Audiovox Corp., Cl. A(1) 304,700 13,292,538
-----------------------------------------------------------------------------------
Canadian Satellite Communications, Inc.(1) 375,500 5,871,229
-----------------------------------------------------------------------------------
Com21, Inc.(1) 300,000 14,100,000
-----------------------------------------------------------------------------------
Computer Network Technology Corp.(1) 150,000 2,625,000
-----------------------------------------------------------------------------------
Globecomm Systems, Inc.(1) 175,000 4,670,313
-----------------------------------------------------------------------------------
inSilicon Corp.(1) 92,600 1,464,238
-----------------------------------------------------------------------------------
International FiberCom, Inc.(1) 300,000 7,125,000
-----------------------------------------------------------------------------------
Madge, NV(1) 890,000 7,565,000
-----------------------------------------------------------------------------------
ODS Networks, Inc.(1) 480,000 11,520,000
-----------------------------------------------------------------------------------
PC-Tel, Inc.(1) 100,000 7,525,000
-----------------------------------------------------------------------------------
Polycom, Inc.(1) 150,000 11,878,125
-----------------------------------------------------------------------------------
Tekelec(1) 550,000 20,418,750
------------
143,201,568
16 | OPPENHEIMER DISCOVERY FUND
<PAGE>
Market Value
Shares See Note 1
-----------------------------------------------------------------------------------
Electronics--17.8%
Aeroflex, Inc.(1) 205,000 $ 10,147,500
-----------------------------------------------------------------------------------
Alpha Industries, Inc.(1) 50,000 4,750,000
-----------------------------------------------------------------------------------
Amkor Technology, Inc.(1) 200,000 10,612,500
-----------------------------------------------------------------------------------
ATMI, Inc.(1) 464,000 22,156,000
-----------------------------------------------------------------------------------
Brooks Automation, Inc.(1) 255,000 15,937,500
-----------------------------------------------------------------------------------
Cirrus Logic, Inc.(1) 905,000 16,516,250
-----------------------------------------------------------------------------------
Cognex Corp.(1) 350,000 20,190,625
-----------------------------------------------------------------------------------
Coherent, Inc.(1) 240,000 12,480,000
-----------------------------------------------------------------------------------
Credence Systems Corp.(1) 228,000 28,528,500
-----------------------------------------------------------------------------------
CTS Corp. 200,000 11,400,000
-----------------------------------------------------------------------------------
DSP Group(1) 330,000 21,780,000
-----------------------------------------------------------------------------------
General Semiconductor, Inc.(1) 220,000 3,795,000
-----------------------------------------------------------------------------------
Intersil Holding Corp.(1) 215,900 11,159,331
-----------------------------------------------------------------------------------
Methode Electronics, Inc., Cl. A 330,000 16,665,000
-----------------------------------------------------------------------------------
Micrel, Inc.(1) 50,000 4,800,000
-----------------------------------------------------------------------------------
MIPS Technologies, Inc., Cl. A(1) 170,000 9,456,250
-----------------------------------------------------------------------------------
Oak Technology, Inc.(1) 710,000 13,667,500
-----------------------------------------------------------------------------------
Orbotech, Ltd.(1) 235,000 19,975,000
-----------------------------------------------------------------------------------
Photon Dynamics, Inc.(1) 271,700 18,747,300
-----------------------------------------------------------------------------------
Photronics, Inc.(1) 295,000 10,417,188
-----------------------------------------------------------------------------------
Robotic Vision System, Inc.(1) 577,300 9,236,800
-----------------------------------------------------------------------------------
Semtech Corp.(1) 180,000 11,531,250
-----------------------------------------------------------------------------------
Silicon Laboratories, Inc.(1) 11,200 991,200
-----------------------------------------------------------------------------------
Tektronix, Inc. 250,000 14,000,000
-----------------------------------------------------------------------------------
Therma-Wave, Inc.(1) 170,400 5,793,600
-----------------------------------------------------------------------------------
Veeco Instruments, Inc.(1) 200,000 14,800,000
-----------------------------------------------------------------------------------
Virata Corp.(1) 100,000 9,987,500
-----------------------------------------------------------------------------------
Zoran Corp.(1) 200,000 11,262,500
--------------
360,784,294
-----------------------------------------------------------------------------------
Utilities--0.3%
-----------------------------------------------------------------------------------
Gas Utilities--0.3%
Philips NV, New York Shares 106,000 4,750,125
-----------------------------------------------------------------------------------
Western Gas Resources, Inc. 95,000 1,508,125
--------------
6,258,250
--------------
Total Common Stocks (Cost $1,450,897,252) 1,919,989,244
17 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF INVESTMENTS Unaudited / Continued
Market Value
Shares See Note 1
======================================================================================
Preferred Stocks--1.0%
Candescent Technologies Corp.:
$2.50 Cv., Series D(1,2) 1,200,000 $ 11,136,000
Sr. Exchangeable, Series E(1,2) 800,000 7,824,000
Sr. Exchangeable, Series F(1,2) 200,000 1,918,000
--------------
Total Preferred Stocks (Cost $8,900,000) 20,878,000
Date Strike Contracts
======================================================================================
Options Purchased--0.3%
PHLX/KBW Bank Index (The) Call
(Cost $4,618,198) 6/12/00 $750 650 5,313,750
Principal
Amount
======================================================================================
Short-Term Notes--2.2%
IBM Credit Corp., 5.84%, 4/24/00 $25,000,000 24,906,722
--------------------------------------------------------------------------------------
Wal-Mart Stores, Inc., 5.81%, 4/11/00 20,000,000 19,967,722
--------------
Total Short-Term Notes (Cost $44,874,444) 44,874,444
======================================================================================
Repurchase Agreements--0.4%
Repurchase agreement with Banc One Capital
Markets, Inc., 6.05%, dated 3/31/00, to be
repurchased at $8,604,336 on 4/3/00,
collateralized by U.S. Treasury Nts., 5%-7.50%,
5/31/00-2/15/07, with a value of $5,753,245 and
U.S. Treasury Bonds, 5.25%-12%, 11/15/09-2/15/29,
with a value of $3,026,283 (Cost $8,600,000) 8,600,000 8,600,000
--------------------------------------------------------------------------------------
Total Investments, at Value (Cost $1,517,889,894) 98.5% 1,999,655,438
--------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.5 30,607,954
---------------------------
Net Assets 100.0% $2,030,263,392
===========================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income-producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
18 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Unaudited
<TABLE>
<CAPTION>
March 31, 2000
===================================================================================
<S> <C>
Assets
Investments, at value (cost $1,517,889,894)--see
accompanying statement $1,999,655,438
-----------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 117,435,788
Shares of beneficial interest sold 17,280,929
Interest and dividends 122,245
Other 58,938
--------------
Total assets 2,134,553,338
===================================================================================
Liabilities
Bank overdraft 266,732
-----------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 84,616,014
Shares of beneficial interest redeemed 17,037,242
Distribution and service plan fees 1,129,224
Transfer and shareholder servicing agent fees 558,705
Trustees' compensation 255,929
Other 426,100
--------------
Total liabilities 104,289,946
===================================================================================
Net Assets $2,030,263,392
==============
===================================================================================
Composition of Net Assets
Paid-in capital $ 986,101,454
-----------------------------------------------------------------------------------
Accumulated net investment loss (7,483,746)
-----------------------------------------------------------------------------------
Accumulated net realized gain on investments and foreign
currency transactions 569,886,206
-----------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation
of assets and liabilities denominated in foreign currencies 481,759,478
--------------
Net assets $2,030,263,392
==============
</TABLE>
19 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
<CAPTION>
Unaudited
================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on
net assets of $1,400,568,768 and 18,561,268 shares of
beneficial interest outstanding) $75.46
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price) $80.06
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $452,650,844 and 6,334,651
shares of beneficial interest outstanding) $71.46
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $68,292,667 and 940,661
shares of beneficial interest outstanding) $72.60
--------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on net assets of $108,751,113 and 1,416,894
shares of beneficial interest outstanding) $76.75
</TABLE>
See accompanying Notes to Financial Statements.
20 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENT OF OPERATIONS Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended March 31, 2000
===================================================================================
<S> <C>
Investment Income
Interest $ 3,285,068
-----------------------------------------------------------------------------------
Dividends 419,218
------------
Total income 3,704,286
===================================================================================
Expenses
Management fees 5,175,263
-----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 1,362,657
Class B 1,732,032
Class C 230,857
-----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,370,075
Class B 417,623
Class C 54,628
Class Y 85,080
-----------------------------------------------------------------------------------
Trustees' compensation 46,539
-----------------------------------------------------------------------------------
Custodian fees and expenses 33,750
-----------------------------------------------------------------------------------
Other 475,501
------------
Total expenses 10,984,005
Less expenses paid indirectly (30,144)
------------
Net expenses 10,953,861
===================================================================================
Net Investment Loss (7,249,575)
===================================================================================
Realized and Unrealized Gain
Net realized gain on:
Investments 572,222,770
Foreign currency transactions 63,621
------------
Net realized gain 572,286,391
-----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 275,082,982
Translation of assets and liabilities denominated in foreign
currencies 220,802
------------
Net change 275,303,784
------------
Net realized and unrealized gain 847,590,175
===================================================================================
Net Increase in Net Assets Resulting from Operations $840,340,600
============
</TABLE>
See accompanying Notes to Financial Statements.
21 | OPPENHEIMER DISCOVERY FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
March 31, 2000 September 30,
(Unaudited) 1999
====================================================================================
<S> <C> <C>
Operations
Net investment loss $ (7,249,575) $ (10,452,859)
------------------------------------------------------------------------------------
Net realized gain 572,286,391 79,072,011
------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 275,303,784 69,855,627
------------------------------
Net increase in net assets resulting from operations 840,340,600 138,474,779
====================================================================================
Dividends and/or Distributions to Shareholders
Distributions from net realized gain:
Class A (48,949,927) (33,486,062)
Class B (15,492,809) (10,003,098)
Class C (1,945,385) (1,248,219)
Class Y (2,425,868) (1,407,650)
====================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions:
Class A 90,245,742 (265,166,206)
Class B 63,379,201 (58,016,597)
Class C 20,346,563 (8,383,628)
Class Y 43,059,801 (3,821,532)
====================================================================================
Net Assets
Total increase (decrease) 988,557,918 (243,058,213)
------------------------------------------------------------------------------------
Beginning of period 1,041,705,474 1,284,763,687
------------------------------
End of period (including accumulated net investment
losses of $7,483,746 and $234,171, respectively) $2,030,263,392 $1,041,705,474
==============================
</TABLE>
See accompanying Notes to Financial Statements.
22 | OPPENHEIMER DISCOVERY FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
March 31, 2000 Sept. 30,
Class A (Unaudited) 1999 1998 1997 1996 1995
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $43.26 $40.12 $51.72 $51.19 $43.65 $35.81
-----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.25) (.28) (.26) (.08) (.13) --
Net realized and unrealized gain (loss) 35.34 4.84 (10.37) 4.12 11.26 9.46
--------------------------------------------------------------------------
Total income (loss) from investment
operations 35.09 4.56 (10.63) 4.04 11.13 9.46
-----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (2.89) (1.42) (.97) (3.51) (3.59) (1.62)
-----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $75.46 $43.26 $40.12 $51.72 $51.19 $43.65
==========================================================================
=============================================================================================================================
Total Return, at Net Asset Value(1) 83.26% 11.59% (20.78)% 9.16% 27.76% 28.03%
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $1,401 $750 $ 946 $1,330 $1,160 $798
-----------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $1,134 $875 $1,216 $1,119 $ 938 $651
-----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.73)% (0.69)% (0.51)% (0.17)% (0.32)% 0.00%
Expenses 1.20% 1.31% 1.18%(3) 1.22%(3) 1.22%(3) 1.33%(3)
-----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 113% 73% 82% 69% 80% 106%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended March 31, 2000, were $1,917,217,614 and $1,610,055,738, respectively.
See accompanying Notes to Financial Statements.
23 | OPPENHEIMER DISCOVERY FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
March 31, 2000 Sept. 30,
Class B (Unaudited) 1999 1998 1997 1996 1995
==============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $41.22 $38.58 $50.15 $50.10 $43.11 $35.65
------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.26) (.85) (.55) (.23) (.23) (.21)
Net realized and unrealized gain (loss) 33.39 4.91 (10.05) 3.79 10.81 9.29
---------------------------------------------------------------------------
Total income (loss) from investment
operations 33.13 4.06 (10.60) 3.56 10.58 9.08
------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (2.89) (1.42) (.97) (3.51) (3.59) (1.62)
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $71.46 $41.22 $38.58 $50.15 $50.10 $43.11
===========================================================================
==============================================================================================================================
Total Return, at Net Asset Value(1) 82.60% 10.73% (21.37)% 8.33% 26.77% 27.04%
==============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $453 $225 $266 $323 $194 $75
------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $348 $257 $319 $233 $120 $43
------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (1.48)% (1.45)% (1.27)% (0.93)% (1.06)% (0.78)%
Expenses 1.95% 2.07% 1.94%(3) 1.97%(3) 1.99%(3) 2.11%(3)
------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 113% 73% 82% 69% 80% 106%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended March 31, 2000, were $1,917,217,614 and $1,610,055,738, respectively.
See accompanying Notes to Financial Statements.
24 | OPPENHEIMER DISCOVERY FUND
<PAGE>
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
March 31, 2000 Sept. 30,
Class C (Unaudited) 1999 1998 1997 1996(5)
===============================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $41.85 $39.15 $50.86 $50.73 $43.20
---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.09) (.85) (.55) (.26) (.21)
Net realized and unrealized gain (loss) 33.73 4.97 (10.19) 3.90 11.33
--------------------------------------------------------
Total income (loss) from investment
operations 33.64 4.12 (10.74) 3.64 11.12
---------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (2.89) (1.42) (.97) (3.51) (3.59)
---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $72.60 $41.85 $39.15 $50.86 $50.73
========================================================
===============================================================================================================
Total Return, at Net Asset Value(1) 82.57% 10.73% (21.34)% 8.39% 27.96%
===============================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $68 $27 $33 $42 $18
---------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $46 $32 $41 $26 $ 7
---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (1.48)% (1.45)% (1.25)% (0.92)% (1.00)%
Expenses 1.95% 2.07% 1.92%(3) 1.94%(3) 2.03%(3)
---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 113% 73% 82% 69% 80%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended March 31, 2000, were $1,917,217,614 and $1,610,055,738, respectively.
5. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
See accompanying Notes to Financial Statements.
25 | OPPENHEIMER DISCOVERY FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
March 31, 2000 Sept. 30,
Class Y (Unaudited) 1999 1998 1997 1996 1995
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $43.92 $40.63 $52.17 $51.44 $43.74 $35.81
-------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.40) (.17) (.09) .02 (.02) (.10)
Net realized and unrealized gain (loss) 36.12 4.88 (10.48) 4.22 11.31 9.65
------------------------------------------------------------------------
Total income (loss) from investment
operations 35.72 4.71 (10.57) 4.24 11.29 9.55
-------------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Distributions from net realized gain (2.89) (1.42) (.97) (3.51) (3.59) (1.62)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $76.75 $43.92 $40.63 $52.17 $51.44 $43.74
========================================================================
===============================================================================================================================
Total Return, at Net Asset Value(1) 83.45% 11.82% (20.47)% 9.50% 28.09% 28.28%
===============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $109 $39 $40 $45 $32 $9
-------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $68 $41 $45 $35 $19 $3
-------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.50)% (0.48)% (0.15)% 0.15% (0.04)% 0.03%
Expenses 0.96% 1.11% 0.81%(3) 0.89%(3) 0.99%(3) 1.26%(3)
-------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 113% 73% 82% 69% 80% 106%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
2. Annualized for periods of less than one full year.
3. Expense ratio has not been grossed up to reflect the effect of expenses paid
indirectly.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended March 31, 2000, were $1,917,217,614 and $1,610,055,738, respectively.
See accompanying Notes to Financial Statements.
26 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited
================================================================================
1. Significant Accounting Policies
Oppenheimer Discovery Fund (the Fund) is registered under the Investment Company
Act of 1940, as amended, as an open-end management investment company. The
Fund's investment objective is to seek capital appreciation. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Manager).
The Fund offers Class A, Class B, Class C and Class Y shares. Class A
shares are sold at their offering price, which is normally net asset value plus
an initial sales charge. Class B and Class C shares are sold without an initial
sales charge but may be subject to a contingent deferred sales charge (CDSC).
Class Y shares are sold to certain institutional investors without either a
front-end sales charge or a CDSC. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Classes A, B and C shares have separate
distribution and/or service plans. No such plan has been adopted for Class Y
shares. Class B shares will automatically convert to Class A shares six years
after the date of purchase. The following is a summary of significant accounting
policies consistently followed by the Fund.
--------------------------------------------------------------------------------
Securities Valuation. Securities for which quotations are readily available are
valued at the last sale price, or if in the absence of a sale, at the last sale
price on the prior trading day if it is within the spread of the closing bid and
asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Foreign currency contracts are valued
based on the closing prices of the forward currency contract rates in the London
foreign exchange markets on a daily basis as provided by a reliable bank, dealer
or pricing service. Short-term "money market type" debt securities with
remaining maturities of sixty days or less are valued at cost (or last
determined market value) and adjusted for amortization or accretion to maturity
of any premium or discount.
--------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's Statement of Operations.
27 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
1. Significant Accounting Policies Continued
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
--------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of Trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended March 31, 2000, a provision of $18,104 was made for the Fund's projected
benefit obligations and payments of $10,919 were made to retired trustees,
resulting in an accumulated liability of $243,510 as of March 31, 2000.
The Board of Trustees has adopted a deferred compensation plan for
independent trustees that enables trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees under the plan will be determined based upon the performance of the
selected funds. Deferral of trustees' fees under the plan will not affect the
net assets of the Fund, and will not materially affect the Fund's assets,
liabilities or net investment income per share.
28 | OPPENHEIMER DISCOVERY FUND
<PAGE>
--------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
--------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
--------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
--------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is obtained subsequent to the ex-dividend date. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
28 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 2000 Year Ended September 30, 1999
Shares Amount Shares Amount
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 5,228,433 $ 360,500,571 7,340,366 $ 305,832,917
Dividends and/or
distributions reinvested 835,154 47,754,081 780,123 31,868,038
Redeemed (4,850,444) (318,008,910) (14,350,871) (602,867,161)
--------------------------------------------------------
Net increase (decrease) 1,213,143 $ 90,245,742 (6,230,382) $(265,166,206)
========================================================
-------------------------------------------------------------------------------------
Class B
Sold 1,724,435 $ 116,765,537 1,771,225 $ 70,895,318
Dividends and/or
distributions reinvested 279,419 15,164,067 249,023 9,751,761
Redeemed (1,120,288) (68,550,403) (3,455,595) (138,663,676)
--------------------------------------------------------
Net increase (decrease) 883,566 $ 63,379,201 (1,435,347) $ (58,016,597)
========================================================
-------------------------------------------------------------------------------------
Class C
Sold 1,026,687 $ 66,478,040 1,894,040 $ 76,754,870
Dividends and/or
distributions reinvested 34,336 1,893,302 30,536 1,214,123
Redeemed (775,362) (48,024,779) (2,123,773) (86,352,621)
--------------------------------------------------------
Net increase (decrease) 285,661 $ 20,346,563 (199,197) $ (8,383,628)
========================================================
-------------------------------------------------------------------------------------
Class Y
Sold 1,093,751 $ 83,127,880 453,623 $ 19,236,361
Dividends and/or
distributions reinvested 41,732 2,425,868 34,009 1,407,649
Redeemed (610,801) (42,493,947) (571,735) (24,465,542)
--------------------------------------------------------
Net increase (decrease) 524,682 $ 43,059,801 (84,103) $ (3,821,532)
========================================================
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of March 31, 2000, net unrealized appreciation on securities of $481,765,544
was composed of gross appreciation of $578,175,156, and gross depreciation of
$96,409,612.
30 | OPPENHEIMER DISCOVERY FUND
<PAGE>
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of average annual net assets, 0.72% of the next $200
million, 0.69% of the next $200 million, 0.66% of the next $200 million, 0.60%
of the next $700 million and 0.58% of average annual net assets in excess of
$1.5 billion. The Fund's management fee for the six months ended March 31, 2000
was 0.65% of average net assets for each class of shares, annualized for periods
of less than one full year.
--------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
--------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Six Months Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
March 31, 2000 $1,202,372 $369,796 $157,955 $1,390,475 $121,481
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Six Months Ended Retained by Distributor Retained by Distributor Retained by Distributor
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
March 31, 2000 $9,771 $340,493 $4,201
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution and
Service Plans for Class B and Class C shares under Rule 12b-1 of the Investment
Company Act. Under those plans the Fund pays the Distributor for all or a
portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
31 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
4. Fees and Other Transactions with Affiliates
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the six months ended March 31, 2000, payments
under the Class A plan totaled $1,362,657, all of which was paid by the
Distributor to recipients. That included $105,538 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
A shares in any fiscal year cannot be recovered in subsequent years.
--------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class C shares may
be more than the payments it receives from the contingent deferred sales charges
collected on redeemed shares and asset-based sales charges from the Fund under
the plans. If any plan is terminated by the Fund, the Board of Trustees may
allow the Fund to continue payments of the asset-based sales charge to the
Distributor for distributing shares before the plan was terminated. The plans
allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the six months ended March 31,
2000, were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $1,732,032 $1,379,033 $7,265,100 1.61%
Class C Plan 230,857 66,053 644,673 0.94
</TABLE>
32 | OPPENHEIMER DISCOVERY FUND
<PAGE>
================================================================================
5. Foreign Currency Contracts
A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts for operational purposes and to seek to protect against
adverse exchange rate fluctuation. Risks to the Fund include the potential
inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
forward transaction. Realized gains and losses are reported with all other
foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
================================================================================
6. Illiquid or Restricted Securities
As of March 31, 2000, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may also be
considered illiquid if it lacks a readily available market or if its valuation
has not changed for a certain period of time. The Fund intends to invest no more
than 10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of March 31, 2000, was $21,023,585,
which represents 1.04% of the Fund's net assets all of which is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit March 31, 2000
-----------------------------------------------------------------------------------------
Stocks and Warrants
<S> <C> <C> <C>
AirNet Communications Corp., Series C 7/6/95 $6.00 $31.44
-----------------------------------------------------------------------------------------
Candescent Technologies Corp., Series D 3/31/95 2.50 9.28
-----------------------------------------------------------------------------------------
Candescent Technologies Corp., Series E 4/24/96 5.50 9.78
-----------------------------------------------------------------------------------------
Candescent Technologies Corp., Series F 6/11/97 7.50 9.59
</TABLE>
33 | OPPENHEIMER DISCOVERY FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Unaudited / Continued
================================================================================
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of 0.08%
per annum.
The Fund had no borrowings outstanding during the six months ended March
31, 2000.
34 | OPPENHEIMER DISCOVERY FUND
<PAGE>
OPPENHEIMER DISCOVERY FUND
<TABLE>
===================================================================================
<S> <C>
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Clayton K. Yeutter, Trustee
Jayne Stevlingson, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
===================================================================================
Investment Advisor OppenheimerFunds, Inc.
===================================================================================
Distributor OppenheimerFunds Distributor, Inc.
===================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
===================================================================================
Custodian of The Bank of New York
Portfolio Securities
===================================================================================
Independent Auditors KPMG LLP
===================================================================================
Legal Counsel Mayer, Brown & Platt
The financial statements included herein have been
taken from the records of the Fund without examination
of those records by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Discovery Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
Discovery Fund. For material information concerning the
Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other agency,
and involve investment risks, including the possible
loss of the principal amount invested.
</TABLE>
35 | OPPENHEIMER DISCOVERY FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
==========================================================================================================
<S> <C> <C>
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
==========================================================================================================
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R) Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R) Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund(R)
Trinity Value Fund Gold & Special Minerals Fund
==========================================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street(R) California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
==========================================================================================================
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY10048-0203.
(C) Copyright 2000 OppenheimerFunds, Inc.
36 | OPPENHEIMER DISCOVERY FUND
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to
help.
--------------------------------------------------------------------------------
Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
--------------------------------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
--------------------------------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
--------------------------------------------------------------------------------
Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on the economy and issues that
may affect your investments
1.800.835.3104
--------------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
--------------------------------------------------------------------------------
Ticker Symbols
Class A: OPOCX Class B: ODIBX Class C: ODICX Class Y: ODIYX
RS0500.001.0300 May 30, 2000
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OppenheimerFunds(R)
Distributor, Inc.
