<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
OPPENHEIMER FUNDS.
"I NEED STEADY INCOME WITHOUT A LOT OF RISK. BUT I WAS WORRIED ABOUT THE IMPACT
CHANGING INTEREST RATES WOULD HAVE ON MY INVESTMENT.
"MY FINANCIAL ADVISOR RECOMMENDED THIS FUND BECAUSE OF ITS SHORTER-TERM AVERAGE
MATURITY, WHICH MEANS IT MAY BE LESS AFFECTED BY INTEREST RATE CHANGES THAN
LONGER-TERM BOND FUNDS."
<PAGE>
FUND FACTS
IN THIS REPORT:
ANSWERS TO TWO TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
// WITH THE CHANGE OF THE FUND'S NAME, WILL THE INVESTMENT OBJECTIVE AND
INVESTMENT STRATEGY ALSO CHANGE?
// HOW HAS THE RECENT INCREASE IN INTEREST RATES AFFECTED THE FUND?
GET THE FACTS ABOUT BONDS AND BOND MUTUAL FUNDS. CALL 1-800-525-7048 FOR YOUR
FREE COPY OF OPPENHEIMERFUNDS "FACTS ABOUT BOND FUNDS" BROCHURE.
SIX FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
1 The Fund, formerly known as Oppenheimer Government Securities Fund, seeks
high current return and safety of principal through investments in fixed
income securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities.
- - -------------------------------------------------------------------------------
2 For the 30 days ended 3/31/94, the Fund's standardized yield was 6.12% for
Class A shares and 5.50% for Class B shares.(1)
- - -------------------------------------------------------------------------------
3 For the 6- and 12-month periods ended 3/31/94, the Fund's total return at
net asset value for Class A shares was 0.85% and 5.19%, respectively. For
Class B shares, total return at net asset value for the 6 months and since
inception of the class on 5/3/93 was 0.43% and 3.27%, respectively.(2)
- - -------------------------------------------------------------------------------
4 The Fund's portfolio allocation on 3/31/94 was as follows:(3)
GNMA 28.3%
U.S. TREASURIES 26.8%
FHLMC 23.2%
FNMA 19.5%
REPURCHASE AGREEMENTS 2.2%
- - -------------------------------------------------------------------------------
5 The Fund's average annual total return for Class A shares for the 1- and
5-year periods ended 3/31/94 and since inception of the Fund on 3/10/86
were 1.51%, 9.33% and 8.33%, respectively.(4)
- - -------------------------------------------------------------------------------
6 "We changed the Fund's investment strategy to create a portfolio of U.S.
government securities with an average effective maturity of less than three
years. We believe that investing in shorter-term securities will help us
maintain a more stable share price and achieve the Fund's objective of high
current return and safety of principal."
PORTFOLIO MANAGER DAVID ROSENBERG, MARCH 31, 1994
(1) Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 3/31/94, divided by the
maximum offering price at the end of the period, compounded semi-annually
and then annualized.
(2) Based on the change in net asset value per share for the periods shown,
without deducting any sales charges. Total return for Class B shares from
5/3/93 (inception of class) to 3/31/94 was -0.74%. This reflects the change
in value of a hypothetical investment made on 5/3/93 and held until
3/31/94, with all dividends reinvested and after applying the contingent
deferred sales charge of 4%.
(3) The Fund's portfolio is subject to change.
(4) Average annual total returns are for a hypothetical investment held until
3/31/94, after deducting the maximum initial sales charge of 3.50% for
Class A shares.
All figures assume reinvestment of dividends and capital gains distributions.
Oppenheimer Management Corporation became the investment advisor to the Fund on
April 7, 1990.
Past performance is not indicative of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost. The performance calculations in
this report reflect the reductions in the sales charges on Class A and Class B
shares that became effective April 1, 1994, as described in the Fund's current
prospectus. The value of the Fund's shares is not guaranteed.
2 Oppenheimer Limited-Term Government Fund
<PAGE>
ATTRACTIVE YIELDS AS OF MARCH 31, 1994
[Bar Chart]
// Oppenheimer Limited-Term Government Fund Class A 6.12%
standardized yield(5)
// Oppenheimer Limited-Term Government Fund Class B 5.50%
standardized yield(5)
// Average money market fund rate(6) 2.30%
// Average rate of one-year CD(6) 3.13%
// Three-month U.S. Treasury bill rate(6) 3.56%
REPORT TO SHAREHOLDERS
We are pleased to report that Oppenheimer Limited-Term Government Fund provided
Class A shareholders with a standardized yield of 6.12% and Class B shareholders
with a standardized yield of 5.50% for the 30-day period ended March 31, 1994(5)
As we recently informed you, the Fund's investment strategy has
changed to concentrate on maintaining a high quality portfolio of government
securities with an average effective portfolio maturity of not more than three
years. The Fund's objective of high current return and safety of principal has
not changed. Because shorter-term fixed income securities are less sensitive to
interest rate changes than longer-term securities, we expect this change in
strategy, which was implemented in early 1994, will help the Fund in a changing
interest rate environment.
The shift in investment strategy to concentrate on shorter-term U.S.
government securities benefited the Fund when the Federal Reserve raised
short-term interest rates in February and March of this year as a pre-emptive
strike against inflation. While rising interest rates generally decrease prices
of U.S. government securities, the Fund's shorter-term effective maturity
minimized the impact on the Fund.
Over the past six months, allocation of the Fund's assets between
mortgage-backed securities and U.S. Treasuries has remained relatively
unchanged. The Fund continues to be heavily weighted toward mortgage-backed
securities, which historically provide higher yields than U.S. Treasuries.
Going forward, we will continue to closely monitor the movement of
interest rates. We feel the market has overreacted to the threat of inflation
caused by a strengthening economy, and expect growth to be moderate in the
latter half of the year-and thus, inflation should remain low. We will seek
attractive yields in the government securities market while conservatively
managing the risk of the portfolio to limit the impact of any further increases
in interest rates.
We appreciate the confidence you have placed in Oppenheimer
Limited-Term Government Fund, and look forward to continuing to help you attain
your financial goals.
/s/ James C. Swain /s/ Jon S. Fossel
James C. Swain, Chairman Jon S. Fossel, President
Oppenheimer Limited-Term Oppenheimer Limited-Term
Government Fund Government Fund
April 25, 1994
"THE SHIFT IN INVESTMENT STRATEGY BENEFITED THE FUND."
(5) See footnote 1, page 2.
(6) Source of data: Bank Rate Monitor, 3/31/94. The CD rate is an average of
the rates of 12-month certificates of deposit available for purchase from
10 regional banks on 3/31/94. The average money market fund rate is the
average rate for the 30-day period ended 3/31/94 for 10 selected money
market mutual funds. CDs are insured by the FDIC and may provide a
guaranteed return, and money market funds provide stability of principal,
whereas the Fund's yield and share value may fluctuate and are not insured
by the FDIC. Source of U.S. Treasury bill rate is BLOOMBERG L.P., 3/31/94.
Principal and interest payments on Treasury bonds are fixed and guaranteed
by the U.S. Government.
3 Oppenheimer Limited-Term Government Fund
<PAGE>
STATEMENT OF INVESTMENTS March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS-2.2%
- - -----------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
3.35%, dated 3/31/94, to be repurchased at $4,201,657 on 4/4/94,
collateralized by U.S. Treasury Nts., 4.625%, 12/31/94, with a value
of $4,286,940 (Cost $4,200,000) $ 4,200,000 $ 4,200,000
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS-96.7%
- - -----------------------------------------------------------------------------------------------------------------------------
AGENCY: FULL FAITH Government National Mortgage Assn.:
AND CREDIT-28.0% 8%, 9/15/07 249,309 259,732
13%, 2/15/11 88,693 103,704
13%, 10/15/12 17,856 20,880
13%, 9/15/14 23,736 27,750
10.50%, 1/15/16 88,810 98,601
10.50%, 2/15/16 799,374 887,506
10.50%, 3/15/16 73,886 82,032
10.50%, 4/15/16 160,164 177,822
10.50%, 5/15/16 216,880 240,791
10.50%, 6/15/16 276,681 307,185
10.50%, 10/15/16 22,398 24,868
9%, 11/15/16 3,826,018 4,044,675
10.50%, 12/15/16 64,127 71,197
10.50%, 7/15/17 339,837 377,457
10.50%, 8/15/17 169,191 187,920
9.50%, 9/15/17 305,594 326,340
10.50%, 10/15/17 20,097 22,321
10.50%, 11/15/17 352,007 390,974
10.50%, 12/15/17 595,345 661,248
10.50%, 2/15/18 329,192 365,802
10.50%, 4/15/18 50,298 55,892
10.50%, 6/15/18 121,449 134,956
10.50%, 10/15/18 114,001 126,679
10.50%, 11/15/18 421,969 468,897
10.50%, 12/15/18 206,898 229,907
10.50%, 3/15/19 491,616 546,569
10.50%, 5/15/19 294,124 327,001
10.50%, 6/15/19 197,322 219,379
10.50%, 7/15/19 422,775 470,033
8.50%, 9/15/21 123,964 129,803
7%, 10/15/22 2,274,757 2,178,375
7.50%, 11/15/22 14,251,669 14,063,689
8.50%, 11/15/22 609,330 630,206
8%, 12/15/22 407,626 412,647
7.50%, 2/15/24 2,855,999 2,814,930
6.50%, 3/15/24 11,530,000 10,614,807
7.50%, 3/15/24 11,317,800 11,133,886
------------
53,236,461
</TABLE>
4 Oppenheimer Limited-Term Government Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
AGENCY: GOVERNMENT Federal Home Loan Mortgage Corp. Collateralized Mtg. Obligations:
SPONSORED-42.2% 8.60%, 2/15/06 $ 3,000,000 $ 3,128,880
11.50%, 3/1/09 4,138,250 4,656,827
13%, 6/1/15 72,841 83,152
8.20%, 7/15/19 2,000,000 2,053,560
9%, 8/1/19 1,526,666 1,605,763
8%, 3/15/21 10,000,000 10,219,499
8.50%, 6/15/21 15,000,000 15,694,050
10%, 8/1/21 5,114,563 5,557,495
8%, 10/25/21 595,000 609,095
7%, 8/1/23 5,930 5,706
----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
8.75%, 11/25/05 430,901 432,159
13%, 6/1/15 100,698 115,016
8%, 7/25/19 8,000,000 8,228,159
STRIPS, 0%, 1/1/23 9,090,104 8,056,104
8%, 1/1/23 380,777 386,119
STRIPS, 0%, 8/25/23 8,335,585 7,804,192
7%, 2/25/24 31,186,342 11,543,819
------------
80,179,595
- - -----------------------------------------------------------------------------------------------------------------------------
TREASURY-26.5% U.S. Treasury Nts.:
9.25%, 1/15/96 10,000,000 10,696,869
6.875%, 3/31/97 152,000 157,035
6.75%, 5/31/97 50,000 51,453
9.125%, 5/15/99 13,000,000 14,604,680
6.375%, 7/15/99 100,000 100,344
7.50%, 11/15/01 200,000 209,812
8.50%, 5/15/19(1) 22,800,000 24,588,361
------------
50,408,554
------------
Total U.S. Government Obligations (Cost $183,909,280) 183,824,610
- - -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $188,109,280) 98.9% 188,024,610
- - -----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.1 2,078,759
---------- ------------
NET ASSETS 100.0% $190,103,369
<FN>
(1) Securities with an aggregate market value of $242,648 are held in escrow to cover initial margin
requirements on open interest rate futures sales contracts, as follows:
TYPE OF CONTRACT NUMBER OF CONTRACTS FACE AMOUNT
-----------------------------------------------------------------------------------------------
U.S. Treasury Nts., 6/94 200 $20,000,000
The market value of the open contracts was $21,256,250 at March 31, 1994, with a net unrealized
gain of $250,000.
See accompanying Notes to Financial Statements.
</TABLE>
5 Oppenheimer Limited-Term Government Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ASSETS Investments, at value (cost $188,109,280)-see accompanying statement $188,024,610
----------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 3,044,049
Interest and principal paydowns 2,516,065
----------------------------------------------------------------------------------------------------
Other 188,509
------------
Total assets 193,773,233
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES Bank overdraft 777,608
Payables and other liabilities:
Shares of beneficial interest redeemed 1,396,821
Dividends 1,152,027
Distribution and service plan fees--Note 4 164,484
Other 178,924
------------
Total liabilities 3,669,864
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS $190,103,369
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $194,849,365
NET ASSETS ----------------------------------------------------------------------------------------------------
Undistributed net investment income 192,816
----------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment transactions (5,104,142)
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments-Note 3 165,330
------------
Net assets $190,103,369
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets of
$179,144,163 and 16,600,772 shares of beneficial interest outstanding) $10.79
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $11.33
----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $10,959,206 and 1,014,213 shares of beneficial interest outstanding) $10.81
See accompanying Notes to Financial Statements.
</TABLE>
6 Oppenheimer Limited-Term Government Fund
<PAGE>
STATEMENT OF OPERATIONS For the Six Months Ended March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INVESTMENT INCOME Interest $6,972,116
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
Expenses Management fees-Note 4 444,031
-----------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A-Note 4 211,948
Class B-Note 4 37,605
-----------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 109,200
Class B 1,969
-----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees-Note 4 98,255
-----------------------------------------------------------------------------------------------
Shareholder reports 56,344
-----------------------------------------------------------------------------------------------
Custodian fees and expenses 42,920
-----------------------------------------------------------------------------------------------
Legal and auditing fees 16,926
-----------------------------------------------------------------------------------------------
Trustees' fees and expenses 1,664
-----------------------------------------------------------------------------------------------
Other 38,147
----------
Total expenses 1,059,009
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,913,107
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain from:
GAIN (LOSS) ON INVESTMENTS Investments 1,211,759
Closing of futures contracts 1,377,500
Net realized gain 2,589,259
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (7,062,254)
----------
Net realized and unrealized loss on investments (4,472,995)
- - -----------------------------------------------------------------------------------------------------------------------------
- - -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,440,112
----------
See accompanying Notes to Financial Statements.
</TABLE>
7 Oppenheimer Limited-Term Government Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1994 SEPTEMBER 30,
(UNAUDITED) 1993
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
OPERATIONS Net investment income $ 5,913,107 $ 10,852,752
--------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 2,589,259 (1,271,113)
--------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (7,062,254) 2,440,150
------------ ------------
Net increase in net assets resulting from operations 1,440,112 12,021,789
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.338 and $.734 per share, respectively) (5,515,745) (10,773,584)
SHAREHOLDERS Class B ($.292 and $.226 per share, respectively) (204,546) (79,168)
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from Class A
TRANSACTIONS beneficial interest transactions-Note 2 4,277,734 19,721,192
--------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B
beneficial interest transactions-Note 2 6,084,893 5,062,554
- - ---------------------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase in net assets 6,082,448 25,952,783
--------------------------------------------------------------------------------------------------------
Beginning of period 184,020,921 158,068,138
End of period $190,103,369 $184,020,921
------------ ------------
------------ ------------
See accompanying Notes to Financial Statements.
</TABLE>
8 Oppenheimer Limited-Term Government Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1994 SEPTEMBER 30,
(UNAUDITED) 1993 1992 1991 1990(2) 1989
- - ----------------------------------------------------------------------------------------------------------------------------------
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $11.04 $10.97 $10.75 $10.18 $10.17 $10.14
- - ----------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .35 .73 .81 .87 .89 .90
Net realized and unrealized
gain (loss) on investments (.26) .07 .22 .57 .01 .03
-------- -------- -------- -------- -------- --------
Total income from
investment operations .09 .80 1.03 1.44 .90 .93
- - ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.34) (.73) (.81) (.87) (.89) (.90)
Distributions from net realized
gain on investments -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions
to shareholders (.34) (.73) (.81) (.87) (.89) (.90)
- - ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.79 $11.04 $10.97 $10.75 $10.18 $10.17
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
- - ----------------------------------------------------------------------------------------------------------------------------------
- - ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(3) .85% 7.61% 9.88% 14.69% 9.15% 9.65%
- - ----------------------------------------------------------------------------------------------------------------------------------
- - ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $179,144 $178,944 $158,068 $167,974 $213,391 $237,819
- - ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $180,063 $161,318 $160,830 $192,404 $218,528 $243,863
- - ----------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 16,601 16,206 14,416 15,624 20,964 23,395
- - ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 6.37%(4) 6.70% 7.44% 8.27% 8.77% 8.96%
Expenses 1.10%(4) 1.02% .97% .98% .90% .93%
- - ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 99% 74% 154% 112% 60% 61%
<CAPTION>
CLASS B
--------------------------------
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1994 SEPTEMBER 30,
(UNAUDITED) 1993(1)
- - -----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $11.06 $10.96
- - -----------------------------------------------------------------------------
Income from investment operations:
Net investment income .27 .23
Net realized and unrealized
gain (loss) on investments (.23) .10
-------- --------
Total income from
investment operations .04 .33
- - -----------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (.29) (.23)
Distributions from net realized
gain on investments -- --
-------- --------
Total dividends and distributions
to shareholders (.29) (.23)
- - -----------------------------------------------------------------------------
Net asset value, end of period $10.81 $11.06
-------- --------
-------- --------
- - -----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------
Total Return, at Net Asset Value(3) .43% 3.02%
- - -----------------------------------------------------------------------------
- - -----------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $10,959 $5,077
- - -----------------------------------------------------------------------------
Average net assets (in thousands) $ 7,152 $2,561
- - -----------------------------------------------------------------------------
Number of shares outstanding at
end of period (in thousands) 1,014 459
- - -----------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.91%(4) 4.81%(4)
Expenses 2.02%(4) 1.87%(4)
- - -----------------------------------------------------------------------------
Portfolio turnover rate(5) 99% 74%
<FN>
(1) For the period from May 3, 1993 (inception of offering) to September 30,
1993.
(2) On April 7, 1990, Oppenheimer Management Corporation became the investment
advisor to the Fund.
(3) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
(4) Annualized.
(5) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the six
months ended March 31, 1994 were $179,432,832 and $183,738,037, respectively.
See accompanying Notes to Financial Statements.
</TABLE>
9 Oppenheimer Limited-Term Government Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Limited-Term Government Fund
ACCOUNTING POLICIES (the Fund), operating under the name
Oppenheimer Government Securities Fund
through April 30, 1994, is registered under
the Investment Company Act of 1940, as
amended, as a diversified, open-end
management investment company. The Fund's
investment advisor is Oppenheimer Management
Corporation (the Manager). The Fund offers
both Class A and Class B shares. Class A
shares are sold with a front-end sales
charge. Class B shares may be subject to a
contingent deferred sales charge. Both
classes of shares have identical rights to
earnings, assets and voting privileges,
except that each class has its own
distribution and/or service plan, expenses
directly attributable to a particular class
and exclusive voting rights with respect to
matters affecting a single class. Class B
shares will automatically convert to Class A
shares six years after the date of purchase.
The following is a summary of significant
accounting policies consistently followed by
the Fund.
---------------------------------------------
INVESTMENT VALUATION. Portfolio securities
are valued at 4:00 p.m. (New York time) on
each trading day. Long-term debt securities
are valued by a portfolio pricing service
approved by the Board of Trustees. Long-term
debt securities which cannot be valued by the
approved portfolio pricing service are valued
by averaging the mean between the bid and
asked prices obtained from two active market
makers in such securities. Short-term debt
securities having a remaining maturity of 60
days or less are valued at cost (or last
determined market value) adjusted for
amortization to maturity of any premium or
discount. Securities for which market quotes
are not readily available are valued under
procedures established by the Board of
Trustees to determine fair value in good
faith.
---------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the
custodian to take possession, to have legally
segregated in the Federal Reserve Book Entry
System or to have segregated within the
custodian's vault, all securities held as
collateral for repurchase agreements. If the
seller of the agreement defaults and the
value of the collateral declines, or if the
seller enters an insolvency proceeding,
realization of the value of the collateral by
the Fund may be delayed or limited.
---------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND
LOSSES. Income, expenses (other than those
attributable to a specific class) and gains
and losses are allocated daily to each class
of shares based upon the relative proportion
of net assets represented by such class.
Operating expenses directly attributable to a
specific class are charged against the
operations of that class.
---------------------------------------------
FEDERAL INCOME TAXES. The Fund intends to
continue to comply with provisions of the
Internal Revenue Code applicable to regulated
investment companies and to distribute all of
its taxable income, including any net
realized gain on investments not offset by
loss carryovers, to shareholders. Therefore,
no federal income tax provision is required.
At March 31, 1994, the Fund had available for
federal income tax purposes an unused capital
loss carryover of approximately $6,222,000,
$3,182,000 of which will expire in 1996 and
$3,040,000 in 1997.
---------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund
intends to declare dividends separately for
Class A and Class B shares from net
investment income each day the New York Stock
Exchange is open for business and pay such
dividends monthly. Distributions from net
realized gains on investments, if any, will
be declared at least once each year.
---------------------------------------------
OTHER. Investment transactions are accounted
for on the date the investments are purchased
or sold (trade date). Discount on securities
purchased is amortized over the life of the
respective securities, in accordance with
federal income tax requirements. Realized
gains and losses on investments and
unrealized appreciation and depreciation are
determined on an identified cost basis, which
is the same basis used for federal income tax
purposes.
10 Oppenheimer Limited-Term Government Fund
<PAGE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number
BENEFICIAL INTEREST of no par value shares of beneficial interest
of each class. Beneficial Interest
Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1994 YEAR ENDED SEPTEMBER 30, 1993(1)
------------------------------- --------------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,173,245 $23,802,105 3,635,741 $39,788,867
Dividends reinvested 343,598 3,757,326 653,622 7,145,654
Issued in connection with
the acquisition of
Main Street Government
Securities Fund-Note 5 -- -- 898,047 9,977,301
Redeemed (2,122,436) (23,281,697) (3,396,764) (37,190,630)
---------- ----------- ---------- -----------
Net increase 394,407 $ 4,277,734 1,790,646 $19,721,192
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
-----------------------------------------------------------------------------------------------
Class B:
Sold 635,994 $ 6,980,171 462,985 $ 5,104,320
Dividends reinvested 15,252 166,840 3,699 40,944
Redeemed (96,245) (1,062,118) (7,472) (82,710)
---------- ----------- ---------- -----------
Net increase 555,001 $ 6,084,893 459,212 $ 5,062,554
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
<FN>
(1) For the year ended September 30, 1993 for
Class A shares and for the period from May 3,
1993 (inception of offering) to September 30,
1993 for Class B shares.
</TABLE>
- - --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND At March 31, 1994, net unrealized
LOSSES ON INVESTMENTS appreciation of investments of $165,330 was
composed of gross appreciation of $2,554,879,
and gross depreciation of $2,389,549.
- - --------------------------------------------------------------------------------
4. MANAGEMENT FEES Management fees paid to the Manager were in
AND OTHER TRANSACTIONS accordance with the investment advisory
WITH AFFILIATES agreement with the Fund which provides for an
annual fee of .50% on the first $100 million
of net assets, .45% on the next $150 million,
.425% on the next $250 million and .40% on
net assets in excess of $500 million. The
Manager has agreed to reimburse the Fund if
aggregate expenses (with specified
exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
The Manager acts as the accounting
agent for the Fund at an annual fee of
$12,000, plus out-of-pocket costs and
expenses reasonably incurred.
For the six months ended March 31,
1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled
$126,230, of which $44,405 was retained by
Oppenheimer Funds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general
distributor, and by an affiliated
broker/dealer. During the six months ended
March 31, 1994, OFDI received contingent
deferred sales charges of $15,505 upon
redemption of Class B shares, as
reimbursement for sales commissions advanced
by OFDI at the time of sale of such shares.
Oppenheimer Shareholder Services
(OSS), a division of the Manager, is the
transfer and shareholder servicing agent for
the Fund, and for other registered investment
companies. OSS's total costs of providing
such services are allocated ratably to these
companies.
11 Oppenheimer Limited-Term Government Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
4. MANAGEMENT FEES AND Under separate approved plans, each class may
OTHER TRANSACTIONS WITH expend up to .25% of its net assets annually
AFFILIATES (CONTINUED) to reimburse OFDI for costs incurred in
connection with the personal service and
maintenance of accounts that hold shares of
the Fund, including amounts paid to brokers,
dealers, banks and other institutions. In
addition, Class B shares are subject to an
asset-based sales charge of .75% of net
assets annually, to reimburse OFDI for sales
commissions paid from its own resources at
the time of sale and associated financing
costs. In the event of termination or
discontinuance of the Class B plan, the Board
of Trustees may allow the Fund to continue
payment of the asset-based sales charge to
OFDI for distribution expenses incurred on
Class B shares sold prior to termination or
discontinuance of the plan. During the six
months ended March 31, 1994, OFDI paid $1,096
to an affiliated broker/dealer as
reimbursement for Class A personal service
and maintenance expenses and retained $37,605
as reimbursement for Class B sales
commissions and service fee advances, as well
as financing costs.
- - --------------------------------------------------------------------------------
5. ACQUISITION OF MAIN On August 27, 1993, the Fund acquired all of
STREET GOVERNMENT the net assets of Main Street Government
SECURITIES FUND Securities Fund (MSGSF), pursuant to an
Agreement and Plan of Reorganization approved
by the MSGSF shareholders on August 26, 1993.
The Fund issued 898,047 shares of beneficial
interest, valued at $9,977,301, in exchange
for the net assets, resulting in combined net
assets of $182,832,580 on August 27, 1993.
The net assets acquired included net
unrealized appreciation of $402,810 and
capital loss carryovers for federal income
tax purposes of $39,537. The exchange was
tax-free.
12 Oppenheimer Limited-Term Government Fund
<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
David A. Rosenberg, Vice President
George C. Bowen, Vice President, Secretary and
Treasurer
Lynn M. Coluccy, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- - --------------------------------------------------------------------------------
INVESTMENT ADVISOR Oppenheimer Management Corporation
- - --------------------------------------------------------------------------------
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
- - --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER Oppenheimer Shareholder Services
SERVICING AGENT
- - --------------------------------------------------------------------------------
CUSTODIAN OF Citibank, N.A.
PORTFOLIO SECURITIES
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche
- - --------------------------------------------------------------------------------
LEGAL COUNSEL Myer, Swanson & Adams, P.C.
The financial statements included herein have been
taken from the records of the Fund without examination
by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Limited-Term Government Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Limited-Term Government Fund. For material
information concerning the Fund, see the Prospectus.
13 Oppenheimer Limited-Term Government Fund
<PAGE>
THE FAMILY OF OPPENHEIMERFUNDS
- - --------------------------------------------------------------------------------
OppenheimerFunds offers over 35 mutual funds designed
to fit virtually every investment goal. Whether you're
investing for retirement, your children's education,
or tax-free income, we have the mutual funds to help
you seek your objective.
When you invest with OppenheimerFunds, you
can feel comfortable knowing that you are investing
with a respected financial institution with over 30
years of experience in helping people just like you
reach their financial goals. And you're investing with
a leader in global, growth stock, and flexible fixed
income investments-with over 1.8 million shareholder
accounts and more than $26 billion under Oppenheimer's
management and that of our affiliates.
As an OppenheimerFunds shareholder, you can
easily exchange shares of eligible funds of the same
class by mail or by telephone for a small
administrative fee.(1) For more information on
OppenheimerFunds, please contact your financial
advisor or call us at 1-800-525-7048 for a prospectus.
You may also write us at the address shown on the back
cover. As always, please read the prospectus carefully
before you invest.
<TABLE>
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
SPECIALTY STOCK FUNDS Global Bio-Tech Fund Gold & Special Minerals
Global Environment Fund Fund
- - ---------------------------------------------------------------------------------------------------------
STOCK FUNDS Discovery Fund Global Fund
Time Fund Oppenheimer Fund
Target Fund Value Stock Fund
Special Fund
- - ---------------------------------------------------------------------------------------------------------
STOCK AND BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
- - ---------------------------------------------------------------------------------------------------------
BOND FUNDS High Yield Fund Strategic Short-Term Income Fund
Champion High Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Limited-Term Government Fund(2)
Strategic Investment Grade Bond Fund
- - ---------------------------------------------------------------------------------------------------------
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(3) New Jersey Tax-Exempt Fund(3)
California Tax-Exempt Fund(3) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(3) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(3) Intermediate Tax-Exempt Bond Fund
- - ---------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS Money Market Fund Tax-Exempt Cash Reserves
Cash Reserves
<FN>
(1) The fee is waived for PhoneLink exchanges between
existing accounts. Exchange privileges are subject to
change or termination.
(2) Formerly Government Securities Fund.
(3) Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds
Distributor, Inc., Two World Trade Center, New York,
NY 10048-0203. -C-Copyright 1994 Oppenheimer
Management Corporation. All rights reserved.
</TABLE>
14 Oppenheimer Limited-Term Government Fund
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
Back Cover F
- - ------------
``How may I help you?''
- - ------------
``Just as OppenheimerFunds offers over 35 different mutual funds designed to
help meet virtually every investment need, Oppenheimer Shareholder Services
offers a variety of services to satisfy your individual needs. Whenever you
require help, we're only a toll-free phone call away.
``For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
``When you want to make account transactions, it's easy for you to redeem
shares, exchange shares, or conduct AccountLink transactions, simply by calling
our Telephone Transactions number.
``And for added convenience, OppenheimerFunds' PhoneLink, an automated
voice response system, is available 24 hours a day, 7 days a week. PhoneLink
gives you access to a variety of fund, account, and market information. You can
even make purchases, exchanges and redemptions using your touch-tone phone. Of
course, PhoneLink will always give you the option to speak with a Customer
Service Representative during the hours shown to the left.
``When you invest in OppenheimerFunds, you know you'll receive a high
level of customer service. The International Customer Service Association knows
it, too, as it awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
``Whatever your needs, we're ready to assist you.''
1993 AWARD OF EXCELLENCE LOGO
[B&W PHOTO]
Barbara Hennigar
Chief Executive Officer
Oppenheimer Shareholder Services
General Information
1-800-525-7048
Talk to a Customer Service Representative.
Monday through Friday from 8:30 a.m. to 8:00 p.m., and Saturday from 10:00 a.m.
to 2:00 p.m. ET.
Telephone Transactions
1-800-852-8457
Make account transactions with a Customer Service Representative. Monday through
Friday from 8:30 a.m. to 8:00 p.m. ET.
PhoneLink
1-800-533-3310
Get automated information or make automated transactions. 24 hours a day, 7 days
a week.
Telecommunication
Device for the Deaf
1-800-843-4461
Service for the hearing impaired.
Monday through Friday from 8:30 a.m. to 8:00 p.m. ET.
OppenheimerFunds
Information Hotline
1-800-835-3104
Hear timely and insightful messages on the economy and issues that affect your
finances.
24 hours a day, 7 days a week.
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- - ------------
Bulk Rate
U.S. Postage
PAID
Permit No. 377
Hackensack, NJ
- - ------------
