<PAGE>
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
Annual Report September 30, 1995
[PHOTO]
"We need our money to work hard, and we need to feel COMFORTABLE
about how it's invested."
[LOGO] OPPENHEIMERFUNDS-c-
<PAGE>
This Fund is for people who want higher returns than traditional short-term
investments, without giving up the comfort.(1)
NEWS
- -------------------
STANDARDIZED YIELDS
- -------------------
For the 30 Days Ended 9/30/95(5)
Class A
- ------------------
6.13%
- ------------------
Class B
- ------------------
5.53%
- ------------------
Class C
- ------------------
5.52%
- ------------------
BEAT THE AVERAGE
- ----------------
Total Return for the 5-Year Period Ended 9/30/95:
Oppenheimer Limited-Term Government Fund
Class A (at NAV)(3)
- ------------------
47.59%
- ------------------
Lipper Short-Term U.S. Government Funds Average(6)
- ------------------
38.71%
- --------------------------------------------------------------------------------
HOW YOUR FUND IS MANAGED
- --------------------------------------------------------------------------------
Oppenheimer Limited-Term Government Fund seeks high current return by investing
in a portfolio of fixed income securities, emphasizing securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, and
mortgage-backed securities. The Fund also invests in collateralized mortgage
obligations and mortgage-backed stripped securities.(2) The Fund is designed to
offer a greater degree of stability than longer-term fixed income investments
because it intends to maintain an average effective portfolio duration of not
more than three years.
- --------------------------------------------------------------------------------
PERFORMANCE
- --------------------------------------------------------------------------------
Total returns at net asset value for the 12 months ended 9/30/95 for Class A and
B shares were 8.03% and 7.18%, respectively.(3)
Your Fund's average annual total returns at maximum offering price for
Class A shares for the 1- and 5-year periods ended 9/30/95 and since inception
of the Class on 3/10/86 were 4.25%, 7.33% and 7.85%, respectively. For Class B
shares, average annual total returns for the 1-year period ended 9/30/95 and
since inception of the Class on 5/3/93 were 3.18% and 3.29%, respectively.(4)
- --------------------------------------------------------------------------------
OUTLOOK
- --------------------------------------------------------------------------------
"This Fund performed as expected during both the difficult bond market of '94
and the huge bull market that followed it. Our share price remained relatively
stable and we were able to maintain a competitive income stream in the face of
both markets. In a relatively low-risk environment like the current market, we
believe we'll benefit by focusing on maintaining a high yield."
David Rosenberg, Portfolio Manager
September 30, 1995
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
1. The Fund may be more volatile than certain short-term investments and may not
have the return potential of longer-term investments.
2. These securities involve risks from early prepayment of underlying mortgages
that can affect the Fund's income and principal value.
3. Based on the change in net asset value per share for the period shown,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
4. Class A returns shown hypothetical investments on 9/30/94, 9/30/90 and
3/10/86 (inception of class), after deducting the current maximum initial sales
charge of 3.50%. Prior to 2/1/94, the maximum Class A sales charge was higher,
and actual account performance would have been less. Class B returns show
hypothetical investments on 9/30/94 and 5/3/93 (inception of class) and the
deduction of the applicable contingent deferred sales charge of 4% (1-year) and
2% (since inception). Certain Class C share performance data are not yet
available because Class C shares were first publicly offered on 2/1/95. The
Fund's investment policy of limiting average portfolio duration was adopted on
5/1/94, and the Fund had a different advisor prior to 4/7/90. An explanation of
the different total returns is in the Fund's prospectus.
5. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 9/30/95, divided by the maximum offering price
at the end of the period, compounded semiannually and then annualized. Falling
net asset values will tend to artificially raise yields.
6. Source: Lipper Analytical Services, 9/30/95, an independent mutual fund
monitoring service. The Lipper total return average for the 5-year period was
for 67 short-term U.S. Government funds. The average is shown for comparative
purposes only. Oppenheimer Limited-Term Government Fund is characterized by
Lipper as a short-term U.S. Government fund. Lipper performance does not take
sales charges into consideration.
2 Oppenheimer Limited-Term Government Fund
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Limited-Term
Government Fund
[PHOTO]
Jon S. Fossel
President
Oppenheimer
Limited-Term
Government Fund
DEAR OPPENHEIMERFUNDS SHAREHOLDER,
Although the U.S. stock market has received much of the media attention this
year, the bond market has also turned in an excellent performance thus far in
1995. The driving force: steadily falling long-term interest rates along with an
expectation that inflation would remain low.
As you may know, inflation erodes the purchasing power of future income
because bonds pay a fixed rate of income over a fixed time period. Therefore,
as a result of low inflation expectations and slower, more stable economic
growth, investors had a greater demand for bonds and, as such, prices rose and
yields fell.
Unlike short-term interest rates, which are affected primarily by the
actions of the Federal Reserve Board, long-term interest rates are driven by
investor expectations. So even though long-term interest rates were falling,
short-term interest rates were not generally declining until July 6, when the
Fed cut short-term rates for the first time in three years in an attempt to
stimulate the weakening U.S. economy in the second quarter. Back in 1994, the
surging economy caused the Fed to increase interest rates seven times prior to
its July 6 rate cut--and those rate hikes were primarily responsible for the
poor performance of the U.S. bond market last year. But investors who remained
patient and stayed the course have been rewarded in 1995.
And, although the economy has shown a variety of mixed signals recently, we
believe the Federal Reserve will not return to a tightening policy any time in
the near future. Indeed, the Fed appears to have successfully engineered a "soft
landing" for the U.S. economy, one in which growth is moderate and inflation
almost nonexistent.
This two-year period is an excellent example of why investors need to
maintain their objectivity and perspective. Like all markets, there will be
volatility in bonds from year to year but, over time, the fixed income markets
should tend to provide strong current income relative to inflation, and capital
appreciation and depreciation typically offset each other. As a result of the
Fed's change in policy, we believe we're now in a period in which capital gains
and losses will again take a back seat to income as the main driver behind bond
investing.
At the same time, the U.S. dollar has strengthened against major overseas
currencies as both Japan and Germany continue to reduce interest rates to
stimulate their economies--actions which make the U.S. bond market relatively
more attractive to foreign investors. So as a result of international market
forces, a moderate U.S. economic environment, and the Fed's anti-inflationary
goal, we expect interest rates to remain relatively stable.
Your portfolio manager discusses the outlook for your Fund on the following
pages. Thank you for your confidence in OppenheimerFunds, and we look forward to
helping you reach your investment goals in the future.
/S/James C. Swain /S/Jon S. Fossel
James C. Swain Jon S. Fossel
October 23, 1995
3 Oppenheimer Limited-Term Government Fund
<PAGE>
[PHOTO]
[PHOTO]
Q & A
Q What is the Fund's GOAL?
AN INTERVIEW WITH YOUR FUND'S MANAGER.
YOUR EMPHASIS ON STABILITY OF PRINCIPAL CAN LIMIT LOSSES IN A DOWN MARKET BUT
CAN ALSO LIMIT GAINS IN A RISING MARKET. HOW DID YOU FARE DURING THIS YEAR'S
SUMMER RALLY AND THE MORE SUBDUED PERIOD THAT FOLLOWED?
This Fund is designed to provide investors with relative price stability plus
income. That means we don't expect to gain or lose much in times of rapid
interest rate moves like we saw over the last year and a half. But since bond
prices and yields move in opposite directions, it also means that our earned
income should be relatively consistent.
In a market like the current one where we don't expect to see much in the
way of interest rate moves, we feel the Fund's focus on income puts us at a
distinct competitive advantage.
WHY DID THE FED CUT INTEREST RATES WHEN THEY DID?
In an effort to combat the threat of inflation, the Fed had been tightening
money supply by raising rates throughout 1994 and into early '95. Their objec-
tive was to curtail the high growth rate the economy was experiencing to one
where growth was slower, but more sustainable. In July, they reversed their
policy and cut rates. We believe the move was warranted because indications were
that economic growth had slowed more than initially expected--which, if left
unchecked, could lead to a recession.
Right now we're seeing enough positive momentum in the economy to believe
that the first rate cut was probably sufficient. In other words, it should not
be necessary for the Fed to ease money supply much further, with the exception
of possible budget deficit reform, for the economy to be able to continue to
grow at a healthy pace.
[PHOTO]
4 Oppenheimer Limited-Term Government Fund
<PAGE>
FACING PAGE
Top left: David Rosenberg,
Portfolio Manager
Top right: Art Steinmetz, Senior
VP, Fixed Income Investments,
Portfolio Management Team
Bottom: Len Darling, Executive VP,
Director of Fixed Income Investments,
consults with Jon Fossel
THIS PAGE
Right: David Rosenberg with
Gina Palmieri, Mortgage Analyst
Below: Eva Zeff, Assistant VP,
Fixed Income Investments
Portfolio Management Team
A To provide investors with relative price stability plus INCOME.
WITHIN YOUR LOWER-RISK AREA OF THE BOND MARKET, WHAT TYPES OF SECURITIES OFFER
THE BEST POTENTIAL FOR INCOME GOING FORWARD?
The Fed's action in July made us take a more defensive position, and we began
shortening the portfolio's average effective maturity. In addition, we've
shifted direction since the July rate cut. Six months ago, we reported that we
were moving away from mortgages in favor of Treasuries, which are more stable in
periods of interest-rate volatility. At that time, approximately 40% of the
portfolio was invested in Treasuries. Now that the rate uncertainty is far
diminished, we've moved back into mortgages--to the tune of about 70%. They
generally offer higher income than Treasuries, and it's our belief that
capturing income is the key to this market.(1)
HOW WOULD YOU CLASSIFY THE MARKET YOU SEE DEVELOPING, AND WHAT IS YOUR OUTLOOK
FOR THE FUND?
The market that evolved out of this year's rate cut is much more
of a "typical" low-volatility government bond market--and that's when a
portfolio like this one, which was designed to provide competitive income while
limiting price fluctuation, should perform best. This Fund performed as expected
during both the difficult bond market of '94 and the huge bull market that
followed. Our share price remained relatively stable and we were able to
maintain a competitive income stream in the face of both markets. In a
relatively low-risk environment like the current market, we believe we'll
benefit by focusing on maintaining a high yield./ /
[PHOTO]
[PHOTO]
1. The Fund's portfolio is subject to change.
5 Oppenheimer Limited-Term Government Fund
<PAGE>
---------------------------------------------
STATEMENT OF INVESTMENTS September 30, 1995
---------------------------------------------
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C> <C>
=================================================================================================================================
MORTGAGE-BACKED OBLIGATIONS--82.0%
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--82.0%
- ---------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/ Federal Home Loan Mortgage Corp., Collateralized Mtg.
SPONSORED--63.2% Obligations, Gtd. Multiclass Mtg. Participation Certificates:
10%, 11/15/19 $10,289,372 $10,504,730
10%, 6/15/20 5,500,000 6,268,281
6.65%, 4/15/21 12,500,000 12,251,953
8.20%, 7/15/19 977,743 992,257
8.50%, 10/15/19 14,795,770 15,026,880
9%, 12/15/20 14,750,000 15,095,703
9.25%, 11/1/08 462,553 486,250
Series 1057, Cl. C, 8%, 3/15/21 2,216,732 2,212,565
Series 1092, Cl. K, 8.50%, 6/15/21 15,000,000 16,174,219
Series 1097, Cl. L, 8.60%, 2/15/06 3,000,000 3,127,500
Series F, 9.50%, 12/15/18 1,696,037 1,715,643
-------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg
Obligations, Series 1548, Cl. C, 7%, 4/15/21 3,000,000 2,926,860
-------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Multiclass Mtg
Participation Certificates:
10%, 8/1/21 2,550,264 2,775,804
10%, 8/1/21 1,505,552 1,638,700
11.50%, 6/1/20 3,050,245 3,475,373
11.75%, 1/1/16 1,062,899 1,210,045
11.75%, 4/1/19 3,262,082 3,718,775
13%, 8/1/15 5,410,185 6,409,380
8%, 4/1/25 14,380,651 14,713,132
Series 1455, Cl. J, 7.50%, 12/15/22 15,000,000 15,445,200
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
11%, 7/1/16--5/1/19 14,762,607 16,538,467
11.75%, 9/1/03--11/1/15 902,324 1,003,701
12%, 8/1/16 3,919,913 4,517,700
13%, 12/1/15 4,743,524 5,616,629
7%, 10/15/25(1) 40,000,000 39,450,000
7%, 8/1/25 16,752,163 16,521,822
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Collateralized Mtg. Obligations,
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
10.50%, 11/25/20 10,000,000 11,834,375
8.75%, 12/25/20 7,500,000 8,058,984
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Mtg. Pass-Through Certificates:
12%, 4/1/19 4,487,810 5,194,641
13%, 8/1/15 3,151,848 3,734,940
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg
Investment Conduit Pass-Through Certificates:
12.50%, 12/1/15 4,550,255 5,322,377
13%, 6/1/15 66,219 74,124
13%, 8/1/10 49,554 55,470
8%, 1/1/23 345,558 353,441
8%, 7/25/19 8,000,000 8,267,500
9%, 8/1/19 1,036,037 1,086,524
Series 1991-169, Cl. PK, 8%, 10/25/21 595,000 622,519
</TABLE>
6 Oppenheimer Limited-Term Government Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/ Federal National Mortgage Assn., Interest-Only Stripped
SPONSORED) Mtg.-Backed Securities:
(CONTINUED) Trust 222, Cl. 2, 11.703%, 6/25/23(2) $85,664,203 $ 26,348,435
Trust 240, Cl. 2, 14.005%, 9/25/23(2) 5,204,460 1,633,306
Trust 257, Cl. 2, 9.127%, 2/25/24(2) 12,956,526 4,114,710
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Principal-Only Stripped Mtg.-Backed
Security, Trust 148, Cl. G, Zero Coupon, 8/25/23(3) 8,891,258 4,640,126
-------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., STRIPS, Series G, Cl. 2, 11.50%, 3/25/09 2,953,705 3,277,691
-----------
304,436,732
- ---------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED Government National Mortgage Assn.:
- --18.8% 10.50%, 1/15/16--10/15/21 4,522,104 4,999,728
11%, 2/15/98--2/15/01 1,648,249 1,744,579
11.50%, 1/15/13--5/15/13 1,173,420 1,297,412
13%, 2/15/11--9/15/14 98,054 110,742
6.50%, 10/1/25(1) 70,000,000 71,028,125
7.50%, 10/15/23 77,090 77,862
8%, 9/15/07--7/15/25 7,427,365 7,638,724
8.50%, 9/15/21--11/15/22 557,624 580,973
9%, 11/15/16 3,034,429 3,222,868
9.50%, 9/15/17 205,766 221,878
-----------
90,922,891
-----------
Total Mortgage-Backed Obligations (Cost $397,217,770) 395,359,623
=================================================================================================================================
U.S. GOVERNMENT OBLIGATIONS--39.4%
- ---------------------------------------------------------------------------------------------------------------------------------
AGENCY--0.4%
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY/ Small Business Administration:(5)
FULL FAITH--0.4% 10.125%, 7/25/06 167,347 184,198
10.625%, 7/25/06 226,777 239,202
10.625%, 6/25/06 278,641 293,908
9.875%, 7/25/05 240,585 253,766
10.625%, 5/25/06 136,869 144,369
10.375%, 1/25/02 308,270 325,160
10.625%, 11/25/06 480,665 507,001
-----------
1,947,604
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY--39.0% U.S. Treasury Bonds:
11.50%, 11/15/95 5,000,000 5,037,500
6.25%, 8/15/23 600,000 570,562
8.875%, 8/15/17 500,000 628,125
-------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
7.625%, 5/31/96 10,300,000 10,428,750
8%, 10/15/96(4) 43,290,000 44,277,527
8.75%, 10/15/97 9,700,000 10,230,463
8.875%, 2/15/96 6,000,000 6,071,250
9.25%, 1/15/96 5,700,000 5,758,778
9.375%, 4/15/96 102,700,000 104,721,840
-----------
187,724,795
-----------
Total U.S. Government Obligations (Cost $191,107,035) 189,672,399
</TABLE>
7 Oppenheimer Limited-Term Government Fund
<PAGE>
--------------------------------------
STATEMENT OF INVESTMENTS (Continued)
--------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $588,324,805) 121.4% $585,032,022
- ---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (21.4) (103,270,259)
------ ------------
NET ASSETS 100.0% $481,761,763
------ ------------
------ ------------
</TABLE>
1. When-issued security to be delivered and settled after
September 30, 1995.
2. Interest-Only Strips represent the right to receive the
monthly interest payments on an underlying pool of mortgage
loans. These securities typically decline in price as
interest rates decline. Most other fixed-income securities
increase in price when interest rates decline. The principal
amount of the underlying pool represents the notional amount
on which current interest is calculated. The price of these
securities is typically more sensitive to changes in prepay-
ment rates than traditional mortgage-backed securities (for
example, GNMA pass-throughs). Interest rates disclosed
represent current yields based upon the current cost basis
and estimated timing and amount of future cash flows.
3. Principal-Only Strips represent the right to receive the
monthly principal payments on an underlying pool of mortgage
loans. The value of these securities generally increases as
interest rates decline and prepayment rates rise. The price
of these securities is typically more volatile than that of
coupon-bearing bonds of the same maturity. Interest rates
disclosed represent current yields based upon the current
cost basis and estimated timing of future cash flows.
4. Securities with an aggregate market value of $721,082 are
held in escrow to cover initial margin requirements on open
futures sales contracts. See Note 7 of Notes to Financial
Statements.
5. Represents the current interest rate for a variable rate
security.
See accompanying Notes to Financial Statements.
8 Oppenheimer Limited-Term Government Fund
<PAGE>
--------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES September 30, 1995
--------------------------------------------------------
<TABLE>
<S> <C> <C>
=================================================================================================================================
ASSETS Investments, at value (cost $588,324,805)--see accompanying statement $585,032,022
- ---------------------------------------------------------------------------------------------------------------------------------
Receivables:
Interest and principal paydowns 10,223,255
Shares of beneficial interest sold 3,915,457
-------------------------------------------------------------------------------------------------------------
Other 47,374
------------
Total assets 599,218,108
=================================================================================================================================
LIABILITIES Bank overdraft 3,672,280
-------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased on a when-issued basis 110,753,455
Shares of beneficial interest redeemed 1,787,448
Dividends 787,054
Distribution and service plan fees--Note 4 261,346
Transfer and shareholder servicing agent fees--Note 4 58,193
Payable for daily variation on futures contracts--Note 7 46,875
Other 89,694
------------
Total liabilities 117,456,345
=================================================================================================================================
NET ASSETS $481,761,763
------------
------------
=================================================================================================================================
COMPOSITION OF Paid-in capital $492,491,079
NET ASSETS -------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,076,858
-------------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment and written option transactions (8,521,204)
-------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Note 3 (3,284,970)
------------
Net assets $481,761,763
------------
------------
=================================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $346,014,524 and 33,135,502 shares of beneficial interest outstanding) $10.44
Maximum offering price per share (net asset value plus sales charge
of 3.50% of offering price) $10.82
-------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $121,177,784 and 11,606,928 shares of beneficial interest outstanding) $10.44
-------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $14,569,455 and 1,396,645 shares of beneficial interest
outstanding $10.43
See accompanying Notes to Financial Statements.
</TABLE>
9 Oppenheimer Limited-Term Government Fund
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
---------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended September 30, 1995
---------------------------------------------------------------
=================================================================================================================================
INVESTMENT INCOME Interest $29,927,571
=================================================================================================================================
EXPENSES Management fees--Note 4 1,599,989
-------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 659,243
Class B 720,839
Class C 40,364
-------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 418,951
-------------------------------------------------------------------------------------------------------------
Shareholder reports 132,982
-------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 92,647
-------------------------------------------------------------------------------------------------------------
Legal and auditing fees 41,819
-------------------------------------------------------------------------------------------------------------
Insurance expenses 8,976
-------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 2,921
-------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 5,375
Class B 29,338
Class C 4,782
-------------------------------------------------------------------------------------------------------------
Other 35,232
-----------
Total expenses 3,793,458
=================================================================================================================================
NET INVESTMENT INCOME 26,134,113
=================================================================================================================================
REALIZED AND Net realized loss on:
UNREALIZED LOSS ON Investments (153,190)
INVESTMENTS AND Closing of futures contracts (1,467,909)
OPTIONS WRITTEN Closing of options written (129,075)
-----------
Net realized loss (1,750,174)
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 2,574,769
-----------
Net realized and unrealized gain on investments and options written 824,595
=================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $26,958,708
-----------
-----------
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Limited-Term Government Fund
<PAGE>
-----------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
-----------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1995 1994
<S> <C> <C> <C>
=================================================================================================================================
OPERATIONS Net investment income $ 26,134,113 $ 13,788,048
-------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments and options written (1,750,174) 787,066
-------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 2,574,769 (12,973,109)
----------- -----------
Net increase in net assets resulting from operations 26,958,708 1,602,005
=================================================================================================================================
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS Class A ($.761 and $.709 per share, respectively) (20,166,681) (12,491,113)
TO SHAREHOLDERS Class B ($.689 and $.62 per share, respectively) (4,762,585) (900,631)
Class C ($.444 per share) (253,856) --
-------------------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.002 per share) -- (44,628)
Class B ($.002 per share) -- (7,614)
-------------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A ($.01 per share) -- (213,840)
Class B ($.01 per share) -- (36,486)
=================================================================================================================================
BENEFICIAL Net increase in net assets resulting from Class A beneficial
INTEREST interest transactions--Note 2 116,780,567 60,069,439
TRANSACTIONS -------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B beneficial
interest transactions--Note 2 81,900,018 34,737,604
-------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C beneficial
interest transactions--Note 2 14,569,935 --
=================================================================================================================================
NET ASSETS Total increase 215,026,106 82,714,736
-------------------------------------------------------------------------------------------------------------
Beginning of period 266,735,657 184,020,921
------------ ------------
End of period [including undistributed (overdistributed)
net investment income of $1,076,858 and $(107,542), respectively] $481,761,763 $266,735,657
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Limited-Term Government Fund
<PAGE>
--------------------
FINANCIAL HIGHLIGHTS
--------------------
<TABLE>
<CAPTION>
CLASS A
------
YEAR ENDED SEPTEMBER 30,
1995 1994 1993 1992 1991 1990(4) 1989
<S> <C> <C> <C> <C> <C> <C> <C>
================================================================================================================================
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.40 $11.04 $10.97 $10.75 $10.18 $10.17 $10.14
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .79 .72 .73 .81 .87 .89 .90
Net realized and unrealized gain (loss)
on investments and options written .01 (.64) .07 .22 .57 .01 .03
-------- -------- -------- -------- -------- -------- --------
Total income (loss) from investment
operations .80 .08 .80 1.03 1.44 .90 .93
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.76) (.71) (.73) (.81) (.87) (.89) (.90)
Dividends in excess of net investment income -- --(6) -- -- -- -- --
Tax return of capital distribution -- (.01) -- -- -- -- --
Distributions from net realized gain on
investments and options written -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total dividends and distributions to shareholders (.76) (.72) (.73) (.81) (.87) (.89) (.90)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.44 $10.40 $11.04 $10.97 $10.75 $10.18 $10.17
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(7) 8.03% .74% 7.61% 9.88% 14.69% 9.15% 9.65%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $346,015 $227,858 $178,944 $158,068 $167,974 $213,391 $237,819
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $274,313 $190,829 $161,318 $160,830 $192,404 $218,528 $243,863
- --------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at end
of period (in thousands) 33,136 21,906 16,206 14,416 15,624 20,964 23,395
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 7.64% 6.74% 6.70% 7.44% 8.27% 8.77% 8.96%
Expenses .91% .99% 1.02% .97% .98% .90% .93%
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(9) 261% 226% 74% 154% 112% 60% 61%
<FN>
1. For the period from February 1, 1995 (inception of offering) to September 30, 1995.
2. For the period from May 3, 1993 (inception of offering) to September 30, 1993.
3. For the period from March 10, 1986 (commencement of operations) to September 30, 1986.
4. On April 7, 1990, Oppenheimer Management Corporation became the investment advisor to the Fund.
5. Net investment income would have been $.84 and $.52 absent the voluntary reimbursement or waiver
of expenses, resulting in an expense ratio of 1.00% and 1.07% for 1987 and 1986, respectively.
6. Less than $.001 per share.
</FN>
</TABLE>
12 Oppenheimer Limited-Term Government Fund
<PAGE>
--------------------
Financial Highlights
--------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
---------------------------------- --------------------------------- ------
YEAR
ENDED
YEAR ENDED SEPTEMBER 30, YEAR ENDED SEPTEMBER 30, SEPT. 30,
1988 1987 1986(3) 1995 1994 1993(2) 1995(1)
<S> <C> <C> <C> <C> <C> <C> <C>
================================================================================================================================
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 9.72 $10.51 $10.56 $10.41 $11.06 $10.96 $10.32
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .89 .86(5) .57(5) .71 .62 .23 .45
Net realized and unrealized gain (loss)
on investments and options written .42 (.74) (.05) .01 (.64) .10 .10
-------- -------- -------- -------- ------- ------ --------
Total income (loss) from investment
operations 1.31 .12 .52 .72 (.02) .33 .55
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.89) (.86) (.57) (.69) (.62) (.23) (.44)
Dividends in excess of net investment income -- -- -- -- --(6) -- --
Tax return of capital distribution -- -- -- -- (.01) -- --
Distributions from net realized gain on
investments and options written -- (.05) -- -- -- -- --
-------- -------- -------- -------- ------- ------ --------
Total dividends and distributions to shareholders (.89) (.91) (.57) (.69) (.63) (.23) (.44)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.14 $ 9.72 $10.51 $10.44 $10.41 $11.06 $10.43
-------- -------- -------- -------- ------- ------ --------
-------- -------- -------- -------- ------- ------ --------
================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(7) 13.86% .95% 4.97% 7.18% (.17)% 3.02% 5.47%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $251,794 $287,181 $127,797 $121,178 $38,877 $5,077 $14,569
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $267,557 $242,181 $105,123 $72,131 $15,801 $2,561 $6,112
- --------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding at end
of period (in thousands) 24,834 29,560 12,162 11,607 3,734 459 1,397
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.75% 8.22% 7.93%(8) 6.80% 5.91% 4.81%(8) 6.51%(8)
Expenses .96% .56%(5) .08%(5)(8) 1.71% 1.79% 1.87%(8) 1.80%(8)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(9) 78% 73% 471% 261% 226% 74% 261%
<FN>
7. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns. Total returns are not annualized for
periods of less than one full year.
8. Annualized.
9. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1995 were $1,205,339,188 and $991,409,240, respectively.
See accompanying Notes to Financial Statements.
</FN>
</TABLE>
13 Oppenheimer Limited-Term Government Fund
<PAGE>
- -----------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
================================================================================
1. SIGNIFICANT Oppenheimer Limited-Term Government Fund (the Fund), is
ACCOUNTING registered under the Investment Company Act of 1940, as
POLICIES amended, as a diversified, open-end management investment
company. The Fund's investment advisor is Oppenheimer
Management Corporation (the Manager). The Fund offers Class
A, Class B and Class C shares. Class A shares are sold with
a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All three
classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own
distribution and/or service plan, expenses directly attri-
butable to a particular class and exclusive voting rights
with respect to matters affecting a single class. Class B
shares will automatically convert to Class A shares six
years after the date of purchase. The following is a summary
of significant accounting policies consistently followed by
the Fund.
------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the
close of the New York Stock Exchange on each trading day.
Listed and unlisted securities for which such information is
regularly reported are valued at the last sale price of the
day or, in the absence of sales, at values based on the
closing bid or asked price or the last sale price on the
prior trading day. Long-term and short-term "non-money
market" debt securities are valued by a portfolio pricing
service approved by the Board of Trustees. Such securities
which cannot be valued by the approved portfolio pricing
service are valued using dealer-supplied valuations provided
the Manager is satisfied that the firm rendering the quotes
is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures
established by the Board of Trustees to determine fair value
in good faith. Short-term "money market type" debt securi-
ties having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted
for amortization to maturity of any premium or discount.
Forward contracts are valued based on the closing prices of
the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable
bank or dealer. Options are valued based upon the last sale
price on the principal exchange on which the option is
traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading
date if it is within the spread between the closing bid and
asked prices. If the last sale price is outside the spread,
the closing bid or asked price closest to the last reported
sale price is used.
------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and
payment for securities that have been purchased by the Fund
on a forward commitment or when-issued basis can take place
a month or more after the transaction date. During the
period, such securities do not earn interest, are subject to
market fluctuation and may increase or decrease in value
prior to their delivery. The Fund maintains, in a segregated
account with its custodian, assets with a market value equal
to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may
increase the volatility of the Fund's net asset value to the
extent the Fund makes such purchases while remaining
substantially fully invested. As of September 30, 1995, the
Fund had entered into outstanding when-issued or forward
commitments of $110,753,455.
In connection with its ability to purchase securities
on a when-issued or forward commitment basis, the Fund may
enter into mortgage "dollar-rolls" in which the Fund sells
securities for delivery in the current month and simultane-
ously contracts with the same counterparty to repurchase
similar (same type, coupon and maturity) but not identical
securities on a specified future date. The Fund records each
dollar-roll as a sale and a new purchase transaction.
------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES.
Income, expenses (other than those attributable to a
specific class) and gains and losses are allocated daily to
each class of shares based upon the relative proportion of
net assets represented by such class. Operating expenses
directly attributable to a specific class are charged
against the operations of that class.
------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with
provisions of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income, including any net realized gain on invest-
ments not offset by loss carryovers, to shareholders. There-
fore, no federal income or excise tax provision is required.
At September 30, 1995, the Fund had available for federal
income tax purposes an unused capital loss carryover of
approximately $5,747,000, expiring between 1996 and 2002.
------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare
dividends separately for Class A, Class B and Class C 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 invest-
ments, if any, will be declared at least once each year.
14 Oppenheimer Limited-Term Government Fund
<PAGE>
================================================================================
1. SIGNIFICANT CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net invest-
ACCOUNTING ment income (loss) and net realized gain (loss) may differ
POLICIES for financial statement and tax purposes primarily because
(CONTINUED) of paydown gains and losses. The character of the distribu-
tions made during the year from net investment income or net
realized gains may differ from their ultimate characteriza-
tion for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or
realized gain (loss) was recorded by the Fund.
During the year ended September 30, 1995, the Fund
changed the classification of distributions to shareholders
to better disclose the differences between financial state-
ment amounts and distributions determined in accordance with
income tax regulations. Accordingly, during the year ended
September 30, 1995, amounts have been reclassified to
reflect an increase in undistributed net investment income
of $233,410, a decrease in paid-in capital of $19,870, and
an increase in accumulated net realized loss on investments
of $213,540.
------------------------------------------------------------
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.
================================================================================
2. SHARES OF The Fund has authorized an unlimited number of no par value
BENEFICIAL shares of beneficial interest of each class. Transactions
INTEREST in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1995(1) YEAR ENDED SEPTEMBER 30, 1994
-------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------
Class A:
Sold 18,462,358 $ 191,899,002 11,073,786 $ 117,379,950
Dividends reinvested 1,399,150 14,547,766 817,206 8,727,397
Issued in connection with the
acquisition of Oppenheimer
Strategic Short-Term Income Fund--Note 6 1,615,189 16,862,577 -- --
Redeemed (10,247,223) (106,528,778) (6,191,329) (66,037,908)
----------- ------------- ----------- -------------
Net increase 11,229,474 $ 116,780,567 5,699,663 $ 60,069,439
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
---------------------------------------------------------------------------------------------------------------
Class B:
Sold 8,638,202 $ 89,826,104 3,707,813 $ 39,327,532
Dividends reinvested 310,362 3,231,003 68,487 725,648
Issued in connection with the
acquisition of Oppenheimer
Strategic Short-Term Income Fund--Note 6 810,988 8,466,715 -- --
Redeemed (1,886,739) (19,623,804) (501,397) (5,315,576)
----------- ------------- ----------- -------------
Net increase 7,872,813 $ 81,900,018 3,274,903 $ 34,737,604
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
---------------------------------------------------------------------------------------------------------------
Class C:
Sold 1,483,730 $ 15,478,180 -- $ --
Dividends reinvested 20,278 211,531 -- --
Redeemed (107,363) (1,119,776) -- --
----------- ------------- ----------- -------------
Net increase 1,396,645 $ 14,569,935 -- $ --
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
<FN>
1. For the year ended September 30, 1995 for Class A and Class B shares and for the period from
February 1, 1995 (inception of offering) to September 30, 1995 for Class C shares.
</FN>
</TABLE>
================================================================================
3. UNREALIZED GAINS At September 30, 1995, net unrealized depreciation on
AND LOSSES ON investments of $3,284,970 was composed of gross appreciation
INVESTMENTS of $6,315,939, and gross depreciation of $9,600,909.
================================================================================
4. MANAGEMENT FEES Management fees paid to the Manager were in accordance with
AND OTHER the investment advisory agreement with the Fund which
TRANSACTIONS provides for a fee of .50% on the first $100 million of
WITH AFFILIATES average annual 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 state regulatory limit on Fund
expenses.
15 Oppenheimer Limited-Term Government Fund
<PAGE>
-------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
-------------------------------------------
================================================================================
4. MANAGEMENT FEES The Manager acts as the accounting agent for the Fund at an
AND OTHER annual fee of $12,000, plus out-of-pocket costs and expenses
TRANSACTIONS reasonably incurred.
WITH AFFILIATES For the year ended September 30, 1995, commissions
(CONTINUED) (sales charges paid by investors) on sales of Class A shares
totaled $2,605,966, of which $681,961 was retained by Oppen-
heimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker
/dealer. Sales charges advanced to broker/dealers by OFDI on
sales of the Fund's Class B shares totaled $2,213,585, of
which $101,273 was paid to an affiliated broker/dealer.
During the year ended September 30, 1995, OFDI received
contingent deferred sales charges of $170,089 and $6,307,
respectively, upon redemption of Class B and Class C shares
as reimbursement for sales commissions advanced by OFDI at
the time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of
the Manager, is the transfer and shareholder servicing agent
for the Fund, and for other registered investment companies.
OSS's total costs of providing such services are allocated
ratably to these companies.
Under separate approved plans, each class may expend up
to .25% of its net assets annually to reimburse OFDI for
costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other
institutions. In addition, Class B and Class C shares are
subject to an asset-based sales charge of .75% of net assets
annually, to reimburse OFDI for sales commissions paid from
its own resources at the time of sale and associated
financing costs. In the event of termination or discontinu-
ance of the Class B or Class C plan, the Board of Trustees
may allow the Fund to continue payment of the asset-based
sales charge to OFDI for distribution expenses incurred on
Class B or Class C shares sold prior to termination or
discontinuance of the plan. At September 30, 1995, OFDI had
incurred unreimbursed expenses of $3,744,614. During the
year ended September 30, 1995, OFDI paid $24,157 and $4,892,
respectively, to an affiliated broker/dealer as reimburse-
ment for Class A and Class B personal service and mainte-
nance expenses and retained $673,962 and $39,445,
respectively, as reimbursement for Class B and Class C sales
commissions and service fee advances, as well as financing
costs.
================================================================================
5. PUT OPTION The Fund may buy and sell put and call options, or write
ACTIVITY covered put and call options on portfolio securities in
order to produce incremental earnings or protect against
changes in the value of portfolio securities.
The Fund generally purchases put options or writes
covered call options to hedge against adverse movements in
the value of portfolio holdings. When an option is written,
the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon
exercise of the option.
Options are valued daily based upon the last sale price
on the principal exchange on which the option is traded and
unrealized appreciation or depreciation is recorded. The
Fund will realize a gain or loss upon the expiration or
closing of the option transaction. When an option is
exercised, the proceeds on sales for a written call option,
the purchase cost for a written put option, or the cost of
the security for a purchased put or call option is adjusted
by the amount of premium received or paid.
In this report, securities designated to cover
outstanding call options are noted in the Statement of
Investments. Shares subject to call, expiration date,
exercise price, premium received and market value are
detailed in a footnote to the Statement of Investments.
Options written are reported as a liability in the Statement
of Assets and Liabilities. Gains and losses are reported in
the Statement of Operations.
The risk in writing a call option is that the Fund
gives up the opportunity for profit if the market price of
the security increases and the option is exercised. The risk
in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund
pays a premium whether or not the option is exercised. The
Fund also has the additional risk of not being able to enter
into a closing transaction if a liquid secondary market does
not exist.
<TABLE>
<CAPTION>
Written option activity for the year ended September 30, 1995 was as follows:
NUMBER OF AMOUNT OF
PUT OPTION ACTIVITY OPTIONS PREMIUMS
<S> <C> <C>
------------------------------------------------------------------------------------------
Options outstanding at September 30, 1994 60,000 $121,875
------------------------------------------------------------------------------------------
Options written -- --
------------------------------------------------------------------------------------------
Options expired prior to exercise -- --
------------------------------------------------------------------------------------------
Options closed (60,000) (121,875)
------- --------
Options outstanding at September 30, 1995 -- $ --
------- --------
------- --------
</TABLE>
16 Oppenheimer Limited-Term Government Fund
<PAGE>
================================================================================
6. ACQUISITION OF On September 22, 1995, the Fund acquired all of the net
OPPENHEIMER assets of Oppenheimer Strategic Short-Term Income Fund,
STRATEGIC pursuant to an Agreement and Plan of Reorganization approved
SHORT-TERM by the Oppenheimer Strategic Short-Term Income Fund share-
INCOME FUND holders on February 28, 1995. The Fund issued 1,615,189 and
810,988 shares of beneficial interest for Class A and Class
B, respectively, valued at $16,862,577 and $8,466,715 in
exchange for the net assets, resulting in combined Class A
net assets of $342,039,434 and Class B net assets of
$118,635,825 on September 22, 1995. The exchange qualified
as a tax-free reorganization for federal income tax
purposes.
================================================================================
7. FUTURES The Fund may buy and sell interest rate futures contracts
CONTRACTS in order to gain exposure to or protect against changes in
interest rates. The Fund may also buy or write put or call
options on these futures contracts.
The Fund generally sells futures contracts to hedge
against increases in interest rates and the resulting nega-
tive effect on the value of fixed rate portfolio securities.
The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more
efficient or cost effective than actually buying fixed
income securities.
Upon entering into a futures contract, the Fund is
required to deposit either cash or securities in an amount
(initial margin) equal to a certain percentage of the
contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin
payments are equal to the daily changes in the contract
value and are recorded as unrealized gains and losses.
The Fund recognizes a realized gain or loss when the
contract is closed or expires.
Securities held in collateralized accounts to cover
initial margin requirements on open futures contracts are
noted in the Statement of Investments. The Statement of
Assets and Liabilities reflects a receivable or payable for
the daily mark to market for variation margin.
Risks of entering into futures contracts (and related
options) include the possibility that there may be an
illiquid market and that a change in the value of the
contract or option may not correlate with changes in the
value of the underlying securities.
<TABLE>
<CAPTION>
At September 30, 1995, the Fund had outstanding futures contracts to sell debt
securities as follows:
Expiration Number of Valuation as of Unrealized
Security Date Futures Contracts September 30, 1995 Appreciation
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
U.S. Treasury Nts. 12/95 125 $25,902,343 $7,813
</TABLE>
17 Oppenheimer Limited-Term Government Fund
<PAGE>
----------------------------
INDEPENDENT AUDITORS' REPORT
----------------------------
================================================================================
The Board of Trustees and Shareholders of Oppenheimer
Limited-Term Government Fund:
We have audited the accompanying statement of assets and
liabilities, including the statement of investments, of
Oppenheimer Limited-Term Government Fund as of September 30,
1995, the related statement of operations for the year then
ended, the statements of changes in net assets for the years
ended September 30, 1995 and 1994, and the financial high-
lights for the period October 1, 1989 (commencement of oper-
ations) to September 30, 1995. These financial statements
and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an
opinion on these financial statements and financial high-
lights based on our audits. The financial highlights (except
for total return) for the period March 10, 1986 (commence-
ment of operations) to September 30, 1989 were audited by
other auditors whose report dated November 2, 1989,
expressed an unqualified opinion on those financial high-
lights.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial high-
lights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures
included confirmation of securities owned at September 30,
1995 by correspondence with the custodian and brokers; and
where confirmations were not received from brokers, we per-
formed other auditing procedures. An audit also includes
assessing the accounting principles used and significant
estimates made by management as well as evaluating the over-
all financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial
highlights present fairly, in all material respects, the
financial position of Oppenheimer Limited-Term Government
Fund at September 30, 1995, the results of its operations,
the changes in its net assets, and the financial highlights
for the respective stated periods, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 20, 1995
18 Oppenheimer Limited-Term Government Fund
<PAGE>
-------------------------------------------
FEDERAL INCOME TAX INFORMATION (Unaudited)
-------------------------------------------
================================================================================
In early 1996, shareholders will receive information regard-
ing all dividends and distributions paid to them by the Fund
during calendar year 1995. Regulations of the U.S. Treasury
Department require the Fund to report this information to
the Internal Revenue Service.
None of the dividends paid by the Fund during the fis-
cal year ended September 30, 1995 are eligible for the cor-
porate dividend-received deduction.
The foregoing information is presented to assist share-
holders in reporting distributions received from the Fund to
the Internal Revenue Service. Because of the complexity of
the federal regulations which may affect your individual tax
return and the many variations in state and local tax regu-
lations, we recommend that you consult your tax advisor for
specific guidance.
19 Oppenheimer Limited-Term Government Fund
<PAGE>
---------------------------------
SHAREHOLDER MEETING (Unaudited)
------------------- -----------
================================================================================
On July 10, 1995, a special shareholder meeting was held at
which the nine Trustees identified below were elected, the
selection of Deloitte & Touche LLP as the independent
certified public accountants and auditors of the Fund for
the fiscal year beginning October 1, 1994 was ratified
(Proposal No. 1), the Fund's amended Class B 12b-1 Distri-
bution and Service Plan was approved by Class B shareholders
(Proposal No. 2), the Fund's amended Class C 12b-1 Distri-
bution and Service Plan was approved by Class C shareholders
(Proposal No. 3), as described in the Fund's proxy statement
for that meeting. The following is a report of the votes
cast:
<TABLE>
<CAPTION>
NOMINEE FOR AGAINST TOTAL
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
Robert G. Avis 17,429,836.73 231,235.33 17,661,072.060
William A. Baker 17,322,197.58 338,874.47 17,661,072.060
Charles Conrad, Jr 17,413,537.11 247,534.94 17,661,072.060
Jon S. Fossel 17,405,755.43 255,316.62 17,661,072.060
Raymond J. Kalinowski 17,425,374.78 235,697.27 17,661,072.060
C. Howard Kast 17,381,019.31 280,052.74 17,661,072.060
Robert M. Kirchner 17,389,747.06 271,325.00 17,661,072.060
Ned M. Steel 17,367,935.50 293,136.55 17,661,072.060
James C. Swain 17,433,835.23 227,236.82 17,661,072.060
</TABLE>
<TABLE>
<CAPTION>
WITHHELD/ BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTES TOTAL
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
Proposal No. 1 16,879,066.704 105,333.865 676,671.491 503,036 17,661,072.060
Proposal No. 2 3,472,991.426 77,674.151 181,783.468 122,401 3,732,449.045
Proposal No. 3 214,500.463 -- -- 7,907 214,500.463
</TABLE>
20 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
Robert J. Bishop, Assistant Treasurer
Scott Farrar, 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 LLP
================================================================================
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppen-
heimer Limited-Term Government Fund. This report must
be preceded or accompanied by a Prospectus of Oppen-
heimer Limited-Term Government Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obliga-
tions of any bank, are not guaranteed by any bank, and
are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of
the principal amount invested.
21 Oppenheimer Limited-Term Government Fund
<PAGE>
- -----------------------
OPPENHEIMERFUNDS FAMILY
- -----------------------
================================================================================
OppenheimerFunds offers over 30 funds designed to fit virtually
every investment goal. Whether you're investing for retirement,
your children's education or tax-free income, we have the funds
to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfor-
table knowing that you are investing with a respected financial
institution with over 35 years of experience in helping people
just like you reach their financial goals. And you're investing
with a leader in global, growth stock and flexible fixed income
investments--with over 2.8 million shareholder accounts and more
than $38 billion under Oppenheimer's management and that of our
affiliates.
At OppenheimerFunds, we don't charge a fee to exchange
shares. And you can exchange shares easily by mail or by tele-
phone.(1) For more information on Oppenheimer funds, please con-
tact 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.
================================================================================
STOCK FUNDS Discovery Fund Global Fund
Global Emerging Growth Fund Oppenheimer Fund
Target Fund Value Stock Fund
Growth Fund Gold & Special Minerals Fund
================================================================================
STOCK & BOND Main Street Income & Growth Fund Equity Income Fund
FUNDS Total Return Fund Asset Allocation Fund
Global Growth & Income Fund Strategic Income & Growth Fund
================================================================================
BOND FUNDS High Yield Fund Bond Fund
Champion Income Fund U.S. Government Trust
Strategic Income Fund Limited-Term Government Fund
International Bond Fund
================================================================================
TAX-EXEMPT New York Tax-Exempt Fund(2) New Jersey Tax-Exempt Fund(2)
FUNDS California Tax-Exempt Fund(2) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(2) Insured Tax-Exempt Fund
Florida Tax-Exempt Fund(2) Intermediate Tax-Exempt Fund
================================================================================
MONEY MARKET Money Market Fund Cash Reserves
FUNDS
1. Exchange privileges are subject to change or termination.
Shares may be exchanged only to the same class of eligible funds.
2. Available only to investors in certain states.
Oppenheimer funds are distributed by Oppenheimer Funds
Distributor, Inc., Two World Trade Center, New York, NY
10048-0203.
-c-Copyright 1995 Oppenheimer Management Corporation. All
rights reserved.
22 Oppenheimer Limited-Term Government Fund
<PAGE>
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
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1-800-525-7048
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TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
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1-800-852-8457
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PHONELINK
24 hours a day, automated
information and transactions
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1-800-533-3310
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TELECOMMUNICATIONS DEVICE
FOR THE DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
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1-800-843-4461
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OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
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1-800-835-3104
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RA0855.001.0995 November 30, 1995
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"HOW MAY I HELP YOU?" [PHOTO]
Jennifer Leonard, Customer Service Representative
Oppenheimer Shareholder Services
As an Oppenheimer funds shareholder, you have some privileges. Whether it's
automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer fund's transfer agent,
Oppenheimer Shareholder Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
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[LOGO] OPPENHEIMERFUNDS-C- --------------
Oppenheimer Funds Distributor, Inc. Bulk Rate
P.O. Box 5270 U.S. Postage
Denver, CO 80217-5270 PAID
Permit No. 469
Denver, CO
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