<PAGE> 1
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
SEMIANNUAL REPORT MARCH 31, 1997
[PHOTO]
"WE NEED OUR
MONEY TO WORK
HARD AND WE
NEED TO FEEL
COMFORTABLE
ABOUT HOW
IT'S INVESTED."
[OPPENHEIMERFUNDS LOGO]
OPPENHEIMERFUNDS
THE RIGHT WAY TO INVEST
<PAGE> 2
THIS FUND IS FOR PEOPLE WHO WANT HIGH RETURN
POTENTIAL WITHOUT GIVING UP THE COMFORT OF A
SHORT-TERM INVESTMENT.(1)
NEWS
STANDARDIZED YIELDS
For the 30 Days Ended 3/31/97:(5)
Class A
6.19%
Class B
5.66%
Class C
6.65%
"THE FUND'S CLASS A SHARES ARE RANKED **** BY MORNINGSTAR MUTUAL FUNDS AMONG
1,172 (3-YEAR), 630 (5-YEAR) AND 258 (10-YEAR) TAXABLE BOND FUNDS FOR THE
COMBINED 3-, 5- AND 10-YEAR PERIODS ENDED 3/31/97.(6)
HOW YOUR FUND IS MANAGED
Oppenheimer Limited-Term Government Fund seeks high current return by investing
in a portfolio of fixed income securities, with an emphasis on 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 under normal conditions.
PERFORMANCE
Total returns for the six months ended 3/31/97 were 2.83% for Class A shares,
2.45% for Class B shares and 2.46% for Class C shares, without deducting sales
charges.(3)
Your Fund's average annual total returns for Class A shares for the
1-, 5- and 10-year periods ended 3/31/97 were 1.88%, 5.46% and 7.12%,
respectively. For Class B shares, average annual total returns for the 1-year
period ended 3/31/97 and since inception on 5/3/93 were 0.84% and 3.91%,
respectively. For Class C shares, average annual total returns for the 1-year
period ended 3/31/97 and since inception on 2/1/95 were 3.80% and 5.87%,
respectively.(4)
OUTLOOK
We believe this is an opportune time for the bond market. If the economic
scenario continues as it is today, with moderate growth and low inflation, bond
investments should thrive.
David Rosenberg, Portfolio
Manager March 31, 1997
Total returns include change in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
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. Includes change in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
4. Class A returns include 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 include the
applicable contingent deferred sales charge of 4% (1 year) and 2% (since
inception). Class C returns include the 1% contingent deferred sales charge for
the 1-year result. The Fund's investment policy of limiting average portfolio
duration was adopted on 5/1/94, and the Fund had a different adviser prior to
4/7/90. An explanation of the different total returns is in the Fund's
prospectus. Class B and Class C shares are subject to an annual 0.75%
asset-based sales charge.
5. Standardized yield is based on net investment income for the 30-day period
ended 3/31/97. Falling net asset values will tend to artificially raise yields.
6. Source: Morningstar Mutual Funds, 3/31/97. Morningstar Inc. ranks mutual
funds in broad investment classes, based on risk-adjusted investment return
after considering sales charges and expenses. Return and risk are measured as
performance above and below 90-day U.S. Treasury bill returns, respectively.
Current star rankings are based on the weighted average of 3-, 5- and 10-year
(if applicable) rankings for a fund or class and are subject to change monthly.
The top 10%: 5 stars. Next 22.5%: 4 stars. Middle 35%: 3 stars. Next 22.5%: 2
stars. Bottom 10%: 1 star. The Fund's Class A shares are ranked 3 stars
(3-year), 4 stars (5-year) and 4 stars (10-year), weighted 20%/30%/50%,
respectively, and 3 stars (1-year) among 1,696 funds.
2 Oppenheimer Limited-Term Government Fund
<PAGE> 3
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Limited-Term
Government Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Limited-Term
Government Fund
DEAR SHAREHOLDER,
As we enter the second quarter, we are optimistic regarding the prospects for
fixed income investors who maintain a long-term perspective. While U.S.
economic policy makers face a considerable challenge in 1997, maintaining the
delicate balance between moderate growth and low inflation, we believe current
political and economic stability creates a favorable environment for long-term
investments. In fact, the current economic trend appears to follow the pattern
that emerged in early 1996.
The similarities between the first few months of 1996 and those of
1997 are striking. In both cases, economic growth was slightly more robust than
expected, and many experts were concerned that an overheating economy would
generate inflation. On March 18th, as a preemptive move against inflation,
Federal Reserve Board Chairman Alan Greenspan raised short-term interest rates
by a modest amount. This was the first change in monetary policy since January
1996, and the first increase in short-term interest rates in over two years.
Today, it appears this initial interest-rate increase may not be the last, and
investors remain concerned about high stock market valuations and the potential
re-emergence of inflation.
At OppenheimerFunds, we are optimistic regarding the long-term
expectations for fixed income markets. We maintain that economic growth will
not accelerate substantially but should continue at a modest rate. In addition,
as investors in general become more realistic about stock market returns, we
foresee fixed income investments becoming attractive relative to potentially
more volatile investments in equities.
In the near term, select yield-oriented securities, such as
mortgage-backed and foreign securities--particularly those in emerging
markets--are well-positioned for producing higher returns and current income.
That's because mortgage-backed securities perform well in a rising
interest-rate environment, and emerging market securities tend to be less
sensitive to U.S. interest-rate and currency movements. Our long-term outlook
is that we may see an increase in the demand for U.S. fixed income products
which could drive yields lower and make it difficult to maintain today's income
stream. However, this increased demand could provide the fixed income investor
with enhanced long-term investment opportunities.
Your portfolio managers discuss the outlook for your Fund in light of
these broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds, The Right Way to Invest. We look forward to helping you reach
your investment goals in the future.
/s/ JAMES C. SWAIN /s/ BRIDGET A. MACASKILL
James C. Swain Bridget A. Macaskill
April 21, 1997
3 Oppenheimer Limited-Term Government Fund
<PAGE> 4
[PHOTO]
Q + A
Q WHAT INVESTMENTS HAVE MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
AN INTERVIEW WITH YOUR FUND'S MANAGERS.
HOW DID THE FUND PERFORM?
Over the past six months, interest rates have remained relatively stable,
creating a more favorable environment for bonds. Oppenheimer Limited-Term
Government Fund ended the period in the top quartile of its peer group, ranking
8th out of 95 short-intermediate U.S. government funds, according to Lipper
Analytical Services, for the 1-year period ended 3/31/97.(1)
[PHOTO]
WHAT FACTORS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE?
First, during the last six months, mortgage-backed securities have performed
exceptionally well. And because a large portion of our portfolio-more than 70
percent at certain times during the period--was invested in mortgage-backed
securities, we were able to profit from these holdings.(2)
In order to understand the success of mortgage-backed securities, we
need to look back at their activity over the past five years. In 1993, when
interest rates were at a 20-year low, many homeowners chose to refinance their
mortgages, a trend that ultimately created a wave of prepayment risk for
investors in mortgage-backed securities. By 1994, rates had stabilized and
prepayment risk was not an issue. Because we gained more knowledge each time
interest rates fell, we were able to predict the outcome of prepayment risk
with a greater degree of certainty. By late 1996--when we had a mini-rally in
bonds at the end of the year--and into early 1997, this knowledge helped us
quickly adapt to interest-rate declines and respond accordingly.
The second contributing factor to the Fund's strong performance is low
interest-rate volatility. A lesser degree of volatility translates into less
interest-rate variability which is highly
1. Source: Lipper Analytical Services, 3/31/97. Oppenheimer Limited-Term
Government Fund's Class A shares were 6th out of 48 funds in its category for
the 5-year period ended 3/31/97 and 2nd out of 11 funds for the 10-year period
ended 3/31/97. Oppenheimer Limited-Term Government Fund is characterized by
Lipper as a short-intermediate U.S. government fund. Lipper rankings are based
on total return and do not take sales charges into consideration.
2. The Fund's portfolio is subject to change.
4 Oppenheimer Limited-Term Government Fund
<PAGE> 5
FACING PAGE
Top left: David Rosenberg,
Portfolio Manager
Top right: Donna Compert, Member
of Fixed Income Investments Team
Bottom: Len Darling, Executive VP,
Director of Fixed Income Investments
THIS PAGE
Top: Michael Maciolek, Member
of Fixed Income Investments Team
Bottom: David Rosenberg with
Leslie Falconio and Gina Palmieri,
Members of Fixed Income
Investments Team
A MORTGAGE-BACKED SECURITIES HAVE PERFORMED EXCEPTIONALLY WELL.
constructive to our mortgage-backed securities portfolio.
WHAT IS THE AVERAGE DURATION OF THE HOLDINGS IN THIS FUND?
Duration, by definition, is the measure of the portfolio's price sensitivity to
changes in interest rates. Oppenheimer Limited-Term Government Fund maintains a
duration somewhere between 2 1/2 to 3 years. By staying in this range, we are
able to earn a yield that may exceed other short-term investment alternatives.
At the same time, we can build a total return and yield profile from
investments that provide higher yield than U.S. Treasuries--such as
mortgage-backed securities and collateralized mortgage obli-gations (CMO's).(3)
WHAT ARE YOU CURRENTLY TARGETING?
We plan to maintain an approach designed to maximize yield while minimizing
portfolio risk. In addition, we have continued to increase our exposure to
mortgage-backed securities in order to add more yield to the Fund.
WHAT IS YOUR OUTLOOK?
We believe this is an opportune time for the bond market. If the economic
scenario continues as it is today, with moderate growth and low inflation, bond
investments should thrive. On the other hand, should the stock market
experience a further correction, interest rates drop and inflation remain low,
as we expect it will, bonds are poised to perform well. Given these two
positive outcomes, we believe the outlook for government bonds remains very
optimistic.
[PHOTO]
[PHOTO]
3. These securities involve risks from early prepayment of underlying mortgages
that can affect the Fund's income and principal value.
5 Oppenheimer Limited-Term Government Fund
<PAGE> 6
STATEMENT OF INVESTMENTS March 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--78.1%
- ----------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--78.1%
- ----------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--64.7%
Federal Home Loan Mortgage Corp.:
Principal-Only Stripped Mtg.-Backed Security, Trust 179, 3.954%, 9/1/26(1) $ 6,936,770 $ 4,542,501
Collateralized Mtg. Obligations, Gtd. Multiclass Mtg.
Participation Certificates:
Series 1060, Cl. D, 8.20%, 7/15/19 202,350 202,919
Series 1065, Cl. H, 8.50%, 10/15/19 5,567,344 5,621,237
Series 1092, Cl. K, 8.50%, 6/15/21 16,000,000 16,575,000
Series 1097, Cl. L, 8.60%, 2/15/06 2,443,670 2,476,489
Series 1252, Cl. J, 8%, 5/15/22 7,000,000 7,032,812
Series 1343, Cl. LA, 8%, 8/15/22 9,100,000 9,182,469
Series 1360, Cl. PK, 10%, 12/15/20 15,030,000 16,786,556
Series 1455, Cl. J, 7.50%, 12/15/22 15,000,000 14,784,300
Series 151, Cl. F, 9%, 5/15/21 2,500,000 2,651,562
Series 5, Cl. Z, 9%, 5/15/19 2,904,693 3,024,966
10%, 8/1/21 2,147,563 2,347,555
10%, 8/1/21 1,259,785 1,377,103
11.50%, 6/1/20 1,942,933 2,239,230
11.75%, 1/1/16--4/1/19 2,950,469 3,386,183
13%, 8/1/15 3,796,971 4,546,873
9.25%, 11/1/08 414,322 434,736
Interest-Only Stripped Mtg.-Backed Security:
Trust 177, Cl. B, 13.097%--15.717%, 7/1/26(2) 149,833,633 55,859,851
Trust 179, 16.793%, 9/1/26(2) 6,936,770 2,443,044
---------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
11%, 11/1/15--5/15/19 16,747,606 18,863,763
11.25%, 6/1/14 1,444,032 1,612,353
11.50%, 8/15/13 1,903,795 2,195,909
11.75%, 9/1/03--11/1/15 589,621 661,231
12%, 1/1/16--4/15/19 7,401,362 8,609,084
13%, 8/1/10--12/1/15 5,455,424 6,532,198
7%, 8/1/25--2/1/27 20,442,430 19,551,682
7.50%, 3/15/12(3) 29,250,000 29,259,067
7.50%, 4/25/27(3) 76,200,000 74,771,250
7.50%, 6/1/25--8/1/25 11,432,232 11,234,799
8.50%, 4/1/27(3) 19,500,000 19,963,125
9%, 8/1/19 740,458 782,450
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates,
Series 1992-34, Cl. G, 8%, 3/25/22 2,940,000 2,922,536
Interest-Only Stripped Mtg.-Backed Security, Trust 254, Cl. 2, 14.631%, 1/1/24(2) 18,752,469 6,671,777
STRIPS, Pass-Through Certificates, Trust 6, Cl. IP, 11.50%, 3/1/09 2,185,006 2,416,465
Gtd. Real Estate Mtg. Investment Conduit Pass-Through Certificates:
12.50%, 12/1/15 3,279,710 3,892,410
8%, 1/1/23 249,322 252,185
Trust 1989-4, Cl. D, 10%, 2/25/19 6,000,000 6,648,720
Trust 1990-143, Cl. J, 8.75%, 12/25/20 7,500,000 7,792,950
Trust 1990-18, Cl. K, 9.60%, 3/25/20 5,000,000 5,442,187
Trust 1991-169, Cl. PK, 8%, 10/25/21 595,000 607,644
</TABLE>
6 Oppenheimer Limited-Term Government Fund
<PAGE> 7
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FHLMC/FNMA/SPONSORED
(CONTINUED)
Trust 1991-170, Cl. E, 8%, 12/25/06 $ 2,500,000 $ 2,556,250
Trust 1992-169, Cl. L, 7%, 9/25/22 5,500,000 5,051,406
Trust 1995-4, Cl. PC, 8%, 5/25/25 4,806,220 4,866,298
Principal-Only Stripped Mtg.-Backed Security:
Trust 148, Cl. G, Zero Coupon, 5.731%, 8/25/23(1) 8,891,258 4,920,756
Trust 267, Cl. 1, Zero Coupon, 0.484%, 10/1/24(1) 20,000,357 13,837,748
------------
417,431,629
- ----------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--13.4%
Government National Mortgage Assn.:
10.50%, 1/15/16--7/15/21 2,937,016 3,241,789
11%, 2/15/98--10/20/19 7,454,301 8,332,030
11.50%, 1/15/13--5/15/13 694,836 791,409
13%, 2/15/11--9/15/14 58,493 68,661
6%, 5/20/27(3) 49,500,000 49,159,688
7.50%, 10/15/25--10/15/26 18,396,894 18,049,341
8%, 9/15/07 140,872 144,322
8.50%, 9/15/21 64,250 66,627
9.50%, 9/15/17 148,925 160,930
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates,
Series 1994-5, Cl. PQ, 7.493%, 7/16/24 6,900,000 6,654,153
------------
86,668,950
------------
Total Mortgage-Backed Obligations (Cost $509,175,624) 504,100,579
==================================================================================================================================
U.S. GOVERNMENT OBLIGATIONS--46.2%
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
8.125%, 8/15/19 218,000 239,119
STRIPS, Zero Coupon, 7.342%, 11/15/21(4) 10,000,000 1,699,149
STRIPS, Zero Coupon, 6.897%, 8/15/22(4) 19,400,000 3,145,165
---------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
6%, 8/31/97(5) 99,995,000 100,057,588
6.375%, 8/15/02 3,712,000 3,644,723
6.875%, 3/31/00 7,840,000 7,893,907
7.25%, 2/15/98 63,100,000 63,711,310
7.50%, 10/31/99--5/15/02 16,500,000 16,958,453
7.75%, 12/31/99--1/31/00 51,780,000 53,284,880
8%, 5/15/01 9,400,000 9,825,942
8.875%, 11/15/97 36,000,000 36,641,266
9.25%, 8/15/98 1,500,000 1,557,657
------------
Total U.S. Government Obligations (Cost $302,469,332) 298,659,159
------------
</TABLE>
7 Oppenheimer Limited-Term Government Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
==================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENT--1.9%
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with Goldman, Sachs & Co., 6.35%,
dated 3/31/97, to be repurchased at $12,502,205 on 4/1/97,
collateralized by U.S. Treasury Nts., 5.875%, 8/15/98,
with a value of $12,768,427 (Cost $12,500,000) $12,500,000 $ 12,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $824,144,956) 126.2% 815,259,738
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (26.2) (169,356,691)
----------- ------------
NET ASSETS 100.0% $645,903,047
=========== ============
</TABLE>
1. 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.
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 prepayment
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. When-issued security to be delivered and settled after March 31,
1997.
4. For zero coupon bonds, the interest rate shown is the effective
yield on the date of purchase.
5. Securities with an aggregate market value of $2,001,252 are held in
collateralized accounts to cover initial margin requirements on open
futures sales contracts. See Note 5 of Notes to Financial Statements.
See accompanying Notes to Financial Statements.
8 Oppenheimer Limited-Term Government Fund
<PAGE> 9
STATEMENT OF ASSETS AND LIABILITIES March 31, 1997 (Unaudited)
<TABLE>
<S> <C>
==================================================================================================================================
ASSETS
Investments, at value (cost $824,144,956)--see accompanying statement $815,259,738
---------------------------------------------------------------------------------------------------------------------------
Cash 36,237
---------------------------------------------------------------------------------------------------------------------------
Receivables:
Investments sold 17,819,375
Interest and principal paydowns 7,622,009
Shares of beneficial interest sold 2,848,750
Daily variation on futures contracts--Note 5 86,875
---------------------------------------------------------------------------------------------------------------------------
Other 7,425
------------
Total assets 843,680,409
==================================================================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased on a when issued basis--Note 1 193,155,148
Shares of beneficial interest redeemed 3,088,661
Dividends 944,183
Distribution and service plan fees 390,856
Transfer and shareholder servicing agent fees 65,421
Daily variation on futures contracts--Note 5 4,828
Other 128,265
------------
Total liabilities 197,777,362
==================================================================================================================================
NET ASSETS $645,903,047
============
==================================================================================================================================
COMPOSITION OF
NET ASSETS
Paid-in capital $667,728,345
---------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,061,171
---------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (15,178,328)
---------------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments--Notes 3 and 5 (7,708,141)
------------
Net assets $645,903,047
============
==================================================================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $418,769,228 and 41,089,320 shares of beneficial interest outstanding) $10.19
Maximum offering price per share (net asset value plus sales charge
of 3.50% of offering price) $10.56
---------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $171,395,555 and 16,819,947 shares of beneficial interest outstanding) $10.19
---------------------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $55,738,264 and 5,476,094 shares of beneficial interest outstanding) $10.18
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Limited-Term Government Fund
<PAGE> 10
STATEMENT OF OPERATIONS For the Six Months Ended March 31, 1997 (Unaudited)
<TABLE>
<S> <C>
==================================================================================================================================
INVESTMENT INCOME
Interest $26,452,707
==================================================================================================================================
EXPENSES
Distribution and service plan fees--Note 4:
Class A 516,661
Class B 826,985
Class C 256,106
---------------------------------------------------------------------------------------------------------------------------
Management fees--Note 4 1,407,096
---------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 347,554
---------------------------------------------------------------------------------------------------------------------------
Shareholder reports 129,639
---------------------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 70,057
Class B 20,493
Class C 6,501
---------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 62,886
---------------------------------------------------------------------------------------------------------------------------
Legal and auditing fees 18,439
---------------------------------------------------------------------------------------------------------------------------
Other 14,936
------------
Total expenses 3,677,353
==================================================================================================================================
NET INVESTMENT INCOME 22,775,354
==================================================================================================================================
REALIZED AND
UNREALIZED LOSS
Net realized loss on:
Investments (2,152,021)
Closing of futures contracts (1,219,632)
------------
Net realized loss (3,371,653)
---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments (2,167,355)
------------
Net realized and unrealized loss (5,539,008)
==================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $17,236,346
============
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Limited-Term Government Fund
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1997 SEPTEMBER 30,
(UNAUDITED) 1996
==================================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 22,775,354 $ 39,979,280
---------------------------------------------------------------------------------------------------------------------------
Net realized loss (3,371,653) (8,479,349)
---------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (2,167,355) (2,255,816)
------------ ------------
Net increase in net assets resulting from operations 17,236,346 29,244,115
==================================================================================================================================
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS
Dividends from net investment income:
Class A (14,943,809) (26,704,976)
Class B (5,168,341) (8,852,431)
Class C (1,601,847) (1,884,621)
---------------------------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A -- (1,369,245)
Class B -- (503,246)
Class C -- (142,148)
==================================================================================================================================
BENEFICIAL INTEREST
TRANSACTIONS
Net increase (decrease) in net assets resulting from beneficial
interest transactions--Note 2:
Class A (15,238,144) 97,751,994
Class B 12,009,036 42,090,398
Class C 10,792,522 31,425,681
==================================================================================================================================
NET ASSETS
Total increase 3,085,763 161,055,521
---------------------------------------------------------------------------------------------------------------------------
Beginning of period 642,817,284 481,761,763
------------ -------------
End of period [including undistributed (overdistributed)
net investment income of $1,061,171 and $(186), respectively] $645,903,047 $ 642,817,284
============ =============
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Limited-Term Government Fund
<PAGE> 12
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31, 1997 YEAR ENDED SEPTEMBER 30,
(UNAUDITED) 1996 1995 1994
============================================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $10.26 $10.44 $10.40 $11.04
- ----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .38 .75 .79 .72
Net realized and unrealized gain (loss) (.09) (.19) .01 (.64)
-------- -------- -------- --------
Total income (loss) from investment operations .29 .56 .80 .08
- ----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.36) (.71) (.76) (.71)
Tax return of capital distribution -- (.03) -- (.01)
-------- -------- -------- --------
Total dividends and distributions to shareholders (.36) (.74) (.76) (.72)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.19 $10.26 $10.44 $10.40
======== ======== ======== ========
============================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 2.83% 5.54% 8.03% 0.74%
============================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $418,769 $436,889 $346,015 $227,858
- ----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $429,463 $393,727 $274,313 $190,829
- ----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 7.31%(4) 7.22% 7.64% 6.74%
Expenses 0.89%(4) 0.87% 0.91% 0.99%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 18.1% 71% 261% 226%
</TABLE>
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. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
12 Oppenheimer Limited-Term Government Fund
<PAGE> 13
<TABLE>
<CAPTION>
CLASS B CLASS C
- ------------------- ----------------------------------------------------------- ----------------------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
MARCH 31, 1997 YEAR ENDED SEPTEMBER 30, MARCH 31, 1997 YEAR ENDED SEPTEMBER 30,
1993 1992 (UNAUDITED) 1996 1995 1994 1993(2) (UNAUDITED) 1996 1995(1)
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$10.97 $10.75 $10.26 $10.44 $10.41 $11.06 $10.96 $10.25 $10.43 $10.32
- -----------------------------------------------------------------------------------------------------------------------------
.73 .81 .34 .67 .71 .62 .23 .34 .66 .45
.07 .22 (.09) (.19) .01 (.64) .10 (.09) (.18) .10
- -------- -------- -------- -------- -------- ------- ------ ------- ------ -------
.80 1.03 .25 .48 .72 (.02) .33 .25 .48 .55
(.73) (.81) (.32) (.63) (.69) (.62) (.23) (.32) (.63) (.44)
-- -- -- (.03) -- (.01) -- -- (.03) --
- -------- -------- -------- -------- -------- ------- ------ ------- ------ -------
(.73) (.81) (.32) (.66) (.69) (.63) (.23) (.32) (.66) (.44)
- -----------------------------------------------------------------------------------------------------------------------------
$11.04 $10.97 $10.19 $10.26 $10.44 $10.41 $11.06 $10.18 $10.25 $10.43
======== ======== ======== ======== ======== ======= ====== ======= ====== =======
=============================================================================================================================
7.61% 9.88% 2.45% 4.74% 7.18% (0.17)% 3.02% 2.46% 4.71% 5.47%
=============================================================================================================================
$178,944 $158,068 $171,396 $160,572 $121,178 $38,877 $5,077 $55,738 $45,356 $14,569
- -----------------------------------------------------------------------------------------------------------------------------
$161,318 $160,830 $166,131 $147,017 $ 72,131 $15,801 $2,561 $51,485 $32,349 $ 6,112
- -----------------------------------------------------------------------------------------------------------------------------
6.70% 7.44% 6.56%(4) 6.46% 6.80% 5.91% 4.81%(4) 6.54%(4) 6.34% 6.51%(4)
1.02% 0.97% 1.64%(4) 1.62% 1.71% 1.79% 1.87%(4) 1.63%(4) 1.64% 1.80%(4)
- -----------------------------------------------------------------------------------------------------------------------------
74% 154% 18.1% 71% 261% 226% 74% 18.1% 71% 261%
</TABLE>
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended March 31, 1997 were $262,358,317 and $118,785,485, respectively. For the
years ended September 30, 1995 and 1994, purchases and sales of investment
securities included mortgage "dollar-rolls."
See accompanying Notes to Financial Statements.
13 Oppenheimer Limited-Term Government Fund
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (Unaudited)
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
Oppenheimer Limited-Term Government Fund (the Fund) is registered
under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's
investment objective is to seek high current return and safety of
principal primarily through investments in U.S. Government and agency
securities. The Fund's investment adviser is OppenheimerFunds, Inc.
(the Manager). The Fund offers Class A, Class B and Class C shares.
Class A shares are sold with a front-end sales charge. Class B and
Class C shares may be subject to a contingent deferred sales charge.
All classes of shares have identical rights to earnings, assets and
voting privileges, except that each class has its own distribution
and/or service plan, expenses directly attributable to a particular
class and exclusive voting rights with respect to matters affecting a
single class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a
summary of significant accounting policies consistently followed by
the Fund.
-----------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of
the New York Stock Exchange on each trading day. Listed and unlisted
securities for which such information is regularly reported are valued
at the last sale price of the day or, in the absence of sales, at
values based on the closing bid or the last sale price on the prior
trading day. Long-term and short-term "non-money market" debt
securities are valued by a portfolio pricing service approved by the
Board of Trustees. Such securities which cannot be valued by the
approved portfolio pricing service are valued using dealer-supplied
valuations provided the Manager is satisfied that the firm rendering
the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established
by the Board of Trustees to determine fair value in good faith.
Short-term "money market type" debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined
market value) adjusted for amortization to maturity of any premium or
discount. 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 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 March 31, 1997, the Fund had entered into outstanding when-issued
or forward commitments of $193,155,148.
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 simultaneously 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.
-----------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take
possession, to have legally segregated in the Federal Reserve Book
Entry System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. The market
value of the underlying securities is required to be at least 102% of
the resale price at the time of purchase. If the seller of the
agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
-----------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, AND GAINS AND LOSSES. Income, expenses
(other than those attributable to a specific class) and gains and
losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating
expenses directly attributable to a specific class are charged against
the operations of that class.
-----------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income, including any
net realized gain on investments not offset by loss carryovers, to
shareholders. Therefore, no federal income or excise tax provision is
required.
14 Oppenheimer Limited-Term Government Fund
<PAGE> 15
================================================================================
1. SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED)
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
investments, if any, will be declared at least once each year.
-----------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income
(loss) and net realized gain (loss) may differ for financial statement
and tax purposes primarily because of paydown gains and losses. The
character of the distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to timing
of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gain
was recorded by the Fund.
-----------------------------------------------------------------------
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 options written and unrealized appreciation
and depreciation are determined on an identified cost basis, which is
the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
income and expenses during the reporting period. Actual results could
differ from those estimates.
================================================================================
2. SHARES OF
BENEFICIAL INTEREST
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1997 YEAR ENDED SEPTEMBER 30, 1996
----------------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 12,206,888 $ 125,462,224 21,513,142 $ 222,573,075
Dividends reinvested 1,091,158 11,217,395 2,005,298 20,746,018
Redeemed (14,788,474) (151,917,763) (14,074,194) (145,567,099)
----------- ------------- ----------- -------------
Net increase (decrease) (1,490,428) $ (15,238,144) 9,444,246 $ 97,751,994
=========== ============= =========== =============
---------------------------------------------------------------------------------------------------------------------
Class B:
Sold 2,909,030 $ 29,910,626 7,184,124 $ 74,533,887
Dividends reinvested 346,499 3,561,456 612,492 6,335,732
Redeemed (2,086,729) (21,463,046) (3,752,397) (38,779,221)
----------- ------------- ----------- -------------
Net increase 1,168,800 $ 12,009,036 4,044,219 $ 42,090,398
=========== ============= =========== =============
---------------------------------------------------------------------------------------------------------------------
Class C:
Sold 2,070,882 $ 21,268,687 3,837,630 $ 39,749,107
Dividends reinvested 123,200 1,264,520 153,531 1,583,682
Redeemed (1,143,527) (11,740,685) (962,267) (9,907,108)
----------- ------------- ----------- -------------
Net increase 1,050,555 $ 10,792,522 3,028,894 $ 31,425,681
=========== ============= =========== =============
</TABLE>
================================================================================
3. UNREALIZED GAINS AND
LOSSES ON INVESTMENTS
At March 31, 1997, net unrealized depreciation on investments and
options written of $8,885,218 was composed of gross appreciation of
$4,055,089, and gross depreciation of $12,940,307.
15 Oppenheimer Limited-Term Government Fund
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
================================================================================
4. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee
of 0.50% on the first $100 million of average annual net assets, 0.45%
on the next $150 million, 0.425% on the next $250 million and 0.40% on
net assets in excess of $500 million.
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, 1997, commissions (sales
charges paid by investors) on sales of Class A shares totaled
$1,092,379, of which $380,091 was retained by OppenheimerFunds
Distributor, Inc. (OFDI), a subsidiary of the Manager, as general
distributor, and by an affiliated broker/dealer. Sales charges
advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $784,366 and $199,943, of which $58,926 and
$7,790, respectively, was paid to an affiliated broker/dealer. During
the six months ended March 31, 1997, OFDI received contingent deferred
sales charges of $192,088 and $24,317, respectively, upon redemption
of Class B and Class C shares as compensation for sales commissions
advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is
the transfer and shareholder servicing agent for the Fund, and for
other registered investment companies. OFS's total costs of providing
such services are allocated ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to
reimburse OFDI for a portion of its costs incurred in connection with
the personal service and maintenance of accounts that hold Class A
shares. Reimbursement is made quarterly at an annual rate that may not
exceed 0.25% of the average annual net assets of Class A shares of the
Fund. OFDI uses the service fee to reimburse brokers, dealers, banks
and other financial institutions quarterly for providing personal
service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended March 31, 1997, OFDI paid
$36,917 to an affiliated broker/dealer as reimbursement for Class A
personal service and maintenance expenses.
The Fund has adopted compensation type Distribution and
Service Plans for Class B and Class C shares to compensate OFDI for
its services and costs in distributing Class B and Class C shares and
servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B shares and Class
C shares, as compensation for sales commissions paid from its own
resources at the time of sale and associated financing costs. OFDI
also receives a service fee of 0.25% per year as compensation for
costs incurred in connection with the personal service and maintenance
of accounts that hold shares of the Fund, including amounts paid to
brokers, dealers, banks and other financial institutions. Both fees
are computed on the average annual net assets of Class B and Class C
shares, determined as of the close of each regular business day.
During the six months ended March 31, 1997, OFDI paid $6,217 and
$4,172, respectively, to an affiliated broker/dealer as compensation
for Class B and Class C personal service and maintenance expenses and
retained $686,214 and $164,709, respectively, as compensation for
Class B and Class C sales commissions and service fee advances, as
well as financing costs. If the Plans are terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the
asset-based sales charge to OFDI for certain expenses it incurred
before the Plans were terminated. At March 31, 1997, OFDI had incurred
unreimbursed expenses of $4,555,418 for Class B and $806,057 for Class
C.
16 Oppenheimer Limited-Term Government Fund
<PAGE> 17
================================================================================
5. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures 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 negative 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 and/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.
At March 31, 1997, the Fund had outstanding futures contracts
to sell debt securities as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
DATE FUTURES CONTRACTS MARCH 31, 1997 APPRECIATION
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Nts., 5-yr. 6/97 99 $10,325,391 $ 86,624
-------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 2-yr. 6/97 103 21,076,375 62,766
-------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 10-yr. 6/97 203 21,416,500 202,375
-------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 30-yr. 6/97 415 44,495,781 825,312
----------- ------------
$97,314,047 $ 1,177,077
=========== ============
</TABLE>
17 Oppenheimer Limited-Term Government Fund
<PAGE> 18
OPPENHEIMER LIMITED-TERM GOVERNMENT FUND
================================================================================
OFFICERS AND TRUSTEES
James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Vice President, Treasurer and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
David A. Rosenberg, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISER
OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR
OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER
SERVICING AGENT
OppenheimerFunds Services
================================================================================
CUSTODIAN OF
PORTFOLIO SECURITIES
Citibank, N.A.
================================================================================
INDEPENDENT AUDITORS
Deloitte & Touche LLP
================================================================================
LEGAL COUNSEL
Myer, Swanson, Adams & Wolf, 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.
Shares of Oppenheimer funds are not deposits or obligations of any bank,
are not guaranteed by any bank, are not insured by the FDIC or any
other agency, and involve investment risks, including possible loss of
the principal amount invested.
18 Oppenheimer Limited-Term Government Fund
<PAGE> 19
OPPENHEIMERFUNDS FAMILY
================================================================================
OppenheimerFunds offers over 50 funds designed to fit virtually every
investment goal. Whether you're investing for retirement, your
children's education or tax-free income, we have the funds to help
you seek your objective.
When you invest with OppenheimerFunds, you can feel
comfortable knowing that you are investing with a respected financial
institution with over 35 years of experience in helping people just
like you reach their financial goals. And you're investing with a
leader in global, growth stock and flexible fixed-income
investments--with over 3 million shareholder accounts and more than
$60 billion under OppenheimerFunds' management and that of our
affiliates.
At OppenheimerFunds we don't charge a fee to exchange shares.
And you can exchange shares easily by mail or by telephone.(1) For
more information on Oppenheimer funds, please contact your financial
adviser or call us at 1-800-525-7048 for a prospectus. You may also
write us at the address shown on the back cover. As always, please
read the prospectus carefully before you invest.
<TABLE>
<S> <C>
====================================================================================================================================
REAL ASSET FUNDS
Real Asset Fund Gold & Special Minerals Fund
====================================================================================================================================
STOCK FUNDS
Developing Markets Fund Growth Fund
Global Emerging Growth Fund Global Fund
Enterprise Fund(2) Quest Global Value Fund
International Growth Fund Disciplined Value Fund
Discovery Fund Oppenheimer Fund
Quest Small Cap Value Fund Value Stock Fund
Capital Appreciation Fund(3) Quest Value Fund
Quest Capital Value Fund
====================================================================================================================================
STOCK & BOND FUNDS
Main Street Income & Growth Fund Equity Income Fund
Quest Opportunity Value Fund Disciplined Allocation Fund
Total Return Fund Multiple Strategies Fund(4)
Quest Growth & Income Value Fund Strategic Income & Growth Fund
Global Growth & Income Fund Bond Fund for Growth
====================================================================================================================================
BOND FUNDS
International Bond Fund Bond Fund
High Yield Fund U.S. Government Trust
Champion Income Fund Limited-Term Government Fund
Strategic Income Fund
====================================================================================================================================
MUNICIPAL FUNDS
California Municipal Fund(5) Insured Municipal Fund
Florida Municipal Fund(5) Intermediate Municipal Fund
New Jersey Municipal Fund(5)
New York Municipal Fund(5) Rochester Division
Pennsylvania Municipal Fund(5) Rochester Fund Municipals
Municipal Bond Fund Limited Term New York Municipal Fund
====================================================================================================================================
MONEY MARKET FUNDS(6)
Money Market Fund Cash Reserves
====================================================================================================================================
LIFESPAN
Growth Fund Income Fund
Balanced Fund
</TABLE>
1. Exchange privileges are subject to change or termination. Shares may
be exchanged only for shares of the same class of eligible funds.
2. Effective 4/1/96, the Fund is closed to new investors.
3. On 12/18/96, the Fund's name was changed from "Target Fund."
4. On 3/6/97, the Fund's name was changed from "Asset Allocation Fund."
5. Available only to investors in certain states.
6. An investment in money market funds is neither insured nor guaranteed
by the U.S. government and there can be no assurance that a money
market fund will be able to maintain a stable net asset value of
$1.00 per share.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.,
Two World Trade Center, New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
19 Oppenheimer Limited-Term Government Fund
<PAGE> 20
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PHONELINK
24 hours a day, automated
information and transactions
1-800-533-3310
TELECOMMUNICATIONS DEVICE
FOR THE DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RS0855.001.0397 May 31, 1997
[PHOTO]
Customer Service Representative
OppenheimerFunds Services
"HOW MAY I HELP YOU?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing
simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling
our toll-free Telephone Transactions number. And, by enrolling in AccountLink,
a convenient service that "links" your Oppenheimer funds accounts and your
bank checking or savings account, you can use the Telephone Transactions number
to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
[OPPENHEIMERFUNDS LOGO]
OppenheimerFunds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
- -------------------
Bulk Rate
U.S. Postage
PAID
Permit No. 130
Torrington, CT
- -------------------
