[FRONT COVER]
Oppenheimer Bond Fund for Growth
Semiannual Report June 30, 1996
[Picture of Shopping Couple]
"We want our
money to work
hard and
grow, but we
also need
some protection
against risk."
[LOGO-OPPENHEIMERFUNDS (R)]
<PAGE>
News
Standardized Yields
For the 30 Days Ended 6/30/96:(3)
Class A
4.97%
Class B
4.52%
Class C
4.65%
Class M
4.56%
The Fund's Class M shares
were ranked ****
among 265 hybrid funds as
of 6/30/96 by Morningstar
Mutual Funds.(4)
This Fund is for people who want the growth potential associated with stocks,
plus the income and downside protection offered by bonds.
How Your Fund Is Managed
Oppenheimer Bond Fund for Growth seeks a high level of total return from a
portfolio comprised mostly of convertible fixed-income securities. By focusing
on convertible securities, which share some of the advantages of both bonds and
stocks, the Fund pursues total return through a combination of current income
and capital appreciation.
Performance
Total returns at net asset value for the six months ended 6/30/96 for Class M,
A, and B shares were 3.96%, 4.22%, and 3.82%, respectively.(1)
For Class A shares, average annual total returns for the 1-year period
ended 6/30/96 and since inception of the Class on 5/1/95 were 7.40% and 11.49%,
respectively. For Class B shares, average annual total returns for the 1-year
period ended 6/30/96 and since inception of the Class on 5/1/95 were 8.19% and
13.17%, respectively. For Class C shares, cumulative return since inception on
3/11/96 was 1.35%. For Class M shares, average annual total returns for the 1-,
5-, and 10-year periods ended 6/30/96 were 9.84%, 18.18%, and 9.78%,
respectively.(2)
Outlook
"Our outlook is positive. The intrinsic value of convertible securities, and one
of the reasons we are so passionate about them, is their ability to help
investors capture some of the growth potential of the stock market while
offering income."
Mike Rosen, Portfolio Manager
June 30, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions. Past performance does not guarantee future results.
Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. For more complete information, please review the
prospectus carefully before you invest. Until 1/4/96, the Fund had a different
investment advisor. However, the prior portfolio manager is now employed by the
current advisor, OppenheimerFunds, Inc.
1. 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.
2. Class A returns show results of hypothetical investments on 6/30/95 and
5/1/95 (inception of class), after deducting the current maximum initial sales
charge of 5.75%. Class B returns show results of hypothetical investments on
6/30/95 and 5/1/95 (inception of class), and the deduction of the applicable
contingent deferred sales charge of 5% (1-year) and 4% (since inception). Class
C returns show results of a hypothetical investment on 3/11/96 after the 1%
contingent deferred sales charge. Class M returns show results of hypothetical
investments on 6/30/95, 6/30/91, and 6/30/86, after deducting the current
maximum initial sales charge of 3.25%. An explanation of the different
performance calculations is in the Fund's prospectus.
3. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 6/30/96, 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.
4. Source: Morningstar Mutual Funds, 6/30/96. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"hybrid") based on risk-adjusted investment return, after considering sales
charges and expenses. Investment return measures a fund's (or class's) 3-, 5-,
and 10-year (depending on the inception of the class or fund) average annual
total returns in excess of 90-day U.S. Treasury bill returns. Risk measures a
fund's (or class's) performance below 90-day U.S. Treasury bill returns. Risk
and returns are combined to produce star rankings, reflecting performance
relative to the average fund in a fund's category. Five stars is the "highest"
ranking (top 10%), four stars is "above average" (next 22.5%) and one star is
the lowest (bottom 10%). The 4-star current ranking is a weighted average of the
3-, 5-, and 10-year rankings for the class, which were 4, 5, and 3 stars,
respectively, weighted 20%/30%/50%. There were 265, 150, and 64 funds ranked in
these respective periods. Rankings are subject to change. The Fund's Class A, B,
C and M shares have the same portfolio.
2 Oppenheimer Bond Fund for Growth
<PAGE>
[PHOTO-BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer
Bond Fund for Growth
Dear Shareholder,
For investors pursuing a competitive total return, market conditions during the
first six months of 1996 aptly displayed the advantages of convertible
securities.
Convertibles combine the favorable characteristics of stocks and
fixed-income securities, participating in the upside appreciation of stocks
along with the income of bonds and similar investments. At the same time,
convertibles are defensive in nature, offering less downside risk when stocks
fall. In addition, convertibles hold up better than other fixed-income
securities in a poor bond market because they can be converted into stocks when
it is advantageous to do so. For these reasons, they are an excellent way to
take advantage of prevailing market conditions.
That downside protection for bonds has been very important so far this
year. Due to rising interest rates, the bond market has been volatile. The
benchmark 30-year Treasury bond has risen in yield from about 6% to over 7%.
Normally, if you're holding a bond that pays 6% and new bonds are paying 7%,
then your 6% bond becomes less valuable. But if you hold a convertible bond and
you have the option to convert it to stock of that issuer, then you may be less
vulnerable to a bear market in bonds.
In contrast, the stock market has continued to perform well through the
first half of the year--though it experienced volatility during the last few
months--primarily due to surprisingly strong corporate profits. However, the
market has not experienced a significant decline since 1990 and because
corporate earnings have begun to slow, many experts felt the market was due for
a correction. If the negative tone in the stock market continues during the
second half of 1996, holders of convertibles are less vulnerable to the decline
in stock prices, because they do not have to convert their bonds into stocks
until it is advantageous to do so.
As a convertible bond holder, your Fund should benefit from lower interest
rates--just like funds that hold other bonds. You should also benefit if the
stock market advances. We believe that investors in a fund holding convertible
securities, though positioned defensively, can still share in the potential
growth of a bull market, while seeking income from securities that are not as
sensitive to the fluctuations in interest rates.
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. We look forward to helping you reach your investment goals in
the future.
/s/ Bridget A. Macaskill
Bridget A. Macaskill
July 22, 1996
3 Oppenheimer Bond Fund for Growth
<PAGE>
Q + A [PHOTO-MIKE ROSEN] [PHOTO-TED EVERETT]
An interview with your Fund's managers.
Q How did
the Fund
perform?
How has the Fund performed over the past six months?
Through the first half of 1996, the Fund has performed well amongst its
competitors in the convertible bond category, overcoming the declines in the
bond market to provide some, but not all, of the growth exhibited in today's
stock market. The Fund offers investors the opportunity to earn attractive
risk-adjusted total returns from convertible securities--an asset class of
hybrid investments that, in part, reflect the variations in both the stock and
bond markets.
What investments made a positive contribution to performance?
The Fund's performance has been advanced by the more equity-sensitive securities
included in the portfolio. However, these securities alone provide little
protection from a potential downturn in the market. Instead of overly
emphasizing such issues, the Fund's portfolio was diversified among many sectors
of the convertible market, including the more income-oriented securities which
can provide modest growth potential--with a good yield--that can actually lower
the volatility of the portfolio.(1)
Were there any investments that didn't perform as well as expected?
Following 1995, we had thought this year would be more rewarding for the
conservative investor. While the stock market has continued its 1995 trend
through the first six months, the bond market has witnessed an unexpected
downturn. Fortunately, unlike individual investors who completely curbed their
appetite for equity markets, the convertible bonds held by the Fund have an
equity component that has offset some of the weakness in the bond market.
1. The Fund's portfolio is subject to change. The Fund is a non-diversified
investment company.
4 Oppenheimer Bond Fund for Growth
<PAGE>
Facing page
Top left: Mike Rosen, Portfolio Manager
Top right: Ted Everett, Member
of Equity Investments Team
This page
Top: Robert Doll, Executive VP, Director of Equity Investments,
and Richard Rubinstein, Member of Equity Investments Team
Bottom: Mike Rosen
A We were
able to earn
attractive
risk-adjusted
total returns
from our
convertibles.
What areas are you currently targeting?
We plan to maintain the Fund's emphasis on a broad spectrum of convertible
securities, using the combined features of these distinctive securities in
seeking to provide strong risk-adjusted total returns to investors. And
regardless of whether we expect a particular security to act more like a stock
or a bond, we carefully evaluate each prospective security for total return
potential.
What is your outlook for the Fund?
Our outlook is positive. The intrinsic value of convertible securities, and one
of the reasons we are so passionate about them, is their ability to help
investors capture some of the growth potential of the stock market while
offering income. The trade-off is being able to take income in exchange for less
capital appreciation potential than that offered by a stock. This is a decision
we're glad to make because we don't believe anyone can fully assess the market's
future. That's a conservative stance, but one conducive to producing attractive
risk-adjusted total returns. [solid box]
[PHOTO-ROBERT DOLL]
[PHOTO-MIKE ROSEN]
5 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Investments June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
====================================================================================================================================
<S> <C> <C>
Convertible Corporate Bonds and Notes--78.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials--1.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--0.3% IMC Global, Inc., 6.25% Cv. Sub. Nts., 12/1/01 $ 980,000 $ 1,210,300
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--0.1% GE Capital Corp., 2.5% Base Metals Cv. Nts., 2/14/97(1) 500,000 505,000
- ------------------------------------------------------------------------------------------------------------------------------------
Paper--1.4% Repap Enterprises, Inc., 8.5% Cv. Redeemable Sub. Debs., 8/1/97 6,295,000 6,200,575
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--15.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Autos & Housing--3.2%
Bluegreen Corp., 8.25% Cv. Sub. Debs., 5/15/12 3,635,000 3,280,587
-----------------------------------------------------------------------------------------------------------------
Continental Homes Holding Corp., 6.875% Cv. Sub. Nts., 11/1/02 2,000,000 2,170,000
-----------------------------------------------------------------------------------------------------------------
Engle Homes, Inc., 7% Cv. Sub. Nts., 3/1/03 2,750,000 2,420,000
-----------------------------------------------------------------------------------------------------------------
MascoTech, Inc., 4.5% Cv. Sub. Debs., 12/15/03 3,980,000 3,164,100
-----------------------------------------------------------------------------------------------------------------
U.S. Home Corp., 4.875% Cv. Sub. Debs., 11/1/05 3,000,000 2,655,000
----------
13,689,687
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--3.6%
Bell Sports Corp., 4.25% Cv. Sub. Debs., 11/15/00 2,415,000 1,817,287
-----------------------------------------------------------------------------------------------------------------
Boston Chicken, Inc., 4.5% Cv. Sub. Debs., 2/1/04 2,000,000 2,405,000
-----------------------------------------------------------------------------------------------------------------
Discovery Zone, Inc., Zero Coupon Sub. Exchangeable LYONS, 7.7%, 10/14/13(1)(2)(11) 3,000,000 108,750
-----------------------------------------------------------------------------------------------------------------
Flagstar Corp., 10% Cv. Jr. Sub. Debs., 11/1/14 3,000,000 1,665,000
-----------------------------------------------------------------------------------------------------------------
Hudson Hotels Corp.:
8% Cv. Sub. Debs., 2/1/04(1)(3) 1,500,000 1,891,560
8% Cv. Sub. Debs., 2/1/05(1)(3) 1,500,000 1,891,560
-----------------------------------------------------------------------------------------------------------------
Marriott International, Inc., Zero Coupon Sub. LYONS, 4.25%, 3/25/11(2)(4) 7,000,000 3,806,250
-----------------------------------------------------------------------------------------------------------------
WMS Industries, Inc., 5.75% Cv. Sub. Debs., 11/30/02 2,000,000 1,990,000
-----------
15,575,407
- ------------------------------------------------------------------------------------------------------------------------------------
Media--3.4%
Graphic Industries, Inc., 7% Cv. Sub. Debs., 5/15/06 750,000 686,250
-----------------------------------------------------------------------------------------------------------------
Hollinger, Inc., Zero Coupon Cv. Sub. LYONS, 6.48%, 10/5/13(2) 3,000,000 971,250
-----------------------------------------------------------------------------------------------------------------
Rogers Communications, Inc.:
2% Cv. Sr. Debs., 11/26/05 3,800,000 1,971,250
Zero Coupon Cv. Sr. LYONS, 6.11%, 5/20/13(2) 1,855,000 672,438
-----------------------------------------------------------------------------------------------------------------
Scandinavian Broadcasting System SA, 7.25% Cv. Sub. Debs., 8/1/05 4,000,000 4,320,000
-----------------------------------------------------------------------------------------------------------------
Scantron Corp., 6.75% Cv. Sub. Debs., 6/1/11
(Cv. into Common Stock of John H. Harland Co.) 1,205,000 1,247,175
-----------------------------------------------------------------------------------------------------------------
Thomas Nelson, Inc., 5.75% Cv. Sub. Nts., 11/30/99 5,000,000 4,850,000
-----------
14,718,363
- ------------------------------------------------------------------------------------------------------------------------------------
Retail: General--2.3%
Danskin, Inc., 8% Cv. Sub. Debs., 9/1/02(1)(3) 5,000,000 6,051,600
-----------------------------------------------------------------------------------------------------------------
Rite Aid Corp., Zero Coupon Cv. Sub. Nts., 6.44%, 7/24/06(2) 3,000,000 1,571,250
-----------------------------------------------------------------------------------------------------------------
Travel Ports of America, Inc.:
8.5% Cv. Sr. Sub. Debs., 1/15/05(1)(3) 1,750,000 1,860,810
8.5% Cv. Sr. Sub. Debs., 1/15/05 (Reg. S)(1)(3) 350,000 372,162
----------
9,855,822
Retail: Specialty--2.5%
Ben Franklin Retail Stores, Inc., 7.5% Cv. Sub. Nts., 6/1/03 2,800,000 1,442,000
-----------------------------------------------------------------------------------------------------------------
General Host Corp., 8% Cv. Sub. Nts., 2/15/02 2,000,000 1,590,000
-----------------------------------------------------------------------------------------------------------------
Lechters, Inc., 5% Cv. Sub. Debs., 9/27/01 2,000,000 1,400,000
-----------------------------------------------------------------------------------------------------------------
Michaels Stores, Inc., 6.75% Cv. Sub. Nts., 1/15/03 3,000,000 2,565,000
</TABLE>
6 Oppenheimer Bond Fund for Growth
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
====================================================================================================================================
<S> <C> <C>
Retail: Specialty--2.5%
(continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Sports & Recreation, Inc., 4.25% Cv. Sub. Nts., 11/1/00 $2,500,000 $1,800,000
-----------------------------------------------------------------------------------------------------------------
Sunglass Hut International, 5.25% Cv. Sub. Debs., 6/15/03(4) 1,750,000 1,782,813
-----------
10,579,813
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--12.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages--0.8%
Chock Full O'Nuts Corp., 8% Cv. Sub. Debs., 9/15/06 3,580,000 3,311,500
- ------------------------------------------------------------------------------------------------------------------------------------
Education--1.0%
National Education Corp., 6.5% Cv. Sub. Debs., 5/15/11 4,997,000 4,222,465
- ------------------------------------------------------------------------------------------------------------------------------------
Food--2.1%
Grand Metropolitan PLC, 6.5% Cv. Nts., 1/31/00(4) 8,500,000 9,254,375
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--4.3%
ALZA Corp., 5% Cv. Sub. Debs., 5/1/06 5,000,000 4,887,500
-----------------------------------------------------------------------------------------------------------------
Chiron Corp., 1.9% Cv. Sub. Nts., 11/17/00(4) 1,750,000 1,671,250
-----------------------------------------------------------------------------------------------------------------
MEDIQ, Inc., 7.5% Exchangeable Sub. Debs., 7/15/03
(Exchangeable into Common Stock of Nutramax Products, Inc.) 900,000 765,000
-----------------------------------------------------------------------------------------------------------------
NABI, Inc., 6.5% Cv. Sub. Nts., 2/1/03(4) 5,000,000 4,600,000
-----------------------------------------------------------------------------------------------------------------
Sandoz Capital BVI Ltd., 2% Cv. Gtd. Bonds, 10/6/02(4) 2,000,000 2,137,500
-----------------------------------------------------------------------------------------------------------------
Sepracor, Inc., 7% Cv. Sub. Debs., 12/1/02(4) 4,500,000 4,511,250
-----------
18,572,500
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Supplies &
Services--3.2%
Beverly Enterprises, Inc., 5.5% Cv. Sub. Debs., 8/1/18 2,165,000 2,208,300
-----------------------------------------------------------------------------------------------------------------
Greenery Rehabilitation Group, Inc., 6.5% Cv. Sub. Debs., 6/15/11(1) 250,000 158,750
-----------------------------------------------------------------------------------------------------------------
Healthsource, Inc., 5% Cv. Sub. Nts., 3/1/03(4) 6,000,000 4,650,000
-----------------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc., 5.75% Cv. Sr. Sub. Debs., 1/1/01 700,000 689,500
-----------------------------------------------------------------------------------------------------------------
Maxxim Medical, Inc., 6.75% Cv. Sub. Debs., 3/1/03 500,000 527,500
-----------------------------------------------------------------------------------------------------------------
Pharmaceutical Marketing Services, Inc., 6.25% Cv. Sub. Debs., 2/1/03 2,000,000 1,535,000
-----------------------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.5% Cv. Sub. Debs., 8/15/00(1)(3)(5) 500,000 50,000
-----------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 6% Exchangeable Sub. Nts., 12/1/05
(Exchangeable into Common Stock of Vencor, Inc.) 4,000,000 4,040,000
-----------
13,859,050
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco--0.8%
Standard Commercial Corp., 7.25% Cv. Sub. Debs., 3/31/07 4,634,000 3,452,330
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--2.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Services &
Producers--1.9%
Key Energy Group, Inc., 7% Cv. Sub. Debs., 7/1/03(4) 5,000,000 5,037,500
-----------------------------------------------------------------------------------------------------------------
SFP Pipeline Holdings, Inc., 11.16%
Variable Rate Exchangeable Debs., 8/15/10 2,500,000 3,087,500
----------
8,125,000
- ------------------------------------------------------------------------------------------------------------------------------------
Oil-Integrated--0.8%
Oryx Energy Co., 7.5% Cv. Sub. Debs., 5/15/14 750,000 663,750
-----------------------------------------------------------------------------------------------------------------
USX Corp., 7% Cv. Sub. Debs., 6/15/17 3,000,000 2,816,250
----------
3,480,000
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--7.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Banks--2.4%
First Republic Bancorp, Inc., 7.25% Cv. Sub. Debs., 12/1/02 8,792,000 10,330,600
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--0.1%
Lomas Financial Corp., 9% Cv. Sr. Debs., 10/31/03(1)(5) 1,850,000 397,750
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--4.8%
Chubb Corp., 6% Cv. Exchangeable Sub. Gtd. Nts., 5/15/98 6,000,000 7,050,000
-----------------------------------------------------------------------------------------------------------------
Pioneer Financial Services, Inc., 6.5% Cv. Sub. Nts., 4/1/03 2,500,000 2,562,500
-----------------------------------------------------------------------------------------------------------------
Republic of Italy, 5% PENs, 6/28/01 (Exchangeable into
ADSs of Istituto Nazionale del Assicurazioni SpA) 2,000,000 2,045,000
-----------------------------------------------------------------------------------------------------------------
Trenwick Group, Inc., 6% Cv. Debs., 12/15/99 8,000,000 8,820,000
-----------
20,477,500
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Investments (Unaudited) (continued)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
====================================================================================================================================
<S> <C> <C>
Industrial--10.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--1.4%
MagnaTek, Inc., 8% Cv. Sub. Nts., 9/15/01 $2,500,000 $2,393,750
-----------------------------------------------------------------------------------------------------------------
Recognition International, Inc., 7.25% Cv. Sub. Debs., 4/15/11 3,000,000 2,700,000
-----------------------------------------------------------------------------------------------------------------
Richardson Electronics, Ltd., 7.25% Cv. Sub. Debs., 12/15/06 895,000 783,125
----------
5,876,875
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--2.8%
CEMEX, SA de CV, 4.25% Cv. Sub. Nts., 11/1/97 7,000,000 6,510,000
-----------------------------------------------------------------------------------------------------------------
Empresas ICA Sociedad Controladora, SA de CV, 5% Cv. Sub. Debs., 3/15/04 6,000,000 3,922,500
-----------------------------------------------------------------------------------------------------------------
Nippon Denro Ispat Ltd., 3% Cv. Bonds, 4/1/01(1) 250,000 125,000
-----------------------------------------------------------------------------------------------------------------
Polymax International Ltd., 2% Sec. Exchangeable Bonds, 2/27/06(4) 1,500,000 1,387,500
-----------
11,945,000
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--2.0%
Roy F. Weston, Inc., 7% Cv. Sub. Debs., 4/15/02 843,000 750,270
-----------------------------------------------------------------------------------------------------------------
United Waste Systems, Inc., 4.5% Cv. Sub. Nts., 6/1/01(4) 5,000,000 5,650,000
-----------------------------------------------------------------------------------------------------------------
WMX Technologies, Inc., 2% Cv. Sub. Nts., 1/24/05 2,466,000 2,231,730
----------
8,632,000
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing--3.5%
Alfa, SA de CV, 8% Cv. Sub. Nts., 9/15/00(4) 2,500,000 2,671,875
-----------------------------------------------------------------------------------------------------------------
Cooper Industries, Inc., 7.05% Cv. Sub. Debs., 1/1/15 1,000,000 1,076,250
-----------------------------------------------------------------------------------------------------------------
Raymond Corp., 6.5% Cv. Sub. Debs., 12/15/03 8,340,000 9,507,600
-----------------------------------------------------------------------------------------------------------------
Thermo TerraTech, Inc., 4.625% Cv. Sub. Debs., 5/1/03(4) 1,250,000 1,256,250
-----------------------------------------------------------------------------------------------------------------
Varlen Corp., 6.5% Cv. Sub. Debs., 6/1/03 500,000 521,250
-----------
15,033,225
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--0.8%
CareLine, Inc., 8% Cv. Sr. Sub. Nts., 5/1/01
(Cv. into Common Stock of Laidlaw, Inc., Class B) 3,000,000 3,210,000
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--26.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.8%
Orbital Sciences Corp., 6.75% Cv. Sub. Debs., 3/1/03 3,000,000 3,555,000
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--9.0%
Apple Computer, Inc., 6% Cv. Sub. Nts., 6/1/01(4) 5,000,000 4,800,000
-----------------------------------------------------------------------------------------------------------------
Conner Peripherals, Inc., 6.5% Cv. Sub. Debs., 3/1/02
(Cv. into Common Stock of Seagate Technology, Inc.) 8,675,000 9,000,313
-----------------------------------------------------------------------------------------------------------------
EMC Corp., 4.25% Cv. Sub. Nts., 1/1/01 6,000,000 6,495,000
-----------------------------------------------------------------------------------------------------------------
Submicron Systems Corp., 9% Cv. Sub. Nts., 12/15/97(1)(3) 450,000 412,898
-----------------------------------------------------------------------------------------------------------------
Telxon Corp.:
5.75% Cv. Sub. Nts., 1/1/03 2,500,000 1,925,000
5.75% Cv. Sub. Nts., 1/1/03(4) 6,500,000 5,005,000
-----------------------------------------------------------------------------------------------------------------
UNISYS Corp., 8.25% Cv. Sub. Nts., 8/1/00 11,000,000 10,738,750
-----------
38,376,961
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software--3.0%
MacNeal-Schwendler Corp., 7.875% Cv. Sub. Debs., 8/18/04 9,617,000 8,222,535
-----------------------------------------------------------------------------------------------------------------
Softkey International, Inc., 5.5% Cv. Sr. Nts., 11/1/00 4,000,000 3,200,000
-----------------------------------------------------------------------------------------------------------------
Spectrum Holobyte, Inc., 6.5% Cv. Sub. Nts., 9/15/02(4) 2,000,000 1,340,000
-----------
12,762,535
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8 Oppenheimer Bond Fund for Growth
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
====================================================================================================================================
<S> <C> <C>
Electronics--12.8%
ADT Operations, Inc., Zero Coupon Sub.
Exchangeable LYONS, 6.49%, 7/6/10(2) $5,000,000 $2,812,500
-----------------------------------------------------------------------------------------------------------------
Audiovox Corp., 6.25% Cv. Sub. Debs., 3/15/01 2,500,000 1,750,000
-----------------------------------------------------------------------------------------------------------------
California Microwave, Inc., 5.25% Cv. Sub. Nts., 12/15/03 2,000,000 1,695,000
-----------------------------------------------------------------------------------------------------------------
Emerson Radio Corp., 8.5% Cv. Sr. Sub. Debs., 8/15/02(1) 1,500,000 1,297,500
-----------------------------------------------------------------------------------------------------------------
Integrated Device Technology, Inc., 5.5% Cv. Sub. Nts., 6/1/02 6,000,000 4,800,000
-----------------------------------------------------------------------------------------------------------------
Laidlaw, Inc., 6% ADT-Linked Cv. Debs., 1/15/99(4) 6,250,000 7,828,125
-----------------------------------------------------------------------------------------------------------------
Park Electrochemical Corp., 5.5% Cv. Sub. Nts., 3/1/06 7,000,000 5,617,500
-----------------------------------------------------------------------------------------------------------------
Thermo Electron Corp., 4.25% Cv. Sub. Debs., 1/1/03(4)(9) 7,000,000 8,645,000
-----------------------------------------------------------------------------------------------------------------
Thermo Optek Corp., 5% Cv. Sub. Debs., 10/15/00(4) 8,535,000 9,559,200
-----------------------------------------------------------------------------------------------------------------
ThermoQuest Corp., 5% Cv. Sub. Debs., 8/15/00(4) 6,835,000 7,586,850
-----------------------------------------------------------------------------------------------------------------
XILINX, Inc., 5.25% Cv. Sub. Nts., 11/1/02 3,500,000 3,202,500
----------
54,794,175
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--0.5%
BroadBand Technologies, Inc., 5% Cv. Sub. Nts., 5/15/01(4) 1,250,000 1,243,750
-----------------------------------------------------------------------------------------------------------------
Porta Systems Corp., Zero Coupon Cv. Sr. Sub. Nts., 11.6%, 1/2/98(1)(2) 1,380,996 669,783
----------
1,913,533
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Utilities--1.0%
AES Corp., 6.5% Cv. Sub. Debs., 3/15/02 3,753,000 4,184,595
- ------------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--1.3%
Consolidated Natural Gas Co., 7.25% Cv. Sub. Debs., 12/15/15 5,000,000 5,356,250
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone-Utilities--0.7%
Compania de Telefonos de Chile SA, 4.5% Cv. Sub. Debs., 1/15/03(9) 2,500,000 3,062,500
------------
Total Convertible Corporate Bonds and Notes (Cost $335,980,039) 336,520,686
Shares
====================================================================================================================================
Common Stocks--1.7%
American Home Products Corp.(9) 20,040 1,204,905
-----------------------------------------------------------------------------------------------------------------
Columbia/HCA Healthcare Corp.(9) 9,100 485,713
-----------------------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc.(9) 13,910 605,085
-----------------------------------------------------------------------------------------------------------------
Ford Motor Co.(9) 6,530 211,409
-----------------------------------------------------------------------------------------------------------------
International Paper Co.(9) 9,392 346,330
-----------------------------------------------------------------------------------------------------------------
Orion Capital Corp. 30,001 1,530,051
-----------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc.(9) 22,000 2,288,000
-----------------------------------------------------------------------------------------------------------------
Porta Systems Corp.(6) 174,600 109,125
-----------------------------------------------------------------------------------------------------------------
Progressive Bank, Inc. 17,588 510,052
----------
Total Common Stock (Cost $1,847,588) 7,290,670
====================================================================================================================================
Preferred Stocks--11.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials--1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--0.0%
LSB Industries, Inc., $3.25 Cv. Exchangeable, Series 2 2,150 80,625
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--0.3%
WHX Corp., $3.75 Cv., Series B 30,000 1,271,250
- ------------------------------------------------------------------------------------------------------------------------------------
Paper--0.7%
International Paper Co., $2.625 Cum. Cv 40,000 1,770,000
-----------------------------------------------------------------------------------------------------------------
James River Corp. of Virginia:
Depositary Shares each representing 1/4 of a Share of
$14.00 Cum. Cv. Exchangeable Preferred Stock, Series L 18,600 871,875
$3.375 Cum. Cv. Exchangeable, Series K 5,000 228,750
---------
2,870,625
</TABLE>
9 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Media--0.6%
American Radio Systems Corp., Depositary Shares each
representing 1/20 of a Share of $3.50 Cv. Exchangeable Preferred Stock(4) 20,000 $1,190,000
-----------------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., $3.25 Cum. Cv. Exchangeable, Series D(4) 30,000 1,578,750
---------
2,768,750
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Services &
Producers--0.5%
ICO, Inc., Depositary Shares each representing
1/4 of a Share of $6.75 Cv. Exchangeable Preferred Stock 95,000 2,090,000
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--4.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Banks--2.3%
Mid Am, Inc., $1.8125 Cum. Cv., Series A 7,500 305,625
-----------------------------------------------------------------------------------------------------------------
ONBANCorp, Inc., $1.6875 Cum. Cv., Series B(9) 119,000 3,123,750
-----------------------------------------------------------------------------------------------------------------
RCSB Financial, Inc., $1.75 Cv., Series B(9)(10) 121,840 4,873,600
-----------------------------------------------------------------------------------------------------------------
Sovereign Bancorp, Inc., $3.125 Cum. Cv., Series B 27,500 1,560,625
----------
9,863,600
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--0.9%
Capstead Mortgage Corp., $1.26 Cum. Cv., Series B 120,000 1,620,000
-----------------------------------------------------------------------------------------------------------------
Phoenix Duff & Phelps Corp., $1.50 Cv., Series A 90,000 2,317,500
----------
3,937,500
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--1.0%
Alexander & Alexander Services, Inc., $3.625 Cv.(4) 15,000 720,000
-----------------------------------------------------------------------------------------------------------------
Conseco, Inc., $3.25 Cv. Exchangeable, Series D 33,300 2,093,737
-----------------------------------------------------------------------------------------------------------------
St. Paul Capital LLC, $3.00 Cv. MIPS 25,000 1,312,500
----------
4,126,237
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial--2.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Materials--1.4%
Owens Corning Capital LLC, 6.5% Cv. MIPS(4) 105,000 5,945,625
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.3%
International Technology Corp., Depositary Shares each
representing 1/100 of a Share of 7% Cum. Cv., Exchangeable Preferred Stock 65,000 1,202,500
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.5%
Corning Delaware LP, 6% Cv. MIPS 15,000 856,875
-----------------------------------------------------------------------------------------------------------------
Greenfield Capital Trust, $3.00 Cv. TIDES(4) 30,000 1,530,000
----------
2,386,875
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--0.4%
Arkansas Best Corp., $2.875 Cum. Cv. Exchangeable, Series A 56,500 1,815,062
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--2.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--0.2%
Kaman Corp., $3.25 Depositary Shares each representing
1/4 of a Share of Cv. Preferred Stock, Series 2 20,000 1,030,000
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software--0.7%
Wang Laboratories, Inc., Depositary Shares each representing
1/20 of a Share of 6.5% Cum. Cv. Preferred Stock, Series B(4) 60,000 2,910,000
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics--0.1%
Comptronix Corp., 6% Cv., Series A(1)(7) 132,020 396,060
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications-
Technology--1.9%
Mobile Telecommunication Technologies Corp.:
7.5% Cum. Cv., Series C(1)(7) 5,000 5,087,500
$2.25 Cum. Cv. Exchangeable(4) 121,100 2,921,537
----------
8,009,037
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone-Utilities--0.1%
Philippine Long Distance Telephone Co., $3.50 Cv., Series III 4,000 218,000
----------
Total Preferred Stocks (Cost $49,258,607) 50,921,746
</TABLE>
10 Oppenheimer Bond Fund for Growth
<PAGE>
<TABLE>
<CAPTION>
Shares or Market Value
Face Amount See Note 1
====================================================================================================================================
<S> <C> <C>
Other Convertible Securities--7.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Leisure & Entertainment--0.3%
Tyco Toys, Inc., $0.4125 Depositary Shares each representing
1/25 of a Share of Mandatorily Cv. Redeemable Preferred Stock, Series C 240,000 $1,350,000
- ------------------------------------------------------------------------------------------------------------------------------------
Media--0.1%
Merrill Lynch & Co., Inc., 6% STRYPES
(Cox Communications, Inc.), 6/1/99(8) 25,000 553,125
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--1.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare/Drugs--0.6%
Bear Stearns Cos. Inc., 5.5% CHIPS (Merck & Co., Inc.), 2/11/97(8) 10,000 462,500
-----------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings Inc., 6.5% YEELDS (Amgen Corp.), 1/15/97(8) 15,000 920,625
-----------------------------------------------------------------------------------------------------------------
Salomon Inc., 6.5% ELKS (Amgen Corp.), 2/1/97(8) 14,000 936,250
----------
2,319,375
- ------------------------------------------------------------------------------------------------------------------------------------
Tobacco--1.0%
RJR Nabisco Holdings Corp., $0.60125 Depositary Shares
each representing 1/10 of a Share of Series C PERCS, 5/15/97 683,900 4,445,350
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--3.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--2.2%
CS First Boston, Inc., 6% Equity-Linked Sr. Medium-Term Nts.
(Charles Schwab Corp.), 2/16/98(1)(8) $5,000,000 5,050,000
-----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 7.25% STRYPES (SunAmerica, Inc.), 6/15/99(8) 80,000 4,530,000
----------
9,580,000
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--1.0%
Allstate Corp., 6.76% Exchangeable Nts., 4/15/98
(Subject to Exchange into Common Stock of The PMI Group, Inc.) 75,000 2,962,500
-----------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6.5% STRYPES (MGIC Investment Corp.), 8/15/98(8) 17,000 918,000
----------
3,880,500
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--0.3%
Browning-Ferris Industries, Inc., 7.25% ACES, 6/30/98(8) 35,000 1,111,250
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing--0.3%
Alco Standard Corp., $5.04 Depositary Shares each representing
1/100 of a Share of Series BB ACES, 10/1/98 15,000 1,245,000
-----------------------------------------------------------------------------------------------------------------
KENETECH Corp., Depositary Shares each representing 1/50
of a Share of 8.25% PRIDES, 5/14/98(5) 20,000 19,360
----------
1,264,360
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--1.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Hardware--1.3%
CS First Boston, Inc., 6% Equity-Linked Sr.
Medium-Term Nts. (Intel Corp.), 2/16/98(1)(8) $5,000,000 5,662,500
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Software--0.4%
Salomon Inc., 5% ELKS (Microsoft Corp.), 11/1/96(8) 15,000 1,625,625
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Gas Utilities--0.2%
MCN Corp., 8.75% PRIDES, 4/30/99 30,000 765,000
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone-Utilities--0.2%
Sprint Corp., 8.25% DECS (Cv. into Shares of Common Stock of
SNET Corp.), 3/31/00(8) 25,000 1,006,250
----------
Total Other Convertible Securities (Cost $31,680,507) 33,563,335
</TABLE>
11 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Investments (unaudited) (continued)
<TABLE>
<CAPTION>
Market Value
Units See Note 1
====================================================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Submicron Systems Corp. Wts., Exp. 12/00(1)(3) 27,000 $ 43,524
----------
Travel Ports of America, Inc. Wts., Exp. 1/05(1)(3) 5,000 4,235
----------
Total Rights, Warrants and Certificates (Cost $0) 47,759
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $418,766,741) 100.1% 428,344,196
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.1) (351,247)
---------- ----------
Net Assets 100.0% $427,992,949
========== ===========
</TABLE>
1. Identifies issues considered to be illiquid--See Note 7 of Notes to Financial
Statements.
2. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
3. The security is being valued under procedures established by the Board of
Trustees to determine fair value in good faith.
4. Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended. This security has been determined
to be liquid under guidelines established by the Board of Trustees. These
securities amount to $111,220,400 or 25.99% of the Fund's net assets at June 30,
1996.
5. Non-income producing security--issuer is in default.
6. Non-income producing security.
7. Dividend is paid in kind.
8. Redeemable in cash at the lesser of a multiple of the issue price or an
amount based on the price of the stated company's common stock at maturity.
9. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
<TABLE>
<CAPTION>
Face/Shares Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
American Home Products Corp. 20,000 7/96 $ 55.00 $47,198 $105,000
- ------------------------------------------------------------------------------------------------------------------------------------
Columbia/HCA Healthcare Corp. 9,100 8/96 55.00 53,188 10,236
- ------------------------------------------------------------------------------------------------------------------------------------
Compania de Telefonos de Chile SA 15,000 8/96 95.00 58,048 78,750
- ------------------------------------------------------------------------------------------------------------------------------------
Fleet Financial Group, Inc. 13,900 10/96 45.00 24,046 22,587
- ------------------------------------------------------------------------------------------------------------------------------------
Ford Motor Co. 6,500 9/96 35.00 16,867 4,067
- ------------------------------------------------------------------------------------------------------------------------------------
International Paper Co. 9,300 10/96 45.00 16,088 3,487
- ------------------------------------------------------------------------------------------------------------------------------------
ONBANCorp, Inc. 40,000 7/96 35.00 77,322 20,000
- ------------------------------------------------------------------------------------------------------------------------------------
Philip Morris Cos., Inc. 22,000 9/96 100.00 120,336 170,500
- ------------------------------------------------------------------------------------------------------------------------------------
RCSB Financial, Inc. 6,200 7/96 22.50 9,176 20,924
- ------------------------------------------------------------------------------------------------------------------------------------
RCSB Financial, Inc. 75,000 7/96 25.00 61,298 75,000
- ------------------------------------------------------------------------------------------------------------------------------------
Thermo Electron Corp. 3,000 9/96 46.625 6,690 2,060
-------- --------
$490,257 $512,611
======== ========
</TABLE>
10. Securities are held in the portfolio to cover the following securities sold
short:
<TABLE>
<CAPTION>
Market Value
Shares Cost See Note 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RCSB Financial, Inc. 103,800 $2,330,310 $2,335,500
</TABLE>
11. The issuer of this zero coupon bond filed for protection under Chapter 11 in
March, 1996. While no payments are due until maturity, the company is considered
to be in default. In accordance with Internal Revenue Service regulations, the
Fund continues to accrue original issue discount.
Portfolio Acronyms:
ACES -- Automatic Common Exchange Securities or Automatically
Convertible Equity Securities
CHIPS -- Common-Linked Higher Income Participation Securities
DECS -- Debt Exchangeable for Common Stock
ELKS -- Equity-Linked Securities
LYONS -- Liquid Yield Option Notes
MIPS -- Monthly Income Preferred Securities
PENs -- Privatization Exchangeable Notes
PERCS -- Preferred Equity Redemption Cumulative Stock
PRIDES -- Preferred Redeemable Increased Dividend Equity Securities
STRYPES -- Structured Yield Product Exchangeable for Stock
TIDES -- Term Income Deferrable Equity Securities
YEELDS -- Yield Enhanced Equity Linked Debt Securities
See accompanying Notes to Financial Statements.
12 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
<TABLE>
====================================================================================================================================
<S> <C> <C>
Assets
Investments, at value (cost $418,766,741)--see accompanying statement $428,344,196
-----------------------------------------------------------------------------------------------------------------
Cash 8,251
-----------------------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 5,651,191
Interest and dividends 5,379,522
Investments sold 4,519,966
Other 14,932
----------
Total assets 443,918,058
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Securities sold short, at value (cost $2,330,310)--see accompanying statement 2,335,500
-----------------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $490,257)--
see accompanying statement--Note 6 512,611
-----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Demand note payable to bank (interest rate 6.25% at 6/30/96)--Note 5 5,720,000
Investments purchased 5,000,000
Shares of beneficial interest redeemed 930,751
Accrued taxes--Note 1 835,814
Dividends 469,461
Other 120,972
----------
Total liabilities 15,925,109
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $427,992,949
============
- ------------------------------------------------------------------------------------------------------------------------------------
Composition of
Net Assets
Paid-in capital $406,723,588
-----------------------------------------------------------------------------------------------------------------
Excess of distributions over net investment income (38,430)
-----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and options 11,757,880
-----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and options 9,549,911
-----------
Net assets $427,992,949
=============
====================================================================================================================================
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $38,822,645 and
2,735,952 shares of beneficial interest outstanding) $ 14.19
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 15.06
-----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $109,279,590 and 7,690,922 shares of beneficial interest outstanding) $ 14.21
-----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $12,854,496 and 906,097 shares of beneficial interest outstanding) $ 14.19
-----------------------------------------------------------------------------------------------------------------
Class M Shares:
Net asset value and redemption price per share (based on net assets of $267,036,218 and
18,821,728 shares of beneficial interest outstanding) $ 14.19
Maximum offering price per share (net asset value plus sales charge of 3.25% of offering price) $ 14.67
See accompanying Notes to Financial Statements.
</TABLE>
13 Oppenheimer Bond Fund for Growth
<PAGE>
Statement of Operations For the Six Months Ended June 30, 1996 (Unaudited)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest $ 9,166,691
-----------------------------------------------------------------------------------------------------------------
Dividends 1,540,045
-------------
Total income 10,706,736
====================================================================================================================================
Expenses
Distribution and service plan fees--Note 4:
Class A 19,640
Class B 311,449
Class C 16,071
Class M 953,304
-----------------------------------------------------------------------------------------------------------------
Management fees--Note 4 876,270
-----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 7,289
Class B 35,695
Class C 1,498
Class M 139,062
-----------------------------------------------------------------------------------------------------------------
Shareholder reports 156,696
-----------------------------------------------------------------------------------------------------------------
Registration and filing fees 135,569
-----------------------------------------------------------------------------------------------------------------
Accounting service fees--Note 4 53,561
-----------------------------------------------------------------------------------------------------------------
Legal and auditing fees 49,421
-----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 28,530
-----------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 16,949
-----------------------------------------------------------------------------------------------------------------
Other 46,378
-----------------------------------------------------------------------------------------------------------------
Interest 91,913
-------------
Total expenses 2,939,295
Less expenses paid indirectly--Note 1 (5,701)
-------------
Total net expenses 2,933,594
====================================================================================================================================
Net Investment Income 7,773,142
====================================================================================================================================
Realized and Unrealized
Gain (Loss)
Net realized gain (loss) on:
Investments (including premiums on options exercised) 11,948,840
Closing and expiration of options written (64,408)
-------------
Net realized gain 11,884,432
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (7,592,463)
Options 81,432
-------------
Net change (7,511,031)
-------------
Net realized and unrealized gain 4,373,401
-------------
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $ 12,146,543
=============
See accompanying Notes to Financial Statements.
</TABLE>
14 Oppenheimer Bond Fund for Growth
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1996 December 31,
(Unaudited) 1995
===================================================================================================================================
<S> <C> <C> <C>
Operations
Net investment income $7,773,142 $9,855,256
-----------------------------------------------------------------------------------------------------------------
Net realized gain 11,884,432 9,472,765
-----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (7,511,031) 21,458,658
---------- ----------
Net increase in net assets resulting from operations 12,146,543 40,786,679
===================================================================================================================================
Dividends and Distributions to
Shareholders
Dividends from net investment income:
Class A (452,201) (92,063)
Class B (1,377,151) (728,015)
Class C (74,671) --
Class M (5,866,618) (11,839,019)
-----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A -- (80,834)
Class B -- (1,126,719)
Class C -- --
Class M -- (8,052,576)
----------
===================================================================================================================================
Beneficial Interest
Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 36,306,525 2,448,545
Class B 74,440,985 34,750,230
Class C 12,932,613 --
Class M 23,629,334 93,550,329
===================================================================================================================================
Net Assets
Total increase 151,685,359 149,616,557
-----------------------------------------------------------------------------------------------------------------
Beginning of period 276,307,590 126,691,033
---------- ----------
End of period (including excess of distributions over
net investment income of $38,430 and $40,930, respectively) $427,992,949 $276,307,590
============ ============
See accompanying Notes to Financial Statements
</TABLE>
15 Oppenheimer Bond Fund for Growth
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A Class B
------------------------------ ------------
Six Months Six Months
Ended Year Ended Ended
June 30, 1996 December 31 June 30, 1996
(Unaudited) 1995(4) (Unaudited)
==============================================================================================================================
<S> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $13.96 $13.11 $13.98
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .36 .54 .30
Net realized and unrealized gain (loss) .21 1.48 .21
------- ------ --------
Total income (loss) from investment operation .57 2.02 .51
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.34) (.68) (.28)
Distributions from net realized gain -- (.49) --
------- ------ --------
Total dividends and distributions to shareholders (.34) (1.17) (.28)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.19 $13.96 $14.21
====== ====== ======
==============================================================================================================================
Total Return, at Net Asset Value(5) 4.22% 15.42% 3.82%
==============================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $38,823 $2,502 $109,280
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $17,790 $1,799 $ 64,950
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 5.09%(6) 5.63%(6) 4.24%(6)
Expenses(7) 1.07%(6) 1.05%(6) 1.85%(6)
Expenses (excluding interest)(7)(8) 1.03%(6) 1.01%(6) 1.80%(6)
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(9) 25.15% 57.51% 25.15%
</TABLE>
1. Net of fees and expenses waived or reimbursed by Fielding Management Company,
Inc. (the former manager) and Rochester Fund Services, Inc. (the former
shareholder servicing, accounting and pricing agent), which amounted to $.07 per
share. Without reimbursement, the ratios would have been 6.79%, 2.82% and 2.75%,
respectively.
2. Net of fees and expenses waived or reimbursed by Fielding Management Company,
Inc. (the former manager) which amounted to $.01 per share. Without
reimbursement, the ratios would have been 6.50%, 2.06% and 2.04%, respectively.
3. For the period from March 11, 1996 (inception of offering) to June 30, 1996.
4. For the period from May 1, 1995 (inception of offering) to December 31, 1995.
5. 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.
16 Oppenheimer Bond Fund for Growth
<PAGE>
<TABLE>
<CAPTION>
Class C Class M
---------- --------------- ------------------------------------------
Six Months
Year Ended Period Ended Ended
December 31, June 30, 1995(3) June 30, 1996 Year Ended December 31,
1995 (Unaudited) (Unaudited) 1995 1994
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $13.11 $14.03 $13.96 $12.20 $13.16
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .45 .19 .32 .70 .68
Net realized and unrealized gain (loss) 1.51 .14 .21 2.42 (.81)
------- ------- -------- -------- --------
Total income (loss) from investment operation 1.96 .33 .53 3.12 (.13)
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.60) (.17) (.30) (.87) (.69)
Distributions from net realized gain (.49) -- -- (.49) (.14)
------- ------- -------- -------- --------
Total dividends and distributions to shareholders (1.09) (.17) (.30) (1.36) (.83)
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.98 $14.19 $14.19 $13.96 $12.20
====================================================================================================================================
Total Return, at Net Asset Value(5) 15.09% 2.35% 3.96% 26.00% (1.12)%
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $34,465 $12,854 $267,036 $239,341 $126,691
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $15,184 $ 5,696 $260,918 $181,719 $106,829
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.82%(6) 4.30%(6) 4.50%(6) 5.12% 5.24%
Expenses(7) 1.69%(6) 1.66%(6) 1.70%(6) 1.58% 1.66%
Expenses (excluding interest)(7)(8) 1.64%(6) 1.62%(6) 1.64%(6) 1.56% 1.65%
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(9) 57.51% 25.15% 25.15% 57.51% 52.82%
Year Ended December 31,
1993 1992(2) 1991(1)
---- ------ ------
Per Share Operating Data:
Net asset value, beginning of period $11.43 $ 9.37 $ 7.88
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .59 .69 .65
Net realized and unrealized gain (loss) 1.79 2.15 1.53
-------- -------- --------
Total income (loss) from investment operation 2.38 2.84 2.18
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.65) (.78) (.69)
Distributions from net realized gain -- -- --
-------- -------- --------
Total dividends and distributions to shareholders (.65) (.78) (.69)
====================================================================================================================================
Net asset value, end of period $13.16 $11.43 $9.37
====================================================================================================================================
Total Return, at Net Asset Value(5) 21.23% 31.19% 28.50%
====================================================================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $69,375 $10,241 $ 6,403
- ------------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $36,923 $ 7,369 $ 6,059
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.70% 6.62% 7.60%
Expenses(7) 1.78% 1.93% 2.01%
Expenses (excluding interest)(7)(8) 1.75% 1.91% 1.94%
- ------------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(9) 88.66% 80.09% 48.55%
</TABLE>
6. Annualized.
7. Beginning in fiscal 1995, the expense ratios reflect the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
8. During the periods shown above, the Fund's interest expense was substantially
offset by the incremental interest income generated on bonds purchased with
borrowed funds.
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 June 30, 1996 were $224,270,390 and $87,865,451, respectively.
Per share information has been determined on the basis of the weighted number of
shares outstanding during the period. See accompanying Notes to Financial
Statements.
17 Oppenheimer Bond Fund for Growth
<PAGE>
Notes to Financial Statements (Unaudited)
================================================================================
1. Significant
Accounting Policies
Oppenheimer Bond Fund for Growth (the Fund), formerly named The Bond Fund For
Growth, a portfolio of the Bond Fund Series, is a non-diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. The Fund's investment objective is to seek a high level of
total return on its assets through a combination of current income and capital
appreciation.
On January 4, 1996, Fielding Management Company, Inc. (FMC), the Fund's
investment advisor, Rochester Fund Distributors, Inc. (RFD), the Fund's
principal underwriter and Rochester Fund Services, Inc. (RFS), the Fund's
shareholder servicing, accounting and pricing agent, consummated a transaction
with OppenheimerFunds, Inc. (the Manager), which resulted in the sale to the
Manager of certain assets of FMC, RFD and RFS, including the transfer of the
investment advisory agreement and other contracts with the Fund and the use of
the name "The Rochester Funds".
On March 11, 1996, the Fund redesignated the Class A shares as Class M
shares, redesignated the Class Y shares as Class A shares and introduced a new
class of shares, designated as Class C.
The Fund offers Class A, Class B, Class C and Class M shares. Class A and
Class M 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 four 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 equity securities
for which such information is regularly reported are valued at the last sale
price of the day or, in the absence of sales, at values based on the closing bid
or asked price or the last sale price on the prior trading day. Long-term debt
securities are valued at the mean between the bid and asked price 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. 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 or asked price closest to the last reported
sale price is used. Securities for which market quotations are not readily
available are valued at fair value under consistently applied procedures
established by the Board of Trustees to determine fair value in good faith.
- --------------------------------------------------------------------------------
Security Credit Risk. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may not invest in securities with bond ratings of less than C at the time of
purchase nor may it invest in securities in default at the time of purchase. At
June 30, 1996, securities with an aggregate market value of $575,860,
representing 0.13% of the Fund's net assets, were in default.
- --------------------------------------------------------------------------------
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. As of June 30, 1996, the
Fund had an accrued tax liability of $835,814 for net unrealized gains at the
time of the 1995 acquisition of Rochester Tax Managed Fund, Inc. (see Note 8).
18 Oppenheimer Bond Fund for Growth
<PAGE>
- --------------------------------------------------------------------------------
1. Significant
Accounting Policies
(continued)
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B, Class C and Class M shares from net investment income each
day the New York Stock Exchange is open for business and pay such dividends
quarterly. Distributions from net realized gains on investments, if any, will be
declared at least once each year.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. The amount and character of
income and gains to be distributed are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences include the treatment of wash sales. Reclassifications are
made to the Fund's capital accounts to reflect income and gains available for
distribution (or available capital loss carryovers) under income tax
regulations.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Cost is determined and realized gains and losses are based
upon the specific identification method for both financial statement and federal
income tax purposes. Interest income is recorded on the accrual basis. In
computing net investment income, the Fund accretes original issue discount.
Market discount is accreted at the time of sale (to the extent of the lesser of
the accrued market discount or the disposition gain) and is treated as income,
rather than capital gain.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. Shares of
Beneficial Interest
The Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest of each class, par value $.01 per share.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996(1) Year Ended December 31, 1995(2)
--------------------------------- ------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,590,140 $36,783,010 167,169 $ 2,280,841
Dividends and distributions reinvested 19,617 277,008 12,344 172,794
Redeemed (52,960) (753,493) (358) (5,090)
--------- ----------- -------- ----------
Net increase 2,556,797 $36,306,525 179,155 $ 2,448,545
========= =========== ======== ==========
- ------------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 5,319,874 $75,781,653 2,362,379 $33,327,370
Dividends and distributions reinvested 74,080 1,047,028 114,523 1,597,930
Redeemed (167,798) (2,387,696) (12,136) (175,070)
--------- ----------- --------- -----------
Net increase 5,226,156 $74,440,985 2,464,766 $34,750,230
- ------------------------------------------------------------------------------------------------------------------------------------
Class C:
Sold 917,590 $13,096,429 -- $ --
Dividends and distributions reinvested 3,620 51,152 -- --
Redeemed (15,113) (214,968) -- --
--------- ----------- --------- -----------
Net increase 906,097 $12,932,613 -- $ --
========= ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Class M:
Sold 3,414,984 $48,349,023 7,217,942 $99,835,909
Dividends and distributions reinvested 309,259 4,362,740 1,158,342 16,067,613
Issued in connection with the acquisition of
Rochester Tax Managed Fund, Inc.--Note 8 -- -- 660,637 9,039,351
Redeemed (2,045,710) (29,082,429) (2,278,192) (31,392,544)
--------- ----------- --------- -----------
Net increase 1,678,533 $23,629,334 6,758,729 $93,550,329
========= =========== ========= ===========
</TABLE>
1. For the six months ended June 30, 1996 for Class A, Class B and Class M
shares and for the period from March 11, 1996 (inception of offering) to June
30, 1996 for Class C shares.
2. For the year ended December 31, 1995 for Class M shares and for the period
from May 1, 1995 (inception of offering) to December 31, 1995 for Class A and
Class B shares.
19 Oppenheimer Bond Fund for Growth
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
3. Unrealized Gains and
Losses on Investments
- --------------------------------------------------------------------------------
At June 30, 1996, net unrealized appreciation on investments and options written
of $9,549,911 was composed of gross appreciation of $29,332,860, and gross
depreciation of $19,782,949.
- --------------------------------------------------------------------------------
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 based on an annual
rate of 0.625% of average daily net assets up to $50 million, 0.50% of average
daily net assets on the next $250 million, and 0.4375% of average daily net
assets in excess of $300 million. During 1996, the Fund paid $16,104 to FMC (the
former manager) and $860,166 to the Manager for management and investment
advisory services.
Accounting fees paid to the Manager were in accordance with the accounting
services agreement with the Fund which provides for an annual fee of $12,000 for
the first $30 million of net assets and $9,000 for each additional $30 million
of net assets. During 1996, the Fund paid $960 to RFS (the former accounting and
pricing agent) and $52,601 to the Manager for accounting and pricing services.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund. The transfer and shareholder
servicing agent fee paid by the Fund is based on an annual maintenance fee of
$24.12 for each Class A and Class M shareholder account and $26.02 for each
Class B and Class C shareholder account. During 1996, the Fund paid a total of
$3,246 to RFS (the former shareholder servicing agent), with the remainder being
paid to OFS.
For the six months ended June 30, 1996, commissions (sales charges paid by
investors) on sales of Class A and Class M shares totaled $571,452 and
$1,305,282, of which $235,872 and $56,320, respectively, 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 $2,224,266 and $110,009, of which $28,975 and $1,653, respectively, was
paid to an affiliated broker/dealer. During the six months ended June 30, 1996,
OFDI received contingent deferred sales charges of $35,370 and $1,841,
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.
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 monthly
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 June 30, 1996, OFDI paid $901 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 that are outstanding for six years or less and on Class C shares, as
compensation for sales commissions paid from its own resources at the time of
sale and associated 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. 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 June 30, 1996,
OFDI retained $312,925 and $16,321, respectively, as compensation for Class B
and Class C sales commissions and service fee advances, as well as financing
costs. At June 30, 1996, OFDI had incurred unreimbursed expenses of $3,115,778
for Class B and $241,889 for Class C.
The Fund has adopted a reimbursement type Distribution and Service Plan for
Class M shares to reimburse OFDI for its services and costs in distributing
Class M shares and servicing accounts. Under the Plan, the Fund pays OFDI an
annual asset-based sales charge of 0.50% per year on Class M shares. OFDI also
receives a service fee of 0.25% per year to reimburse dealers for providing
personal services for accounts that hold Class M shares. OFDI may pay a portion
of the asset-based sales charge which it receives from the Fund to provide
additional compensation to broker/dealers who sell Class M shares. Both fees are
computed on the average annual net assets of Class M shares, determined as of
the close of each regular business day. During the six months ended June 30,
1996, OFDI paid $1,415 to an affiliated broker/dealer as reimbursement for Class
M personal service and maintenance expenses.
20 Oppenheimer Bond Fund for Growth
<PAGE>
================================================================================
================================================================================
5. Bank Borrowings
The Fund may borrow up to 5% of its total net assets from a bank to purchase
portfolio securities, or for temporary and emergency purposes. The Fund has
entered into an agreement which enables it to participate with two other
Rochester Division funds managed by the Manager in an unsecured line of credit
with a bank which permits borrowings up to $70 million, collectively. Interest
is charged to each fund, based on its borrowings, at a rate equal to the New
York Interbank Offer Rate (NIBOR) plus 0.75%. Borrowings are payable on demand.
The Fund had borrowings of $5,720,000 outstanding at June 30, 1996. For the
six month period ended June 30, 1996, the average monthly loan balance was
$4,745,333 at an average interest rate of 6.237%. The maximum amount of
borrowings outstanding at any month-end was $5,720,000.
- --------------------------------------------------------------------------------
6. Option Activity
The Fund may buy put options or write covered 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 or the cost of the security for
a purchased put option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. 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 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. Written option activity for the six months ended June 30, 1996 was as
follows:
<TABLE>
<CAPTION>
Call Options
Number of Amount
Options of Premiums
- --------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at December 31, 1995 2,365 $580,692
- --------------------------------------------------------------------------------
Options written 4,488 1,321,349
- --------------------------------------------------------------------------------
Options cancelled in closing purchase transactions (1,820) (853,212)
- --------------------------------------------------------------------------------
Options expired prior to exercise (1,366) (216,367)
- --------------------------------------------------------------------------------
Options exercised (1,467) (342,205)
- --------------------------------------------------------------------------------
Options outstanding at June 30, 1996 2,200 $490,257
===== ========
</TABLE>
21 Oppenheimer Bond Fund for Growth
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited) (Continued)
================================================================================
7. Illiquid and
Restricted Securities
At June 30, 1996, investments in securities included issues that are illiquid or
restricted. The securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if its valuation has not changed for a certain period of time. The Fund
may not invest more than 15% of its net assets (determined at the time of
purchase and reviewed from time to time) in illiquid or restricted securities.
The aggregate value of these securities subject to this limitation at June 30,
1996 was $32,036,941 which represents 7.49% of the Fund's net assets.
Information concerning these securities is as follows:
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CS First Boston, Inc., Equity-Linked Sr. Medium-Term Nts.:
6% (Intel Corp.), 2/16/98 2/9/96 $100.00 $113.250
6% (Charles Schwab Corp.), 2/16/98 4/24/96 $100.00 $101.000
- ------------------------------------------------------------------------------------------------------------------------------------
Comptronix Corp., 6% Cv., Series A Preferred Stock 8/18/95--1/5/96 $ 3.51 $3.000
- ------------------------------------------------------------------------------------------------------------------------------------
Danskin, Inc., 8% Cv. Sub. Debs., 9/1/02 8/14/95 $100.00 $121.032
- ------------------------------------------------------------------------------------------------------------------------------------
Discovery Zone, Inc., Zero Coupon Sub. Exchangeable
LYONS, 10/14/13 12/1/95 $26.93 $3.625
- ------------------------------------------------------------------------------------------------------------------------------------
Emerson Radio Corp., 8.5% Cv. Sr. Sub. Debs., 8/15/02 8/17/95 $100.00 $86.500
- ------------------------------------------------------------------------------------------------------------------------------------
GE Capital Corp., 2.5% Base Metals Cv. Nts., 2/14/97 1/31/94 $100.00 $101.000
- ------------------------------------------------------------------------------------------------------------------------------------
Greenery Rehabilitation Group, Inc., 6.5% Cv. Sub. Debs., 6/15/11 1/2/96 $72.75 $63.500
- ------------------------------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Debs., 10/31/03 8/29/94 $70.00 $21.500
- ------------------------------------------------------------------------------------------------------------------------------------
Hudson Hotels Corp.:
8% Cv. Sub. Debs., 2/1/04 1/28/94 $100.00 $126.104
8% Cv. Sub. Debs., 2/1/05 1/12/95 $100.00 $126.104
- ------------------------------------------------------------------------------------------------------------------------------------
Mobile Telecommunication Technologies Corp., 7.5% Cum. Cv.,
Series C Preferred Stock 5/31/96 $992.50 $1,017.500
- ------------------------------------------------------------------------------------------------------------------------------------
Nippon Denro Ispat Ltd., 3% Cv. Bonds, 4/1/01 3/1/94 $100.00 $50.000
- ------------------------------------------------------------------------------------------------------------------------------------
Physicians Clinical Laboratory, Inc., 7.5% Cv. Sub. Debs., 8/15/00 2/16/94 $103.00 $10.000
- ------------------------------------------------------------------------------------------------------------------------------------
Porta Systems Corp., Zero Coupon Cv. Sr. Sub. Nts., 1/2/98 4/1/93--5/26/94 $72.49 $48.500
- ------------------------------------------------------------------------------------------------------------------------------------
Submicron Systems Corp.:
9% Cv. Sub. Nts., 12/15/97 12/11/95 $100.00 $91.755
Warrants, Exp. 12/00 12/11/95 $ 0.00 $1.612
- ------------------------------------------------------------------------------------------------------------------------------------
Travel Ports of America, Inc.:
8.5% Cv. Sr. Sub. Debs., 1/15/05 2/13/95, 8/9/95 $100.04 $106.332
8.5% Cv. Sr. Sub. Debs., 1/15/05 (Reg S) 2/13/95, 6/14/95 $103.63 $106.332
Warrants, Exp. 1/05 2/13/95 $ 0.00 $0.847
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to be liquid and are not included within the 15%
limitation specified above.
- ------
8. Acquisition
On June 28, 1995, the Fund acquired all of the assets and liabilities of
Rochester Tax Managed Fund, Inc. (RTMF). The acquisition was accomplished by a
tax-free exchange of 660,637 Class M shares of the Fund (valued at $9,039,351)
for 760,094 shares of RTMF. The net assets of RTMF were valued at $9,039,351 and
included unrealized appreciation of $4,275,694. Prior to the acquisition, RTMF
did not distribute its net investment income or realized gains and was taxed as
a C corporation. Accordingly, an accrued tax liability was assumed by the Fund
on the date of the acquisition (see Note 1). During the second half of 1995,
approximately $2,788,000 of accumulated earnings and profits resulting from the
June 28, 1995 acquisition of RTMF was distributed to shareholders of the Fund.
The aggregate net assets of the Fund after the acquisition were $189,184,982.
22 Oppenheimer Bond Fund for Growth
<PAGE>
================================================================================
Oppenheimer Bond Fund for Growth
================================================================================
Officers and Trustees
Bridget A. Macaskill, Chairman of the Board of Trustees and President
John Cannon, Trustee
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Lacy B. Hermann, Trustee
George Loft, Trustee
Michael S. Rosen, Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Adele A. Campbell, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder
Servicing Agent OppenheimerFunds Services
================================================================================
Custodian of
Portfolio Securities Bank of New York
================================================================================
Independent Accountants Price Waterhouse LLP
================================================================================
Legal Counsel Kirkpatrick & Lockhart LLP
The financial statements included herein have been taken from the
records of the Fund without examination by the independent
accountants. This is a copy of a report to shareholders of Oppenheimer
Bond Fund for Growth. This report must be preceded or accompanied by a
Prospectus of Oppenheimer Bond Fund for Growth. 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, and are not insured by the FDIC or any other
agency, and involve investment risks, including possible loss of the
principal amount invested.
23 Oppenheimer Bond Fund for Growth
<PAGE>
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RS0345.001.0696 August 31, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Services
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As an Oppenheimer fund shareholder, you have some special privileges. Whether
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