<PAGE>
================================
Annual Report September 30, 1998
================================
O P P E N H E I M E R
Insured
Municipal Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's
Manager
8 Fund Performance
- --------------------
13 Financial
Statements
31 Independent
Auditors' Report
- --------------------
32 Federal
Income Tax
Information
33 Officers and
Trustees
36 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o Top-quartile performance: The Fund's Class A shares were ranked 6 out of 51
insured municipal funds measured by Lipper Analytical Services, Inc. for the
one-year period ended September 30, 1998./1/
o In our opinion, tax-free municipal bond yields are extremely attractive in
relation to taxable U.S. Treasury bond yields.
Avg Annual Total Returns
For the 1-Year Period Ended 9/30/98
Class A
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
9.01% 3.83%
- --------------------------------------------------------------------------------
Class B
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
8.18% 3.18%
- --------------------------------------------------------------------------------
Class C
Without Sales Chg./2/ With Sales Chg./3/
- --------------------------------------------------------------------------------
8.18% 7.18%
- --------------------------------------------------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Source: Lipper Analytical Services, Inc., 9/30/98.
Based on the comparisons between changes in net asset value without considering
sales charges, with dividends and capital gains distributions of the Fund's
Class A shares reinvested. The Fund's Class A shares were ranked 6 out of 51
(1-year), 6 out of 29 (5-year), 4 out of 16 (10-year) among insured municipal
funds for the periods ended 9/30/98.
2. Includes changes in net asset value per share without deducting any sales
charges.
3. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class B and
C shares are subject to a 0.75% asset-based sales charge. An explanation of the
different performance calculations is in the Fund's prospectus.
2 Oppenheimer Insured Municipal Fund
<PAGE>
[PHOTO]
James C. Swain
Chairman
Oppenheimer
Insured Municipal Fund
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Insured Municipal Fund
Dear shareholder,
- --------------------------------------------------------------------------------
The performance of the financial markets over the past several months could be
viewed as "A Tale of Two Markets." Until mid-July, the excitement surrounding
the stock market's continued ascent to new record highs overshadowed the
favorable economic environment that existed for bonds: low inflation and
declining interest rates. However, since late summer, amid heightened global
concern, stocks declined sharply. Yet, despite continued economic concerns
worldwide, the bond market appeared ready to benefit.
Why have the stock and bond markets responded differently? The financial
crises in Asia and Russia have weakened the earnings of some large U.S.
corporations and have contributed to a slowdown in U.S. economic growth.
Although this slowing economic growth has negatively impacted stocks, it created
a positive environment for bonds. That's because slowing economic growth
generally means fewer inflationary pressures and, as we've recently seen,
interest rates also tend to decline.
What should you do during this period of relative uncertainty? If you have
well-defined, long-term financial goals and an investment strategy designed to
achieve them, we encourage you to stay the course. However, if you feel your
financial plan is out-of-date or incomplete, now is the time to make
improvements. The best way to cope with short-term volatility is to adhere to a
long-term plan that contains proven strategies, such as diversification among
various financial markets, geographic regions, investment styles and individual
securities. A long-term plan will give you the focus and perspective you need
to put short-term volatility in its proper context.
As longstanding advocates of financial planning, we have been encouraged by
our shareholders' rational responses to the latest market events. Many of you
tell us that you have a long-term strategy in place, which includes diversifying
your investment portfolio among a number of different asset classes in
accordance with your tolerance for risk. At OppenheimerFunds, our portfolio
management teams include seasoned professionals who have encountered extreme
market volatility in the past, giving them the perspective required to address
risks and take advantage of opportunities in turbulent markets. In our view,
having a well-defined set of financial goals, a disciplined long-term strategy
and the help of experienced investment professionals are all fundamental parts
of The Right Way to Invest.
Sincerely,
/s/ James C. Swain /s/ Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
October 21, 1998
3 Oppenheimer Insured Municipal Fund
<PAGE>
"One of the
major decisions
that a bond
manager makes
is regarding
duration."
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How did Oppenheimer Insured Municipal Fund perform during the last 12 months?
The Fund provided investors with strong total returns for the fiscal year. In
fact, the Fund's Class A shares were ranked 6 out of 51 insured municipal funds
as measured by Lipper Analytical Services, Inc. for the 1-year period ended
September 30, 1998.(1)
During the period, bond prices rose dramatically and interest rates declined.
As a result, the fixed monthly dividend payment on the Fund's Class A shares was
reduced from $0.0743 per share at September 30, 1997 to $0.0655 per share at
September 30, 1998.
What factors affected the Fund's performance?
A bias toward a longer than average duration during a period of falling interest
rates was the key factor driving the Fund's performance.
While the fund performed well relative to its peers, municipal bonds as a
sector have lagged the gains in Treasury bonds. The Asian economic crisis, which
surfaced last summer, caused investors to seek the safety and liquidity of U.S.
Treasury bonds, and ignore all other fixed income securities.
Another reason why municipal bonds' performance lagged behind that of
Treasury securities is that most munis are "callable" and Treasury bonds are
not. In other words, Treasury securities cannot be redeemed before maturity by
the issuer, in this case, the U.S. government. In contrast, most municipal bond
investors risk such calls when interest rates fall dramatically, forcing them to
reinvest at lower yields. As a result, prices on municipal bonds do not rise as
much in a falling interest rate environment as prices on noncallable Treasury
notes and bonds.
4 Oppenheimer Insured Municipal Fund
<PAGE>
Portfolio Management Team (l to r)
Bob Patterson,
Caryn Halbrecht (Portfolio Manager),
Jerry Webman
Compared to last year, the supply of municipal bonds in 1998 has doubled. This
contributed to munis' dampened performance, relative to Treasuries. Low interest
rates have encouraged municipalities to issue new bonds and refinance old debt
at lower rates. In addition, state and local governments have enjoyed a
healthier fiscal environment, which has permitted them to obtain political
backing for new projects. The combination of these factors has led to tax-exempt
yields on `Aaa' municipals that are equal to or higher than long Treasury bonds,
representing terrific value.
What specific investment strategies have worked well for the Fund?
We emphasized bonds maturing in 15 years, which given the risk taken, generally
offered better yield than longer term investments. For instance, an investor
might pick up an extra percentage point by extending a maturity from 1 to 15
years, whereas an extension from 15 to 30 years would only add another 20 basis
points in yield.
Another strategy that worked well was to take advantage of the market's
desire for noncallable munis, which are very popular in a period of declining
interest rates.
1. Source: Lipper Analytical Services, Inc., 9/30/98. Based on the comparisons
between changes in net asset value without considering sales charges, with
dividends and capital gains distributions of the Fund's Class A shares
reinvested. The Fund's Class A shares were ranked 6 out of 51 (1-year), 6 out of
29 (5-year), 4 out of 16 (10-year) among insured municipal funds for the periods
ended 9/30/98.
5 Oppenheimer Insured Municipal Fund
<PAGE>
================================
Avg Annual Total Returns
For the Periods Ended 9/30/98(2)
================================
Class A
1 year 5 year 10 year
====================================
3.83% 4.76% 7.62%
====================================
Class B
Since
1 year 5 year Inception
====================================
3.18% 4.66% 5.60%
====================================
Class C
Since
1 year 5 year Inception
====================================
7.18% N/A 7.70%
====================================
An interview with your Fund's manager
- --------------------------------------------------------------------------------
We sold some of these noncallable bonds at a high price and bought some very
attractively priced callable bonds. However, we focused on bonds that couldn't
be called for ten years.
Have any of your strategies proven less successful?
Yes. One of the major decisions that a bond manager makes is regarding
"duration," which measures the sensitivity of the portfolio to interest rate
changes. Over the past few years, we have been very successful in managing
duration. However, this year's interest rate movements were particularly
unusual. At times, we had a shorter duration than our performance benchmark when
we believed interest rates had fallen far enough. That means that our portfolio
didn't rise in value as much as it otherwise would have during certain periods
of the year.
What is your outlook for the bond market over the coming months?
We do not believe that the global economic turmoil will be over very soon. This
suggests that sluggish growth, very low inflation, and low interest rates will
continue for sometime. All of these conditions create a good environment for
bond-holders. In our opinion, municipal bonds should remain very attractive
investments compared to U.S. Treasury bonds.
2. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 11/11/86. The Fund's
maximum sales charge for Class A shares was lower prior to 2/1/93, so actual
performance may have been higher. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 2% (5 -year) and 1% (since
inception on 5/3/93). Class C returns for the one-year result include the
contingent deferred sales charge of 1%. Class C shares have an inception date of
8/29/95. Class B and C shares are subject to an annual 0.75% asset-based sales
charge. An explanation of the different performance calculations is in the
Fund's prospectus.
6 Oppenheimer Insured Municipal Fund
<PAGE>
Credit Allocation/3/
[PIE CHART]
* AAA 78.2%
* AA 19.6
* A 2.2
Standardized Yields/4/
For the 30-days Ended 9/30/98
- -------------------------------------
Class A 3.99%
- -------------------------------------
Class B 3.44
- -------------------------------------
Class C 3.44
- -------------------------------------
As of September 30, 1998, Oppenheimer Insured Municipal Fund Class A
shares' yield of 3.99% at fiscal year end is equivalent to a taxable yield of
6.61% for an investor in a 39.6% federal income tax bracket. We think investors
will find these yields attractive, particularly if the stock market continues to
encounter difficulty. Regardless of the market environment, we will continue to
search for municipal bonds that offer high-quality tax-exempt income for our
shareholders. This search for quality, yield and performance is what makes
Oppenheimer Insured Municipal Fund part of The Right Way to Invest.
10 Largest Positions by State/3/
- -----------------------------------------------------------------------------
Pennsylvania 13.8%
- -----------------------------------------------------------------------------
Texas 11.9
- -----------------------------------------------------------------------------
Illinois 11.2
- -----------------------------------------------------------------------------
California 7.2
- -----------------------------------------------------------------------------
Indiana 6.2
- -----------------------------------------------------------------------------
Colorado 5.5
- -----------------------------------------------------------------------------
New York 5.2
- -----------------------------------------------------------------------------
District of Columbia 4.6
- -----------------------------------------------------------------------------
Washington 4.4
- -----------------------------------------------------------------------------
Georgia 4.4
- -----------------------------------------------------------------------------
3. Portfolio data is subject to change. Percentages are as of September 30, 1998
and are dollar-weighted based on invested assets. Securities rated by any rating
organization are included in the equivalent Standard & Poor's rating category.
Average credit quality and allocation include rated securities and those not
rated by a national rating organization (currently 2.86% of total investments)
but which the ratings given above have been assigned by the Manager for internal
purposes as being comparable, in the Manager's judgment, to securities rated by
a rating agency in the same category.
4. Standardized yield is based on net investment income for the 30-day period
ended September 30, 1998. Falling share prices will tend to artificially raise
yields.
7 Oppenheimer Insured Municipal Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion by the Manager of the Fund's
performance during its fiscal year ended September 30, 1998, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
. Management's Discussion of Performance
During the past fiscal year that ended September 30, 1998, Oppenheimer Insured
Municipal Fund's investments generally appreciated in a falling interest rate
environment. However, the municipal bond market as a whole did not perform as
well as the U.S. Treasury bond market, which global investors sought as a refuge
from the Asian economic crisis. As a result, municipal bond price increases have
lagged those of taxable investments. However, municipal bonds are currently
offering very attractive yields, particularly for those investors in high tax
brackets. The Fund's portfolio and its portfolio manager's strategies are
subject to change.
During the Fund's fiscal year ended September 30, 1998, the Fund maintained
the practice, to the extent consistent with the amount of the Fund's net
investment income and other distributable income, of attempting to pay dividends
on Class A Shares at a constant level. The Fund was able to pay dividends at the
targeted level from net investment income and other distributable income,
without any material impact on the Manager's portfolio management practices or
on the Fund's net asset value per share.
8 Oppenheimer Insured Municipal Fund
<PAGE>
. Comparing the Fund's Performance to the Market
The graphs that follow show the performance of a hypothetical $10,000 investment
in each Class of shares of the Fund held until September 30, 1998. In the case
of Class A shares, performance is measured over a ten-year period. In the case
of Class B shares, performance is measured from inception of the Class on May 3,
1993. In the case of Class C shares, performance is measured from inception of
the Class on August 29, 1995. The Fund's performance reflects the deduction of
the 4.75% maximum initial sales charge on Class A shares, the 5% (1-year) and 2%
(5-year) and 1% (since inception) applicable contingent deferred sales charge
for Class B, and the 1% (1-year) contingent deferred sales charge for Class C
shares. The graphs assume that all dividends and capital gains distributions
were reinvested in additional shares.
The Fund's performance is compared to the performance of that of the Lehman
Brothers Municipal Bond Index, an unmanaged index of a broad range of investment
grade municipal bonds that is widely regarded as a measure of the performance of
the general municipal bond market. Index performance reflects the reinvestment
of dividends but does not consider the effect of capital gains or transaction
costs, and none of the data in the graphs that follow shows the effect of taxes.
The Fund's performance reflects the effects of Fund business and operating
expenses. While index comparisons may be useful to provide a benchmark for the
Fund's performance, it must be noted that the Fund's investments are not limited
to the securities in the index.
9 Oppenheimer Insured Municipal Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of change in value of $10,000 Hypothetical Investments in:
Oppenheimer Insured Municipal Fund (Class A) and Lehman Brothers Municipal Bond
Index
[The following table was originally a line graph in the printed materials.]
Oppenheimer Insured Lehman Brothers
Municipal Fund Municipal Bond
Date Class A Index
---- ------------------- ----------------
9/30/88 $ 9,525 $ 10,000
9/30/89 10,417 10,868
9/30/90 11,022 11,607
9/30/91 12,463 13,137
9/30/92 13,803 14,511
9/30/93 15,737 16,359
9/30/94 14,882 15,960
9/30/95 16,415 17,747
9/30/96 17,509 18,819
9/30/97 19,128 20,514
9/30/98 20,852 22,301
Average Annual Total Return of Class A Shares of the Fund at 09/30/98(1)
1 Year 3.83% 5 Year 4.76% 10 Year 7.62%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Insured Municipal Fund (Class B) and Lehman Brothers
Municipal Bond Index
[The following table was originally a line graph in the printed materials.]
Oppenheimer Insured Lehman Brothers
Municipal Fund Municipal Bond
Date Class B Index
---- ------------------- -----------------
5/3/93 $ 10,000 $ 10,000
9/30/93 10,604 10,569
9/30/94 9,949 10,312
9/30/95 10,892 11,466
9/30/96 11,531 12,159
9/30/97 12,502 13,254
9/30/98 13,424 14,409
9/30/99
Average Annual Total Return of Class B Shares of the Fund at 9/30/98(2)
1 Year 3.18% 5 Year 4.66% Life 5.60%
10 Oppenheimer Insured Municipal Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Insured Municipal Fund (Class C) and Lehman Brothers Municipal Bond
Index
[The following table was originally a line graph in the printed materials.]
Oppenheimer Insured Lehman Brothers
Municipal Fund Municipal Bond
Date Class A Index
---- -------------------- ----------------
8/29/95 10,000 10,000
9/30/95 10,130 10,063
9/30/96 10,714 10,671
9/30/97 11,622 11,631
9/30/98 12,573 12,645
Average Annual Total Return of Class C Shares of the Fund at 9/30/98(3)
1 Year 7.18% Life 7.70%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for the Lehman Brothers Municipal Bond Index in the
graphs begins on 4/30/93 for Class B and begins on 8/31/95 for Class C.
1. The average annual total returns are shown net of the applicable 4.75%
maximum initial sales charge.
2. Class B shares of the Fund were first publicly offered on 5/3/93. The average
annual total returns are shown net of the applicable 5%, 2% and 1% contingent
deferred sales charges, respectively, for the one-, five-year period and the
life of the class. The ending account value in the graph is net of the
applicable 1% contingent deferred sales charge.
3. Class C shares of the Fund were first publicly offered on 8/29/95. The
average annual total returns are shown net of the applicable 1% contingent
deferred sales charge for the one-year period.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
11 Oppenheimer Insured Municipal Fund
<PAGE>
Financials
--------------------------------------
12 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Investments September 30, 1998
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- -----------------------------------------------------------------------------------------------
Municipal Bonds and Notes--101.3%
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alaska--3.5%
AK Export & IDAU RB, Snettisham
Hydroelectric Power, First Series,
AMBAC Insured, 5.50%, 1/1/16 Aaa/AAA $1,145,000 $1,212,910
- -----------------------------------------------------------------------------------------------
AK Export & IDAU RB, Snettisham
Hydroelectric Power, First Series,
AMBAC Insured, 5.50%, 1/1/17 Aaa/AAA 1,265,000 1,336,865
- -----------------------------------------------------------------------------------------------
AK Student Loan Corp. RRB, Series A,
AMBAC Insured, 5.30%, 7/1/15 Aaa/AAA 2,165,000 2,235,925
----------
4,785,700
- -----------------------------------------------------------------------------------------------
Arizona--0.9%
AZ Educational LMC RRB, Series B,
7%, 3/1/05 Aa2/NR 1,090,000 1,177,407
- -----------------------------------------------------------------------------------------------
California--7.3%
CA SCDAU Revenue Refunding COP,
Cedars-Sinai Medical Center, MBIA Insured,
6.50%, 8/1/12 Aaa/AAA 1,000,000 1,219,920
- -----------------------------------------------------------------------------------------------
Pomona, CA USD GORB, Series A,
MBIA Insured, 6.15%, 8/1/15 Aaa/AAA 1,000,000 1,202,230
- -----------------------------------------------------------------------------------------------
Redding, CA Electric System Revenue COP,
MBIA Insured, Inverse Floater, 8.803%, 7/8/22(1) Aaa/AAA 1,500,000 2,064,375
- -----------------------------------------------------------------------------------------------
Sacramento, CA MUD Electric RRB, Series G,
MBIA Insured, 6.50%, 9/1/13 Aaa/AAA/A 1,000,000 1,231,010
- -----------------------------------------------------------------------------------------------
San Francisco, CA City & Cnty. International
Airport Commission RB, Second Series
Issue 14-A, MBIA Insured, 8%, 5/1/09 Aaa/AAA 1,455,000 1,812,406
- -----------------------------------------------------------------------------------------------
Turlock, CA Irrigation District RRB, Series A,
MBIA Insured, 5%, 1/1/13 Aaa/AAA/AAA 2,175,000 2,294,647
----------
9,824,588
- -----------------------------------------------------------------------------------------------
Colorado--5.6%
Centennial Water & Sanitation District CO,
Water & Sewer RB, 5.75%, 6/15/15 Aaa/AAA 1,775,000 1,938,513
- -----------------------------------------------------------------------------------------------
CO Housing FAU MH RB, Series B-2,
5.90%, 10/1/38 Aa2/AA 1,000,000 1,044,170
- -----------------------------------------------------------------------------------------------
CO Housing FAU SFM CAP RB, Series C-1,
Zero Coupon, 5.625%, 11/1/29(2) Aa2/NR 5,000,000 912,150
- -----------------------------------------------------------------------------------------------
CO Housing FAU SFM RB, Sr. Lien, Series C-2,
6.875%, 11/1/28 Aa2/NR 2,000,000 2,268,020
</TABLE>
13 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Colorado (continued)
Douglas and Elbert Cntys., CO SDI No. RE-1,
Improvement GOB, Series A, MBIA
Insured, 8%, 12/15/09 Aaa/AAA $1,000,000 $1,337,380
-----------
7,500,233
- ----------------------------------------------------------------------------------------------
Connecticut--3.1%
CT Housing FAU RB, Series A, Subseries A-2,
6.20%, 11/15/22 Aa2/AA 960,000 1,032,662
- ----------------------------------------------------------------------------------------------
CT Housing FAU RRB, Series A, Subseries D-2,
6.20%, 11/15/27 Aa2/AA 995,000 1,067,187
- ----------------------------------------------------------------------------------------------
CT Housing FAU RRB, Subseries C-2,
5.85%, 11/15/28 Aa2/AA 2,000,000 2,113,840
----------
4,213,689
- ----------------------------------------------------------------------------------------------
Florida--2.7%
FL HFA MH RRB, Series C, 6%, 8/1/11 NR/AAA 1,000,000 1,090,630
- ----------------------------------------------------------------------------------------------
Lee Cnty., FL Hospital Board of Directors
RRB, MBIA Insured, Inverse Floater,
8.548%, 3/26/20(1) Aaa/AAA 1,000,000 1,181,250
- ----------------------------------------------------------------------------------------------
Miami-Dade Cnty., FL SPO RRB, Sub. Lien,
Series A, MBIA Insured, Zero Coupon,
5.45%, 10/1/15(2) Aaa/AAA 3,000,000 1,314,690
----------
3,586,570
- ----------------------------------------------------------------------------------------------
Georgia--4.4%
Dalton, GA DAU RB, MBIA Insured,
5.50%, 8/15/26 Aaa/AAA 1,000,000 1,109,370
- ----------------------------------------------------------------------------------------------
GA MEAU RRB, Project One, Sub. Lien,
Series A, AMBAC Insured, 5.375%, 1/1/13 Aaa/AAA/A- 2,285,000 2,442,825
- ----------------------------------------------------------------------------------------------
Richmond Cnty., GA DAU RB, Sub. Lien,
Series C, Zero Coupon, 5.82%, 12/1/21(2) Aaa/NR 8,000,000 2,429,680
----------
5,981,875
- ----------------------------------------------------------------------------------------------
Illinois--11.3%
Chicago, IL BOE GOB, Chicago School
Reform Project, Series A, AMBAC Insured,
5.25%, 12/1/22 Aaa/AAA/AAA 2,000,000 2,044,840
- ----------------------------------------------------------------------------------------------
Chicago, IL Midway Airport RRB, Series A,
MBIA Insured, 5.125%, 1/1/35 Aaa/AAA 2,000,000 1,999,840
- ----------------------------------------------------------------------------------------------
Chicago, IL O'Hare International Airport
RRB, General Airport, Second Lien, Series A,
AMBAC Insured, 5.50%, 1/1/16 Aaa/AAA/AAA 2,500,000 2,641,250
- ----------------------------------------------------------------------------------------------
Chicago, IL SFM RB, Series B, 6.95%, 9/1/28 Aaa/NR 1,890,000 2,156,339
</TABLE>
14 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Illinois (continued)
Cook Cnty., IL Community College
District No. 508 Chicago COP, FGIC Insured,
8.75%, 1/1/05 Aaa/AAA/AAA $ 500,000 $ 627,295
- -----------------------------------------------------------------------------------------------
Cook Cnty., IL Community College District
No. 508 Lease COP, Series C, MBIA Insured,
7.70%, 12/1/07 Aaa/AAA 1,500,000 1,907,955
- -----------------------------------------------------------------------------------------------
Cook Cnty., IL SDI No. 99 Cicero GOB,
FGIC Insured, 8.50%, 12/1/05 Aaa/AAA 1,170,000 1,487,725
- -----------------------------------------------------------------------------------------------
IL HFAU RRB, Northwestern Medical
Facilities, MBIA Insured, 5%, 11/15/10 Aaa/NR/AAA 2,285,000 2,388,488
----------
15,253,732
- -----------------------------------------------------------------------------------------------
Indiana--6.3%
Hamilton Southeastern, IN Consolidated
School Building Corp. RRB, First Mtg.,
AMBAC Insured, 7%, 7/1/11 Aaa/AAA/AAA 500,000 542,870
- -----------------------------------------------------------------------------------------------
IN HFAU RRB, Holy Cross Health Systems
Corp., MBIA Insured, 5%, 12/1/22 Aaa/AAA/AAA 2,500,000 2,470,450
- -----------------------------------------------------------------------------------------------
IN HFFAU Hospital RB, Clarian Health
Partners, Inc., Series A, 6%, 2/15/21 Aa3/AA/AA 2,000,000 2,200,160
- -----------------------------------------------------------------------------------------------
IN Office Building Commission Capital
Complex RB, Series B, MBIA Insured,
7.40%, 7/1/15 Aaa/AAA 2,500,000 3,304,525
---------
8,518,005
- -----------------------------------------------------------------------------------------------
Massachusetts--4.2%
MA Health & Educational FA RB, Mt. Auburn
Hospital Issue, Series B-1, MBIA Insured,
6.25%, 8/15/14 Aaa/AAA 1,000,000 1,118,860
- -----------------------------------------------------------------------------------------------
MA HFA RB, Series A, AMBAC Insured,
6.60%, 7/1/14 Aaa/AAA/AAA 1,905,000 2,069,268
- -----------------------------------------------------------------------------------------------
MA TUAU Metropolitan Highway System
RRB, Sr. Lien, Series A, MBIA Insured,
5%, 1/1/37 Aaa/AAA/AAA 2,500,000 2,493,450
---------
5,681,578
- -----------------------------------------------------------------------------------------------
Nevada--1.6%
Clark Cnty., NV Passenger Facility Charge RB,
Las Vegas McCarran International Airport
Project, Series B, MBIA Insured, 6.50%, 7/1/12 Aaa/AAA 2,000,000 2,192,600
- -----------------------------------------------------------------------------------------------
New Hampshire--0.4%
NH Turnpike System RRB, Series A,
FGIC Insured, 6.75%, 11/1/11 Aaa/AAA/AAA 500,000 592,065
</TABLE>
15 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New Jersey--1.2%
Bergen Cnty., NJ Utilities WPCAU RRB,
Series A, FGIC Insured, 5%, 12/15/14 Aaa/AAA $1,545,000 $1,591,613
- ----------------------------------------------------------------------------------------------
New York--5.2%
L.I., NY PAU Electric Systems RRB, Series A,
FSA Insured, 5.125%, 12/1/22 Aaa/AAA/AAA 4,000,000 4,055,880
- ----------------------------------------------------------------------------------------------
NYS United Nations Development Corp.RRB,
Sr.Lien, Series B, 5.60%, 7/1/26 A2/NR/A 3,000,000 3,013,860
----------
7,069,740
- ----------------------------------------------------------------------------------------------
North Carolina--2.6%
NC Medical Care Community HCF RB,
Duke University Health Systems, Series B,
5%, 6/1/28 Aa3/AA/AA 3,500,000 3,470,320
- ----------------------------------------------------------------------------------------------
Ohio--2.1%
OH HFA Mtg.RB, 6.10%, 9/1/28 NR/AAA 1,990,000 2,132,584
Streetsboro, OH SDI GOB, AMBAC Insured,
7.125%, 12/1/10 Aaa/AAA/AAA 500,000 636,710
----------
2,769,294
- ----------------------------------------------------------------------------------------------
Oklahoma--1.7%
OK Industrial Authority Health Systems RB,
Baptist Medical Center, Series C, AMBAC
Insured, 7%, 8/15/05 Aaa/AAA/AAA 2,000,000 2,341,040
- ----------------------------------------------------------------------------------------------
Pennsylvania--14.0%
Allegheny Cnty., PA Airport RRB, Pittsburgh
International Airport, Series A, MBIA Insured,
5.75%, 1/1/08 Aaa/AAA 1,000,000 1,109,250
- ----------------------------------------------------------------------------------------------
Berks Cnty., PA GOB, Prerefunded, FGIC
Insured, Inverse Floater, 8.672%, 11/10/20(1) Aaa/AAA/AAA 1,000,000 1,217,500
- ----------------------------------------------------------------------------------------------
Chester Cnty., PA Education & HFAU RRB,
Series B, 5.375%, 5/15/27 A1/AA-/AA- 3,575,000 3,664,947
- ----------------------------------------------------------------------------------------------
Delaware Valley, PA Regional FAU Local
Government RB, Series B, AMBAC Insured,
5.70%, 7/1/27 Aaa/AAA 2,000,000 2,294,400
- ----------------------------------------------------------------------------------------------
PA HEAA Student Loan RB, Series B, AMBAC
Insured, Inverse Floater, 8.419%, 3/1/22(1) Aaa/AAA/AAA 1,250,000 1,437,500
- ----------------------------------------------------------------------------------------------
Philadelphia, PA Airport IDAU RB,
Philadelphia Airport System Project, Series A,
FGIC Insured, 5.125%, 7/1/28 Aaa/AAA 3,000,000 3,012,930
- ----------------------------------------------------------------------------------------------
Philadelphia, PA Airport RB, Series 387A,
Inverse Floater, 6.95%, 6/15/12(1) Aaa/AAA/AAA 1,565,000 1,750,296
- ----------------------------------------------------------------------------------------------
Philadelphia, PA Airport RB, Series 387B,
Inverse Floater, 6.95%, 6/15/14(1) Aaa/AAA/AAA 1,960,000 2,156,039
</TABLE>
16 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pennsylvania (continued)
Philadelphia, PA Regional POAU Lease RB,
MBIA Insured, Inverse Floater, 8.50%, 9/1/20(1) Aaa/AAA $1,900,000 $2,256,250
----------
18,899,112
- ----------------------------------------------------------------------------------------------
South Dakota--0.8%
SD Lease Revenue Trust Certificates, Series B,
FSA Insured, 8%, 9/1/02 Aaa/AAA 1,000,000 1,147,440
- ----------------------------------------------------------------------------------------------
Texas--12.0%
Cedar Hill, TX ISD CAP RRB, Zero Coupon,
6.10%, 8/15/11(2) Aaa/AAA/AAA 1,585,000 858,071
- ----------------------------------------------------------------------------------------------
Grand Prairie, TX HFDC RRB, Dallas/Ft.Worth
Medical Center Project, AMBAC Insured,
6.875%, 11/1/10 Aaa/AAA 1,800,000 2,072,538
- ----------------------------------------------------------------------------------------------
Harris Cnty., TX Hospital District RRB,
AMBAC Insured, 7.40%, 2/15/10 Aaa/AAA/AAA 2,000,000 2,440,740
- ----------------------------------------------------------------------------------------------
Harris Cnty., TX Houston Sports Authority
Special CAP RB, Jr. Lien, Series B, MBIA
Insured, Zero Coupon, 11.013%, 11/15/13(2) Aaa/AAA/AAA 4,360,000 2,071,349
- ----------------------------------------------------------------------------------------------
Lower Neches Valley, TX IDAU Corp. RRB,
Mobil Oil Refining Corp., 5.55%, 3/1/33 Aa2/AA 3,000,000 3,151,860
- ----------------------------------------------------------------------------------------------
Lower Neches Valley, TX IDAU Corp. Sewer
Facilities RB, Mobil Oil Refining Corp. Project,
6.40%, 3/1/30 Aa2/AA 1,000,000 1,104,250
- ----------------------------------------------------------------------------------------------
Rio Grande Valley TX HFDC Retirement
Facilities RB, Golden Palms, Series B, MBIA
Insured, 6.40%, 8/1/12 Aaa/AAA 2,000,000 2,192,700
- ----------------------------------------------------------------------------------------------
Tarrant Cnty., TX HFDC RB, Texas Health
Resources System, Series A, MBIA Insured,
5.75%, 2/15/11 Aaa/AAA 2,130,000 2,367,580
----------
16,259,088
- ----------------------------------------------------------------------------------------------
Washington--4.5%
Chelan Cnty., WA Public Utilities District
No.1 RB, Chelan Hydro Conservation
System-Division III, Series A, 5.60%, 7/1/32 Aa3/AA 2,000,000 2,111,500
- ----------------------------------------------------------------------------------------------
Tacoma, WA Electric Systems RB,
Prerefunded, AMBAC Insured, Inverse
Floater, 9.013%, 1/2/15(1) Aaa/AAA/AAA 1,000,000 1,152,500
- ----------------------------------------------------------------------------------------------
WA PP Supply System RRB, Nuclear Project
No.1, Series A, 5%, 7/1/13 Aa1/AA-/AA- 1,500,000 1,527,270
</TABLE>
17 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Investments (Continued)
================================================================================
<TABLE>
<CAPTION>
Ratings:
Moody's/
S&P/Fitch Face Market Value
(Unaudited) Amount See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Washington (continued)
WA PP Supply System RRB, Nuclear Project
No.2, Series A, FGIC Insured, Zero Coupon,
5.50%, 7/1/09(2) Aaa/AAA/AAA $2,000,000 $1,240,720
------------
6,031,990
- -----------------------------------------------------------------------------------------------
Wisconsin--1.2%
WI Health & Educational FA RB, Aurora
Medical Group, Inc. Project, FSA Insured,
6%, 11/15/11 Aaa/AAA 1,370,000 1,596,406
- -----------------------------------------------------------------------------------------------
District of Columbia--4.7%
DC Convention Center Authority Dedicated
Tax RB, Sr. Lien, AMBAC Insured, 5%, 10/1/21 Aaa/AAA/AAA 3,000,000 2,993,880
- -----------------------------------------------------------------------------------------------
DC Hospital RRB, Medlantic Healthcare
Group, Series A, MBIA Insured, 5.25%, 8/15/12 Aaa/AAA 1,000,000 1,049,040
- -----------------------------------------------------------------------------------------------
DC RRB, Prerefunded, Series A-1, MBIA
Insured, 6%, 6/1/11 Aaa/AAA 100,000 115,670
- -----------------------------------------------------------------------------------------------
DC RRB, Unrefunded Balance, Series A-1,
MBIA Insured, 6%, 6/1/11 Aaa/AAA 1,900,000 2,171,814
------------
6,330,404
- -----------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $126,698,612) 101.3% 136,814,489
- -----------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.3) (1,812,306)
--------- ------------
Net Assets 100.0% $135,002,183
========= ============
</TABLE>
18 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
To simplify the listings of securities, abbreviations are used per the table
below:
<TABLE>
<CAPTION>
<S> <C> <C>
BOE --Board of Education LMC --Loan Marketing Corp.
CAP --Capital Appreciation MEAU --Municipal Electric Authority
COP --Certificates of Participation MH --Multifamily Housing
DAU --Development Authority MUD --Municipal Utility District
FA --Facilities Authority NYS --New York State
FAU --Finance Authority PAU --Power Authority
GOB --General Obligation Bonds POAU --Port Authority
GORB --General Obligation Refunding Bonds PP --Public Power
HCF --Health Care Facilities RB --Revenue Bonds
HEAA --Higher Education Assistance Agency RRB --Revenue Refunding Bonds
HFA --Housing Finance Agency SCDAU --Statewide Communities Development Authority
HFAU --Health Facilities Authority SDI --School District
HFDC --Health Facilities Development Corp. SFM --Single Family Mtg.
HFFAU --Health Facilities Finance Authority SPO --Special Obligations
IDAU --Industrial Development Authority TUAU --Turnpike Authority
ISD --Independent School District USD --Unified School District
L.I. --Long Island WPCAU --Water Pollution Control Authority
</TABLE>
1. Represents the current interest rate for a variable rate bond known as an
"inverse floater" which pays interest at a rate that varies inversely with
short-term interest rates. As interest rates rise, inverse floaters produce less
current income. Their price may be more volatile than the price of a comparable
fixed-rate security. Inverse floaters amount to $13,215,710 or 9.79% of the
Fund's net assets as of September 30,1998.
2. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
As of September 30, 1998, securities subject to the alternative minimum tax
amount to $45,239,049 or 33.51% of the Fund's net assets.
See accompanying Notes to Financial Statements.
19 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Assets and Liabilities September 30, 1998
================================================================================
<TABLE>
<CAPTION>
====================================================================================================
Assets
- ----------------------------------------------------------------------------------------------------
<S> <C>
Investments, at value (cost $126,698,612)--see accompanying statement $ 136,814,489
- ----------------------------------------------------------------------------------------------------
Cash 18,819
- ----------------------------------------------------------------------------------------------------
Receivables:
Interest 1,656,357
Shares of beneficial interest sold 333,128
Investments sold 99,107
- ----------------------------------------------------------------------------------------------------
Other 16,310
-----------
Total assets 138,938,210
====================================================================================================
Liabilities
Payables and other liabilities:
Investments purchased 3,421,063
Dividends 297,350
Distribution and service plan fees 79,900
Shares of beneficial interest redeemed 70,535
Transfer and shareholder servicing agent fees 15,223
Other 51,956
---------
Total liabilities 3,936,027
====================================================================================================
Net Assets $ 135,002,183
=============
====================================================================================================
Composition of Net Assets
Paid-in capital $ 124,052,041
- ----------------------------------------------------------------------------------------------------
Overdistributed net investment income (297,350)
- ----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 1,131,615
- ----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 10,115,877
-------------
Net assets $ 135,002,183
=============
</TABLE>
20 Oppenheimer Insured Municipal Fund
<PAGE>
<TABLE>
<S> <C>
=============================================================================================
=============================================================================================
=============================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$102,687,383 and 5,607,969 shares of beneficial interest outstanding) $18.31
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $19.22
- ---------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $27,391,541 and
1,495,409 shares of beneficial interest outstanding) $18.32
- ---------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $4,923,259 and
268,917 shares of beneficial interest outstanding) $18.31
</TABLE>
See accompanying Notes to Financial Statements
21 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statement of Operations For the Year Ended September 30, 1998
================================================================================
<TABLE>
<CAPTION>
====================================================================================================
<S> <C>
Investment Income
Interest $ 6,659,055
====================================================================================================
Expenses
Management fees--Note 4 545,563
- ----------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 231,419
Class B 237,967
Class C 36,548
- ----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 101,131
- ----------------------------------------------------------------------------------------------------
Shareholder reports 47,288
- ----------------------------------------------------------------------------------------------------
Registration and filing fees 44,748
- ----------------------------------------------------------------------------------------------------
Custodian fees and expenses 26,754
- ----------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 12,920
- ----------------------------------------------------------------------------------------------------
Accounting service fees--Note 4 12,000
- ----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 4,048
- ----------------------------------------------------------------------------------------------------
Other 7,848
---------
Total expenses 1,308,234
Less expenses paid indirectly--Note 4 (17,548)
---------
Net expenses 1,290,686
====================================================================================================
Net Investment Income 5,368,369
====================================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 2,061,528
Closing of futures contracts (879,746)
---------
Net realized gain 1,181,782
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 3,993,214
---------
Net realized and unrealized gain 5,174,996
====================================================================================================
Net Increase in Net Assets Resulting from Operations $ 10,543,365
=============
</TABLE>
See accompanying Notes to Financial Statements.
22 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Ended September 30,
1998 1997
===============================================================================================
<S> <C> <C>
Operations
Net investment income $ 5,368,369 $ 5,398,040
- -----------------------------------------------------------------------------------------------
Net realized gain 1,181,782 559,776
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 3,993,214 3,288,007
------------- -------------
Net increase in net assets resulting from operations 10,543,365 9,245,823
===============================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (4,498,622) (4,428,263)
Class B (921,805) (753,073)
Class C (140,882) (72,828)
- -----------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (646,115) --
Class B (149,337) --
Class C (19,416) --
===============================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 8,417,042 4,293,559
Class B 6,601,026 3,315,084
Class C 2,237,718 1,554,898
===============================================================================================
Net Assets
Total increase 21,422,974 13,155,200
- -----------------------------------------------------------------------------------------------
Beginning of period 113,579,209 100,424,009
------------- -----------
End of period [including undistributed (overdistributed) net
investment income of $(297,350) and $310,788, respectively] $ 135,002,183 $ 113,579,209
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
Class A
------------------------------------------------------------------
Year Ended September 30,
1998 1997 1996 1995 1994
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 17.72 $ 17.07 $ 16.86 $ 16.14 $ 18.06
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .80 .91 .90 .90 .89
Net realized and unrealized gain (loss) .75 .63 .20 .71 (1.84)
----------- ----------- ----------- ----------- -----------
Total income (loss) from
investment operations 1.55 1.54 1.10 1.61 (.95)
- -----------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.84) (.89) (.89) (.89) (.89)
Distributions from net realized gain (.12) -- -- -- (.08)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions
to shareholders (.96) (.89) (.89) (.89) (.97)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 18.31 $ 17.72 $ 17.07 $ 16.86 $ 16.14
=========== =========== =========== =========== ===========
=======================================================================================================================
Total Return, at Net Asset Value(3) 9.01% 9.25% 6.67% 10.29% (5.46)%
=======================================================================================================================
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $ 102,687 $ 91,051 $ 83,516 $ 76,691 $ 67,793
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 96,458 $ 86,511 $ 81,233 $ 70,650 $ 66,953
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.49% 5.25% 5.27% 5.52% 5.23%
Expenses(5) 0.89% 0.95% 1.02% 0.95% 1.05%
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 73% 77% 93% 58% 99%
</TABLE>
1. For the period from August 29, 1995 (inception of offering) to September 30,
1995.
2. Per share amounts calculated based on the average shares outstanding
during the period.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
4. Annualized.
24 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
<TABLE>
<CAPTION>
Class B Class C
- ---------------------------------------------------------------------- --------------------------------------------------
Year Ended September 30, Year Ended September 30,
1998 1997 1996 1995 1994 1998 1997(2) 1996 1995(1)
==============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 17.73 $ 17.08 $ 16.87 $ 16.15 $ 18.07 $ 17.72 $ 17.06 $ 16.86 $ 16.72
- -----------------------------------------------------------------------------------------------------------------------------
.67 .76 .77 .78 .77 .70 .76 .75 .08
.74 .65 .20 .71 (1.86) .71 .65 .21 .14
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1.41 1.41 .97 1.49 (1.09) 1.41 1.41 .96 .22
- -----------------------------------------------------------------------------------------------------------------------------
(.70) (.76) (.76) (.77) (.75) (.70) (.75) (.76) (.08)
(.12) -- -- -- (.08) (.12) -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
(.82) (.76) (.76) (.77) (.83) (.82) (.75) (.76) (.08)
- -----------------------------------------------------------------------------------------------------------------------------
$ 18.32 $ 17.73 $ 17.08 $ 16.87 $ 16.15 $ 18.31 $ 17.72 $ 17.06 $ 16.86
========== ========== ========== ========== ========== ========== ========== ========== ==========
=============================================================================================================================
8.18% 8.43% 5.87% 9.47% (6.20)% 8.18% 8.48% 5.77% 1.30%
=============================================================================================================================
$ 27,392 $ 19,974 $ 15,983 $ 13,341 $ 11,571 $ 4,923 $ 2,554 $ 924 $ 211
- -----------------------------------------------------------------------------------------------------------------------------
$ 23,817 $ 17,309 $ 14,822 $ 11,987 $ 9,209 $ 3,661 $ 1,720 $ 618 $ 1
- -----------------------------------------------------------------------------------------------------------------------------
3.76% 4.48% 4.50% 4.75% 4.43% 3.82% 4.45% 4.38% 4.89%(4)
1.64% 1.71% 1.77% 1.71% 1.82% 1.64% 1.72% 1.81% 1.07%(4)
- -----------------------------------------------------------------------------------------------------------------------------
73% 77% 93% 58% 99% 73% 77% 93% 58%
</TABLE>
5. Beginning in fiscal 1996, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended September 30, 1998, were $102,480,896 and $90,478,993, respectively.
See accompanying Notes to Financial Statements.
25 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Notes to Financial Statements
================================================================================
================================================================================
1. Significant Accounting Policies
Oppenheimer Insured Municipal Fund (the Fund) is a separate series of
Oppenheimer Municipal Fund, a 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 current income exempt
from Federal income tax. The Fund will, under normal market conditions, invest
at least 80% of its assets in Municipal Securities and will invest at least 65%
of its total assets in insured Municipal Securities. The Fund's investment
advisor is Oppenheimer Funds, Inc.(the Manager).The Fund offers Class A, Class B
and Class C shares. Class A shares are sold with a front-end sales charge. Class
B and Class C shares may be subject to a contingent deferred sales charge. All
classes of shares have identical rights to earnings, assets and voting
privileges, except that each class has its own distribution and/or service plan,
expenses directly attributable to that class and exclusive voting rights with
respect to matters affecting that class. Class B shares will automatically
convert to Class A shares six years after the date of purchase. The following is
a summary of significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term "non-
money market" debt securities are valued by a portfolio pricing service approved
by the Board of Trustees. Such securities which cannot be valued by an approved
portfolio pricing service are valued using dealer-supplied valuations provided
the Manager is satisfied that the firm rendering the quotes is reliable and that
the quotes reflect current market value, or are valued under consistently
applied procedures established by the Board of Trustees to determine fair value
in good faith. Short-term "money market type" debt securities having a remaining
maturity of 60 days or less are valued at cost (or last determined market value)
adjusted for amortization to maturity of any premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
26 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends
monthly. Distributions from net realized gains on investments, if any, will be
declared at least once each year.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes.The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended September 30, 1998, amounts have been reclassified to reflect an
increase in paid-in capital of $420,762, a decrease in undistributed net
investment income of $415,198, and a decrease in accumulated net realized gain
on investments of $5,564.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Original issue discount on securities purchased
is amortized over the life of the respective securities, in accordance with
federal income tax requirements.As of November 4, 1997, in order to conform book
and tax bases, the Fund began amortization of premiums on securities for book
purposes. Such cumulative change was limited to a reclassification adjustment
and had no impact on net assets or total increase (decrease) in net assets.
Accordingly, during the year ended September 30, 1998, amounts have been
reclassified to reflect an increase in net unrealized appreciation on
investments of $549,002. Paid-in capital was decreased by the same amount. For
bonds acquired after April 30, 1993, on disposition or maturity, taxable
ordinary income is recognized to the extent of the lesser of gain or market
discount that would have accrued over the holding period.Realized gains and
losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
27 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1998 Year Ended September 30, 1997
----------------------------- -----------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------
Class A:
<S> <C> <C> <C> <C>
Sold 955,728 $ 17,118,675 925,621 $ 16,067,826
Dividends and distributions
reinvested 212,388 3,794,412 190,616 3,300,646
Redeemed (698,348) (12,496,045) (870,242) (15,074,913)
------- ------------ ------- ------------
Net increase 469,768 $ 8,417,042 245,995 $ 4,293,559
======= ============ ======= ============
- ------------------------------------------------------------------------------------------------
Class B:
Sold 543,004 $ 9,724,208 328,196 $ 5,695,198
Dividends and distributions
reinvested 39,547 706,671 28,559 494,913
Redeemed (213,910) (3,829,853) (165,697) (2,875,027)
------- ------------ ------- ------------
Net increase 368,641 $ 6,601,026 191,058 $ 3,315,084
======= ============ ======= ============
- ------------------------------------------------------------------------------------------------
Class C:
Sold 156,606 $ 2,808,699 106,290 $ 1,838,223
Dividends and distributions
reinvested 7,178 128,230 2,660 46,164
Redeemed (39,038) (699,211) (18,976) (329,489)
------- ------------ ------- ------------
Net increase 124,746 $ 2,237,718 89,974 $ 1,554,898
======= ============ ======= ============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Investments
As of September 30, 1998, net unrealized appreciation on investments of
$10,115,877 was composed of gross appreciation of $10,115,877.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.45% of the first
$100 million of average annual net assets, 0.40% of the next $150 million,
0.375% of the next $250 million and 0.35% of net assets in excess of $500
million. The Fund's management fee for the year ended September 30, 1998, was
0.44% of average annual net assets for its Class A, Class B and Class C shares.
The Manager acts as the accounting agent for the Fund at an annual fee of
$12,000, plus out-of-pocket costs and expenses reasonably incurred.
28 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
================================================================================
- --------------------------------------------------------------------------------
For the year ended September 30, 1998, commissions (sales charges paid by
investors) on sales of Class A shares totaled $197,210, of which $47,360 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 $350,427 and $27,494, respectively, of which $5,664 and
$2,600, respectively, was paid to an affiliated broker/deal or Class B and Class
C shares. During the year ended September 30, 1998, OFDI received contingent
deferred sales charges of $80,736 and $1,564, 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.
OppenheimerFunds Services (OFS), a division of the Manager, is the transfer
and shareholder servicing agent for the Fund and for other Oppenheimer funds.
OFS's total costs of providing such services are allocated ratably to these
funds.
Expenses paid indirectly represent a reduction of custodian fees for earnings
on cash balances maintained by the Fund.
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 shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the year ended September 30, 1998, OFDI paid $11,269 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its 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 and Class C shares for its
services rendered in distributing Class B and Class C shares. OFDI also receives
a service fee of 0.25% per year to compensate dealers for providing personal
services for accounts that hold Class B and Class C shares. Each fee is
computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the year ended
September 30, 1998, OFDI paid $2,503 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and retained
$197,544 and $25,438, respectively, as compensation for Class B and Class C
sales commissions and service fee advances, as well as financing costs. If
either Plan is terminated by the Fund, the Board of Trustees may allow the Fund
to continue payments of the asset-based sales charge to OFDI for distributing
shares before the Plan was terminated. As of September 30, 1998, OFDI had
incurred excess distribution and servicing costs of $875,951 for Class B and
$67,456 for Class C.
29 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Notes to Financial Statements (Continued)
================================================================================
================================================================================
5. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
or write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended September 30,
1998.
30 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Independent Auditors' Report
================================================================================
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Insured Municipal Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Insured Municipal Fund as of
September 30, 1998, the related statement of operations for the year then
ended, the statements of changes in net assets for the years ended September
30, 1998 and 1997, and the financial highlights for the period October 1, 1993,
to September 30, 1998. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
September 30, 1998, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer Insured
Municipal Fund at September 30, 1998, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Denver, Colorado
October 21, 1998
31 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Federal Income Tax Information (Unaudited)
================================================================================
================================================================================
In early 1999, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $0.1935, $0.1823 and $0.1823 per share were paid to Class A,
Class B and Class C shareholders, respectively, on December 10, 1997, of which,
for each class of shares, $0.0150 was designated as a capital gain distribution
in the "28% Rate Group" and $0.0178 was designated as a capital gain
distribution in the "20% Rate Group" for federal income tax purposes. Whether
received in stock or cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of capital assets.
None of the dividends paid by the Fund during the fiscal year ended September
30, 1998 are eligible for the corporate dividend-received deduction. The
dividends were derived from interest on municipal bonds and are not subject to
federal income tax. To the extent a shareholder is subject to any state or local
tax laws, some or all of the dividends received may be taxable.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
32 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
Oppenheimer Insured Municipal Fund
================================================================================
A Series of Oppenheimer Municipal Fund
================================================================================
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Trustee, Vice President, Treasurer
and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
Caryn R. Halbrecht, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of
Oppenheimer Insured Municipal Fund. This report must
be preceded or accompanied by a Prospectus of
Oppenheimer Insured Municipal Fund. For material
information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, and are not insured by the FDIC or any other
agency, and involve investment risks, including
possible loss of the principal amount invested.
33 Oppenheimer Insured Municipal Fund
<PAGE>
================================================================================
OppenheimerFunds Family
================================================================================
<TABLE>
<S> <C> <C>
===========================================================================================
Real Asset Funds
- -------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
===========================================================================================
Global Stock Funds
- -------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
===========================================================================================
Stock Funds
- -------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
===========================================================================================
Stock & Bond Funds
- -------------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund/1/ Convertible Securities Fund/2/
Value Fund Equity Income Fund
===========================================================================================
Taxable Bond Funds
- -------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
===========================================================================================
Municipal Bond Funds
- -------------------------------------------------------------------------------------------
California Municipal Fund/3/ Pennsylvania Municipal Fund/3/ Rochester Division:
Florida Municipal Fund/3/ Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund/3/ Insured Municipal Fund Limited Term New York
New York Municipal Fund/3/ Intermediate Municipal Fund Municipal Fund
===========================================================================================
Money Market Funds/4/
- -------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
34 Oppenheimer Insured Municipal Fund
<PAGE>
Internet
24-hr access to account
information. Online
transactions now available
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pmET
1-800-525-7048
Account Transactions
Mon-Fri 8:30am-8pm ET
1-800-852-8457
PhoneLink
24-hr automated information
and automated transactions
1-800-533-3310
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
1-800-843-4461
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
1-800-835-3104
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RA0865.001.0998 November 27, 1998
