[COVER PAGE]
Oppenheimer Quest Growth & Income Value Fund
Annual Report October 31, 1996
[LOGO]OPPENHEIMERFUNDS/R/
<PAGE>
NEWS
- ----------------
BEAT THE AVERAGE
- ----------------
Cumulative Total Return for the
3-Year period ended 9/30/96:
Oppenheimer Quest Growth
& Income Value Fund
Class A (at net asset value)(1)
- ------
55.91%
- ------
Lipper Growth and Income Funds
Average for 299 Growth and
Income Funds for the 3-Year
Period Ended 9/30/96(3)
- ------
49.53%
- ------
The Fund's Class A shares
are ranked ****
among 408 (3-year) hybrid
funds as of 9/30/96 by
MORNINGSTAR MUTUAL FUNDS.(4)
This Fund is for people who want their money to GROW over time, and want INCOME
for today's needs.
- ------------------------
HOW YOUR FUND IS MANAGED
- ------------------------
By investing in a diversified mix of what the Fund believes are undervalued
stocks of well-established companies and bonds, Oppenheimer Quest Growth &
Income Value Fund seeks to provide capital growth and may also provide income.
The Fund's diversified investment strategy offers you the potential for growth
with less risk.
- -----------
PERFORMANCE
- -----------
Cumulative total returns for the 12 months ended 9/30/96 for Class A, B, and C
shares were 16.87%, 16.10% and 16.01%, respectively, without deducting sales
charges.(1)
Your Fund's average annual total returns for Class A shares for the 1-year
period ended 9/30/96 and since inception on 11/1/91 were 10.15% and 12.19%,
respectively. For Class B shares, average annual total returns for the 1-year
period ended 9/30/96 and since inception on 9/1/93 were 11.10% and 14.01%,
respectively. For Class C shares, average annual total returns for the 1-year
period ended 9/30/96 and since inception on 9/1/93 were 15.01% and 14.37%,
respectively.(2)
- -------
OUTLOOK
- -------
"While we cannot predict where the market will be in twelve months, we believe
that opportunities remain for strong returns, and we will continue to look for
quality companies whose valuations have not, in our view, kept pace with the
market."
Colin Glinsman, Portfolio Manager
October 31, 1996
Total returns include change in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. The Fund's
Sub-Adviser is OpCap Advisors (formerly Quest for Value Advisors, the Fund's
adviser until 11/22/95).
1. Includes change in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
2. Class A returns include the current maximum initial sales charge of 5.75%.
Class A shares were first publicly offered on 11/1/91. The Fund's maximum sales
charge rate for Class A shares was lower prior to 11/22/95, so actual results
would have been greater. Class B returns include the applicable contingent
deferred sales charge of 5% (1-year) and 3% (since inception). Class C returns
include the 1% contingent deferred sales charge for the 1-year result. An
explanation of the different total returns is in the Fund's prospectus. Class B
and C shares are subject to an annual .75% asset-based sales charge and Class A
shares are subject to an annual .15% asset-based sales charge.
3. Source: Lipper Analytical Services, 9/30/96. The Lipper average is shown
for comparative purposes only. Funds included in the index may have different
investment policies and risks than the Fund. Oppenheimer Quest Growth & Income
Value Fund is characterized by Lipper as a growth and income fund. Lipper
performance is based on total return and does not take sales charges into
account.
4. Source: MORNINGSTAR MUTUAL FUNDS, 9/30/96. Morningstar rankings are 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 the underperformance of U.S.
Treasury bill returns in those periods. Risk and returns are combined to produce
star rankings, reflecting performance relative to the average fund in the fund's
category. The top 10% of funds in each investment class receive 5 stars; the
next 22.5%, 4 stars; the middle 35%, 3 stars; the next 22.5%, 2 stars, and the
bottom 10%, 1 star. The 4-star current ranking is based on the 3-year ranking
for the Fund's Class A shares, which was 4 stars. The 1-year star ranking is 3
stars, but is not included in Morningstar's overall ranking calculations. There
were 408 funds in the 1-year period. Rankings are subject to change monthly. The
Fund's Class A, B and C shares have the same investment portfolio but different
expenses.
2 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
BRIDGET A. MACASKILL
President
Oppenheimer Quest
Growth & Income
Value Fund
DEAR SHAREHOLDER,
Following a summer of uncertainty surrounding the economy and the stock
market, the arrival of fall brought renewed vigor to both. Most notable, the Dow
Jones Industrial Average broke out of its fluctuating pattern and burst through
the once-unimaginable 6,000 mark, sending many stock prices to all-time highs.
But as the Dow began accelerating faster than the economy, a debate erupted
about how long this bull run could last.
Looking back, the autumn rally was clearly a result of three main
factors: solid corporate profits, low inflation and stabilized interest rates,
all of which attracted investors to Wall Street. And though the stock market is
currently highly valued, there continue to be a number of positive economic
influences that may extend the market's uphill run.
We consider the leading catalyst to be the robust returns from corporate
America, where a strong economy boosted third-quarter earnings. To date, we're
still witnessing a cycle of events that could maintain the appeal of these
companies to investors. For example, corporate streamlining efforts, such as
spinoffs of non-core businesses, and consolidation within industries are helping
to increase the cash flow of many firms. In return, additional cash flows enable
these companies to add shareholder value by initiating stock repurchasing
programs. As corporations buy back record amounts of their own stocks, they are
reducing the supply and thereby raising the book value of their outstanding
shares, a move which further contributes to higher stock prices.
Additionally, the demand for stocks remains strong, largely because, as
many experts believe, investors are taking more responsibility for their
retirement investments. Indeed, as the country's baby boomers near retirement,
they are becoming increasingly aware of the need to secure their own financial
future, because they expect less and less from standard company pensions or
Social Security. As a result, equity mutual funds have become the fastest
growing means by which these investors are seeking to achieve their long-term
goals.
While these signs appear favorable for many well-managed companies,
stock valuations remain at historically high levels, causing us to become more
cautious about the market overall. We do not, however, expect to see a
significant market decline. In fact, we are confident that as long as corporate
earnings stay healthy, there will continue to be numerous investment
opportunities available to fill the demand for stocks. Nevertheless, it is
becoming more difficult to uncover true values and justify higher prices.
Therefore, we believe the correct approach to take at this point is to carefully
evaluate companies based on individual merits, such as strong management,
fundamental business policies and long-term prospects for the future.
Your portfolio manager discusses 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
November 21, 1996
3 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
COLIN GLINSMAN
Portfolio Manager
Q + A
An interview with your Fund's managers.
HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
Our strong stock selection once again put the Oppenheimer Quest Growth & Income
Value Fund's performance ahead of the average for its peer group. The Fund
finished 291st out of 503 growth and income funds ranked by Lipper Analytical
Services for the 1-year period ended 9/30/96.(1) This was impressive
considering that the Fund is managed conservatively for its category with
approximately one-third of the portfolio allocated to fixed income investments.
WHAT CHARACTERISTICS DO YOU LOOK FOR WHEN EVALUATING STOCKS?
We use a bottom-up approach to identify potential investments for the Fund,
researching high quality businesses with a dominant competitive edge in their
industry. Within this group we look for companies that are currently undervalued
by the market, trading at bargain prices and capable of providing high future
price appreciation.
WHAT INVESTMENTS MADE POSITIVE CONTRIBUTIONS TO PERFORMANCE OVER THE PERIOD?
Our stocks did extremely well overall. One company in particular, a personal
computer manufacturer, was undervalued at the beginning of the period due to
investor concerns that the PC market had become saturated. Seeing strong
potential in this company, and believing these concerns to be overblown, we
bought stock early on at cheap prices and realized substantial gains.(2)
DID ANY INVESTMENTS OR MARKET FACTORS HURT THE FUND?
Interest rate concerns during the period led to volatility in the bond market,
which in turn affected our fixed-income investments. Longer term bonds which are
more sensitive to fluctuations in interest rates were among our hardest hit
investments. We have since reduced the Fund's weighting in long-term bonds.
Our only disappointment on the equity side was with our cable television
holdings. Investor concerns regarding increased competition and deregulation
caused prices to fall across the sector. As a result, we have since added to our
stock positions in cable companies that we feel are strong enough to survive the
competition and provide the Fund with positive performance.
WHAT IS YOUR OUTLOOK FOR THE FUND?
While we cannot predict where the market will be in twelve months, we believe
that opportunities remain for strong returns, and we will continue to look for
quality companies whose valuations have not, in our view, kept pace with the
market. Despite the rapid increase in market prices, we are having no difficulty
finding attractive new investments.
In keeping with its stated objective, the Fund is positioned
conservatively. In a strong market, we expect the Fund to keep up with its peer
group, just as it has in the past. In a weak market, however, we believe the
Fund is positioned to do substantially better than some of the competition.//
1. Source: Lipper Analytical Services, 9/30/96. Oppeheimer Quest Growth &
Income Value Fund is characterized by Lipper as a growth and income fund.
Lipper performance is based on total return and does not take sales charges into
account.
2. The Fund's portfolio is subject to change.
4 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
=========================================
STATEMENT OF INVESTMENTS OCTOBER 31, 1996
FACE MARKET VALUE
AMOUNT SEE NOTE 1
=============================================================================================================================
<S> <C> <C> <C>
SHORT-TERM NOTES - 11.5%
- -----------------------------------------------------------------------------------------------------------------------------
Deere (John) Capital Corp., 5.27%, 11/4/96(1) $3,000,000 $ 2,998,683
------------------------------------------------------------------------------------------------------------------
Household Finance Corp., 5.25%, 11/26/96(1) 4,564,000 4,547,360
------------
Total Short-Term Notes (Cost $7,546,043) 7,546,043
=============================================================================================================================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES - 20.5%
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 7.9%
- -----------------------------------------------------------------------------------------------------------------------------
Comcast Corp., 10.625% Sr. Sub. Debs., 7/15/12 2,500,000 2,671,875
------------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 8.05% Debs., 1/15/16 2,000,000 1,958,190
------------------------------------------------------------------------------------------------------------------
Time Warner, Inc., 9.125% Debs., 1/15/13 500,000 543,065
------------
5,173,130
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 7.8%
- -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 4.1%
------------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.625% Sr. Unsec. Nts., 12/1/03 2,500,000 2,656,250
- -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 3.7%
------------------------------------------------------------------------------------------------------------------
Playtex Family Products Corp., 9% Sr. Sub. Nts., 12/15/03 2,500,000 2,443,750
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL - 1.6%
- -----------------------------------------------------------------------------------------------------------------------------
NationsBank Corp., 7.75% Sub. Nts., 8/15/15 1,000,000 1,029,718
- -----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 3.2%
- -----------------------------------------------------------------------------------------------------------------------------
Northrop Grumman Corp., 7.75% Nts., 3/1/16 2,000,000 2,057,230
------------
Total Non-Convertible Corporate Bonds and Notes (Cost $13,219,007) 13,360,078
SHARES
=============================================================================================================================
COMMON STOCKS - 64.6%
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS - 11.9%
- -----------------------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT - 1.7%
------------------------------------------------------------------------------------------------------------------
McDonald's Corp. 25,000 1,109,375
- -----------------------------------------------------------------------------------------------------------------------------
MEDIA - 5.7%
------------------------------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), TCI Group, Series A(2) 300,000 3,731,250
- -----------------------------------------------------------------------------------------------------------------------------
RETAIL: GENERAL - 4.5%
------------------------------------------------------------------------------------------------------------------
VF Corp. 45,000 2,941,875
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS - 5.4%
- -----------------------------------------------------------------------------------------------------------------------------
BEVERAGES - 2.7%
------------------------------------------------------------------------------------------------------------------
PepsiCo, Inc. 60,000 1,777,500
- -----------------------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES - 1.7%
------------------------------------------------------------------------------------------------------------------
Becton, Dickinson & Co. 26,000 1,131,000
- -----------------------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS - 1.0%
------------------------------------------------------------------------------------------------------------------
Avon Products, Inc. 12,000 651,000
- -----------------------------------------------------------------------------------------------------------------------------
ENERGY - 0.9%
- -----------------------------------------------------------------------------------------------------------------------------
OIL-INTEGRATED - 0.9%
------------------------------------------------------------------------------------------------------------------
Triton Energy Corp.(2) 13,000 580,125
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL - 14.7%
- -----------------------------------------------------------------------------------------------------------------------------
BANKS - 5.6%
------------------------------------------------------------------------------------------------------------------
Citicorp 10,000 990,000
------------------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 10,000 2,671,250
------------
3,661,250
</TABLE>
5 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
====================================
STATEMENT OF INVESTMENTS (CONTINUED)
MARKET VALUE
SHARES SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DIVERSIFIED FINANCIAL - 4.5%
------------------------------------------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. $ 50,000 $ 1,425,000
------------------------------------------------------------------------------------------------------------------
United Asset Management Corp. 60,000 1,470,000
------------
2,895,000
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE - 4.6%
------------------------------------------------------------------------------------------------------------------
ACE Ltd. 55,000 3,011,250
- -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL - 9.8%
- -----------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES - 3.4%
------------------------------------------------------------------------------------------------------------------
Briggs & Stratton Corp. 55,000 2,200,000
- -----------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 2.5%
------------------------------------------------------------------------------------------------------------------
Caterpillar, Inc. 15,000 1,029,375
------------------------------------------------------------------------------------------------------------------
Grand Metropolitan plc, Sponsored ADR 20,245 620,003
-----------
1,649,378
- -----------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.9%
------------------------------------------------------------------------------------------------------------------
Canadian Pacific Ltd. (New) 100,000 2,525,000
- -----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 21.9%
- -----------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE - 3.4%
------------------------------------------------------------------------------------------------------------------
McDonnell Douglas Corp. 40,000 2,180,000
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE - 0.9%
------------------------------------------------------------------------------------------------------------------
Adaptec, Inc.(2) 10,000 608,750
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 8.2%
------------------------------------------------------------------------------------------------------------------
Electronic Arts, Inc.(2) 100,000 3,750,000
------------------------------------------------------------------------------------------------------------------
Maxis, Inc.(2) 125,000 1,625,000
------------
5,375,000
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 5.9%
------------------------------------------------------------------------------------------------------------------
General Instrument Corp.(2) 120,000 2,415,000
------------------------------------------------------------------------------------------------------------------
Intel Corp. 13,000 1,428,375
------------
3,843,375
- -----------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY - 3.5%
------------------------------------------------------------------------------------------------------------------
Sprint Corp. 15,000 588,750
------------------------------------------------------------------------------------------------------------------
WorldCom, Inc.(2) 70,000 1,706,250
------------
2,295,000
------------
Total Common Stocks (Cost $36,149,776) 42,166,128
=============================================================================================================================
OTHER SECURITIES - 2.1%
- -----------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 6% Cv. Preferred, Structured Yield
Product Exchangeable for Cox Communication, Inc. Common Stock
(Cost $1,642,425) 71,800 1,391,125
------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $58,557,251) 98.7% 64,463,374
------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.3 842,807
------ ------------
NET ASSETS 100.0% $65,306,181
====== ============
</TABLE>
1. Short-term notes are generally traded on a discount basis; the
interest rate is the discount rate received by the Fund at the time
of purchase.
2. Non-income producing security.
See accompanying Notes to Financial Statements.
6 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
====================================================
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996
=============================================================================================================================
<S> <C> <C>
ASSETS Investments, at value (cost $58,557,251) - see accompanying statement $64,463,374
----------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 762,948
Interest and dividends 373,459
----------------------------------------------------------------------------------------------------
Other 6,725
------------
Total assets 65,606,506
=============================================================================================================================
LIABILITIES Bank overdraft 62,106
----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Shares of beneficial interest redeemed 172,002
Shareholder reports 21,488
Transfer agent and accounting service fees 13,917
Distribution and service plan fees 13,620
Trustees' fees 3,096
Other 14,096
------------
Total liabilities 300,325
=============================================================================================================================
NET ASSETS $65,306,181
============
=============================================================================================================================
COMPOSITION OF Par value of shares of beneficial interest $ 52,398
NET ASSETS ----------------------------------------------------------------------------------------------------
Additional paid-in capital 52,727,002
----------------------------------------------------------------------------------------------------
Undistributed net investment income 120,291
----------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 6,500,367
----------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments - Note 3 5,906,123
------------
Net assets $65,306,181
============
=============================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $49,322,380 and 3,952,924 shares of beneficial interest outstanding) $12.48
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $13.24
----------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $13,174,944 and 1,060,887 shares of beneficial interest outstanding) $12.42
----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $2,808,857 and 225,974 shares of beneficial interest outstanding) $12.43
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
===========================================================
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1996
=============================================================================================================================
<S> <C> <C>
INVESTMENT INCOME Interest $ 1,602,402
----------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $4,829) 574,115
------------
Total income 2,176,517
=============================================================================================================================
EXPENSES Management fees - Note 4 472,835
----------------------------------------------------------------------------------------------------
Distribution and service plan fees - Note 4:
Class A 173,048
Class B 100,727
Class C 22,005
----------------------------------------------------------------------------------------------------
Transfer agent and accounting service fees - Note 4 136,194
----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 41,572
Class B 13,329
Class C 2,758
----------------------------------------------------------------------------------------------------
Shareholder reports 53,836
----------------------------------------------------------------------------------------------------
Legal and auditing fees 29,778
----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 24,859
----------------------------------------------------------------------------------------------------
Custodian fees and expenses 24,719
----------------------------------------------------------------------------------------------------
Other 38,383
------------
Total expenses 1,134,043
Less expenses paid indirectly - Note 4 (13,485)
------------
Net expenses 1,120,558
=============================================================================================================================
NET INVESTMENT INCOME 1,055,959
=============================================================================================================================
REALIZED AND Net realized gain on investments 6,454,155
UNREALIZED GAIN ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 3,175,436
------------
Net realized and unrealized gain 9,629,591
=============================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,685,550
============
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
===================================
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED OCTOBER 31,
1996 1995
=============================================================================================================================
<S> <C> <C> <C>
OPERATIONS Net investment income $ 1,055,959 $ 965,811
----------------------------------------------------------------------------------------------------
Net realized gain 6,454,155 2,227,731
----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 3,175,436 2,324,387
-------------------------------
Net increase in net assets resulting
from operations 10,685,550 5,517,929
=============================================================================================================================
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS Class A (830,842) (917,781)
TO SHAREHOLDERS Class B (138,167) (105,700)
Class C (28,888) (17,697)
----------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (1,723,234) (1,275,011)
Class B (359,598) (129,812)
Class C (82,370) (20,124)
=============================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2:
Class A 6,377,895 3,863,132
Class B 4,189,051 4,358,519
Class C 683,425 1,300,722
=============================================================================================================================
NET ASSETS Total increase 18,772,822 12,574,177
----------------------------------------------------------------------------------------------------
Beginning of period 46,533,359 33,959,182
-------------------------------
End of period (including undistributed net investment
income of $120,291 and $62,229, respectively) $65,306,181 $46,533,359
===============================
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
====================
FINANCIAL HIGHLIGHTS
CLASS A
----------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
1996(2) 1995 1994 1993 1992
====================================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.92 $10.09 $11.24 $10.80 $10.00
- --------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .23 .27(3) .32(3) .30(3) .28(3)
Net realized and unrealized gain 2.05 1.27 .55 .73 .80
- --------------------------------------------------------------------------------------------------------------------
Total income from investment
operations 2.28 1.54 .87 1.03 1.08
- --------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.22) (.29) (.32) (.26) (.28)
Distributions from net realized gain (.50) (.42) (1.70) (.33) --
- --------------------------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.72) (.71) (2.02) (.59) (.28)
- --------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.48 $10.92 $10.09 $11.24 $10.80
======================================================================
====================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 21.84% 16.35% 8.64% 9.93% 10.84%
====================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $49,322 $37,082 $30,576 $28,466 $8,057
- --------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $43,428 $33,397 $29,112 $23,771 $6,940
- --------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 2.03% 2.60%(5) 3.16%(5) 2.66%(5) 2.73%(5)
Expenses(7) 1.90% 1.99%(5) 1.86%(5) 1.90%(5) 2.23%(5)
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 124.2% 130.0% 113.0% 192.0% 77.0%
Average brokerage commission rate(9) $0.0548 -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
====================
FINANCIAL HIGHLIGHTS
CLASS B
-------------------------------------------------------
YEAR ENDED OCTOBER 31,
1996(2) 1995 1994 1993(1)
=====================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.88 $10.07 $11.23 $11.21
- -----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .19(3) .25(3) .04(3)
Net realized and unrealized gain 2.03 1.28 .56 .05
- -----------------------------------------------------------------------------------------------------
Total income from investment
operations 2.20 1.47 .81 .09
- -----------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.16) (.24) (.27) (.07)
Distributions from net realized gain (.50) (.42) (1.70) --
- -----------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.66) (.66) (1.97) (.07)
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $12.42 $10.88 $10.07 $11.23
=======================================================
=====================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 21.07% 15.65% 7.96% 0.81%
=====================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $13,175 $7,623 $2,928 $319
- -----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $10,097 $4,856 $1,586 $228
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.40% 1.71%(5) 2.53%(5) 1.83%(5)(6)
Expenses(7) 2.53% 2.59%(5) 2.47%(5) 2.49%(5)(6)
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 124.2% 130.0% 113.0% 192.0%
Average brokerage commission rate(9) $0.0548 -- -- --
</TABLE>
1. For the period from September 1, 1993 (inception of offering) to October 31,
1993.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment adviser
to the Fund.
3. Based on average shares outstanding for the period.
4. 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.
5. During the periods presented above, the former Adviser voluntarily waived a
portion of its fees. If such waivers had not been in effect, the ratios of net
investment income to average net assets and the ratios of expenses to average
net assets for Class A would have been 2.57% and 2.02%, respectively, for the
year ended October 31, 1995, 2.70% and 2.32%, respectively, for the year ended
October 31, 1994, 2.38% and 2.18%, respectively, for the year ended October 31,
1993, and 1.98% and 2.98%, respectively, for the year ended October 31, 1992.
The ratios of net investment income to average net assets and the ratios of
expenses to average net assets would have been 1.73% and 2.57%, respectively,
for Class B and 1.43% and 2.84%, respectively, for Class C, for the year ended
October 31, 1995, 2.07% and 2.93%, respectively, for Class B and 1.91% and
3.10%, respectively, for Class C, for the year ended October 31, 1994, and 1.44%
and 2.88%, respectively, for Class B and 1.80% and 2.87%, respectively, for
Class C, for the period September 1, 1993 (inception of offering) to October
31, 1993.
10 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
<TABLE>
<CAPTION>
--------------------------------
FINANCIAL HIGHLIGHTS (Continued)
CLASS C
------------------------------------------------------
YEAR ENDED OCTOBER 31,
1996(2) 1995 1994 1993(1)
====================================================================================================
PER SHARE OPERATING DATA:
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.89 $10.07 $11.23 $11.21
- ----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .17 .15(3) .24(3) .04(3)
Net realized and unrealized gain 2.02 1.30 .56 .05
- ----------------------------------------------------------------------------------------------------
Total income from investment
operations 2.19 1.45 .80 .09
- ----------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.15) (.21) (.26) (.07)
Distributions from net realized gain (.50) (.42) (1.70) --
- ----------------------------------------------------------------------------------------------------
Total dividends and distributions
to shareholders (.65) (.63) (1.96) (.07)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $12.43 $10.89 $10.07 $11.23
======================================================
====================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 20.97% 15.38% 7.91% 0.81%
====================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $2,809 $1,828 $455 $102
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $2,200 $ 968 $298 $100
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.40% 1.39%(5) 2.39%(5) 2.18%(5)(6)
Expenses(7) 2.53% 2.88%(5) 2.62%(5) 2.49%(5)(6)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 124.2% 130.0% 113.0% 192.0%
Average brokerage commission rate(9) $0.0548 -- -- --
</TABLE>
6. Annualized.
7. Beginning in fiscal 1996, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund. Prior year expense ratios have not been
adjusted.
8. 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 October 31, 1996 were $66,479,417 and $66,212,071, respectively.
9. Total brokerage commissions paid on applicable purchases and sales of
portfolio securities for the period, divided by the total number of related
shares purchased and sold.
See accompanying Notes to Financial Statements.
11 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Growth & Income Value Fund (the Fund), formerly named
Quest for Value Growth and Income Fund, a series of Oppenheimer Quest for
Value Funds, is 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 combination of growth of capital and
investment income with growth of capital as the primary objective. On
November 22, 1995, OCC Distributors (previously Quest for Value
Distributors), OpCap Advisors (previously Quest for Value Advisors) and
their parent Oppenheimer Capital consummated a transaction with
OppenheimerFunds, Inc. (the Manager), which resulted in the sale to the
Manager of certain mutual fund assets of OCC Distributors and OpCap
Advisors including the transfer of Quest for Value Funds and the use of the
name "Quest for Value." As part of the transaction, the Fund entered into
an investment advisory agreement with the Manager and the Manager has
entered into a sub-advisory agreement with OpCap Advisors (the former
Manager). The Fund offers Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge. Class B and Class C shares
may be subject to a contingent deferred sales charge. All three classes of
shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution and/or service plan,
expenses directly attributable to a particular class and exclusive voting
rights with respect to matters affecting a single class. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
INVESTMENT VALUATION. Portfolio securities are valued at the close of the
New York Stock Exchange on each trading day. Listed and unlisted securities
for which such information is regularly reported are valued at the last
sale price of the day or, in the absence of sales, at values based on the
closing bid or the last sale price on the prior trading day. Long-term and
short-term "non-money market" debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Such securities which
cannot be valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by
the Board of Trustees to determine fair value in good faith. Short-term
"money market type" debt securities having a remaining maturity of 60 days
or less are valued at cost (or last determined market value) adjusted for
amortization to maturity of any premium or discount.
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. At October 31, 1996,
the Fund had available for federal income purposes an unused capital loss
carryover of approximately $46,000, which expires in 2000.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders
are recorded on the ex-dividend date.
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 their ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gain (loss) was
recorded by the Fund.
12 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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. Interest income in accrued on a daily
basis. 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.
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest. Transactions in shares of beneficial interest were as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
--------------------------- ----------------
SHARES AMOUNT SHARES AMOUNT
Class A:
<S> <C> <C> <C> <C>
Sold 966,147 $11,466,003 790,817 $ 8,471,883
Dividends and distributions
reinvested 219,311 2,441,586 216,701 2,097,137
Redeemed (627,593) (7,529,694) (641,530) (6,705,888)
--------- ------------ --------- ------------
Net increase 557,865 $ 6,377,895 365,988 $ 3,863,132
========= ============ ========= ============
Class B:
Sold 482,330 $ 5,647,365 438,682 $ 4,674,731
Dividends and distributions
reinvested 42,284 468,109 22,368 217,205
Redeemed (164,144) (1,926,423) (51,318) (533,417)
--------- ------------ --------- ------------
Net increase 360,470 $ 4,189,051 409,732 $ 4,358,519
========= ============ ========= ============
Class C:
Sold 96,190 $ 1,134,271 140,694 $ 1,497,250
Dividends and distributions
reinvested 9,569 105,983 3,711 36,149
Redeemed (47,618) (556,829) (21,778) (232,677)
--------- ------------ --------- ------------
Net increase 58,141 $ 683,425 122,627 $ 1,300,722
========= ============ ========= ============
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1996, net unrealized appreciation on investments of
$5,906,123 was composed of gross appreciation of $8,340,380, and gross
depreciation of $2,434,257.
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 0.85% of
average annual net assets. Prior to November 22, 1995, management fees were
paid to the former Manager at an annual rate of 0.85% of the Fund's average
net assets. The Manager has agreed to reimburse the Fund if aggregate
expenses (with specified exceptions) exceed the most stringent applicable
regulatory limit on Fund expenses. The Manager acts as the accounting agent
for the Fund at an annual fee of $55,000, plus out-of-pocket costs and
expenses reasonably incurred. Prior to November 22, 1995, accounting service
fees were paid monthly to the former Manager.
Effective November 22, 1995, the Manager pays OpCap Advisors (the
Sub-Adviser) a monthly fee based on the fee schedule set forth in the
Prospectus. For the period ended October 31, 1996, the Manager paid $173,666
to the Sub-Adviser.
13 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
For the year ended October 31, 1996, commissions (sales charges paid by
investors) on sales of Class A shares totaled $121,912, of which $53,994 was
retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by affiliated broker/dealers. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B
and Class C shares totaled $184,452 and $9,314, respectively, of which
$10,906 was paid to an affiliated broker/dealer for Class B shares. During
the year ended October 31, 1996, OFDI received contingent deferred sales
charges of $25,162 and $1,359, respectively, upon redemption of Class B and
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 registered
investment companies. The Fund pays OFS an annual maintenance fee of $14.85
for each Fund shareholder account and reimburses OFS for its out-of-pocket
expenses. During the period ended October 31, 1996, the Fund paid OFS
$64,382.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Distribution and Service Plan for Class A shares to
compensate OFDI for a portion of its costs incurred in connection with the
personal service and maintenance of accounts that hold Class A shares. Under
the Plan, the Fund pays an annual asset-based sales charge to OFDI of 0.15%
per year on Class A shares. The Fund also pays a service fee to OFDI of
0.25% per year. Both fees are computed on the average annual net assets of
Class A shares of the Fund, determined as of the close of each regular
business day. OFDI uses all of the service fee and a portion of the
asset-based sales charge to compensate brokers, dealers, banks and other
financial institutions quarterly for providing personal service and
maintenance of accounts of their customers that hold Class A shares. OFDI
retains the balance of the asset-based sales charge to reimburse itself for
its other expenditures under the Plan.
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 and Class C shares, as compensation for sales commissions
paid from its own resources at the time of sale and associated financing
costs. OFDI also receives a service fee of 0.25% per year as compensation
for costs incurred in connection with the personal service and maintenance
of accounts that hold shares of the Fund, including amounts paid to brokers,
dealers, banks and other financial institutions. Both fees are computed on
the average annual net assets of Class B and Class C shares, determined as
of the close of each regular business day. During the year ended October 31,
1996, OFDI retained $83,077 and $11,762, respectively, as compensation for
Class B and Class C sales commissions and service fee advances, as well as
financing costs. If the Plans are terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for certain expenses it incurred before the Plans were
terminated. At October 31, 1996, OFDI had incurred unreimbursed expenses of
$106,918 for Class B and $1,913 for Class C.
14 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Oppenheimer Quest Growth & Income Value Fund
To the Board of Trustees and Shareholders of
Oppenheimer Quest Growth & Income Value Fund
In our opinion, the accompanying statement of assets and liabilities,
including the statement of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Oppenheimer Quest Growth & Income Value Fund (formerly Quest for Value
Growth and Income Fund, one of the portfolios constituting Oppenheimer
Quest for Value Funds, formerly Quest for Value Family of Funds, hereafter
referred to as the Fund) at October 31, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to
as financial statements) are the responsibility of the Fund's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial statements
in accordance with generally accepted auditing standards which require that
we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at October 31, 1996
by correspondence with the custodian, provide a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
Denver, Colorado
November 21, 1996
15 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1997 shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1996.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
Dividends paid by the Fund during the fiscal year ended October 31, 1996
which are not designated as capital gain distributions should be multiplied
by 11.20% to arrive at the net amount eligible for the corporate
dividend-received deduction.
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 adviser for specific
guidance.
16 Oppenheimer Quest Growth & Income Value Fund
<PAGE>
OPPENHEIMER QUEST GROWTH & INCOME VALUE FUND
A Series of Oppenheimer Quest for Value Funds
OFFICERS AND TRUSTEES Bridget A. Macaskill, Chairman of the Board of
Trustees and President
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
Robert C. Doll, Jr., Vice President
George C. Bowen, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
INVESTMENT ADVISER OppenheimerFunds, Inc.
SUB-ADVISER OpCap Advisors
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
TRANSFER AND OppenheimerFunds Services
SHAREHOLDER SERVICING
AGENT
CUSTODIAN OF PORTFOLIO State Street Bank and Trust Company
SECURITIES
INDEPENDENT Price Waterhouse LLP
ACCOUNTANTS
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of Oppenheimer Quest Growth &
Income Value Fund. This report must be preceded or accompanied by a
Prospectus of Oppenheimer Quest Growth & Income Value 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.
17 Oppenheimer Quest Growth & Income Value Fund
