<PAGE> 1
ANNUAL REPORT OCTOBER 31, 1997
OPPENHEIMER
QUEST GROWTH &
INCOME VALUE FUND
[PHOTO]
[OPPENHEIMER LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
4 Fund Performance
6 An Interview with the Fund's Managers
10 Statement of Investments
14 Statement of Assets & Liabilities
16 Statement of Operations
17 Statements of Changes in Net Assets
18 Financial Highlights
20 Notes to Financial Statements
26 Report of Independent Accountants
27 Federal Income Tax Information
28 Shareholder Meeting
29 Officers & Trustees
32 Information & Services
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
THE FUND'S POSITIVE PERFORMANCE can be traced back to two major influences:
- - FIRST, the stellar performance of the U.S. economy produced lower interest
rates, which in turn provided capital appreciation for fixed-income investors.
- - SECOND, the overwhelming growth in the stock market.
ANNUAL TOTAL RETURNS
For the 1-Year Period Ended 10/31/97 (without sales charges)(1)
CLASS A
25.18%
CLASS B
24.55%
CLASS C
24.51%
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.
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
2 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer Quest
Growth & Income
Value Fund
DEAR SHAREHOLDER,
- --------------------------------------------------------------------------------
As you are no doubt aware, during the end of October and early November many
stock markets around the world recorded their all-time largest point declines,
followed by subsequent gains and continued volatility, leaving investors
uncertain about what would occur next.
To put those events in focus, let's look at a "snapshot" of the two-week
time period. Sharp declines in the overseas stock markets, particularly in Asia,
triggered a series of sell-offs throughout Europe, Latin America and the United
States. In response, the U.S. stock market, as measured by the Dow Jones
Industrial Average, dropped 554 points on October 27, its largest point decline
in history. However, almost as quickly, the U.S. stock market bounced back over
the succeeding few days, regaining nearly all of its losses.
While no one could have predicted the timing or extent of these
fluctuations, many analysts, including our fund managers here at
OppenheimerFunds, had warned of a correction for several months. We believed
that U.S. valuations were too high, stocks were expensive relative to bonds,
recent corporate earnings were somewhat disappointing and that Federal Reserve
Chairman Alan Greenspan could possibly seek a short-term interest rate hike.
While only one short-term interest rate hike occurred in March of 1997, the
other factors have held true.
We'd like to take this opportunity to remind shareholders that stock
market volatility is a normal and expected part of the business cycle. As Alan
Greenspan suggested, in years to come this period will likely be remembered as a
positive change for a market that was growing too quickly.
For frequent market updates, please visit our website at
WWW.OPPENHEIMERFUNDS.COM or call 1-800-835-3104 to listen to our recorded
messages. In the meantime, thank you for your confidence in OppenheimerFunds,
The Right Way to Invest. We look forward to helping you reach your investment
goals in the future.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
November 21, 1997
3 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 4
AVG ANNUAL TOTAL RETURNS
For the Period Ended 9/30/97(1)
<TABLE>
<CAPTION>
CLASS A
Since
1 year 5 year Inception
<S> <C> <C>
18.90% 14.91% 14.44%
<CAPTION>
CLASS B
Since
1 year 5 year Inception
<S> <C> <C>
20.50% N/A 16.81%
<CAPTION>
CLASS C
Since
1 year 5 year Inception
<S> <C> <C>
24.46% N/A 16.99%
<CAPTION>
Cumulative Total Return
For the Period Ended 9/30/97(1)
CLASS A
5 year
<S> <C>
100.32% $19,746(3)
</TABLE>
PERFORMANCE UPDATE
- --------------------------------------------------------------------------------
Oppenheimer Quest Growth & Income Value Fund performed very well during the past
12 months. In fact, the Fund's Class A shares provided an average annual total
return, without sales charges, of 25.18% for the one-year period ended October
31, 1997.(2) These strong results are consistent with the Fund's goal of seeking
capital growth and current income.
<TABLE>
<CAPTION>
GROWTH OF $10,000
Over five years
(without sales charges)(3)
Oppenheimer Quest Growth & Income
Value Fund Class A shares S&P 500 Index
<S> <C>
$ 10,000 $ 10,000
10,223 10,503
10,483 10,962
10,690 11,015
10,797 11,300
11,427 11,562
11,171 11,123
11,449 11,170
11,802 11,716
11,556 11,714
12,478 12,855
13,724 14,082
14,404 15,201
14,839 16,117
15,446 16,982
15,997 17,744
16,834 18,292
17,503 19,817
17,366 20,348
19,424 23,901
$ 21,237 $ 25,692
</TABLE>
1. 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
5.75%. Class A shares were first publicly offered on 11/1/91. The Fund's maximum
sales charge for Class A shares was lower prior to 11/24/95, so actual
performance may have been higher. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 2% (since inception on
9/1/93). Class C returns for the 1-year result include the contingent deferred
sales charge of 1%. Class C shares have an inception date of 9/1/93. An
explanation of the different performance calculations is in the Fund's
prospectus. Class B and C shares are subject to an annual 0.75% asset-based
sales charge and Class A shares are subject to an annual 0.15% asset-based sales
charge.
OppenheimerFunds, Inc. became the Fund's advisor on 11/22/95. The Fund's
subadvisor is OpCap Advisors, which was the Fund's advisor prior to 11/22/95.
The portfolio manager is employed by the Fund's subadvisor.
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
4 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 5
SECTOR WEIGHTINGS(4)
TECHNOLOGY 33.9%
FINANCE 19.7
CONSUMER CYCLICAL 18.6
CONSUMER
NON-CYCLICAL 13.0
UTILITIES 6.1
BASIC UTILITIES 4.6
INDUSTRIAL 4.1
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
Oppenheimer Quest Growth & Income Value Fund is for investors seeking tomorrow's
growth potential and today's income.
WHAT WE LOOK FOR
- - Large, well-established companies that are UNDERVALUED BY THE MARKET.
- - Companies that fundamental analysis identifies as WELL-MANAGED, SOLID
businesses.
- - DIVIDEND-PAYING STOCKS and INCOME-PRODUCING BONDS to generate sufficient
current income.
<TABLE>
<CAPTION>
TOP 10 STOCK HOLDINGS(4)
<S> <C> <C>
..............................................................................
Sysco Corp. 7.1% Electronic Arts, Inc. 5.6%
..............................................................................
Sprint Corp. 6.6 Lockheed Martin Corp. 5.4
..............................................................................
McDonald's Corp. 6.3 NextLevel Systems, Inc. 5.1
..............................................................................
U S West Communications Dow Chemical Co. 4.6
Group 6.1
..............................................................................
Time Warner, Inc. 5.9 Wells Fargo & Co. 3.7
..............................................................................
</TABLE>
3. Results of a hypothetical $10,000 investment in Class A shares on September
30, 1992. The S&P 500 Index is a broad-based unmanaged stock index including
daily reinvestment of dividends, and cannot be purchased directly by investors.
4. Portfolio is subject to change. Percentages are as of October 31, 1997 and
are based on total market value of stock holdings.
5 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 6
"Our bond holdings have
benefited greatly from
SOUND ECONOMIC
CONDITIONS and
low inflation."
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED DURING THE PERIOD?
Oppenheimer Quest Growth & Income Value Fund's Class A shares provided an
average annual total return of 25.18% for the one-year period ended October 31,
1997.(1) These results reflect changes in share price, plus reinvested income
distributions, but are calculated before sales charges are considered.
WHAT INFLUENCES IN THE BOND AND STOCK MARKETS AFFECTED THE FUND THE MOST OVER
THE PAST YEAR?
The first major influence was the excellent performance of the U.S. economy.
Indicators early in the year suggested that the economy might be growing too
quickly, which prompted the Federal Reserve Board to raise short-term interest
rates in a pre-emptive strike against inflation. However, the economy has
expanded fairly steadily and inflation has not been a problem. That has allowed
bond prices to rally and has supported higher corporate earnings in the stock
market.
The second major influence has been the overwhelming presence of
momentum-based investing in the stock market. As its name implies, momentum
investing is when investors latch onto specific securities that are reporting
positive earnings growth, and bid their prices up to very high levels without
much regard for the company's true underlying value.
The Fund has benefited from both trends. Our bond holdings have benefited
greatly from sound economic
1. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
6 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 7
[PHOTO]
PORTFOLIO MANAGEMENT TEAM (L TO R)
Colin Glinsman (Fund Manager)
Jeffrey C. Whittington
conditions and low inflation, which have produced lower interest rates and
capital appreciation for fixed-income investments. In addition, because we favor
high-quality companies with strong fundamentals, some of our stock positions
have been the subject of momentum investing. As other investors have driven
their prices higher, we have taken profits.
IF ECONOMIC CONDITIONS ARE EXCELLENT, WHY HAS THE STOCK MARKET BEEN SO VOLATILE?
When viewed from a day-to-day or week-to-week perspective, the past year was
indeed volatile. The stock market declined sharply between January 1 and
mid-April, producing the largest correction in several years, and experienced
another sell-off toward the end of October. The first decline was mainly the
result of investors' as-yet misplaced fears that an economy growing too quickly
might rekindle inflationary pressures, which can erode the value of financial
assets over time. The more recent sell-off was the result of problems in Asian
stock markets, especially Hong Kong. But when viewed from a long-term
perspective, day-to-day volatility seems to disappear and what emerges is a less
volatile upward trend.
It is important to understand, however, that Oppenheimer Quest Growth &
Income Value Fund pays very little attention to the movements of entire markets
or even sectors within those markets. Instead, we manage the portfolio one
security at a time. In the stock market, that means we focus on finding
companies able to produce superior returns on invested capital over time. Within
those parameters, we try to find those companies with a competitive
7 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 8
"We look for
investments
with STRONG
PROSPECTS
for the
long term..."
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- --------------------------------------------------------------------------------
advantage that will enable them not only to have high returns today, but in the
future as well.
DID YOUR "BOTTOM-UP" APPROACH LEAD YOU TO COMPANIES IN CERTAIN MARKET SECTORS?
Yes, we found a number of attractive companies that were overlooked by momentum
investors because they are in unexciting businesses. While so-called "boring"
companies do not comprise a market sector per se, some have produced exciting
returns for our shareholders. For example, SYSCO Corp. is a food distributor
with a high-quality business and a great competitive position. While other
investors have focused on highly visible industrial companies with very high
growth rates, this company continues to provide steady earnings growth year
after year. Because it was overlooked in the momentum-oriented market
environment, we were able to buy its stock at lower valuations than usual.
Another winner was Tenet Healthcare, one of the nation's two national
hospital companies. Tenet benefited from consolidation in the hospital industry
and the legal difficulties experienced by its primary competitor.
HOW HAVE YOU MANAGED THE BOND PORTION OF THE FUND IN THIS ENVIRONMENT?
There has been very little activity in our bond portfolio, except that as we
added to our bond holdings we have purchased higher-credit-quality bonds. As
other fixed-income investors have reached for higher yields by investing in
high-yield stocks, the differences in yields between low-grade and high-grade
bonds have narrowed considerably. As a result, we have not been adequately
compensated to assume the risks of the high-yield market and we have maintained
our holdings in U.S. Treasury securities and investment-grade corporate bonds.
HAVE YOU HAD ANY DISAPPOINTING INVESTMENTS IN THE PAST YEAR?
8 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 9
"...because we
approach these businesses
as OWNERS,
not as traders."
Yes, we have. Our greatest disappointments have been in companies that have
excellent businesses, but whose stock prices have had a hard time. For example,
we own stock in McDonald's Corp., which is highly visible but has been neglected
by investors because of problems in its domestic business. Yet, its overseas
business has shown positive growth, so its stock price represented an excellent
value for an excellent company, in our opinion. The same is true for Wells
Fargo, which has a strong banking franchise but mishandled its merger with First
Interstate. We think both stocks will realize their fair values as these
situations work themselves out.
WHAT DO YOU LOOK FOR WHEN MAKING NEW INVESTMENTS?
First, we seek to invest in companies that we believe have solid fundamentals to
support their businesses in good economic times and bad. Second, we pay careful
attention to the price we pay for those companies. We look for situations in
which great companies are selling for less than their fair values.
Perhaps most important, we look for investments with strong prospects for
the long term. That's because we approach these businesses as owners, not as
traders. In our view, being an owner of high-quality businesses represents The
Right Way to Invest.
9 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 10
STATEMENT OF INVESTMENTS October 31, 1997
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
==================================================================================
COMMON STOCKS--70.3%
- ----------------------------------------------------------------------------------
BASIC MATERIALS--3.2%
- ----------------------------------------------------------------------------------
CHEMICALS--3.2%
Dow Chemical Co. 40,000 $ 3,630,000
- ----------------------------------------------------------------------------------
CONSUMER CYCLICALS--13.1%
- ----------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--11.3%
AMR Corp.(1) 10,000 1,164,375
- ----------------------------------------------------------------------------------
Carnival Corp., Cl. A 40,000 1,940,000
- ----------------------------------------------------------------------------------
McDonald's Corp. 110,000 4,929,375
- ----------------------------------------------------------------------------------
Time Warner, Inc. 80,000 4,615,000
----------
12,648,750
- ----------------------------------------------------------------------------------
MEDIA--1.8%
Reed International plc, Sponsored ADR 50,000 1,981,250
- ----------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--9.1%
- ----------------------------------------------------------------------------------
FOOD--5.7%
Sysco Corp. 140,000 5,600,000
- ----------------------------------------------------------------------------------
Unilever NV, NY Shares 16,000 854,000
----------
6,454,000
- ----------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--3.4%
Becton, Dickinson & Co. 26,000 1,197,625
- ----------------------------------------------------------------------------------
Tenet Healthcare Corp.(1) 85,000 2,597,812
----------
3,795,437
- ----------------------------------------------------------------------------------
FINANCIAL--13.8%
- ----------------------------------------------------------------------------------
BANKS--5.5%
Chase Manhattan Corp. 20,000 2,307,500
- ----------------------------------------------------------------------------------
Citicorp 8,000 1,000,500
- ----------------------------------------------------------------------------------
Wells Fargo & Co. 10,000 2,913,750
----------
6,221,750
- ----------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--3.9%
Countrywide Credit Industries, Inc. 50,000 1,715,625
- ----------------------------------------------------------------------------------
Freddie Mac 70,000 2,651,250
----------
4,366,875
- ----------------------------------------------------------------------------------
INSURANCE--4.4%
ACE Ltd. 15,000 1,394,062
- ----------------------------------------------------------------------------------
AFLAC, Inc. 50,000 2,543,750
- ----------------------------------------------------------------------------------
General Re Corp. 5,000 985,937
----------
4,923,749
</TABLE>
10 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
<S> <C> <C>
- ----------------------------------------------------------------------------------
INDUSTRIAL--2.9%
- ----------------------------------------------------------------------------------
MANUFACTURING--2.9%
Dover Corp. 20,000 $ 1,350,000
- ----------------------------------------------------------------------------------
Grand Metropolitan plc, Sponsored ADR 50,245 1,877,907
----------
3,227,907
- ----------------------------------------------------------------------------------
TECHNOLOGY--23.9%
- ----------------------------------------------------------------------------------
AEROSPACE/DEFENSE--6.4%
Boeing Co. 60,000 2,872,500
- ----------------------------------------------------------------------------------
Lockheed Martin Corp. 45,000 4,277,813
----------
7,150,313
- ----------------------------------------------------------------------------------
COMPUTER HARDWARE--1.4%
Adaptec, Inc.(1) 15,000 726,563
- ----------------------------------------------------------------------------------
EMC Corp.(1) 15,000 840,000
----------
1,566,563
- ----------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES--6.3%
Computer Associates International, Inc. 35,000 2,609,688
- ----------------------------------------------------------------------------------
Electronic Arts, Inc.(1) 130,126 4,408,018
----------
7,017,706
- ----------------------------------------------------------------------------------
ELECTRONICS--0.1%
Intel Corp. 1,000 77,000
- ----------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--9.7%
CommScope, Inc.(1) 46,666 513,326
- ----------------------------------------------------------------------------------
General Semiconductor, Inc.(1) 100,000 1,137,500
- ----------------------------------------------------------------------------------
NextLevel Systems, Inc.(1) 300,000 4,050,000
- ----------------------------------------------------------------------------------
Sprint Corp. 100,000 5,200,000
----------
10,900,826
- ----------------------------------------------------------------------------------
UTILITIES--4.3%
- ----------------------------------------------------------------------------------
TELEPHONE UTILITIES--4.3%
U S West Communications Group 120,000 4,777,500
----------
Total Common Stocks (Cost $72,190,245) 78,739,626
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
==================================================================================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--27.5%
- ----------------------------------------------------------------------------------
CONSUMER CYCLICALS--8.0%
- ----------------------------------------------------------------------------------
MEDIA--8.0%
<S> <C> <C>
Comcast Corp., 10.625% Sr. Sub. Debs., 7/15/12 $2,500,000 3,075,000
- ----------------------------------------------------------------------------------
News America Holdings, Inc., 8.25% Bonds, 10/17/2096 3,000,000 3,152,577
</TABLE>
11 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------
<S> <C> <C>
MEDIA(CONTINUED)
Time Warner, Inc.:
8.05% Debs., 1/15/16 $2,000,000 $ 2,150,426
9.125% Debs., 1/15/13 500,000 589,777
----------
8,967,780
- ---------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--8.1%
- ---------------------------------------------------------------------------------
BEVERAGES--2.5%
Coca-Cola Co., 7.375% Debs., 7/29/2093 2,570,000 2,811,313
- ---------------------------------------------------------------------------------
FOOD--0.9%
AmeriServe Food Distribution, Inc., 10.125%
Sr. Sub. Nts., 7/15/07(2) 1,000,000 1,035,000
- ---------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--2.4%
Tenet Healthcare Corp., 8.625%
Sr. Unsec. Nts., 12/1/03 2,500,000 2,660,918
- ---------------------------------------------------------------------------------
HOUSEHOLD GOODS--2.3%
Playtex Family Products Corp., 9%
Sr. Sub. Nts., 12/15/03 2,500,000 2,512,500
- ---------------------------------------------------------------------------------
ENERGY--3.8%
- ---------------------------------------------------------------------------------
OIL-INTEGRATED--3.8%
Triton Energy Ltd.:
8.75% Sr. Nts., 4/15/02 1,000,000 1,048,583
9.25% Sr. Nts., 4/15/05 3,000,000 3,238,692
----------
4,287,275
- ---------------------------------------------------------------------------------
FINANCIAL--2.9%
- ---------------------------------------------------------------------------------
BANKS--2.9%
NationsBank Corp.:
7.75% Sub. Nts., 8/15/15 1,000,000 1,068,889
7.80% Sub. Nts., 9/15/16 2,000,000 2,159,388
----------
3,228,277
- ---------------------------------------------------------------------------------
TECHNOLOGY--4.7%
- ---------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.9%
Northrop Grumman Corp., 7.75% Nts., 3/1/16 2,000,000 2,166,830
- ---------------------------------------------------------------------------------
TELECOMMUNICATIONS-TECHNOLOGY--2.8%
U.S. West Capital Funding, Inc., 7.95%
Gtd. Bonds, 2/1/2097 3,000,000 3,154,110
----------
Total Non-Convertible Corporate Bonds and Notes
(Cost $28,669,482) 30,824,003
</TABLE>
12 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 13
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
=================================================================================
<S> <C> <C>
SHORT-TERM NOTES--1.7%
- ---------------------------------------------------------------------------------
Federal Home Loan Bank, 5.50%,
11/3/97 (Cost $1,949,404)(3) $1,950,000 $ 1,949,404
- ---------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $102,809,131) 99.5% 111,513,033
- ---------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 0.5 534,686
---------- -----------
NET ASSETS 100.0% $112,047,719
========== ===========
</TABLE>
1. Non-income producing security.
2. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,035,000 or 0.92% of the Fund's net
assets, at October 31, 1997.
3. 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. See
accompanying Notes to Financial Statements.
13 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES October 31, 1997
<TABLE>
<S> <C>
=================================================================================
ASSETS
Investments, at value (cost $102,809,131)
- --see accompanying statement $111,513,033
- ---------------------------------------------------------------------------------
Receivables:
Investments sold 2,426,047
Interest and dividends 554,629
Shares of beneficial interest sold 308,617
- ---------------------------------------------------------------------------------
Other 4,821
------------
Total assets 114,807,147
=================================================================================
LIABILITIES
Bank overdraft 16,107
- ---------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,545,039
Shares of beneficial interest redeemed 113,679
Distribution and service plan fees 23,970
Transfer agent and accounting services fees 10,648
Other 49,985
------------
Total liabilities 2,759,428
=================================================================================
NET ASSETS $112,047,719
============
=================================================================================
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 80,196
- ---------------------------------------------------------------------------------
Additional paid-in capital 88,376,387
- ---------------------------------------------------------------------------------
Undistributed net investment income 261,830
- ---------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 14,625,404
- ---------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 8,703,902
------------
Net assets $112,047,719
============
</TABLE>
14 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 15
<TABLE>
<S> <C>
=====================================================================================
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $79,751,227 and 5,699,813 shares of beneficial interest outstanding) $13.99
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $14.84
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $25,609,155 and 1,839,419 shares of beneficial interest outstanding) $13.92
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $6,687,337 and 480,416 shares of beneficial interest outstanding) $13.92
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 16
STATEMENT OF OPERATIONS For the Year Ended October 31, 1997
<TABLE>
<S> <C>
=================================================================================
INVESTMENT INCOME
Interest $ 2,256,457
- ---------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $6,309) 530,991
-----------
Total income 2,787,448
=================================================================================
EXPENSES
Management fees--Note 4 726,006
- ---------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 246,044
Class B 191,895
Class C 47,119
- ---------------------------------------------------------------------------------
Transfer agent and accounting services fees--Note 4 136,080
- ---------------------------------------------------------------------------------
Shareholder reports 38,770
- ---------------------------------------------------------------------------------
Registration and filing fees 37,188
- ---------------------------------------------------------------------------------
Legal and auditing fees 19,260
- ---------------------------------------------------------------------------------
Trustees' fees and expenses 17,472
- ---------------------------------------------------------------------------------
Custodian fees and expenses 15,598
- ---------------------------------------------------------------------------------
Other 18,267
-----------
Total expenses 1,493,699
=================================================================================
NET INVESTMENT INCOME 1,293,749
=================================================================================
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 14,740,001
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 2,797,779
-----------
Net realized and unrealized gain 17,537,780
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $18,831,529
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 17
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1997 1996
=================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 1,293,749 $ 1,055,959
- ---------------------------------------------------------------------------------
Net realized gain 14,740,001 6,454,155
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 2,797,779 3,175,436
------------ -----------
Net increase in net assets resulting from operations 18,831,529 10,685,550
=================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (922,387) (830,842)
Class B (181,875) (138,167)
Class C (47,948) (28,888)
- ---------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (4,518,417) (1,723,234)
Class B (1,310,410) (359,598)
Class C (319,471) (82,370)
=================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 22,268,436 6,377,895
Class B 9,713,355 4,189,051
Class C 3,228,726 683,425
=================================================================================
NET ASSETS
Total increase 46,741,538 18,772,822
- ---------------------------------------------------------------------------------
Beginning of period 65,306,181 46,533,359
------------ -----------
End of period (including undistributed net investment
income of $261,830 and $120,291, respectively) $112,047,719 $65,306,181
============ ===========
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 18
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------
YEAR ENDED OCTOBER 31,
1997 1996(2) 1995 1994 1993
====================================================================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.48 $10.92 $10.09 $11.24 $10.80
- ----------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .20 .23 .27(3) .32(3) .30(3)
Net realized and unrealized gain 2.65 2.05 1.27 .55 .73
------ ------ ------ ------ ------
Total income from investment
operations 2.85 2.28 1.54 .87 1.03
- ----------------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net investment
income (.19) (.22) (.29) (.32) (.26)
Distributions from net realized gain (1.15) (.50) (.42) (1.70) (.33)
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.34) (.72) (.71) (2.02) (.59)
- ----------------------------------------------------------------------------------------------------
Net asset value, end of period $13.99 $12.48 $10.92 $10.09 $11.24
====== ====== ====== ====== ======
====================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(4) 25.18% 21.84% 16.35% 8.64% 9.93%
====================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $79,751 $49,322 $37,082 $30,576 $28,466
- ----------------------------------------------------------------------------------------------------
Average net assets (in thousands) $61,618 $43,428 $33,397 $29,112 $23,771
- ----------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.68% 2.03% 2.60%(5) 3.16%(5) 2.66%(5)
Expenses 1.58% 1.90%(7) 1.99%(5) 1.86%(5) 1.90%(5)
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate(8) 89.2% 124.2% 130.0% 113.0% 192.0%
Average brokerage
commission rate(9) $0.0500 $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 advisor 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 Advisor 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 would have been 2.57% and 2.02%, respectively, for Class A, 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; 2.70% and 2.32%, respectively, for Class A,
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 2.38% and 2.18%,
respectively, for Class A, 1.44% and 2.88%, respectively, for Class B and 1.80%
and 2.87%, respectively, for Class C, for the year or period ended October 31,
1993.
18 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 19
<TABLE>
<CAPTION>
CLASS B CLASS C
- ---------------------------------------------------------- -------------------------------------------------------------
YEAR ENDED OCTOBER 31, YEAR ENDED OCTOBER 31,
1997 1996(2) 1995 1994 1993(1) 1997 1996(2) 1995 1994 1993(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$12.42 $10.88 $10.07 $11.23 $11.21 $12.43 $10.89 $10.07 $11.23 $11.21
- --------------------------------------------------------------------------------------------------------------------------------
.15 .17 .19(3) .25(3) .04(3) .15 .17 .15(3) .24(3) .04(3)
2.62 2.03 1.28 .56 .05 2.62 2.02 1.30 .56 .05
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
2.77 2.20 1.47 .81 .09 2.77 2.19 1.45 .80 .09
- --------------------------------------------------------------------------------------------------------------------------------
(.12) (.16) (.24) (.27) (.07) (.13) (.15) (.21) (.26) (.07)
(1.15) (.50) (.42) (1.70) -- (1.15) (.50) (.42) (1.70) --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
(1.27) (.66) (.66) (1.97) (.07) (1.28) (.65) (.63) (1.96) (.07)
- --------------------------------------------------------------------------------------------------------------------------------
$13.92 $12.42 $10.88 $10.07 $11.23 $13.92 $12.43 $10.89 $10.07 $11.23
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
================================================================================================================================
24.55% 21.07% 15.65% 7.96% 0.81% 24.51% 20.97% 15.38% 7.91% 0.81%
================================================================================================================================
$25,609 $13,175 $7,623 $2,928 $319 $6,687 $2,809 $1,828 $455 $102
- ---------------------------------------------------------------------------------------------------------------------------------
$19,230 $10,097 $4,856 $1,586 $228 $4,724 $2,200 $ 968 $298 $100
- ---------------------------------------------------------------------------------------------------------------------------------
1.09% 1.40% 1.71%(5) 2.53%(5) 1.83%(5)(6) 1.09% 1.40% 1.39%(5) 2.39%(5) 2.18%(5)(6)
2.17% 2.53% 2.59%(5) 2.47%(5) 2.49%(5)(6) 2.17% 2.53% 2.88%(5) 2.62%(5) 2.49%(5)(6)
- ---------------------------------------------------------------------------------------------------------------------------------
89.2% 124.2% 130.0% 113.0% 192.0% 89.2% 124.2% 130.0% 113.0% 192.0%
$0.0500 $0.0548 -- -- -- $0.0500 $0.0548 -- -- --
</TABLE>
6. Annualized.
7. The expense ratio reflects the effect of gross expenses paid indirectly by
the Fund.
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, 1997 were $107,946,613 and $72,867,209, 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.
19 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Growth & Income Value Fund (the 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 primarily
through investments in equity securities. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class A shares are sold with a front-end sales charge. Class B and
Class C shares may be subject to a contingent deferred sales charge. All classes
of shares have identical rights to earnings, assets and voting privileges,
except that each class has its own distribution and/or service plan, expenses
directly attributable to 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, 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.
20 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 21
================================================================================
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.
- --------------------------------------------------------------------------------
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 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 October 31, 1997, amounts have been reclassified to reflect a
decrease of $466,666 in accumulated net realized gain on investment
transactions. Paid-in capital was increased by the same amount.
- --------------------------------------------------------------------------------
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 is 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.
21 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
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 OCTOBER 31, 1997 YEAR ENDED OCTOBER 31, 1996
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,557,883 $ 33,165,870 966,147 $11,466,003
Dividends and distributions
reinvested 445,487 5,194,062 219,311 2,441,586
Redeemed (1,256,481) (16,091,496) (627,593) (7,529,694)
---------- ----------- -------- ----------
Net increase 1,746,889 $ 22,268,436 557,865 $ 6,377,895
========== =========== ======== ==========
- ----------------------------------------------------------------------------------------------
Class B:
Sold 904,241 $ 11,537,097 482,330 $ 5,647,365
Dividends and distributions
reinvested 122,631 1,412,244 42,284 468,109
Redeemed (248,340) (3,235,986) (164,144) (1,926,423)
---------- ------------ -------- -----------
Net increase 778,532 $ 9,713,355 360,470 $ 4,189,051
========== ============ ======== ===========
- ----------------------------------------------------------------------------------------------
Class C:
Sold 320,442 $ 4,096,151 96,190 $ 1,134,271
Dividends and distributions
reinvested 30,289 350,561 9,569 105,983
Redeemed (96,289) (1,217,986) (47,618) (556,829)
---------- ------------ -------- -----------
Net increase 254,442 $ 3,228,726 58,141 $ 683,425
========== ============ ======== ===========
</TABLE>
================================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
At October 31, 1997, net unrealized appreciation on investments of $8,703,902
was composed of gross appreciation of $10,093,433, and gross depreciation of
$1,389,531.
22 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 23
================================================================================
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. 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.
The Manager pays OpCap Advisors (the Sub-Advisor) a monthly fee
based on the fee schedule set forth in the Prospectus. For the year ended
October 31, 1997, the Manager paid $259,632 to the Sub-Advisor. On February 13,
1997, PIMCO Advisors L.P. signed a definitive agreement with Oppenheimer Group,
Inc. and its subsidiary Oppenheimer Financial Corp. for PIMCO Advisors L.P. and
its affiliate, Thomson Advisory Group, Inc., to acquire the one-third managing
general partner interest in Oppenheimer Capital (the parent of OpCap Advisors)
and the 1.0% general interest in Oppenheimer Capital L.P.
For the year ended October 31, 1997, commissions (sales charges paid
by investors) on sales of Class A shares totaled $201,700, of which $53,948 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 $356,224 and $37,159, respectively, of which $19,785 and $1,327,
respectively, were paid to an affiliated broker/dealer. During the year ended
October 31, 1997, OFDI received contingent deferred sales charges of $33,972 and
$2,155, 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 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 year ended October 31, 1997, the Fund paid OFS $83,245.
23 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES (CONTINUED)
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 shareholder 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. During the
year ended October 31, 1997, OFDI paid $29,445 to an affiliated broker/dealer as
compensation 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 C shares. Each fee is
computed on the average annual net assets of Class B and Class C shares,
respectively, determined as of the close of each regular business day. During
the year ended October 31, 1997, OFDI paid $5,722 and $4,737, respectively, to
an affiliated broker/dealer as compensation for Class B and Class C personal
service and maintenance expenses and retained $160,975 and $25,007,
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. At October 31, 1997, OFDI had incurred unreimbursed expenses of
$368,721 for Class B and $45,643 for Class C.
24 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 25
================================================================================
5. 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 October
31, 1997.
25 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 26
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
To the Board of Trustees and Shareholders of
Oppenheimer Quest for Value Funds
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 (one of the portfolios constituting Oppenheimer Quest for Value
Funds, hereafter referred to as the Fund) at October 31, 1997, 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 each
of the five years in the period then ended, 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, 1997 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Denver, Colorado
November 21, 1997
26 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 27
FEDERAL INCOME TAX INFORMATION (Unaudited)
================================================================================
In early 1998 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1997. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $1.2023, $1.1825 and $1.1866 per share were paid to
Class A, Class B and Class C shareholders, respectively, on December 16, 1996,
of which, for each class of shares, $0.4534 was designated as a "capital gain
distribution" for federal income tax purposes. Whether received in stock or in
cash, the capital gain distribution should be treated by shareholders as a gain
from the sale of capital assets held for more than one year (long-term capital
gain).
Dividends paid by the Fund during the fiscal year ended October 31,
1997 which are not designated as capital gain distributions should be multiplied
by 5.07% 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 advisor for specific
guidance.
27 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 28
SHAREHOLDER MEETING (Unaudited)
================================================================================
On May 19, 1997, a special shareholder meeting was held at which the selection
of Price Waterhouse LLP as the independent accountants and auditors of the Fund
for the fiscal year beginning November 1, 1996 was ratified (Proposal No. 1),
the proposed changes to certain of the Fund's fundamental investment policies,
including changes to the investment objective were approved (Proposal No. 2),
the Investment Advisory Agreement between the Funds and OppenheimerFunds, Inc.
was approved (Proposal No. 3), the Subadvisory Agreement between
OppenheimerFunds, Inc. and OpCap Advisors was approved (Proposal No. 4), the
Fund's Class A 12b-1 Distribution and Service Plan was approved by Class A
shareholders (Proposal No. 5), the Fund's Class B 12b-1 Distribution and Service
Plan was approved by Class B shareholders (Proposal No. 6), and the Fund's Class
C 12b-1 Distribution and Service Plan was approved by Class C shareholders
(Proposal No. 7) as described in the Fund's proxy statement for that meeting.
The following is a report of the votes cast:
<TABLE>
<CAPTION>
WITHHELD/ BROKER
PROPOSAL FOR AGAINST ABSTAIN NON-VOTES TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Proposal No. 1 3,010,822.443 19,632.582 129,386.164 2,422,085 3,159,841.189
Proposal No. 2 2,757,935.840 225,153.056 193,777.293 2,422,085 3,176,866.189
Proposal No. 3 2,850,194.008 128,019.478 198,653.703 2,422,085 3,176,867.189
Proposal No. 4 2,826,386.792 153,164.293 197,317.104 2,422,085 3,176,868.189
Proposal No. 5 1,950,485.389 90,302.300 197,091.086 1,713,946 2,237,878.775
Proposal No. 6 653,861.229 18,742.765 50,391.030 566,194 722,995.024
Proposal No. 7 203,358.704 9,468.459 3,164.227 141,944 215,991.390
</TABLE>
28 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 29
OPPENHEIMER QUEST GROWTH & INCOME VALUE FUND
A Series of Oppenheimer Quest for Value Funds
<TABLE>
<S> <C>
==================================================================================================
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 ADVISOR OppenheimerFunds, Inc.
==================================================================================================
SUB-ADVISOR OpCap Advisors
==================================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
==================================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
==================================================================================================
CUSTODIAN OF PORTFOLIO State Street Bank and Trust Company
SECURITIES
==================================================================================================
INDEPENDENT ACCOUNTANTS Price Waterhouse LLP
==================================================================================================
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.
</TABLE>
29 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 30
OPPENHEIMERFUNDS FAMILY
<TABLE>
<S> <C> <C>
=======================================================================================================
REAL ASSET FUNDS
- -------------------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
=======================================================================================================
STOCK FUNDS
- -------------------------------------------------------------------------------------------------------
Developing Markets Fund Capital Appreciation Fund(1) Disciplined Value Fund
Enterprise Fund Quest Capital Value Fund Quest Value Fund
International Growth Fund Growth Fund MidCap Fund
Discovery Fund Global Fund International Small
Quest Small Cap Value Fund Quest Global Value Fund Company Fund
=======================================================================================================
STOCK & BOND FUNDS
- -------------------------------------------------------------------------------------------------------
Main Street Income & Quest Growth & Income Disciplined Allocation Fund
Growth Fund Value Fund Multiple Strategies Fund(2)
Quest Opportunity Value Fund Global Growth & Income Fund Bond Fund for Growth
Total Return Fund Equity Income Fund
=======================================================================================================
BOND FUNDS
- -------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
High Yield Fund Strategic Income Fund Limited-Term Government Fund
Bond Fund
=======================================================================================================
MUNICIPAL 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
=======================================================================================================
LIFESPAN
- -------------------------------------------------------------------------------------------------------
Growth Fund Balanced Fund Income Fund
</TABLE>
1. On 12/18/96, the Fund's name was changed from "Target Fund."
2. On 3/16/97, the Fund's name was changed from "Asset Allocation Fund."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
U.S. government and there can be no assurance that a money market fund will be
able to maintain a stable net asset value of $1.00 per share. Oppenheimer funds
are distributed by OppenheimerFunds Distributor, Inc., Two World Trade Center,
New York, NY 10048-0203.
(C) Copyright 1997 OppenheimerFunds, Inc. All rights reserved.
30 Oppenheimer Quest Growth & Income Value Fund
<PAGE> 31
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- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at www.oppenheimerfunds.com
- --we're here to help.
[OPPENHEIMERFUNDS LOGO]
RA0257.001.1097 December 30, 1997
