Semiannual Report April 30, 1998
O P P E N H E I M E R
Quest Small Cap
Value Fund
[photo of calculator]
[4-hands logo]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Report highlights
- --------------------------------------------------------------------------------
Contents
<TABLE>
<S> <C>
3 President's Letter
4 Fund Performance
6 An Interview
with the Fund's
Manager
10 Statement of
Investments
14 Statement of
Assets and
Liabilities
16 Statement of
Operations
17 Statements of
Changes in
Net Assets
18 Financial Highlights
21 Notes to Financial
Statements
26 Officers and
Trustees
28 Information and
Services
</TABLE>
[bullet] We found values in the small-cap stock market, which is trading at
historically inexpensive levels relative to large companies.
[bullet] The Fund is well-positioned to take advantage of small-cap stocks'
return to more normal valuations.
Cumulative Total Returns
For the 6-Month Period
Ended 4/30/98
<TABLE>
<CAPTION>
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
<S> <C>
8.78% 2.52%
<CAPTION>
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
<S> <C>
8.48% 3.53%
<CAPTION>
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
<S> <C>
8.54% 7.55%
</TABLE>
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. This performance is not annualized.
2. Class A return includes the current maximum initial sales charge of 5.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the applicable contingent deferred sales charge of 1%.
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 0.25% asset-based sales
charge. This performance is not annualized.
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 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO OF BRIDGET A. MACASKILL]
Bridget A. Macaskill
President
Oppenheimer Quest
Small Cap Value Fund
As we move further into 1998, we remain impressed by the remarkable resilience
of the financial markets. Recent efforts by the United States to help support
the Japanese Yen have inspired hope that the fallout of the Asian economic
crisis can be contained. In general, the U.S. and world markets have continued
to build wealth for investors at a virtually unprecedented pace.
At OppenheimerFunds, we are pleased to help our fund shareholders
participate in the potential rewards of today's markets, but we also recognize
that this rate of growth cannot last forever. Because no one can predict exactly
when the next correction or bear market might occur, we think it is prudent to
continually identify, evaluate and manage the risks that may affect our fund
shareholders.
We believe that one of the leading risks facing investors today is that
stock valuations are at the high end of their historical range, while U.S.
corporate earnings growth is slowing. Given these facts, we believe it is
unlikely that stocks will sustain the growth rate of the past three years. Stock
prices could continue trading near current levels until earnings "catch up," or
there could be a market correction. However, we believe that either scenario
would be only a temporary pause on the way to potentially greater long-term
gains.
We are also examining the potential economic effects of the "millennium
problem" that may render many computer systems unable to recognize the year 2000
when it arrives. Solving this problem has required companies to divert
substantial human and financial resources from their core businesses, possibly
constraining global economic growth during 1999 and 2000.
For our part, we can report that OppenheimerFunds has made solid progress
toward ensuring that our shareholder accounting systems are fully "year 2000
compliant," and that all shareholder accounts will make a seamless transition
into the 21st century.
We encourage you to meet with your financial advisor to discuss how a
possible market correction or the millennium problem may affect your
investments. Together, you can prepare your investment portfolio for the
challenges and opportunities of the new century.
Sincerely,
/S/ Bridget A. Macaskill
Bridget A. Macaskill
May 21, 1998
3 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Performance update
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Avg Annual Total Returns
For the Periods Ended 3/31/98(1)
Class A
Since
1 year 5 year Inception
<S> <C> <C>
29.35% 13.60% 14.65%
<CAPTION>
Class B
Since
1 year 5 year Inception
<S> <C> <C>
31.56% N/A 14.49%
<CAPTION>
Class C
Since
1 year 5 year Inception
<S> <C> <C>
35.56% N/A 14.76%
<CAPTION>
Cumulative Total Return
For the Period Ended 3/31/98(1)
Class A
5 year
<S> <C>
89.22% $18,922(3)
</TABLE>
Oppenheimer Quest Small Cap Value Fund Class A shares provided a cumulative
total return, without sales charges, of 8.78% for the six-month period ended
April 30, 1998.(2) During the period investors have shown a preference for well
established companies with track records of consistent growth in the financial
markets, and small cap stock prices have suffered as a result.
Growth of $10,000
Over five years
(without sales charges)(3)
[mountain chart]
Oppenheimer Quest
Small Cap Value Fund
Class A shares Russell 2000 Index
3/31/93 10000 10000
10163 10218
10637 11111
10982 11403
10659 11100
10199 10668
10896 11408
10949 11195
10565 11711
11442 12809
12130 14074
12309 14379
12870 15113
13338 15869
13661 15923
14684 16751
14627 15885
17050 18460
18698 21207
18255 20497
3/31/98 20076 22559
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 1/3/89. 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 one-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 0.25% asset-based sales
charge.
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance is not annualized and would have been lower if sales
charges were taken into account.
4 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Portfolio review
- --------------------------------------------------------------------------------
Sector Weightings(4)
[pie chart]
Equities 87.6%
Cash Equivalents 12.4
Oppenheimer Quest Small Cap Value Fund is for investors aggressively seeking
capital appreciation from small company stocks.
What We Look For
[bullet] Good businesses with growing free cash flow.
[bullet] Management motivated to work for shareholders.
[bullet] Securities that can be purchased at a reasonable price.
[bullet] High return on capital vs. high growth.
Top 10 Stock Holdings(4)
<TABLE>
<S> <C> <C> <C>
........................................................................
Wang Laboratories, Inc. 3.5% United Wisconsin
Services, Inc. 2.5%
........................................................................
RenaissanceRe Holdings Ltd. 3.0 BISYS Group, Inc.
(The) 2.5
........................................................................
Flowserve Corp. 3.0 Magellan Health
Services, Inc. 2.5
........................................................................
Schulman (A.), Inc. 2.8 KCS Energy, Inc. 2.3
........................................................................
Cabot Oil & Gas Corp., Cl. A 2.5 Lydall, Inc. 2.2
........................................................................
</TABLE>
Top 5 Industries(4)
<TABLE>
<S> <C>
...............................
Insurance 15.2%
...............................
Manufacturing 10.3
...............................
Autos & Housing 6.3
...............................
Industrial Services 5.1
...............................
Chemicals 4.4
...............................
</TABLE>
3. Results of a hypothetical $10,000 investment in Class A shares on March 31,
1993. The Fund's investments are not limited to securities in the Russell 2000
Index, which cannot be purchased directly by investors. The Russell 2000 Index
is a capitalization-weighted index of 2000 U.S. issuers with market values
ranging from $25 million to $1 billion.
4. Portfolio is subject to change. Percentages are as of April 30, 1998, and are
based on total market value of investments.
5 Oppenheimer Quest Small Cap Value Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How has the Fund performed during the period?
We are pleased with the Fund's performance in this somewhat volatile market.
More specifically, Oppenheimer Quest Small Cap Value Fund's Class A shares
provided a cumulative total return, without sales charges, of 8.78% for the
six-month period ended April 30, 1998.(1)
Overall, how has the small-capitalization stock market fared over the past six
months?
The return generated by small-cap stocks continued to lag large-capitalization
stocks, as it has for the past four years. We attribute this relative
underperformance of small-cap stocks to investors' preference for well-
established companies with track records of consistent growth in the financial
markets. The past four years have been contrary to longer-term historical
averages, in which small-cap stocks have tended to outperform their larger
counterparts.
How did the financial crisis in Asia affect the Fund?
The Fund had only a handful of holdings with direct exposure to Asian markets
during and after the financial crisis that began last summer. However, the Fund
was indirectly affected when sharp declines in the Hong Kong and other Asian
stock markets sent shock waves throughout the world. In the third-quarter of
1997, U.S. small-capitalization stocks were rallying strongly, and it appeared
that a sustained upturn had begun. The Asian crisis dampened that rally, even
though most U.S. small companies derive their revenues from domestic sources,
not from the emerging markets. Although U.S. small-cap stocks have rebounded
nicely since last October, they have not participated in the broad stock
market's advance.
[callout]
- ---------------------
"The Fund was
indirectly affected
when sharp declines
in the Asian stock
markets sent
shock waves
throughout the
world."
6 Oppenheimer Quest Small Cap Value Fund
<PAGE>
[photo of Portfolio Management Team]
Portfolio Management Team (l to r)
Timothy McCormack
Timothy Curro(2)
Gavin Albert
Did the Fund's composition change significantly over the past six months?
No, it did not. It's important to understand that, unlike some stock funds, we
don't allocate assets to achieve a predetermined balance among industries or
market sectors. Instead, we take a "bottom-up" approach in which we look at
individual companies one by one. We buy stocks that we believe meet our
stringent criteria for growth and value, regardless of their industry
affiliations.
However, our bottom-up approach sometimes inadvertently leads to a
concentration of assets in specific industries. Over the past six months, the
Fund has had significant holdings in the technology industry. Our investments
in this market sector have focused on service-oriented companies with
predictable streams of income. For example, Wang Laboratories, the Fund's
largest single stock position, derives its revenues from computer and network
maintenance contracts for other corporations. These contracts provide a
steadier stream of revenue than hardware sales once did.
Insurance companies also comprised a significant part of the portfolio
during the reporting period. These stocks have performed well individually,
despite the challenging fundamentals which faced the insurance industry during
the period.
1. Includes changes 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. As of May 18, 1998, Timothy Curro is no longer a member of this portfolio
management team.
7 Oppenheimer Quest Small Cap Value Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
What individual stocks contributed most to the Fund's performance over the past
six months?
We've already discussed Wang Laboratories, which has completed a remarkable
transformation from a bankrupt computer hardware supplier to a profitable
provider of computer and network services for corporations.
In addition, Delphi Financial, an insurance company, has performed very
well in a difficult pricing environment. They've succeeded in part because
their management team acquired a few smaller, relatively inefficient insurance
companies. Delphi rationalized these companies' investment portfolios and
positioned the firm as one of the most efficient companies in the disability
and workman's compensation insurance markets.
In addition, E. W. Blanch, a reinsurance broker, benefited from new
sources of steady income. Revenue from fees replaced traditional
brokerage-generated income, which tends to be more volatile.
About 12% of the Fund's assets are in cash as of April 30. Why?
We've reduced our holdings of certain stocks that have reached their target
prices. By selling stocks that we no longer consider compelling values, we
believe we are reducing the valuation risk in the portfolio.
As value managers, we take our risk management responsibilities very
seriously. That's why we've adopted a somewhat defensive position for the Fund.
We've attempted to structure the portfolio so that it can participate in most
of the gains in rising markets, but avoid some of the volatility in declining
markets. In our view, this prudent approach to investing should serve our
shareholders well in the long term.
[callout]
- ----------------------
"We buy those
stocks that
we believe
meet our
stringent criteria
for growth
and value,
regardless of
their industry
affiliations."
8 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Did any stocks disappoint you over the past six months?
Happily, few of our holdings fit this category. However, Magellan Health
represents one investment that has not yet met our expectations. Magellan is
the country's largest provider of mental health managed care. The company has
sold or closed about half of its facilities, and it has an agreement to sell
the rest. The company is redeploying that capital into large, specialty managed
care companies that offer higher returns on capital. Temporary problems related
to this transition have hampered Magellan Health's stock price, but we remain
optimistic about the company as a whole. In fact, we believe that this is the
best kind of "disappointment" to have in the portfolio because we expect to be
rewarded handsomely for our patience when Magellan Health resolves its problems
and completes its transition to a more efficient company.
What is your outlook for small-cap stocks over the foreseeable future?
We are optimistic because small-cap stocks are trading at a substantial
discount to their historical relationship with large-cap stocks. Historically,
valuations of small-cap stocks have been about 25% higher than valuations of
large companies. As of April 30, that premium was only about 2%, which
represents a five-year low. That means small-cap stocks have plenty of room to
catch up to their large-cap counterparts. We believe that our value-oriented,
bottom-up approach to investing will serve our shareholders well as small-cap
stocks move closer to their historical valuations.
[callout]
- --------------------
"We've cut back
on ownership
of certain stocks
as they've
reached their
target prices."
9 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Statement of Investments April 30, 1998 (Unaudited)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ---------------------------------------------------------------------
<S> <C> <C>
Common Stocks--87.4%
- ---------------------------------------------------------------------
Basic Materials--5.0%
- ---------------------------------------------------------------------
Chemicals--4.4%
M. A. Hanna Co. 124,900 $ 2,864,894
- ---------------------------------------------------------------------
McWhorter Technologies, Inc.(1) 121,300 3,153,800
- ---------------------------------------------------------------------
Schulman (A.), Inc. 469,700 10,509,537
-----------
16,528,231
- ---------------------------------------------------------------------
Paper--0.6%
Rock-Tenn Co., Cl. A 137,500 2,191,406
- ---------------------------------------------------------------------
Consumer Cyclicals--12.4%
- ---------------------------------------------------------------------
Autos & Housing--6.3%
Borg-Warner Automotive, Inc. 72,200 4,489,937
- ---------------------------------------------------------------------
Champion Enterprises, Inc.(1) 217,100 5,400,362
- ---------------------------------------------------------------------
Dollar Thrifty Automotive Group, Inc.(1) 223,500 4,218,562
- ---------------------------------------------------------------------
Harman International Industries, Inc. 116,100 4,992,300
- ---------------------------------------------------------------------
Security Capital Group, Inc., Cl. B(1) 155,150 4,693,287
-----------
23,794,448
- ---------------------------------------------------------------------
Media--2.9%
Bowne & Co., Inc. 114,100 4,713,756
- ---------------------------------------------------------------------
Hollinger International, Inc. 402,000 6,231,000
-----------
10,944,756
- ---------------------------------------------------------------------
Retail: General--3.2%
Guilford Mills, Inc. 198,800 5,616,100
- ---------------------------------------------------------------------
WestPoint Stevens, Inc.(1) 195,600 6,552,600
-----------
12,168,700
- ---------------------------------------------------------------------
Consumer Non-Cyclicals--8.7%
- ---------------------------------------------------------------------
Food--2.2%
Agribrands International, Inc.(1) 74,200 2,824,237
- ---------------------------------------------------------------------
Triarc Cos.(1) 214,600 5,539,362
-----------
8,363,599
- ---------------------------------------------------------------------
Healthcare/Drugs--2.2%
Dentsply International, Inc. 107,800 3,543,925
- ---------------------------------------------------------------------
Trigon Healthcare, Inc.(1) 160,600 4,878,225
-----------
8,422,150
</TABLE>
10 Oppenheimer Quest Small Cap Value Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------------
<S> <C> <C>
Healthcare/Supplies & Services--4.3%
CorVel Corp.(1) 136,800 $ 4,873,500
- ----------------------------------------------------------------------
Magellan Health Services, Inc.(1) 334,500 9,282,375
- ----------------------------------------------------------------------
Vital Signs, Inc. 116,300 2,166,087
-----------
16,321,962
- ----------------------------------------------------------------------
Energy--5.4%
- ----------------------------------------------------------------------
Energy Services & Producers--2.0%
Basin Exploration, Inc.(1) 167,200 3,323,100
- ----------------------------------------------------------------------
Newfield Exploration Co.(1) 53,600 1,299,800
- ----------------------------------------------------------------------
St. Mary Land & Exploration Co. 88,900 2,844,800
-----------
7,467,700
- ----------------------------------------------------------------------
Oil-Integrated--3.4%
KCS Energy, Inc. 570,500 8,842,750
- ----------------------------------------------------------------------
Nuevo Energy Co.(1) 114,000 4,061,250
-----------
12,904,000
- ----------------------------------------------------------------------
Financial--16.1%
- ----------------------------------------------------------------------
Diversified Financial--0.9%
BA Merchant Services, Inc., A Shares(1) 221,200 3,318,000
- ----------------------------------------------------------------------
Insurance--15.2%
Annuity & Life RE Holdings Ltd.(1) 75,000 1,790,625
- ----------------------------------------------------------------------
Chartwell Re Corp. 114,200 3,518,787
- ----------------------------------------------------------------------
CNA Surety Corp.(1) 276,900 4,638,075
- ----------------------------------------------------------------------
Delphi Financial Group, Inc., Cl. A(1) 138,750 7,908,784
- ----------------------------------------------------------------------
E.W. Blanch Holdings, Inc. 190,200 6,657,000
- ----------------------------------------------------------------------
Enhance Financial Services Group, Inc. 53,500 3,671,437
- ----------------------------------------------------------------------
Gryphon Holdings, Inc.(1) 64,700 1,152,469
- ----------------------------------------------------------------------
Horace Mann Educators Corp. 99,700 3,427,187
- ----------------------------------------------------------------------
RenaissanceRe Holdings Ltd. 238,300 11,378,825
- ----------------------------------------------------------------------
Terra Nova (Bermuda) Holdings Ltd., Cl. A 131,100 4,014,938
- ----------------------------------------------------------------------
United Wisconsin Services, Inc. 304,800 9,467,850
-----------
57,625,977
- ----------------------------------------------------------------------
Industrial--19.1%
- ----------------------------------------------------------------------
Electrical Equipment-- 2.4%
AMETEK, Inc. 140,100 4,264,294
- ----------------------------------------------------------------------
Oak Industries, Inc.(1) 81,600 2,963,100
- ----------------------------------------------------------------------
Woodhead Industries, Inc. 108,300 2,030,625
-----------
9,258,019
</TABLE>
11 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Statement of Investments (Unaudited) (Continued)
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -------------------------------------------------------------------
<S> <C> <C>
Industrial Materials--1.3%
AEP Industries, Inc.(1) 47,300 $ 1,631,850
- -------------------------------------------------------------------
Interpool, Inc. 213,900 3,382,294
-----------
5,014,144
- -------------------------------------------------------------------
Industrial Services--5.1%
GP Strategies Corp.(1) 265,300 4,244,800
- -------------------------------------------------------------------
Lydall, Inc.(1) 442,400 8,212,050
- -------------------------------------------------------------------
National Data Corp. 141,900 5,791,294
- -------------------------------------------------------------------
Nonnell Corp. 55,100 1,160,544
-----------
19,408,688
- -------------------------------------------------------------------
Manufacturing--10.3%
Baldwin Technology Co., Inc., Cl. A(1) 677,200 3,978,550
- -------------------------------------------------------------------
Butler Manufacturing Co. 2,500 93,281
- -------------------------------------------------------------------
EASCO, Inc. 165,400 2,439,650
- -------------------------------------------------------------------
Flowserve Corp. 376,300 11,241,963
- -------------------------------------------------------------------
OmniQuip International, Inc. 225,700 5,275,738
- -------------------------------------------------------------------
Paxar Corp.(1) 410,200 6,076,088
- -------------------------------------------------------------------
Roper Industries, Inc. 209,800 6,503,800
- -------------------------------------------------------------------
Watts Industries, Inc., Cl. A 136,200 3,490,125
-----------
39,099,195
- -------------------------------------------------------------------
Technology--18.2%
- -------------------------------------------------------------------
Aerospace/Defense --4.0%
Kaydon Corp. 156,300 6,847,894
- -------------------------------------------------------------------
Tracor, Inc.(1) 37,900 1,489,944
- -------------------------------------------------------------------
Watkins-Johnson Co. 249,200 6,930,875
-----------
15,268,713
- -------------------------------------------------------------------
Computer Hardware--4.1%
Auspex Systems, Inc.(1) 332,800 2,412,800
- -------------------------------------------------------------------
Wang Laboratories, Inc.(1) 490,200 13,235,400
-----------
15,648,200
- -------------------------------------------------------------------
Computer Software/Services--3.5%
BancTec, Inc.(1) 168,000 3,664,500
- -------------------------------------------------------------------
BISYS Group, Inc. (The)(1) 239,200 9,448,400
-----------
13,112,900
</TABLE>
12 Oppenheimer Quest Small Cap Value Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------
<S> <C> <C>
Electronics--3.0%
Belden, Inc. 73,400 $ 3,041,513
- ----------------------------------------------------------------
CTS Corp. 24,600 908,663
- ----------------------------------------------------------------
Exar Corp.(1) 217,100 5,454,638
- ----------------------------------------------------------------
Pioneer-Standard Electronics, Inc. 146,200 1,836,638
------------
11,241,452
- ----------------------------------------------------------------
Telecommunications-Technology--3.6%
General Semiconductor, Inc.(1) 336,000 4,599,000
- ----------------------------------------------------------------
TCA Cable TV, Inc. 102,500 6,329,375
- ----------------------------------------------------------------
Volt Information Sciences, Inc.(1) 87,300 2,902,725
------------
13,831,100
- ----------------------------------------------------------------
Utilities--2.5%
- ----------------------------------------------------------------
Gas Utilities--2.5%
Cabot Oil & Gas Corp., Cl. A 409,800 9,604,688
------------
Total Common Stocks (Cost $273,194,889) 331,538,028
</TABLE>
<TABLE>
<CAPTION>
Face
Amount
- ------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Notes--12.3%(2)
- ------------------------------------------------------------------------------------
American Express Credit Corp., 5.50%, 5/8/98-5/20/98 $ 6,257,000 6,241,672
- ------------------------------------------------------------------------------------
Associates Corp. of North America, 5.50%, 6/17/98 4,117,000 4,087,438
- ------------------------------------------------------------------------------------
BMW US Capital Corp., 5.52%, 6/11/98 13,074,000 12,991,808
- ------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.47%, 6/1/98 3,666,000 3,648,732
- ------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.51%, 5/18/98 623,000 620,049
- ------------------------------------------------------------------------------------
IBM Credit Corp., 5.48%, 5/4/98 949,000 948,566
- ------------------------------------------------------------------------------------
John Deere Capital Corp., 5.49%, 5/20/98 13,580,000 13,540,652
- ------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.:
5.51%, 5/29/98 1,145,000 1,140,093
5.53%, 6/25/98 3,632,000 3,601,315
------------
Total Short-Term Notes (Cost $46,820,325) 46,820,325
- ------------------------------------------------------------------------------------
Total Investments, at Value (Cost $320,015,214) 99.7% 378,358,353
- ------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.3 1,195,003
------------ ------------
Net Assets 100.0% $379,553,356
============ ============
</TABLE>
1. Non-income producing security.
2. 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 Small Cap Value Fund
<PAGE>
Statement of Assets and Liabilities April 30, 1998 (Unaudited)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------
Assets
Investments, at value (cost $320,015,214)--see accompanying statement $378,358,353
- -------------------------------------------------------------------------------------
Cash 17,087
- -------------------------------------------------------------------------------------
Receivables:
Investments sold 2,188,044
Shares of beneficial interest sold 1,986,805
Interest and dividends 195,776
- -------------------------------------------------------------------------------------
Other 45,474
------------
Total assets 382,791,539
- -------------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 1,613,155
Investments purchased 1,442,244
Distribution and service plan fees 77,862
Transfer agent and accounting services fees 26,608
Other 78,314
------------
Total liabilities 3,238,183
- -------------------------------------------------------------------------------------
Net Assets $379,553,356
============
- -------------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial interest $ 173,058
- -------------------------------------------------------------------------------------
Additional paid-in capital 311,487,801
- -------------------------------------------------------------------------------------
Accumulated net investment loss (981,826)
- -------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 10,531,184
- -------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 58,343,139
------------
Net assets $379,553,356
============
</TABLE>
14 Oppenheimer Quest Small Cap Value Fund
<PAGE>
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $234,309,509 and 10,583,144 shares of beneficial interest outstanding) $ 22.14
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $ 23.49
- -------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $112,256,285 and 5,193,825 shares of beneficial interest outstanding) $ 21.61
- -------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $32,987,562 and 1,528,855 shares of beneficial interest outstanding) $ 21.58
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Statement of Operations For the Six Months Ended April 30, 1998 (Unaudited)
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------
Investment Income
Interest $ 1,115,206
- ---------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $1,544) 1,046,702
-----------
Total income 2,161,908
- ---------------------------------------------------------------------------------
Expenses
Management fees--Note 4 1,625,743
- ---------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 508,990
Class B 466,385
Class C 141,372
- ---------------------------------------------------------------------------------
Transfer agent and accounting services fees--Note 4 256,266
- ---------------------------------------------------------------------------------
Registration and filing fees:
Class A 36,623
Class B 17,439
Class C 5,126
- ---------------------------------------------------------------------------------
Shareholder reports 37,292
- ---------------------------------------------------------------------------------
Trustees' fees and expenses 13,287
- ---------------------------------------------------------------------------------
Legal and auditing fees 12,118
- ---------------------------------------------------------------------------------
Custodian fees and expenses 10,185
- ---------------------------------------------------------------------------------
Other 12,908
-----------
Total expenses 3,143,734
- ---------------------------------------------------------------------------------
Net Investment Loss (981,826)
- ---------------------------------------------------------------------------------
Realized and Unrealized Gain
Net realized gain on investments 10,705,845
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments 18,732,296
-----------
Net realized and unrealized gain 29,438,141
- ---------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $28,456,315
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1998 October 31,
(Unaudited) 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment loss $ (981,826) $ (949,721)
- -------------------------------------------------------------------------------------------------
Net realized gain 10,705,845 26,283,370
- -------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 18,732,296 26,186,257
------------- -------------
Net increase in net assets resulting from operations 28,456,315 51,519,906
- -------------------------------------------------------------------------------------------------
Distributions to Shareholders
Distributions from net realized gain:
Class A (15,921,537) (12,867,588)
Class B (7,220,048) (4,078,752)
Class C (2,252,551) (1,743,582)
- -------------------------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest
transactions--Note 2:
Class A 50,328,573 56,911,663
Class B 31,640,908 41,289,209
Class C 8,282,337 8,515,292
- -------------------------------------------------------------------------------------------------
Net Assets
Total increase 93,313,997 139,546,148
- -------------------------------------------------------------------------------------------------
Beginning of period 286,239,359 146,693,211
------------- -------------
End of period (including accumulated net investment
loss of $981,826 for the six months ended 4/30/98) $ 379,553,356 $ 286,239,359
============= =============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
-------------------------------------------------------------------
Six Months
Ended
April 30,
1998 Year Ended October 31,
(Unaudited) 1997 1996(2) 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of
period $22.26 $19.03 $17.31 $16.33
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.07) .03 .11(3)
Net realized and unrealized gain 1.79 5.66 2.79 1.29
------ ------ ------ ------
Total income (loss) from
investment operations 1.74 5.59 2.82 1.40
- ------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income -- -- (.11) --
Distributions from net realized gain (1.86) (2.36) (.99) (.42)
------ ------ ------ ------
Total dividends and distributions
to shareholders (1.86) (2.36) (1.10) (.42)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $22.14 $22.26 $19.03 $17.31
====== ====== ====== ======
- ------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(4) 8.78% 32.72% 17.17% 8.82%
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $234,310 $181,973 $102,746 $116,307
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $205,578 $131,503 $117,765 $119,440
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.42)%(5) (0.32)% 0.11% 0.67%
Expenses 1.74%(5) 1.78% 1.90% 1.80%
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 23.8% 82.1% 70.4% 76.0%
Average brokerage commission
rate(7) $0.0558 $0.0550 $0.0515 --
</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.
18 Oppenheimer Quest Small Cap Value Fund
<PAGE>
<TABLE>
<CAPTION>
1994 1993
- ------------------------------
<S> <C>
$17.68 $14.60
- ------------------------------
(.03)(3) (.04)(3)
.01 4.26
------ ------
(.02) 4.22
- ------------------------------
-- --
(1.33) (1.14)
------ ------
(1.33) (1.14)
- ------------------------------
$16.33 $17.68
====== ======
- ------------------------------
0.04% 30.21%
- ------------------------------
$120,102 $104,898
- ------------------------------
$115,276 $ 75,500
- ------------------------------
(0.14)% (0.36)%
1.88% 1.89%
- ------------------------------
67.0% 74.0%
-- --
<CAPTION>
Class B
- ------------------------------------------------------------------------------------------------
Six Months
Ended
April 30,
1998 Year Ended October 31,
(Unaudited) 1997 1996(2) 1995 1994 1993(1)
- ------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$21.83 $18.79 $17.11 $16.24 $17.66 $17.19
- ------------------------------------------------------------------------------------------------
(.06) (.05) (.06) .02(3) (.11)(3) (.02)(3)
1.70 5.45 2.76 1.27 .02 .49
------ ------ ------ ------ ------ ------
1.64 5.40 2.70 1.29 (.09) .47
- ------------------------------------------------------------------------------------------------
-- -- (.03) -- -- --
(1.86) (2.36) (.99) (.42) (1.33) --
------ ------ ------ ------ ------ ------
(1.86) (2.36) (1.02) (.42) (133) --
- ------------------------------------------------------------------------------------------------
$21.61 $21.83 $18.79 $17.11 $16.24 $17.66
====== ====== ====== ====== ====== ======
- ------------------------------------------------------------------------------------------------
8.48% 32.05% 16.57% 8.17% (0.39)% 2.73%
- ------------------------------------------------------------------------------------------------
$112,256 $79,754 $30,766 $23,440 $16,144 $1,754
- ------------------------------------------------------------------------------------------------
$ 94,231 $47,462 $26,478 $20,105 $ 9,401 $ 934
- ------------------------------------------------------------------------------------------------
(0.92)%(5) (0.80)% (0.37)% 0.09% (0.70)% (1.15)%(5)
2.24%(5) 2.27% 2.38% 2.37% 2.48% 2.57%(5)
- ------------------------------------------------------------------------------------------------
23.8% 82.1% 70.4% 76.0% 67.0% 74.0%
$0.0558 $0.0550 $0.0515 -- -- --
</TABLE>
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. Annualized.
19 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Financial Highlights (Continued)
<TABLE>
<CAPTION>
Class C
---------------------------------------------
Six Months
Ended
April 30,
1998 Year Ended October 31,
(Unaudited) 1997 1996(2)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning
of period $21.79 $18.76 $17.11
- ------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.08) (.05)
Net realized and unrealized gain 1.70 5.47 2.75
------ ------ ------
Total income (loss) from
investment operations 1.65 5.39 2.70
- ------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income -- -- (.06)
Distributions from net realized gain (1.86) (2.36) (.99)
------ ------ ------
Total dividends and
distributions to shareholders (1.86) (2.36) (1.05)
- ------------------------------------------------------------------------------------
Net asset value, end of period $21.58 $21.79 $18.76
====== ====== ======
- ------------------------------------------------------------------------------------
Total Return, at Net Asset Value(4) 8.54% 32.05% 16.55%
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $32,988 $24,512 $13,181
- ------------------------------------------------------------------------------------
Average net assets (in thousands) $28,556 $17,401 $11,501
- ------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (0.92)%(5) (0.81)% (0.40)%
Expenses 2.24%(5) 2.28% 2.40%
- ------------------------------------------------------------------------------------
Portfolio turnover rate(6) 23.8% 82.1% 70.4%
Average brokerage
commission rate(7) $0.0558 $0.0550 $0.0515
<CAPTION>
Class C
---------------------------------------------
Year Ended October 31,
1995 1994 1993(1)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning
of period $16.23 $17.67 $17.19
- ------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .01(3) (.13)(3) (.02)(3)
Net realized and unrealized gain 1.29 .02 .50
------ ------ ------
Total income (loss) from
investment operations 1.30 (.11) .48
- ------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment
income -- -- --
Distributions from net realized gain (.42) (1.33) --
------ ------ ------
Total dividends and
distributions to shareholders (.42) (1.33) --
- ------------------------------------------------------------------------------------
Net asset value, end of period $17.11 $16.23 $17.67
====== ====== ======
- ------------------------------------------------------------------------------------
Total Return, at Net Asset Value(4) 8.24% (0.51)% 2.79%
- ------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in thousands) $9,068 $3,344 $235
- ------------------------------------------------------------------------------------
Average net assets (in thousands) $6,114 $1,381 $138
- ------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) 0.08% (0.81)% (1.20)%(5)
Expenses 2.38% 2.59% 2.57%(5)
- ------------------------------------------------------------------------------------
Portfolio turnover rate(6) 76.0% 67.0% 74.0%
Average brokerage
commission rate(7) -- -- --
</TABLE>
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended April 30, 1998 were $123,482,189 and $69,107,673,
respectively.
7. 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.
20 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Quest Small Cap 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 capital appreciation. The Fund seeks its
investment objective through investments in a diversified portfolio which under
normal conditions will have at least 65% of its total assets invested in equity
securities of companies with market capitalizations under $1 billion. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager) and the
Manager has entered into a sub-advisory agreement with OpCap Advisors. 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.
21 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
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.
- --------------------------------------------------------------------------------
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.
22 Oppenheimer Quest Small Cap Value Fund
<PAGE>
- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended April 30, 1998 Year Ended October 31, 1997
------------------------------- ------------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 2,815,558 $ 60,212,468 4,335,222 $ 89,701,871
Distributions reinvested 768,682 15,266,026 702,966 12,330,011
Redeemed (1,175,888) (25,149,921) (2,262,183) (45,120,219)
---------- ------------- ---------- -------------
Net increase 2,408,352 $ 50,328,573 2,776,005 $ 56,911,663
========== ============= ========== =============
- ------------------------------------------------------------------------------------------
Class B:
Sold 1,629,701 $ 34,083,165 2,332,167 $ 48,062,468
Distributions reinvested 356,031 6,914,130 224,295 3,875,823
Redeemed (445,953) (9,356,387) (539,908) (10,649,082)
---------- ------------- ---------- -------------
Net increase 1,539,779 $ 31,640,908 2,016,554 $ 41,289,209
========== ============= ========== =============
- ------------------------------------------------------------------------------------------
Class C:
Sold 529,899 $ 11,075,081 824,415 $ 16,750,151
Distributions reinvested 109,265 2,118,648 98,870 1,705,500
Redeemed (235,084) (4,911,392) (501,181) (9,940,359)
---------- ------------- ---------- -------------
Net increase 404,080 $ 8,282,337 422,104 $ 8,515,292
========== ============= ========== =============
</TABLE>
- -------------------------------------------------------------------------------
3. Unrealized Gains and Losses on Investments
At April 30, 1998, net unrealized appreciation on investments of $58,343,139
was composed of gross appreciation of $65,325,727, and gross depreciation of
$6,982,588.
23 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 1.00% of the first
$400 million of average annual net assets, 0.90% of the next $400 million and
0.85% of average annual net assets over $800 million. 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) based on the
fee schedule set forth in the Prospectus. For the six months ended April 30,
1998, the Manager paid $563,052 to the Sub-Advisor.
For the six months ended April 30, 1998, commissions (sales
charges paid by investors) on sales of Class A shares totaled $656,905, of
which $170,403 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 $985,236 and $79,845,
respectively, of which $80,767 and $1,313, respectively, was paid to an
affiliated broker/dealer. During the six months ended April 30, 1998, OFDI
received contingent deferred sales charges of $99,322 and $6,936, 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 six months ended April 30, 1998, the Fund
paid OFS $214,602. Effective May 1, 1998, the Board of Trustees approved an
increase in the annual maintenance fee from $14.85 to $18.00 for each
shareholder account.
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 0.25% per year on Class A shares. The Fund also pays a
service fee to OFDI of 0.25% per year. Each fee is 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 six months ended April 30, 1998, OFDI
paid $10,749 to an affiliated broker/dealer as compensation for Class A
personal service and maintenance expenses.
24 Oppenheimer Quest Small Cap Value Fund
<PAGE>
- --------------------------------------------------------------------------------
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
it's services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and Class C shares. Each fee
is computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the six months
ended April 30, 1998, OFDI retained $403,196 and $79,311, 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 April 30, 1998, OFDI had incurred excess distribution and
servicing costs of $1,893,050 for Class B and $212,288 for Class C.
- -------------------------------------------------------------------------------
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 six months
ended April 30, 1998.
25 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Oppenheimer Quest Small Cap 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
</TABLE>
The financial statements included herein have been
taken from the records of the Fund without examination
by the independent accountants.
This is a copy of a report to shareholders of
Oppenheimer Quest Small Cap Value Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Quest Small Cap 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.
26 Oppenheimer Quest Small Cap Value Fund
<PAGE>
OppenheimerFunds Family
<TABLE>
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Real Asset Funds
- -----------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
- -----------------------------------------------------------------------------------------
Global Stock Funds
- -----------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Quest Global Value Fund
International Small Global Fund Global Growth & Income Fund
Company Fund
- -----------------------------------------------------------------------------------------
Stock Funds
- -----------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Disciplined Value Fund
Quest Small Cap Value Fund Quest Capital Value Fund Quest Value Fund
- -----------------------------------------------------------------------------------------
Stock & Bond Funds
- -----------------------------------------------------------------------------------------
Main Street Income & Total Return Fund Disciplined Allocation Fund
Growth Fund Quest Balanced Multiple Strategies Fund
Quest Opportunity Value Fund1 Convertible Securities Fund(2)
Value Fund Equity Income Fund
- -----------------------------------------------------------------------------------------
Taxable Bond Funds
- -----------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
- -----------------------------------------------------------------------------------------
Municipal Bond Funds
- -----------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
- -----------------------------------------------------------------------------------------
Money Market Funds(4)
- -----------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds seek to preserve the value of your investment at $1.00 per share,
it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
27 Oppenheimer Quest Small Cap Value Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
Internet
24-hr access to account
information. Online
transactions now available
www.oppenheimerfunds.com
General Information
Mon-Fri 8:30am-9pm ET
Sat 10am-4pm ET
1-800-525-7048
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OppenheimerFunds
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affect your investments
1-800-835-3104
RS0251.001.0498 June 29, 1998
As an Oppenheimer fund shareholder, you have some special privileges. Whether
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And when you need help, our Customer Service Representatives are only a
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When you want to make a transaction, you can do it easily by calling
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