<PAGE> 1
SEMIANNUAL REPORT APRIL 30, 1999
OPPENHEIMER
Quest Balanced
Value Fund
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
5 An Interview
with your Fund's
Manager
10 Financial
Statements
27 Officers and
Trustees
28 Information and
Services
REPORT HIGHLIGHTS
- --------------------------------------------------------------------------------
- - THE FUND TOOK ADVANTAGE OF COMPELLING VALUES after the stock market declined
sharply last fall, and sold or reduced positions that reached full value during
the subsequent recovery.
- - THE FUND'S FIXED INCOME PORTFOLIO during the period included inflation-indexed
U.S. Treasury securities.
CUMULATIVE TOTAL RETURNS
For the 6-Month Period
Ended 4/30/99
CLASS A
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------
20.19% 13.28%
- ---------------------------------
CLASS B
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------
19.89% 14.89%
- ---------------------------------
CLASS C
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------
19.85% 18.85%
- ---------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. IN REVIEWING PERFORMANCE AND
RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THE ORIGINAL COST. BECAUSE THE STOCK MARKET CAN BE VOLATILE, THE FUND'S
PERFORMANCE MAY BE SUBJECT TO SUBSTANTIAL SHORT-TERM CHANGES. FOR UPDATES ON THE
FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT
1-800-525-7048 OR VISIT OUR WEBSITE, WWW.OPPENHEIMERFUNDS.COM. 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.
1. Includes changes in net asset value per share without deducting any sales
charges.
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%.
Class A shares are subject to an annual 0.15% asset-based sales charge while
Class B and C shares are subject to an annual 0.75% asset-based sales charge. An
explanation of the different performance calculations is in the Fund's
prospectus.
2 Oppenheimer QuestBalanced Value Fund
<PAGE> 3
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Quest Balanced
Value Fund
DEAR SHAREHOLDER,
- --------------------------------------------------------------------------------
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities.(1)
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified portfolio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most
analysts' expectations and the breadth of the market's positive performance has
begun to widen. This has raised concerns that inflationary pressures may
re-emerge. In fact, the Federal Reserve Board recently indicated its readiness
to raise short-term interest rates as an inflation-fighting measure. Looking
outside of the United States, many foreign economies also appear to be on the
mend. The impact of these changes, as it applies to your fund, is discussed more
fully inside by your portfolio manager.
(over, please)
1. Foreign investing entails higher expenses and risks, such as foreign currency
fluctuations, economic and political instability, and differences in accounting
standards.
3 Oppenheimer Quest Balanced Value Fund
<PAGE> 4
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of our Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ BRIDGET A. MACASKILL
Bridget A. Macaskill
May 21, 1999
4 Oppenheimer Quest Balanced Value Fund
<PAGE> 5
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Jolene Mirenna
Colin Glinsman
(Portfolio Manager)
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW DID OPPENHEIMER QUEST BALANCED VALUE FUND PERFORM DURING THE SIX-MONTH
PERIOD THAT ENDED APRIL 30, 1999?
We are pleased with the Fund's performance, especially in an environment that
has favored growth-oriented stocks over the value-oriented stocks in which we
primarily invest. We were able to take advantage of a number of value-oriented
opportunities during the market correction that occurred during the third
quarter of 1998, and those investments subsequently performed well when their
prices rose over the past six months.
WHAT TYPES OF INVESTMENTS DID YOU MAKE DURING LAST YEAR'S MARKET CORRECTION AND
SUBSEQUENT RECOVERY?
We invested in a number of growing companies in a variety of different
industries that we believed were unfairly punished during last fall's broad
market decline. However, not only did we move quickly to acquire these "fallen
angels" at or near their lows, we maintained a strict sell discipline to help
ensure that we either eliminated or reduced holdings that had, in our opinion,
become fully-valued. In several cases, our sell discipline benefited performance
by protecting the portfolio when the prices of fully-valued securities
subsequently declined. For example, both software developer Computer Associates
International, Inc. and a leading food and tobacco company provided attractive
gains during the fall of 1998.
5 Oppenheimer Quest Balanced Value Fund
<PAGE> 6
AVG ANNUAL TOTAL RETURNS
For the Periods Ended 3/31/99(1)
CLASS A
Since
1 year 5 year Inception
- ------------------------------
18.79% 21.42% 17.32%
- ------------------------------
CLASS B
Since
1 year 5 year Inception
- ------------------------------
20.23% 21.96% 20.02%
- ------------------------------
CLASS C
Since
1 year 5 year Inception
- ------------------------------
24.29% 22.02% 20.00%
- ------------------------------
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
After we trimmed our positions, the stocks' prices fell substantially. We were
therefore able to protect the Fund from the full impact of those price declines.
As a bonus, we reacquired shares of Computer Associates International, Inc. at a
lower cost. Because of adverse developments related to lawsuits, however, we did
not reacquire all of the shares of the food and tobacco company which we had
sold.
HOW WERE THE FUND'S ASSETS ALLOCATED AMONG STOCKS AND BONDS OVER THE PAST SIX
MONTHS?
We have maintained a fairly steady and conservative posture, with our allocation
to stocks running between 50% and 60% of total assets. Typically, equities
comprise between 50% to 75% of the portfolio. We have generally stayed toward
the light side of that range because the stock market has done very well, and
we're concerned about high valuations.
Our fixed income investments, which comprised approximately 30% of the
portfolio on April 30, included inflation-linked U.S. Treasury securities, which
we believe are more attractive than the bond market as a whole, especially if
inflationary pressures re-emerge. We also held a position of high yield bonds
during the period.
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 1% (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. Class A
shares are subject to an annual 0.15% asset-based sales charge while Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
6 Oppenheimer Quest Balanced Value Fund
<PAGE> 7
DID YOU MAKE ANY CHANGES TO THE PORTFOLIO'S EXPOSURE TO ANY SPECIFIC INDUSTRIES
OR MARKET SECTORS?
Yes. But first, it is important to understand that we select stocks on a
company-by-company basis, not according to macroeconomic or industry trends.
This "bottom-up" approach did lead us to a number of opportunities in the
telecommunications industry, however. Our research suggested that companies such
as MCI WorldCom, Inc. and Motorola, Inc. would benefit from higher demand for
telecommunication services created by the growth of the Internet and technology.
MCI WorldCom, Inc. has a terrific long distance network, in our opinion.
They are a leader in Internet traffic, and have built local access facilities in
the United States and Europe. We believe that profits will improve further when
the company completes its restructuring, which should drive its stock price
higher.
Motorola, Inc. is primarily a turn-around story. The stock languished
after a series of management errors between 1995 and 1997. In 1998, Motorola
moved aggressively to correct its mistakes, and we are optimistic that their
cellular telephone business is now positioned to prosper.
7 Oppenheimer Quest Balanced Value Fund
<PAGE> 8
ASSET ALLOCATION(2)
[PIE CHART]
<TABLE>
<S> <C>
- - Stocks 53.6%
- - Bonds 32.8
- - Cash Equivalents 13.6
</TABLE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
WHAT IS YOUR OUTLOOK FOR THE FINANCIAL MARKETS AND THE PORTFOLIO?
While we are cautiously optimistic about the stock and bond markets as a whole,
we feel very good about the positioning of the portfolio. In our opinion, many
of our holdings continue to represent attractive values, and they appear to be
poised for good long-term returns. The portfolio is focused on stocks and bonds
in which we have a high degree of confidence, and as value managers, we seek to
ensure that the stocks in the portfolio do not become so "mature" that they no
longer offer value. We believe that this unwavering focus on value is an
important part of what makes OppenheimerFunds The Right Way to Invest.
<TABLE>
<CAPTION>
TOP 10 STOCK HOLDINGS(2)
- ----------------------------------------------------------------------------
<S> <C>
Computer Associates International, Inc. 7.0%
- ----------------------------------------------------------------------------
Monsanto Co. 4.3
- ----------------------------------------------------------------------------
Motorola, Inc. 3.8
- ----------------------------------------------------------------------------
AMR Corp. 3.3
- ----------------------------------------------------------------------------
Compaq Computer Corp. 3.2
- ----------------------------------------------------------------------------
Adaptec, Inc. 3.0
- ----------------------------------------------------------------------------
Household International, Inc. 2.8
- ----------------------------------------------------------------------------
MCI WorldCom, Inc. 2.4
- ----------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc. 2.3
- ----------------------------------------------------------------------------
Wells Fargo Co. 2.3
- ----------------------------------------------------------------------------
</TABLE>
2. Portfolio is subject to change. Percentages are as of April 30, 1999, and are
based on total market value of investments.
8 Oppenheimer Quest Balanced Value Fund
<PAGE> 9
FINANCIALS
- --------------------------------------------------------------------------------
9 Oppenheimer Quest Balanced Value Fund
<PAGE> 10
STATEMENT OF INVESTMENTS April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
================================================================================================================
<S> <C> <C>
COMMON STOCKS--50.1%
- ----------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--6.9%
- ----------------------------------------------------------------------------------------------------------------
CHEMICALS--4.6%
Hercules, Inc. 100,000 $ 3,781,250
- ----------------------------------------------------------------------------------------------------------------
Monsanto Co. 800,000 36,200,000
-----------
39,981,250
- ----------------------------------------------------------------------------------------------------------------
METALS--2.3%
Freeport-McMoRan Copper & Gold, Inc., Cl. B 1,300,000 19,906,250
- ----------------------------------------------------------------------------------------------------------------
CAPITAL GOODS--3.4%
- ----------------------------------------------------------------------------------------------------------------
MANUFACTURING--3.4%
AlliedSignal, Inc. 200,000 11,750,000
- ----------------------------------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 200,000 17,800,000
-----------
29,550,000
- ----------------------------------------------------------------------------------------------------------------
COMMUNICATION SERVICES--6.7%
- ----------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS: LONG DISTANCE--6.7%
General Semiconductor, Inc.(1) 750,000 5,625,000
- ----------------------------------------------------------------------------------------------------------------
L.M. Ericsson Telephone Co., Cl. B, ADR 600,000 16,200,000
- ----------------------------------------------------------------------------------------------------------------
MCI WorldCom, Inc.(1) 250,000 20,546,875
- ----------------------------------------------------------------------------------------------------------------
Sprint Corp. (Fon Group) 150,000 15,384,375
-----------
57,756,250
- ----------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--2.8%
- ----------------------------------------------------------------------------------------------------------------
BROADCASTING--1.1%
Chancellor Media Corp.(1) 172,200 9,449,475
- ----------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--1.7%
McDonald's Corp. 340,000 14,407,500
- ----------------------------------------------------------------------------------------------------------------
FINANCIAL--6.7%
- ----------------------------------------------------------------------------------------------------------------
BANKS--2.2%
Wells Fargo Co. 450,000 19,434,375
- ----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--4.5%
Citigroup, Inc. 200,000 15,050,000
- ----------------------------------------------------------------------------------------------------------------
Household International, Inc. 480,000 24,150,000
-----------
39,200,000
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE--1.0%
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE/DRUGS--1.0%
American Home Products Corp. 140,000 8,540,000
- ----------------------------------------------------------------------------------------------------------------
TECHNOLOGY--18.3%
- ----------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--6.0%
Adaptec, Inc.(1) 1,050,000 25,265,625
- ----------------------------------------------------------------------------------------------------------------
Compaq Computer Corp. 1,200,000 26,775,000
-----------
52,040,625
</TABLE>
10 Oppenheimer Quest Balanced Value Fund
<PAGE> 11
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SERVICES--1.5%
First Data Corp. 300,000 $ 12,731,250
- ----------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--7.1%
Cadence Design Systems, Inc.(1) 150,000 2,034,375
- ----------------------------------------------------------------------------------------------------------------
Computer Associates International, Inc. 1,400,000 59,762,500
------------
61,796,875
- ----------------------------------------------------------------------------------------------------------------
ELECTRONICS--3.7%
Motorola, Inc. 400,000 32,050,000
- ----------------------------------------------------------------------------------------------------------------
TRANSPORTATION--4.3%
- ----------------------------------------------------------------------------------------------------------------
AIR TRANSPORTATION--3.2%
AMR Corp.(1) 400,000 27,925,000
- ----------------------------------------------------------------------------------------------------------------
RAILROADS & TRUCKERS--1.1%
Canadian Pacific Ltd. 440,000 9,955,000
------------
Total Common Stocks (Cost $374,326,861) 434,723,850
================================================================================================================
PREFERRED STOCKS--1.0%
- ----------------------------------------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Depositary Shares
each representing 0.05 Shares of Step-Up Cum. Cv., Non-Vtg.
(Cost $8,173,336) 506,400 8,925,300
FACE
AMOUNT
================================================================================================================
U.S. GOVERNMENT OBLIGATIONS--14.2%
- ----------------------------------------------------------------------------------------------------------------
Tennessee Valley Authority Inflationary Bonds, 3.375%, 1/15/07(2) $ 19,000,000 18,548,426
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Inflationary Index Nts., 3.875%, 1/15/09(2) 104,400,000 104,597,949
------------
Total U.S. Government Obligations (Cost $122,992,536) 123,146,375
================================================================================================================
NON-CONVERTIBLE CORPORATE BONDS AND NOTES--18.0%
- ----------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--0.7%
- ----------------------------------------------------------------------------------------------------------------
CHEMICALS--0.7%
IMC Global, Inc., 7.625% Bonds, 11/1/05 5,500,000 5,710,660
- ----------------------------------------------------------------------------------------------------------------
CAPITAL GOODS--3.7%
- ----------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.2%
Raytheon Co., 6.40% Bonds, 12/15/18(3) 11,500,000 10,906,611
- ----------------------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--1.3%
Allied Waste North America, Inc., 7.625% Sr. Nts., Series B, 1/1/06 9,500,000 9,310,000
- ----------------------------------------------------------------------------------------------------------------
American Standard Cos., Inc., 7.375% Sr. Nts., 2/1/08 2,000,000 1,980,000
------------
11,290,000
- ----------------------------------------------------------------------------------------------------------------
MANUFACTURING--1.2%
Federal-Mogul Corp., 7.375% Nts., 1/15/06(3) 10,500,000 10,314,570
</TABLE>
11 Oppenheimer Quest Balanced Value Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Unaudited)(Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER CYCLICALS--1.0%
- ----------------------------------------------------------------------------------------------------------------
LEISURE & ENTERTAINMENT--1.0%
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 $ 6,000,000 $ 5,677,500
- ----------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 7.875% Sr. Nts., Series A, 8/1/05 2,750,000 2,722,500
------------
8,400,000
- ----------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--3.4%
- ----------------------------------------------------------------------------------------------------------------
BROADCASTING--2.4%
USA Networks, Inc., 6.75% Sr. Nts., 11/15/05(3) 21,150,000 20,970,267
- ----------------------------------------------------------------------------------------------------------------
FOOD--0.4%
AmeriServe Food Distribution, Inc., 10.125% Sr. Sub. Nts., 7/15/07(4) 4,000,000 3,260,000
- ----------------------------------------------------------------------------------------------------------------
HOUSEHOLD GOODS--0.6%
Playtex Family Products Corp., 9% Sr. Sub. Nts., 12/15/03 5,500,000 5,678,750
- ----------------------------------------------------------------------------------------------------------------
FINANCIAL--5.5%
- ----------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--2.5%
Conseco Financing Trust II, 8.70% Unsec. Capital Securities, 11/15/26 22,955,000 21,467,769
- ----------------------------------------------------------------------------------------------------------------
INSURANCE--3.0%
AFLAC, Inc., 6.50% Sr. Nts., 4/15/09(3) 18,500,000 18,252,377
- ----------------------------------------------------------------------------------------------------------------
Conseco, Inc., 6.80% Unsec. Nts., 6/15/05 8,000,000 7,724,616
------------
25,976,993
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE--3.7%
- ----------------------------------------------------------------------------------------------------------------
HEALTHCARE/SUPPLIES & SERVICES--3.7%
PharMerica, Inc., 8.375% Sr. Sub. Nts., 4/1/08(4) 6,000,000 6,390,000
- ----------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp.:
7.625% Sr. Nts., 6/1/08(3) 5,350,000 5,229,625
8% Sr. Nts., 1/15/05 17,500,000 17,675,000
8.625% Sr. Unsec. Nts., 12/1/03 2,500,000 2,550,738
------------
31,845,363
------------
Total Non-Convertible Corporate Bonds and Notes (Cost $158,051,123) 155,820,983
================================================================================================================
CONVERTIBLE CORPORATE BONDS AND NOTES--1.3%
- ----------------------------------------------------------------------------------------------------------------
TECHNOLOGY--1.3%
- ----------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE--1.0%
Adaptec, Inc., 4.75% Cv. Sub. Nts., 2/1/04 10,000,000 8,537,500
- ----------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE--0.3%
Hyperion Solutions Corp., 4.50% Cv. Unsec. Debs., 3/15/05 4,000,000 2,740,000
------------
Total Convertible Corporate Bonds and Notes (Cost $11,851,183) 11,277,500
</TABLE>
12 Oppenheimer Quest Balanced Value Fund
<PAGE> 13
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
================================================================================================================
<S> <C> <C>
SHORT-TERM NOTES--13.3%(5)
- -----------------------------------------------------------------------------------------------------------------
American Express Credit Corp., 4.75%, 5/24/99 $ 8,335,000 $ 8,309,706
- -----------------------------------------------------------------------------------------------------------------
Associates Corp. of North America, 4.78%, 5/17/99 8,451,000 8,433,046
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 4.65%, 5/3/99-6/1/99 36,640,000 36,570,437
- -----------------------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
4.78%, 6/1/99 10,400,000 10,357,193
4.83%, 5/3/99 16,840,000 16,835,481
- -----------------------------------------------------------------------------------------------------------------
John Deere Capital Corp., 4.77%, 5/5/99 20,000,000 19,989,400
- -----------------------------------------------------------------------------------------------------------------
Norwest Financial Corp., 4.80%, 5/27/99 15,000,000 14,948,000
------------
Total Short-Term Notes (Cost $115,443,263) 115,443,263
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $790,838,302) 97.9% 849,337,271
- -----------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 2.1 18,606,794
---------- ------------
NET ASSETS 100.0% $867,944,065
========== ============
</TABLE>
1. Non-income producing security.
2. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
3. 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 $65,673,450 or 7.57% of the Fund's net
assets as of April 30, 1999.
4. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
5. 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 Balanced Value Fund
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
================================================================================================================
<S> <C>
ASSETS
Investments, at value (cost $790,838,302)--see accompanying statement $849,337,271
- ----------------------------------------------------------------------------------------------------------------
Cash 186,565
- ----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 15,271,504
Interest and dividends 5,670,108
Other 7,069
------------
Total assets 870,472,517
================================================================================================================
LIABILITIES
Payables and other liabilities:
Investments purchased 1,277,931
Shares of beneficial interest redeemed 894,494
Distribution and service plan fees 159,703
Shareholder reports 68,258
Transfer and shareholder servicing agent fees 35,133
Trustees' compensation--Note 1 11,620
Other 81,313
------------
Total liabilities 2,528,452
================================================================================================================
NET ASSETS $867,944,065
============
================================================================================================================
COMPOSITION OF NET ASSETS
Par value of shares of beneficial interest $ 533,177
- ----------------------------------------------------------------------------------------------------------------
Additional paid-in capital 778,684,001
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 1,755,363
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 28,472,555
- ----------------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 58,498,969
------------
Net assets $867,944,065
============
</TABLE>
14 Oppenheimer Quest Balanced Value Fund
<PAGE> 15
<TABLE>
<CAPTION>
================================================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$420,269,227 and 25,716,338 shares of beneficial interest outstanding) $16.34
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price) $17.34
- ----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets
of $322,232,730 and 19,864,869 shares of beneficial interest outstanding) $16.22
- ----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets
of $125,442,108 and 7,736,499 shares of beneficial interest outstanding) $16.21
</TABLE>
See accompanying Notes to Financial Statements.
15 Oppenheimer Quest Balanced Value Fund
<PAGE> 16
STATEMENT OF OPERATIONS For the Six Months Ended April 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
================================================================================================================
<S> <C>
INVESTMENT INCOME
Interest $ 6,497,263
- ----------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $3,851) 1,379,712
-----------
Total income 7,876,975
================================================================================================================
EXPENSES
Management fees--Note 4 2,001,045
- ----------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 503,745
Class B 784,081
Class C 310,721
- ----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 273,728
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees 190,498
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 79,910
- ----------------------------------------------------------------------------------------------------------------
Trustees' compensation--Note 1 17,113
- ----------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 11,159
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 9,571
- ----------------------------------------------------------------------------------------------------------------
Other 40,182
-----------
Total expenses 4,221,753
Less expenses paid indirectly--Note 4 (3,517)
-----------
Net expenses 4,218,236
================================================================================================================
NET INVESTMENT INCOME 3,658,739
================================================================================================================
REALIZED AND UNREALIZED GAIN
Net realized gain on investments 29,131,886
Net change in unrealized appreciation or depreciation on investments 45,907,975
-----------
Net realized and unrealized gain 75,039,861
================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $78,698,600
===========
</TABLE>
See accompanying Notes to Financial Statements.
16 Oppenheimer Quest Balanced Value Fund
<PAGE> 17
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31,
(UNAUDITED) 1998
===================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 3,658,739 $ 2,923,416
- ---------------------------------------------------------------------------------------------------
Net realized gain 29,131,886 30,835,570
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 45,907,975 3,887,092
------------ ------------
Net increase in net assets resulting from operations 78,698,600 37,646,078
===================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (2,052,879) (1,415,504)
Class B (852,614) (321,556)
Class C (349,363) (96,706)
- ---------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (19,068,681) (10,300,115)
Class B (8,964,456) (3,423,832)
Class C (3,441,414) (921,807)
===================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 262,809,630 42,617,372
Class B 245,450,372 29,355,474
Class C 98,176,723 12,351,024
===================================================================================================
NET ASSETS
Total increase 650,405,918 105,490,428
- ---------------------------------------------------------------------------------------------------
Beginning of period 217,538,147 112,047,719
------------ ------------
End of period (including undistributed net investment
income of $1,755,363 and $1,351,480, respectively) $867,944,065 $217,538,147
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Quest Balanced Value Fund
<PAGE> 18
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30,
1999 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996(1) 1995
================================================================================================================
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $15.50 $13.99 $12.48 $10.92 $10.09
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .09 .26 .20 .23 .27(2)
Net realized and unrealized gain 2.82 3.24 2.65 2.05 1.27
------ ------ ------ ------ ---------
Total income from investment
operations 2.91 3.50 2.85 2.28 1.54
- ----------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.15) (.20) (.19) (.22) (.29)
Distributions from net realized gain (1.92) (1.79) (1.15) (.50) (.42)
------ ------ ------ ------ ---------
Total dividends and distributions to
shareholders (2.07) (1.99) (1.34) (.72) (.71)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.34 $15.50 $13.99 $12.48 $10.92
====== ====== ====== ====== =========
================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 20.19% 27.91% 25.18% 21.84% 16.35%
================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $420,269 $135,821 $79,751 $49,322 $37,082
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $255,529 $103,244 $61,618 $43,428 $33,397
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.83%(5) 2.07% 1.68% 2.03% 2.60%(4)
Expenses(6) 1.50%(5) 1.55% 1.58% 1.90% 1.99%(4)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 43% 165% 89% 124% 130%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
2. Based on average shares outstanding for the period.
3. Assumes a $1,000 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.
18 Oppenheimer Quest Balanced Value Fund
<PAGE> 19
<TABLE>
<CAPTION>
CLASS B
- --------- ---------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30,
1999 YEAR ENDED OCTOBER 31,
1994 (UNAUDITED) 1998 1997 1996(1) 1995 1994
================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
$11.24 $15.40 $13.92 $12.42 $10.88 $10.07 $11.23
- ----------------------------------------------------------------------------------------------------------------
.32(2) .06 .19 .15 .17 .19(2) .25(2)
.55 2.79 3.20 2.62 2.03 1.28 .56
------ ------ ------ ----- ------ ------ ------
.87 2.85 3.39 2.77 2.20 1.47 .81
- ----------------------------------------------------------------------------------------------------------------
(.32) (.11) (.12) (.12) (.16) (.24) (.27)
(1.70) (1.92) (1.79) (1.15) (.50) (.42) (1.70)
------ ------ ------ ----- ------ ------ ------
(2.02) (2.03) (1.91) (1.27) (.66) (.66) (1.97)
- ----------------------------------------------------------------------------------------------------------------
$10.09 $16.22 $15.40 $13.92 $12.42 $10.88 $10.07
====== ====== ====== ===== ====== ====== ======
================================================================================================================
8.64% 19.89% 27.08% 24.55% 21.07% 15.65% 7.96%
================================================================================================================
$30,576 $322,233 $60,807 $25,609 $13,175 $7,623 $2,928
- ----------------------------------------------------------------------------------------------------------------
$29,112 $159,550 $39,165 $19,230 $10,097 $4,856 $1,586
- ----------------------------------------------------------------------------------------------------------------
3.16%(4) 1.22%(5) 1.53% 1.09% 1.40% 1.71%(4) 2.53%(4)
1.86%(4) 2.09%(5) 2.15% 2.17% 2.53% 2.59%(4) 2.47%(4)
- ----------------------------------------------------------------------------------------------------------------
113% 43% 165% 89% 124% 130% 113%
</TABLE>
4. 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, and 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.
5. Annualized.
19 Oppenheimer Quest Balanced Value Fund
<PAGE> 20
FINANCIAL HIGHLIGHTS (Continued)
<TABLE>
<CAPTION>
CLASS C
--------------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30,
1999 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1998 1997 1996(1) 1995 1994
================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $15.40 $13.92 $12.43 $10.89 $10.07 $11.23
- ----------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .07 .18 .15 .17 .15(2) .24(2)
Net realized and unrealized gain 2.78 3.21 2.62 2.02 1.30 .56
------ ------ ------ ------ ------ ------
Total income from investment
operations 2.85 3.39 2.77 2.19 1.45 .80
- ----------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.12) (.12) (.13) (.15) (.21) (.26)
Distributions from net realized gain (1.92) (1.79) (1.15) (.50) (.42) (1.70)
------ ------ ------ ------ ------ ------
Total dividends and distributions to
shareholders (2.04) (1.91) (1.28) (.65) (.63) (1.96)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.21 $15.40 $13.92 $12.43 $10.89 $10.07
====== ====== ====== ====== ====== ======
================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 19.85% 27.12% 24.51% 20.97% 15.38% 7.91%
================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $125,442 $20,910 $6,687 $2,809 $1,828 $455
- ----------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 63,231 $11,598 $4,724 $2,200 $ 968 $298
- ----------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 1.21%(5) 1.60% 1.09% 1.40% 1.39%(4) 2.39%(4)
Expenses(6) 2.09%(5) 2.15% 2.17% 2.53% 2.88%(4) 2.62%(4)
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 43% 165% 89% 124% 130% 113%
</TABLE>
6. The expense ratio reflects the effect of gross expenses paid indirectly by
the Fund.
7. 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, 1999, were $657,444,900 and $185,076,787,
respectively.
See accompanying Notes to Financial Statements.
20 Oppenheimer Quest Balanced Value Fund
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (Unaudited)
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Quest Balanced 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 growth of capital. The Fund's investment
advisor is OppenheimerFunds, Inc. (the Manager). 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.
21 Oppenheimer Quest Balanced Value Fund
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
===============================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- -------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- -------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Fund has adopted a nonfunded retirement plan for
the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended April 30, 1999, a provision of $8,500 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $11,572 as of
April 30, 1999.
- -------------------------------------------------------------------------------
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.
22 Oppenheimer Quest Balanced Value Fund
<PAGE> 23
===============================================================================
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
===============================================================================
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30, 1999 YEAR ENDED OCTOBER 31, 1998
------------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 18,729,032 $291,451,921 4,356,057 $ 61,783,195
Dividends and
distributions reinvested 1,357,140 20,143,079 862,256 11,210,143
Redeemed (3,134,925) (48,785,370) (2,153,035) (30,375,966)
---------- ------------ ---------- ------------
Net increase 16,951,247 $262,809,630 3,065,278 $ 42,617,372
========== ============ ========== ============
- ----------------------------------------------------------------------------------------------------------------
Class B:
Sold 16,086,457 $248,530,685 2,418,672 $ 34,018,626
Dividends and
distributions reinvested 627,174 9,251,479 276,040 3,565,995
Redeemed (796,961) (12,331,792) (585,932) (8,229,147)
---------- ------------ ---------- ------------
Net increase 15,916,670 $245,450,372 2,108,780 $ 29,355,474
========== ============ ========== ============
- ----------------------------------------------------------------------------------------------------------------
Class C:
Sold 6,523,707 $100,589,604 990,115 $ 14,015,246
Dividends and
distributions reinvested 240,794 3,550,212 74,668 964,286
Redeemed (386,000) (5,963,093) (187,201) (2,628,508)
---------- ------------ ---------- ------------
Net increase 6,378,501 $ 98,176,723 877,582 $ 12,351,024
========== ============ ========== ============
</TABLE>
23 Oppenheimer Quest Balanced Value Fund
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
===============================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of April 30, 1999, net unrealized appreciation on investments of $58,498,969
was composed of gross appreciation of $73,817,155, and gross depreciation of
$15,318,186.
===============================================================================
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 Fund's management fee for the six months ended April 30,
1999 was 0.85% of average annual net assets for each class of shares.
The Manager pays OpCap Advisors (the Sub-Advisor) a monthly fee based
on the fee schedule set forth in the Prospectus. For the six months ended April
30, 1999, the Manager paid $625,421 to the Sub-Advisor.
For the six months ended April 30, 1999, commissions (sales charges
paid by investors) on sales of Class A shares totaled $2,598,364, of which
$667,888 was retained by OppenheimerFunds Distributor, Inc. (OFDI), a
subsidiary of the Manager, as general distributor, and by an affiliated
broker/dealer. Sales charges advanced to broker/dealers by OFDI on sales of the
Fund's Class A, Class B and Class C shares totaled $305,005, $5,432,235 and
$654,493, respectively. Amounts paid to an affiliated broker/dealer for Class B
and Class C shares were $239,542 and $6,963, respectively. During the six
months ended April 30, 1999, OFDI received contingent deferred sales charges of
$8,287, $146,360 and $9,001, respectively, upon redemption of Class A, 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 other Oppenheimer
funds. The Fund pays OFS an annual maintenance fee of $20.00 for each Fund
shareholder account and reimburses OFS for its out-of-pocket expenses. During
the six months ended April 30, 1999, the Fund paid OFS $256,345.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
24 Oppenheimer Quest Balanced Value Fund
<PAGE> 25
===============================================================================
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. 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 compensate itself for its other expenditures
under the Plan. During the six months ended April 30, 1999, OFDI paid $16,200
to an affiliated broker/dealer as compensation for Class A personal service and
maintenance expenses and retained $101,320 as compensation for Class A sales
commissions and service fee advances, as well as financing costs.
The Fund has adopted Distribution and Service Plans for Class B and
Class C shares to compensate OFDI for its costs in distributing Class B and
Class C shares and servicing accounts. Under the Plans, the Fund pays OFDI an
annual asset-based sales charge of 0.75% per year on Class B and Class C shares
for its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and Class C shares. Each fee
is computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the six months
ended April 30, 1999, OFDI paid $2,983 and $1,592, respectively, to an
affiliated broker/dealer as compensation for Class B and Class C personal
service and maintenance expenses and retained $675,277 and $193,928,
respectively, as compensation for Class B and Class C sales commissions and
service fee advances, as well as financing costs. If either Plan is terminated
by the Fund, the Board of Trustees may allow the Fund to continue payments of
the asset-based sales charge to OFDI for distributing shares before the Plan
was terminated. As of April 30, 1999, OFDI had incurred excess distribution and
servicing costs of $6,227,639 for Class B and $1,118,914 for Class C.
25 Oppenheimer Quest Balanced Value Fund
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (Unaudited) (Continued)
===============================================================================
5. ILLIQUID AND RESTRICTED SECURITIES
As of April 30, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may be
considered illiquid if it lacks a readily available market or its valuation has
not changed for a certain period of time. The Fund intends to invest no more
than 10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of April 30, 1999, was $9,650,000, which
represents 1.11% of the Fund's net assets.
===============================================================================
6. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended
April 30, 1999.
26 Oppenheimer Quest Balanced Value Fund
<PAGE> 27
OPPENHEIMER QUEST BALANCED VALUE FUND
A Series of Oppenheimer Quest For Value Funds
===============================================================================
OFFICERS AND TRUSTEES Bridget A. Macaskill, Chairman of the
Board of Trustees and President
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Robert G. Galli, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
Robert C. Doll, Jr., Vice President
Brian W. Wixted, 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 Citibank, N.A.
PORTFOLIO SECURITIES
===============================================================================
INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP
===============================================================================
LEGAL COUNSEL Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have
been taken from the records of the Fund
without examination of the independent
accountants. This is a copy of a report to
shareholders of Oppenheimer Quest Balanced
Value Fund. This report must be preceded or
accompanied by a Prospectus of Oppenheimer
Quest Balanced 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, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
27 Oppenheimer Quest Balanced Value Fund
<PAGE> 28
INFORMATION AND SERVICES
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[OPPENHEIMERFUNDS LOGO]
RS0257.001.0499 June 29, 1999
