---------------------------------------
Annual Report October 31, 1998
---------------------------------------
OPPENHEIMER
Quest
Opportunity
Value Fund
[GRAPHIC OMITTED]
[OPPENHEIMER LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
4 An Interview
with Your Fund's
Manager
9 Fund Performance
- ---------------------------------------
13 Financial
Statements
31 Report of
Independent
Accountants
- ---------------------------------------
32 Federal
Income Tax
Information
33 Officers and
Trustees
36 Information and
Services
Report highlights
- --------------------------------------------------------------------------------
o The Fund focuses on high-quality businesses whose true value is not reflected
in their stock prices.
o The recent stock market correction has created opportu nities to buy sound
businesses at attractive prices.
o We are favoring companies with businesses that are resistant to the ups and
downs of the economic cycle.
Avg Annual Total Returns
For the 1-Year Period
Ended 10/31/98
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
5.83% -0.26%
- ---------------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
5.29% 0.29%
- ---------------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
5.29% 4.29%
- ---------------------------------------
Class Y
Without With
Sales Chg.(1) Sales Chg.(2)
- ---------------------------------------
6.38% 6.38%
- ---------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because of ongoing
market volatility, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com. 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. Such performance would have been lower if sales charges were taken into
account.
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 contingent deferred sales charge of 1%. Class Y
shares were first publicly offered on 12/16/96 and are not available for sale to
individual shareholders. 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. An explanation of the different performance
calculations is in the Fund's prospectus.
2 Oppenheimer Quest Opportunity Value Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Quest Opportunity
Value Fund
Dear shareholder,
- --------------------------------------------------------------------------------
In retrospect, 1998 has been an unsettling year for the financial markets.
Around the world, stock and bond markets experienced considerable instability,
with particular tumult being felt in Southeast Asia, Russia and Latin America.
The U.S. stock market was not immune from the extreme volatility, as it climbed
to record levels through July before correcting sharply in the third quarter and
rebounding to new highs in the fourth quarter. In the bond market, yields on
U.S. Treasury securities declined to record lows before rising modestly late in
the year.
Does the swift recovery of the U.S. stock market and the favorable
economic environment for the bond market mean that domestic stocks and bonds
will continue to prosper? We are optimistic over the long term, but we do expect
that concerns about corporate earnings growth in a slow-growth economy will
contribute to more stock market volatility in 1999. In the bond market, the
Federal Reserve Board's decisions to reduce short-term interest rates should
help create a positive climate for fixed-income securities. While lower interest
rates are generally good for bond prices, it will become more difficult for bond
funds to maintain their dividends at current levels if yields decline further.
As an Oppenheimer fund shareholder, you may wonder how this potential
volatility will affect you. If you maintain a long-term perspective, as we do,
short-term volatility over the coming months should have little bearing on your
ability to achieve your future financial goals. That's why we continue to
suggest that you adhere to your long-term investment plan. In fact, we are very
encouraged that most of our shareholders stayed the course during last summer's
stock market correction, avoiding the temptation of selling into a temporarily
declining market.
Finally, I would like to thank those shareholders who contacted us about
our revised account statement. Response has been very positive, and we are
pleased that many of you find the new format easier to read and more
informative. If you have any questions about the new statement or any other
matter, please don't hesitate to call us at 1-800-525-7048. In the meantime,
thank you for choosing OppenheimerFunds, The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 20, 1998
3 Oppenheimer Quest Opportunity Value Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
"We have favored companies whose businesses are relatively insulated from
changes in the economy."
How did the Fund perform over the one-year period that ended October 31, 1998?
Although broad market indexes recorded new highs in late 1997 and the first half
of 1998, most of those gains were limited to a handful of large growth
companies. Our value style of investing was out of favor during the market's
advance. Since mid-July, when the stock market corrected sharply, value stocks
were relatively hard-hit as investors continued to favor large companies they
believed could provide consistent earnings growth.
However, the Fund's Class A shares have earned an overall 4-star ranking
(****) from Morningstar for the combined 3- and 5-year periods ended September
30, 1998, among 2,678 (3-year) and 1,584 (5-year) domestic equity funds.(1) The
Fund's Class A shares provided an average annual total return, without sales
charges, of 5.83% for the one-year period ended October 31, 1998.(2)
1. Source: Morningstar, Inc., 9/30/98. Morningstar ranks mutual funds in broad
investment classes, based on risk adjusted returns after considering sales
charges and expenses. Return and risk are measured as performance above and
below 90-day U.S. Treasury bill returns, respectively. Current star rankings are
based on the weighted average of 3-, 5- and 10-year (if applicable) rankings for
a fund or class and are subject to change monthly. Top 10%: 5 stars. Next 22.5%:
4 stars. Middle 35%: 3 stars. Next 22.5%: 2 stars. Bottom 10%: 1 star. The
Fund's Class A shares were ranked 3 stars (3-year) and 4 stars (5-year),
weighted 40%/60%, respectively.
2. Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
4 Oppenheimer Quest Opportunity Value Fund
<PAGE>
[PHOTO]
Portfolio Management (l to r)
Richard Glasebrook II
(Portfolio Manager)
James Sheldon
Have any of the Fund's holdings reported disappointing earnings?
In some cases, yes. Our value-oriented approach to investing led us to some
companies that do business throughout the world. While many of these global
stocks led the markets higher over the past several years, some have recently
reported disappointing earnings or indicated that they may do so soon. Lower
earnings were largely the result of economic weakness in the emerging markets of
Asia, Latin America and Eastern Europe. Citigroup, Inc. and McDonald's Corp. are
examples of holdings that declined in price because of fear of weak business
conditions overseas.
How did you manage the Fund in this challenging economic environment?
We maintained our disciplined investment approach of identifying high-quality
businesses selling at what we believe are attractive valuations. Heightened
volatility in the world's markets is changing the valuation characteristics of
many companies, so we sold some companies that no longer appeared to be
compelling values. We used the proceeds to add either to our cash reserves or to
holdings of companies that we believe offered better appreciation potential.
5 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 9/30/98(3)
Class A
Since
1 year 5 year Inception
- ---------------------------------------
- -9.65% 14.50% 15.88%
- ---------------------------------------
Class B
Since
1 year 5 year Inception
- ---------------------------------------
- -9.25% 15.05% 15.00%
- ---------------------------------------
Class C
Since
1 year 5 year Inception
- ---------------------------------------
- -5.56% 15.25% 15.08%
- ---------------------------------------
Class Y
Since
1 year 5 year Inception
- ---------------------------------------
- -3.62% N/A 9.77%
- ---------------------------------------
An interview with your Fund's manager
- --------------------------------------------------------------------------------
As a result, we reduced the number of financial services companies in the
portfolio whose earnings are closely tied to the economy. We also reduced our
already small allocation to technology companies because we believe tighter
capital expenditures in the coming year will lessen the demand for their
products. On the other hand, we have favored companies whose businesses are
relatively insulated from changes in the economy. Typically, these companies
produce small, inexpensive products that people can afford in an economic
downturn. Cigarette manufacturer Philip Morris is a good example of such a
company.
What companies contributed most positively to the Fund's performance?
We have had a number of winners over the past twelve months. For example,
tobacco giant Philip Morris Cos., Inc. has provided good returns as it moves
toward resolution of its legal problems in the United States. We believe that
the stock price does not adequately reflect the strength of the company's
international tobacco business, which tends to do well even under recessionary
conditions.
In addition, we have seen good results from a chemical company that
distinguished itself as a leader in the agricultural chemical business. A
holding company containing telephone and non-U.S. cable television properties
was also a strong performer.
6 Oppenheimer Quest Opportunity Value Fund
<PAGE>
What companies were most disappointing?
Caterpillar, Inc. is a strong company whose stock has languished. The company
has met earnings expectations, and it is using cash flow to repurchase shares,
which tends to create value for shareholders. However, its stock has not yet
reflected these positive attributes because of concerns over international
business conditions.
One of our airline stocks also has not responded as well as expected when
we purchased its stock after the onset of the Asian crisis last year. The
company has managed its Asian routes well and has benefited from positive
traffic trends in the United States, causing earnings estimates to rise. Yet,
investors remain concerned about the company's exposure to international
markets.
What is your outlook for the foreseeable future?
Over the near term, we are waiting for the markets to become more stable before
we shift more of our cash reserves and fixed income investment into stocks. Over
the long run, we are convinced that today's market weakness should give rise to
opportunities to buy the stocks of strong businesses at bargain prices. That's
because we've seen markets like this one before.
3. 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 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 Y
shares were first publicly offered on 12/16/96 and are not available for sale to
individual shareholders. 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. An explanation of the different performance
calculations is in the Fund's prospectus.
7 Oppenheimer Quest Opportunity Value Fund
<PAGE>
[The following table was represented by a pie chart in the printed materials.]
Asset Allocation(4)
o Equities 83.7%
o Bonds 5.1
o Cash Equivalents 11.2
In our experience, price weakness eventually gives way to buying opportunities.
We intend to continue to evaluate companies objectively, identifying investments
likely to produce attractive long-term returns when better conditions return. In
fact, we think that our time-tested value-oriented management style is part of
The Right Way to Invest in these uncertain markets.
Top 10 Stock Holdings(4)
- --------------------------------------------------------------------------------
Freddie Mac 6.3%
- --------------------------------------------------------------------------------
McDonald's Corp. 5.8
- --------------------------------------------------------------------------------
Time Warner, Inc. 5.4
- --------------------------------------------------------------------------------
Citigroup, Inc. 4.8
- --------------------------------------------------------------------------------
Wells Fargo & Co. 4.1
- --------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 4.1
- --------------------------------------------------------------------------------
Caterpillar, Inc. 3.3
- --------------------------------------------------------------------------------
ACE Ltd. 3.3
- --------------------------------------------------------------------------------
Philip Morris Cos., Inc. 3.1
- --------------------------------------------------------------------------------
Diageo plc, Sponsored ADR 3.0
- --------------------------------------------------------------------------------
Top 5 Sectors(4)
- --------------------------------------------------------------------------------
Financial 25.1%
- --------------------------------------------------------------------------------
Consumer Cyclicals 19.4
- --------------------------------------------------------------------------------
Industrial 11.7
- --------------------------------------------------------------------------------
Basic Materials 10.2
- --------------------------------------------------------------------------------
Consumer Non-Cyclicals 7.7
- --------------------------------------------------------------------------------
4. Portfolio is subject to change. Percentages are as of October 31, 1998, and
are based on total market value of investments.
8 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended October 31,1998, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
o Management's Discussion of Performance. During the Fund's fiscal year
that ended October 31, 1998, Oppenheimer Quest Opportunity Value Fund's
performance was negatively affected, as our value style of investing was out of
favor during the market's advance. In particular, performance was hurt by
weakness in the stocks of companies doing business in international markets. In
addition, the Fund's stock selection strategy led the managers away from
companies in the electric utilities and technology industries, which represented
two of the better performing sectors of the market during the recent correction.
As a result, the Fund's performance for the period trailed the performance of
its benchmark Standard & Poor's (S&P) 500 Index. The Fund's portfolio holdings,
allocations and investment style are subject to change.
o Comparing the Fund's Performance to the Market. The graphs that follow
show the performance of a hypothetical $10,000 investment in each class of
shares of the Fund held until October 31, 1998. In the case of Class A shares,
performance is measured from the inception of the class on January 3, 1989; in
the case of Class B and Class C shares, performance is measured from inception
of those classes on September 1, 1993; and in the case of Class Y shares,
performance is measured from inception of the class on December 16, 1996. The
Fund's performance reflects the deduction of the 5.75% maximum initial sales
charge on Class A shares, the 5% (1-year) and 1% (since inception) applicable
contingent deferred sales charge for Class B, and the 1% (1-year) contingent
deferred sales charge for Class C shares. The graphs assume that all dividends
and capital gains distributions were reinvested in additional shares.
The Fund's performance is compared to the performance of the S&P 500
Index, a broad-based index of equity securities widely regarded as a general
measure of the performance of the U.S. equity securities market. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the graphs
shows the effect of taxes. The Fund's performance reflects the effects of Fund
business and operating expenses. While index comparisons may be useful to
provide a benchmark for the Fund's performance, it must be noted that the Fund's
investments are not limited to the securities in the index.
9 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Quest Opportunity Value Fund (Class A) and S&P 500 Index
[The following table was represented by a line graph in the printed materials.]
Oppenheimer Quest
Opportunity Value Fund
Class A S&P 500
1.3.89 9425 10000
10.31.89 10924 12599
10.31.90 9545 11657
10.31.91 14359 15552
10.31.92 17509 17099
10.31.93 20020 19648
10.31.94 21703 20406
10.31.95 28189 25796
10.31.96 34830 32007
10.31.97 42724 42282
10.31.98 45215 51579
Average Annual Total Return of Class A Shares of the Fund at 10/31/98(1)
1 Year -0.26% 5 Year 16.31% Life 16.59%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Quest Opportunity Value Fund (Class B) and S&P 500 Index
[The following table was represented by a line graph in the printed materials.]
Oppenheimer Quest
Opportunity Value Fund
Class B S&P 500
9.1.93 10000 10000
10.31.93 9984 10128
10.31.94 10767 10519
10.31.95 13909 13297
10.31.96 17099 16499
10.31.97 20868 21796
10.31.98 21872 26589
Average Annual Total Return of Class B Shares of the Fund at 10/31/98(2)
1 Year 0.29% 5 Year 16.88% Life 16.36%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for S&P 500 Index in the graphs begins on 12/31/88
for Class A, 8/31/93 for both Class B and Class C, and 12/31/96 for Class Y.
1. The inception date of the Fund (Class A shares) was 1/3/89. The average
annual total returns are shown net of the applicable 5.75% maximum initial sales
charge.
2. Class B shares of the Fund were first publicly offered on 9/1/93. The average
annual total returns are shown net of the applicable 5% and 1% contingent
deferred sales charges, respectively, for the one-year period and the life of
the class. The ending account value in the graph is net of the applicable 1%
contingent deferred sales charge.
10 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Quest Opportunity Value Fund (Class C) and S&P 500 Index
[The following table was represented by a line graph in the printed materials.]
Oppenheimer Quest
Opportunity Value Fund
Class C S&P 500
9.1.93 10000 10000
10.31.93 9984 10128
10.31.94 10761 10519
10.31.95 13898 13297
10.31.96 17078 16499
10.31.97 20844 21796
10.31.98 21946 26589
Average Annual Total Return of Class C Shares of the Fund at 10/31/98(3)
1 Year 4.29% 5 Year 17.06% Life 16.43%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Quest Opportunity Value Fund (Class Y) and S&P 500 Index
[The following table was represented by a line graph in the printed materials.]
Oppenheimer Quest
Opportunity Value Fund
Class Y S&P 500
12.16.96 10000 10000
10.31.97 11951 12531
10.31.98 12714 15286
Average Annual Total Return of Class Y Shares of the Fund at 10/31/98(4)
1 Year 6.38% Life 13.66%
3. Class C shares of the Fund were first publicly offered on 9/1/93. The average
annual total returns are shown net of the applicable 1% contingent deferred
sales charge for the one-year period.
4. Class Y shares were first publicly offered on 12/16/96 and are not available
for sale to individual shareholders.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
11 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
12 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments October 31, 1998
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
================================================================================
Common Stocks--83.5%
- --------------------------------------------------------------------------------
Basic Materials--10.2%
- --------------------------------------------------------------------------------
Chemicals--8.6%
Dow Chemical Co. 1,200,000 $112,350,000
- --------------------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 3,200,000 184,000,000
- --------------------------------------------------------------------------------
Hercules, Inc. 500,000 16,656,250
- --------------------------------------------------------------------------------
Monsanto Co. 1,663,300 67,571,562
- --------------------------------------------------------------------------------
Solutia, Inc. 380,000 8,336,250
------------
388,914,062
- --------------------------------------------------------------------------------
Paper--1.6%
Champion International Corp. 2,243,800 71,661,362
- --------------------------------------------------------------------------------
Consumer Cyclicals--19.4%
- --------------------------------------------------------------------------------
Autos & Housing--0.9%
Security Capital Group, Inc., Cl. A(1) 48,627 38,901,600
- --------------------------------------------------------------------------------
Leisure & Entertainment--16.8%
Mattel, Inc. 3,600,000 129,150,000
- --------------------------------------------------------------------------------
McDonald's Corp. 3,900,000 260,812,500
- --------------------------------------------------------------------------------
Time Warner, Inc. 2,625,000 243,632,812
- --------------------------------------------------------------------------------
UAL Corp.(1) 1,950,000 126,628,125
------------
760,223,437
- --------------------------------------------------------------------------------
Media--0.5%
Reed International plc, Sponsored ADR 697,500 23,366,250
- --------------------------------------------------------------------------------
Retail: General--1.2%
Nordstrom, Inc. 2,000,000 54,625,000
- --------------------------------------------------------------------------------
Consumer Non-Cyclicals--7.7%
- --------------------------------------------------------------------------------
Food--3.0%
Diageo plc, Sponsored ADR 3,100,000 136,206,250
- --------------------------------------------------------------------------------
Healthcare/Supplies & Services--0.8%
Becton, Dickinson & Co. 850,000 35,806,250
- --------------------------------------------------------------------------------
Household Goods--0.8%
Avon Products, Inc. 906,200 35,964,812
- --------------------------------------------------------------------------------
Tobacco--3.1%
Philip Morris Cos., Inc. 2,750,000 140,593,750
13 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Financial--25.0%
- --------------------------------------------------------------------------------
Banks--13.1%
BankBoston Corp. 3,025,000 $111,357,813
- --------------------------------------------------------------------------------
Citigroup, Inc. 4,587,500 215,899,219
- --------------------------------------------------------------------------------
M&T Bank Corp. 163,100 81,305,350
- --------------------------------------------------------------------------------
Wells Fargo & Co. 500,000 185,000,000
------------
593,562,382
- --------------------------------------------------------------------------------
Diversified Financial--6.8%
American Express Co. 175,000 15,465,625
- --------------------------------------------------------------------------------
Countrywide Credit Industries, Inc. 228,400 9,864,025
- --------------------------------------------------------------------------------
Freddie Mac 4,950,000 284,625,000
------------
309,954,650
- --------------------------------------------------------------------------------
Insurance--5.1%
ACE Ltd. 4,350,000 147,356,250
- --------------------------------------------------------------------------------
Exel Ltd., Cl. A 771,400 58,963,888
- --------------------------------------------------------------------------------
Transamerica Corp. 215,400 22,401,600
------------
228,721,738
- --------------------------------------------------------------------------------
Industrial--11.7%
- --------------------------------------------------------------------------------
Manufacturing--11.7%
Avery-Dennison Corp. 1,000,000 41,437,500
- --------------------------------------------------------------------------------
Caterpillar, Inc. 3,300,000 148,500,000
- --------------------------------------------------------------------------------
ITT Industries, Inc. 3,300,000 117,975,000
- --------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 1,250,000 100,000,000
- --------------------------------------------------------------------------------
Tenneco, Inc. (New) 1,500,000 45,562,500
- --------------------------------------------------------------------------------
Textron, Inc. 1,000,000 74,375,000
------------
527,850,000
14 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Technology--7.3%
- -----------------------------------------------------------------------------------------------
Aerospace/Defense--2.1%
Boeing Co. 2,567,500 $ 96,281,250
- -----------------------------------------------------------------------------------------------
Computer Hardware--0.0%
Adaptec, Inc.(1) 100,000 1,618,750
- -----------------------------------------------------------------------------------------------
Computer Software/Services--2.0%
Computer Associates International, Inc. 2,250,000 88,593,750
- -----------------------------------------------------------------------------------------------
Electronics--2.0%
Unitrode Corp.(1)(2) 3,110,000 39,069,375
- -----------------------------------------------------------------------------------------------
Varian Associates, Inc. 1,271,300 49,739,613
--------------
88,808,988
- -----------------------------------------------------------------------------------------------
Telecommunications/Technology--1.2%
Loral Space & Communications Ltd.(1) 700,000 13,256,250
- -----------------------------------------------------------------------------------------------
Tele-Communications, Inc. (New), TCI Ventures Group, Cl. A(1) 2,160,000 40,230,000
--------------
53,486,250
- -----------------------------------------------------------------------------------------------
Utilities--2.2%
- -----------------------------------------------------------------------------------------------
Telephone Utilities--2.2%
Sprint Corp. 1,325,000 101,693,750
--------------
Total Common Stocks (Cost $3,164,447,148) 3,776,834,281
Face
Amount
===============================================================================================
U.S. Government Obligations--5.1%
- -----------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
6.25%, 8/15/23 $100,000,000 112,031,300
6.375%, 8/15/27 100,000,000 115,093,800
- -----------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
7.50%, 11/15/01-5/15/02 2,000,000 2,188,752
7.875%, 8/15/01 550,000 600,188
--------------
Total U.S. Government Obligations (Cost $204,015,562) 229,914,040
</TABLE>
15 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
===========================================================================================
<S> <C> <C>
Short-Term Notes--11.2%(3)
- -------------------------------------------------------------------------------------------
Amex Credit Corp., 5.20%, 11/9/98 $50,000,000 $ 49,942,222
- -------------------------------------------------------------------------------------------
Federal Home Loan Bank, 4.78%, 11/18/98 1,025,000 1,022,686
- -------------------------------------------------------------------------------------------
Ford Motor Credit Corp.:
5.05%, 11/23/98 612,000 610,111
5.06%, 11/16/98 50,000,000 49,894,583
5.07%, 11/24/98 26,027,000 25,942,694
5.25%, 11/12/98 15,000,000 14,975,938
- -------------------------------------------------------------------------------------------
General Electric Capital Services, Inc., 5.49%, 12/14/98 39,512,000 39,271,778
- -------------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.09%, 12/2/98 15,411,000 15,343,453
- -------------------------------------------------------------------------------------------
Household Finance Corp.:
5%, 12/3/98 50,000,000 49,777,778
5.09%, 11/19/98 50,000,000 49,872,750
5.10%, 12/1/98 42,164,000 41,984,803
5.25%, 11/12/98 1,396,000 1,393,761
- -------------------------------------------------------------------------------------------
IBM Corp., 5.27%, 11/13/98 42,708,000 42,632,976
- -------------------------------------------------------------------------------------------
IBM Credit Corp., 5.20%, 11/2/98 13,136,000 13,134,103
- -------------------------------------------------------------------------------------------
John Deere Capital Corp., 5.27%, 11/9/98 50,000,000 49,941,445
- -------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.:
5.09%, 12/7/98 14,487,000 14,413,261
5.11%, 12/10/98 26,801,000 26,652,634
5.12%, 12/10/98 453,000 450,488
- -------------------------------------------------------------------------------------------
Prudential Funding Corp., 5.27%, 11/6/98 18,326,000 18,312,586
--------------
Total Short-Term Notes (Cost $505,570,050) 505,570,050
- -------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $3,874,032,760) 99.8% 4,512,318,371
- -------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.2 9,136,368
----------- --------------
Net Assets 100.0% $4,521,454,739
=========== ==============
</TABLE>
16 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. Non-income producing security.
2. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended October 31, 1998.
The aggregate fair value of securities of all affiliated companies held by the
Fund as of October 31, 1998 amounts to $39,069,375. Transactions during the
period in which the issuer was an affiliate are as follows:
Shares Shares
October 31, Gross Gross October 31,
1997 Additions Reductions 1998
- --------------------------------------------------------------------------------
Unitrode Corp. 400,000 2,790,000 80,000 3,110,000
3. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
See accompanying Notes to Financial Statements.
17 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities October 31, 1998
- --------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $3,829,668,339) $4,473,248,996
Affiliated companies (cost $44,364,421) 39,069,375
- --------------------------------------------------------------------------------
Cash 61,411
- --------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 8,154,477
Shares of beneficial interest sold 4,837,508
Investments sold 4,350,985
Other 12,879
--------------
Total assets 4,529,735,631
================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 5,962,125
Distribution and service plan fees 909,599
Transfer and shareholder servicing agent fees 815,332
Shareholder reports 414,463
Trustees' fees 83,265
Other 96,108
--------------
Total liabilities 8,280,892
================================================================================
Net Assets $4,521,454,739
==============
================================================================================
Composition of Net Assets
Par value of shares of beneficial interest $ 1,253,235
- --------------------------------------------------------------------------------
Additional paid-in capital 3,628,889,262
- --------------------------------------------------------------------------------
Undistributed net investment income 26,521,050
- --------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 226,505,581
- --------------------------------------------------------------------------------
Net unrealized appreciation on investments--Note 3 638,285,611
--------------
Net assets $4,521,454,739
==============
18 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$2,026,959,395 and 55,631,233 shares of beneficial interest outstanding) $36.44
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $38.66
- --------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $1,996,142,360 and 55,769,627 shares of beneficial interest
outstanding) $35.79
- --------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $475,510,093 and 13,299,248 shares of beneficial interest
outstanding) $35.75
- --------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $22,842,891 and 623,374 shares of beneficial
interest outstanding) $36.64
See accompanying Notes to Financial Statements.
19 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended October 31, 1998
- --------------------------------------------------------------------------------
===============================================================================
Investment Income
Dividends (net of foreign withholding taxes of $391,902) $ 66,005,512
- -------------------------------------------------------------------------------
Interest 42,943,910
-------------
Total income 108,949,422
===============================================================================
Expenses
Management fees--Note 4 39,225,283
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 10,352,036
Class B 19,753,318
Class C 4,871,049
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4:
Class A 2,685,670
Class B 2,615,343
Class C 627,909
Class Y 21,897
- -------------------------------------------------------------------------------
Shareholder reports 1,235,511
- -------------------------------------------------------------------------------
Registration and filing fees 275,214
- -------------------------------------------------------------------------------
Custodian fees and expenses 178,331
- -------------------------------------------------------------------------------
Trustees' fees and expenses--Note 1 141,153
- -------------------------------------------------------------------------------
Legal, auditing and other professional fees 100,363
- -------------------------------------------------------------------------------
Accounting service fees--Note 4 55,000
- -------------------------------------------------------------------------------
Other 268,924
-------------
Total expenses 82,407,001
===============================================================================
Net Investment Income 26,542,421
===============================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on investments:
Unaffiliated companies 227,181,722
Affiliated companies (661,273)
-------------
Net realized gain 226,520,449
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments (42,135,039)
-------------
Net realized and unrealized gain 184,385,410
===============================================================================
Net Increase in Net Assets Resulting from Operations $ 210,927,831
=============
See accompanying Notes to Financial Statements.
20 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 31,
1998 1997
==========================================================================================
<S> <C> <C>
Operations
Net investment income $ 26,542,421 $ 12,106,567
- ------------------------------------------------------------------------------------------
Net realized gain 226,520,449 119,527,334
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation (42,135,039) 409,132,436
-------------- --------------
Net increase in net assets resulting from operations 210,927,831 540,766,337
==========================================================================================
Dividends and Distributions to Shareholders
Dividends from net investment income:
Class A (9,231,256) (3,619,233)
Class B (2,214,613) (804,150)
Class C (509,042) (155,755)
Class Y (144,826) --
- ------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (54,377,169) (24,749,053)
Class B (51,630,451) (20,565,101)
Class C (13,039,020) (5,201,848)
Class Y (470,723) --
==========================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions--Note 2:
Class A 146,362,570 709,459,770
Class B 259,717,702 786,575,074
Class C 33,985,827 201,535,805
Class Y 7,211,645 14,559,098
==========================================================================================
Net Assets
Total increase 526,588,475 2,197,800,944
- ------------------------------------------------------------------------------------------
Beginning of period 3,994,866,264 1,797,065,320
-------------- --------------
End of period (including undistributed net investment
income of $26,521,050 and $12,086,617, respectively) $4,521,454,739 $3,994,866,264
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------
Year Ended October 31,
1998 1997 1996(2) 1995 1994
==================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $35.62 $29.89 $24.59 $19.69 $18.71
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .31 .16 .10 .23(3) .18(3)
Net realized and unrealized gain 1.72 6.46 5.62 5.40 1.35
------ ------ ------ ------ ------
Total income from investment operations 2.03 6.62 5.72 5.63 1.53
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.18) (.11) (.13) (.12) (.33)
Distributions from net realized gain (1.03) (.78) (.29) (.61) (.22)
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.21) (.89) (.42) (.73) (.55)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $36.44 $35.62 $29.89 $24.59 $19.69
====== ====== ====== ====== ======
==================================================================================================================
Total Return, at Net Asset Value(4) 5.83% 22.66% 23.56% 29.88% 8.41%
==================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $2,027 $1,839 $897 $367 $163
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $2,071 $1,399 $609 $252 $137
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.85% 0.67% 0.64% 1.02% 0.96%
Expenses 1.54% 1.54% 1.62% 1.69% 1.78%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 45.1% 30.0% 25.4% 21.0% 42.0%
</TABLE>
1. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
3. Based on average shares outstanding for the period.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
22 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
----------------------------------------------------------------
Year Ended October 31,
1998 1997 1996(2) 1995 1994
==================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $35.05 $29.49 $24.33 $19.59 $18.70
- ------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .13 .06 .05 .11(3) .08(3)
Net realized and unrealized gain 1.68 6.31 5.47 5.36 1.34
------ ------ ------ ------ ------
Total income from investment operations 1.81 6.37 5.52 5.47 1.42
- ------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.04) (.03) (.07) (.12) (.31)
Distributions from net realized gain (1.03) (.78) (.29) (.61) (.22)
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (1.07) (.81) (.36) (.73) (.53)
- ------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $35.79 $35.05 $29.49 $24.33 $19.59
====== ====== ====== ====== ======
==================================================================================================================
Total Return, at Net Asset Value(4) 5.29% 22.05% 22.92% 29.19% 7.84%
==================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $1,996 $1,706 $719 $218 $43
- ------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $1,976 $1,239 $426 $117 $16
- ------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.35% 0.17% 0.12% 0.48% 0.43%
Expenses 2.04% 2.03% 2.14% 2.21% 2.34%
- ------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 45.1% 30.0% 25.4% 21.0% 42.0%
</TABLE>
<TABLE>
<CAPTION>
Class C
--------------------
Year Ended October 31,
1998 1997
======================================================================
<S> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $35.01 $29.45
- ----------------------------------------------------------------------
Income from investment operations:
Net investment income .13 .06
Net realized and unrealized gain 1.68 6.30
------ ------
Total income from investment operations 1.81 6.36
- ----------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.04) (.02)
Distributions from net realized gain (1.03) (.78)
------ ------
Total dividends and distributions
to shareholders (1.07) (.80)
- ----------------------------------------------------------------------
Net asset value, end of period $35.75 $35.01
====== ======
======================================================================
Total Return, at Net Asset Value(4) 5.29% 22.05%
======================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $476 $434
- ----------------------------------------------------------------------
Average net assets (in millions) $487 $316
- ----------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.35% 0.17%
Expenses 2.04% 2.04%
- ----------------------------------------------------------------------
Portfolio turnover rate(6) 45.1% 30.0%
</TABLE>
5. Annualized.
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 October 31, 1998 were $2,133,951,635 and $1,789,366,682, respectively.
23 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C (continued) Class Y
-------------------------------- ------------------
Year Ended October 31, Year Ended October 31,
1996(2) 1995 1994 1998 1997(1)
==========================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $24.31 $19.58 $18.70 $35.77 $29.93
- ----------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .06 .08(3) .08(3) .48 .17
Net realized and unrealized gain 5.44 5.38 1.33 1.74 5.67
------ ------ ------ ------ ------
Total income from investment operations 5.50 5.46 1.41 2.22 5.84
- ----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.07) (.12) (.31) (.32) --
Distributions from net realized gain (.29) (.61) (.22) (1.03) --
------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.36) (.73) (.53) (1.35) --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.45 $24.31 $19.58 $36.64 $35.77
====== ====== ====== ====== ======
==========================================================================================================
Total Return, at Net Asset Value(4) 22.89% 29.16% 7.78% 6.38% 19.51%
==========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in millions) $181 $50 $7 $23 $15
- ----------------------------------------------------------------------------------------------------------
Average net assets (in millions) $105 $24 $3 $20 $6
- ----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 0.12% 0.37% 0.43% 1.39% 1.30%(5)
Expenses 2.14% 2.31% 2.35% 1.00% 0.91%(5)
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 25.4% 21.0% 42.0% 45.1% 30.0%
</TABLE>
1. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
2. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor to
the Fund.
3. Based on average shares outstanding for the period.
4. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
and distributions reinvested in additional shares on the reinvestment date, and
redemption at the net asset value calculated on the last business day of the
fiscal period. Sales charges are not reflected in the total returns. Total
returns are not annualized for periods of less than one full year.
5. Annualized.
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 October 31, 1998 were $2,133,951,635 and $1,789,366,682, respectively.
See accompanying Notes to Financial Statements.
24 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Quest Opportunity 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 seeks its investment
objective through investments in a diversified portfolio of common stocks, bonds
and cash equivalents, the proportions of which will vary based upon management's
assessment of the relative values of each investment under prevailing market
conditions. 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, Class C and Class Y 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 expenses directly attributable to that class and exclusive
voting rights with respect to matters affecting that class. Classes A, B and C
have separate distribution and/or service plans. No such plan has been adopted
for Class Y shares. Class B shares will automatically convert to Class A shares
six years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
25 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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.
- --------------------------------------------------------------------------------
Trustees' Fees and Expenses. 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 year ended
October 31, 1998, a provision of $83,265 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $83,265 as of
October 31, 1998.
- --------------------------------------------------------------------------------
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of the distributions made during the year from net
investment income or net realized gains may differ from its ultimate
characterization for federal income tax purposes. Also, due to timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the fiscal year in which the income or realized gain was recorded by
the Fund.
The Fund adjusts the classification of distributions to shareholders
to reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 1998, amounts have been reclassified to reflect a
decrease in undistributed net investment income of $8,252. Accumulated net
realized gain on investments was increased by the same amount.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Interest income is accrued on a daily basis. Realized gains
and losses on investments and unrealized appreciation and depreciation are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
26 Oppenheimer Quest Opportunity 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>
Year Ended October 31, 1998 Year Ended October 31, 1997(1)
------------------------------ ------------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
Class A:
<S> <C> <C> <C> <C>
Sold 15,821,067 $ 583,239,788 29,187,396 $ 963,814,139
Dividends and
distributions reinvested 1,742,757 61,154,538 895,931 27,272,152
Redeemed (13,576,905) (498,031,756) (8,466,400) (281,626,521)
------------- ------------- ------------- -------------
Net increase 3,986,919 $ 146,362,570 21,616,927 $ 709,459,770
============= ============= ============= =============
- -------------------------------------------------------------------------------------------
Class B:
Sold 12,868,364 $ 469,045,381 27,082,534 $ 879,940,989
Dividends and
distributions reinvested 1,478,196 51,190,003 673,907 20,277,098
Redeemed (7,254,611) (260,517,682) (3,442,467) (113,643,013)
------------- ------------- ------------- -------------
Net increase 7,091,949 $ 259,717,702 24,313,974 $ 786,575,074
============= ============= ============= =============
- -------------------------------------------------------------------------------------------
Class C:
Sold 3,470,557 $ 126,532,813 7,353,599 $ 238,923,162
Dividends and
distributions reinvested 374,287 12,946,527 171,000 5,140,248
Redeemed (2,934,835) (105,493,513) (1,283,150) (42,527,605)
------------- ------------- ------------- -------------
Net increase 910,009 $ 33,985,827 6,241,449 $ 201,535,805
============= ============= ============= =============
- -------------------------------------------------------------------------------------------
Class Y:
Sold 319,320 $ 11,839,211 478,353 $ 16,256,910
Dividends and
distributions reinvested 17,532 615,549 -- --
Redeemed (142,310) (5,243,115) (49,521) (1,697,812)
------------- ------------- ------------- -------------
Net increase 194,542 $ 7,211,645 428,832 $ 14,559,098
============= ============= ============= =============
</TABLE>
1. For the year ended October 31, 1997, for Class A, B and C shares and for the
period from December 16, 1996 (inception of offering) to October 31, 1997 for
Class Y shares.
================================================================================
3. Unrealized Gains and Losses on Investments
As of October 31, 1998, net unrealized appreciation on investments of
$638,285,611 was composed of gross appreciation of $814,313,957, and gross
depreciation of $176,028,346.
27 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (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 of
average annual net assets, 0.85% of the next $3.2 billion of average annual net
assets, 0.80% of the next $4 billion of average annual net assets, and 0.75% of
average annual net assets over $8 billion. The Fund's management fee for the
year ended October 31, 1998, was 0.86% of the average annual net assets for
Class A, Class B, Class C and Class Y shares. 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) monthly an annual
fee based on the fee schedule set forth in the Prospectus. For the year ended
October 31, 1998, the Manager paid $12,427,926 to the Sub-Advisor.
For the year ended October 31, 1998, commissions (sales charges paid
by investors) on sales of Class A shares totaled $9,230,186, of which $2,290,391
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 $1,335,288, $16,257,319 and $1,141,010,
respectively. Amounts paid to an affiliated broker/dealer for Class B and Class
C shares were $993,082 and $35,945, respectively. During the year ended October
31, 1998, OFDI received contingent deferred sales charges of $15,446, $3,917,979
and $133,923, 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 $18.00 for each Fund
shareholder account and reimburses OFS for its out-of-pocket expenses. During
the year ended October 31, 1998, the Fund paid OFS $5,314,732. 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.
28 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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
year ended October 31, 1998, OFDI paid $369,544 to an affiliated broker/dealer
as compensation for Class A personal service and maintenance expenses and
retained $3,819,141 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 year ended
October 31, 1998, OFDI paid $76,468 and $41,525, respectively, to an affiliated
broker/dealer as compensation for Class B and Class C personal service and
maintenance expenses and retained $16,531,832 and $2,684,276, 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
October 31, 1998, OFDI had incurred excess distribution and servicing costs of
$45,846,802 for Class B and $3,930,941 for Class C.
29 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
5. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended October
31, 1998.
================================================================================
6. Other Matters
As of September 24, 1998, the Fund changed its custodian bank from State Street
Bank and Trust Company to Citibank, N.A.
================================================================================
7. Subsequent Event
Effective November 1, 1998, the Manager discontinued the accounting services fee
charged to the Fund. The Manager will continue to act as accounting agent for
the Fund.
30 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
================================================================================
To the Board of Trustees and Shareholders of
Oppenheimer Quest for Value Funds
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Oppenheimer Quest Opportunity Value
Fund (one of the portfolios constituting Oppenheimer Quest for Value Funds,
hereafter referred to as the Fund) at October 31, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as financial statements) are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
November 20, 1998
31 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
In early 1999 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1998. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $1.2100, $1.0788, $1.0748 and $1.3527 per share
were paid to Class A, Class B, Class C and Class Y shareholders, respectively,
on December 12, 1997, of which, for each class of shares, $0.3180 was designated
as a capital gain distribution in the "28% Rate Group" and $0.3197 was
designated as a capital gain distribution in the "20% Rate Group" for federal
income tax purposes. Whether received in stock or cash, the capital gain
distribution should be treated by shareholders as a gain from the sale of
capital assets.
Dividends paid by the Fund during the fiscal year ended October 31,
1998, which are not designated as capital gain distributions should be
multiplied by 100.00% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
32 Oppenheimer Quest Opportunity Value Fund
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Quest Opportunity 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
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 OppenheimerFunds Services
Shareholder
Servicing Agent
================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
================================================================================
Independent Accountants PricewaterhouseCoopers LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
This is a copy of a report to shareholders of
Oppenheimer Quest Opportunity Value Fund. This report
must be preceded or accompanied by a Prospectus of
Oppenheimer Quest Opportunity 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.
33 Oppenheimer Quest Opportunity 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 Fund(1) Convertible Securities Fund(2)
Value Fund Equity Income Fund
=================================================================================================================
Taxable Bond Funds
- -----------------------------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
=================================================================================================================
Municipal Bond Funds
- -----------------------------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
=================================================================================================================
Money Market Funds(4)
- -----------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. On 5/18/98, the Fund's name was changed from "Quest Growth & Income Value
Fund."
2. On 4/28/98, the Fund's name was changed from "Bond Fund for Growth."
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds.
Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1998 OppenheimerFunds, Inc. All rights reserved.
34 Oppenheimer Quest Opportunity Value Fund
<PAGE>
Information and services
- --------------------------------------------------------------------------------
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number or by visiting our website. And, by
enrolling in AccountLink, a convenient service that "links" your Oppenheimer
funds accounts and your bank checking or savings account, you can use the
Telephone Transactions number or website to make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993.
So call us today, or visit us at our website at
www.oppenheimerfunds.com--we're here to help.
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
- -------------------------
Account Transactions
Mon-Fri 8:30am-8pm ET
- -------------------------
1-800-852-8457
- -------------------------
PhoneLink
24-hr automated information
and automated transactions
- -------------------------
1-800-533-3310
- -------------------------
Telecommunication Device
for the Deaf (TDD)
Mon-Fri 8:30am-2pm ET
- -------------------------
1-800-843-4461
- -------------------------
OppenheimerFunds
Information Hotline
24 hours a day, timely and
insightful messages on the
economy and issues that
affect your investments
- -------------------------
1-800-835-3104
- -------------------------
[LOGO] OppenheimerFunds(R)
Distributor, Inc.
RA0236.001.1098 December 30, 1998
