[photo of winding road]
Annual Report October 31, 1999
Oppenheimer
Quest Opportunity
Value Fund
[logo] OppenheimerFunds(R)
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
In selecting holdings for the portfolio, we focus on a company's management,
which must be capable of maximizing the value of the company's assets and making
effective use of free cash flow.
Although value stocks spent the past year in the doldrums, the Fund owned
several issues that excelled and identified a number of new opportunities.
As economies around the world recover from the mid-1998 financial crisis, we
expect value stocks to improve as well.
CONTENTS
1 President's Letter
3 An Interview
with Your Fund's
Manager
7 Fund Performance
12 Financial
Statements
29 Report of
Independent Accountants
30 Federal
Income Tax
Information
31 Officers and Trustees
32 OppenheimerFunds
Family
- ------------------------------
Average Annual
Total Returns
For the 1-Year Period
Ended 10/31/99*
Class A
Without With
Sales Chg. Sales Chg.
- ----------------------
16.31% 9.62%
Class B
Without With
Sales Chg. Sales Chg.
- ----------------------
15.72% 10.72%
Class C
Without With
Sales Chg. Sales Chg.
- ----------------------
15.74% 14.74%
Class Y
Without With
Sales Chg. Sales Chg.
- ----------------------
16.74% 16.74%
- ------------------------------
- ------------------------------
Not FDIC Insured.
No Bank Guarantee.
May Lose Value.
- ------------------------------
* See page 10 for further details.
<PAGE>
PRESIDENT'S LETTER
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Quest Opportunity
Value Fund
Dear shareholder,
Whenever a new year begins--let alone a new decade or century--it makes sense to
pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns and,
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a
moderate-growth, low-inflation course. As recent revisions of 1999's economic
statistics demonstrated, the economy has defied many analysts' forecasts by
growing at a strong rate, which should be positive for the bond market.
Similarly, positive economic forces could help the stock market's performance
broaden to include value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market.
Many foreign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving
1 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
PRESIDENT'S LETTER
companies there the same potential for cost-cutting and productivity
improvements that U.S. companies enjoyed 10 years ago. In Japan and Asia,
economic recovery is expected to gain strength, which could allow stocks to
rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an
infallible crystal ball, we believe that in almost any investment environment,
consistent success stems from an unwavering focus on fundamental investment
principles such as maintaining a long-term perspective, using diversification to
manage risks and availing oneself of the services of a knowledgeable financial
advisor. Indeed, these principles serve as the foundation for every investment
we offer, helping to make OppenheimerFunds The Right Way to Invest in 2000 and
beyond.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 19, 1999
These general market views represent opinions of OppenheimerFunds, Inc. and
are not intended to predict or depict performance of any particular fund.
Specific discussion, as it applies to your Fund, is contained in the pages that
follow.
2 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
[PHOTO]
Portfolio Management
Team (l to r)
Richard Glasebrook II
(Portfolio Manager)
James Sheldon
Q How did Oppenheimer Quest Opportunity Value Fund perform during the one-year
period that ended October 31, 1999?
A. As we reported in April, value-style investing remains out of favor. During
the period, the gap between valuations of growth- and value-oriented equities
continued at extreme levels as investors persistently sought to own
large-company stocks with predictable earnings, regardless of the price. Except
in the early spring, value stocks delivered relatively weak results for the
period. Despite the unfavorable environment, we are pleased with the Fund's
performance for the period.
How did you manage the Fund during this period?
During the past six months, we became increasingly concerned that the general
market is overvalued and will grow more volatile as interest rates continue to
rise. We raised the Fund's non-equity allocation to more than 20% of total
assets, a move that should reduce the impact of any broad market correction. At
the same time, we maintained our disciplined strategy, searching for companies
selling below their fair values that present both limited downside and
substantial upside potential. We also divested or trimmed holdings that reached
their fair price or disappointed at a fundamental level.
3 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
How do you identify companies for investment?
We are particularly interested in a company's management, which must be capable
of maximizing the value of the company assets and making effective use of free
cash flow. A good example is a business considered to be the world's largest
entertainment and media company, which we bought close to its low approximately
2-1/2 years ago. Over the past decade, the firm's management built a matrix of
software offerings, hardware and programming that provide a solid underpinning
to their cable business. This has enabled them to launch new cable networks and
embellish existing ones, significantly increasing cash flow. In fact, management
has focused on running the business for cash, which they have used to buy back
stock. Investors have gained confidence in the company, and it shows in the
stock price, which rose dramatically last spring. As value managers, we took
this as a signal to trim our position by about 50%. The price has dropped back
markedly since then, though it's still well above our cost per share.
We're also pleased with what's happened at McDonald's Corp. We've owned
this stock since the days when the company's U.S. business was in the doldrums
and its international business was the only bright spot. Since then, management
has capitalized on their competitive size advantage and changed the domestic
business considerably. The franchisees are excited about the new management,
cooking process and foods that have been introduced. Over the next 18 months, as
additional changes are rolled out, we believe it should put the luster back on
this stock.
[callout]
"Europe is picking up speed quickly, Asia is strong, and business in the United
States is good...all of which can lead to higher revenues, earnings and stock
prices for large-cap value companies."
4 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
Did you identify any new opportunities to invest?
A midwestern grocer recently rose to the top of our "buy" list. It's a
relatively consistent business, is expanding through acquisition of smaller
local competitors, and has seen margins improve considerably over the past
decade. Currently, earnings are considerable, but we believe that they can
improve even further. With the stock selling at a discount to the market, we see
the company as a good play over the next few years.
Which issues or sectors proved disappointing?
We don't invest in "sectors" per se. Any sector weighting, high or low, is
simply the result of the individual securities we select. However, since the
Fund tends to be very concentrated--the top 10 holdings represent about 45% of
total assets--it may appear that we're focused on a specific industry. It's just
coincidence that the two disappointments involve companies that have small drug
businesses. We originally purchased them because each was on the verge of
introducing new drugs with relatively strong sales potential (relative to the
size of its respective drug business). Since then, one of the companies,
American Home Products Corp., stumbled due to legal issues surrounding its
Fen-Phen diet drug. Management is closing in on a global settlement of the
plaintiffs' issues, and several other new drugs are about to come online, so we
believe the worst is over and intend to hold onto this position.
The other company, which also has promising new drugs pending, invested
heavily in another aspect of its business, genetically modified seeds, and has
paid heavily for a negative public reaction in Europe. However, management is
aware of the problem and is seeking remedies, including a possible strategic
transaction. We are monitoring this situation closely.
[sidebar]
- ------------------------------
Average Annual
Total Returns
For the Periods Ended 9/30/99(1)
Class A
1-Year 5-Year 10-Year
- -------------------------
11.45% 17.29% 15.53%
Class B Since
1-Year 5-Year Inception
- -------------------------
12.62% 17.88% 15.53%
Class C Since
1-Year 5-Year Inception
- -------------------------
16.65% 18.06% 15.50%
Class Y Since
1-Year 5-Year Inception
- -------------------------
18.65% N/A 12.87%
- ------------------------------
1. See page 10 for further details.
5 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
What is your outlook for the Fund over the coming months?
As a class, value stocks have reached very low valuations--in some cases, the
lowest in a decade. But most large-cap value stocks are exposed to the world
economies, which are definitely recovering. We think this will translate to
higher earnings for value stocks. If we're correct, there will be some good
opportunities to buy upside potential at prices that won't be crushed if the
market stumbles, which is why Oppenheimer Quest Opportunity Value Fund is an
important part of The Right Way to Invest.
- ---------------------------------
Portfolio Allocation(2)
[pie chart]
Stocks 79.3%
Bonds 9.6
Cash Equivalents 11.1
- ---------------------------------
Top 10 Stock Holdings(3)
- ----------------------------------------------------------
Citigroup, Inc. 7.9%
- ----------------------------------------------------------
Wells Fargo Co. 7.3
- ----------------------------------------------------------
Freddie Mac 7.0
- ----------------------------------------------------------
McDonald's Corp. 6.7
- ----------------------------------------------------------
Boeing Co. 5.8
- ----------------------------------------------------------
Computer Associates International, Inc. 5.4
- ----------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. 5.3
- ----------------------------------------------------------
Sprint Corp. (Fon Group) 4.4
- ----------------------------------------------------------
American Home Products Corp. 4.3
- ----------------------------------------------------------
News Corp. Ltd., Sponsored ADR, Preference 3.7
Top Five Industries(3)
- ----------------------------------------------------------
Diversified Financial 17.3%
- ----------------------------------------------------------
Entertainment 10.9
- ----------------------------------------------------------
Manufacturing 10.8
- ----------------------------------------------------------
Banks 9.9
- ----------------------------------------------------------
Chemicals 6.9
2. Portfolio is subject to change. Percentages are as of October 31, 1999, and
are based on total market value of investments.
3. Portfolio is subject to change. Percentages are as of October 31, 1999, and
are based on total market value of common stock.
6 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, 1999, followed by a
graphical comparison of the Fund's performance to an appropriate broad-based
market index.
Management's discussion of performance. During the fiscal year that ended
October 31, 1999, Oppenheimer Quest Opportunity Value Fund was adversely
affected by the market trends. Nevertheless, the Fund generated good returns for
the period. Throughout the majority of the period, market gains were driven by a
limited number of highly valued technology and large-capitalization growth
issues. Value stocks generally lagged during this advance. More specifically,
rising interest rates from January 1999 onward hurt many of the Fund's
investments in financial stocks, despite the fact that several of these
companies actually benefit from higher rates. Offsetting these losses were gains
in several other types of investments, including restaurant, industrial, media
and technology holdings. The Fund's portfolio holdings, allocations and
strategies are subject to change.
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, 1999. 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 maximum initial sales charge on Class
A shares, the applicable contingent deferred sales charge on Class B and Class C
shares, and reinvestments of all dividends and capital gains distributions.
The Fund's performance is compared to the performance of the Standard &
Poor's (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 income but does not consider the
effect of 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.
7 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
[LINE CHART]
<TABLE>
<CAPTION>
Oppenheimer Quest
Opportunity Value Fund Class A S&P 500 Index
<S> <C> <C>
1.3.89 9425 10000
10.31.89 10924 11774
9545 10894
10.31.91 14359 14534
17509 15980
10.31.93 20020 18365
21703 19073
10.31.95 28189 24108
34830 29907
10.31.97 42724 39500
45215 48192
10.31.99 52591 60557
</TABLE>
Average Annual Total Return of Class A Shares of the Fund at 10/31/99(1)
1-Year 9.62% 5-Year 17.96% 10-Year 16.33%
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
[LINE CHART]
<TABLE>
<CAPTION>
Oppenheimer Quest
Opportunity Value Fund Class B S&P 500 Index
<S> <C> <C>
9.1.93 10000 10000
10.31.93 9984 10128
10.31.94 10767 10519
10.31.95 13909 13296
10.31.96 17099 16494
10.31.97 20868 21785
10.31.98 21972 26579
10.31.99 25426 33398
</TABLE>
Average Annual Total Return of Class B Shares of the Fund at 10/31/99(1)
1-Year 10.72% 5-Year 18.55% Life 16.36%
The performance information for the S&P 500 Index in the graphs begins on
12/31/88 for Class A, 8/31/93 for Class B and Class C, and 12/31/96 for Class Y.
8 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
[LINE CHART]
<TABLE>
<CAPTION>
Oppenheimer Quest
Opportunity Value Fund Class C S&P 500 Index
<S> <C> <C>
9.1.93 10000 10000
10.31.93 9984 10128
10.31.94 10761 10519
10.31.95 13898 13296
10.31.96 17078 16494
10.31.97 20844 21785
10.31.98 21946 26579
10.31.99 25402 33398
</TABLE>
Average Annual Total Return of Class C Shares of the Fund at 10/31/99(1)
1-Year 14.74% 5-Year 18.74% Life 16.32%
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
[LINE CHART]
<TABLE>
<CAPTION>
Oppenheimer Quest
Opportunity Value Fund Class Y S&P 500 Index
<S> <C> <C>
12.16.96 10000 10000
10.31.97 11951 12529
10.31.98 12714 15285
10.31.99 14841 19207
</TABLE>
Average Annual Total Return of Class Y Shares of the Fund at 10/31/99(1)
1-Year 16.74% Life 14.72%
1. See page 10 for further details.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
9 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
NOTES
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
sub-advisor is OpCap Advisors, which was the Fund's advisor prior to 11/22/95.
The portfolio manager is employed by the Fund's sub-advisor.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
Class A shares were first publicly offered on 1/3/89. The average annual total
returns are shown net of the applicable 5.75% maximum initial sales charge. 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 A shares are subject to an annual
0.25% asset-based sales charge.
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 contingent deferred sales
charges of 5% (1-year) and 1% (5-year). Because Class B shares convert to Class
A shares 72 months after purchase, the "life of class" return for Class B uses
Class A performance for the period after conversion. Class B shares are subject
to an annual 0.75% asset-based sales charge.
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. Class C shares are subject to an annual
0.75% asset-based sales charge.
Class Y shares of the Fund were first publicly offered on 12/16/96. Class Y
shares are offered only to certain institutional investors under special
agreement with the Distributor.
An explanation of the different performance calculations is in the Fund's
prospectus.
10 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
Financials
11 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENT OF INVESTMENTS October 31, 1999
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks--79.1%
- -----------------------------------------------------------------------------------------
Basic Materials--6.6%
- -----------------------------------------------------------------------------------------
Chemicals--5.5%
Du Pont (E.I.) De Nemours & Co. 2,800,000 $180,425,000
- -----------------------------------------------------------------------------------------
Monsanto Co. 1,400,000 53,900,000
------------
234,325,000
- -----------------------------------------------------------------------------------------
Paper--1.1%
Champion International Corp. 818,000 47,290,625
- -----------------------------------------------------------------------------------------
Capital Goods--13.6%
- -----------------------------------------------------------------------------------------
Aerospace/Defense--4.6%
Boeing Co. 4,285,000 197,377,812
- -----------------------------------------------------------------------------------------
Industrial Services--0.5%
Waste Management, Inc. 1,218,400 22,388,100
- -----------------------------------------------------------------------------------------
Manufacturing--8.5%
Avery-Dennison Corp. 600,000 37,500,000
- -----------------------------------------------------------------------------------------
Caterpillar, Inc. 1,500,000 82,875,000
- -----------------------------------------------------------------------------------------
ITT Industries, Inc. 3,000,000 102,562,500
- -----------------------------------------------------------------------------------------
Minnesota Mining & Manufacturing Co. 1,000,000 95,062,500
- -----------------------------------------------------------------------------------------
Textron, Inc. 600,000 46,312,500
------------
364,312,500
- -----------------------------------------------------------------------------------------
Communication Services--5.3%
- -----------------------------------------------------------------------------------------
Telecommunications: Long Distance--3.5%
Sprint Corp. (Fon Group) 2,000,000 148,625,000
- -----------------------------------------------------------------------------------------
Telephone Utilities--1.8%
Bell Atlantic Corp. 1,150,000 74,678,125
- -----------------------------------------------------------------------------------------
Consumer Cyclicals--3.4%
- -----------------------------------------------------------------------------------------
Autos & Housing--0.8%
Security Capital Group, Inc., Cl. A(1) 48,627 33,358,122
- -----------------------------------------------------------------------------------------
Media--2.3%
Time Warner, Inc. 1,400,000 97,562,500
- -----------------------------------------------------------------------------------------
Retail: General--0.2%
Nordstrom, Inc. 400,000 9,975,000
- -----------------------------------------------------------------------------------------
Retail: Specialty--0.1%
Nike, Inc., Cl. B 100,000 5,643,750
- -----------------------------------------------------------------------------------------
Consumer Staples--13.7%
- -----------------------------------------------------------------------------------------
Broadcasting--1.6%
AMFM, Inc.(1) 1,000,000 70,000,000
- -----------------------------------------------------------------------------------------
Entertainment--8.6%
- -----------------------------------------------------------------------------------------
Disney (Walt) Co.(1) 600,000 15,825,000
- -----------------------------------------------------------------------------------------
McDonald's Corp. 5,500,000 226,875,000
- -----------------------------------------------------------------------------------------
News Corp. Ltd., Sponsored ADR, Preference 4,500,000 124,031,250
------------
366,731,250
12 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
<CAPTION>
Market Value
Shares See Note 1
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Food--2.8%
Diageo plc, Sponsored ADR 2,900,000 $ 117,812,500
- -----------------------------------------------------------------------------------------
Food & Drug Retailers--0.7%
Kroger Co.(1) 1,500,000 31,218,750
- -----------------------------------------------------------------------------------------
Financial--23.2%
- -----------------------------------------------------------------------------------------
Banks--7.9%
M&T Bank Corp. 180,000 89,190,000
- -----------------------------------------------------------------------------------------
Wells Fargo Co. 5,150,000 246,556,250
--------------
335,746,250
- -----------------------------------------------------------------------------------------
Diversified Financial--13.7%
Citigroup, Inc. 4,950,000 267,918,750
- -----------------------------------------------------------------------------------------
Freddie Mac 4,400,000 237,875,000
- -----------------------------------------------------------------------------------------
Household International, Inc. 1,750,000 78,093,750
--------------
583,887,500
- -----------------------------------------------------------------------------------------
Insurance--1.6%
- -----------------------------------------------------------------------------------------
ACE Ltd. 1,499,061 29,137,998
- -----------------------------------------------------------------------------------------
XL Capital Ltd., Cl. A 735,144 39,468,044
--------------
68,606,042
- -----------------------------------------------------------------------------------------
Healthcare--3.4%
- -----------------------------------------------------------------------------------------
Healthcare/Drugs--3.4%
American Home Products Corp. 2,800,000 146,300,000
- -----------------------------------------------------------------------------------------
Technology--8.2%
- -----------------------------------------------------------------------------------------
Computer Hardware--1.2%
Compaq Computer Corp. 2,650,000 50,350,000
- -----------------------------------------------------------------------------------------
Computer Software--4.3%
Computer Associates International, Inc. 3,250,000 183,625,000
- -----------------------------------------------------------------------------------------
Communications Equipment--0.4%
L.M. Ericsson Telephone Co., Cl. B, ADR 400,000 17,100,000
- -----------------------------------------------------------------------------------------
Electronics--2.3%
Motorola, Inc. 900,000 87,693,750
- -----------------------------------------------------------------------------------------
Texas Instruments, Inc. 120,000 10,770,000
--------------
98,463,750
- -----------------------------------------------------------------------------------------
Transportation--1.7%
- -----------------------------------------------------------------------------------------
Air Transportation--1.7%
UAL Corp.(1) 1,089,100 74,126,869
--------------
Total Common Stocks (Cost $2,574,376,328) 3,379,504,445
13 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENT OF INVESTMENTS Continued
<CAPTION>
Face Market Value
Amount See Note 1
- -----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. Government Obligations--9.6%
U.S. Treasury Nts., 6.50%, 5/15/05 $400,000,000 $ 407,250,000
- -----------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.50%, 11/15/01 1,000,000 1,031,563
- -----------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.50%, 5/15/02 1,000,000 1,037,500
- -----------------------------------------------------------------------------------------
U.S. Treasury Nts., 7.875%, 8/15/01 550,000 569,078
-------------
Total U.S. Government Obligations (Cost $428,980,406) 409,888,141
- -----------------------------------------------------------------------------------------
Short-Term Notes--11.1%(2)
American Express Credit Corp., 5.28%, 11/5/99 95,765,000 95,709,003
- -----------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, 5.26%, 11/15/99 50,000,000 49,897,722
- -----------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, 5.28%, 11/15/99 38,950,000 38,870,023
- -----------------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce, 5.30%, 11/18/99 40,000,000 39,899,889
- -----------------------------------------------------------------------------------------
Federal National Mortgage Assn., 5.15%, 11/22/99 25,775,000 25,697,568
- -----------------------------------------------------------------------------------------
Ford Motor Credit Co., 5.29%, 11/12/99 57,833,000 57,739,591
- -----------------------------------------------------------------------------------------
General Electric Capital Services, 5.25%, 11/2/99 50,000,000 49,992,708
- -----------------------------------------------------------------------------------------
General Motors Acceptance Corp., 5.23%, 11/2/99 5,249,000 5,248,236
- -----------------------------------------------------------------------------------------
IBM Credit Corp., 5.27%, 11/22/99 36,260,000 36,148,531
- -----------------------------------------------------------------------------------------
Prudential Funding Corp., 5.28%, 11/15/99 36,750,000 36,674,540
- -----------------------------------------------------------------------------------------
Prudential Funding Corp., 5.33%, 11/29/99 13,588,000 13,532,621
- -----------------------------------------------------------------------------------------
Royal Bank of Canada, 5.30%, 12/29/99 25,000,000 24,786,528
-------------
Total Short-Term Notes (Cost $474,196,960) 474,196,960
- -----------------------------------------------------------------------------------------
Total Investments, at Value (Cost $3,477,553,694) 99.8% 4,263,589,546
- -----------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.2 9,310,205
---------------------------------
Net Assets 100.0% $4,272,899,751
=================================
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Non-income-producing security.
2. Short-term notes are generally traded on a discount basis; the interest rate
is the discount rate received by the Fund at the time of purchase.
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, 1999. Transactions during
the period in which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
Shares Shares
October 31, Gross Gross October 31,
1998 Additions Reductions 1999
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unitrode Corp. 3,110,000 -- 3,110,000 --
</TABLE>
See accompanying Notes to Financial Statements.
14 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES October 31, 1999
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------
Assets
Investments, at value (cost $3,477,553,694)
--see accompanying statement $4,263,589,546
- -----------------------------------------------------------------------------------
Cash 144,107
- -----------------------------------------------------------------------------------
Receivables and other assets:
Interest and dividends 16,557,269
Investments sold 7,158,737
Shares of beneficial interest sold 3,008,400
Other 66,267
--------------
Total assets 4,290,524,326
- -----------------------------------------------------------------------------------
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 11,230,421
Investments purchased 3,838,736
Distribution and service plan fees 863,638
Transfer and shareholder servicing agent fees 639,060
Trustees' compensation 315,431
Other 737,289
--------------
Total liabilities 17,624,575
- -----------------------------------------------------------------------------------
Net Assets $4,272,899,751
==============
- -----------------------------------------------------------------------------------
Composition of Net Assets
Par value of shares of beneficial interest $ 1,081,013
- -----------------------------------------------------------------------------------
Additional paid-in capital 2,988,810,653
- -----------------------------------------------------------------------------------
Undistributed net investment income 9,098,760
- -----------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 487,873,473
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments 786,035,852
--------------
Net assets $4,272,899,751
==============
</TABLE>
15 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES Continued
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$1,820,496,689 and 45,555,628 shares of beneficial interest outstanding) $39.96
Maximum offering price per share (net asset value plus sales charge of 5.75% of
offering price) $42.40
- -------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$1,969,529,307 and 50,253,893 shares of beneficial interest outstanding) $39.19
- -------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $428,181,747
and 10,930,285 shares of beneficial interest outstanding) $39.17
- -------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $54,692,008 and 1,361,539 shares of beneficial interest outstanding) $40.17
</TABLE>
See accompanying Notes to Financial Statements.
16 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENT OF OPERATIONS For the Year Ended October 31, 1999
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------
Investment Income
Dividends $ 45,969,149
- -----------------------------------------------------------------------------------
Interest 44,418,946
------------
Total income 90,388,095
- -----------------------------------------------------------------------------------
Expenses
Management fees 37,766,685
- -----------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 9,474,020
Class B 19,864,236
Class C 4,485,091
- -----------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 2,516,812
Class B 3,256,223
Class C 650,114
Class Y 84,516
- -----------------------------------------------------------------------------------
Trustees' compensation 335,923
- -----------------------------------------------------------------------------------
Custodian fees and expenses 176,600
- -----------------------------------------------------------------------------------
Other 2,592,772
------------
Total expenses 81,202,992
Less expenses paid indirectly (13,441)
------------
Net expenses 81,189,551
- -----------------------------------------------------------------------------------
Net Investment Income 9,198,544
- -----------------------------------------------------------------------------------
Realized and Unrealized Gain
Net realized gain on investments:
Unaffiliated companies 443,673,288
Affiliated companies 46,502,823
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments 147,750,241
------------
Net realized and unrealized gain 637,926,352
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $647,124,896
============
</TABLE>
See accompanying Notes to Financial Statements.
17 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended October 31, 1999 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income $ 9,198,544 $ 26,542,421
- -----------------------------------------------------------------------------------
Net realized gain 490,176,111 226,520,449
- -----------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 147,750,241 (42,135,039)
-----------------------------
Net increase in net assets resulting from operations 647,124,896 210,927,831
- -----------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (16,812,169) (9,231,256)
Class B (7,874,144) (2,214,613)
Class C (1,648,542) (509,042)
Class Y (285,979) (144,826)
- -----------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (100,567,795) (54,377,169)
Class B (102,846,211) (51,630,451)
Class C (24,240,838) (13,039,020)
Class Y (1,153,375) (470,723)
- -----------------------------------------------------------------------------------
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions:
Class A (377,200,503) 146,362,570
Class B (203,279,021) 259,717,702
Class C (86,850,052) 33,985,827
Class Y 27,078,745 7,211,645
- -----------------------------------------------------------------------------------
Net Assets
Total increase (decrease) (248,554,988) 526,588,475
- -----------------------------------------------------------------------------------
Beginning of period 4,521,454,739 3,994,866,264
-----------------------------
End of period (including undistributed net investment
income of $9,098,760 and $26,521,050, respectively) $4,272,899,751 $4,521,454,739
=============================
</TABLE>
See accompanying Notes to Financial Statements.
18 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Class A Year Ended October 31, 1999 1998 1997 1996(1) 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $36.44 $35.62 $29.89 $24.59 $19.69
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .22 .31 .16 .10 .23(2)
Net realized and unrealized gain 5.46 1.72 6.46 5.62 5.40
----------------------------------------------
Total income from investment operations 5.68 2.03 6.62 5.72 5.63
- --------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.31) (.18) (.11) (.13) (.12)
Distributions from net realized gain (1.85) (1.03) (.78) (.29) (.61)
----------------------------------------------
Total dividends and distributions
to shareholders (2.16) (1.21) (.89) (.42) (.73)
- --------------------------------------------------------------------------------------
Net asset value, end of period $39.96 $36.44 $35.62 $29.89 $24.59
==============================================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value(3) 16.31% 5.83% 22.66% 23.56% 29.88%
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in millions) $1,820 $2,027 $1,839 $897 $367
- --------------------------------------------------------------------------------------
Average net assets (in millions) $1,894 $2,071 $1,399 $609 $252
- --------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) 0.50% 0.85% 0.67% 0.64% 1.02%
Expenses 1.57% 1.54%(5) 1.54%(5) 1.62%(5) 1.69%(5)
- --------------------------------------------------------------------------------------
Portfolio turnover rate(6) 47% 45% 30% 25% 21%
</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.
4. Annualized for periods of less than one full year.
5. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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, 1999, were $1,812,441,937 and $2,667,724,723, respectively.
See accompanying Notes to Financial Statements.
19 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class B Year Ended October 31, 1999 1998 1997 1996(1) 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $35.79 $35.05 $29.49 $24.33 $19.59
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.02) .13 .06 .05 .11(2)
Net realized and unrealized gain 5.41 1.68 6.31 5.47 5.36
----------------------------------------------
Total income from investment operations 5.39 1.81 6.37 5.52 5.47
- --------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.14) (.04) (.03) (.07) (.12)
Distributions from net realized gain (1.85) (1.03) (.78) (.29) (.61)
----------------------------------------------
Total dividends and distributions
to shareholders (1.99) (1.07) (.81) (.36) (.73)
- --------------------------------------------------------------------------------------
Net asset value, end of period $39.19 $35.79 $35.05 $29.49 $24.33
==============================================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value(3) 15.72% 5.29% 22.05% 22.92% 29.19%
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period
(in millions) $1,970 $1,996 $1,706 $719 $218
- --------------------------------------------------------------------------------------
Average net assets (in millions) $1,986 $1,976 $1,239 $426 $117
- --------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.03)% 0.35% 0.17% 0.12% 0.48%
Expenses 2.10% 2.04%(5) 2.03%(5) 2.14%(5) 2.21%(5)
- --------------------------------------------------------------------------------------
Portfolio turnover rate(6) 47% 45% 30% 25% 21%
</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.
4. Annualized for periods of less than one full year.
5. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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, 1999, were $1,812,441,937 and $2,667,724,723, respectively.
See accompanying Notes to Financial Statements.
20 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Class C Year Ended October 31, 1999 1998 1997 1996(1) 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $35.75 $35.01 $29.45 $24.31 $19.58
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.01) .13 .06 .06 .08(2)
Net realized and unrealized gain 5.40 1.68 6.30 5.44 5.38
----------------------------------------------
Total income from investment operations 5.39 1.81 6.36 5.50 5.46
- --------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.12) (.04) (.02) (.07) (.12)
Distributions from net realized gain (1.85) (1.03) (.78) (.29) (.61)
----------------------------------------------
Total dividends and distributions
to shareholders (1.97) (1.07) (.80) (.36) (.73)
- --------------------------------------------------------------------------------------
Net asset value, end of period $39.17 $35.75 $35.01 $29.45 $24.31
==============================================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value(3) 15.74% 5.29% 22.05% 22.89% 29.16%
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $428 $476 $434 $181 $50
- --------------------------------------------------------------------------------------
Average net assets (in millions) $448 $487 $316 $105 $24
- --------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) (0.02)% 0.35% 0.17% 0.12% 0.37%
Expenses 2.08% 2.04%(5) 2.04%(5) 2.14%(5) 2.31%(5)
- --------------------------------------------------------------------------------------
Portfolio turnover rate(6) 47% 45% 30% 25% 21%
</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.
4. Annualized for periods of less than one full year.
5. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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, 1999, were $1,812,441,937 and $2,667,724,723, respectively.
See accompanying Notes to Financial Statements.
21 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
FINANCIAL HIGHLIGHTS Continued
<TABLE>
<CAPTION>
Class Y Year Ended October 31, 1999 1998 1997(7)
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $36.64 $35.77 $29.93
- --------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .35 .48 .17
Net realized and unrealized gain 5.48 1.74 5.67
--------------------------
Total income from investment operations 5.83 2.22 5.84
- --------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.45) (.32) --
Distributions from net realized gain (1.85) (1.03) --
--------------------------
Total dividends and distributions
to shareholders (2.30) (1.35) --
- --------------------------------------------------------------------------------------
Net asset value, end of period $40.17 $36.64 $35.77
==========================
- --------------------------------------------------------------------------------------
Total Return, at Net Asset Value(3) 16.74% 6.38% 19.51%
- --------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in millions) $55 $23 $15
- --------------------------------------------------------------------------------------
Average net assets (in millions) $41 $20 $ 6
- --------------------------------------------------------------------------------------
Ratios to average net assets:(4)
Net investment income (loss) 0.98% 1.39% 1.30%
Expenses 1.14% 1.00%(5) 0.91%(5)
- --------------------------------------------------------------------------------------
Portfolio turnover rate(6) 47% 45% 30%
</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.
4. Annualized for periods of less than one full year.
5. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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, 1999, were $1,812,441,937 and $2,667,724,723, respectively.
7. For the period from December 16, 1996 (inception of offering) to October 31,
1997.
See accompanying Notes to Financial Statements.
22 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'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 on investments up to $1 million. Class B and Class C shares may be
subject to a contingent deferred sales charge (CDSC). Class Y shares are sold to
certain institutional investors without either a front-end sales charge or a
CDSC. 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.
- --------------------------------------------------------------------------------
Securities 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. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
- --------------------------------------------------------------------------------
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.
23 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' 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 year ended October
31, 1999, a provision of $232,027 was made for the Fund's projected benefit
obligations resulting in an accumulated liability of $315,292 as of October 31,
1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustees in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under
the plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
income per share.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
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 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.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. 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.
24 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
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>
Year Ended October 31, 1999 Year Ended October 31, 1998
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 8,551,790 $ 321,080,745 15,821,067 $ 583,239,788
Dividends and/or
distributions reinvested 3,117,078 110,843,305 1,742,757 61,154,538
Redeemed (21,744,473) (809,124,553) (13,576,905) (498,031,756)
--------------------------------------------------------
Net increase (decrease) (10,075,605) $(377,200,503) 3,986,919 $ 146,362,570
========================================================
- ------------------------------------------------------------------------------------
Class B
Sold 5,241,255 $ 193,785,720 12,868,364 $ 469,045,381
Dividends and/or
distributions reinvested 2,988,020 104,730,514 1,478,196 51,190,003
Redeemed (13,745,009) (501,795,255) (7,254,611) (260,517,682)
--------------------------------------------------------
Net increase (decrease) (5,515,734) $(203,279,021) 7,091,949 $ 259,717,702
========================================================
- ------------------------------------------------------------------------------------
Class C
Sold 1,504,878 $ 55,520,355 3,470,557 $ 126,532,813
Dividends and/or
distributions reinvested 707,828 24,788,138 374,287 12,946,527
Redeemed (4,581,669) (167,158,545) (2,934,835) (105,493,513)
--------------------------------------------------------
Net increase (decrease) (2,368,963) $ (86,850,052) 910,009 $ 33,985,827
========================================================
- ------------------------------------------------------------------------------------
Class Y
Sold 1,134,727 $ 42,223,962 319,320 $ 11,839,211
Dividends and/or
distributions reinvested 40,419 1,439,354 17,532 615,549
Redeemed (436,981) (16,584,571) (142,310) (5,243,115)
--------------------------------------------------------
Net increase 738,165 $ 27,078,745 194,542 $ 7,211,645
========================================================
</TABLE>
- --------------------------------------------------------------------------------
3. Unrealized Gains and Losses on Securities
As of October 31, 1999, net unrealized appreciation on securities of
$786,035,852 was composed of gross appreciation of $921,565,345, and gross
depreciation of $135,529,493.
25 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
4. Management Fees and Other Transactions with Affiliates
Management Fees. 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 of the Fund, 0.90% of the
next $400 million, 0.85% of the next $3.2 billion, 0.80% of the next $4 billion,
and 0.75% of average annual net assets in excess of $8 billion. The Fund's
management fee for the year ended October 31, 1999, was 0.86% of the average
annual net assets for each class of shares.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. 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, 1999, the Manager paid $11,985,215 to the Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. 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, 1999, the Fund paid OFS $6,654,052.
- --------------------------------------------------------------------------------
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A Commissions Commissions Commissions
Front-End Front-End on Class A on Class B on Class C
Sales Charges Sales Charges Shares Shares Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
October 31, 1999 $3,799,361 $967,264 $904,221 $5,691,828 $439,212
</TABLE>
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Year Ended Retained by Distributor Retained by Distributor Retained by Distributor
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
October 31, 1999 $59,257 $6,119,440 $91,610
</TABLE>
The Fund has adopted Distribution and Service Plans for Class A, Class B and
Class C shares under Rule 12b-1 of the Investment Company Act. Under those plans
the Fund pays the Distributor for all or a portion of its costs incurred in
connection with the distribution and/or servicing of the shares of the
particular class.
26 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
- --------------------------------------------------------------------------------
Class A Distribution and Service Plan Fees. Under the plan the Fund pays an
asset-based sales charge to the Distributor at an annual rate of 0.25% of
average annual net assets of Class A shares of the Fund. The Fund also pays a
service fee to the Distributor of 0.25% of the average annual net assets of
Class A shares. The Distributor currently uses the fees it receives from the
Fund to pay brokers, dealers and other financial institutions. The Distributor
makes payments to plan recipients quarterly at an annual rate not to exceed
0.25% of the average annual net assets consisting of Class A shares of the Fund.
For the fiscal year ended October 31, 1999, payments under the Class A Plan
totaled $9,474,020, all of which was paid by the Distributor to recipients. That
included $381,130 paid to an affiliate of the Distributor's parent company. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended October 31, 1999,
were as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payments Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $19,864,236 $15,613,591 $32,888,309 1.67%
Class C Plan 4,485,091 1,448,720 4,032,190 0.94
</TABLE>
27 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 0.45%. 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 0.08%
per annum.
The Fund had no borrowings outstanding during the year ended October 31,
1999.
28 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, 1999, 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 periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as financial statements) are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial presentation. We believe that our audits, which included confirmation
of securities at October 31, 1999, by correspondence with the custodian, provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
November 19, 1999
29 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Distributions of $2.1576, $1.9901, $1.9743 and $2.3070 per share were paid
to Class A, Class B, Class C and Class Y shareholders, respectively, on December
8, 1998, of which $1.8486 was designated as a "capital gain distribution" for
federal income tax purposes. Whether received in stock or in cash, the capital
gain distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended October 31, 1999,
which are not designated as capital gain distributions should be multiplied by
100% 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.
30 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<TABLE>
<S> <C>
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
O. Leonard Darling, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- -------------------------------------------------------------------------------------------------
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 Mayer, Brown & Platt
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.
</TABLE>
31 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------
Global Equity
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
- -----------------------------------------------------------------------------------------------------
Equity
Stock Stock & Bond
Enterprise Fund(1) Main Street(R)Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street(R)Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund Specialty
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
- -----------------------------------------------------------------------------------------------------
Fixed Income
Taxable Municipal
International Bond Fund Main Street(R)California Municipal Fund(3)
World Bond Fund California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
Rochester Division
Rochester Fund Municipals
Limited Term New York Municipal Fund
- -----------------------------------------------------------------------------------------------------
Money Market(4)
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income Fund."
3. Available to investors only 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 1999 OppenheimerFunds, Inc. All rights reserved.
32 OPPENHEIMER QUEST OPPORTUNITY VALUE FUND
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us whenever
you need assistance. So call us today, or visit our website--we're here to help.
Internet
24-hr access to account information and transactions
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
- --------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
- --------------------------------------------------------------------------------
PhoneLink
24-hr automated information and automated transactions
1.800.533.3310
- --------------------------------------------------------------------------------
Telecommunications Device for the Deaf (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
- --------------------------------------------------------------------------------
OppenheimerFunds Information Hotline 24 hours a day, timely and insightful
messages on the economy and issues that may affect your investments
1.800.835.3104
- --------------------------------------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
[Logo] OppenheimerFunds(R)
RA0236.001.1099 December 30, 1999 Distributor, Inc.
