<PAGE>
[GRAPHIC]
Annual Report October 31, 2000
Oppenheimer
Quest Balanced Value Fund(SM)
[LOGO OF OPPENHEIMER FUNDS]
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REPORT HIGHLIGHTS
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CONTENTS
1 President's Letter
3 An Interview with Your Fund's Manager
7 Fund Performance
12 Financial Statements
29 Independent Auditors' Report
30 Federal Income Tax Information
31 Officers and Trustees
Although our overall performance proved disappointing, we were encouraged by
investors' apparent migration toward more reasonably priced securities.
The Fund focused its equity investments on "traditional" value stocks and
companies that are relatively less sensitive to economic changes.
In our fixed income allocation, we emphasized U.S. Treasuries and U.S.
Inflation-
Indexed securities, which helped to offset market volatility.
Average Annual
Total Returns*
For the 1-Year Period
Ended 10/31/00
Class A
Without With
Sales Chg. Sales Chg.
-----------------------------
5.78% -0.30%
Class B
Without With
Sales Chg. Sales Chg.
-----------------------------
5.10% 0.10%
Class C
Without With
Sales Chg. Sales Chg.
-----------------------------
5.10% 4.10%
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Cumulative
Total Return*
For the Period
from 5/1/00 to 10/31/00
Class Y
-----------------------------
7.32%
*See Notes on page 10 for further details.
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PRESIDENT'S LETTER
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Dear Shareholder,
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Quest Balanced
Value Fund
Over the past several decades, our investment teams have learned the importance
of avoiding complacency when it comes to navigating the financial
markets--especially when times are good. Right now, times appear particularly
good. The U.S. economy is in its tenth year of expansion. In the bond market,
U.S. Treasury issues have been performing favorably over the past year. In
addition, despite volatility in the second quarter, the stock market has been
providing attractive returns from a wide spectrum of industry sectors,
capitalization ranges and investment styles.
We have arrived at this juncture after months of monitoring the rapid pace
of global economic growth and its implications for inflation, as well as the
Federal Reserve Board's evolving monetary policy. At this point, economic
indicators suggest a dampening of short-term inflationary pressures. While
recent increases in oil prices are certainly taking their toll, we don't believe
this signals a return to 1970's-style inflation. Accordingly, if the Fed
continues in its diligence, the economy could maintain its healthy rate of
growth.
In the bond market, the achievement of a federal budget surplus has
prompted the Treasury to buy back many of its long-term securities. The
resulting supply shortage boosted these securities' returns, causing an
inversion of the yield curve--an unusual situation in which shorter term
Treasuries yield more than their longer term counterparts. Other bond sectors
are offering many opportunities in the form of attractive valuations.
Perhaps most important is that we have begun to see encouraging signs in
the stock market. Formerly high-flying Internet stocks have generally come down
to earth, and investors have begun to refocus on companies with strong business
fundamentals and justifiable valuations. Investors have also returned to
long-neglected, value-oriented companies.
1 OPPENHEIMER QUEST BALANCED VALUE FUND
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PRESIDENT'S LETTER
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What else do these various trends tell us? They tell us that the ability to
discriminate between long-term potential and short-lived fads has become more
critical than ever. Trying to generate good long-term performance requires
tracking the best companies through intensive research, combined with
hard-earned experience.
At OppenheimerFunds, our seasoned portfolio management teams fight
complacency by remaining constantly aware of the risks that face the economy and
financial markets. Virtually anything could affect the overall markets--a surge
in inflation, a decline in productivity, deteriorating corporate earnings, or
even the new Administration's proposals regarding tax reform, health-care and
Social Security. However, by remaining vigilant in our quest for fundamentally
sound businesses, we believe we can find good investments that can weather
market volatility.
In this environment, we encourage you to consult your financial advisor and
to stay on track with your long-term financial plan. For our part, we will
continue to monitor the opportunities and risks ever present in the financial
markets. Thank you for your confidence in OppenheimerFunds, The Right Way to
Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 21, 2000
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of the securities markets or any
particular fund. Specific discussion, as it applies to your Fund, is contained
in the pages that follow. Stocks and bonds have different types of investment
risks; stocks are subject to market volatility and bonds are subject to credit
and interest rate risks.
2 OPPENHEIMER QUEST BALANCED VALUE FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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[PHOTO]
Portfolio Management
Team (l to r)
Jolene Mirenna
Colin Glinsman
(Portfolio Manager)
How did Oppenheimer Quest Balanced Value FundSM perform during the 12 months
that ended October 31, 2000?
A. Although our overall performance proved disappointing for the fiscal year,
and we underperformed our benchmark, the S&P 500 Index slightly, we were
encouraged by recent developments suggesting a resurgence in value investing. In
our view, value stocks' extended underperformance of late has not indicated a
lack of fundamental strengths in these issues. Rather, we believe this
environment illustrated a market in awe of rapidly growing, yet overheated
technology and telecommunications issues. From mid-year to period end, however,
a marked increase in volatility prompted investors to take a more discerning
view. As a result, there appeared to be a migration toward more reasonably
priced alternatives offering solid fundamentals and realistic expectations.
Why did investor sentiment change?
Investors began to focus on individual opportunities, regardless of their
industry classification. This was in stark contrast to what transpired earlier
in the period, when the market was indiscriminately rewarding a narrow group of
fast-growing "new economy" stocks with questionable valuations. The moment of
truth, though, came in mid-March when inflation concerns reemerged, signaling
that the Federal Reserve Board would likely continue its standing policy of
raising interest rates to slow economic growth. At this juncture, investors came
to realize that the exorbitant prices they were paying for these high-growth
stocks--many without visible earnings or even the prospect of earnings--might be
unjustified. A torrent of widespread selling followed, as investors sought to
lock in gains. Although a rebound soon followed, the rally was short lived, as
technology stocks sold off in July and again in September.
3 OPPENHEIMER QUEST BALANCED VALUE FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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"We remained committed to our discipline, which looks at companies one at a time
to find what we believe are superior, undervalued businesses."
Meanwhile, the Federal Reserve Board's yearlong efforts to engineer a "soft
landing" appeared to take hold, a sign that inflation might well be under
control. While that prospect implied an end to further interest rate
hikes--typically a supportive environment for stocks--skyrocketing oil prices,
Mideast tensions and a number of corporate profit warnings converged to further
complicate the picture towards the end of the reporting period. As investor
sentiment turned increasingly cautious, it also became increasingly selective.
By period end, previously beaten-down sectors, such as financial services and
healthcare, had in fact transformed into performance leaders.
How was the Fund managed in this volatile environment?
We remained committed to our discipline, which looks at companies one at a time
to find what we believe are superior, undervalued businesses. By a superior
business, we mean one that is extremely well managed, earns high returns on
capital, has a dominant competitive position to protect those returns and uses
the resulting free cash flow to create shareholder value through acquisitions or
share repurchases. "Undervalued," however, should not be confused with "cheap."
Specifically, we use "undervalued" to refer to companies that are selling for
less than their fair market value--or the price a prudent buyer would pay for
the entire business.
Severe volatility persuaded us to take a fairly conservative stance with
respect to our asset allocation. At period end, approximately 60% of Fund assets
was invested in stocks, 32% in bonds and 8% in cash. The stock portion of the
Fund emphasized "traditional" value companies, such as financial services
stocks, in addition to companies perceived as less cyclical or sensitive to
changes in the economy, such as consumer staples. As for bonds, we focused on
longer term U.S. Treasuries and Treasury inflation-indexed securities, two of
the better performing fixed income asset classes during the fiscal year.
4 OPPENHEIMER QUEST BALANCED VALUE FUND
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Average Annual
Total Returns
For the Periods Ended 9/30/001
Class A Since
1-Year 5-Year Inception
-------------------------------
-0.87% 16.97% 15.09%
Class B Since
1-Year 5-Year Inception
-------------------------------
-0.44% 17.45% 16.61%
Class C Since
1-Year 5-Year Inception
-------------------------------
3.56% 17.64% 16.43%
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Cumulative
Total Return
For the Period
from 5/1/00 to 9/30/001
Class Y Since
Inception
-------------------------------
3.20%
Which stocks contributed most to the Fund's performance?
Although a volatile stock throughout the year, Freddie Mac, a quasi-government
agency that securitizes and guarantees residential mortgages, continued to post
solid earnings growth and market share gains. As for detractors, a
telecommunications giant experienced several setbacks, particularly slower
revenue growth, in the wake of its failed merger. Global fast-food leader
McDonald's Corp. continued to struggle, as its dollar-denominated earnings were
eroded by weakness in the euro and other foreign currencies.
How did the Fund's fixed income investments perform?
We strategically underweighted investments in the high yield market for most of
the year, and therefore avoided most of the volatility within this asset class.
We emphasized U.S. Treasuries, the best performing fixed income asset class for
the period, and Treasury inflation-indexed securities, which benefited from
rising interest rates. Unfortunately, this conservative positioning, designed to
act more as a cushion against volatility, held back overall performance.
What is your outlook for the future?
While waiting out volatility can certainly be unsettling, it is the hallmark of
the patient investor. For this reason, we will continue to seek out compelling
value on a company-by-company basis, especially when we believe fundamentally
sound, attractively valued businesses have been sold without rhyme or reason.
As we appear to be transitioning toward a broader market, investors once again
seem willing to explore opportunities on their own merits. This plays to our
strengths as value investors, and is just one of many reasons why Oppenheimer
Quest Balanced Value Fund is an important part of The Right Way to Invest.
1. See page 10 for further details.
5 OPPENHEIMER QUEST BALANCED VALUE FUND
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AN INTERVIEW WITH YOUR FUND'S MANAGER
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Portfolio Allocation/2/
[GRAPH]
Stocks 60.0%
Bonds 32.3
Cash Equivalents 7.7
Top Ten Common Stock Holdings/3/
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CVS Corp. 6.0%
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Kroger Co. 5.9
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Freddie Mac 5.8
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Computer Associates International, Inc. 5.1
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John Hancock Financial Services, Inc. 3.2
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American Home Products Corp. 3.0
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Verizon Communications 3.0
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McDonald's Corp. 2.7
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FleetBoston Financial Corp. 2.5
--------------------------------------------------------------------------------
Chevron Corp. 2.1
Top Five Common Stock Industries/3/
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Food & Drug Retailers 11.9%
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Diversified Financial 9.9
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Computer Software 7.9
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Telecommunications: Long Distance 4.8
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Banks 4.6
2. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on total market value of investments.
3. Portfolio is subject to change. Percentages are as of October 31, 2000, and
are based on net assets.
6 OPPENHEIMER QUEST BALANCED VALUE FUND
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FUND PERFORMANCE
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How has the Fund performed? Below is a discussion by OppenheimerFunds, Inc. of
the Fund's performance during its fiscal year ended October 31, 2000, 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, 2000, Oppenheimer Quest Balanced Fund operated in a highly volatile
environment that adversely affected its returns and slightly underperformed its
benchmark, the Standard & Poor's (S&P) 500 Index. For most of the period,
investors overlooked value stocks in favor of rising growth stocks. However,
during the summer, in light of recurring inflation concerns, rising oil prices,
a strong US dollar and corporate profit warnings, the broader stock market began
to show signs of strain. At that point, investors turned to the solid
fundamentals, reasonable valuations and realistic expectations of traditional
value stocks. During the period, the Fund's managers continued their
longstanding value discipline and maintained many of their stock positions.
However, because value stocks generally lagged the broader market for most of
the period, this short rally in value stocks did little to help performance. The
managers focused the Fund's fixed income investments on a conservative mix of
U.S. Treasuries and Treasury inflation-indexed securities, which provided a
cushion against volatility, but also held back performance. 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, 2000. In the case of Class A shares, performance is
measured from the inception of the Class on November 1, 1991, and in the case of
Class B and Class C shares, performance is measured from inception of those
classes on September 1, 1993. In the case of Class Y shares, performance is
measured from the inception of the class on May 1, 2000. 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 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.
7 OPPENHEIMER QUEST BALANCED VALUE FUND
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FUND PERFORMANCE
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Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPH]
Oppenheimer Quest Balanced S&P
Value Fund (Class A) 500 Index
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11/1/91 9,425 10,000
1/31/92 9,821 10,495
4/30/92 10,069 10,730
7/31/92 10,408 11,056
10/31/92 10,447 10,995
1/31/93 10,840 11,604
4/30/93 10,860 11,720
7/31/93 11,087 12,019
10/31/93 11,484 12,634
1/31/94 12,384 13,095
4/30/94 11,839 12,342
7/31/94 12,168 12,638
10/31/94 12,476 13,121
1/31/95 12,148 13,164
4/30/95 13,613 14,494
7/31/95 15,184 15,933
10/31/95 14,516 16,587
1/31/96 15,808 18,247
4/30/96 16,501 18,868
7/31/96 16,134 18,570
10/31/96 17,687 20,581
1/31/97 19,130 23,051
4/30/97 18,708 23,608
7/31/97 21,761 28,247
10/31/97 22,141 27,187
1/31/98 24,011 29,252
4/30/98 26,764 33,303
7/31/98 25,994 33,700
10/31/98 28,320 33,171
1/31/99 32,412 38,762
4/30/99 34,037 40,573
7/31/99 34,151 40,508
10/31/99 34,403 41,684
1/31/2000 33,684 42,771
4/30/2000 34,123 44,679
7/31/2000 33,251 44,140
10/31/2000 36,392 44,218
Average Annual Total Return of Class A Shares of the Fund at 10/31/00/1/
1-Year -0.30% 5-Year 18.77% Life 15.43%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPH]
Oppenheimer Quest Balanced S&P
Value Fund (Class B) 500 Index
--------------------------------------------------------------------------------
9/1/93 10,000 10,000
10/31/93 10,081 10,128
1/31/94 10,842 10,498
4/30/94 10,363 9,894
7/31/94 10,627 10,132
10/31/94 10,884 10,519
1/31/95 10,583 10,553
4/30/95 11,841 11,619
7/31/95 13,185 12,773
10/31/95 12,588 13,297
1/31/96 13,692 14,628
4/30/96 14,264 15,126
7/31/96 13,926 14,887
10/31/96 15,240 16,499
1/31/97 16,463 18,480
4/30/97 16,079 18,926
7/31/97 18,680 22,645
10/31/97 18,981 21,795
1/31/98 20,557 23,451
4/30/98 22,867 26,698
7/31/98 22,173 27,017
10/31/98 24,122 26,593
1/31/99 27,572 31,075
4/30/99 28,918 32,526
7/31/99 28,967 32,475
10/31/99 29,178 33,417
1/31/2000 28,567 34,288
4/30/2000 28,940 35,818
7/31/2000 28,201 35,386
10/31/2000 30,865 35,448
Average Annual Total Return of Class B Shares of the Fund at 10/31/00/1/
1-Year 0.10% 5-Year 19.27% Life 17.03%
1. See page 10 for further details.
8 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPH]
Class C
Oppenheimer Quest Balanced S&P
Value Fund (Class C) 500 Index
--------------------------------------------------------------------------------
9/1/93 10,000 10,000
10/31/93 10,081 10,128
1/31/94 10,856 10,498
4/30/94 10,371 9,894
7/31/94 10,634 10,132
10/31/94 10,879 10,519
1/31/95 10,571 10,553
4/30/95 11,821 11,619
7/31/95 13,153 12,773
10/31/95 12,551 13,297
1/31/96 13,642 14,628
4/30/96 14,212 15,126
7/31/96 13,875 14,887
10/31/96 15,183 16,499
1/31/97 16,393 18,480
4/30/97 16,012 18,926
7/31/97 18,601 22,645
10/31/97 18,904 21,795
1/31/98 20,477 23,451
4/30/98 22,778 26,698
7/31/98 22,090 27,017
10/31/98 24,031 26,593
1/31/99 27,457 31,075
4/30/99 28,801 32,526
7/31/99 28,866 32,475
10/31/99 29,029 33,417
1/31/2000 28,369 34,288
4/30/2000 28,711 35,818
7/31/2000 27,930 35,386
10/31/2000 30,510 35,448
Average Annual Total Return of Class C Shares of the Fund at 10/31/00/1/
1-Year 4.10% 5-Year 19.44% Life 16.84%
Class Y Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
[GRAPH]
Oppenheimer Quest Balanced S&P
Value Fund (Class Y) 500 Index
--------------------------------------------------------------------------------
5/1/2000 10,000 10,000
7/31/2000 9,795 9,879
10/31/2000 10,732 9,897
Cumulative Total Return of Class Y Shares of the Fund at 10/31/00/1/
Life 7.32%
The performance information for the S&P 500 Index in the graphs begins on
10/31/91 for Class A, and 8/31/93 for both Class B and Class C, and 4/30/00 for
Class Y.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
9 OPPENHEIMER QUEST BALANCED VALUE FUND
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NOTES
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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. The Fund's returns
at 10/31/00 include results for periods of exceptional market performance that
are not typical of historical results. You should not expect those growth rates
to continue. Because of ongoing market volatility, the Fund's performance has
been subject to substantial short-term fluctuation and current performance may
be less than the results shown. For quarterly updates on the Fund's performance,
please contact your financial advisor, call us at 1.800.525.7048 or visit our
website at 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 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. The Fund's total returns shown do
not show the effects of income taxes on an individual's investment. Taxes may
reduce your actual investment returns on income or gains paid by the Fund or any
gains you may realize if you sell your shares.
Class A shares were first publicly offered on 11/1/91. Unless otherwise noted,
Class A returns include the current maximum initial sales charge of 5.75%. 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 a maximum annual 0.15% asset-based sales charge.
There is a voluntary waiver of a portion of the Class A asset-based sales charge
as described in the Prospectus.
Class B shares were first publicly offered on 9/1/93. Unless otherwise noted,
Class B returns include the applicable contingent deferred sales charges of 5%
(1-year) and 2% (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 were first publicly offered on 9/1/93. Unless otherwise noted,
Class C returns include the contingent deferred sales charge of 1% for the
one-year period. Class C shares are subject to an annual 0.75% asset-based sales
charge.
Class Y shares were first publicly offered on 5/1/00. Class Y shares are offered
only to certain institutional investors under special agreement with the
Distributor.
An explanation of the calculation of performance is in the Fund's
Statement of Additional Information.
10 OPPENHEIMER QUEST BALANCED VALUE FUND
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Financials
11 OPPENHEIMER QUEST BALANCED VALUE FUND
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STATEMENT OF INVESTMENTS October 31, 2000
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Market Value
Shares See Note 1
================================================================================
Common Stocks--60.3%
--------------------------------------------------------------------------------
Basic Materials--3.0%
--------------------------------------------------------------------------------
Chemicals--1.3%
Dow Chemical Co. 1,000,000 $ 30,625,000
--------------------------------------------------------------------------------
Metals--1.7%
Alcoa, Inc. 1,000,000 28,687,500
--------------------------------------------------------------------------------
Freeport-McMoRan Copper & Gold, Inc., Cl. B/1/ 1,300,000 10,318,750
------------
39,006,250
--------------------------------------------------------------------------------
Communication Services--4.8%
--------------------------------------------------------------------------------
Telecommunications: Long Distance--4.8%
Verizon Communications 1,200,000 69,375,000
--------------------------------------------------------------------------------
WorldCom, Inc./1/ 1,700,000 40,375,000
------------
109,750,000
--------------------------------------------------------------------------------
Consumer Cyclicals--2.0%
--------------------------------------------------------------------------------
Leisure & Entertainment--1.7%
Mattel, Inc. 3,000,000 38,812,500
--------------------------------------------------------------------------------
Retail: Specialty--0.3%
Gap, Inc. 300,000 7,743,750
--------------------------------------------------------------------------------
Consumer Staples--15.0%
--------------------------------------------------------------------------------
Broadcasting--0.4%
Clear Channel Communications, Inc./1/ 150,000 9,009,375
--------------------------------------------------------------------------------
Entertainment--2.7%
McDonald's Corp. 2,000,000 62,000,000
--------------------------------------------------------------------------------
Food & Drug Retailers--11.9%
CVS Corp. 2,600,000 137,637,500
--------------------------------------------------------------------------------
Kroger Co./1/ 6,000,000 135,375,000
------------
273,012,500
--------------------------------------------------------------------------------
Energy--5.2%
--------------------------------------------------------------------------------
Energy Services--1.0%
Exelon Corp. 400,000 24,050,000
--------------------------------------------------------------------------------
Oil: Domestic--4.2%
Chevron Corp. 600,000 49,275,000
--------------------------------------------------------------------------------
Texaco, Inc. 800,000 47,250,000
------------
96,525,000
--------------------------------------------------------------------------------
Financial--15.4%
--------------------------------------------------------------------------------
Banks--4.6%
Chase Manhattan Corp. 1,050,000 47,775,000
--------------------------------------------------------------------------------
FleetBoston Financial Corp. 1,500,000 57,000,000
------------
104,775,000
12 OPPENHEIMER QUEST BALANCED VALUE FUND
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Market Value
Shares See Note 1
--------------------------------------------------------------------------------
Diversified Financial--9.9%
Countrywide Credit Industries, Inc. 600,000 $ 22,462,500
--------------------------------------------------------------------------------
Freddie Mac 2,200,000 132,000,000
--------------------------------------------------------------------------------
John Hancock Financial Services, Inc./1/ 2,300,000 72,737,500
--------------
227,200,000
--------------------------------------------------------------------------------
Insurance--0.9%
American General Corp. 250,000 20,125,000
--------------------------------------------------------------------------------
Healthcare--4.4%
--------------------------------------------------------------------------------
Healthcare/Drugs--4.4%
American Home Products Corp. 1,100,000 69,850,000
--------------------------------------------------------------------------------
Bristol-Myers Squibb Co. 500,000 30,468,750
--------------
100,318,750
--------------------------------------------------------------------------------
Technology--9.2%
--------------------------------------------------------------------------------
Computer Hardware--1.0%
Dell Computer Corp./1/ 800,000 23,600,000
--------------------------------------------------------------------------------
Computer Software--7.9%
Computer Associates International, Inc. 3,700,000 117,937,500
--------------------------------------------------------------------------------
Compuware Corp./1/ 2,400,000 18,900,000
--------------------------------------------------------------------------------
Microsoft Corp./1/ 300,000 20,662,500
--------------------------------------------------------------------------------
Sabre Holdings Corp. 700,693 23,429,422
--------------
180,929,422
--------------------------------------------------------------------------------
Electronics--0.3%
Texas Instruments, Inc. 150,000 7,359,375
--------------------------------------------------------------------------------
Transportation--1.3%
--------------------------------------------------------------------------------
Air Transportation--1.3%
AMR Corp./1/ 900,000 29,475,000
--------------
Total Common Stocks (Cost $1,278,642,264) 1,384,316,922
================================================================================
Preferred Stocks--0.3%
Freeport-McMoRan Copper & Gold, Inc., 7%
Cum. Cv., Non-Vtg. (Depository shares each
representing 0.05 shares of step-up preferred) 506,400 5,570,400
(Cost 8,173,336)
13 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
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STATEMENT OF INVESTMENTS Continued
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market Value
Amount See Note 1
=========================================================================================
<S> <C> <C>
U.S. Government Obligations--19.6%
Tennessee Valley Authority Inflationary Bonds, 3.375%,
1/15/07/2/ $ 57,770,530 $ 54,641,678
-----------------------------------------------------------------------------------------
U.S. Treasury Bonds, 5.25%, 2/15/29 27,500,000 25,069,165
-----------------------------------------------------------------------------------------
U.S. Treasury Inflationary Index Nts., 3.875%,
1/15/09--4/15/29/2/ 337,644,630 338,446,908
-----------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5.75%, 8/15/10 8,025,000 8,019,992
5.875%, 11/15/04 4,050,000 4,052,746
6%, 8/15/09 18,125,000 18,318,883
-----------
Total U.S. Government Obligations (Cost $428,252,308) 448,549,372
=========================================================================================
Non-Convertible Corporate Bonds and Notes--12.9%
-----------------------------------------------------------------------------------------
Basic Materials--1.9%
-----------------------------------------------------------------------------------------
Chemicals--1.9%
E.I. DuPont De Nemours & Co., 6.875% Unsec. Nts., 10/15/09 38,000,000 37,410,468
-----------------------------------------------------------------------------------------
IMC Global, Inc., 7.625% Bonds, 11/1/05 5,500,000 5,286,974
-----------
42,697,442
-----------------------------------------------------------------------------------------
Capital Goods--1.5%
-----------------------------------------------------------------------------------------
Manufacturing--1.5%
Federal-Mogul Corp., 7.375% Nts., 1/15/06 10,500,000 2,887,500
-----------------------------------------------------------------------------------------
Textron, Inc., 6.75% Unsec. Nts., 9/15/02 32,400,000 32,222,383
35,109,883
-----------------------------------------------------------------------------------------
Consumer Cyclicals--1.7%
-----------------------------------------------------------------------------------------
Leisure & Entertainment--0.1%
HMH Properties, Inc., 7.875% Sr. Nts., Series A, 8/1/05 2,750,000 2,626,250
-----------------------------------------------------------------------------------------
Retail: General--1.6%
J. C. Penney Co., Inc.:
7.375% Nts., 6/15/04 16,975,000 12,545,883
7.40% Nts., 4/1/37 34,000,000 24,052,552
-----------
36,598,435
-----------------------------------------------------------------------------------------
Consumer Staples--1.0%
-----------------------------------------------------------------------------------------
Food & Drug Retailers--0.8%
Safeway, Inc., 7% Nts., 9/15/02 18,500,000 18,441,077
-----------------------------------------------------------------------------------------
Household Goods--0.2%
Playtex Family Products Corp., 9% Sr. Sub. Nts., 12/15/03 5,500,000 5,335,000
-----------------------------------------------------------------------------------------
Financial--3.5%
-----------------------------------------------------------------------------------------
Diversified Financial--2.2%
Conseco Financing Trust II, 8.70% Capital Securities,
11/15/26 51,155,000 18,160,025
-----------------------------------------------------------------------------------------
Conseco Financing Trust III, 8.796% 10/1/09 4/1/27 41,990,000 14,906,450
-----------------------------------------------------------------------------------------
Duke Capital Corp., 7.50% Bonds, 10/1/09 11,500,000 11,578,200
-----------------------------------------------------------------------------------------
Textron Financial Corp., 7.125% Nts., 12/9/04 5,800,000 5,846,394
-----------
50,491,069
</TABLE>
14 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
Principal Market Value
Amount See Note 1
--------------------------------------------------------------------------------
Insurance--1.3%
AFLAC, Inc., 6.50% Sr. Unsec. Nts., 4/15/09 $ 26,900,000 $ 24,914,565
--------------------------------------------------------------------------------
Conseco, Inc., 6.80% Unsec. Nts., 6/15/05 8,000,000 4,960,000
--------------
29,874,565
--------------------------------------------------------------------------------
Healthcare--2.2%
--------------------------------------------------------------------------------
Healthcare/Supplies & Services--2.2%
PharMerica, Inc., 8.375% Sr. Sub. Nts., 4/1/08/3/ 6,000,000 4,530,000
--------------------------------------------------------------------------------
Tenet Healthcare Corp.:
7.625% Sr. Unsec. Nts., Series B, 6/1/08 5,350,000 5,109,250
8% Sr. Nts., 1/15/05 39,150,000 38,709,563
8.625% Sr. Unsec. Nts., 12/1/03 2,500,000 2,519,390
--------------
50,868,203
--------------------------------------------------------------------------------
Transportation--1.1%
--------------------------------------------------------------------------------
Air Transportation--1.1%
Delta Air Lines, Inc., 7.70% Nts., 12/15/05 24,800,000 23,901,521
--------------
Total Non-Convertible Corporate Bonds
and Notes (Cost $366,620,214) 295,943,445
================================================================================
Convertible Corporate Bonds and Notes--0.1%
Hyperion Solutions Corp., 4.50% Cv. Unsec. Debs.,
3/15/05 (Cost 3,958,989) $ 4,000,000 2,900,000
================================================================================
Short-Term Notes--7.7%
American Express Credit Corp., 6.47%, 11/27/00 46,472,000 46,254,847
--------------------------------------------------------------------------------
Federal Home Loan Bank, 6.45%, 11/1/00 41,147,000 41,147,000
--------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.37%, 11/7/00 10,564,000 10,552,785
--------------------------------------------------------------------------------
Ford Motor Credit Co., 6.48%, 11/20/00 50,000,000 49,829,000
--------------------------------------------------------------------------------
General Electric Credit Capital, 6.50%, 12/4/00 20,000,000 19,880,833
--------------------------------------------------------------------------------
General Motors Acceptance Corp., 6.49%, 11/15/00 10,000,000 9,974,761
--------------
Total Short-Term Notes (Cost $177,639,226) 177,639,226
--------------------------------------------------------------------------------
Total Investments, at Value (Cost $2,263,286,337) 100.9% 2,314,919,365
--------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (0.9) (19,915,113)
---------------------------
Net Assets 100.0% $2,295,004,252
===========================
1. Non-income-producing security.
2. Denotes an inflation-indexed security: coupon and principal are indexed to
the consumer price index.
3. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
15 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES October 31, 2000
--------------------------------------------------------------------------------
================================================================================
Assets
Investments, at value (cost $2,263,286,337)--
see accompanying statement $2,314,919,365
--------------------------------------------------------------------------------
Cash 172,453
--------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 11,815,166
Interest and dividends 11,545,951
Shares of beneficial interest sold 3,931,954
Other 85,635
---------------
Total assets 2,342,470,524
================================================================================
Liabilities
Payables and other liabilities:
Shares of beneficial interest redeemed 35,042,322
Investments purchased 11,406,160
Distribution and service plan fees 469,556
Trustees' compensation 256,738
Transfer and shareholder servicing agent fees 51,371
Other 240,125
---------------
Total liabilities 47,466,272
================================================================================
Net Assets $2,295,004,252
===============
================================================================================
Composition of Net Assets
Par value of shares of beneficial interest $ 1,384,302
--------------------------------------------------------------------------------
Additional paid-in capital 2,185,816,114
--------------------------------------------------------------------------------
Undistributed net investment income 16,372,655
--------------------------------------------------------------------------------
Accumulated net realized gain on investment transactions 39,798,153
--------------------------------------------------------------------------------
Net unrealized appreciation on investments 51,633,028
---------------
Net Assets $2,295,004,252
===============
================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net
assets of $1,027,559,835 and 61,695,162 shares of beneficial
interest outstanding) $ 16.66
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price) $ 17.68
--------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net
assets of $925,476,461 and 56,025,004 shares of beneficial
interest outstanding) $ 16.52
--------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable
contingent deferred sales charge) and offering price per
share (based on net assets of $341,824,441 and 20,701,407
shares of beneficial interest outstanding) $ 16.51
--------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per
share (based on net assets of 143,515 and 8,608 shares of
beneficial interest outstanding) $ 16.67
See accompanying Notes to Financial Statements.
16 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
================================================================================
Investment Income
Interest $ 65,943,107
--------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $83,954) 16,471,982
--------------
Total income 82,415,089
================================================================================
Expenses
Management fees 18,958,482
--------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 4,081,922
Class B 8,735,122
Class C 3,364,066
--------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 1,242,992
Class B 1,104,550
Class C 417,369
Class Y 17
--------------------------------------------------------------------------------
Trustees' compensation 202,285
--------------------------------------------------------------------------------
Custodian fees and expenses 123,414
--------------------------------------------------------------------------------
Other 1,480,866
--------------
Total expenses 39,711,085
Less expenses paid indirectly (31,240)
--------------
Net expenses 39,679,845
================================================================================
Net Investment Income 42,735,244
================================================================================
Realized and Unrealized Gain
Net realized gain on investments 57,872,248
--------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 13,242,015
--------------
Net realized and unrealized gain 71,114,263
================================================================================
Net Increase in Net Assets Resulting from Operations $ 113,849,507
==============
See accompanying Notes to Financial Statements
17 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Year Ended October 31, 2000 1999
================================================================================
Operations
Net investment income $ 42,735,244 $ 14,207,435
--------------------------------------------------------------------------------
Net realized gain 57,872,248 50,925,358
--------------------------------------------------------------------------------
Net change in unrealized appreciation 13,242,015 25,800,019
---------------------------
Net increase in net assets resulting from operations 113,849,507 90,932,812
================================================================================
Dividends and/or Distributions to Shareholders
Dividends from net investment income:
Class A (17,543,827) (6,078,115)
Class B (10,102,062) (3,048,066)
Class C (3,988,979) (1,204,827)
Class Y (153) --
--------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (22,769,050) (19,068,191)
Class B (19,818,961) (8,965,339)
Class C (7,666,158) (3,441,385)
Class Y -- --
================================================================================
Beneficial Interest Transactions
Net increase in net assets resulting from
beneficial interest transactions:
Class A 112,910,940 739,204,026
Class B 111,351,592 722,633,645
Class C 24,570,641 285,571,885
Class Y 136,170 --
================================================================================
Net Assets
Total increase 280,929,660 1,796,536,445
--------------------------------------------------------------------------------
Beginning of period 2,014,074,592 217,538,147
------------------------------
End of period (including undistributed net
investment income of $16,372,655 and $5,227,907,
respectively) $ 2,295,004,252 $2,014,074,592
==============================
See accompanying Notes to Financial Statements.
18 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Year Ended October 31, 2000 1999 1998 1997 1996/1/
============================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 16.41 $ 15.50 $ 13.99 $ 12.48 $ 10.92
----------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .36 .21 .26 .20 .23
Net realized and unrealized gain .55 2.88 3.24 2.65 2.05
------------------------------------------------------------------
Total income from investment operations .91 3.09 3.50 2.85 2.28
----------------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.28) (.26) (.20) (.19) (.22)
Distributions from net realized gain (.38) (1.92) (1.79) (1.15) (.50)
------------------------------------------------------------------
Total dividends and/or distributions to shareholders (.66) (2.18) (1.99) (1.34) (.72)
------------------------------------------------------------------
Net asset value, end of period $ 16.66 $ 16.41 $ 15.50 $ 13.99 $ 2.48
==================================================================
============================================================================================================================
Total Return, at Net Asset Value/2/ 5.78% 21.48% 27.91% 25.18% 21.84%
============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 1,027,560 $ 899,084 $ 135,821 $ 79,751 $ 49,322
----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 1,020,483 $ 454,409 $ 103,244 $ 61,618 $ 43,428
----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 2.24% 1.81% 2.07% 1.68% 2.03%
Expenses 1.45% 1.51% 1.55%/4/ 1.58%/4/ 1.90%/4/
----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 58% 165% 89% 124%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
19 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Year Ended October 31, 2000 1999 1998 1997 1996/1/
===================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 16.28 $ 15.40 $ 13.92 $ 12.42 $ 10.88
-------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .25 .14 .19 .15 .17
Net realized and unrealized gain .55 2.84 3.20 2.62 2.03
-----------------------------------------------------------------
Total income from investment operations .80 2.98 3.39 2.77 2.20
-------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.18) (.18) (.12) (.12) (.16)
Distributions from net realized gain (.38) (1.92) (1.79) (1.15) (.50)
-----------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.56) (2.10) (1.91) (1.27) (.66)
-----------------------------------------------------------------
Net asset value, end of period $ 16.52 $ 16.28 $ 15.40 $ 13.92 $ 12.42
=================================================================
===================================================================================================================
Total Return, at Net Asset Value/2/ 5.10% 20.84% 27.08% 24.55% 21.07%
===================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 925,476 $ 801,485 $ 60,807 $ 25,609 $ 13,175
-------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 873,470 $ 355,797 $ 39,165 $ 19,230 $ 10,097
-------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 1.64% 1.21% 1.53% 1.09% 1.40%
Expenses 2.06% 2.10% 2.15%/4/ 2.17%/4/ 2.53%/4/
-------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 58% 165% 89% 124%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
20 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
<TABLE>
<CAPTION>
Class C Year Ended October 31, 2000 1999 1998 1997 1996/1/
=====================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 16.27 $ 15.40 $ 13.92 $ 12.43 $ 10.89
---------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .25 .15 .18 .15 .17
Net realized and unrealized gain .55 2.83 3.21 2.62 2.02
-------------------------------------------------------------------
Total income from investment operations .80 2.98 3.39 2.77 2.19
---------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to
shareholders:
Dividends from net investment income (.18) (.19) (.12) (.13) (.15)
Distributions from net realized gain (.38) (1.92) (1.79) (1.15) (.50)
-------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.56) (2.11) (1.91) (1.28) (.65)
-------------------------------------------------------------------
Net asset value, end of period $ 16.51 16.27 $ 15.40 $ 13.92 $ 12.43
===================================================================
=====================================================================================================================
Total Return, at Net Asset Value/2/ 5.10% 20.80% 27.12% 24.51% 20.97%
=====================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 341,824 $ 313,506 $ 20,910 $ 6,687 $ 2,809
---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 336,336 $ 139,356 $ 11,598 $ 4,724 $ 2,200
---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 1.64% 1.21% 1.60% 1.09% 1.40%
Expenses 2.06% 2.10% 2.15%/4/ 2.17%/4/ 2.53%/4/
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 58% 165% 89% 124%
</TABLE>
1. On November 22, 1995, OppenheimerFunds, Inc. became the investment advisor
to the Fund.
2. 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.
3. Annualized for periods of less than one full year.
4. Expense ratio has not been grossed up to reflect the effect of expenses
paid indirectly.
See accompanying Notes to Financial Statements.
21 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS Continued
--------------------------------------------------------------------------------
Class Y Period Ended October 31, 2000/1/
================================================================================
Per Share Operating Data
Net asset value, beginning of period $ 15.65
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income .15
Net realized and unrealized gain .99
--------
Total income from investment operations 1.14
--------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income (.12)
Distributions from net realized gain --
--------
Total dividends and/or distributions to shareholders (.12)
--------------------------------------------------------------------------------
Net asset value, end of period $ 16.67
========
================================================================================
Total Return, at Net Asset Value/2/ 7.32%
--------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 144
--------------------------------------------------------------------------------
Average net assets (in thousands) $ 32
--------------------------------------------------------------------------------
Ratios to average net assets:/3/
Net investment income 2.46%
Expenses .98%
--------------------------------------------------------------------------------
Portfolio turnover rate 105%
1. For the period from May 1, 2000 (inception of offering) to October 31,
2000.
2. 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.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.
22 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Quest Balanced Value Fund (the Fund), a series of Oppenheimer Quest
For Value Funds, is an open-end management investment company registered under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is 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 at their offering price, which is normally net asset value plus
a front-end sales charge. Class B and Class C shares are sold without a
front-end sales charge but 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. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
--------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
--------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
23 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
Trustees' Compensation. The Fund has adopted an unfunded retirement plan for the
Fund's independent Board of 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, 2000, a provision of $150,741 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $224,160 as of
October 31, 2000.
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 Board of Trustees in shares of one
or more Oppenheimer funds selected by the trustee. The amount paid to the Board
of Trustees 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 investment 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 Dividends and Distributions to Shareholders. Net investment
income (loss) and net realized gain (loss) may differ for financial statement
and tax purposes. The character of dividends and distributions made during the
fiscal 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 dividends and 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, 2000, amounts have been reclassified to reflect an
increase in paid-in capital of $18,041,064, an increase in undistributed net
investment income of $44,525, and a decrease in accumulated net realized gain on
investments of $18,085,589. This reclassification includes $18,085,589
distributed in connection with Fund share redemptions which increased paid-in
capital and reduced accumulated net realized gain. Net assets of the Fund were
unaffected by the reclassifications.
--------------------------------------------------------------------------------
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. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the dividend if
such information is
24 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
obtained subsequent to the ex-dividend 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.
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, 2000/1/ Year Ended October 31, 1999
Shares Amount Shares Amount
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Sold 43,943,603 $ 691,390,182 52,113,404 $ 837,757,585
Dividends and/or distributions
reinvested 2,250,576 35,496,341 1,593,155 23,977,272
Redeemed (39,287,912) (613,975,583) (7,682,755) (122,530,831)
-----------------------------------------------------------------
Net increase 6,906,267 $ 112,910,940 46,023,804 $ 739,204,026
=================================================================
------------------------------------------------------------------------------------------------
Class B
Sold 26,123,757 $ 408,575,609 47,556,516 $ 759,392,906
Dividends and/or distributions
reinvested 1,767,287 27,770,767 754,928 11,312,030
Redeemed (21,108,052) (324,994,784) (3,017,631) (48,071,291)
-----------------------------------------------------------------
Net increase 6,782,992 $ 111,351,592 45,293,813 $ 722,633,645
=================================================================
------------------------------------------------------------------------------------------------
Class C
Sold 10,628,869 $ 165,996,553 19,021,846 $ 303,512,681
Dividends and/or distributions
reinvested 684,150 10,744,678 290,560 4,352,373
Redeemed (9,881,441) (152,170,590) (1,400,575) (22,293,169)
-----------------------------------------------------------------
Net increase 1,431,578 $ 24,570,641 17,911,831 $ 285,571,885
=================================================================
------------------------------------------------------------------------------------------------
Class Y
Sold 10,078 $ 159,209 -- $ --
Dividends and/or distributions
reinvested 9 145 -- --
Redeemed (1,479) (23,184) -- --
-----------------------------------------------------------------
Net increase 8,608 $ 136,170 -- $ --
=================================================================
</TABLE>
1. For the year ended October 31, 2000, for Class A, B and C shares and for the
period from May 1, 2000 (inception of offering) to October 31, 2000, for Class Y
shares.
25 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended October 31, 2000, were
$2,406,474,909 and $2,054,788,046, respectively.
As of October 31, 2000, unrealized appreciation (depreciation) based on
cost of securities for federal income tax purposes of $2,286,663,324 was:
Gross unrealized appreciation $ 193,325,613
Gross unrealized depreciation (165,069,572)
-------------
Net unrealized appreciation $ 28,256,041
=============
================================================================================
4. 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 0.85%
of average annual net assets. The Fund's management fee for the year ended
October 31, 2000, was an annualized rate of 0.85%, before any waiver by the
Manager if applicable.
--------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager pays OpCap Advisors (the Sub-Advisor) a monthly
fee based on the fee schedule set forth in the Prospectus. For the year ended
October 31, 2000, the Manager paid $5,657,214 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 for each Fund
shareholder account and reimburses OFS for its out-of-pocket expenses.
--------------------------------------------------------------------------------
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.
Year Ended
October 31, 2000
<TABLE>
<CAPTION>
Aggregate Class A Front- Commissions Commissions Commissions
Front-End End Sales on Class A on Class B on Class C
Sales Charges 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, 2000 $6,392,362 $1,302,254 $2,029,296 $11,994,681 $1,446,469
</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, 2000 $74,107 $ 2,960,905 $285,981
</TABLE>
26 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
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.
--------------------------------------------------------------------------------
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 0.15% 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, banks 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 year ended October 31, 2000, payments under the Class A Plan
totaled $4,081,922, all of which was paid by the Distributor to recipients. That
included $191,845 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. The Distributor pays
out the portion of the asset-based sales charge equal to 0.10% of average net
assets representing Class A shares.
--------------------------------------------------------------------------------
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 asset-based sales charges from the Fund under
the plans. If any 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 carryforward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
27 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS Continued
--------------------------------------------------------------------------------
================================================================================
4. Fees and Other Transactions with Affiliates Continued
Distribution fees paid to the Distributor for the year ended October 31, 2000,
were as follows:
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as %
Total Payment Amount Retained Expenses of Net Assets
Under Plan by Distributor Under Plan of Class
--------------------------------------------------------------------------------
Class B Plan $8,735,122 $7,939,491 $28,042,493 3.03%
Class C Plan 3,364,066 2,316,618 4,276,406 1.25
================================================================================
5. Illiquid Securities
As of October 31, 2000, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund intends to invest no more than 15% of its net assets (determined at the
time of purchase and reviewed periodically) in illiquid securities. The
aggregate value of illiquid securities subject to this limitation as of October
31, 2000, was $4,530,000, which represents 0.20% of the Fund's net assets.
================================================================================
6. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. 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 or at October
31, 2000.
28 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Quest Balanced Value Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Quest Balanced Value Fund as of
October 31, 2000, and the related statement of operations, the statement of
changes in net assets and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets for the year ended October 31, 1999, and the financial
highlights for each of the years in the four-year period ended October 31, 1999,
were audited by other auditors whose report dated November 19, 1999, expressed
an unqualified opinion on this information.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian
and brokers; and where confirmations were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Quest Balanced Value Fund as of October 31, 2000, and the results of
its operations, the changes in its net assets and the financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States of America.
KPMG LLP
Denver, Colorado
November 21, 2000
29 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION Unaudited
--------------------------------------------------------------------------------
================================================================================
In early 2001 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 2000. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends and distributions of $0.5166, $0.4894 and $0.4897 per share were
paid to Class A, Class B and Class C shareholders, respectively, on December 7,
1999, of which $0.0470 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, 2000,
which are not designated as capital gain distributions should be multiplied by
12.80% 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 BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
OPPENHEIMER QUEST BALANCED VALUE FUND
--------------------------------------------------------------------------------
A Series of Oppenheimer Quest For Value Funds
================================================================================
Officers and Trustees Bridget A. Macaskill, Chairman of the Board of
Trustees and President
Paul Y. Clinton, Trustee
Thomas W. Courtney, Trustee
Robert G. Galli, Trustee
Lacy B. Herrmann, Trustee
George Loft, Trustee
O. Leonard Darling, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Sub-Advisor OpCap Advisors
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
================================================================================
Legal Counsel Mayer, Brown & Platt
For more complete information about Oppenheimer
Quest Balanced Value Fund, please refer to the
Prospectus. To obtain a copy, call your financial
advisor, or call OppenheimerFunds Distributor,
Inc. at 1.800.525.7048, or visit the
OppenheimerFunds Internet website at
www.oppenheimerfunds.com.
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.
Oppenheimer funds are distributed by
OppenheimerFunds Distributor, Inc., Two World
Trade Center, New York, NY 10048-0203.
(C)Copyright 2000 OppenheimerFunds, Inc. All rights reserved.
31 OPPENHEIMER QUEST BALANCED VALUE FUND
<PAGE>
--------------------------------------------------------------------------------
OPPENHEIMERFUNDS FAMILY
--------------------------------------------------------------------------------
================================================================================
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
Emerging Technologies Fund Main Street(R)Growth & Income
Fund
Enterprise Fund Quest Opportunity Value Fund
Discovery Fund Total Return Fund
Main Street(R)Small Cap Fund Quest Balanced Value Fund
Quest Small Cap Fund/1/ Capital Income Fund
MidCap Fund Multiple Strategies Fund
Main Street(R)Opportunity Fund Disciplined Allocation Fund
Growth Fund Convertible Securities Fund
Capital Appreciation Fund
Large Cap Growth Fund Specialty
Disciplined Value Fund Real Asset Fund(R)
Quest Capital Value Fund Gold & Special Minerals Fund
Quest Value Fund
Trinity Growth Fund
Trinity Core Fund
Trinity Value Fund
================================================================================
Fixed Income
Taxable Municipal
International Bond Fund California Municipal Fund/3/
World Bond Fund/2/ Main Street(R)California
Municipal Fund/2/,/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/2/
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
1. The Fund's name changed from "Oppenheimer Quest Small Cap Value Fund" on
5/19/00.
2. The Fund's Board has proposed to reorganize the Fund into another Oppenheimer
fund subject to shareholder approval.
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.
32 OPPENHEIMER QUEST BALANCED 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/1/
www.oppenheimerfunds.com
--------------------------------------------------------------------------------
General Information
Mon-Fri 8am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
--------------------------------------------------------------------------------
Telephone Transactions
Mon-Fri 8am-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 9am-6:30pm ET
1.800.843.4461
--------------------------------------------------------------------------------
OppenheimerFunds Market 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
--------------------------------------------------------------------------------
Ticker Symbols Class A: QVGIX Class B: QGRBX Class C: QGRCX
--------------------------------------------------------------------------------
1. At times this website may be inaccessible or its transaction feature may be
unavailable.
[LOGO OF OPPENHEIMER FUNDS]
RAQ257.001.1000 December 30, 2000
