<PAGE> 1
OPPENHEIMER CHAMPION HIGH YIELD FUND
ANNUAL REPORT SEPTEMBER 30, 1994
(OPPENHEIMERFUNDS(R) LOGO)
[PHOTO OF COUPLE SKIING]
"THERE'S MORE THAT WE WANT TO
DO THAN EVER BEFORE, SO WE NEED
THE KIND OF INVESTMENT INCOME
THAT WILL HELP US REACH THOSE GOALS.
"THIS FUND HAS GIVEN US A LEVEL
OF INCOME THAT HAS IMPROVED OUR
QUALITY OF LIFE AND HELPED PAY
FOR SOME SPECIAL EXTRAS."
<PAGE> 2
FUND FACTS
IN THIS REPORT:
ANSWERS TO TIMELY
QUESTIONS YOU SHOULD
ASK YOUR FUND'S
MANAGERS.
* HOW DID THE FUND RESPOND TO RISING INTEREST RATES IN 1994?
* DID THE FED'S ACTIONS DRIVE ANY CHANGES IN YOUR INVESTMENT FOCUS?
* WHAT'S THE OUTLOOK FOR HIGH-YIELD CORPORATE BONDS?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER CHAMPION HIGH YIELD FUND
- --------------------------------------------------------------------------------
1 The Fund's objective is to seek high current income.
- --------------------------------------------------------------------------------
2 The Fund's standardized yield for the 30-day period ended 9/30/94 was
7.90% for Class A shares and 7.48% for Class C shares.(1)
- --------------------------------------------------------------------------------
3 For the 12 months ended 9/30/94, total return at net asset value for
Class A shares was 5.61%.(2) Average annual total returns for Class A
shares for the 1- and 5-year periods ended 9/30/94 and from inception
of the Fund on 11/16/87 were 0.60%, 12.62%, and 12.93%, respectively.
Total return for Class C shares since inception on 12/1/93 was
0.11%.(3)
- --------------------------------------------------------------------------------
4 The Fund's Class A shares received a ***** ranking among 609 taxable
bond funds from Morningstar, Inc. on 9/30/94.(4)
- --------------------------------------------------------------------------------
5 The Fund's top five holdings as of 9/30/94 were:(5)
AMERICAN MEDICAL INTERNATIONAL
TRIANGLE PACIFIC CORPORATION
HARMAN INTERNATIONAL INDUSTRIES, INC.
STONE CONTAINER CORPORATION
NL INDUSTRIES
- --------------------------------------------------------------------------------
6 "In today's economy, the high yield bond market offers very
attractive opportunities. The bonds provide attractive income but are
less sensitive to interest rate changes than other fixed income
securities, responding instead to the underlying financial strength
and earning power of the issuer."
Portfolio Manager Ralph Stellmacher, September 30, 1994
(1) Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 9/30/94, divided by the
maximum offering price at the end of the period, compounded semiannually and
then annualized. Falling net asset values will tend to artificially raise
yields.
(2) Based on the change in net asset value per share from 9/30/93 to 9/30/94,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
(3) Average annual total returns for Class A shares are based on a hypothetical
investment, after deducting the maximum initial sales charge of 4.75% on
9/30/93, 9/30/89 and 11/16/87, respectively, held until 9/30/94. The Fund's
maximum sales charge rate for Class A shares was higher during a portion of
some of the periods shown, and actual investment results will be different as a
result of the change. The total return for Class C shares was based on a
hypothetical investment held for that period, after deducting the 1% contingent
deferred sales charge.
(4) Source: Morningstar Mutual Funds, 9/30/94. Morningstar, Inc., an
independent mutual fund monitoring service, produces proprietary monthly
rankings of mutual funds in broad investment categories (equity, taxable bond,
tax-exempt bond, and "hybrid') based on risk-adjusted investment return, after
considering sales charges and expenses. Investment return measures a fund's (or
class's) 3-, 5-, and 10-year (depending on the inception of the class or fund)
average annual total returns in excess of 90-day U.S. Treasury bill returns.
Risk measures a fund's (or class's) performance below 90-day U.S. Treasury bill
returns. Risk and returns are combined to produce star rankings reflecting
performance relative to the average fund in a fund's category. Five stars is
the "highest" ranking (top 10%), and 1 star is lowest (bottom 1%). The 5-star
current ranking is a weighted average of the 3- and 5-year rankings for the
class, which were 5 stars each, weighted 40%/60%. Rankings are subject to
change. The Fund's Class A and Class C shares have a common portfolio.
(5) The Fund's portfolio is subject to change.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on 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.
2 Oppenheimer Champion High Yield Fund
<PAGE> 3
REPORT TO SHAREHOLDERS
ABOVE AVERAGE
TOTAL RETURNS
Total return for the 1-year
period ended 9/30/94
- -------------------------------
Oppenheimer 5.61%
Champion High Yield
Fund Class A(7) (at NAV)
- -------------------------------
Lipper high current 2.12%
yield funds average(8)
As the performance summary on the facing page shows, for the period ended
September 30, 1994, Oppenheimer Champion High Yield Fund extended the record
that has made it one of just 65 out of 609 taxable bond funds to earn a *****
ranking from Morningstar, Inc. for its Class A shares.(6)
In the six months since our last report, the Federal Reserve Board
continued to move aggressively to raise short-term interest rates in an effort
to slow the nation's economic expansion and keep inflation in check. Reflecting
the Fed's preemptive strike against inflation, your managers made several
adjustments to the Fund's portfolio.
First, your managers continued to invest in cyclical industries in the
U.S., while increasing investments in high yield bonds issued by companies
which derive a large percentage of their earnings from Europe. Recent purchases
include NL Industries, American Standard, and Coleman Holdings, all of which
have significant European sales.
Your managers also focused more attention on bonds positioned to
benefit from rising commodity prices worldwide, notably those issued by
companies in the chemicals, metals, and forest products sectors. Significant
additions to the portfolio include Stone Container, Riverwood International,
and Gaylord Container Corporation.
Looking ahead, your managers believe that the positive outlook for
high yield corporate bonds remains intact. The fundamental factors, including
low inflation and steady economic growth, that have made high yield bonds one
of the market's best-performing sectors are still in place. And, just as
important, the role these bonds play in financing business growth is now firmly
established, bringing new issuers--and new investment opportunities--to the
market every day. As in the past, your managers will analyze those
opportunities carefully, investing in those that promise to provide value for
our shareholders over time.
We appreciate the confidence you have placed in Oppenheimer Champion
High Yield Fund, and we look forward to continuing to help you meet your
investment objectives in the future.
/s/ JAMES C. SWAIN /s/ JON S. FOSSEL
- ------------------ -----------------
James C. Swain Jon S. Fossel
Chairman President
Oppenheimer Champion High Yield Fund Oppenheimer Champion High Yield Fund
October 21, 1994
(6) See footnote 4, page 2.
(7) See footnote 2, page 2.
(8) Source: Lipper Analytical Services, an independent mutual fund monitoring
service, 9/30/94. The Lipper total return average for the 1-year period was for
85 high current yield funds. The average is shown for comparative purposes
only. Oppenheimer Fund is characterized by Lipper as a high current yield fund.
Lipper performance does not take sales charges into consideration.
3 Oppenheimer Champion High Yield Fund
<PAGE> 4
STATEMENT OF INVESTMENTS September 30, 1994
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
====================================================================================================================================
<S> <C> <C>
REPURCHASE AGREEMENTS--25.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with The First Boston Corp., 4.70%, dated
9/30/94, to be repurchased at $23,009,008 on 10/3/94, collateralized
by U.S. Treasury Bills, 0%, 6/29/95, with a value of $23,489,049 $23,000,000 $23,000,000
------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.95%,
dated 9/30/94, to be repurchased at $24,009,900 on 10/3/94,
collateralized by U.S. Treasury Nts., 4.25%-8.50%, 4/15/95-7/15/98,
with a value of $13,571,193 and U.S. Treasury Bills, 0%, 3/16/95-
3/23/95, with a value of $10,931,075 24,000,000 24,000,000
----------
Total Repurchase Agreements (Cost $47,000,000) 47,000,000
====================================================================================================================================
LONG-TERM GOVERNMENT OBLIGATIONS--7.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds,
Bonos de Consolidacion de Deudas, Series I, 4.8125%:
9/1/02(4)(7) 2,143,200 1,443,192
4/1/07(4)(7) 1,436,586 894,430
------------------------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC
International Finance BV Gtd. Matador Bonds, 8%, 8/5/03(6) 500,000(1) 436,250
------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds, 6%, 12/10/99 6,500,000(1) 949,243
------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Interest-Only Stripped
Mtg.-Backed Security, Trust 240, Class 2, 7%, 9/25/23(8) 3,230,425 1,221,505
------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 5.9375%, 1/1/09(4)(6) 4,500,000 3,285,000
------------------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation Agreement,
5.0625%, 2/3/24(6)(9) 1,000,000 553,342
------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 9.25%, 1/15/96(10) 4,575,000 4,742,271
----------
Total Long-Term Government Obligations (Cost $13,528,559) 13,525,233
====================================================================================================================================
MUNICIPAL BONDS AND NOTES--0.4%
- ------------------------------------------------------------------------------------------------------------------------------------
San Joaquin Hills, California Transportation Corridor Agency Toll Road
Capital Appreciation Revenue Bonds, Jr. Lien, 0%, 1/1/28 (Cost $723,059) 13,500,000 782,649
====================================================================================================================================
CORPORATE BONDS AND NOTES--63.2%
- ------------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--15.2%
- ------------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--9.1% Acme Metals, Inc., 12.50% Sr. Sec. Nts., 8/1/02 1,000,000 1,015,000
------------------------------------------------------------------------------------------------------
Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04(6) 1,500,000 1,522,500
------------------------------------------------------------------------------------------------------
Atlantis Group, Inc., 11% Sr. Nts., 2/15/03 600,000 591,000
------------------------------------------------------------------------------------------------------
Caldor Corp., 15% Sr. Sub. Nts., 6/1/00 1,000,000 1,110,000
------------------------------------------------------------------------------------------------------
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 1,000,000 1,022,500
------------------------------------------------------------------------------------------------------
Container Corp. of America, 13.50% Sr. Sub. Nts., 12/1/99 1,500,000 1,618,125
------------------------------------------------------------------------------------------------------
Envirodyne Industries, Inc., 10.25% Sr. Nts., 12/1/01 652,000 528,120
------------------------------------------------------------------------------------------------------
First Nationwide Holdings, Inc., 12.25% Sr. Nts., 5/15/01(6) 400,000 421,000
------------------------------------------------------------------------------------------------------
Georgia Gulf Corp., 15% Sr. Sub. Nts., 4/15/00 1,500,000 1,575,000
------------------------------------------------------------------------------------------------------
Kloster Cruise Ltd., 13% Sr. Sec. Nts., 5/1/03 500,000 497,500
------------------------------------------------------------------------------------------------------
Malette, Inc., 12.25% Sr. Sec. Nts., 7/15/04 750,000 776,250
------------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04(3) 100,000 59,250
</TABLE>
4 Oppenheimer Champion High Yield Fund
<PAGE> 5
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CHEMICALS (CONTINUED) NL Industries, Inc.:
11.75% Sr. Sec. Nts., 10/15/03 $1,300,000 $ 1,342,250
0%/13% Sr. Sec. Disc. Nts., 10/15/05(3) 1,000,000 636,250
-------------------------------------------------------------------------------------------------------
OSI Specialities Holdings Co., Units(6) 3,000,000 1,845,000
-------------------------------------------------------------------------------------------------------
Rexene Corp.:
9% Fst. Priority Nts., 11/15/99(5) 950,000 945,250
10% 2nd Priority Nts., 11/15/02(7) 509,000 485,671
-------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 1,150,000 1,161,500
----------
17,152,166
- ------------------------------------------------------------------------------------------------------------------------------------
METALS--1.5% Armco, Inc., 8.50% SF Debs., 9/1/01 275,000 254,375
-------------------------------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00 400,000 400,000
-------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.:
9.875% Sr. Nts., 2/15/02 870,000 774,300
12.75% Sr. Sub. Nts., 2/1/03 700,000 680,750
-------------------------------------------------------------------------------------------------------
Stelco, Inc.:
10.25% Debs., 4/30/96 300,000(1) 221,420
10.40% Debs., 11/30/09 800,000(1) 565,850
----------
2,896,695
- ------------------------------------------------------------------------------------------------------------------------------------
PAPER AND FOREST Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02(2) 50,000 29,250
PRODUCTS--4.6% -------------------------------------------------------------------------------------------------------
Gaylord Container Corp.:
11.50% Sr. Nts., 5/15/01 1,000,000 1,025,000
0%/12.75% Sr. Sub. Disc. Debs., 5/15/05(3) 700,000 591,500
-------------------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 800,000 750,000
-------------------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 400,000 350,000
-------------------------------------------------------------------------------------------------------
Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01 355,000 355,888
-------------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.25% Fst. Priority Sr. Sec. Nts., 2/1/02 680,000 608,600
-------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
11.25% Sr. Sub. Nts., 6/15/02 1,100,000 1,155,000
10.375% Sr. Sub. Nts., 6/30/04 500,000 511,250
-------------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 325,000 320,938
-------------------------------------------------------------------------------------------------------
Stone Container Corp.:
9.875% Sr. Nts., 2/1/01 800,000 753,000
10.75% Sr. Sub. Debs., 4/1/02 700,000 668,500
10.75% Fst. Mtg. Nts., 10/1/02 590,000 589,262
Stone Savannah River Pulp & Paper Corp., 14.125% Sr. Sub. Nts., 12/15/00 900,000 966,375
----------
8,674,563
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--18.1%
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE--3.1% Envirotest Systems Corp.:
9.125% Sr. Nts., 3/15/01 500,000 463,750
9.625% Sr. Sub. Nts., 4/1/03 1,000,000 920,000
-------------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp., 11.25% Sr. Nts., 10/1/02 450,000 451,125
-------------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp., Units(6) 750,000 416,250
-------------------------------------------------------------------------------------------------------
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01 800,000 808,000
-------------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 975,000 901,875
-------------------------------------------------------------------------------------------------------
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02 1,750,000 1,828,750
----------
5,789,750
</TABLE>
5 Oppenheimer Champion High Yield Fund
<PAGE> 6
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONSTRUCTION SUPPLIES Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 $2,400,000 $2,364,000
AND DEVELOPMENT--2.2% -------------------------------------------------------------------------------------------------------
USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 1,750,000 1,793,750
----------
4,157,750
- -------------------------------------------------------------------------------------------------------------------------------
CONSUMER GOODS AND Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 2,100,000 1,417,500
SERVICES--4.9% -------------------------------------------------------------------------------------------------------
Consoltex Group, Inc., 11% Gtd. Sr. Sub. Nts., Series B, 10/1/03 1,200,000 1,131,000
-------------------------------------------------------------------------------------------------------
Genesco, Inc., 10.375% Sr. Nts., 2/1/03 500,000 377,500
-------------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 2,000,000 2,140,000
-------------------------------------------------------------------------------------------------------
Insilco Corp., 10.375% Sr. Sec. Nts., 7/1/97 400,000 406,500
-------------------------------------------------------------------------------------------------------
Interco, Inc., 9% Sec. Nts., Series B, 6/1/04 698,000 685,785
-------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B, 11/1/03 1,000,000 955,000
-------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01 600,000 568,900
-------------------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 1,600,000 1,454,000
-----------
9,136,185
- -------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT--2.3% Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(6) 275,000 240,625
-------------------------------------------------------------------------------------------------------
Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 400,000 352,500
-------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(6) 200,000 155,000
-------------------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Gtd. Sr. Nts., 4/1/02 700,000 605,500
-------------------------------------------------------------------------------------------------------
Maritime Group Ltd., Units(6) 267,224 211,842
-------------------------------------------------------------------------------------------------------
Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 1,250,000 781,250
-------------------------------------------------------------------------------------------------------
Resorts International, Inc., 0% Sec. Fst. Mtg.
-------------------------------------------------------------------------------------------------------
Non-Recourse Pass-Through Nts., 6/30/00 1,010,000 883,750
-------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
9.625% Sr. Sub. Nts., Series A, 6/1/03 550,000 473,000
9.625% Sr. Sub. Nts., Series B, 6/1/03 200,000 172,000
-------------------------------------------------------------------------------------------------------
Trump's Castle Funding, Inc., 7% Sub. Nts., 11/15/05(5)(7) 860 748
-------------------------------------------------------------------------------------------------------
United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 590,000 493,387
----------
4,369,602
- -------------------------------------------------------------------------------------------------------------------------------
MEDIA--2.7% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 1,300,000 1,261,000
-------------------------------------------------------------------------------------------------------
News America Holdings, Inc., 10.125% Gtd. Sr. Debs., 10/15/12 700,000 734,266
-------------------------------------------------------------------------------------------------------
SCI Television, Inc., 7.50% Fst. Sec. Loan Nts., 6/30/98 357,000 348,968
-------------------------------------------------------------------------------------------------------
Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 500,000 485,000
-------------------------------------------------------------------------------------------------------
Turner Broadcasting System, Inc., 12% Sr. Sub. Debs., 10/15/01 1,580,000 1,651,100
-------------------------------------------------------------------------------------------------------
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 500,000 530,625
----------
5,010,959
- -------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE Hees International Corp., 10% Sr. Nts., 8/23/99 1,000,000(1) 661,650
DEVELOPMENT--0.7% -------------------------------------------------------------------------------------------------------
Olympia & York First Canadian Place Ltd., 11% Debs., Series 3, 11/4/49(2) 1,250,000(1) 577,779
----------
1,239,429
- -------------------------------------------------------------------------------------------------------------------------------
RETAIL--2.2% Brylane LP/Brylane Capital Corp., 10% Sr. Sub. Nts., Series B, 9/1/03 500,000 477,500
-------------------------------------------------------------------------------------------------------
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 1,050,000 1,034,250
-------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 1,000,000 844,867
-------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 485,000 460,750
</TABLE>
6 Oppenheimer Champion High Yield Fund
<PAGE> 7
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RETAIL (CONTINUED) International Semi-Tech Microelectronics, Inc.,
0%/11.50% Sr. Sec. Disc. Nts., 8/15/03(3) $1,000,000 $ 472,500
------------------------------------------------------------------------------------------------------
R.H. Macy & Co., Inc., 14.50% Sr. Sub. Debs., 10/15/98(2) 450,000 324,000
------------------------------------------------------------------------------------------------------
Zale Delaware, Inc., 11% Gtd. 2nd Priority Sr. Sec. Nts., 7/30/00 500,000 501,250
4,115,117
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--8.3%
- ------------------------------------------------------------------------------------------------------------------------------------
FOOD--1.6% ARA Group, Inc. (The), 12% Sub. Debs., 4/15/00 500,000 539,375
------------------------------------------------------------------------------------------------------
Flagstar Corp., 10.75% Sr. Nts., 9/15/01 400,000 379,000
------------------------------------------------------------------------------------------------------
Heileman Acquisition Corp., 9.625% Sr. Sub. Nts., 1/31/04 800,000 682,000
------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01(2) 300,000 85,500
------------------------------------------------------------------------------------------------------
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00 1,400,000 1,305,500
----------
2,991,375
- ------------------------------------------------------------------------------------------------------------------------------------
FOOD AND DRUG Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05(7) 558,000 545,968
DISTRIBUTION--3.5% ------------------------------------------------------------------------------------------------------
Di Giorgio Corp., 12% Sr. Nts., 2/15/03 700,000 700,000
------------------------------------------------------------------------------------------------------
Duane Reade, 12% Sr. Nts., Series B, 9/15/02 500,000 485,000
------------------------------------------------------------------------------------------------------
Grand Union Co.:
11.25% Sr. Nts., 7/15/00 1,150,000 1,043,625
12.25% Sr. Sub. Nts., 7/15/02 800,000 592,000
------------------------------------------------------------------------------------------------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 1,000,000 885,000
------------------------------------------------------------------------------------------------------
Revco D.S., Inc., 9.125% Sr. Nts., 1/15/00 700,000 710,500
------------------------------------------------------------------------------------------------------
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 1,750,000 1,745,625
----------
6,707,718
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE--3.2% American Medical International, Inc.:
11.375% Sr. Sub. Nts., 2/1/95 1,500,000 1,531,875
9.50% Sr. Sub. Nts., Series B, 4/15/06 1,000,000 975,000
------------------------------------------------------------------------------------------------------
Amerisource Corp., 14.50% Sr. Sub. Nts., Series A, 9/15/99 1,000,000 1,065,000
------------------------------------------------------------------------------------------------------
Healthtrust, Inc. - The Hospital Co.:
10.75% Sub. Nts., 5/1/02 1,500,000 1,567,500
10.25% Sub. Nts., 4/15/04 100,000 103,125
------------------------------------------------------------------------------------------------------
Total Renal Care, Inc., Units 1,000,000 720,000
----------
5,962,500
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY--4.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Ferrellgas LP/Ferrellgas Finance Corp., 10% Sr. Nts., 8/1/01 1,300,000 1,306,500
------------------------------------------------------------------------------------------------------
Maxus Energy Corp.:
9.875% Nts., 10/15/02 100,000 96,500
11.50% Debs., 11/15/15 500,000 502,500
------------------------------------------------------------------------------------------------------
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98(3) 1,158,000 1,027,725
------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 1,225,000 1,399,562
------------------------------------------------------------------------------------------------------
Presidio Oil Co.:
11.50% Sr. Sec. Nts., Series B, 9/15/00 450,000 429,750
13.90% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02(4) 600,000 534,000
------------------------------------------------------------------------------------------------------
Sante Fe Energy Resources, Inc., 11% Sr. Sub. Debs., 5/15/04 1,720,000 1,763,000
------------------------------------------------------------------------------------------------------
Wainoco Oil Corp., 12% Sr. Nts., 8/1/02 1,200,000 1,239,000
----------
8,298,537
</TABLE>
7 Oppenheimer Champion High Yield Fund
<PAGE> 8
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCIAL--2.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Acme Holdings, Inc., 11.75% Sr. Nts., 6/1/00 $ 400,000 $ 182,000
------------------------------------------------------------------------------------------------------
American Life Holding Co., 11.25% Sr. Sub. Nts., 9/15/04 520,000 531,700
------------------------------------------------------------------------------------------------------
Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 1,000,000 945,000
------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(6) 771,840 849,025
------------------------------------------------------------------------------------------------------
Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 700,000 761,250
------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03 600,000 435,000
----------
3,703,975
- ------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--6.4%
- ------------------------------------------------------------------------------------------------------------------------------------
CONTAINERS--1.8% Owens-Illinois, Inc.:
10.50% Sr. Sub. Nts., 6/15/02 200,000 206,000
11% Sr. Debs., 12/1/03 1,445,000 1,533,506
------------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 1,700,000 1,691,500
----------
3,431,006
- ------------------------------------------------------------------------------------------------------------------------------------
GENERAL INDUSTRIAL--3.3% American Standard, Inc.:
9.875% Sr. Sub. Nts., 6/1/01 1,000,000 985,000
0%/10.50% Sr. Sub. Disc. Debs., 6/1/05(3) 750,000 491,250
------------------------------------------------------------------------------------------------------
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 1,600,000 1,456,000
------------------------------------------------------------------------------------------------------
Imo Industries, Inc.:
12.25% Sr. Sub. Debs., 8/15/97 1,200,000 1,215,000
12% Sr. Sub. Debs., 11/1/01 500,000 512,500
------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(6) 750,000 750,000
------------------------------------------------------------------------------------------------------
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01 735,000 832,387
----------
6,242,137
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.3% Sea Containers Ltd.:
9.50% Sr. Nts., 7/1/03 250,000 231,875
12.50% Sr. Sub. Debs., Series A, 12/1/04 250,000 261,875
12.50% Sr. Sub. Debs., Series B, 12/1/04 100,000 105,500
------------------------------------------------------------------------------------------------------
Southern Pacific Transportation Co.,
10.50% Sr. Sec. Nts., Series B, 7/1/99 400,000 413,037
------------------------------------------------------------------------------------------------------
Tiphook Financial Corp.:
7.125% Gtd. Nts., 5/1/98 900,000 652,500
8% Gtd. Nts., 3/15/00 489,000 337,410
------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(3) 750,000 410,625
----------
2,412,822
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--7.8%
- ------------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--0.7% GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 930,000 781,200
------------------------------------------------------------------------------------------------------
GPA Holland BV, 8.94% Med.-Term Nts., 2/16/99 700,000 558,250
----------
1,339,450
</TABLE>
8 Oppenheimer Champion High Yield Fund
<PAGE> 9
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CABLE TELEVISION--2.6% Cablevision Systems Corp.:
14% Sr. Sub. Reset Debs., 11/15/03 $1,000,000 $ 1,012,500
10.75% Sr. Sub. Debs., 4/1/04 200,000 204,000
9.875% Sr. Sub. Debs., 2/15/13 300,000 279,750
------------------------------------------------------------------------------------------------------
Echostar Communications Corp., Units 1,290,000 619,200
------------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp.,
9% Sr. Sec. Nts., Series B, 11/1/03(4) 750,000 678,750
------------------------------------------------------------------------------------------------------
International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03(3) 150,000 84,000
------------------------------------------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 1,000,000 1,005,000
------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 1,000,000 1,086,250
------------
4,969,450
- ------------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS--3.3% Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03(3) 2,250,000 1,485,000
------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 500,000 452,500
------------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(3) 2,000,000 1,440,000
------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/9.75% Sr. Disc. Nts., 8/15/04(3) 1,200,000 594,000
------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
9.75% Sr. Sec. Nts., 8/1/00 500,000 498,750
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(3) 1,700,000 1,143,250
------------------------------------------------------------------------------------------------------
Rogers Communications, Inc., 10.875% Sr. Debs., 4/15/04 600,000 613,500
------------
6,227,000
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--1.2% Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B, 3/1/05(3) 1,900,000 997,500
------------------------------------------------------------------------------------------------------
Businessland, Inc., 5.50% Sub. Debs., 3/1/07 805,000 161,000
------------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01(5)(6) 1,200,000 1,050,000
------------
2,208,500
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES--1.0%
- ------------------------------------------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(3) 1,405,000 1,008,087
------------------------------------------------------------------------------------------------------
First PV Funding Corp., 10.30% Lease Obligation Bonds,
Series 1986A, 1/15/14 350,000 325,456
------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(6) 500,000 461,250
------------
1,794,793
------------
Total Corporate Bonds and Notes (Cost $121,929,956) 118,831,479
<CAPTION>
SHARES
====================================================================================================================================
<S> <C> <C> <C>
COMMON STOCKS--0.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Gaming, Inc.(2)(6) 3,809 25,235
------------------------------------------------------------------------------------------------------
ECM Fund L.P.I.(6) 75 75,000
------------------------------------------------------------------------------------------------------
Leaseway Transportation Corp.(2) 23,610 239,051
------------------------------------------------------------------------------------------------------
Marriott International, Inc. 601 17,354
------------------------------------------------------------------------------------------------------
New World Communications Group, Inc., Cl. A(2) 3,640 51,870
------------------------------------------------------------------------------------------------------
Petrolane, Inc., Cl. B 34,270 488,348
------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc.(2)(6) 9,500 92,625
------------------------------------------------------------------------------------------------------
Trizec, Ltd.(2) 21,598 169,068
------------------------------------------------------------------------------------------------------
Zale Corp.(2) 7,775 94,272
------------
Total Common Stocks (Cost $1,191,710) 1,252,823
</TABLE>
9 Oppenheimer Champion High Yield Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
================================================================================================================================
<S> <C> <C>
PREFERRED STOCKS--0.8%
- --------------------------------------------------------------------------------------------------------------------------------
Algoma Finance Corp., 5.50% Exch., Series A 7,313 $ 120,625
--------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., Cl. A(2) 3,500 42,000
--------------------------------------------------------------------------------------------------
First Madison Bank, FSB, 11.50% 5,000 525,000
--------------------------------------------------------------------------------------------------
K-III Communications Corp., $11.625 Exch., Series B(7) 6,507 637,743
--------------------------------------------------------------------------------------------------
Navistar International Corp., $6.00 Cv., Series G 4,500 227,250
----------
Total Preferred Stocks (Cost $1,535,131) 1,552,618
<CAPTION>
UNITS
================================================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.2%
- --------------------------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Ctfs., Series AG-7A 6,200 62
Litigation Trust 19,829 198
--------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(6) 12,500 25,000
--------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99(6) 15,037 48,870
--------------------------------------------------------------------------------------------------
Casino America, Inc. Wts., Exp. 11/96 1,631 2,447
--------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc. Wts., Exp. 10/03 1,000 10,133
--------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 7/96 4,219 29,533
--------------------------------------------------------------------------------------------------
Hollywood Casino Corp. Wts., Exp. 4/98 1,904 205,632
--------------------------------------------------------------------------------------------------
Interco, Inc. Wts., Series 1, Exp. 8/99 8,655 35,702
--------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 11/03 28,000 89,880
--------------------------------------------------------------------------------------------------
Purity Supreme, Inc. Wts., Exp. 8/97(6) 1,733 35
--------------------------------------------------------------------------------------------------
Southland Corp. Wts., Exp. 3/96 300 1,125
--------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96(6) 129 194
--------------------------------------------------------------------------------------------------
UGI Corp. Wts., Exp. 3/98 4,750 9,880
----------
Total Rights, Warrants and Certificates ($269,652) 458,691
</TABLE>
<TABLE>
<CAPTION>
FACE
DATE/PRICE AMOUNT
================================================================================================================================
<S> <C> <C> <C>
PUT OPTIONS PURCHASED--0.0%
- --------------------------------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put Nov. 2/1.60 DEM $1,161,541 3,786
--------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put Nov. 4/1.60 DEM 580,490 2,070
--------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put Nov. 8/1.60 DEM 580,462 2,411
----------
Total Put Options Purchased (Cost $39,999) 8,267
================================================================================================================================
STRUCTURED INSTRUMENTS--0.7%
- --------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank, N.Y. Branch, Mexican
Peso Linked Confidence Nt., Girozentrale Branch,
35.50%, 12/30/94(6) 200,000 196,500
--------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
Standard & Poor's 500 Index-Linked Nts.:
4.85%, 11/16/94(6) 300,000 387,240
4.9125%, 12/14/94(6) 150,000 222,750
5.0375%, 12/22/94(6) 100,000 138,870
5.10%, 12/27/94(6) 100,000 143,810
--------------------------------------------------------------------------------------------------
Salomon, Inc., 5% Standard & Poor's 500
Index-Linked Nts., 11/21/94(6) 250,000 315,000
----------
Total Structured Instruments (Cost $1,478,800) 1,404,170
</TABLE>
10 Oppenheimer Champion High Yield Fund
<PAGE> 11
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS, AT VALUE (COST $187,696,866) 98.2% $184,815,930
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.8 3,432,578
------ ------------
NET ASSETS 100.0% $188,248,508
====== ============
(1) Face amount is reported in foreign currency.
(2) Non-income-producing security.
(3) Represents a zero coupon bond that converts to a fixed rate of
interest at a designated future date.
(4) Represents the current interest rate for a variable rate security.
(5) Represents the current interest rate for an increasing rate security.
(6) Restricted or illiquid security--See Note 6 of Notes to Financial
Statements.
(7) Interest or dividend is paid in kind.
(8) Interest-Only Strips represent the right to receive the monthly
interest payments on an underlying pool of mortgage loans. These
securities typically decline in price as interest rates decline.
Most other fixed-income securities increase in price when interest
rates decline. The principal amount of the underlying pool
represents the notional amount on which current interest is
calculated. The price of these securities is typically more
sensitive to changes in prepayment rates than traditional
mortgage-backed securities (for example, GNMA pass-throughs).
(9) Partial interest payment was received.
(10) Securities with an aggregate market value of $179,325 are held
in escrow to cover outstanding call options, as follows:
</TABLE>
<TABLE>
<CAPTION>
FACE SUBJECT EXPIRATION EXERCISE PREMIUMS MARKET VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE (1)
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
European OTC Deutsche Mark/U.S. Dollar 801,038 11/2/94 1.50 DEM $ 3,721 $ 2,112
--------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 359,886 11/2/94 1.60 DEM 9,386 11,994
--------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 400,519 11/4/94 1.50 DEM 1,928 1,183
--------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 179,943 11/4/94 1.60 DEM 4,728 5,943
--------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 400,519 11/8/94 1.5445 DEM 4,779 4,924
--------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 179,943 11/8/94 1.60 DEM 4,893 6,157
------- -------
$29,435 $32,313
======= =======
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Champion High Yield Fund
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
<TABLE>
<S> <C> <C>
===================================================================================================================================
ASSETS Investments, at value (including repurchase agreements of $47,000,000)
(cost $187,696,866)--see accompanying statement $184,815,930
-----------------------------------------------------------------------------------------------------
Cash 91,720
-----------------------------------------------------------------------------------------------------
Receivables:
Interest and dividends 3,890,033
Shares of beneficial interest sold 1,433,484
Investments sold 823,738
-----------------------------------------------------------------------------------------------------
Other 4,168
------------
Total assets 191,059,073
===================================================================================================================================
LIABILITIES Options written, at value (premiums received $29,435)--
see accompanying statement--Note 4 32,313
-----------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,466,028
Shares of beneficial interest redeemed 741,086
Dividends 279,733
Distribution and service plan fees--Note 5 107,852
Other 183,553
------------
Total liabilities 2,810,565
===================================================================================================================================
NET ASSETS $188,248,508
------------
===================================================================================================================================
COMPOSITION OF Paid-in capital $192,153,811
NET ASSETS -----------------------------------------------------------------------------------------------------
Overdistributed net investment income (232,629)
-----------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment and foreign currency transactions (790,678)
-----------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments, options written and
translation of assets and liabilities denominated in foreign currencies (2,881,996)
------------
Net assets $188,248,508
------------
===================================================================================================================================
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $160,505,162 and 13,025,896 shares of beneficial interest outstanding) $12.32
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $12.93
-----------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $27,743,346 and 2,251,419 shares of beneficial interest outstanding) $12.32
</TABLE>
See accompanying Notes to Financial Statements.
12 Oppenheimer Champion High Yield Fund
<PAGE> 13
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
<TABLE>
<S> <C>
===================================================================================================================================
INVESTMENT INCOME Interest (net of withholding taxes of $54,954) $13,756,895
-----------------------------------------------------------------------------------------------------
Dividends (net of withholding taxes of $553) 440,348
-----------
Total income 14,197,243
===================================================================================================================================
EXPENSES Management fees--Note 5 1,026,200
-----------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 319,690
Class C--Note 5 113,624
-----------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 228,430
-----------------------------------------------------------------------------------------------------
Shareholder reports 57,827
-----------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 20,092
Class C 10,050
-----------------------------------------------------------------------------------------------------
Custodian fees and expenses 27,375
-----------------------------------------------------------------------------------------------------
Legal and auditing fees 15,089
-----------------------------------------------------------------------------------------------------
Trustees' fees and expenses 1,588
-----------------------------------------------------------------------------------------------------
Other 55,417
-----------
Total expenses 1,875,382
===================================================================================================================================
NET INVESTMENT INCOME 12,321,861
===================================================================================================================================
REALIZED AND UNREALIZED Net realized loss from:
GAIN (LOSS) ON INVESTMENTS, Investments (521,682)
OPTIONS WRITTEN AND FOREIGN Foreign currency transactions (65,590)
CURRENCY TRANSACTIONS -----------
Net realized loss (587,272)
-----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (5,841,830)
Translation of assets and liabilities denominated in foreign currencies 1,304
-----------
Net change (5,840,526)
-----------
Net realized and unrealized loss on investments,
options written and foreign currency transactions (6,427,798)
===================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 5,894,063
===========
</TABLE>
See accompanying Notes to Financial Statements.
13 Oppenheimer Champion High Yield Fund
<PAGE> 14
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1994 1993
<S> <C> <C> <C>
===================================================================================================================================
OPERATIONS Net investment income $ 12,321,861 $ 6,982,465
-----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments
and foreign currency transactions (587,272) 1,926,265
-----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation
on investments, options written and translation of assets
and liabilities denominated in foreign currencies (5,840,526) 1,827,231
------------ ------------
Net increase in net assets resulting from operations 5,894,063 10,735,961
===================================================================================================================================
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($1.102 and $1.22 per share, respectively) (11,428,985) (6,982,465)
SHAREHOLDERS Class C ($.765 per share) (828,957) --
-----------------------------------------------------------------------------------------------------
Dividends in excess of net investment income:
Class A ($.006 per share) (59,802) --
Class B ($.004 per share) (4,337) --
-----------------------------------------------------------------------------------------------------
Distributions in excess of capital gains:
Class A ($.189 per share) (1,773,705) --
Class C ($.189 per share) (25,332) --
===================================================================================================================================
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS Class A beneficial interest transactions--Note 2 63,236,754 53,586,890
-----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
Class C beneficial interest transactions--Note 2 28,773,777 --
===================================================================================================================================
NET ASSETS Total increase 83,783,476 57,340,386
-----------------------------------------------------------------------------------------------------
Beginning of year 104,465,032 47,124,646
------------ ------------
End of year (including overdistributed
net investment income of $232,629 in 1994) $188,248,508 $104,465,032
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
14 Oppenheimer Champion High Yield Fund
<PAGE> 15
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A CLASS C
----------------------------------------------------------------------- ------------
YEAR ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1992 1991 1990 1989 1988(2) 1994(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $12.90 $12.26 $11.49 $10.46 $11.53 $12.10 $11.43 $13.13
- --------------------------------------------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income 1.10 1.22 1.41 1.45 1.43 1.42(3) 1.24 .75
Net realized and unrealized gain
(loss) on investments, options written
and foreign currency transactions (.38) .64 .77 1.04 (1.08) (.43) .67 (.60)
-------- -------- ------- ------- ------- ------- ------- -------
Total income from
investment operations .72 1.86 2.18 2.49 .35 .99 1.91 .15
- --------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net
investment income (1.10) (1.22) (1.41) (1.46) (1.42) (1.42) (1.24) (.77)
Dividends in excess of net
investment income (.01) -- -- -- -- -- -- --(4)
Distributions from net realized
gain on investments -- -- -- -- -- (.14) -- --
Distributions in excess of net
realized gain on investments (.19) -- -- -- -- -- -- (.19)
-------- -------- ------- ------- ------- ------- ------- -------
Total dividends and
distributions to shareholders (1.30) (1.22) (1.41) (1.46) (1.42) (1.56) (1.24) (.96)
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.32 $12.90 $12.26 $11.49 $10.46 $11.53 $12.10 $12.32
======== ======== ======= ======= ======= ======= ======= =======
================================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(5) 5.61% 15.92% 19.94% 25.62% 3.13% 8.53% 17.29% 1.11%
================================================================================================================================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $160,505 $104,465 $47,125 $16,044 $13,910 $20,642 $18,579 $27,743
- --------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $135,431 $ 73,334 $28,270 $14,057 $17,163 $21,349 $11,116 $13,693
- --------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 13,026 8,096 3,844 1,397 1,330 1,790 1,535 2,251
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.49% 9.52% 11.60% 13.49% 12.92% 11.87% 11.50%(6) 7.24%(6)
Expenses 1.22% 1.24% 1.35% 1.49% 1.40% 1.19%(3) 1.05%(6) 1.94%(6)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 108.0% 116.2% 121.5% 114.8% 67.8% 98.5% 31.6% 108.0%
</TABLE>
(1) For the period from December 1, 1993 (inception of offering) to September
30, 1994.
(2) For the period from November 16, 1987 (commencement of operations) to
September 30, 1988.
(3) Net investment income would have been $1.41 per share absent the voluntary
expense reimbursement, resulting in an expense ratio of 1.25%.
(4) Less than .005 per share.
(5) Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, 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.
(6) Annualized.
(7) The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the year ended September 30, 1994 were $191,965,365 and $131,099,734,
respectively.
See accompanying Notes to Financial Statements.
15 Oppenheimer Champion High Yield Fund
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
====================================================================================================================================
1. SIGNIFICANT Oppenheimer Champion High Yield Fund (the Fund) is registered under the Investment Company Act of
ACCOUNTING POLICIES 1940, as amended, as a diversified, open-end management investment company. The Fund's investment
advisor is Oppenheimer Management Corporation (the Manager). The Fund offers both Class A and Class C
shares. Class A shares are sold with a front-end sales charge. Class C shares may be subject to a
contingent deferred sales charge. Both classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or service plan, expenses
directly attributable to a particular class and exclusive voting rights with respect to matters
affecting a single class. The following is a summary of significant accounting policies consistently
followed by the Fund.
------------------------------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at 4:00 p.m. (New York time) 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 asked
price or the last sale price on the prior trading day. Long-term debt securities are valued by a
portfolio pricing service approved by the Board of Trustees. Long-term debt securities which cannot be
valued by the approved portfolio pricing service are valued by averaging the mean between the bid and
asked prices obtained from two active market makers in such securities. Short-term 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. Securities for which market quotes
are not readily available are valued under procedures established by the Board of Trustees to
determine fair value in good faith. An option is valued based upon the last sales 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 on the prior trading date if it is within the spread between the
closing bid and asked prices. If the last sale is outside the spread, the closing bid or asked price
closest to the last reported sale price is used. Forward foreign currency exchange contracts are
valued at the forward rate on a daily basis.
------------------------------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high-yield securities, which may be subject to a greater
degree of credit risk, greater market fluctuations and risk of loss of income and principal, and may
be more sensitive to economic conditions than lower yielding, higher rated fixed income securities.
The Fund may acquire securities in default, and is not obligated to dispose of securities whose
issuers subsequently default. At September 30, 1994, securities with an aggregate market value of
$1,569,871, representing .82% of the Fund's total assets, were in default.
------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained in U.S. dollars.
Prices of securities denominated in foreign currencies are translated into U.S. dollars at the closing
rates of exchange. Amounts related to the purchase and sale of securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such transactions.
The Fund generally enters into forward foreign currency exchange contracts
as a hedge, upon the purchase or sale of a security denominated in a foreign currency. In
addition, the Fund may enter into such contracts as a hedge against changes in foreign currency
exchange rates on portfolio positions. A forward exchange contract is a commitment to purchase or sell
a foreign currency at a future date, at a negotiated rate. Risks may arise from the potential
inability of the counterparty to meet the terms of the contract and from unanticipated movements in
the value of a foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market values of securities held
and reported with all other foreign currency gains and losses in the Fund's results of operations.
------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to have legally segregated
in the Federal Reserve Book Entry System or to have segregated within the custodian's vault, all
securities held as collateral for repurchase agreements. If the seller of the agreement defaults and
the value of the collateral declines, or if the seller enters an insolvency proceeding, realization of
the value of the collateral by the Fund may be delayed or limited.
------------------------------------------------------------------------------------------------------
OPTIONS WRITTEN. The Fund may write covered call and put options. When an option is written, the Fund
receives a premium and becomes obligated to sell or purchase the underlying security at a fixed price,
upon exercise of the option. In writing an option, the Fund bears the market risk of an unfavorable
change in the price of the security underlying the written option. Exercise of an option written by
the Fund could result in the Fund selling or purchasing a security at a price different from the
current market value. All securities covering call options written are held in escrow by the custodian
bank and the Fund maintains liquid assets sufficient to cover written put options in the event of
exercise by the holder.
</TABLE>
16 Oppenheimer Champion High Yield Fund
<PAGE> 17
<TABLE>
<S> <C>
====================================================================================================================================
1. SIGNIFICANT ACCOUNTING ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other than those attributable
POLICIES (CONTINUED) to a specific class) and gains and losses are allocated daily to each class of shares based upon the
relative proportion of net assets represented by such class. Operating expenses directly attributable
to a specific class are charged against the operations of that class.
------------------------------------------------------------------------------------------------------
FEDERAL INCOME 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 tax provision is required.
------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately for Class A and Class
C shares from net investment income each day the New York Stock Exchange is open for business and pay
such dividends monthly. Distributions from net realized gains on investments, if any, will be declared
at least once each year.
------------------------------------------------------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective October 1, 1993, the Fund adopted
Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the Fund
changed the classification of distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with income tax regulations.
Accordingly, subsequent to September 30, 1993, amounts have been reclassified to reflect a decrease in
paid-in capital of $2,652, a decrease in undistributed net investment income of $50,018, and a
decrease in undistributed capital loss on investments of $52,670. During the year ended September 30,
1994, in accordance with Statement of Position 93-2, undistributed net investment income was decreased
by $182,391 and undistributed capital loss was decreased by $182,391.
------------------------------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for on the date the investments are purchased or sold
(trade date) and dividend income is recorded on the ex-dividend date. Discount on securities purchased
is amortized over the life of the respective securities, in accordance with federal income tax
requirements. 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. Dividends in kind are recognized as income on the ex-dividend date, at the current market
value of the underlying security. Interest on payment-in-kind debt instruments is accrued as income at
the coupon rate and a market adjustment is made on the ex-date.
====================================================================================================================================
2. SHARES OF
BENEFICIAL INTEREST The Fund has authorized an unlimited number of no par value shares of beneficial interest of each
class. Transactions in shares of beneficial interest were as follows:
<CAPTION>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1994(1) SEPTEMBER 30, 1993
----------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 10,281,508 $131,255,862 6,506,627 $82,210,524
Dividends and distributions reinvested 665,353 8,503,155 345,523 4,361,170
Redeemed (6,017,355) (76,522,263) (2,599,817) (32,984,804)
---------- ------------ ---------- -----------
Net increase 4,929,506 $ 63,236,754 4,252,333 $53,586,890
========== ============ ========== ===========
-----------------------------------------------------------------------------------------------------
Class C:
Sold 2,447,647 $ 31,251,062 -- $ --
Dividends and distributions reinvested 45,942 574,950 -- --
Redeemed (242,170) (3,052,235) -- --
---------- ------------ ---------- -----------
Net increase 2,251,419 $ 28,773,777 -- $ --
========== ============ ========== ===========
</TABLE>
(1) For the year ended September 30, 1994 for
Class A shares and for the period from December
1, 1993 (inception of offering) to September
30, 1994 for Class C shares.
17 Oppenheimer Champion High Yield Fund
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<S> <C>
====================================================================================================================================
3. UNREALIZED GAINS
AND LOSSES ON INVESTMENTS At September 30, 1994, net unrealized depreciation on investments and options written of $2,883,814
was composed of gross appreciation of $2,143,382, and gross depreciation of $5,027,196.
====================================================================================================================================
4. CALL OPTION ACTIVITY Call option activity for the year ended September 30, 1994 was as follows:
</TABLE>
<TABLE>
<CAPTION>
NUMBER AMOUNT OF
OF OPTIONS PREMIUMS
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Options outstanding at September 30, 1993 -- --
Options written 2,321,848 29,435
--------- -------
Options outstanding at September 30, 1994 2,321,848 $29,435
========= =======
</TABLE>
<TABLE>
<S> <C>
====================================================================================================================================
5. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES Management fees paid to the Manager were in accordance with the investment advisory agreement with the
Fund which provides for an annual fee of .70% on the first $250 million of net assets, .65% on the
next $250 million, .60% on the next $500 million and .55% on net assets in excess of $1 billion. The
Manager has agreed to reimburse the Fund if aggregate expenses (with specified exceptions) exceed the
most stringent applicable regulatory limit on Fund expenses.
For the year ended September 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $2,343,545, of which $595,684 was retained by
Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the Manager, as general distributor,
and by an affiliated broker/dealer. During the year ended September 30, 1994, OFDI received
contingent deferred sales charges of $10,342 upon redemption of Class C shares, as reimbursement for
sales commissions advanced by OFDI at the time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered investment
companies. OSS's total costs of providing such services are allocated ratably to these companies.
Under separate approved plans, each class may expend up to .25% of its net
assets annually to reimburse OFDI for costs incurred in connection with the personal service and
maintenance of accounts that hold shares of the Fund, including amounts paid to brokers, dealers,
banks and other institutions. In addition, Class C shares are subject to an asset-based sales charge
of .75% of net assets annually, to reimburse OFDI for sales commissions paid from its own resources
at the time of sale and associated financing costs. In the event of termination or discontinuance of
the Class C plan, the Board of Trustees may allow the Fund to continue payment of the asset-based
sales charge to OFDI for distribution expenses incurred on Class C shares sold prior to termination
or discontinuance of the plan. During the year ended September 30, 1994, OFDI paid $18,814 to an
affiliated broker/dealer as reimbursement for Class A personal service and maintenance expenses and
retained $113,624 as reimbursement for Class C sales commissions and service fee advances, as well
as financing costs.
</TABLE>
18 Oppenheimer Champion High Yield Fund
<PAGE> 19
<TABLE>
<S> <C>
====================================================================================================================================
6. RESTRICTED SECURITIES The Fund owns securities purchased in private placement transactions, without registration under the
Securities Act of 1933 (the Act). The securities are valued under methods approved by the Board of
Trustees as reflecting fair value. The Fund intends to invest no more than 10% of its net assets
(determined at the time of purchase) in restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that are determined to be liquid by the Board of
Trustees or by the Manager under Board-approved guidelines. Restricted and illiquid securities,
excluding securities eligible for resale pursuant to Rule 144A of the Act amount to $6,753,927, or
3.59% of the Fund's net assets, at September 30, 1994. Illiquid and/or restricted securities,
including those restricted securities eligible for resale pursuant to Rule 144A of the Act are listed
below.
</TABLE>
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
ACQUISITION COST SEPTEMBER 30,
SECURITY DATE PER UNIT 1994
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aftermarket Technology Corp.,
12% Sr. Sub. Nts., 8/1/04(1) 7/22/94 $ 100.00 $ 101.50
------------------------------------------------------------------------------------------------------
Arizona Charlie's, Inc.,
12%Fst. Mtg. Nts., Series A, 11/15/00 11/18/93 $ 100.00 $ 87.50
------------------------------------------------------------------------------------------------------
Banco Nacional de Comercio Exterior SNC International
Finance BV Gtd. Matador Bonds, 8%, 8/5/03(1) 11/12/93 $ 97.82 $ 87.25
------------------------------------------------------------------------------------------------------
Bayerische Landesbank, N.Y. Branch, Mexican Peso Linked
Confidence Nt., Girozentrale Branch, 35.50%, 12/30/94 9/23/94 $ 100.00 $ 98.25
------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ 2.00
------------------------------------------------------------------------------------------------------
Capital Gaming, Inc. Common Stock 9/9/94 $ 7.60 $ 6.63
------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99 9/9/94 $ 4.45 $ 3.25
------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc.,
12% Fst. Mtg. Nts., Series A, 11/15/00 11/18/93 $ 87.50 $ 77.50
------------------------------------------------------------------------------------------------------
ECM Fund L.P.I.:
Common Stock 4/14/92 $1,000.00 $1,000.00
14% Sub. Nts., 6/10/02 4/14/92-7/28/92 $ 100.50 $ 110.00
------------------------------------------------------------------------------------------------------
First Nationwide Holdings, Inc.,
12.25% Sr. Nts., 5/15/01(1) 7/20/94 $ 100.00 $ 105.25
------------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp., Units(1) 6/21/94 $ 51.39 $ 55.50
------------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01(1) 3/7/94 $ 92.75 $ 87.50
------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc.,
Standard & Poor's 500 Index-Linked Nts.:
4.85%, 11/16/94 8/16/94 $ 139.20 $ 129.08
4.9125%, 12/14/94 9/13/94 $ 143.60 $ 148.50
5.0375%, 12/22/94 9/21/94 $ 145.80 $ 138.87
5.10%, 12/27/94 9/23/94 $ 149.00 $ 143.81
------------------------------------------------------------------------------------------------------
Maritime Group Ltd., Units(1) 2/16/94-8/12/94 $ 99.60 $ 79.28
------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation
Agreement, Tranche A, 5.9375%, 1/1/09 2/28/94-4/20/94 $ 69.26 $ 73.00
------------------------------------------------------------------------------------------------------
OSI Specialties Holdings Co., Units(1) 4/12/94 $ 57.25 $ 61.50
------------------------------------------------------------------------------------------------------
Polish People's Republic Loan
Participation Agreement, 5.0625%, 2/3/24 1/12/94-1/13/94 $ 65.11 $ 55.33
------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(1) 6/17/94 $ 100.00 $ 100.00
------------------------------------------------------------------------------------------------------
Purity Supreme, Inc. Wts., Exp. 8/97 10/25/93 $ -- $ .02
------------------------------------------------------------------------------------------------------
Salomon, Inc., 5% Standard & Poor's 500
Index-Linked Nts., 11/21/94 8/19/94 $ 140.40 $ 126.00
------------------------------------------------------------------------------------------------------
Subic Power Corp.,
9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93 $ 99.93 $ 92.25
------------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96(1) 6/29/94 $ 1.49 $ 1.50
------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. Common Stock 5/2/94 $ 9.50 $ 9.75
1. Transferable under Rule 144A of the Act.
</TABLE>
19 Oppenheimer Champion High Yield Fund
<PAGE> 20
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of Oppenheimer Champion High Yield Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Champion High Yield Fund as of
September 30, 1994, the related statement of operations for the year then
ended, the statements of changes in net assets for the years ended September
30, 1994 and 1993, and the financial highlights for the period November 16,
1987 (commencement of operations) to September 30, 1994. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at September 30, 1994 by correspondence with the custodian and brokers; where
replies 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 audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Champion High Yield Fund at September 30, 1994, the results of its operations,
the changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 21, 1994
20 Oppenheimer Champion High Yield Fund
<PAGE> 21
FEDERAL INCOME TAX INFORMATION (Unaudited)
In early 1995, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1994.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
A capital gain distribution of $.189 per share was paid on December 31,
1993, of which $.039 was designated as a "capital gain distribution" for
federal income tax purposes. Whether received in stock or cash, the capital
gain distribution should be treated by shareholders as a gain from the sale of
capital assets held for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended September 30,
1994 which are not designated as capital gain distributions should be
multiplied by 2.40% 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.
21 Oppenheimer Champion High Yield Fund
<PAGE> 22
OPPENHEIMER CHAMPION HIGH YIELD FUND
<TABLE>
<S> <C>
====================================================================================================================================
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
Ralph W. Stellmacher, Vice President
George C. Bowen, Vice President, Secretary and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
====================================================================================================================================
INVESTMENT ADVISOR Oppenheimer Management Corporation
====================================================================================================================================
DISTRIBUTOR Oppenheimer Funds Distributor, Inc.
====================================================================================================================================
TRANSFER AND SHAREHOLDER Oppenheimer Shareholder Services
SERVICING AGENT
====================================================================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
====================================================================================================================================
INDEPENDENT AUDITORS Deloitte & Touche LLP
====================================================================================================================================
LEGAL COUNSEL Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of Oppenheimer Champion High Yield Fund. This report must
be preceded or accompanied by a Prospectus of Oppenheimer Champion High Yield Fund. For material
information concerning the Fund, see the Prospectus.
</TABLE>
22 Oppenheimer Champion High Yield Fund
<PAGE> 23
OPPENHEIMERFUNDS FAMILY
<TABLE>
<S> <C>
====================================================================================================================================
OppenheimerFunds offers over 35 funds designed to fit virtually every investment goal. Whether you're
investing for retirement, your children's education or tax-free income, we have the funds to help you
seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing that you
are investing with a respected financial institution with over 30 years of experience in helping
people just like you reach their financial goals. And you're investing with a leader in global,
growth stock and flexible fixed income investments--with over 1.8 million shareholder accounts and
more than $26 billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of eligible
funds of the same class by mail or by telephone for a small administrative fee.(1) For more
information on OppenheimerFunds, please contact your financial advisor or call us at 1-800-525-7048
for a prospectus. You may also write us at the address shown on the back cover. As always, please
read the prospectus carefully before you invest.
====================================================================================================================================
STOCK FUNDS Discovery Fund Global Fund
Global Emerging Growth Fund(2) Oppenheimer Fund
Time Fund Value Stock Fund
Target Fund Gold & Special Minerals Fund
Growth Fund(3)
====================================================================================================================================
STOCK & BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund
====================================================================================================================================
BOND FUNDS High Yield Fund Strategic Short-Term Income Fund
ChampionHigh Yield Fund Investment Grade Bond Fund
Strategic Income & Growth Fund Mortgage Income Fund
Strategic Income Fund U.S. Government Trust
Strategic Diversified Income Fund Limited-Term Government Fund
Strategic Investment Grade Bond Fund
====================================================================================================================================
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(4) New Jersey Tax-Exempt Fund(4)
California Tax-Exempt Fund(4) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(4) Insured Tax-Exempt Bond Fund
Florida Tax-Exempt Fund(4) Intermediate Tax-Exempt Bond Fund
====================================================================================================================================
MONEY MARKET FUNDS Money Market Fund Cash Reserves
(1) The fee is waived for PhoneLink exchanges between existing accounts.
Exchange privileges are subject to change or termination.
(2) Formerly Oppenheimer Global Bio-Tech Fund and Oppenheimer Global
Environment Fund.
(3) Formerly Special Fund.
(4) Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203. (C) Copyright 1994 Oppenheimer
Management Corporation. All rights reserved.
</TABLE>
23 Oppenheimer Champion High Yield Fund
<PAGE> 24
'Talk to a Customer Service
Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m., and
Saturday from 10:00 a.m.
to 2:00 p.m. ET.
Make account transactions with a
Customer Service Representative.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
Get automated information or
make automated transcactions.
24 hours a day, 7 days a week.
Service for the hearing impaired.
Monday through Friday from
8:30 a.m. to 8:00 p.m. ET.
Hear timely and insightful
messages on the economy and
issues that affect your finances.
24 hours a day, 7 days a week.
"Just as OppenheimerFunds offers over 35 different mutual funds designed to
help meet virtually every investment need, Oppenheimer Shareholder Services
offers a variety of services to satisfy your individual needs. Whenever you
require help, we're only a toll-free phone call away.
"For personalized assistance
and account information, call our General
Information number to speak with our
knowledgeable Customer Service
Representatives and get the help you need. [Photograph of
"When you want to make account Barbara Hennigar
transactions, it's easy for you to redeem Chief Executive Officer
shares, exchange shares, or conduct Oppenheimer Shareholder
AccountLink transactions, simply by calling Services.]
our Telephone Transactions number.
"And for added convenience,
OppenheimerFunds' Phone Link, an automated
voice response system is available 24 hours
a day, 7 days a week. PhoneLink gives you access to a variety of fund,
account, and market information. You can even make purchases,
- ------------ exchanges and redemptions using your touch-tone phone. Of
1 9 9 3 course, PhoneLink will always give you the option to
AWARD of speak with a Customer Service Representative during the hours
EXCELLENCE shown to the left.
[LOGO] icsa "When you invest in OppenheimerFunds, you know
- ------------ you'll receive a high level of customer service. The
International International Customer Service Association knows it, too, as
Customer it awarded Oppenheimer Shareholder Services a 1993 Award of
Service Excellence for consistenly demonstrating superior customer
Association service.
"Whatever your needs, we're ready to assist you."
[Logo] OppenheimerFunds(R) -------------------
Oppenheimer Funds Distributor, Inc. Bulk Rate
P.O. Box 5270 U.S. Postage
Denver, CO 80217-5270 PAID
Permit No. 377
Hackensack, NJ
--------------------
