<PAGE> 1
SEMIANNUAL REPORT MARCH 31, 1999
OPPENHEIMER
CHAMPION
INCOME FUND
[PHOTO]
[OPPENHEIMERFUNDS LOGO]
THE RIGHT WAY TO INVEST
<PAGE> 2
CONTENTS
3 President's Letter
4 An Interview
with Your Fund's
Managers
9 Financial
Statements
46 Officers and
Trustees
48 Information and
Services
REPORT HIGHLIGHTS
- -------------------------------------------------------------------------------
- - HIGH YIELD BONDS REGAINED LOST GROUND after the Fed's October 15th interest
rate cut, outpacing most other types of fixed income instruments.
- - THE FUND INVESTED HEAVILY in the telecommunications and cable industries,
which proved to be among the best-performing sectors in the high yield market.
- - WE BELIEVE CONDITIONS REMAIN POSITIVE FOR BOND INVESTORS. The U.S. economy
appears to be on track for continued growth, although perhaps at a slower rate.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
For the 6-Month Period
Ended 3/31/99
<S> <C>
CLASS A
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------------
7.61% 2.50%
- ----------------------------------
CLASS B
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------------
7.21% 2.21%
- ----------------------------------
CLASS C
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------------
7.21% 6.21%
- ----------------------------------
</TABLE>
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. IN REVIEWING PERFORMANCE AND
RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE DOES NOT GUARANTEE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS
THAN THE ORIGINAL COST. THE FUND'S PERFORMANCE MAY FROM TIME TO TIME BE SUBJECT
TO SUBSTANTIAL SHORT-TERM CHANGES, PARTICULARLY DURING PERIODS OF MARKET OR
INTEREST RATE VOLATILITY. FOR UPDATES ON THE FUND'S PERFORMANCE, PLEASE CONTACT
YOUR FINANCIAL ADVISOR, CALL US AT 1-800-525-7048 OR VISIT OUR WEBSITE,
WWW.OPPENHEIMERFUNDS.COM.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer Champion Income Fund
<PAGE> 3
[PHOTO]
JAMES C. SWAIN
Chairman
Oppenheimer
Champion Income Fund
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
Champion Income Fund
DEAR SHAREHOLDER,
- -------------------------------------------------------------------------------
The strength of the U.S. economy continues to surprise and concern many
analysts. At a time when the majority of the world's economies are beleaguered
by financial strain, the U.S. economy has been growing at a remarkable rate.
With respect to the U.S. bond market, stronger than expected economic
growth has triggered concerns that the Federal Reserve may raise key interest
rates to forestall an acceleration of inflation. As a result, yields of longer
term taxable bonds have risen from their October 1998 lows, when investors had
bid up prices during the global "flight to quality." At the same time,
tax-exempt bond prices and yields have remained relatively stable.
In the U.S. stock market, it might appear at first glance that prices are
rising as rapidly as the economy is growing. However, a closer look reveals
that, with the exception of large-cap growth companies and the technology
industry, most stock prices remained relatively flat through March 31. What's
more, the disparity in valuations between large companies, which have led the
market's advance, and smaller ones, which have lagged, has become historically
wide.
What do these observations mean for your investments? In our view,
actively managed portfolios that are closely monitored by expert money managers
may provide better returns than passive index investing in 1999. That's because
selectivity is expected to be more critical to performance than it has been over
the past few years. In a potentially overvalued stock market and rising
interest-rate environment, the ability to identify the most promising securities
could become paramount.
Even though many equity investors may be tempted to focus their portfolio
on the technology sector, we suggest a more prudent course: broad
diversification beyond any single asset class, industry, capitalization range or
geographic region. We believe that the risks of this investment environment
require consideration of a broad range of investments and markets, including
bonds. That way, if one market experiences setbacks, one or more of the others
may help cushion the effects on your overall portfolio.
No matter what the financial markets have in store, we resolve to
continue working with your financial advisor to keep you apprised of potential
risks and opportunities. Providing you with the market information,
professionally managed investments and other resources you need to achieve your
financial goals is an important part of our enduring commitment to you as The
Right Way to Invest.
Sincerely,
/s/ JAMES C. SWAIN /s/ BRIDGET A MACASKILL
James C. Swain Bridget A. Macaskill
April 22, 1999
3 Oppenheimer Champion Income Fund
<PAGE> 4
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- -------------------------------------------------------------------------------
HOW DID THE FUND PERFORM DURING THE SIX-MONTH PERIOD THAT ENDED MARCH 31, 1999?
We are generally pleased with Oppenheimer Champion Income Fund's performance,
especially considering the high level of volatility experienced by fixed income
markets. The Fund succeeded in providing investors with a good total rate of
return.
WHAT MADE THIS SUCH A VOLATILE PERIOD?
The first two weeks of October 1998, saw a continuation of the decline in bond
and equity markets that began earlier that summer. Concern over widespread
economic difficulties in emerging markets and the potential for slower U.S.
economic growth made investors reluctant to invest in corporate debt securities.
Instead, investors turned to the relative safety of U.S. Treasury instruments,
which performed much more strongly than other types of bonds.
On October 15th, the Federal Reserve Board (the Fed) stepped in with a
surprise cut in government lending rates. By signaling the Fed's willingness to
act decisively in attempting to avoid a recession in the United States, the move
bolstered investor confidence. As a result, corporate bond prices rebounded
strongly. From the beginning of the year until the end of the reporting period,
high yield corporate bonds tended to outpace other fixed income instruments,
supported by generally favorable economic conditions of robust U.S. growth and
low rates of inflation. Emerging market bonds, on the other hand, suffered in
the wake of a currency deflation that occurred in Brazil in mid-January.
HOW DID THE FUND MEET THESE CHALLENGES?
We remained committed to our disciplined investment strategy, focused primarily
on strong companies within growth sectors of the European and U.S. economies.
4 Oppenheimer Champion Income Fund
<PAGE> 5
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
David Negri
Thomas Reedy
However, in early 1998, we became concerned about the potential for a global
economic slowdown, and began shifting the Fund's assets out of the bond sectors
we believed would be the most vulnerable. By the beginning of October, we had
already reduced the Fund's exposure to emerging markets, as well as the
commodity businesses most likely to be negatively affected by falling global
demand for raw materials, such as paper companies, chemical companies and metal
producers. We chose to invest the proceeds in U.S. Treasuries and maintain a
larger than normal cash reserve.
These actions helped buffer the Fund from the market declines that
continued through early October. As markets rebounded following the Fed's rate
cut on October 15th, we reduced our Treasury holdings and began putting the
Fund's cash to work. Specifically, we took advantage of compelling opportunities
among high yield corporate instruments.
WHAT INDUSTRIES AND COMPANIES CONTRIBUTED MOST TO THE FUND'S PERFORMANCE?
We began this six-month period with a higher than average percentage of assets
invested in the telecommunications and cable industries. The lion's share of
investments we made during the period went to these same sectors, which proved
to be among the strongest performers for the last six months, accounting for a
significant share of the Fund's total return. These sectors were characterized
by high growth rates, as well as high rates of corporate acquisition and
investment.
5 Oppenheimer Champion Income Fund
<PAGE> 6
<TABLE>
<CAPTION>
AVG ANNUAL TOTAL RETURNS
For the Periods Ended 3/31/99(1)
<S> <C> <C>
CLASS A
1 year 5 year 10 year
- --------------------------------
- -4.28% 7.98% 11.10%
- --------------------------------
CLASS B
Since
1 year 5 year Inception
- --------------------------------
- -4.84% N/A 8.11%
- --------------------------------
CLASS C
Since
1 year 5 year Inception
- --------------------------------
- -1.17% 8.20% 7.71%
- --------------------------------
</TABLE>
AN INTERVIEW WITH YOUR FUND'S MANAGERS
- -------------------------------------------------------------------------------
Two of our European cable positions benefited from significant investments by
Microsoft, which materially improved the companies' financial conditions,
driving their stock prices higher.
WHAT IS YOUR OUTLOOK FOR THE FUTURE?
We believe conditions remain positive for bond investors. The U.S. economy
appears to be on track for continued growth, although perhaps at a slower rate.
Inflation seems likely to remain in check. Such conditions have historically
been very favorable for the high yield bond market because companies are
generally able to earn good revenues, maintain positive cash flows and pay their
debt obligations. We remain on the lookout for attractive opportunities in the
bonds of strong, fast-growing companies.
Among other bond sectors, we believe that emerging market instruments
are currently selling at very low prices. Many emerging markets, such as Mexico,
Argen-tina, the Philippines, the Czech Republic and Poland offer attractive
long-term investment potential with modest or low rates of inflation, manageable
budget deficits, and a reasonable balance of trade. However, risks remain
relatively high in the aftermath of Brazil's devaluation. We plan to carefully
monitor developments in the sector, biding our time until we are more confident
of the outlook for these markets.
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
4.75%. Class A shares were first publicly offered on 11/16/87. Class B returns
include the applicable contingent deferred sales charge of 5% (1-year) and 3%
(since inception on 10/2/95). Class C returns for the one-year result include
the contingent deferred sales charge of 1%. Class C shares have an inception
date of 12/1/93. Class B and C shares are subject to an annual 0.75% asset-based
sales charge. An explanation of the different performance calculations is in the
Fund's prospectus.
6 Oppenheimer Champion Income Fund
<PAGE> 7
CREDIT ALLOCATION(2)
[PIE CHART]
<TABLE>
<S> <C>
- - B 57.6%
- - BB 14.4
- - CCC 12.2
- - A 4.4
- - AAA 3.7
- - BBB 3.4
- - CC 0.2
- - C 0.2
- - Other 3.9
</TABLE>
<TABLE>
<CAPTION>
STANDARDIZED YIELDS(3)
For the 30 Days Ended 3/31/99
- -----------------------------
<S> <C>
CLASS A 8.37%
- -----------------------------
CLASS B 8.02
- -----------------------------
CLASS C 8.03
- -----------------------------
</TABLE>
Above all, we remain dedicated to our strict investment discipline, striving to
provide high income and growth potential from a portfolio of diversified
securities. That's what makes Oppenheimer Champion Income Fund part of The Right
Way to Invest.
<TABLE>
<CAPTION>
TOP 5 HOLDINGS BY ISSUER(4)
- ------------------------------------------------------------------------------
<S> <C>
NTL, Inc. 3.1%
- ------------------------------------------------------------------------------
Bankers Trust NY Corp. 2.1
- ------------------------------------------------------------------------------
Bear Stearns Cos., Inc. 1.9
- ------------------------------------------------------------------------------
Intermedia Communications, Inc. 1.8
- ------------------------------------------------------------------------------
Nextlink Communications 1.7
- ------------------------------------------------------------------------------
</TABLE>
2. Portfolio is subject to change. Percentages are as of March 31, 1999 and are
dollar-weighted based on total market value of investments. Securities rated by
any rating organization are included in the equivalent Standard & Poor's rating
category. Average credit quality includes securities rated by national rating
organizations as well as unrated securities (17.7% of total investments as of
March 31, 1999) which have ratings assigned by the manager in categories
equivalent to those of rating organizations. Under normal market conditions, the
Fund invests primarily in high yield, lower rated, fixed income securities
commonly known as "junk bonds." Securities rated below investment grade carry a
greater risk of default. While the Fund has generally invested under 25% of its
assets in foreign securities, which are subject to exchange rate and political
uncertainties, it is not restricted to any amount by the prospectus.
3. Standardized yield is based on net investment income for the 30-day period
ended March 31, 1999. Falling share prices will tend to artificially raise
yields.
4. Portfolio is subject to change. Percentages are as of March 31, 1999, and are
based on total market value of investments.
7 Oppenheimer Champion Income Fund
<PAGE> 8
FINANCIALS
- -------------------------------------------------------------------------------
8 Oppenheimer Champion Income Fund
<PAGE> 9
STATEMENT OF INVESTMENTS March 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--1.7%
- ----------------------------------------------------------------------------------------------------------------
AMRESCO Commercial Mortgage Funding I Corp., Multiclass
Mtg. Pass-Through Certificates, Series 1997-C1, Cl. H, 7%, 6/17/29(2) $ 360,000 $ 232,425
- ----------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through
Certificates:
Series 1997-D4, Cl. B3, 7.525%, 4/14/29(3) 1,500,000 1,019,063
Series 1997-D5, Cl. B2, 6.93%, 2/14/41 3,800,000 2,662,375
- ----------------------------------------------------------------------------------------------------------------
CBA Mortgage Corp., Mtg. Pass-Through Certificates,
Series 1993-C1, Cl. E, 6.72%, 12/25/03(2)(3) 622,000 541,529
- ----------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through
Certificates, Series 1998-C1, Cl. F, 6%, 5/17/40(2) 3,000,000 1,839,375
- ----------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, 8.064%, 2/25/11(2)(3) 4,000,000 2,842,500
- ----------------------------------------------------------------------------------------------------------------
First Union-Lehman Brothers Commercial Mortgage Trust,
Interest-Only Stripped Mtg.-Backed Security,
Series 1997-C1, 10.11%, 4/18/27(4) 14,252,630 914,173
- ----------------------------------------------------------------------------------------------------------------
General Motors Acceptance Corp., Collateralized Mtg.
Obligations, Series 1997-C2, Cl. F, 6.75%, 4/16/29 2,000,000 1,332,500
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates:
Series 1997-RR, Cl. D, 7.67%, 4/30/39(2) 2,000,000 1,678,750
Series 1997-RR, Cl. F, 7.65%, 4/30/39(2) 5,000,000 3,150,000
Series 1997-XL1, Cl. G, 7.695%, 10/3/30(2)(3) 1,200,000 1,032,000
- ----------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1997-MC1, Cl. F, 7.452%, 5/20/07(2) 600,000 492,750
- ----------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 7/25/02 2,893,935 2,874,040
- ----------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through
Certificates:
Series 1994-C2, Cl. E, 8%, 4/25/25 425,107 418,930
Series 1995-C1, Cl. F, 6.90%, 2/25/27 216,352 200,633
- ----------------------------------------------------------------------------------------------------------------
Salomon Brothers Mortgage Securities VII,
Series 1996-C1, Cl. E, 9.184%, 1/20/06 704,000 695,420
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Commercial Mtg. Pass-Through Certificates,
Series 1998-A1, 5%, 12/25/00(2) 219,915 213,318
- ----------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Commercial Mtg. Pass-Through
Certificates, Series 1997-LLI, Cl. F, 7.30%, 4/12/12(2) 3,000,000 2,308,125
------------
Total Mortgage-Backed Obligations (Cost $28,668,517) 24,447,906
</TABLE>
9 Oppenheimer Champion Income Fund
<PAGE> 10
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
FOREIGN GOVERNMENT OBLIGATIONS--1.9%
- ----------------------------------------------------------------------------------------------------------------
Argentina (Republic of) Bonds, Bonos de Consolidacion de
Deudas, Series I, 2.953%, 4/1/07(3) ARP 15,983,113 $ 11,120,301
- ----------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 2.953%,
4/1/07(3) ARP 3,016,909 1,920,304
- ----------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Disc. Bonds, Tranche A, 5.875%, 7/28/24(3) 3,795,000 2,552,137
- ----------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer
Bonds, Tranche A, 2.50%, 7/28/12(5) 1,000,000 567,500
- ----------------------------------------------------------------------------------------------------------------
Bulgaria (Republic of) Interest Arrears Bonds, 5.875%, 7/28/11(3) 4,400,000 2,953,500
- ----------------------------------------------------------------------------------------------------------------
Perusahaan Listr, 17%, 8/21/01(2)(IDR) 1,000,000,000 60,519
- ----------------------------------------------------------------------------------------------------------------
PT Hutama Karya Medium-Term Nts., Zero Coupon,
3/17/99(2)(6) IDR 1,000,000,000 31,700
- ----------------------------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Bonds,
Series DEF, 5.50%, 12/23/23(5) 1,750,000 984,375
- ----------------------------------------------------------------------------------------------------------------
Panama (Government of) Bonds, 8.875%, 9/30/27 885,000 820,838
- ----------------------------------------------------------------------------------------------------------------
Panama (Government of) Past Due Interest Debs., 5.41%,
7/17/16(3) 2,224,144 1,765,414
- ----------------------------------------------------------------------------------------------------------------
Peru (Republic of) Front-Loaded Interest Reduction Bonds,
3.75%, 3/7/17(5) 2,000,000 1,192,500
- ----------------------------------------------------------------------------------------------------------------
Philippines (Republic of) Debs., 6%, 12/1/09(3) 880,000 763,400
- ----------------------------------------------------------------------------------------------------------------
Russia (Government of) Debs., 5.97%, 12/15/15(3) 75,773 6,251
- ----------------------------------------------------------------------------------------------------------------
Russia (Government of) Federal Loan Bonds,
Series 5022, 15%, 2/23/00(2)(6) RUR 20,402,000 170,445
- ----------------------------------------------------------------------------------------------------------------
Russia (Government of) Principal Loan Debs.,
Series 24 yr., 12/15/20(6) 4,500,000 306,563
- ----------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds, Series DL, 5.938%,
12/18/07(3) 2,357,142 1,658,839
------------
Total Foreign Government Obligations (Cost $28,546,087) 26,874,586
================================================================================================================
LOAN PARTICIPATIONS--0.1%
- ----------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.,
Tranche 1, 6%, 9/4/06(3) 1,561,090 738,591
- ----------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 6.063%, 1/1/09(2)(3) 1,023,809 831,845
------------
Total Loan Participations (Cost $2,031,547) 1,570,436
</TABLE>
10 Oppenheimer Champion Income Fund
<PAGE> 11
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
CORPORATE BONDS AND NOTES--76.6%
- ----------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE--1.8%
America West Airlines, Inc., 10.75% Sr. Nts., 9/1/05(7) $2,000,000 $ 2,070,000
- ----------------------------------------------------------------------------------------------------------------
Amtran, Inc.:
9.625% Nts., 12/15/05 1,800,000 1,800,000
10.50% Sr. Nts., 8/1/04 3,400,000 3,523,250
- ----------------------------------------------------------------------------------------------------------------
Atlas Air, Inc.:
9.375% Sr. Nts., 11/15/06(8) 3,300,000 3,316,500
10.75% Sr. Nts., 8/1/05 60,000 63,075
- ----------------------------------------------------------------------------------------------------------------
BE Aerospace, Inc., 9.50% Sr. Unsec. Sub. Nts., 11/1/08 3,160,000 3,365,400
- ----------------------------------------------------------------------------------------------------------------
Constellation Finance LLC, 9.80% Airline Receivable
Asset-Backed Nts., Series 1997-1, 1/1/01(2) 3,500,000 3,395,000
- ----------------------------------------------------------------------------------------------------------------
Decrane Aircraft Holdings, Inc., Units (each unit consists of
$1,000 principal amount of 12% sr. sub. nts., 9/30/08 and one
warrant to purchase 1.55 shares of common stock)(8)(9) 3,450,000 3,398,250
- ----------------------------------------------------------------------------------------------------------------
Pegasus Aircraft Lease Securitization Trust, 11.76% Sr. Nts.,
Series 1997-A, Cl. B, 6/15/04(2) 1,777,290 1,834,875
- ----------------------------------------------------------------------------------------------------------------
SC International Services, Inc., 9.25% Sr. Sub. Nts., Series B, 9/1/07 1,000,000 1,085,000
- ----------------------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust, 7/2/08(2) 1,058,643 1,037,471
------------
24,888,821
================================================================================================================
CHEMICALS--1.8%
Brunner Mond Group plc, 12.50% Sr. Sub. Nts., 7/15/08(8) GBP 4,425,000 4,107,388
- ----------------------------------------------------------------------------------------------------------------
ClimaChem, Inc., 10.75% Sr. Unsec. Nts., Series B, 12/1/07 2,520,000 2,431,800
- ----------------------------------------------------------------------------------------------------------------
ICO, Inc., 10.375% Sr. Nts., 6/1/07 600,000 411,000
- ----------------------------------------------------------------------------------------------------------------
Laroche Industries, Inc., 9.50% Sr. Sub. Nts., Series B, 9/15/07 625,000 465,625
- ----------------------------------------------------------------------------------------------------------------
NL Industries, Inc., 11.75% Sr. Sec. Nts., 10/15/03 9,205,000 9,803,325
- ----------------------------------------------------------------------------------------------------------------
PCI Chemicals Canada, Inc., 9.25% Sec. Nts., 10/15/07 50,000 40,500
- ----------------------------------------------------------------------------------------------------------------
Pioneer Americas Acquisition Corp., 9.25% Sr. Nts., 6/15/07 1,900,000 1,567,500
- ----------------------------------------------------------------------------------------------------------------
Sovereign Specialty Chemicals, Inc., 9.50% Sr. Unsec. Sub. Nts.,
Series B, 8/1/07 3,995,000 4,144,812
- ----------------------------------------------------------------------------------------------------------------
Sterling Chemicals, Inc.:
11.25% Sr. Sub. Nts., 4/1/07 170,000 156,400
11.75% Sr. Unsec. Sub. Nts., 8/15/06 500,000 472,500
- ----------------------------------------------------------------------------------------------------------------
Texas Petrochemical Corp., 11.125% Sr. Sub. Nts., 7/1/06 1,035,000 967,725
------------
24,568,575
</TABLE>
11 Oppenheimer Champion Income Fund
<PAGE> 12
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
CONSUMER DURABLES--0.4%
Holmes Products Corp.:
9.875% Sr. Sub. Nts., Series C, 11/15/07(2) $1,000,000 $ 955,000
9.875% Sr. Unsec. Sub. Nts., Series B, 11/15/07 2,575,000 2,459,125
- ----------------------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts., 12/15/05(2) 1,865,000 2,130,222
------------
5,544,347
================================================================================================================
CONSUMER NON-DURABLES--3.0%
AKI Holdings, Inc.:
0%/13.50% Sr. Disc. Debs., 7/1/09(10) 1,350,000 543,375
10.50% Sr. Unsec. Nts., 7/1/08 2,800,000 2,758,000
- ----------------------------------------------------------------------------------------------------------------
American Pad & Paper Co., 13% Sr. Sub. Nts., Series B, 11/15/05 3,605,000 2,307,200
- ----------------------------------------------------------------------------------------------------------------
Bell Sports, Inc., 11% Sr. Unsec. Sub. Nts., Series B, 8/15/08 4,400,000 4,543,000
- ----------------------------------------------------------------------------------------------------------------
Fruit of the Loom, Inc., 8.875% Sr. Unsec. Nts., 4/15/06(8) 5,800,000 5,829,000
- ----------------------------------------------------------------------------------------------------------------
Globe Manufacturing, Inc., 10% Sr. Sub. Nts., 8/1/08(8) 4,300,000 3,311,000
- ----------------------------------------------------------------------------------------------------------------
Phillips-Van Heusen Corp., 9.50% Sr. Unsec. Sub. Nts., 5/1/08 1,100,000 1,094,500
- ----------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp.:
8.625% Sr. Unsec. Sub. Nts., 2/1/08 4,765,000 4,383,800
9% Sr. Nts., 11/1/06 5,800,000 5,771,000
- ----------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., Zero Coupon Sr. Sec. Disc. Nts.,
Series B, 20.38%, 3/15/01(11) 2,910,000 1,760,550
- ----------------------------------------------------------------------------------------------------------------
Salton/Maxim Housewares, Inc., 10.75% Sr. Sub. Nts., 12/15/05(2) 6,000,000 6,090,000
- ----------------------------------------------------------------------------------------------------------------
Styling Technology Corp., 10.875% Sr. Unsec. Sub. Nts., 7/1/08 2,815,000 2,744,625
- ----------------------------------------------------------------------------------------------------------------
William Carter Co., 10.375% Sr. Sub. Nts., Series A, 12/1/06(2) 805,000 865,375
------------
42,001,425
================================================================================================================
ENERGY--3.8%
AEI Resources, Inc., 11.50% Sr. Sub. Nts., 12/15/06(8) 2,500,000 2,506,250
- ----------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp.:
9.125% Sr. Unsec. Nts., 4/15/06 2,530,000 2,036,650
9.625% Sr. Unsec. Nts., Series B, 5/1/05 1,200,000 1,005,000
- ----------------------------------------------------------------------------------------------------------------
Clark Refinancing & Marketing, Inc., 8.875% Sr. Sub. Nts., 11/15/07 3,625,000 3,063,125
- ----------------------------------------------------------------------------------------------------------------
Clark USA, Inc., 10.875% Sr. Nts., Series B, 12/1/05(2) 825,000 688,875
- ----------------------------------------------------------------------------------------------------------------
Dailey International, Inc., 9.50% Sr. Unsec. Nts., Series B, 2/15/08(2) 1,750,000 568,750
- ----------------------------------------------------------------------------------------------------------------
Denbury Management, Inc., 9% Sr. Sub. Nts., 3/1/08 1,250,000 1,068,750
- ----------------------------------------------------------------------------------------------------------------
Empresa Electric Del Norte, 10.50% Sr. Debs., 6/15/05(8) 3,800,000 2,489,000
</TABLE>
12 Oppenheimer Champion Income Fund
<PAGE> 13
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
ENERGY(CONTINUED)
Forcenergy, Inc.:
8.50% Sr. Sub. Nts., Series B, 2/15/07(6) $ 2,550,000 $ 1,211,250
9.50% Sr. Sub. Nts., 11/1/06(6)(7) 2,000,000 950,000
- ----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp., 0%/14.125% Sr. Disc. Nts., 5/1/06(10) 8,775,000 2,720,250
- ----------------------------------------------------------------------------------------------------------------
Gothic Production Corp., 11.125% Sr. Sec. Nts., Series B, 5/1/05(8) 3,000,000 2,340,000
- ----------------------------------------------------------------------------------------------------------------
Grant Geophysical, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/15/08(7) 1,985,000 1,181,075
- ----------------------------------------------------------------------------------------------------------------
National Energy Group, Inc., 10.75% Sr. Nts., Series D, 11/1/06(6) 3,250,000 991,250
- ----------------------------------------------------------------------------------------------------------------
Ocean Rig Norway AS, 10.25% Sr. Sec. Nts., 6/1/08 3,150,000 2,220,750
- ----------------------------------------------------------------------------------------------------------------
P&L Coal Holdings Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08 10,125,000 10,618,594
- ----------------------------------------------------------------------------------------------------------------
Parker Drilling Co., 9.75% Sr. Unsec. Nts., Series D, 11/15/06 1,500,000 1,252,500
- ----------------------------------------------------------------------------------------------------------------
Pogo Producing Co., 8.75% Sr. Sub. Nts., 5/15/07(2) 1,330,000 1,230,250
- ----------------------------------------------------------------------------------------------------------------
R&B Falcon Corp., 12.25% Sr. Nts., 3/15/06(8) 5,000,000 5,325,000
- ----------------------------------------------------------------------------------------------------------------
RAM Energy, Inc., 11.50% Sr. Unsec. Nts., 2/15/08(2) 6,300,000 4,079,250
- ----------------------------------------------------------------------------------------------------------------
Statia Terminals International/Statia Terminals (Canada),
Inc., 11.75% First Mtg. Nts., Series B, 11/15/03 1,050,000 1,123,500
- ----------------------------------------------------------------------------------------------------------------
Stone Energy Corp., 8.75% Sr. Sub. Nts., 9/15/07 2,905,000 2,926,787
- ----------------------------------------------------------------------------------------------------------------
Universal Compression Holdings, Inc.:
0%/9.875% Sr. Disc. Nts., 2/15/08(10) 2,350,000 1,445,250
0%/11.375% Sr. Disc. Nts., 2/15/09(10) 800,000 476,000
------------
53,518,106
================================================================================================================
FINANCIAL--1.4%
AMRESCO, Inc., 9.875% Sr. Sub. Nts., Series 98-A, 3/15/05 165,000 124,575
- ----------------------------------------------------------------------------------------------------------------
Bank Plus Corp., 12% Sr. Nts., 7/18/07 578,000 479,740
- ----------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(2) 61,562 61,716
- ----------------------------------------------------------------------------------------------------------------
Emergent Group, Inc., 10.75% Sr. Nts., Series B, 9/15/04(2) 1,220,000 494,100
- ----------------------------------------------------------------------------------------------------------------
Lomas Financial Corp., 9% Cv. Sr. Nts., 10/31/03(2)(6) 600,000 --
- ----------------------------------------------------------------------------------------------------------------
Parametric RE Ltd., 10.206% Nts., 11/15/07(3) 600,000 612,000
- ----------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 24% Nts., 6/19/03(6) IDR 6,314,400,000 94,625
- ----------------------------------------------------------------------------------------------------------------
RBF Finance Co.:
11% Sec. Nts., 3/15/06(8) 5,000,000 5,237,500
11.375% Sec. Nts., 3/15/09(8) 2,000,000 2,105,000
- ----------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 9.75% Sr. Sec. Nts.,
Series B, 4/1/08 8,995,000 8,365,350
- ----------------------------------------------------------------------------------------------------------------
Veritas Capital Trust, 10% Nts., 1/1/28 1,700,000 1,568,250
------------
19,142,856
</TABLE>
13 Oppenheimer Champion Income Fund
<PAGE> 14
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
FOOD & DRUG--2.1%
AmeriKing, Inc., 10.75% Sr. Nts., 12/1/06 $3,101,000 $ 3,294,812
- ----------------------------------------------------------------------------------------------------------------
Family Restaurants, Inc.:
9.75% Sr. Nts., 2/1/02 6,690,000 3,712,950
10.875% Sr. Sub. Disc. Nts., 2/1/04(2) 400,000 160,000
- ----------------------------------------------------------------------------------------------------------------
Fleming Cos., Inc., 10.625% Sr. Sub. Nts., Series B, 7/31/07 5,320,000 4,934,300
- ----------------------------------------------------------------------------------------------------------------
Pathmark Stores, Inc.:
2.625% Sub. Nts., 6/15/02(2) 5,210,000 5,385,837
0%/10.75% Jr. Sub. Deferred Coupon Nts., 11/1/03(10) 6,420,000 6,355,800
- ----------------------------------------------------------------------------------------------------------------
Randall's Food Markets, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07 3,970,000 4,317,375
- ----------------------------------------------------------------------------------------------------------------
Shoppers Food Warehouse Corp., 9.75% Sr. Nts., 6/15/04(2) 1,260,000 1,360,800
------------
29,521,874
================================================================================================================
FOOD/TOBACCO--2.2%
Aurora Foods, Inc., 8.75% Sr. Sub. Nts., Series B, 7/1/08 900,000 940,500
- ----------------------------------------------------------------------------------------------------------------
Cott Corp., 9.375% Sr. Nts., 7/1/05 3,885,000 3,710,175
- ----------------------------------------------------------------------------------------------------------------
Del Monte Foods Co., 0%/12.50% Sr. Disc. Nts., Series B,
12/15/07(10) 2,251,000 1,682,622
- ----------------------------------------------------------------------------------------------------------------
International Home Foods, Inc., 10.375% Sr. Sub. Nts., 11/1/06 4,655,000 5,085,587
- ----------------------------------------------------------------------------------------------------------------
New World Pasta Co., 9.25% Sr. Sub. Nts., 2/15/09(8) 4,800,000 4,884,000
- ----------------------------------------------------------------------------------------------------------------
Packaged Ice, Inc., 9.75% Sr. Unsec. Nts., Series B, 2/1/05(2) 8,065,000 8,105,325
- ----------------------------------------------------------------------------------------------------------------
Purina Mills, Inc., 9% Sr. Unsec. Sub. Nts., 3/15/10 1,000,000 820,000
- ----------------------------------------------------------------------------------------------------------------
Sparkling Spring Water Group Ltd., 11.50% Sr. Sec. Sub. Nts.,
11/15/07 4,025,000 3,038,875
- ----------------------------------------------------------------------------------------------------------------
Triarc Consumer Products Group LLC, 10.25% Sr. Sub. Nts.,
2/15/09(8) 3,250,000 3,233,750
------------
31,500,834
================================================================================================================
FOREST PRODUCTS/CONTAINERS--2.0%
Ball Corp.:
7.75% Sr. Unsec. Nts., 8/1/06 3,000,000 3,112,500
8.25% Sr. Unsec. Sub. Nts., 8/1/08 2,100,000 2,178,750
- ----------------------------------------------------------------------------------------------------------------
Four M Corp., 12% Sr. Sec. Nts., Series B, 6/1/06 540,000 413,100
- ----------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 9.75% Sr. Nts., 6/15/07 2,000,000 1,950,000
- ----------------------------------------------------------------------------------------------------------------
Mail-Well Corp., 8.75% Sr. Sub. Nts., 12/15/08(8) 3,335,000 3,435,050
- ----------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.625% Sr. Unsec. Nts., 8/1/07 3,550,000 3,709,750
10.875% Sr. Sub. Nts., 4/1/08 4,300,000 4,181,750
- ----------------------------------------------------------------------------------------------------------------
SD Warren Co., 12% Sr. Sub. Nts., Series B, 12/15/04 3,450,000 3,760,500
- ----------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., 0%/12.75% Sr. Disc. Nts., 3/15/08(10) 700,000 189,000
- ----------------------------------------------------------------------------------------------------------------
U.S. Can Corp., 10.125% Sr. Sub. Nts., Series B, 10/15/06 800,000 848,000
- ----------------------------------------------------------------------------------------------------------------
U.S. Timberlands Co. LP, 9.625% Sr. Nts., 11/15/07 4,085,000 4,110,531
------------
27,888,931
</TABLE>
14 Oppenheimer Champion Income Fund
<PAGE> 15
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
GAMING/LEISURE--5.5%
AP Holdings, Inc., 0%/11.25% Sr. Disc. Nts., 3/15/08(10) $ 750,000 $ 431,250
- ----------------------------------------------------------------------------------------------------------------
Apcoa, Inc., 9.25% Sr. Unsec. Sub. Nts., 3/15/08 1,675,000 1,582,875
- ----------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Promissory Nts.,
8/1/95(6) 7,500 --
- ----------------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00(2)(6) 100,000 5,000
- ----------------------------------------------------------------------------------------------------------------
Capstar Hotel Co., 8.75% Sr. Sub. Nts., 8/15/07 2,100,000 2,034,375
- ----------------------------------------------------------------------------------------------------------------
Casino Magic of Louisiana Corp., 13% First Mtg. Nts.,
Series B, 8/15/03 2,030,000 2,324,350
- ----------------------------------------------------------------------------------------------------------------
Coast Hotel & Casinos, Inc., 9.50% Sr. Sub. Nts., 4/1/09(8) 1,750,000 1,776,250
- ----------------------------------------------------------------------------------------------------------------
Empress Entertainment, Inc., 8.125% Sr. Sub. Nts., 7/1/06 2,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------------
Empress River Casino Finance Corp., 10.75% Sr. Nts., 4/1/02 2,705,000 2,864,054
- ----------------------------------------------------------------------------------------------------------------
Hard Rock Hotel, Inc., 9.25% Sr. Sub. Nts., 4/1/05 2,800,000 2,730,000
- ----------------------------------------------------------------------------------------------------------------
Harveys Casino Resorts, 10.625% Sr. Unsec. Sub. Nts., 6/1/06 150,000 159,375
- ----------------------------------------------------------------------------------------------------------------
HMH Properties, Inc., 8.45% Sr. Nts., Series C, 12/1/08 8,000,000 8,000,000
- ----------------------------------------------------------------------------------------------------------------
Hollywood Park, Inc., 9.25% Sr. Sub. Nts., 2/15/07(8) 4,500,000 4,646,250
- ----------------------------------------------------------------------------------------------------------------
Horseshoe Gaming LLC, 9.375% Sr. Sub. Nts., 6/15/07 5,895,000 6,071,850
- ----------------------------------------------------------------------------------------------------------------
Intrawest Corp., 9.75% Sr. Nts., 8/15/08 6,995,000 7,257,312
- ----------------------------------------------------------------------------------------------------------------
Jupiters Ltd., 8.50% Sr. Nts., 3/1/06(8) 3,725,000 3,762,250
- ----------------------------------------------------------------------------------------------------------------
Majestic Star Casino LLC (The), 12.75% Sr. Sec. Nts., 5/15/03 1,400,000 1,533,000
- ----------------------------------------------------------------------------------------------------------------
Meristar Hospitality Corp., 8.75% Sr. Sub. Nts., 8/15/07(8) 2,000,000 1,920,000
- ----------------------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 8.75% Sr. Sub. Nts., 1/1/09(8) 4,800,000 5,022,000
- ----------------------------------------------------------------------------------------------------------------
Outboard Marine Corp., 10.75% Sr. Nts., 6/1/08(8) 1,355,000 1,117,875
- ----------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp., 7.875% Sr. Sub. Nts., 12/15/05(8) 1,500,000 1,477,500
- ----------------------------------------------------------------------------------------------------------------
Premier Cruise Ltd., 11% Sr. Nts., 3/15/08(2) 3,900,000 1,267,500
- ----------------------------------------------------------------------------------------------------------------
Premier Parks, Inc.:
0%/10% Sr. Disc. Nts., 4/1/08(10) 1,970,000 1,383,925
9.25% Sr. Nts., 4/1/06 1,595,000 1,666,775
- ----------------------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc.:
9.50% Sr. Sub. Nts., 4/15/07 4,490,000 4,916,550
10.625% Sr. Sub. Nts., 7/15/05 1,825,000 1,980,125
- ----------------------------------------------------------------------------------------------------------------
Six Flags Entertainment Corp., 8.875% Sr. Nts., 4/1/06 1,900,000 1,952,250
- ----------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.:
9.75% Sr. Sub. Nts., 4/15/07 3,400,000 3,604,000
10.125% Sr. Sub. Nts., 3/15/06 3,000,000 3,195,000
------------
76,681,691
</TABLE>
15 Oppenheimer Champion Income Fund
<PAGE> 16
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
HEALTHCARE--1.6%
Fresenius Medical Care Capital Trust II, 7.875% Nts., 2/1/08 $4,350,000 $ 4,252,125
- ----------------------------------------------------------------------------------------------------------------
ICN Pharmaceuticals, Inc., 8.75% Sr. Nts., 11/15/08(8) 3,345,000 3,378,450
- ----------------------------------------------------------------------------------------------------------------
Integrated Health Services, Inc.:
9.50% Sr. Sub. Nts., 9/15/07 4,370,000 2,906,050
10.25% Sr. Sub. Nts., 4/30/06 2,850,000 2,009,250
- ----------------------------------------------------------------------------------------------------------------
King Pharmaceutical, Inc., 10.75% Sr. Sub. Nts., 2/15/09(8) 4,500,000 4,612,500
- ----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc., 11% Sr. Nts., 5/15/05(2) 3,100,000 3,193,000
- ----------------------------------------------------------------------------------------------------------------
Sun Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 7/1/07 500,000 102,500
- ----------------------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 8.125% Sr. Sub. Nts., 12/1/08(8) 2,250,000 2,171,250
------------
22,625,125
================================================================================================================
HOUSING--1.5%
Building Materials Corp. of America, 8.625% Sr. Nts.,
Series B, 12/15/06 200,000 203,500
- ----------------------------------------------------------------------------------------------------------------
D.R. Horton, Inc., 8% Sr. Nts., 2/1/09 3,500,000 3,447,500
- ----------------------------------------------------------------------------------------------------------------
Del Webb Corp., 10.25% Sr. Unsec. Sub. Nts., 2/15/10 4,750,000 4,856,875
- ----------------------------------------------------------------------------------------------------------------
Falcon Building Products, Inc., 9.50% Sr. Sub. Nts., 6/15/07 675,000 617,625
- ----------------------------------------------------------------------------------------------------------------
Nortek, Inc.:
8.875% Sr. Nts., 8/1/08(8) 2,000,000 2,070,000
9.125% Sr. Nts., Series B, 9/1/07(12) 5,040,000 5,254,200
9.25% Sr. Nts., Series B, 3/15/07 4,070,000 4,263,325
------------
20,713,025
================================================================================================================
INFORMATION TECHNOLOGY--1.2%
Businessland, Inc., 5.50% Sub. Debs., 3/1/07(2) 770,000 550,550
- ----------------------------------------------------------------------------------------------------------------
Details, Inc., 10% Sr. Sub. Nts., Series B, 11/15/05 2,800,000 2,576,000
- ----------------------------------------------------------------------------------------------------------------
Dialog Corp. plc, 11% Sr. Sub. Nts., Series B, 11/15/07 1,750,000 1,684,375
- ----------------------------------------------------------------------------------------------------------------
DII Group, Inc., 8.50% Sr. Sub. Nts., 9/15/07 1,200,000 1,212,000
- ----------------------------------------------------------------------------------------------------------------
Dyncorp, Inc., 9.50% Sr. Sub. Nts., 3/1/07 2,150,000 2,184,937
- ----------------------------------------------------------------------------------------------------------------
Fairchild Semiconductor Corp., 10.375% Sr. Sub. Nts., 10/1/07(8)(13) 4,900,000 4,985,750
- ----------------------------------------------------------------------------------------------------------------
Unisys Corp., 11.75% Sr. Nts., 10/15/04 2,275,000 2,582,125
- ----------------------------------------------------------------------------------------------------------------
Wavetek Corp., 10.125% Sr. Sub. Nts., 6/15/07 1,440,000 1,346,400
------------
17,122,137
</TABLE>
16 Oppenheimer Champion Income Fund
<PAGE> 17
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MANUFACTURING--2.3%
Applied Power, Inc., 8.75% Sr. Sub. Nts., 4/1/09 $2,800,000 $ 2,852,500
- ----------------------------------------------------------------------------------------------------------------
Axia, Inc. (New), 10.75% Sr. Sub. Nts., 7/15/08 1,560,000 1,560,000
- ----------------------------------------------------------------------------------------------------------------
Burke Industries, Inc., 10% Sr. Sub. Nts., 8/15/07 1,125,000 1,018,125
- ----------------------------------------------------------------------------------------------------------------
Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
Series B, 8/1/05 802,000 851,122
- ----------------------------------------------------------------------------------------------------------------
Eagle-Picher Industries, Inc., 9.375% Sr. Unsec. Sub. Nts., 3/1/08 1,500,000 1,451,250
- ----------------------------------------------------------------------------------------------------------------
Grove Worldwide LLC, 9.25% Sr. Sub. Nts., 5/1/08 1,150,000 937,250
- ----------------------------------------------------------------------------------------------------------------
Hydrochem Industrial Services, Inc., 10.375% Sr. Sub. Nts., 8/1/07 2,275,000 1,990,625
- ----------------------------------------------------------------------------------------------------------------
Insilco Corp., Units (each unit consists of $1,000 principal
amount of 12% sr. sub. nts., 8/15/07 and one warrant to
purchase 0.52 shares of common stock)(8)(9) 3,390,000 3,356,100
- ----------------------------------------------------------------------------------------------------------------
International Wire Group, Inc., 11.75% Sr. Sub. Nts.,
Series B, 6/1/05(2) 3,720,000 3,952,500
- ----------------------------------------------------------------------------------------------------------------
Jordan Industries, Inc., 10.375% Sr. Nts., Series C, 8/1/07(8) 3,000,000 2,992,500
- ----------------------------------------------------------------------------------------------------------------
Moll Industries, Inc., 10.50% Sr. Unsec. Sub. Nts., 7/1/08 1,000,000 855,000
- ----------------------------------------------------------------------------------------------------------------
Paragon Corp. Holdings, Inc., 9.625% Sr. Unsec. Nts.,
Series B, 4/1/08 355,000 285,775
- ----------------------------------------------------------------------------------------------------------------
Park-Ohio Industries, Inc., 9.25% Sr. Sub. Nts., 12/1/07 2,100,000 2,173,500
- ----------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 9% Sr. Sub. Nts., 7/1/07 960,000 976,800
- ----------------------------------------------------------------------------------------------------------------
Roller Bearing Co. of America, Inc., 9.625% Sr. Sub. Nts.,
Series B, 6/15/07 3,385,000 3,241,137
- ----------------------------------------------------------------------------------------------------------------
Terex Corp.:
8.875% Sr. Unsec. Sub. Nts., 4/1/08(2) 1,000,000 985,000
8.875% Sr. Unsec. Sub. Nts., Series C, 4/1/08(8) 2,000,000 1,970,000
- ----------------------------------------------------------------------------------------------------------------
Unifrax Investment Corp., 10.50% Sr. Nts., 11/1/03 1,075,000 1,096,500
------------
32,545,684
================================================================================================================
MEDIA/ENTERTAINMENT: BROADCASTING--2.5%
Allbritton Communications Co., 8.875% Sr. Sub. Nts.,
Series B, 2/1/08 1,000,000 1,030,000
- ----------------------------------------------------------------------------------------------------------------
Capstar Broadcasting Partners, Inc., 9.25% Sr. Sub. Nts., 7/1/07 3,240,000 3,450,600
- ----------------------------------------------------------------------------------------------------------------
CBS Radio, Inc., 11.375% Unsec. Sub. Debs., 1/15/09(14) 1,174,400 1,368,176
- ----------------------------------------------------------------------------------------------------------------
Chancellor Media Corp., 9% Sr. Unsec. Sub. Nts., 10/1/08 9,400,000 10,128,500
- ----------------------------------------------------------------------------------------------------------------
Emmis Communications Corp., 8.125% Sr. Sub. Nts., 3/15/09(8) 7,500,000 7,593,750
- ----------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02 4,185,000 4,352,400
- ----------------------------------------------------------------------------------------------------------------
Radio One, Inc., 7% Sr. Sub. Nts., Series B, 5/15/04(5) 1,000,000 1,025,000
- ----------------------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc., 9% Sr. Unsec. Sub. Nts., 7/15/07 3,335,000 3,410,037
- ----------------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc.:
11% Sr. Nts., 3/15/04(2) 650,000 711,750
12.50% Sr. Nts., 6/15/02 300,000 334,500
- ----------------------------------------------------------------------------------------------------------------
Young Broadcasting, Inc., 8.75% Sr. Sub. Debs., 6/15/07 1,650,000 1,699,500
------------
35,104,213
</TABLE>
17 Oppenheimer Champion Income Fund
<PAGE> 18
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MEDIA/ENTERTAINMENT: CABLE/WIRELESS VIDEO--4.2%
Adelphia Communications Corp., 8.125% Sr. Nts., Series B, 7/15/03 $ 6,000,000 $ 6,090,000
- ----------------------------------------------------------------------------------------------------------------
Bresnan Communications, Inc.:
0%/9.25% Sr. Disc. Nts., 2/1/09(8)(10) 4,350,000 2,979,750
8% Sr. Nts., 2/1/09(8) 1,100,000 1,135,750
- ----------------------------------------------------------------------------------------------------------------
Charter Communication Holdings LLC/Charter Communication
Holdings Capital Corp.:
8.25% Sr. Nts., 4/1/07(8) 2,000,000 2,055,000
0%/9.92% Sr. Disc. Nts., 4/1/11(8)(10) 9,000,000 5,850,000
- ----------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc.:
9.875% Sr. Sub. Nts., 5/15/06 1,710,000 1,846,800
9.875% Sr. Sub. Debs., 4/1/23 2,450,000 2,756,250
9.875% Sr. Sub. Debs., 2/15/13 215,000 240,531
- ----------------------------------------------------------------------------------------------------------------
Diva Systems Corp., 0%/12.625% Sr. Disc. Nts., Series B, 3/1/08(2)(10) 2,000,000 670,000
- ----------------------------------------------------------------------------------------------------------------
EchoStar DBS Corp., 9.375% Sr. Unsec. Nts., 2/1/09(8) 14,000,000 14,612,500
- ----------------------------------------------------------------------------------------------------------------
EchoStar I, 8.25% Bonds, 2/26/01(2) 938,155 938,156
- ----------------------------------------------------------------------------------------------------------------
EchoStar II, 8.25% Sinking Fund Bonds, 11/9/01(2) 948,818 948,819
- ----------------------------------------------------------------------------------------------------------------
Falcon Holding Group LP:
0%/9.285% Sr. Disc. Debs., Series B, 4/15/10(10) 4,720,000 3,292,200
8.375% Sr. Unsec. Debs., Series B, 4/15/10 1,800,000 1,818,000
- ----------------------------------------------------------------------------------------------------------------
Optel, Inc., 13% Sr. Nts., Series B, 2/15/05 10,140,000 10,266,750
- ----------------------------------------------------------------------------------------------------------------
United International Holdings, Inc., 0%/10.75% Sr. Disc. Nts.,
Series B, 2/15/08(10) 5,510,000 3,767,462
------------
59,267,968
================================================================================================================
MEDIA/ENTERTAINMENT: DIVERSIFIED MEDIA--3.1%
Ackerley Group, Inc., 9% Sr. Sub. Nts., 1/15/09(8) 5,250,000 5,446,875
- ----------------------------------------------------------------------------------------------------------------
AMC Entertainment, Inc., 9.50% Sr. Sub. Nts., 2/1/11(8) 4,200,000 4,016,250
- ----------------------------------------------------------------------------------------------------------------
Hollinger International Publishing, Inc.,
9.25% Sr. Unsec. Sub. Nts., 2/1/06 1,000,000 1,050,000
- ----------------------------------------------------------------------------------------------------------------
Hollywood Theaters, Inc., 10.625% Sr. Sub. Nts., 8/1/07 700,000 493,500
- ----------------------------------------------------------------------------------------------------------------
IPC Magazines Group plc:
0%/10.75% Bonds, 3/15/08(10) GBP 1,250,000 1,011,461
9.625% Bonds, 3/15/08GBP 3,000,000 4,068,040
- ----------------------------------------------------------------------------------------------------------------
Outdoor Systems, Inc., 8.875% Sr. Sub. Nts., 6/15/07 2,000,000 2,140,000
- ----------------------------------------------------------------------------------------------------------------
Regal Cinemas, Inc.:
8.875% Sr. Unsec. Sub. Nts., 12/15/10 5,000,000 4,912,500
9.50% Sr. Unsec. Sub. Nts., 6/1/08 3,800,000 3,904,500
- ----------------------------------------------------------------------------------------------------------------
SFX Entertainment, Inc.:
9.125% Sr. Sub. Nts., 12/1/08(8) 6,350,000 6,524,625
9.125% Sr. Unsec. Sub. Nts., Series B, 2/1/08 3,900,000 3,997,500
- ----------------------------------------------------------------------------------------------------------------
TV Guide, Inc., 8.125% Sr. Sub. Nts., 3/1/09(8) 2,500,000 2,550,000
- ----------------------------------------------------------------------------------------------------------------
World Color Press, Inc., 7.75% Sr. Sub. Nts., 2/15/09(8) 3,000,000 2,955,000
------------
43,070,251
</TABLE>
18 Oppenheimer Champion Income Fund
<PAGE> 19
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS--17.0%
Allegiance Telecom, Inc., 0%/11.75% Sr. Unsec. Disc. Nts.,
Series B, 2/15/08(10) $ 1,750,000 $1,111,250
- ----------------------------------------------------------------------------------------------------------------
Amazon.Com, Inc., 0%/10% Sr. Unsec. Disc. Nts., 5/1/08(10) 12,275,000 8,408,375
- ----------------------------------------------------------------------------------------------------------------
COLT Telecom Group plc:
Units (each unit consists of $1,000 principal amount of
0%/12% sr. disc. nts., 12/15/06 and one warrant to purchase
7.8 ordinary shares)(9)(10) 3,185,000 2,691,325
0%/12% Sr. Unsec. Disc. Nts., 12/15/06(10) 900,000 760,500
7.625% Bonds, 7/31/08 DEM 9,725,000 5,519,004
8.875% Sr. Nts., 11/30/07 DEM 1,880,000 1,103,882
10.125% Sr. Nts., 11/30/07 GBP 2,330,000 4,024,615
- ----------------------------------------------------------------------------------------------------------------
Comcast UK Cable Partner Ltd., 0%/11.20%
Sr. Disc. Debs., 11/15/07(2)(10) 1,350,000 1,218,375
- ----------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 12.75% Sr. Unsec. Nts., 12/15/07(2) 2,225,000 2,530,937
- ----------------------------------------------------------------------------------------------------------------
Convergent Communications, Inc., 13% Sr. Nts., 4/1/08 1,600,000 1,072,000
- ----------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc., 0%/13.50%
Sr. Disc. Nts., 3/15/08(10) 12,000,000 6,555,000
- ----------------------------------------------------------------------------------------------------------------
Diamond Cable Communications plc:
0%/10.75% Sr. Disc. Nts., 2/15/07(10) 1,800,000 1,404,000
0%/11.75% Sr. Disc. Nts., 12/15/05(10) 10,665,000 9,478,519
- ----------------------------------------------------------------------------------------------------------------
Diamond Holdings plc, 9.125% Sr. Nts., 2/1/08 800,000 836,000
- ----------------------------------------------------------------------------------------------------------------
DTI Holdings, Inc., 0%/12.50% Sr. Unsec. Disc. Nts.,
Series B, 3/1/08(2)(10) 6,000,000 1,650,000
- ----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 13.75% Sr. Nts., 7/15/07 1,400,000 1,400,000
- ----------------------------------------------------------------------------------------------------------------
Exodus Communications, Inc., 11.25% Sr. Nts., 7/1/08 1,155,000 1,269,056
- ----------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc., 0%/13% Sr. Disc. Nts., 4/15/08(10) 3,785,000 1,476,150
- ----------------------------------------------------------------------------------------------------------------
Focal Communications Corp., 0%/12.125% Sr. Unsec.
Disc. Nts., 2/15/08(10) 2,745,000 1,544,062
- ----------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 9.625% Sr. Nts., 5/15/08 3,510,000 3,926,813
- ----------------------------------------------------------------------------------------------------------------
Globix Corp., 13% Sr. Unsec. Nts., 5/1/05(2) 4,175,000 4,362,875
- ----------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc., 0%/13.875% Cv. Sr. Sub.
Disc. Nts., 12/15/05(8)(10) 407,000 413,614
- ----------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc./GST Network Funding Corp., Inc.,
0%/10.50% Sr. Disc. Nts., 5/1/08(8)(10) 3,000,000 1,590,000
- ----------------------------------------------------------------------------------------------------------------
GST USA, Inc., 0%/13.875% Gtd. Sr. Disc. Nts., 12/15/05(10) 3,335,000 2,501,250
- ----------------------------------------------------------------------------------------------------------------
Hyperion Telecommunication, Inc., 12% Sr. Sub. Nts., 11/1/07(8) 6,000,000 6,240,000
- ----------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 0%/12.50% Sr. Sec. Disc. Nts., 5/1/06(2)(10) 400,000 330,000
- ----------------------------------------------------------------------------------------------------------------
ICG Services, Inc., 0%/10% Sr. Exchangeable Unsec. Disc. Nts.,
2/15/08(10) 415,000 255,225
</TABLE>
19 Oppenheimer Champion Income Fund
<PAGE> 20
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS(CONTINUED)
Intermedia Communications, Inc.:
0%/12.25% Sr. Disc. Nts., 3/1/09(8)(10) $ 5,000,000 $ 3,175,000
8.875% Sr. Nts., 11/1/07 2,690,000 2,750,525
8.50% Sr. Nts., Series B, 1/15/08 3,920,000 3,929,800
8.60% Sr. Unsec. Nts., Series B, 6/1/08 4,390,000 4,411,950
- ----------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc., 0%/12.50% Sr. Unsec. Disc. Nts.,
2/15/08(2)(10) 9,135,000 5,092,763
- ----------------------------------------------------------------------------------------------------------------
Level 3 Communications, Inc.:
0%/10.50% Sr. Disc. Nts., 12/1/08(8)(10) 12,150,000 7,700,063
9.125% Sr. Unsec. Nts., 5/1/08 4,000,000 4,050,000
- ----------------------------------------------------------------------------------------------------------------
Long Distance International, Inc., 12.25% Sr. Disc. Nts., 4/15/08(8) 1,390,000 979,950
- ----------------------------------------------------------------------------------------------------------------
McLeodUSA, Inc., 8.125% Sr. Nts., 2/15/09(8) 2,800,000 2,807,000
- ----------------------------------------------------------------------------------------------------------------
Metromedia Fiber Network, Inc., 10% Sr. Nts., 11/15/08(8) 6,000,000 6,465,000
- ----------------------------------------------------------------------------------------------------------------
Netia Holdings BV:
0%/11% Sr. Disc. Nts., 11/1/07(10) DEM 2,250,000 807,274
0%/11.25% Sr. Disc. Nts., Series B, 11/1/07(10) 3,600,000 2,466,000
- ----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc.:
0%/9.45% Sr. Disc. Unsec. Nts., 4/15/08(10) 2,155,000 1,379,200
9% Sr. Nts., 3/15/08 1,700,000 1,704,250
9.625% Sr. Nts., 10/1/07 6,673,000 6,823,143
10.75% Sr. Nts., 11/15/08(8) 5,700,000 6,184,500
- ----------------------------------------------------------------------------------------------------------------
NorthEast Optic Network, Inc., 12.75% Sr. Nts., 8/15/08 1,950,000 2,037,750
- ----------------------------------------------------------------------------------------------------------------
NTL, Inc.:
0%/9.75% Sr. Deferred Coupon Nts., Series B, 4/1/08(10) 2,055,000 1,407,675
0%/12.375% Sr. Nts., 10/1/08(8)(10) 16,965,000 11,705,850
0%/10.75% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(2)(10) GBP 3,765,000 4,193,713
7% Cv. Sub. Nts., 12/15/08(8) 11,700,000 17,915,625
10% Sr. Nts., Series B, 2/15/07 2,940,000 3,138,450
11.50% Sr. Nts., 10/1/08(8) 4,000,000 4,530,000
- ----------------------------------------------------------------------------------------------------------------
Petersburg Long Distance, Inc., 9% Cv. Sub. Nts., 6/1/06(8) 200,000 104,750
- ----------------------------------------------------------------------------------------------------------------
PLD Telekom, Inc., 14% Sr. Disc. Nts., 6/1/04 3,500,000 2,117,500
- ----------------------------------------------------------------------------------------------------------------
Pratama Datakom Asia BV, 12.75% Gtd. Nts., 7/15/05(2) 4,000,000 810,000
- ----------------------------------------------------------------------------------------------------------------
PSINet, Inc., 10% Sr. Unsec. Nts., Series B, 2/15/05 10,390,000 11,039,375
- ----------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc., 0%/9.47% Sr. Disc. Nts.,
10/15/07(10)(12) 7,285,000 5,828,000
- ----------------------------------------------------------------------------------------------------------------
RSL Communications plc:
0%/10% Bonds, 3/15/08(10) DEM 4,200,000 1,480,831
0%/10.125% Sr. Disc. Nts., 3/1/08(10) 1,300,000 851,500
10.50% Gtd. Sr. Nts., 11/15/08 4,000,000 4,260,000
- ----------------------------------------------------------------------------------------------------------------
TeleWest Communications plc:
0%/11% Sr. Disc. Debs., 10/1/07(10) 5,525,000 4,889,625
11.25% Sr. Nts., 11/1/08(8) 4,910,000 5,744,700
- ----------------------------------------------------------------------------------------------------------------
Time Warner Telecom LLC, 9.75% Sr. Nts., 7/15/08 3,950,000 4,285,750
- ----------------------------------------------------------------------------------------------------------------
US Xchange LLC, 15% Sr. Unsec. Nts., 7/1/08 1,485,000 1,570,388
</TABLE>
20 Oppenheimer Champion Income Fund
<PAGE> 21
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS(CONTINUED)
Verio, Inc.:
10.375% Sr. Unsec. Nts., 4/1/05 $ 3,135,000 $ 3,370,125
11.25% Sr. Nts., 12/1/08(8) 4,800,000 5,436,000
13.50% Sr. Unsec. Nts., 6/15/04 700,000 819,000
- ----------------------------------------------------------------------------------------------------------------
Viatel, Inc.:
0%/12.50% Sr. Unsec. Disc. Nts., 4/15/08(10) 950,000 586,625
11.25% Sr. Sec. Nts., 4/15/08 2,700,000 2,760,750
- ----------------------------------------------------------------------------------------------------------------
WAM!NET, Inc., 0%/13.25% Sr. Unsec. Disc. Nts., Series B, 3/1/05(10) 5,745,000 3,360,825
------------
238,644,052
================================================================================================================
MEDIA/ENTERTAINMENT: WIRELESS COMMUNICATIONS--6.5%
Arch Communications, Inc., 12.75% Sr. Nts., 7/1/07 700,000 633,500
- ----------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc., 0%/14% Sr. Disc. Nts., 10/1/07(10) 4,749,000 1,852,110
- ----------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 10.75% Sr. Sub. Nts., 12/15/08(8) 3,200,000 3,376,000
- ----------------------------------------------------------------------------------------------------------------
Crown Castle International Corp., 0%/10.625% Sr. Unsec. Disc. Nts.,
11/15/07(2)(10) 5,635,000 3,930,413
- ----------------------------------------------------------------------------------------------------------------
CTI Holdings SA, 0%/11.50% Sr. Deferred Coupon Nts., 4/15/08(10) 2,525,000 1,388,750
- ----------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 11.75% Sr. Nts., 4/15/07 900,000 968,625
- ----------------------------------------------------------------------------------------------------------------
Geotek Communications, Inc., 12% Cv. Sr. Sub. Nts., 2/15/01(6) 1,665,000 --
- ----------------------------------------------------------------------------------------------------------------
ICO Global Communications (Holdings) Ltd., Units (each unit
consists of $1,000 principal amount of 15% sr. nts., 8/1/05 and one
warrant to purchase 19.85 shares of common stock)(9) 1,325,000 801,625
- ----------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd., 9.50% Sr. Nts., 1/15/06(8) 7,000,000 6,632,500
- ----------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc.:
0%/11.125% Sr. Disc. Nts., Series B, 10/15/07(10) CAD 4,405,000 1,940,011
0%/14% Sr. Disc. Nts., Series B, 6/1/06(10) 3,300,000 2,706,000
- ----------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA, 0%/13.50% Sr. Disc. Nts., 6/1/06(10) 2,000,000 1,490,000
- ----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc.:
0%/9.75% Sr. Disc. Nts., 10/31/07(10) 4,445,000 3,133,725
0%/9.95% Sr. Disc. Nts., 2/15/08(10) 1,650,000 1,165,313
0%/10.65% Sr. Disc. Nts., 9/15/07(10) 2,195,000 1,624,300
9.75% Sr. Disc. Nts., 8/15/04 1,700,000 1,770,125
- ----------------------------------------------------------------------------------------------------------------
Omnipoint Corp.:
11.625% Sr. Nts., 8/15/06 2,475,000 2,178,000
11.625% Sr. Nts., Series A, 8/15/06 7,300,000 6,424,000
- ----------------------------------------------------------------------------------------------------------------
Orange plc:
7.625% Sr. Nts., 8/1/08 EUR 2,600,000 3,013,928
8% Sr. Nts., 8/1/08 12,500,000 12,937,500
- ----------------------------------------------------------------------------------------------------------------
ORBCOMM Global LP/ORBCOMM Capital Corp., 14% Sr. Nts.,
8/15/04 2,890,000 2,911,675
- ----------------------------------------------------------------------------------------------------------------
Orion Network Systems, Inc., 0%/12.50% Sr. Disc. Nts., 1/15/07(10) 3,315,000 1,856,400
- ----------------------------------------------------------------------------------------------------------------
Pinnacle Holdings, Inc., 0%/10% Sr. Unsec. Disc. Nts., 3/15/08(10) 6,445,000 3,899,225
- ----------------------------------------------------------------------------------------------------------------
Price Communications Cellular Holdings, Inc., 11.25% Sr. Nts.,
8/15/08(14) 2,944,101 2,826,337
</TABLE>
21 Oppenheimer Champion Income Fund
<PAGE> 22
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
MEDIA/ENTERTAINMENT: WIRELESS COMMUNICATIONS(CONTINUED)
Price Communications Wireless, Inc.:
9.125% Sr. Sec. Nts., Series B, 12/15/06 $4,100,000 $ 4,284,500
11.75% Sr. Sub. Nts., 7/15/07 3,650,000 4,033,250
- ----------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 9.625% Sr. Sub. Nts., Series B, 5/15/08(2) 3,000,000 3,142,500
- ----------------------------------------------------------------------------------------------------------------
Satelites Mexicanos SA, 10.125% Sr. Nts., 11/1/04 875,000 667,188
- ----------------------------------------------------------------------------------------------------------------
SBA Communications Corp., 0%/12% Sr. Unsec. Disc. Nts., 3/1/08(10) 9,635,000 6,118,225
- ----------------------------------------------------------------------------------------------------------------
Spectrasite Holdings, Inc., 0%/12% Sr. Disc. Nts., 7/15/08(8)(10) 4,100,000 2,562,500
- ----------------------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II, 14% Sr. Nts., 11/1/04 655,000 658,275
------------
90,926,500
================================================================================================================
METALS/MINERALS--2.6%
AK Steel Corp.:
7.875% Sr. Nts., 2/15/09(8) 7,000,000 7,008,750
9.125% Sr. Nts., 12/15/06 1,000,000 1,060,000
- ----------------------------------------------------------------------------------------------------------------
Bar Technologies, Inc., 13.50% Sr. Sec. Nts., 4/1/01 1,965,000 2,073,075
- ----------------------------------------------------------------------------------------------------------------
California Steel Industries Corp., 8.50% Sr. Nts., 4/1/09(8)(13) 2,800,000 2,828,000
- ----------------------------------------------------------------------------------------------------------------
Centaur Mining & Exploration Ltd., 11% Sr. Nts., 12/1/07 2,325,000 2,121,563
- ----------------------------------------------------------------------------------------------------------------
Great Lakes Carbon Corp., 10.25% Sr. Sub. Nts., Series B, 5/15/08(2) 2,700,000 2,794,500
- ----------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc., 10.75% Sr. Sub. Nts., 2/1/08 750,000 767,813
- ----------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp., 12.75% Sr. Sub. Nts., 2/1/03 2,065,000 2,003,050
- ----------------------------------------------------------------------------------------------------------------
Metallurg Holdings, Inc., 0%/12.75% Sr. Disc. Nts., 7/15/08(10) 6,100,000 2,104,500
- ----------------------------------------------------------------------------------------------------------------
Metallurg, Inc., 11% Sr. Nts., 12/1/07 3,945,000 3,609,675
- ----------------------------------------------------------------------------------------------------------------
National Steel Corp.:
9.875% First Mtg. Bonds, 3/1/09(8) 2,000,000 2,065,000
9.875% Nts., 3/1/09(8) 1,800,000 1,858,500
- ----------------------------------------------------------------------------------------------------------------
Republic Engineered Steels, Inc., 9.875% First Mtg. Nts., 12/15/01 6,250,000 6,468,750
------------
36,763,176
================================================================================================================
RETAIL--1.4%
Boyds Collection Ltd., 9% Sr. Sub. Nts., 5/15/08(8) 3,870,000 4,161,100
- ----------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 9.125% Sr. Unsec. Sub. Nts.,
5/1/08 6,470,000 5,661,250
- ----------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 9% Debs., 5/1/08 3,500,000 3,307,500
- ----------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 8.375% Sr. Nts., 5/1/08 1,025,000 1,009,625
- ----------------------------------------------------------------------------------------------------------------
Home Interiors & Gifts, Inc., 10.125% Sr. Sub. Nts., 6/1/08 4,100,000 4,161,500
- ----------------------------------------------------------------------------------------------------------------
Pantry, Inc. (The), 10.25% Sr. Sub. Nts., 10/15/07 1,600,000 1,688,000
------------
19,988,975
================================================================================================================
SERVICE--4.6%
Allied Waste North America, Inc., 7.875% Sr. Unsec. Nts.,
Series B, 1/1/09 4,400,000 4,328,500
- ----------------------------------------------------------------------------------------------------------------
Borg-Warner Security Corp., 9.625% Sr. Sub. Nts., 3/15/07 2,570,000 2,775,600
- ----------------------------------------------------------------------------------------------------------------
Coinstar, Inc., 0%/13% Sr. Disc. Nts., 10/1/06(10) 2,025,000 1,650,375
</TABLE>
22 Oppenheimer Champion Income Fund
<PAGE> 23
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
SERVICE(CONTINUED)
Comforce Operating, Inc., 12% Sr. Nts., Series B, 12/1/07(2) $1,080,000 $ 1,069,200
- ----------------------------------------------------------------------------------------------------------------
Fisher Scientific International, Inc.:
9% Sr. Sub. Nts., 2/1/08 910,000 914,550
9% Sr. Unsec. Sub. Nts., 2/1/08 5,065,000 5,090,325
- ----------------------------------------------------------------------------------------------------------------
Formica Corp., 10.875% Sr. Sub. Nts., 3/1/09(8) 5,000,000 5,000,000
- ----------------------------------------------------------------------------------------------------------------
Great Lakes Dredge & Dock Corp., 11.25% Sr. Sub. Nts., 8/15/08(8) 2,900,000 3,088,500
- ----------------------------------------------------------------------------------------------------------------
Kindercare Learning Centers, Inc., 9.50% Sr. Sub. Nts., 2/15/09 3,550,000 3,585,500
- ----------------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 9.625% Sr. Sub. Nts., 12/1/06 3,270,000 3,547,950
- ----------------------------------------------------------------------------------------------------------------
Metal Management, Inc., 10% Gtd. Sr. Unsec. Sub. Debs., 5/15/08 1,250,000 762,500
- ----------------------------------------------------------------------------------------------------------------
Norse CBO Ltd., 9.342% Sub. Bonds, Series 1A, Cl. C2, 8/13/10(2) 7,500,000 6,600,000
- ----------------------------------------------------------------------------------------------------------------
Packaging Corp. of America, 9.625% Sr. Sub. Nts., 4/1/09(8)(13) 1,250,000 1,287,500
- ----------------------------------------------------------------------------------------------------------------
Panolam Industries International, Inc., 11.50% Sr. Sub. Nts., 2/15/09(8) 4,000,000 4,120,000
- ----------------------------------------------------------------------------------------------------------------
Premier Graphics, Inc., 11.50% Sr. Nts., 12/1/05(2) 3,500,000 3,465,000
- ----------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc.:
6.75% Cv. Sr. Sub. Nts., 9/15/03 2,868,000 2,670,825
13.625% Sr. Sub. Disc. Nts., 6/30/05 2,700,000 3,084,750
- ----------------------------------------------------------------------------------------------------------------
Tembec Industries, Inc., 8.625% Sr. Nts., 6/30/09(13) 2,000,000 2,032,500
- ----------------------------------------------------------------------------------------------------------------
United Rentals, Inc.:
9% Nts., 4/1/09(8) 1,750,000 1,758,750
9.25% Sr. Sub. Nts., 1/15/09(8) 6,250,000 6,281,250
- ----------------------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05 692,000 769,850
------------
63,883,425
================================================================================================================
TRANSPORTATION--2.6%
Coach USA, Inc., 9.375% Sr. Sub. Nts., Series B, 7/1/07(2) 1,505,000 1,580,250
- ----------------------------------------------------------------------------------------------------------------
Collins & Aikman Products Co., 11.50% Sr. Unsec. Sub. Nts., 4/15/06 6,480,000 6,917,400
- ----------------------------------------------------------------------------------------------------------------
Hayes Wheels International, Inc., 11% Sr. Sub. Nts., 7/15/06 4,160,000 4,617,600
- ----------------------------------------------------------------------------------------------------------------
HDA Parts System, Inc., 12% Sr. Sub. Nts., 8/1/05(8) 3,150,000 3,047,625
- ----------------------------------------------------------------------------------------------------------------
Key Plastics, Inc., 10.25% Sr. Sub. Nts., Series B, 3/15/07 2,405,000 2,408,006
- ----------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc., Units (each unit consists of $1,000
principal amount of 12% first priority ship mtg. sr. sec. nts.,
7/15/05 and one warrant to purchase five shares of common stock)(9) 3,200,000 2,416,000
- ----------------------------------------------------------------------------------------------------------------
Navigator Gas Transport plc:
10.50% First Priority Ship Mtg. Nts., 6/30/07(8) 3,715,000 2,749,100
Units (each unit consists of $1,000 principal amount of 12%
second priority ship mtg. nts., 6/30/07 and 7.66 warrants)(8)(9) 2,605,000 1,654,175
- ----------------------------------------------------------------------------------------------------------------
Oxford Automotive, Inc., 10.125% Sr. Sub. Nts., 6/15/07(8) 1,000,000 1,042,500
- ----------------------------------------------------------------------------------------------------------------
TFM SA de CV, 10.25% Sr. Nts., 6/15/07 1,440,000 1,267,200
- ----------------------------------------------------------------------------------------------------------------
Trans World Airlines, Inc., 11.50% Sr. Sec. Nts., 12/15/04 5,775,000 4,417,875
- ----------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc.
Nts., Series B, 12/15/03(10) 4,391,000 4,336,113
- ----------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(8) 895,436 463,388
------------
36,917,232
</TABLE>
23 Oppenheimer Champion Income Fund
<PAGE> 24
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
UTILITY--1.5%
CalEnergy Co., Inc., 7.52% Sr. Unsec. Nts., 9/15/08 $12,000,000 $ 12,671,136
- ----------------------------------------------------------------------------------------------------------------
El Paso Electric Co., 9.40% First Mtg. Sec. Nts., Series E, 5/1/11 2,350,000 2,712,774
- ----------------------------------------------------------------------------------------------------------------
Integrated Electric Services, Inc., 9.375% Sr. Sub. Nts., 2/1/09(8) 2,400,000 2,460,000
- ----------------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp.:
0%/8.50% Sr. Unsec. Nts., Series H, 7/1/10(10) 1,000,000 774,449
7.75% Sr. Unsec. Nts., Series G, 10/1/08 2,000,000 2,151,180
--------------
20,769,539
--------------
Total Corporate Bonds and Notes (Cost $1,095,432,513) 1,073,598,762
<CAPTION>
SHARES
================================================================================================================
<S> <C> <C>
PREFERRED STOCKS--5.6%
- ----------------------------------------------------------------------------------------------------------------
AmeriKing, Inc., 13% Cum. Sr. Exchangeable, Non-Vtg.(6)(14) 105,968 2,834,644
- ----------------------------------------------------------------------------------------------------------------
BankUnited Capital Trust, 10.25% Gtd. Bonds, 12/31/26 750,000 736,875
- ----------------------------------------------------------------------------------------------------------------
Capstar Communications, Inc., 12.625% Cum. Exchangeable,
Series E, Non-Vtg.(14) 4,363 524,651
- ----------------------------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A(2)(14)(15) 160,595 4,014,875
- ----------------------------------------------------------------------------------------------------------------
Chesapeake Energy Corp., 7% Cum. Cv., Non-Vtg.(8) 71,000 923,000
- ----------------------------------------------------------------------------------------------------------------
Clark USA, Inc., 11.50% Cum. Sr. Exchangeable(14) 2,862 2,010,555
- ----------------------------------------------------------------------------------------------------------------
Concentric Network Corp., 13.50% Sr. Redeemable Exchangeable
Preferred Stock, Series B, Non-Vtg.(14) 2,423 2,586,552
- ----------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 11.125% Cum., Series M(14) 5,635 645,207
- ----------------------------------------------------------------------------------------------------------------
Doane Products Co., 14.25% Exchangeable, Non-Vtg.(2)(16) 100,000 4,425,000
- ----------------------------------------------------------------------------------------------------------------
Dobson Communications Corp., 12.25% Sr. Exchangeable(14) 2,818 2,684,145
- ----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc., 12.75% Jr. Redeemable Preferred
Stock, Non-Vtg.(14) 1,310 618,975
- ----------------------------------------------------------------------------------------------------------------
Eagle-Picher Holdings, Inc., Cum. Exchangeable, Series B,
3/1/08, Non-Vtg.(16) 15,000 783,750
- ----------------------------------------------------------------------------------------------------------------
Fidelity Federal Bank FSB Glendale California, l2% Non-Cum.
Exchangeable Perpetual Preferred Stock, Series A(16) 30 697
- ----------------------------------------------------------------------------------------------------------------
Global Crossing Holdings Ltd., 10.50% Sr. Exchangeable Preferred,
12/1/08(16) 23,000 2,656,500
- ----------------------------------------------------------------------------------------------------------------
ICG Holdings, Inc., 14.25% Exchangeable, Non-Vtg.(14) 3,017 3,296,072
- ----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.:
Depositary Shares Representing one one-hundredth
7% Cum. Cv. Jr. Preferred Stock, Series E, Non-Vtg.(8) 61,150 1,612,831
7% Cv. Preferred Securities(8) 200,000 4,250,000
13.50% Exchangeable, Series B(14) 2,279 2,455,622
- ----------------------------------------------------------------------------------------------------------------
International Utility Structures, Inc.:
13% Preferred, Non-Vtg.(8)(14)(16) 39 33,638
Units (each unit consists of $1,000 principal amount of
13% sr. exchangeable preferred stock and one warrant to
purchase 30 shares of common stock)(2)(9)(14) 300 298,500
</TABLE>
24 Oppenheimer Champion Income Fund
<PAGE> 25
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
================================================================================================================
<S> <C> <C>
PREFERRED STOCKS(CONTINUED)
Nebco Evans Holdings, Inc., 11.25% Sr. Redeemable
Exchangeable Preferred Stock, Non-Vtg.(14) 27,889 $ 1,080,699
- ----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 11.125%, Non-Vtg.(14) 4,652 4,756,670
- ----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., 14% Cum., Non-Vtg.(14) 111,885 6,461,359
- ----------------------------------------------------------------------------------------------------------------
Packaging Corp. of America, 12.375%, Preferred Stock(8)(13)(14)(16) 800 82,800
- ----------------------------------------------------------------------------------------------------------------
Paxson Communications Corp., 13.25% Cum. Jr. Exchangeable,
Non-Vtg.(14) 301 2,505,825
- ----------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 2.75% Jr. Cv., Series A, Non-Vtg.(16) 16,377 28,660
- ----------------------------------------------------------------------------------------------------------------
PRIMEDIA, Inc.:
8.625% Exchangeable, Series H, Non-Vtg. 54,950 5,233,988
9.20% Exchangeable, Series F, Non-Vtg. 22,500 2,311,875
- ----------------------------------------------------------------------------------------------------------------
Rural Cellular Corp., 11.375% Cum. Sr., Series B, Non-Vtg.(14) 4,333 4,289,670
- ----------------------------------------------------------------------------------------------------------------
SD Warren Co., 14% Cum. Exchangeable, Series B, Non-Vtg.(16) 128,300 6,896,125
- ----------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc.:
13.75% Exchangeable(8)(14)(16) 6 21,600
13.75% Cum. Nts., Series B, 3/15/09, Non-Vtg.(14) 100 360,000
- ----------------------------------------------------------------------------------------------------------------
Spanish Broadcasting Systems, Inc., 14.25% Cum. Exchangeable,
Non-Vtg.(8)(14) 4,080 4,375,800
- ----------------------------------------------------------------------------------------------------------------
Supermarkets General Holdings, $3.52(14)(16) 22,624 820,120
- ----------------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc.:
9.16% Cv., Series B, Non-Vtg. 3,250 69,875
9.20% Preferred, Vtg. 83,700 1,747,238
------------
Total Preferred Stocks (Cost $85,568,766) 78,434,393
================================================================================================================
OTHER SECURITIES--0.3%
- ----------------------------------------------------------------------------------------------------------------
CSC Holdings, Inc., 8.50% Cum. Cv., Series I, Non-Vtg. 28,900 3,222,350
- ----------------------------------------------------------------------------------------------------------------
Earthwatch, Inc., 12% Cum. Cv., Series C, Non-Vtg.(8)(14)(16) 110,000 165,000
- ----------------------------------------------------------------------------------------------------------------
Viatel, Inc., 10% Cv., Series A(14) 1,406 302,642
------------
Total Other Securities (Cost $1,756,462) 3,689,992
================================================================================================================
COMMON STOCKS--3.1%
- ----------------------------------------------------------------------------------------------------------------
Airtouch Communications, Inc.(16) 35,000 3,381,875
- ----------------------------------------------------------------------------------------------------------------
AT&T - Liberty Media Group, Series A(16) 56,200 2,957,525
- ----------------------------------------------------------------------------------------------------------------
AT&T Corp. 37,663 3,005,978
- ----------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp.(16) 40,000 2,965,000
- ----------------------------------------------------------------------------------------------------------------
EchoStar Communications Corp., Cl. A(16) 30,000 2,448,750
- ----------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(2) 75 66,375
- ----------------------------------------------------------------------------------------------------------------
El Paso Electric Co.(16) 56,400 430,050
- ----------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(2)(16) 2,261 2,261
- ----------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc.(16) 83,176 1,850,666
- ----------------------------------------------------------------------------------------------------------------
Grupo Iusacell SA, ADR(16) 45,000 360,000
- ----------------------------------------------------------------------------------------------------------------
GST Telecommunications, Inc.(16) 75,000 820,313
</TABLE>
25 Oppenheimer Champion Income Fund
<PAGE> 26
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET VALUE
SHARES SEE NOTE 1
================================================================================================================
<S> <C> <C>
COMMON STOCKS(CONTINUED)
Hilton Hotels Corp. 30,000 $ 421,875
- ----------------------------------------------------------------------------------------------------------------
Horizon Group Properties, Inc.(16) 1,880 8,225
- ----------------------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc.(16) 30,000 363,750
- ----------------------------------------------------------------------------------------------------------------
ICG Communications, Inc.(16) 50,000 1,000,000
- ----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(16) 85,119 2,266,293
- ----------------------------------------------------------------------------------------------------------------
Intermedia Communications, Inc.(2)(16) 8,121 172,977
- ----------------------------------------------------------------------------------------------------------------
ITC DeltaCom, Inc.(16) 40,000 872,500
- ----------------------------------------------------------------------------------------------------------------
Millicom International Cellular SA(16) 45,000 1,170,000
- ----------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., Cl. A(16) 45,000 1,648,125
- ----------------------------------------------------------------------------------------------------------------
NEXTLINK Communications, Inc., Cl. A(16) 10,000 560,000
- ----------------------------------------------------------------------------------------------------------------
Omnipoint Corp.(16) 15,000 216,563
- ----------------------------------------------------------------------------------------------------------------
Optel, Inc.(16) 3,815 38
- ----------------------------------------------------------------------------------------------------------------
Oxford Health Plans, Inc.(16) 50,000 781,250
- ----------------------------------------------------------------------------------------------------------------
Panamerican Beverages, Inc., Cl. A 40,000 702,500
- ----------------------------------------------------------------------------------------------------------------
Park Place Entertainment Corp.(16) 75,000 567,187
- ----------------------------------------------------------------------------------------------------------------
Protection One, Inc.(16) 55,000 343,750
- ----------------------------------------------------------------------------------------------------------------
PsiNet, Inc.(16) 70,000 2,979,375
- ----------------------------------------------------------------------------------------------------------------
Qwest Communications International, Inc.(16) 48,305 3,482,489
- ----------------------------------------------------------------------------------------------------------------
RSL Communications Ltd., Cl. A(16) 30,000 1,078,125
- ----------------------------------------------------------------------------------------------------------------
SF Holdings Group, Inc., Cl. C(16) 5,100 10,200
- ----------------------------------------------------------------------------------------------------------------
Siena Holdings, Inc.(2)(16) 16,299 16,299
- ----------------------------------------------------------------------------------------------------------------
Sovereign Bancorp, Inc. 26,000 318,500
- ----------------------------------------------------------------------------------------------------------------
Sprint Corp. (Fon Group) 20,000 1,962,500
- ----------------------------------------------------------------------------------------------------------------
Station Casinos, Inc.(16) 45,000 573,750
- ----------------------------------------------------------------------------------------------------------------
Time Warner, Inc. 16,000 1,137,000
- ----------------------------------------------------------------------------------------------------------------
Tricon Global Restaurants, Inc.(16) 10,000 702,500
- ----------------------------------------------------------------------------------------------------------------
Verio, Inc.(16) 25,000 1,153,125
- ----------------------------------------------------------------------------------------------------------------
Vimpel-Communications, Sponsored ADR(16) 5,000 77,500
- ----------------------------------------------------------------------------------------------------------------
WinStar Communications, Inc.(16) 10,000 363,438
------------
Total Common Stocks (Cost $34,782,511) 43,238,627
</TABLE>
26 Oppenheimer Champion Income Fund
<PAGE> 27
<TABLE>
<CAPTION>
MARKET VALUE
UNITS SEE NOTE 1
================================================================================================================
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.8%
- ----------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99(2) 5,500 $ 55
- ----------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 8/00(2) 850 9
- ----------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc., Litigation Trust(2) 19,829 198
- ----------------------------------------------------------------------------------------------------------------
Australis Holdings PTY Ltd./Australia Media Ltd. Wts., Exp. 5/00(2) 190 1
- ----------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(2) 12,500 125
- ----------------------------------------------------------------------------------------------------------------
CellNet Data Systems, Inc. Wts., Exp. 10/07(8) 1,649 6,802
- ----------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49(2)(15) 130,000 39,000
- ----------------------------------------------------------------------------------------------------------------
Clearnet Communications, Inc. Wts., Exp. 9/05 1,320 7,327
- ----------------------------------------------------------------------------------------------------------------
Concentric Network Corp. Wts., Exp. 12/07(2) 2,320 696,290
- ----------------------------------------------------------------------------------------------------------------
Covad Communications Group, Inc. Wts., Exp. 3/08(2) 7,310 6,586,310
- ----------------------------------------------------------------------------------------------------------------
Covergent Communications, Inc. Wts., Exp. 4/08(2) 6,400 11,200
- ----------------------------------------------------------------------------------------------------------------
Diva Systems Corp. Wts., Exp. 3/08(2) 6,000 78,000
- ----------------------------------------------------------------------------------------------------------------
DTI Holdings, Inc. Wts., Exp. 3/08(2) 30,000 4,050
- ----------------------------------------------------------------------------------------------------------------
e.spire Communications, Inc. Wts., Exp. 11/05 725 77,873
- ----------------------------------------------------------------------------------------------------------------
FirstWorld Communications, Inc. Wts., Exp. 4/08(2) 3,785 37,850
- ----------------------------------------------------------------------------------------------------------------
Gaylord Container Corp. Wts., Exp. 11/02 1,174 9,025
- ----------------------------------------------------------------------------------------------------------------
Globix Corp. Wts., Exp. 5/05(2) 4,175 313,125
- ----------------------------------------------------------------------------------------------------------------
Golden State Bancorp, Inc. Wts., Exp. 1/01 58,176 281,790
- ----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/03 58,503 --
- ----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/03(2) 30,983 310
- ----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 5/05(2) 69,612 6,961
- ----------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 9/04(2) 91,000 102,375
- ----------------------------------------------------------------------------------------------------------------
Grand Union Co. Wts., Exp. 8/03(2) 94 206
- ----------------------------------------------------------------------------------------------------------------
Hyperion Telecommunications, Inc. Wts., Exp. 4/01 265 13,018
- ----------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(2) 17,655 255,270
- ----------------------------------------------------------------------------------------------------------------
In-Flight Phone Corp. Wts., Exp. 8/02 1,600 --
- ----------------------------------------------------------------------------------------------------------------
KMC Telecom Holdings, Inc. Wts., Exp. 4/08(2) 7,885 20,698
- ----------------------------------------------------------------------------------------------------------------
Long Distance International, Inc. Wts., Exp. 4/08(2) 1,390 3,475
- ----------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/07(2) 2,565 31,101
- ----------------------------------------------------------------------------------------------------------------
Millenium Seacarriers, Inc. Wts., Exp. 7/05(2) 3,200 21,600
- ----------------------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00(2) 8,000 115,500
- ----------------------------------------------------------------------------------------------------------------
PLD Telekom, Inc. Wts., Exp. 6/06(2) 3,500 350
- ----------------------------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(2) 19,178 1,054,790
- ----------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 11/03(2) 28,000 350,000
- ----------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 6/05(2) 15,200 182,400
- ----------------------------------------------------------------------------------------------------------------
Rocky Mountain Internet, Inc. Wts., Exp. 7/03(2) 12,145 127,531
- ----------------------------------------------------------------------------------------------------------------
Trizec Hahn Corp. Wts., Exp. 7/99 1,985 3,018
- ----------------------------------------------------------------------------------------------------------------
Walden Residential Properties, Inc. Wts., Exp. 1/02(2) 49,200 30,750
- ----------------------------------------------------------------------------------------------------------------
WAM!NET, Inc. Wts., Exp. 3/05(2) 17,235 267,143
------------
Total Rights, Warrants and Certificates (Cost $648,332) 10,735,526
</TABLE>
27 Oppenheimer Champion Income Fund
<PAGE> 28
STATEMENT OF INVESTMENTS (Unaudited) (Continued)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
================================================================================================================
<S> <C> <C>
STRUCTURED INSTRUMENTS--4.9%
- ----------------------------------------------------------------------------------------------------------------
Bankers Trust/Bear Stearns High Yield Composite Index Linked Nts.:
8.135%, 6/1/99 $12,500,000 $ 12,682,625
8.55%, 5/4/99 5,000,000 4,764,700
7.70%, 5/5/99 6,000,000 6,273,180
8.55%, 4/5/99 5,000,000 4,786,500
- ----------------------------------------------------------------------------------------------------------------
Bear Stearns High Yield Composite Index Linked Nts.:
8.50%, 4/14/99 9,000,000 9,051,570
8.50%, 4/9/99 5,000,000 4,646,450
8.50%, 5/14/99 12,000,000 12,093,360
- ----------------------------------------------------------------------------------------------------------------
Shoshone Partners Loan Trust Sr. Nts., 6.689%, 4/28/02
(representing a basket of reference loans and a total return swap
between Chase Manhattan Bank and the Trust)(2)(3) 16,600,000 14,606,283
--------------
Total Structured Instruments (Cost $71,292,353) 68,904,668
================================================================================================================
REPURCHASE AGREEMENTS--3.6%
- ----------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
4.85%, dated 3/31/99, to be repurchased at $50,606,817 on 4/1/99,
collateralized by U.S. Treasury Nts., 4%-7.875%, 11/30/99-2/15/07,
with a value of $46,768,580, U.S. Treasury Bonds, 8%-10.75%,
2/15/03-11/15/21, with a value of $3,013,238 and U.S. Treasury
Bills, 4/8/99-4/22/99, with a value of $1,870,868 (Cost $50,600,000) 50,600,000 50,600,000
================================================================================================================
TOTAL INVESTMENTS, AT VALUE (COST $1,399,327,088) 98.6% 1,382,094,896
- ----------------------------------------------------------------------------------------------------------------
OTHER ASSETS NET OF LIABILITIES 1.4 18,994,724
----------- --------------
NET ASSETS 100.0% $1,401,089,620
=========== ==============
</TABLE>
28 Oppenheimer Champion Income Fund
<PAGE> 29
- -------------------------------------------------------------------------------
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP--Argentine Peso GBP--British Pound Sterling
CAD--Canadian Dollar IDR--Indonesian Rupiah
DEM--German Mark RUR--Russian Ruble
EUR--Euro
2. Identifies issues considered to be illiquid or restricted--See Note 7 of
Notes to Financial Statements.
3. Represents the current interest rate for a variable rate security.
4. 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). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Represents the current interest rate for an increasing rate security.
6. Non-income producing--issuer is in default.
7. A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
8. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $308,404,524 or 22.01% of the Fund's net
assets as of March 31, 1999.
9. Units may be comprised of several components, such as debt and equity and/or
warrants to purchase equity at some point in the future. For units which
represent debt securities, face amount disclosed represents total underlying
principal.
10. Denotes a step bond: a zero coupon bond that converts to a fixed or variable
interest rate at a designated future date.
11. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
12. Securities with an aggregate market value of $7,319,000 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
13. When-issued security to be delivered and settled after March 31, 1999.
14. Interest or dividend is paid-in-kind.
15. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended March 31, 1999.
The aggregate fair value of securities of affiliated companies held by the Fund
as of March 31, 1999, amounts to $4,053,875. Transactions during the period in
which the issuer was an affiliate are as follows:
<TABLE>
<CAPTION>
SHARES
SHARES GROSS GROSS MARCH 31,
SEPTEMBER 30, 1998 ADDITIONS REDUCTIONS 1999
================================================================================================================
<S> <C> <C> <C> <C>
CGA Group Ltd.,
Preferred Stock, Series A 130,000 30,595 -- 160,595
- ----------------------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts.,
Exp. 12/49 130,000 -- -- 130,000
</TABLE>
16. Non-income producing security.
See accompanying Notes to Financial Statements.
29 Oppenheimer Champion Income Fund
<PAGE> 30
STATEMENT OF ASSETS AND LIABILITIES March 31, 1999 (Unaudited)
<TABLE>
================================================================================================================
<S> <C>
ASSETS
Investments, at value--see accompanying statement:
Unaffiliated companies (cost $1,395,312,146) $1,378,041,021
Affiliated companies (cost $4,014,942) 4,053,875
- ----------------------------------------------------------------------------------------------------------------
Cash 83,816
- ----------------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts--Note 5 602,173
- ----------------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 25,369,198
Investments sold 9,917,637
Shares of beneficial interest sold 7,445,338
Daily variation on futures contracts--Note 6 543,800
Other 9,518
==============
Total assets 1,426,066,376
================================================================================================================
LIABILITIES
Unrealized depreciation on foreign currency exchange contracts--Note 5 13,000
- ----------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $13,824,000 purchased on a
when-issued basis)--Note 1 18,125,025
Dividends 2,933,599
Shares of beneficial interest redeemed 2,614,383
Distribution and service plan fees 805,331
Transfer and shareholder servicing agent fees 211,706
Shareholder reports 152,326
Custodian fees 26,294
Other 95,092
--------------
Total liabilities 24,976,756
================================================================================================================
NET ASSETS $1,401,089,620
==============
================================================================================================================
COMPOSITION OF NET ASSETS
Paid-in capital $1,442,123,025
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment income 654,557
- ----------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign
currency transactions (25,211,343)
- ----------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of
assets and liabilities denominated in foreign currencies (16,476,619)
--------------
Net assets $1,401,089,620
==============
</TABLE>
30 Oppenheimer Champion Income Fund
<PAGE> 31
<TABLE>
================================================================================================================
<S> <C>
NET ASSET VALUE PER SHARE
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$659,802,779 and 52,992,732 shares of beneficial interest outstanding) $12.45
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $13.07
- ----------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $487,287,627
and 39,174,443 shares of beneficial interest outstanding) $12.44
- ----------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $253,999,214
and 20,420,599 shares of beneficial interest outstanding) $12.44
</TABLE>
See accompanying Notes to Financial Statements.
31 Oppenheimer Champion Income Fund
<PAGE> 32
STATEMENT OF OPERATIONS For the Six Months Ended March 31, 1999 (Unaudited)
<TABLE>
================================================================================================================
<S> <C>
INVESTMENT INCOME
Interest (net of foreign withholding taxes of $1,302) $ 58,252,725
- ----------------------------------------------------------------------------------------------------------------
Dividends 4,877,510
------------
Total income 63,130,235
================================================================================================================
EXPENSES
Distribution and service plan fees--Note 4:
Class A 738,181
Class B 2,158,677
Class C 1,176,964
- ----------------------------------------------------------------------------------------------------------------
Management fees--Note 4 3,934,854
- ----------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 1,057,448
- ----------------------------------------------------------------------------------------------------------------
Shareholder reports 238,058
- ----------------------------------------------------------------------------------------------------------------
Registration and filing fees 50,909
- ----------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 29,926
- ----------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 20,166
- ----------------------------------------------------------------------------------------------------------------
Trustees' compensation 5,878
- ----------------------------------------------------------------------------------------------------------------
Insurance expenses 4,849
- ----------------------------------------------------------------------------------------------------------------
Other 39,307
-----------
Total expenses 9,455,217
Less expenses paid indirectly--Note 4 (26,625)
-----------
Net expenses 9,428,592
================================================================================================================
NET INVESTMENT INCOME 53,701,643
================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments (11,593,299)
Closing of futures contracts (10,555,124)
Foreign currency transactions (354,706)
------------
Net realized loss (22,503,129)
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 63,485,907
Translation of assets and liabilities denominated in foreign currencies (1,143,864)
------------
Net change 62,342,043
------------
Net realized and unrealized gain 39,838,914
================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 93,540,557
============
</TABLE>
See accompanying Notes to Financial Statements.
32 Oppenheimer Champion Income Fund
<PAGE> 33
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1999 SEPTEMBER 30,
(UNAUDITED) 1998
================================================================================================================
<S> <C> <C>
OPERATIONS
Net investment income $ 53,701,643 $ 86,285,917
- ----------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (22,503,129) 6,948,507
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 62,342,043 (115,693,863)
--------------- --------------
Net increase (decrease) in net assets resulting from operations 93,540,557 (22,459,439)
================================================================================================================
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A (26,756,886) (44,685,298)
Class B (17,427,149) (23,050,424)
Class C (9,517,608) (14,921,590)
- ----------------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A -- (1,752,073)
Class B -- (1,189,487)
Class C -- (687,045)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (4,622,478) (8,099,904)
Class B (3,297,538) (4,232,404)
Class C (1,792,465) (2,892,893)
================================================================================================================
BENEFICIAL INTEREST TRANSACTIONS
Net increase in net assets resulting from beneficial
interest transactions--Note 2:
Class A 73,322,541 131,249,208
Class B 88,157,317 189,452,940
Class C 24,118,603 66,892,330
================================================================================================================
NET ASSETS
Total increase 215,724,894 263,623,921
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 1,185,364,726 921,740,805
-------------- --------------
End of period (including undistributed net investment income
of $654,557 and $654,557, respectively) $1,401,089,620 $1,185,364,726
============== ==============
</TABLE>
See accompanying Notes to Financial Statements.
33 Oppenheimer Champion Income Fund
<PAGE> 34
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31,
1999 YEAR ENDED SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996
===============================================================================================================
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $12.18 $13.49 $12.92 $12.47
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .54 1.09 1.15 1.15
Net realized and unrealized gain (loss) .36 (1.11) .57 .44
------- ------ ------- ------
Total income from investment
operations .90 (.02) 1.72 1.59
- ---------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.54) (1.05) (1.15) (1.14)
Dividends in excess of net investment
income -- -- -- --
Tax return of capital distribution -- (.04) -- --
Distributions from net realized gain (.09) (.20) -- --
Distributions in excess of net
realized gain -- -- -- --
------ ------ ------ ------
Total dividends and distributions
to shareholders (.63) (1.29) (1.15) (1.14)
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.45 $12.18 $13.49 $12.92
====== ====== ====== ======
===============================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 7.61% (0.49)% 13.96% 13.28%
===============================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $659,803 $572,354 $502,211 $359,208
- ---------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $607,197 $567,689 $425,258 $305,638
- ---------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.84%(4) 8.18% 8.75% 8.97%
Expenses(5) 1.09%(4) 1.06% 1.10% 1.17%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 23% 100% 136% 95%
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to September 30,
1994.
2. For the period from October 2, 1995 (inception of offering) to September 30,
1996.
3. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
34 Oppenheimer Champion Income Fund
<PAGE> 35
<TABLE>
<CAPTION>
CLASS B
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31,
1999 YEAR ENDED SEPTEMBER 30,
1995 1994 (UNAUDITED) 1998 1997 1996(2)
===============================================================================================================
<S> <C> <C> <C> <C> <C>
$12.32 $12.90 $12.17 $13.48 $12.91 $12.47
- ---------------------------------------------------------------------------------------------------------------
1.05 1.10 .49 .99 1.05 1.03
.14 (.38) .36 (1.11) .57 .44
------ ------ ------ ------ ------ ------
1.19 .72 .85 (.12) 1.62 1.47
- ---------------------------------------------------------------------------------------------------------------
(1.04) (1.10) (.49) (.95) (1.05) (1.03)
-- (.01) -- -- -- --
-- -- -- (.04) -- --
-- -- (.09) (.20) -- --
-- (.19) -- -- -- --
------ ------ ------ ------ ------ ------
(1.04) (1.30) (.58) (1.19) (1.05) (1.03)
- ---------------------------------------------------------------------------------------------------------------
$12.47 $12.32 $12.44 $12.17 $13.48 $12.91
====== ====== ====== ====== ====== ======
===============================================================================================================
10.09% 5.61% 7.21% (1.25)% 13.10% 12.20%
===============================================================================================================
$255,139 $160,505 $487,288 $388,572 $238,505 $82,052
- ---------------------------------------------------------------------------------------------------------------
$204,917 $135,431 $433,463 $326,804 $151,197 $33,189
- ---------------------------------------------------------------------------------------------------------------
8.45% 8.49% 8.06%(4) 7.42% 7.89% 7.90%(4)
1.18% 1.22% 1.84%(4) 1.81% 1.86% 1.97%(4)
- ---------------------------------------------------------------------------------------------------------------
73% 108% 23% 100% 136% 95%
</TABLE>
4. Annualized.
5. Beginning in fiscal 1995, the expense ratio reflects the effect of gross
expenses paid indirectly by the Fund.
Prior year expenses have not been adjusted.
35 Oppenheimer Champion Income Fund
<PAGE> 36
FINANCIAL HIGHLIGHTS(Continued)
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------------------------
SIX MONTHS
ENDED
MARCH 31,
1999 YEAR ENDED SEPTEMBER 30,
(UNAUDITED) 1998 1997 1996 1995 1994(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
Net asset value, beginning of period $12.17 $13.48 $12.91 $12.46 $12.32 $13.13
- -------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .49 .99 1.05 1.06 .95 .75
Net realized and unrealized gain (loss) .36 (1.11) .57 .44 .13 (.60)
------ ------ ------ ------ ------ ------
Total income from investment
operations .85 (.12) 1.62 1.50 1.08 .15
- -------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.49) (.95) (1.05) (1.05) (.94) (.77)
Dividends in excess of net investment
income -- -- -- -- -- --
Tax return of capital distribution -- (.04) -- -- -- --
Distributions from net realized gain (.09) (.20) -- -- -- --
Distributions in excess of net
realized gain -- -- -- -- -- (.19)
------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.58) (1.19) (1.05) (1.05) (.94) (.96)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.44 $12.17 $13.48 $12.91 $12.46 $12.32
====== ====== ====== ====== ====== ======
===============================================================================================================================
TOTAL RETURN, AT NET ASSET VALUE(3) 7.21% (1.25)% 13.12% 12.44% 9.16% 1.11%
===============================================================================================================================
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands) $253,999 $224,439 $181,025 $112,945 $64,932 $27,743
- -------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $236,202 $210,338 $143,363 $ 89,416 $43,584 $13,693
- -------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.08%(4) 7.42% 7.98% 8.19% 7.63% 7.24%(4)
Expenses(5) 1.84%(4) 1.81% 1.86% 1.93% 1.95% 1.94%(4)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 23% 100% 136% 95% 73% 108%
</TABLE>
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term securities)
for the period ended March 31, 1999, were $530,689,300 and $252,819,176,
respectively.
See accompanying Notes to Financial Statements.
36 Oppenheimer Champion Income Fund
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS (Unaudited)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Champion Income Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek a high level of
current income. The Fund's investment advisor is OppenheimerFunds, Inc. (the
Manager). The Fund offers Class A, Class B and Class C shares. Class A shares
are sold with a front-end sales charge. Class B and Class C shares may be
subject to a contingent deferred sales charge. All classes of shares have
identical rights to earnings, assets and voting privileges, except that each
class has its own distribution and/or service plan, expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Class B shares will automatically convert to Class A
shares six years after the date of purchase. The following is a summary of
significant accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
37 Oppenheimer Champion Income Fund
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
STRUCTURED NOTES. The Fund invests in foreign currency-linked structured notes
whereby the market value and redemption price are linked to foreign currency
exchange rates. The Fund also invests in index-linked notes whereby the
principal and/or interest payment depend on one or more market indices. The
structured notes may be leveraged, which increases the notes' volatility
relative to the face of the security. Fluctuations in values of the securities
are recorded as unrealized gains and losses in the accompanying financial
statements. During the six months ended March 31, 1999, the market value of
these securities comprised an average of 5% of the Fund's net assets, and
resulted in realized and unrealized losses of $3,177,664.
- --------------------------------------------------------------------------------
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. As of March 31, 1999, securities with an
aggregate market value of $6,288,914, representing 0.44% of the Fund's net
assets, were in default.
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of March 31, 1999,
the Fund had entered into outstanding when-issued or forward commitments of
$11,019,500.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Fund may enter into mortgage dollar-rolls in which
the Fund sells securities for delivery in the current month and simultaneously
contracts with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records each dollar-roll as a sale and a new purchase transaction.
- --------------------------------------------------------------------------------
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 foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
38 Oppenheimer Champion Income Fund
<PAGE> 39
================================================================================
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 Statement 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. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. 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.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately
for Class A, Class B 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.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of the distributions
made during the year from net investment income or net realized gains may differ
from its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
39 Oppenheimer Champion Income Fund
<PAGE> 40
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
================================================================================
2. 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:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 1999 YEAR ENDED SEPTEMBER 30, 1998
----------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 13,401,412 $ 163,664,983 19,832,167 $ 263,900,806
Dividends and
distributions reinvested 1,837,746 22,471,333 2,859,050 37,768,272
Redeemed (9,243,839) (112,813,775) (12,908,673) (170,419,870)
--------- ------------- --------- -------------
Net increase 5,995,319 $ 73,322,541 9,782,544 $ 131,249,208
========= ============= ========= =============
- ----------------------------------------------------------------------------------------------
Class B:
Sold 10,339,422 $ 125,889,018 17,351,158 $ 230,121,700
Dividends and
distributions reinvested 1,112,939 13,598,131 1,359,478 17,905,868
Redeemed (4,215,461) (51,329,832) (4,464,160) (58,574,628)
--------- ------------- ---------- -------------
Net increase 7,236,900 $ 88,157,317 14,246,476 $ 189,452,940
========= ============= ========== =============
- ----------------------------------------------------------------------------------------------
Class C:
Sold 4,721,025 $ 57,521,419 8,603,599 $ 114,157,872
Dividends and
distributions reinvested 679,630 8,301,412 1,025,732 13,534,307
Redeemed (3,428,561) (41,704,228) (4,608,529) (60,799,849)
--------- ------------- --------- -------------
Net increase 1,972,094 $ 24,118,603 5,020,802 $ 66,892,330
========= ============= ========= =============
</TABLE>
40 Oppenheimer Champion Income Fund
<PAGE> 41
================================================================================
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
As of March 31, 1999, net unrealized depreciation on investments of $17,232,192
was composed of gross appreciation of $62,681,328, and gross depreciation of
$79,913,520.
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.70% of the first
$250 million of average annual net assets of the Fund, 0.65% of the next $250
million, 0.60% of the next $500 million and 0.55% of average annual net assets
in excess of $1 billion. The Fund's management fee for the six months ended
March 31, 1999, was 0.62% of average annual net assets for each class of shares.
For the six months ended March 31, 1999, commissions (sales charges paid
by investors) on sales of Class A shares totaled $1,704,088, of which $461,850
was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class A, Class
B and Class C shares totaled $125,100, $3,942,675 and $429,066, respectively.
Amounts paid to an affiliated broker/dealer for Class B and Class C shares were
$189,600 and $7,010, respectively. During the six months ended March 31, 1999,
OFDI received contingent deferred sales charges of $581,565 and $40,872,
respectively, upon redemption of Class B and Class C shares, as reimbursement
for sales commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of shareholder accounts that hold Class A shares. Reimbursement is
made quarterly at an annual rate that may not exceed 0.25% of the average annual
net assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the six months ended March 31, 1999, OFDI paid $45,157 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
41 Oppenheimer Champion Income Fund
<PAGE> 42
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
================================================================================
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES(continued)
The Fund has adopted a Distribution and Service Plan for Class B shares to
compensate OFDI for its costs in distributing Class B shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge
of 0.75% per year on Class B shares for its services rendered in distributing
Class B shares. OFDI also receives a service fee of 0.25% per year to compensate
dealers for providing personal services for accounts that hold Class B shares.
Each fee is computed on the average annual net assets of Class B shares,
determined as of the close of each regular business day. During the six months
ended March 31, 1999, OFDI paid $7,934 to an affiliated broker/dealer as
compensation for Class B personal service and maintenance expenses and retained
$1,852,433 as compensation for Class B sales commissions and service fee
advances, as well as financing costs. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for distributing shares before the Plan was terminated. As
of March 31, 1999, OFDI had incurred excess distribution and servicing costs of
$18,476,001 for Class B.
The Fund has adopted a Distribution and Service Plan for Class C shares
to reimburse OFDI for its costs in distributing Class C shares and servicing
accounts. Under the Plan, the Fund pays OFDI an annual asset-based sales charge
of 0.75% per year on Class C shares for its services rendered in distributing
Class C shares. OFDI also receives a service fee of 0.25% per year to reimburse
dealers for providing personal services for accounts that hold Class C shares.
Each fee is computed on the average annual net assets of Class C shares,
determined as of the close of each regular business day. During the six months
ended March 31, 1999, OFDI paid $8,385 to an affiliated broker/dealer as
reimbursement for Class C personal service and maintenance expenses and retained
$717,845 as reimbursement for Class C sales commissions and service fee
advances, as well as financing costs. If the Plan is terminated by the Fund, the
Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for distributing shares before the Plan was terminated. As
of March 31, 1999, OFDI had incurred excess distribution and servicing costs of
$3,651,379 for Class C.
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuation. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided by
a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
42 Oppenheimer Champion Income Fund
<PAGE> 43
================================================================================
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transaction. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
As of March 31, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
EXPIRATION CONTRACT AMOUNT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION DATES (000S) MARCH 31, 1999 APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO SELL
- -----------------
British Pound
Sterling (GBP) 7/15/99-9/15/99 11,195GBP $18,603,530 $189,755 $ --
Canadian
Dollar (CAD) 7/15/99 2,925CAD 1,934,372 -- 13,000
Euro (EUR) 7/15/99 8,065EUR 8,765,714 412,418 --
-------- -------
Total Unrealized Appreciation and Depreciation $602,173 $13,000
======== =======
</TABLE>
================================================================================
6. FUTURES CONTRACTS
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
and sell financial futures. The Fund may also buy or write put or call options
on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark-to-market for variation margin.
Risks of entering into futures contracts (and related options) include
the possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value of
the underlying securities.
43 Oppenheimer Champion Income Fund
<PAGE> 44
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued)
================================================================================
6. FUTURES CONTRACTS (CONTINUED)
As of March 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACT DESCRIPTION DATE CONTRACTS MARCH 31, 1999 APPRECIATION
- --------------------------------------------------------------------------------
CONTRACTS TO SELL
- -----------------
<S> <C> <C> <C> <C> <C>
Standard & Poor's 500 6/99 80 $25,866,000 $187,875
================================================================================
</TABLE>
================================================================================
7. ILLIQUID AND RESTRICTED SECURITIES
As of March 31, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of March 31, 1999, was $142,150,171, which
represents 10.15% of the Fund's net assets, of which $7,643,261 is considered
restricted. Information concerning restricted securities is as follows:
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT MARCH 31, 1999
- --------------------------------------------------------------------------------------------------
BONDS
- -----
<S> <C> <C> <C>
Capitol Queen & Casino, Inc., 12% First Mtg. Nts.,
Series A, 11/15/00 11/18/93 95.74% 5.00%
- --------------------------------------------------------------------------------------------------
ECM Fund L.P.I., 14% Sub. Nts., 6/10/02 7/28/92 100.50 100.25
- --------------------------------------------------------------------------------------------------
TAG Heuer International SA, 12% Sr. Sub. Nts.,
12/15/05 8/13/96 105.75 114.22
- --------------------------------------------------------------------------------------------------
Trans World Airlines Lease, 14% Equipment Trust,
7/2/08 3/19/98 101.00 98.00
STOCKS & WARRANTS
- -----------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93 $ 2.00 $ .01
- --------------------------------------------------------------------------------------------------
CGA Group Ltd., Preferred Stock, Series A 6/17/97 25.00 25.00
- --------------------------------------------------------------------------------------------------
CGA Group Ltd. Wts., Exp. 12/49 6/17/97 -- .30
- --------------------------------------------------------------------------------------------------
ECM Fund, L.P.I. 4/14/92 1,000.00 885.00
- --------------------------------------------------------------------------------------------------
Intermedia Communications, Inc. 9/29/98 15.09 21.30
- --------------------------------------------------------------------------------------------------
Omnipoint Corp. Wts., Exp. 11/00 11/29/95 -- 14.44
</TABLE>
44 Oppenheimer Champion Income Fund
<PAGE> 45
================================================================================
8. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended March
31, 1999.
45 Oppenheimer Champion Income Fund
<PAGE> 46
OPPENHEIMER CHAMPION INCOME FUND
================================================================================
OFFICERS AND TRUSTEES James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
George C. Bowen, Trustee, Vice President, Treasurer
and Assistant Secretary
Andrew J. Donohue, Vice President and Secretary
David P. Negri, Vice President
Thomas P. Reedy, Vice President
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
INVESTMENT ADVISOR OppenheimerFunds, Inc.
================================================================================
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
================================================================================
TRANSFER AND SHAREHOLDER OppenheimerFunds Services
SERVICING AGENT
================================================================================
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
================================================================================
INDEPENDENT AUDITORS Deloitte & Touche LLP
================================================================================
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors. This is a
copy of a report to shareholders of Oppenheimer
Champion Income Fund. This report must be preceded
or accompanied by a Prospectus of Oppenheimer
Champion Income Fund. For material information
concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including the
possible loss of the principal amount invested.
46 Oppenheimer Champion Income Fund
<PAGE> 47
OPPENHEIMERFUNDS FAMILY
<TABLE>
<CAPTION>
===========================================================================================
<S> <C> <C>
REAL ASSET FUNDS
- -------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
===========================================================================================
GLOBAL STOCK FUNDS
- -------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
===========================================================================================
STOCK FUNDS
- -------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
===========================================================================================
STOCK & BOND FUNDS
- -------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Multiple Strategies Fund
Income Fund(1) Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund(2)
===========================================================================================
TAXABLE BOND FUNDS
- -------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
===========================================================================================
MUNICIPAL BOND FUNDS
- -------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
===========================================================================================
MONEY MARKET FUNDS(4)
- -------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. The Fund's name was changed from "Oppenheimer Main Street Income & Growth
Fund" on 12/22/98.
2. The Fund's name was changed from "Oppenheimer Equity Income Fund" on 4/1/99.
3. Available only to investors in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
47 Oppenheimer Champion Income Fund
<PAGE> 48
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- --------------------------------------------------------------------------------
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When you want to make a transaction, you can do it easily by calling our
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For added convenience, you can get automated information with
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PhoneLink gives you access to a variety of fund, account, and market
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You can count on us whenever you need assistance. That's why the
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So call us today, or visit us at our website at
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[OPPENHEIMERFUNDS LOGO]
RS0190.001.0399 May 28, 1999
