<PAGE>
OPPENHEIMER GLOBAL BIO-TECH FUND
SEMI-ANNUAL REPORT MARCH 31, 1994
[Logo]
"WITH ALL THE TALK ABOUT HEALTHCARE,
THE BIOTECH SECTOR CAN PROVIDE
SOME EXCITING INVESTMENT
OPPORTUNITIES.
"SURE, IT'S VENTURESOME.
BUT THE LONG-RANGE REWARDS
LOOK GOOD."
<PAGE>
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
FUND FACTS
- - -------------------------------------------------------------------------------
SIX FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER GLOBAL BIO-TECH FUND
- - -------------------------------------------------------------------------------
1 The Fund aggressively seeks capital appreciation from a portfolio
of stocks issued by companies that derive at least half their revenues
from or invest at least half their R&D budgets in biotechnology.
- - -------------------------------------------------------------------------------
2 The Fund is designed for more aggressive investors who are willing
to accept greater risk of loss in the short term in anticipation of
greater long-term gains. The Fund's net asset value may be adversely
affected by the high degree of volatility of biotechnology stocks.(1)
- - -------------------------------------------------------------------------------
3 Total return at net asset value was -2.65% for the six months ended
March 31, 1994 and 10.13% for the 12 months ended on that date.(2)
- - -------------------------------------------------------------------------------
4 The Fund has provided long-term shareholders with attractive returns.
Its average annual total returns for the 1- and 5-year periods ended
March 31, 1994 and from inception of the Fund on December 30, 1987 were
3.80%, 12.84%, and 11.98%, respectively.(3)
- - -------------------------------------------------------------------------------
5 The five largest holdings in the Fund's portfolio at March 31 were:(4)
AMGEN, INC. One of the sector's blue-chip firms.
GENENTECH, INC. One of the largest companies worldwide that makes
biotechnology pharmaceuticals.
PROTEIN DESIGN LABS, INC. An emerging leader in drug design.
GENZYME CORP. An emerging firm that has brought promising products to
market, most recently a patented treatment for Gaucher's Disease.
PERSEPTIVE BIOSYSTEMS, INC. A leader in the manufacture of instruments
and media for bioseparations.
- - -------------------------------------------------------------------------------
6 "Five years ago, biotech investors were buying into a vision. Today,
they're investing in a reality, and as the field evolves, the
traditional models for success are giving way to new models. Today,
some of the best growth opportunities are offered by companies that
serve specific market niches, firms that are forging strategic
partnerships with other enterprises, and companies that support the
commercialization of promising biotech products."
PORTFOLIO MANAGER SANDRA PANEM, MARCH 31, 1994
IN THIS REPORT:
ANSWERS TO THREE TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
/ / HOW HAS THE RECENT VOLATILITY IN THE U.S. STOCK MARKET AFFECTED THE FUND?
/ / WHAT KINDS OF BIOTECH COMPANIES DO YOU THINK WILL BE MOST SUCCESSFUL IN THE
YEARS AHEAD?
/ / WHAT EMERGING OPPORTUNITIES DO YOU SEE IN THE BIOTECHNOLOGY SECTOR?
1. The special risks involved in investing in biotechnology stocks are described
in greater detail in the Fund's prospectus.
2. Based on the change in net asset value per share from 9/30/93 and 3/31/93 to
3/31/94, without considering a sales charge. All total return figures assume
reinvestment of capital gains distributions.
3. Average annual total returns are for a hypothetical investment held until
3/31/94, after deducting the maximum initial sales charge of 5.75%.All total
return figures assume reinvestment of dividends and capital gains distributions.
4. The Fund's portfolio is subject to change.
Past performance does not guarantee future results. The principal value and
return 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.
2 Oppenheimer Global Bio-Tech Fund
<PAGE>
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- - -------------------------------------------------------------------------------
REPORT TO SHAREHOLDERS
- - -------------------------------------------------------------------------------
The six months covered in this report spanned one of the most volatile periods
the stock market has seen in several years. For the six months ended March 31,
1994, Oppenheimer Global Bio-Tech Fund's total return at net asset value was
- - -2.65%.(5)
The Fund's returns were affected by the general decline in stock
prices that followed two increases in interest rates by the Federal Reserve
Board in February and March. Throughout the period, however, your management
team held to a steady course, focusing on biotechnology companies, and
maintaining a sound investment balance between established companies and the
innovative smaller firms that are developing the products of the future.
Over the last six months, your managers continued to concentrate
on diversification and careful stock selection. We used market rallies to take
profits in several large, liquid, "core" stocks such as Genentech, Genzyme,
Chiron, and Amgen, and used the proceeds to build positions in smaller, high-
potential companies.
For example, we added to holdings in several companies with
strong positions in fast-growing markets, such as Cephalon in neuroscience and
COR Therapeutics in cardiovascular research. We also expanded positions in
several gene therapy companies, and added shares of several companies that
provide the technology needed to track clinical trials and bring new products to
market. In our view, medical information companies, such as ClinTrials,
Quintiles Transnational, Cerner, and Pyxis, represent a major investment
opportunity.
Despite some recent interest-rate driven setbacks, economies
across Europe are beginning to improve, and we added to the portfolio's
foreign-stock holdings, concentrating on larger pharmaceutical companies with a
strong biotech bias, such as Sandoz and Schering AG. We also maintained a
position in Roche Holdings.
Although biotech stocks are inherently more volatile than the
stock market as a whole, we believe that the outlook for the sector is bright.
While some major drug companies have been cutting their research budgets,
several smaller firms have been pushing ahead, as shown by the growing number of
products in the FDA approval pipeline.
While the Clinton Administration's focus on controlling healthcare
costs will continue to impact the biotech market in the short-term, aggressive
biotech research and product development remain clear keys to any long-range
healthcare solution and, we believe, to long-term investment gains.
We appreciate your confidence in Oppenheimer Global Bio-Tech Fund,
and we look forward to helping you meet your investment goals in the future.
/s/ Donald W. Spiro
Donald W. Spiro
President, Oppenheimer Global Bio-Tech Fund
April 25, 1994
5. See footnote 2, page 2.
3 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Statement of Investments March 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
- - ------------
Repurchase Agreements--13.2%
- - ------------
Repurchase agreement with J.P. Morgan Securities, Inc., 3.53%, dated
3/31/94, to be repurchased at $24,809,727 on 4/4/94, collateralized
by U.S. Treasury Nts., 4.25%--8.875%, 5/15/95--10/15/96, with a value
of $25,396,708 (Cost $24,800,000) $24,800,000 $24,800,000
- - ------------
Corporate Bonds and Notes--3.0%
- - ------------
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(3) 2,500,000 2,037,500
- - ------------
Elan International Finance Ltd., 0% Sub. Liq. Yld. Opt. Nts., 10/16/12 5,000,000 1,975,000
- - ------------
Glycomed, Inc., 7.50% Cv. Sub. Debs., 1/1/03 2,000,000 1,540,000
- - ------------
Total Corporate Bonds and Notes (Cost $6,159,193) 5,552,500
Units
-----
- - ------------
Rights and Warrants--1.4%
- - ------------
Biota Holdings Ltd. Wts., Exp. 9/94 225,000 741,325
- - ------------
Gensia Pharmaceuticals, Inc. Wts., 12/96 110,000 632,500
- - ------------
Genzyme Corp. Wts.:
Exp. 12/94 20,000 185,000
Exp. 12/96 50,000 331,250
- - ------------
PerSeptive Technology Corp. Wts., Exp. 12/97 1,000 683,939
- - ------------
Protein Polymer Technologies, Inc. Wts., Exp. 1/97 100,000 31,250
- - ------------
Xoma Corp. Wts., Exp. 6/95 7,706 3,853
- - ------------
Total Rights and Warrants (Cost $2,864,434) 2,609,117
Shares
------
- - ------------
Preferred Stocks--2.1%
- - ------------
Cambridge Antibody Technology Ltd., Cv.(1)(3) 100,000 2,474,013
- - ------------
Synaptic Pharmaceutical Corp., Cv. Series 3(1)(2)(3) 500,000 1,541,461
------------
Total Preferred Stocks (Cost $5,300,000) 4,015,474
- - ------------
Common Stocks--79.8%
- - ------------
Basic Materials--0.3%
- - ------------
Chemicals--0.3% Ringer Corp. 150,000 487,500
- - ------------
Consumer Non-Cyclicals--74.4%
- - ------------
Agriculture Biotechnology--5.4% biosys(1) 160,000 760,000
- - ------------
Delta and Pine Land Co. 70,000 962,500
- - ------------
DNA Plant Technology Corp.(1) 200,000 975,000
- - ------------
EcoScience Corp.(1) 175,000 1,225,000
- - ------------
Mogen International(1) 150,000 351,675
- - ------------
Pioneer Hi-Bred International, Inc.(1) 50,000 1,637,500
- - ------------
Plant Genetics Systems International NV(1)(3) 213,944 3,290,420
- - ------------
Syntro Corp.(1) 400,000 950,000
------------
10,152,095
- - ------------
Anti-sense/Nucleic Acids--2.4%
Gilead Sciences, Inc.(1) 215,000 2,311,250
- - ------------
Isis Pharmaceuticals, Inc.(1) 300,000 2,137,500
------------
4,448,750
</TABLE>
4 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
- - ------------
Cardiovascular/Blood--2.6% Aramed, Inc.(1) 90,000 $2,092,500
- - ------------
COR Therapeutics, Inc.(1) 175,000 2,078,125
- - ------------
Corvas International, Inc.(1) 135,000 506,250
- - ------------
Protein Polymer Technologies, Inc.(1) 100,000 131,250
- - ------------
4,808,125
------------
Chemicals/Industrial
Biotechnology--4.2%
Celgene Corp.(1) 200,000 1,350,000
- - ------------
PerSeptive Biosystems, Inc.(1) 154,079 4,468,291
- - ------------
PerSeptive Technology II Corp., Units(1) 70,000 1,995,000
------------
7,813,291
- - ------------
Drugs--5.0% Astra AB, Series A Free Shares 150,000 2,935,863
- - ------------
CytoTherapeutics, Inc. 20,000 207,500
- - ------------
Roche Holdings AG 125 621,955
- - ------------
Sandoz AG 1,475 3,999,321
- - ------------
Watson Pharmaceutical, Inc. 90,000 1,372,500
- - ------------
Yuhan Corp. 6,526 263,588
------------
9,400,727
- - ------------
Drug Delivery--4.9% Cygnus Therapeutic Systems(1) 150,000 1,425,000
- - ------------
Elan Corp. PLC, ADR(1) 50,000 1,662,500
- - ------------
Elan Corp. PLC, Units(1) 13,108 368,663
- - ------------
Ethical Holdings Ltd., Sponsored ADR(1) 100,000 950,000
- - ------------
Liposome Technology, Inc.(1) 225,000 1,743,750
- - ------------
Matrix Pharmaceutical, Inc.(1) 280,000 3,115,000
------------
9,264,913
- - ------------
Drug Design--6.4% Biota Holdings Ltd. 400,000 2,276,882
- - ------------
Protein Design Labs, Inc.(1) 260,000 5,720,000
- - ------------
Vertex Pharmaceuticals, Inc.(1) 300,000 4,012,500
------------
12,009,382
- - ------------
Endocrine/Metabolism--1.4% Amylin Pharmaceuticals, Inc.(1) 250,000 2,687,500
- - ------------
Gene Therapy--1.8% Applied Immune Sciences, Inc. 200,000 1,750,000
- - ------------
Viagene, Inc. 100,000 887,500
- - ------------
Vical, Inc. 60,000 705,000
------------
3,342,500
5 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Statement of Investments (Unaudited) (Continued)
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
Healthcare: Diversified--2.1%
Schering AG 6,120 $3,874,780
- - ------------
Healthcare:
Miscellaneous--6.1%
Biochem Pharmaceuticals, Inc.(1) 140,000 1,400,000
- - ------------
ClinTrials, Inc. 60,000 705,000
- - ------------
Genzyme Transgenics Corp. 75,000 543,750
- - ------------
Magainin Pharmaceuticals, Inc.(1) 225,000 2,981,250
- - ------------
Martek Biosciences Corp.(1) 145,000 1,341,250
- - ------------
Penederm, Inc. 80,000 1,140,000
- - ------------
Quintiles Transnational Corp.(3) 28,950 580,459
- - ------------
Shaman Pharmaceuticals, Inc. 150,000 1,462,500
- - ------------
Syncor International Corp. 60,000 1,215,000
------------
11,369,209
- - ------------
Immunology--4.9% Ares-Serono Group, Cl. B 2,885 1,621,817
- - ------------
AutoImmune, Inc.(1) 170,000 1,232,500
- - ------------
Cantab Pharmaceuticals PLC, Sponsored ADR(1) 99,000 569,250
- - ------------
ImmuLogic Pharmaceutical Corp.(1) 147,500 1,548,750
- - ------------
Medimmune, Inc.(1) 100,000 1,025,000
- - ------------
Sangstat Medical Corp. 100,000 762,500
- - ------------
T Cell Sciences, Inc.(1) 371,000 1,505,625
- - ------------
Univax Biologics, Inc.(1) 130,000 991,250
------------
9,256,692
- - ------------
Inflammation--1.5% Alpha Beta Technology, Inc.(1) 50,000 1,075,000
- - ------------
Cortech, Inc.(1) 89,000 734,250
- - ------------
Glycomed, Inc.(1) 114,000 541,500
- - ------------
ICOS Corp.(1) 100,000 500,000
------------
2,850,750
- - ------------
Labs/Diagnostics--1.7% DNX Corp. 200,000 912,500
- - ------------
Genelabs Technologies, Inc.(1) 75,000 234,375
- - ------------
IG Laboratories, Inc.(1) 325,000 2,112,500
------------
3,259,375
- - ------------
Major Biotechnology--18.2% ALZA Corp., Cl. A(1) 75,001 1,706,273
- - ------------
Amgen, Inc.(1) 210,000 8,032,500
- - ------------
Chiron Corp.(1)(4) 63,000 4,142,250
- - ------------
Genentech, Inc.(1) 150,000 6,600,000
- - ------------
Genetic Therapy, Inc.(1) 250,500 3,131,250
- - ------------
Genetics Institute, Inc. 100,000 4,225,000
- - ------------
Genzyme Corp.(1) 200,435 5,361,636
- - ------------
Neozyme II Corp., Units(1) 20,000 740,000
- - ------------
Therapeutic Discovery Corp., Units(1) 10,000 57,500
------------
33,996,409
</TABLE>
6 Oppenheimer Global Bio-Tech Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
------ ------------
<S> <C> <C>
- - ------------
Neuroscience--2.9% Athena Neurosciences, Inc.(1) 300,000 $2,212,500
- - ------------
Cambridge Neuroscience, Inc.(1) 100,000 725,000
- - ------------
Cephalon, Inc.(1) 138,000 1,880,250
- - ------------
CoCensys, Inc.(1) 122,500 581,875
------------
5,399,625
- - ------------
Wound Healing--2.9% Advanced Tissue Sciences, Inc., Cl. A(1) 200,000 1,550,000
- - ------------
Celtrix Pharmaceuticals, Inc.(1) 300,000 2,157,188
- - ------------
Creative BioMolecules, Inc. 200,000 1,700,000
------------
5,407,188
- - ------------
Industrial--0.2%
- - ------------
Pollution Control--0.2% EnSys Environmental Products, Inc. 55,000 412,500
- - ------------
Technology--4.9%
- - ------------
Computer Software
And Services--1.5%
Cerner Corp. 30,000 1,245,000
- - ------------
Pyxis Corp.(1) 60,000 1,575,000
------------
2,820,000
- - ------------
Electronics:
Instrumentation--3.4%
IDEXX Laboratories, Inc.(1) 100,000 2,700,000
- - ------------
Igen, Inc. 100,000 1,000,000
- - ------------
Molecular Dynamics, Inc. 177,500 1,775,000
- - ------------
Oxford GlycoSystems Group PLC(1)(3) 515,132 915,158
------------
6,390,158
------------
Total Common Stocks (Cost $153,422,107) 149,451,469
- - ------------
Total Investments, at Value (Cost $192,545,734) 99.5% 186,428,560
- - ------------
Other Assets Net of Liabilities .5 833,618
------------ ------------
Net Assets 100.0% $187,262,178
------------ ------------
------------ ------------
<FN>
1. Non-income producing security.
2. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended March 31, 1994.
3. Restricted security--See Note 6 of Notes to Financial Statements.
4. Securities with an aggregate market value of $2,301,250 are held in escrow to
cover outstanding call options, as follows:
Shares
Subject Expiration Exercise Premium Market Value
to Call Date Price Received See Note 1
------------
Chiron Corp. 15,000 4/94 $90.00 $ 67,048 $1,875
------------
Chiron Corp. 20,000 7/94 $90.00 94,897 16,250
-------- -------
$161,945 $18,125
-------- -------
-------- -------
</TABLE>
See accompanying Notes to Financial Statements.
7 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Statement of Assets and Liabilities March 31, 1994 (Unaudited)
<TABLE>
<S> <C>
- - ------------
Assets Investments, at value (cost $192,545,734)--see accompanying statement $186,428,560
- - ------------
Cash 154,428
- - ------------
Receivables:
Investments sold 6,907,239
Shares of beneficial interest sold 193,736
Dividends and interest 99,220
- - ------------
Other 20,803
- - ------------
Total assets 193,803,986
- - ------------
Liabilities Options written, at value (premiums received $161,945)--
see accompanying statement--Note 4 18,125
- - ------------
Payables and other liabilities:
Investments purchased 3,293,125
Shares of beneficial interest redeemed 2,768,375
Service plan fees--Note 5 127,075
Other 335,108
------------
Total liabilities 6,541,808
- - ------------
Net Assets $187,262,178
------------
------------
- - ------------
Composition of Net Assets
Paid-in capital $189,589,871
- - ------------
Accumulated net investment loss (4,278,219)
- - ------------
Accumulated net realized gain from investment, written option and foreign
currency transactions 7,906,485
- - ------------
Net unrealized depreciation on investments, options written and translation of assets and
liabilities denominated in foreign currencies (5,955,959)
------------
Net assets--applicable to 8,955,930 shares of beneficial interest outstanding $187,262,178
------------
------------
- - ------------
Net Asset Value and Redemption Price Per Share $20.91
- - ------------
Maximum Offering Price Per Share (net asset value plus sales charge of 5.75% of offering
price) $22.19
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Global Bio-Tech Fund
<PAGE>
- - ------------
Statement of Operations For the Six Months Ended March 31, 1994 (Unaudited)
<TABLE>
<S> <C>
- - ------------
Investment Income Interest $388,027
- - ------------
Dividends (net of withholding taxes of $6,931) 94,109
------------
Total income 482,136
- - ------------
Expenses Management fees--Note 5 864,226
- - ------------
Transfer and shareholder servicing agent fees--Note 5 500,323
- - ------------
Service plan fees--Note 5 276,698
- - ------------
Trustees' fees and expenses 64,215
- - ------------
Shareholder reports 45,606
- - ------------
Legal and auditing fees 19,001
- - ------------
Custodian fees and expenses 6,596
- - ------------
Other 57,011
------------
Total expenses 1,833,676
- - ------------
Net Investment Loss (1,351,540)
- - ------------
Realized and Unrealized Gain (Loss) On Investments, Options Written and
Foreign Currency Transactions Net realized gain (loss) from:
Investments 12,528,634
Closing of option contracts written (675,507)
Foreign currency transactions (14,893)
------------
Net realized gain 11,838,234
------------
Net change in unrealized appreciation or depreciation on:
Investments (15,457,484)
Translation of assets and liabilities denominated in foreign currencies (123,038)
------------
Net change (15,580,522)
------------
Net realized and unrealized loss on investments, options written and foreign
currency transactions (3,742,288)
------------
Net Decrease in Net Assets Resulting From Operations $(5,093,828)
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
(Unaudited) 1993
---------------- -------------
<S> <C> <C>
- - ------------
Operations Net investment loss $(1,351,540) $(1,538,653)
- - ------------
Net realized gain (loss) on investments, options written and foreign
currency transactions 11,838,234 (680,679)
- - ------------
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies (15,580,522) 13,448,220
------------ ------------
Net increase (decrease) in net assets resulting from operations (5,093,828) 11,228,888
- - ------------
Dividends and Distributions to Shareholders
Distributions from net realized gain on investments, options written and
foreign currency transactions ($.169 and $.202 per share, respectively) (1,561,283) (1,873,746)
- - ------------
Beneficial Interest
Transactions
Net increase (decrease) in net assets resulting from beneficial interest
transactions--Note 2 (5,779,328) 60,707,523
- - ------------
Net Assets Total increase (decrease) (12,434,439) 70,062,665
- - ------------
Beginning of period 199,696,617 129,633,952
------------ ------------
End of period (including accumulated net investment losses of
$4,278,219 and $2,926,679, respectively) $187,262,178 $199,696,617
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1994 September 30,
---------------- ------------------------------------------------------
(Unaudited) 1993 1992 1991(1) 1990 1989
---------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
- - ------------
Per Share Operating Data
Net asset value, beginning
of period $21.64 $20.25 $26.90 $11.81 $12.09 $10.63
- - ------------
Income (loss) from
investment operations:
Net investment loss (.16) (.10) (.17) (.03) (.02) (.10)
Net realized and unrealized gain
(loss) on investments,
options written and foreign
currency transactions (.40) 1.69 (6.47) 15.12 (.26) 1.69
--------- --------- --------- --------- --------- ---------
Total income (loss) from
investment operations (.56) 1.59 (6.64) 15.09 (.28) 1.59
- - ------------
Dividends and distributions
to shareholders:
Dividends from net
investment income -- -- (.01) -- -- (.10)
Distributions from net realized
gain on investments,
options written and foreign
currency transactions (.17) (.20) -- -- -- (.03)
--------- --------- --------- --------- --------- ---------
Total dividends and
distributions to shareholders (.17) (.20) (.01) -- -- (.13)
- - ------------
Net asset value, end of period $20.91 $21.64 $20.25 $26.90 $11.81 $12.09
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
- - ------------
Total Return, at Net Asset Value(2) (2.65)% 7.79% (24.70)% 127.78% (2.32)% 15.21%
- - ------------
Ratios/Supplemental Data:
Net assets, end of period
(in thousands) $187,262 $199,697 $129,634 $103,352 $16,217 $3,872
- - ------------
Average net assets
(in thousands) $212,204 $194,184 $166,144 $50,989 $8,716 $2,343
- - ------------
Number of shares outstanding
at end of period (in thousands) 8,956 9,226 6,400 3,841 1,373 320
- - ------------
Ratios to average net assets:
Net investment loss (1.28)%(3) (.80)% (.71)% (.18)% (.37)% (.70)%
Expenses 1.73%(3) 1.59% 1.39% 1.50% 1.78% 2.40%
- - ------------
Portfolio turnover rate(4) 30.2% 41.0% 2.6% 11.2% 16.6% 17.1%
<FN>
1. Per share amounts calculated based on the weighted average number of shares
outstanding during the period.
2. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions reinvested
in additional shares on the reinvestment date, and redemption at the net asset
value calculated on the last business day of the fiscal period. Sales charges
are not reflected in the total returns.
3. Annualized.
4. 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 six
months ended March 31, 1994 were $59,163,268 and $67,607,516, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Notes to Financial Statements (Unaudited)
- - ------------
1. Significant Accounting Policies
Oppenheimer Global Bio-Tech 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 advisor is Oppenheimer Management
Corporation (the Manager). The following is a summary of significant accounting
policies consistently followed by the Fund.
- - ------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the closing bid or asked price
or the last sale price on the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities.
Short-term debt securities having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount. Securities for which market quotes are not
readily available are valued under procedures established by the Board of
Trustees to determine fair value in good faith. A call option is valued based
upon the last sales price on the principal exchange on which the option is
traded or, in the absence of any transactions that day, the value is based upon
the last sale on the prior trading date if it is within the spread between the
closing bid and asked prices. If the last sale price is outside the spread, the
closing bid or asked price closest to the last reported sale price is used.
- - ------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The Fund generally enters into forward currency exchange contracts as a hedge,
upon the purchase or sale of a security denominated in a foreign currency. Risks
may arise from the potential inability of the counterparty to meet the terms of
the contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's results of operations.
- - ------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
- - ------------
Call Options Written. The Fund may write covered call options. When an option is
written, the Fund receives a premium and becomes obligated to sell the
underlying security at a fixed price, upon exercise of the option. In writing an
option, the Fund bears the market risk of an unfavorable change in the price of
the security underlying the written option. Exercise of an option written by the
Fund could result in the Fund selling a security at a price different from the
current market value. All securities covering call options written are held in
escrow by the custodian bank.
- - ------------
Federal Income Taxes. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required.
- - ------------
Trustees' Fees and Expenses. The Fund has adopted a nonfunded retirement plan
for the Fund's independent trustees. Benefits are based on years of service and
fees paid to each trustee during the years of service. During the six months
ended March 31, 1994, a provision of $44,299 was made for the Fund's projected
benefit obligations, resulting in an accumulated liability of $108,120 at March
31, 1994. No payments have been made under the plan.
12 Oppenheimer Global Bio-Tech Fund
<PAGE>
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1. Significant Accounting Policies (continued)
Distributions to Shareholders. Dividends and distributions to shareholders are
recorded on the ex-dividend date.
- - ------------
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.
- - ------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended March 31, 1994 Year Ended September 30, 1993
------------------------------- -----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold 1,433,919 $33,597,662 5,810,447 $123,150,808
Distributions reinvested 63,095 1,414,298 72,297 1,686,679
Redeemed (1,767,490) (40,791,288) (3,056,478) (64,129,964)
------------ ------------ ------------ ------------
Net increase (decrease) (270,476) $(5,779,328) 2,826,266 $60,707,523
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
- - ------------
3. Unrealized Gains and Losses on Investments And Options Written
At March 31, 1994, net unrealized depreciation of investments and options
written of $5,973,354 was composed of gross appreciation of $22,168,978, and
gross depreciation of $28,142,332.
- - ------------
4. Call Option Activity Call option activity for the six months ended March 31,
1994 was as follows:
<TABLE>
<CAPTION>
Number Amount
of Options of Premiums
---------- -----------
<S> <C> <C>
- - ------------
Options outstanding at September 30, 1993 500 $232,867
- - ------------
Options written 1,000 227,556
- - ------------
Options cancelled in closing purchase transactions (1,150) (298,478)
------------ ------------
Options outstanding at March 31, 1994 350 $161,945
------------ ------------
------------ ------------
</TABLE>
- - ------------
5. Management Fees And Other Transactions With Affiliates
Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for an annual fee of
1% on the first $50 million of net assets, .75% on the next $150 million with a
reduction of .03% on each $200 million thereafter to $800 million, and .60% on
net assets in excess of $800 million. The Manager has agreed to reimburse the
Fund if aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the six months ended March 31, 1994, commissions (sales charges paid by
investors) on sales of Fund shares totaled $731,051, of which $180,448 was
retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered
investment companies. OSS's total costs of providing such services are allocated
ratably to these companies.
Under an approved service plan, the Fund may expend up to .25% of its
net assets annually to reimburse OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other financial
institutions. During the six months ended March 31, 1994, OFDI paid $9,754 to an
affiliated broker/dealer as reimbursement for personal service and maintenance
expenses.
13 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Notes to Financial Statements (Unaudited) (Continued)
- - ------------
6. Restricted Securities
The Fund owns securities purchased in private placement transactions, without
registration under the Securities Act of 1933 (the Act). The securities are
valued under methods approved by the Board of Trustees as reflecting fair value.
The Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase) in restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that are determined to be
liquid by the Board of Trustees or by the Manager under Board-approved
guidelines. Restricted and illiquid securities amount to $8,801,511, or 4.7% of
the Fund's net assets, at March 31, 1994.
<TABLE>
<CAPTION>
Valuation Per Unit
Security Acquisition Date Cost Per Unit as of March 31, 1994
- - ------------ ---------------- ------------- --------------------
<S> <C> <C> <C>
Cambridge Antibody Technology Ltd., Cv. 2/5/93 $33.00 $24.74
- - ------------
Chiron Corp., 1.90% Cv. Sub. Nts., 11/17/00(1) 11/19/93 $85.00 $81.50
- - ------------
Oxford GlycoSystems Group PLC 5/21/93 $1.94 $1.78
- - ------------
Plant Genetics Systems International NV 5/27/92 $11.18 $15.38
- - ------------
Quintiles Transnational Corp. 8/2/93 $17.27 $20.05
- - ------------
Synaptic Pharmaceutical Corp., Cv. Series 3 1/20/93 $4.00 $3.08
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
14 Oppenheimer Global Bio-Tech Fund
<PAGE>
------------
Oppenheimer Global Bio-Tech Fund
- - ------------
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Leo Cherne, Trustee
Edmund T. Delaney, Trustee
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Sidney M. Robbins, Trustee
Donald W. Spiro, Trustee and President
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Sandra Panem, Vice President
George C. Bowen, Treasurer
Lynn M. Coluccy, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
- - ------------
Investment Advisor Oppenheimer Management Corporation
- - ------------
Distributor Oppenheimer Funds Distributor, Inc.
- - ------------
Transfer and Shareholder
Servicing Agent
Oppenheimer Shareholder Services
- - ------------
Custodian of
Portfolio Securities
The Bank of New York
- - ------------
Independent Auditors KPMG Peat Marwick
- - ------------
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors. This is a copy of a report
to shareholders of Oppenheimer Global Bio-Tech Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer Global Bio-Tech Fund. For
material information concerning the Fund, see the Prospectus.
15 Oppenheimer Global Bio-Tech Fund
<PAGE>
- - ------------
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