<PAGE>
Oppenheimer
Global Emerging Growth Fund
Prospectus dated January 24, 1995
Oppenheimer Global Emerging Growth Fund (the "Fund") is a mutual fund that
aggressively seeks capital appreciation as its investment objective.
Current income is not an objective of the Fund.
In seeking its objective, the Fund emphasizes investments in emerging
growth companies worldwide that offer the potential for accelerated growth
of earnings or revenue. In an uncertain investment environment, the Fund
may stress defensive investment methods. The Fund also uses "hedging"
instruments to seek to reduce the risks of market fluctuations that affect
the value of the securities the Fund holds.
Some investment techniques the Fund uses may be considered to be
speculative investment methods that may increase the costs of investing
in the Fund and may also increase the Fund's operating costs. The Fund
is designed for investors who are willing to accept greater risks of loss
in the hopes of greater gains, and is not intended for those who desire
assured income and conservation of capital. Please refer to "Investment
Policies and Strategies" for more information about the types of
securities the Fund invests in and the risks of investing in the Fund.
This Prospectus explains concisely what you should know before investing
in the Fund. Please read this Prospectus carefully and keep it for future
reference. You can find more detailed information about the Fund in the
January 24, 1995, Statement of Additional Information. For a free copy,
call Oppenheimer Shareholder Services, the Fund's Transfer Agent, at 1-
800-525-7048, or write to the Transfer Agent at the address on the back
cover. The Statement of Additional Information has been filed with the
Securities and Exchange Commission and is incorporated into this
Prospectus by reference (which means that it is legally part of this
Prospectus).
Because of the Fund's investment policies and practices, the Fund's shares
may be considered to be speculative.
Shares of the Fund are not deposits or obligations of any bank, are not
guaranteed by any bank, are not insured by the F.D.I.C. or any other
agency, and involve investment risks, including the possible loss of the
principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
Contents
A B O U T T H E F U N D
Expenses
Brief Overview of the Fund
Financial Highlights
Investment Objective and Policies
How the Fund is Managed
Performance of the Fund
A B O U T Y O U R A C C O U N T
How to Buy Shares
Special Investor Services
AccountLink
Automatic Withdrawal and Exchange Plans
Reinvestment Privilege
Retirement Plans
How to Sell Shares
By Mail
By Telephone
How to Exchange Shares
Shareholder Account Rules and Policies
Dividends, Capital Gains and Taxes
Appendix
<PAGE>
A B O U T T H E F U N D
Expenses
The Fund pays a variety of expenses directly for management of its
assets, administration, distribution of its shares and other services, and
those expenses are subtracted from the Fund's assets to calculate the
Fund's net asset value per share. All shareholders therefore pay those
expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The following tables are
provided to help you understand your direct expenses of investing in the
Fund and your share of the Fund's operating expenses that you will bear
indirectly. The numbers below are based on the Fund's expenses during its
last fiscal year ended September 30, 1994.
- -- Shareholder Transaction Expenses are charges you pay when you buy or
sell shares of the Fund. Please refer to "About Your Account," from pages
___ through ___ for an explanation of how and when these charges apply.
Maximum Sales Charge 5.75%
on Purchases (as a %
of offering price)
- -----------------------------------------------------
Sales Charge on None
Reinvested Dividends
- -----------------------------------------------------
Deferred Sales Charge None(1)
(as a % of the lower of
the original purchase
price or redemption
proceeds)
- -----------------------------------------------------
Exchange Fee $5.00(2)
- -----------------------------------------------------
(1) If you invest more than $1 million in shares of the Fund, you may have
to pay a sales charge of up to 1% if you sell your shares within 18
calendar months from the end of the calendar month during which you
purchased those shares. See "How to Buy Shares," below.
(2) Fee is waived for automated exchanges, as described in "How to
Exchange Shares."
-- Annual Fund Operating Expenses are paid out of the Fund's assets
and represent the Fund's expenses in operating its business. For example,
the Fund pays management fees to its investment adviser, Oppenheimer
Management Corporation (which is referred to in this Prospectus as the
"Manager"). The rates of the Manager's fees are set forth in "How the
Fund is Managed," below. The Fund has other regular expenses for
services, such as transfer agent fees, custodial fees paid to the bank
that holds its portfolio securities, audit fees and legal expenses. These
expenses are detailed in the Fund's Financial Statements included in the
Statement of Additional Information.
The numbers in the chart below are projections of the Fund's business
expenses based on the Fund's expenses in its last fiscal year. These
amounts are shown as a percentage of the average net assets of the Fund
for that year. The "12b-1 Plan Fees" are the Service Plan Fees (which can
be up to a maximum of 0.25% of average annual net assets).
The actual expenses of the Fund in future years may be more or less,
depending on a number of factors, including changes in the actual value
of the Fund's assets on which some of these fees are based.
Management Fees 0.81%
-----------------------------------------
12b-1 Service Plan Fees 0.24%
-----------------------------------------
Other Expenses 0.72%
-----------------------------------------
Total Fund Operating Expenses 1.77%
-----------------------------------------
-- Example. To try to show the effect of these expenses on an
investment over time, we have created the hypothetical example shown
below. Assume that you make a $1,000 investment in the Fund, and that the
Fund's annual return is 5%, and that its operating expenses are the ones
shown in the chart above. If you were to redeem your shares at the end
of each period shown below, your investment would incur the following
expenses by the end of 1, 3, 5 and 10 years:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$ 74 $110 $148 $254
This example shows the effect of expenses on an investment, but is
not meant to state or predict actual or expected costs or investment
returns of the Fund, all of which will vary.
<PAGE>
A Brief Overview of the Fund
Some of the important facts about the Fund are summarized below, with
references to the section of this Prospectus where more complete
information can be found. You should carefully read the entire Prospectus
before making a decision about investing in the Fund. Keep the Prospectus
for reference after you invest, particularly for information about your
account, such as how to sell or exchange shares.
-- What Is The Fund's Investment Objective? The Fund's investment
objective is to aggressively seek capital appreciation (that is, growth
in the value of its shares). It does not invest to earn current income
to pay to shareholders.
-- What Does the Fund Invest In? The Fund emphasizes investment in
common stocks or other equity securities, including convertible
securities, of emerging growth companies located in the United States and
as few as three foreign countries. The Fund may hold warrants and rights.
The Fund may also use hedging instruments and some derivative investments
to try to manage investment risks. These investments are more fully
explained in "Investment Objective and Policies," starting on page ___.
-- Who Manages the Fund? The Fund's investment adviser is
Oppenheimer Management Corporation, which (including a subsidiary) advises
investment company portfolios having over $29 billion in assets at
December 31, 1994. The Fund's portfolio manager, who is primarily
responsible for the selection of the Fund's securities, is James C, Ayer,
Jr. The Manager is paid an advisory fee by the Fund, based on its net
assets. The Fund's Board of Trustees, elected by shareholders, oversees
the investment adviser and the portfolio manager. Please refer to "How
the Fund is Managed," starting on page ___ for more information about the
Manager and its fees.
-- How Risky is the Fund? All investments carry risks to some
degree. It is important to remember that the Fund is designed for long-
term investing. The Fund's investments in stocks are subject to changes
in their value from a number of factors such as changes in general bond
and stock market movements, or the change in value of particular stocks
because of an event affecting the issuer. The Fund's investments in
foreign securities are subject to additional risks associated with
investing abroad, such as the effect of currency rate changes on stock
values. These changes affect the value of the Fund's investments and its
price per share. In the OppenheimerFunds spectrum, the Fund is generally
more volatile than the other stock funds, the income and growth funds, and
the more conservative income funds. While the Manager tries to reduce
risks by diversifying investments, by carefully researching securities
before they are purchased for the portfolio, and in some cases by using
hedging techniques, there is no guarantee of success in achieving the
Fund's objective and your shares may be worth more or less than their
original cost when you redeem them. Please refer to "Investment Objective
and Policies" starting on page ___ for a more complete discussion.
-- How Can I Buy Shares? You can buy shares through your dealer or
financial institution, or you can purchase shares directly through the
Distributor by completing an Application or by using an Automatic
Investment Plan under AccountLink. Please refer to "How to Buy Shares"
on page ___ for more details.
-- Will I Pay a Sales Charge to Buy Shares? The Fund's shares are
offered with a front-end sales charge, starting at 5.75%, and reduced for
larger purchases. Please review "How to Buy Shares" starting on page ___
for more details.
-- How Can I Sell My Shares? Shares can be redeemed by mail or by
telephone call to the Transfer Agent on any business day, or through your
dealer. Please refer to "How to Sell Shares" on page ___.
-- How Has the Fund Performed? The Fund measures its performance
by quoting its average annual total return and cumulative total return,
which measure historical performance. Those returns can be compared to
the returns (over similar periods) of other funds. Of course, other funds
may have different objectives, investments, and levels of risk. The
Fund's performance can also be compared to broad market indices, which we
have done on page ___. Please remember that past performance does not
guarantee future results.
<PAGE>
Financial Highlights
The table on this page presents selected financial information about
the Fund, including per share data and expense ratios and other data based
on the Fund's average net assets. This information has been audited by
KPMG Peat Marwick LLP, the Fund's independent auditors, whose report on
the Fund's Financial Statements for the fiscal year ended September 30,
1994, is included in the Statement of Additional Information.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
1994 1993 1992 1991(2) 1990 1989 1988(1)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $10.00
-------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) (.01) (.10) (.17) (.03) (.02) (.10) .14
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions (2.11) 1.69 (6.47) 15.12 (.26) 1.69 .49
------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (2.12) 1.59 (6.64) 15.09 (.28) 1.59 .63
-------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income -- -- (.01) -- -- (.10) --
Distributions in excess
of 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 $19.35 $21.64 $20.25 $26.90 $11.81 $12.09 $10.63
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(3) (9.91)% 7.79% (24.70)% 127.78% (2.32)% 15.21% 6.30%
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $163,295 $199,697 $129,634 $103,352 $16,217 $3,872 $1,921
-------------------------------------------------------------------------------------------
Average net assets
(in thousands) $190,984 $194,184 $166,144 $50,989 $8,716 $2,343 $1,394
-------------------------------------------------------------------------------------------
Number of shares
outstanding at end of
period (in thousands) 8,437 9,226 6,400 3,841 1,373 320 181
-------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (1.05)% (.80)% (.71)% (.18)% (.37)% (.70)% 1.41%(4)
Expenses 1.77% 1.59% 1.39% 1.50% 1.78% 2.40% 2.06%(4)
-------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 54.7% 41.0% 2.6% 11.2% 16.6% 17.1% 1.7%
<FN>
1. For the period from December 30, 1987 (commencement of operations) to September 30, 1988.
Per
share amounts calculated based on the weighted average number of shares outstanding during the
period.
2. Per share amounts calculated based on the weighted average number of shares outstanding during
the period.
3. 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.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly
average of the market value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding short-term securities) for
the year ended September 30, 1994 were $92,464,689 and $140,116,746, respectively.
</TABLE>
<PAGE>
Investment Objective and Policies
Objective. The Fund invests its assets to aggressively seek capital
appreciation for shareholders. The Fund does not invest to seek current
income to pay to shareholders.
Investment Policies and Strategies. The Fund seeks its investment
objective by emphasizing investment in common stocks or other equity
securities, including convertible securities, and may hold warrants and
rights. These may include securities of U.S. companies or foreign
companies, as discussed below. These securities may be traded on
securities exchanges or in over-the-counter markets.
As a non-fundamental policy, the Fund, under normal market
conditions, invests at least 65% of its total assets in securities of
emerging growth companies located in the United States and at least three
foreign countries. As a global emerging growth fund, the Fund looks for
the most promising areas, both in the U.S. and abroad, for accelerated
growth of earnings or revenues.
The Fund may also seek to take advantage of changes in the business
cycle by investing in companies that are sensitive to those changes, if
the Manager believes they present opportunities for accelerated growth.
For example, when the economy is expanding, companies in the financial
services and consumer products industries may be in a position to benefit
from changes in the business cycle and may present long-term growth
opportunities.
When investing the Fund's assets, the Manager considers many factors,
including general economic conditions abroad relative to the U.S. and
trends in foreign and domestic stock markets. The Fund may try to hedge
against losses in the value of its portfolio securities by using hedging
strategies described below. When market conditions are unstable, the Fund
may invest substantial amounts of its assets in debt securities, such as
money market instruments or government securities, as described below. The
Fund's portfolio manager may employ special investment techniques in
selecting securities for the Fund. These are also described below.
Additional information may be found about them under the same headings in
the Statement of Additional Information.
Prior Investment Policy. The Fund previously emphasized investments
in biotechnology companies, and was named "Oppenheimer Global Bio-Tech
Fund". At a meeting held September 19, 1994, the Fund's shareholders
approved a proposal to expand the Fund's investment policies to emphasize
investments in emerging growth companies worldwide, and to eliminate the
policy that the Fund would generally invest at least 65% of its total
assets in biotechnology companies. The Fund's fundamental investment
objective of aggressively seeking capital appreciation remained unchanged.
The Fund's Board of Trustees simultaneously changed the Fund's name to
"Oppenheimer Global Emerging Growth Fund" to reflect its revised
investment policies.
Interim Concentration Policy. The Fund reserves the freedom to
concentrate its investments (that is, to invest 25% or more of its total
assets) in securities of biotechnology companies for an interim transition
period to permit an orderly reduction in its biotechnology position.
However, unanticipated market conditions affecting the Fund's current
portfolio holdings or unanticipated redemptions of Fund shares might make
it impracticable for the Fund to quickly reduce its biotechnology position
in an orderly manner to less than 25% of its total assets until
circumstances permit. The Fund defines biotechnology companies as those
with a significant business or investment in biotechnology. The Fund has
adopted the industry classifications set forth in the Appendix to this
Prospectus. For purposes of its interim biotechnology concentration
policy, the Fund reserves the right to invest more than 25% of its assets
in the "health care/drugs" or "health care/supplies & service" industry
categories.
Recent Acquisition. On November 18, 1994, the Fund acquired
substantially all of the assets of Oppenheimer Global Environment Fund
("Global Environment Fund"), following approval by shareholders of Global
Environment Fund. The Fund anticipates that it will maintain, for at
least an interim period, a substantial portion of the assets of Global
Environment Fund that are invested in environmental securities, most of
which will qualify as emerging growth companies.
-- What Are "Emerging Growth" Companies? The Manager will emphasize
investments in aggressive growth opportunities that offer the potential
for accelerated earnings or revenues growth. Emerging growth companies
tend to be smaller companies that are developing new products or services
or that are expanding into new markets for their products. However,
emerging growth companies can be any size and can be in any industry.
They normally retain a large part of their earnings for research,
development and investment in capital assets. Therefore, they tend not to
emphasize the payment of dividends. The Manager intends to use a global
"theme oriented approach" in managing the Fund, thereby seeking to
capitalize on important global trends. Examples of current themes
include special telecommunications, infrastructure spending,
efficiency enhancing technology, energy logistics, emerging consumer
markets, healthcare/biotechnology and the environment.
-- Can the Fund's Investment Objective and Policies Change? The Fund
has an investment objective, which is described above, as well as
investment policies it follows to try to achieve its objective.
Additionally, the Fund uses certain investment techniques and strategies
in carrying out those investment policies. The Fund's investment policies
and techniques are not "fundamental" unless the Prospectus or Statement
of Additional Information says that a particular policy is "fundamental."
The Fund's investment objective is a fundamental policy.
Fundamental policies are those that cannot be changed without the
approval of a "majority" of the Fund's outstanding voting shares. The
term "majority" is defined in the Investment Company Act to be a
particular percentage of outstanding voting shares (and this term is
explained in the Statement of Additional Information). The Fund's Board
of Trustees may change non-fundamental policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus.
-- Investment Risks. Expanding the Fund's investment policies to
emphasize investments in emerging growth companies worldwide serves to
diversify the Fund's investments across a number of sectors, in addition
to the biotechnology sector. In addition, the Fund would not hold a
substantial amount of stock of any one company and would not invest too
great a percentage of the Fund's assets in any one company.
Diversification reduces some of the risk to a shareholder's principal,
while providing greater growth potential.
Because the Fund invests a substantial portion of its assets in
stocks, the value of the Fund's portfolio will be affected by changes in
the stock markets. At times, the stock markets can be volatile, and stock
prices can change substantially. This market risk will affect the Fund's
net asset value per share, which will fluctuate as the values of the
Fund's portfolio securities change. Not all stock prices change uniformly
or at the same time, and other factors can affect a particular stock's
prices (for example, poor earnings reports by an issuer, loss of major
customers, major litigation against an issuer, or changes in government
regulations affecting an industry). Not all of these factors can be
predicted.
Because of the types of companies the Fund invests in and the
investment techniques the Fund uses, some of which may be speculative, the
Fund is designed for investors who are investing for the long-term and who
are willing to accept greater risks of loss of their capital in the hope
of achieving greater capital appreciation. Investing for capital
appreciation entails the risk of loss of all or part of your principal.
Because changes in securities market prices can occur at any time, there
is no assurance that the Fund will achieve its investment objective, and
when you redeem your shares, they may be worth more or less than what you
paid for them.
-- Special Risks - Borrowing for Leverage. The Fund may borrow money
from banks in an amount up to 10% of the value of its assets to buy
securities. The Fund will borrow only if it can do so without putting up
assets as security for a loan. This is a speculative investment method
known as "leverage." This investing technique may subject the Fund to
greater risks and costs than funds that do not borrow. These risks may
include the possibility that the Fund's net asset value per share will
fluctuate more than funds that don't borrow, since the Fund pays interest
on borrowings and interest expense affects the Fund's share price.
-- Foreign Securities. The Fund may purchase equity (and debt)
securities issued or guaranteed by foreign companies or foreign
governments or their agencies. The Fund may buy securities of companies
in any country, developed or underdeveloped. There is no limit on the
amount of the Fund's assets that may be invested in foreign securities.
The Fund will hold foreign currency only in connection with the purchase
or sale of foreign securities. If the Fund's securities are held abroad,
the countries in which they are held and the sub-custodians holding them
must be approved by the Fund's Board of Trustees.
Foreign securities have special risks. For example, foreign issuers
are not subject to the same accounting and disclosure requirements that
U.S. companies are subject to. The value of foreign investments may be
affected by changes in foreign currency rates, exchange control
regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in
governmental economic or monetary policy in the U.S. or abroad, or other
political and economic factors. More information about the risks and
potential rewards of investing in foreign securities is contained in the
Statement of Additional Information.
-- Warrants and Rights. Warrants basically are options to purchase
stock at set prices that are valid for a limited period of time. The Fund
may invest up to 5% of its total assets in warrants or rights. That 5%
does not apply to warrants the Fund has acquired as part of units with
other securities or that were attached to other securities. No more than
2% of the Fund's assets may be invested in warrants that are not listed
on the New York or American Stock Exchanges. These percentage limitations
are fundamental policies. For further details about these investments,
see "Warrants and Rights" in the Statement of Additional Information.
-- Portfolio Turnover. A change in the securities held by the Fund
is known as "portfolio turnover." The Fund may engage in short-term
trading to try to achieve its objective. The "Financial Highlights,"
above, show the Fund's portfolio turnover rate during past fiscal years.
High turnover and short-term trading may cause the Fund to have relatively
larger commission expenses and transaction costs than funds that do not
engage in short-term trading. Additionally, high portfolio turnover may
affect the ability of the Fund to qualify as a "regulated investment
company" under the Internal Revenue Code to enable the Fund to obtain tax
deductions for dividends and capital gain distributions paid to
shareholders. The Fund qualified in its last fiscal year and intends to
do so in the coming year, although it reserves the right not to qualify.
Other Investment Techniques and Strategies. The Fund may also use the
investment techniques and strategies described below. These involve
certain risks. The Statement of Additional Information contains more
information about these practices, including limitations on their use that
are intended to reduce some of the risks.
-- Investing in Small, Unseasoned Companies. The Fund may invest in
securities of small, unseasoned companies. These are companies that have
been in operation for less than three years, counting the operations of
any predecessors. Securities of these companies may have limited
liquidity (which means that the Fund may have difficulty selling them at
an acceptable price when it wants to) and the prices of these securities
may be volatile. The Fund currently intends to invest no more than 10% of
its total assets in securities of small, unseasoned issuers, while
reserving the right to invest up to 25% of its total assets in such
issuers.
-- Hedging. As described below, the Fund may purchase and sell
certain kinds of futures contracts, put and call options, forward
contracts, and options on futures and broadly-based stock indices. These
are all referred to as "hedging instruments." The Fund does not use
hedging instruments for speculative purposes, and has limits on the use
of them, described below. The hedging instruments the Fund may use are
described below and in greater detail in "Other Investment Techniques and
Strategies" in the Statement of Additional Information.
The Fund may buy and sell options, futures and forward contracts for
a number of purposes. It may do so to try to manage its exposure to the
possibility that the prices of its portfolio securities may decline, or
to establish a position in the securities market as a temporary substitute
for purchasing individual securities. Some of these strategies, such as
selling futures, buying puts and writing covered calls, hedge the Fund's
portfolio against price fluctuations.
Other hedging strategies, such as buying futures and call options,
tend to increase the Fund's exposure to the securities market. Forward
contracts are used to try to manage foreign currency risks on the Fund's
foreign investments. Foreign currency options are used to try to protect
against declines in the dollar value of foreign securities the Fund owns,
or to protect against an increase in the dollar cost of buying foreign
securities. Writing covered call options may also provide income to the
Fund for liquidity purposes.
Futures. The Fund may buy and sell futures contracts that relate to
broadly-based stock indices (these are referred to as Stock Index
Futures).
Put and Call Options. The Fund may buy and sell certain kinds of put
options (puts) and call options (calls).
The Fund may buy calls only on securities, broadly-based stock
indices, foreign currencies or Stock Index Futures, or to terminate its
obligation on a call the Fund previously wrote. The Fund may write (that
is, sell) covered call options. When the Fund writes a call, it receives
cash (called a premium). The call gives the buyer the ability to buy the
investment on which the call was written from the Fund at the call price
during the period in which the call may be exercised. If the value of the
investment does not rise above the call price, it is likely that the call
will lapse without being exercised, while the Fund keeps the cash premium
(and the investment).
The Fund may purchase put options. Buying a put on an investment
gives the Fund the right to sell the investment at a set price to a seller
of a put on that investment. The Fund can buy only those puts that relate
to (1) securities that the Fund owns, (2) broadly-based stock indices, (3)
foreign currencies or (4) Stock Index Futures. The Fund can buy a put on
a Stock Index Future whether or not the Fund owns the particular Stock
Index Future in its portfolio.
The Fund may write puts on securities, broadly-based stock indices,
foreign currencies or Stock Index Futures in an amount up to 50% of its
total assets only if such puts are covered by segregated liquid assets.
In writing puts, there is a risk that the Fund may be required to buy the
underlying security at a disadvantageous price.
The Fund may buy and sell puts and calls only if certain conditions
are met: (1) after the Fund writes a call, not more than 25% of the Fund's
total assets may be subject to calls; (2) calls the Fund buys or sells
must be listed on a securities or commodities exchange, or quoted on the
Automated Quotation System of the National Association of Securities
Dealers, Inc. (NASDAQ,) or traded in the over-the-counter market; (3) in
the case of puts and calls on foreign currency, they must be traded on a
securities or commodities exchange, or in the over-the-counter market, or
are quoted by recognized dealers in those options; (4) each call the Fund
writes must be "covered" while it is outstanding: that means the Fund must
own the investment on which the call was written or it must own other
securities that are acceptable for the escrow arrangements required for
calls; (5) the Fund may write calls on Futures contracts it owns, but
these calls must be covered by securities or other liquid assets the Fund
owns and segregates to enable it to satisfy its obligations if the call
is exercised; and (6) a call or put option may not be purchased if the
value of all of the Fund's put and call options would exceed 5% of the
Fund's total assets.
Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future
delivery at a fixed price. The Fund uses them to try to "lock in" the
U.S. dollar price of a security denominated in a foreign currency that the
Fund has bought or sold, or to protect against possible losses from
changes in the relative values of the U.S. dollar and foreign currency.
Hedging instruments can be volatile investments and may involve
special risks. In the broadest sense, exchange-traded options and futures
contracts and other hedging instruments the Fund can use may be defined
as "derivative" investments. In general, a derivative investment is a
specially-designed investment whose performance is linked to the
performance of another investment or security. The use of hedging
instruments requires special skills and knowledge of investment techniques
that are different than what is required for normal portfolio management.
If the Manager uses a hedging instrument at the wrong time or judges
market conditions incorrectly, hedging strategies may reduce the Fund's
return. The Fund could also experience losses if the prices of its futures
and options positions were not correlated with its other investments or
if it could not close out a position because the market for the future or
option was illiquid.
Options trading involves the payment of premiums and has special tax
effects on the Fund. There are also special risks in particular hedging
strategies. If a covered call written by the Fund is exercised on an
investment that has increased in value, the Fund will be required to sell
the investment at the call price and will not be able to realize any
profit if the investment has increased in value above the call price. The
use of forward contracts may reduce the gain that would otherwise result
from a change in the relationship between the U.S. dollar and a foreign
currency. These risks are described in greater detail in the Statement
of Additional Information.
-- Illiquid and Restricted Securities. Under the policies and
procedures established by the Fund's Board of Trustees, the Manager
determines the liquidity of certain of the Fund's investments. Investments
may be illiquid because of the absence of an active trading market, making
it difficult to value them or dispose of them promptly at an acceptable
price. A restricted security is one that has a contractual restriction on
its resale or which cannot be sold publicly until it is registered under
the Securities Act of 1933.
The Fund will not invest more than 10% of its net assets in illiquid
or restricted securities (that limit may increase to 15% if certain state
laws are changed or the Fund's shares are no longer sold in those states).
The Fund's percentage limitation on these investments does not apply to
certain restricted securities that are eligible for resale to qualified
institutional purchasers.
-- Loans of Portfolio Investments. To raise cash for liquidity
purposes, the Fund may lend its portfolio investments to brokers, dealers
and other financial institutions approved by the Board of Trustees. Each
loan must be collateralized in accordance with applicable regulatory
requirements. As a fundamental policy, these loans are limited to not more
than 25% of the value of the Fund's total assets. There are some risks
in connection with securities lending. The Fund might experience a delay
in receiving additional collateral to secure a loan, or a delay in
recovering loaned securities if the borrower defaults. The Fund presently
does not intend to engage in loans of investments that will exceed 5% of
the value of the Fund's total assets in the coming year.
-- Repurchase Agreements. The Fund may enter into repurchase
agreements. In a repurchase transaction, the Fund buys a security and
simultaneously sells it to the vendor for delivery at a future date.
These are used primarily for cash liquidity purposes. There is no limit
on the amount of the Fund's net assets that may be subject to repurchase
agreements of seven days or less.
Repurchase agreements must be fully collateralized. However, if the
vendor fails to pay the resale price on the delivery date, the Fund may
incur costs in disposing of the collateral and may experience losses if
there is any delay in its ability to do so. The Fund will not enter into
a repurchase agreement that causes more than 10% of its net assets to be
subject to repurchase agreements having a maturity beyond seven days.
-- Short Sales "Against-the-Box." In a short sale, the seller does
not own the security that is sold, but normally borrows the security to
fulfill its delivery obligation. The seller later buys the security to
repay the loan, in the expectation that the price of the security will be
lower when the purchase is made, resulting in a gain. The Fund may not
sell securities short except in collateralized transactions referred to
as short sales "against-the-box," where the Fund owns an equivalent amount
of the securities sold short. This technique is primarily used for tax
purposes. No more than 15% of the Fund's net assets will be held as
collateral for short sales at any one time.
-- Temporary Defensive Investments. Under unusual economic, political
or business circumstances, the Fund may invest all or a portion of its
assets in defensive securities. Securities selected for defensive purposes
may include debt securities. These may be rated or unrated bonds and
debentures, preferred stocks, cash or cash equivalents (such as U.S.
Treasury Bills and other short-term obligations of the U.S. Government,
its agencies or instrumentalities) or commercial paper rated "A-1" or
better by Standard & Poor's Corporation or "P-1" or better by Moody's
Investors Service, Inc.
Other Investment Restrictions. The Fund has other investment restrictions
which are fundamental policies. Under these fundamental policies, the
Fund cannot do any of the following: (1) invest in securities of any one
issuer (other than the U.S. Government or its agencies or
instrumentalities) if immediately thereafter more than 5% of the Fund's
assets would be invested in securities of that issuer; (2) with respect
to 75% of its assets, invest in securities of any one issuer (other than
the U.S. Government or its agencies or instrumentalities) if the Fund
would then own more than 10% of the voting securities or 10% of any class
of securities of that issuer (all debt and all preferred stock of an
issuer are respectively considered single classes for this purpose); (3)
borrow money in excess of 10% of the value of its net assets; (4) invest
in other open-end investment companies, except in a merger, consolidation,
reorganization or acquisition of assets, or invest more than 10% of its
net assets through open-market purchases in closed-end investment
companies, including small business investment companies, nor make any
such investments at commission rates that are not in excess of normal
brokerage commissions; or (5) deviate from the percentage restrictions
listed under "Borrowing," "Warrants and Rights," "Loans of Portfolio
Investments" and "Short Sales Against-the-Box" or from the restrictions
under "Foreign Securities" as to what foreign securities may be purchased.
All of the percentage restrictions described above and elsewhere in
this Prospectus (other than the percentage limits that apply to borrowing,
described in the Statement of Additional Information) apply only at the
time the Fund purchases a security. The Fund need not dispose of a
security merely because the size of the Fund's assets has changed or the
security has increased in value relative to the size of the Fund. There
are other fundamental policies discussed in the Statement of Additional
Information.
How the Fund is Managed
Organization and History. The Fund was organized in 1987 as a
Massachusetts business trust. The Fund is an open-end, diversified
management investment company, with an unlimited number of authorized
shares of beneficial interest.
The Fund is governed by a Board of Trustees, which is responsible for
protecting the interests of shareholders under Massachusetts law. The
Trustees meet periodically throughout the year to oversee the Fund's
activities, review its performance, and review the actions of the Manager.
"Trustees and Officers of the Fund" in the Statement of Additional
Information names the Trustees and officers of the Fund and provides more
information about them. Although the Fund is not required by law to hold
annual meetings, it may hold shareholder meetings from time to time on
important matters, and shareholders have the right to call a meeting to
remove a Trustee or to take other action described in the Fund's
Declaration of Trust.
Presently, the Fund has only one class of shares. However, the Board
of Trustees has the power, without shareholder approval, to divide
unissued shares of the Fund into two or more classes. These classes could
have different dividends and distributions and could be subject to
different expenses. Shares of the Fund are freely transferrable.
The Manager and Its Affiliates. The Fund is managed by the Manager,
Oppenheimer Management Corporation, which is responsible for selecting the
Fund's investments and handles its day-to-day business. The Manager
carries out its duties, subject to the policies established by the Board
of Trustees, under an Investment Advisory Agreement which states the
Manager's responsibilities. The Agreement sets forth the fees paid by the
Fund to the Manager, and describes the expenses that the Fund is
responsible to pay to conduct its business.
The Manager has operated as an investment adviser since 1959. The
Manager and its affiliates currently manage investment companies,
including other OppenheimerFunds, with assets of more than $29 billion as
of December 31, 1994, and with more than 1.8 million shareholder accounts.
The Manager is owned by Oppenheimer Acquisition Corp., a holding company
that is owned in part by senior officers of the Manager and controlled by
Massachusetts Mutual Life Insurance Company, a mutual life insurance
company.
-- Portfolio Manager. The Manager has designated a Portfolio Manager
as the person principally responsible for the day-to-day management of the
Fund's portfolio. Since August, 1994, James C. Ayer, Jr., has been the
portfolio manager for the Fund. In addition, since August, 1994, Mr. Ayer
has also been a Vice President of the Fund. He is also an Assistant Vice
President of the Manager. Prior to joining the Manager in 1992, Mr. Ayer
was an international equities investment officer with Brown Brothers
Harriman & Co.
-- Fees and Expenses. Under the Investment Advisory Agreement, the
Fund pays the Manager the following annual fees, which decline on
additional assets as the Fund grows: 1.0% of the first $50 million of
average annual net assets; 0.75% of the next $150 million; 0.72% of the
next $200 million; 0.69% of the next $200 million; 0.66% of the next $200
million; and 0.60% of net assets in excess of $800 million. The Fund's
management fee for its last fiscal year ended September 30, 1994 was 0.81%
of average annual net assets of the Fund, which may be higher than the
rate paid by some other mutual funds.
The Fund pays expenses related to its daily operations, such as
custodian fees, Trustees' fees, transfer agency fees, legal and auditing
costs. Those expenses are paid out of the Fund's assets and are not paid
directly by shareholders. However, those expenses reduce the net asset
value of shares, and therefore are indirectly borne by shareholders
through their investment. More information about the investment advisory
agreement and the other expenses paid by the Fund is contained in the
Statement of Additional Information.
There is also information about the Fund's brokerage policies and
practices in "Brokerage Policies of the Fund" in the Statement of
Additional Information. That section discusses how brokers and dealers are
selected for the Fund's portfolio transactions. When deciding which
brokers to use, the Manager is permitted by the investment advisory
agreement to consider whether brokers have sold shares of the Fund or any
other funds for which the Manager serves as investment adviser.
-- The Distributor. The Fund's shares are sold through dealers and
brokers that have a sales agreement with Oppenheimer Funds Distributor,
Inc., a subsidiary of the Manager that acts as the Fund's Distributor.
The Distributor also distributes the shares of other mutual funds managed
by the Manager (the "OppenheimerFunds") and is sub-distributor for funds
managed by a subsidiary of the Manager.
-- The Transfer Agent. The Fund's transfer agent is Oppenheimer
Shareholder Services, a division of the Manager, which acts as the
shareholder servicing agent for the Fund and the other OppenheimerFunds
on an "at-cost" basis. Shareholders should direct inquiries about their
account to the Transfer Agent at the address and toll-free numbers shown
below in this Prospectus and on the back cover.
Performance of the Fund
Explanation of Performance Terminology. The Fund uses the terms "total
return" and "average annual total return" to illustrate its performance.
This performance information may be useful to help you see how your
investment has done and to compare it to other funds or market indices,
as we have done below.
It is important to understand that the Fund's total returns represent
past performance and should not be considered to be predictions of future
returns or performance. This performance data is described below, but
more detailed information about how total returns are calculated is
contained in the Statement of Additional Information, which also contains
information about other ways to measure and compare the Fund's
performance. The Fund's investment performance will vary over time,
depending on market conditions, the composition of the portfolio and
expenses.
-- Total Returns. There are different types of total returns used to
measure the Fund's performance. Total return is the change in value of
a hypothetical investment in the Fund over a given period, assuming that
all dividends and capital gains distributions are reinvested in additional
shares. The cumulative total return measures the change in value over the
entire period (for example, ten years). An average annual total return
shows the average rate of return for each year in a period that would
produce the cumulative total return over the entire period. However,
average annual total returns do not show the Fund's actual year-by-year
performance.
When total returns are quoted for shares of the Fund, they reflect
the payment of the maximum initial sales charge. Total returns may also
be quoted "at net asset value," without considering the effect of the
sales charge, and those returns would be reduced if sales charges were
deducted.
How Has the Fund Performed? Below is a discussion by the Manager of the
Fund's performance during its last fiscal year ended September 30, 1994,
followed by a graphical comparison of the Fund's performance to an
appropriate broad-based market index.
-- Management's Discussion of Performance. Prior to the change in
investment policies approved by the Fund's shareholders on September 19,
1994, the Manager was building the Fund's cash position, selling smaller
positions and taking profits in stocks that appeared to have reached their
peak. Following shareholder approval of the investment policy change, the
Fund began to use its cash position to begin to diversify the portfolio
by country, investing in both established and emerging markets in Europe,
Asia and Latin America. The Fund seeks to capitalize on trends that it
believes offer promising opportunities for long-term growth.
-- Comparing the Fund's Performance to the Market. The chart below
shows the performance of a hypothetical $10,000 investment in shares of
the Fund held from the inception of the Fund (December 30, 1987) until
September 30, 1994, with all dividends and capital gains distributions
reinvested in additional shares. The graph reflects the deduction of the
5.75% maximum current initial sales charge on shares of the Fund.
For the fiscal year ended September 30, 1994, the Fund has selected
a different index against which to compare its performance, the Morgan
Stanley World Index, an unmanaged index of issuers listed on the stock
exchanges of 20 foreign countries and the United States, which is widely
recognized as a measure of global stock market performance. For the
fiscal year ended September 30, 1993, the Fund had compared its
performance to that of the S & P 500 Index, a broad-based index of equity
securities widely regarded as a general measurement of the performance of
the U.S. equity securities market. The newly-selected index reflects
shareholder approval on September 19, 1994 of expansion of the Fund's
investment policies to emphasize investments in emerging growth companies
worldwide. The performance graph below includes the S & P 500 Index for
comparison purposes.
Index performance reflects reinvestment of dividends but does not
consider the effect of capital gains or transaction costs, and none of the
data below shows the effect of taxes. Also, the Fund's performance
reflects the effect of Fund business and operating expenses. While index
comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited
to the securities in either the Morgan Stanley World Index or the S & P
500 Index, and that index data does not reflect any assessment of the risk
of the investments included in the index.
Comparison of Change
in Value of $10,000 [graph]
Hypothetical Investment in
Oppenheimer Global
Emerging Growth Fund1,
Morgan Stanley World Index
and S&P 500 Index
Average Annual Total Return of the Fund at 9/30/94
1-Year 5-Year Life2
<15.09>% 8.93% 9.79%
Past performance is not predictive of future performance.
1. Formerly named Oppenheimer Global Bio-Tech Fund
2. The Fund began operations on 12/30/87.
A B O U T Y O U R A C C O U N T
How to Buy Shares
When you buy shares of the Fund, you pay an initial sales charge (on
investments up to $1 million). If you purchase shares of the Fund as part
of an investment of at least $1 million in shares of one or more
OppenheimerFunds, you will not pay any initial sales charge, but if you
sell any of those shares within 18 months after your purchase, you may pay
a contingent deferred sales charge, which will vary depending on the
amount you invested. Sales charges are described below.
How Much Must You Invest? You can open a Fund account with a minimum
initial investment of $1,000 and make additional investments at any time
with as little as $25. There are reduced minimum investments under special
investment plans.
With Asset Builder Plans, Automatic Exchange Plans, 403(b)(7)
custodial plans and military allotment plans, you can make initial and
subsequent investments of as little as $25; and subsequent purchases of
at least $25 can be made by telephone through AccountLink.
Under pension and profit-sharing plans and Individual Retirement
Accounts (IRAs), you can make an initial investment of as little as $250
(if your IRA is established under an Asset Builder Plan, the $25 minimum
applies), and subsequent investments may be as little as $25.
There is no minimum investment requirement if you are buying
shares by reinvesting dividends from the Fund or other OppenheimerFunds
(a list of them appears in the Statement of Additional Information, or you
can ask your dealer or call the Transfer Agent), or by reinvesting
distributions from unit investment trusts that have made arrangements with
the Distributor.
-- How Are Shares Purchased? You can buy shares several ways --
through any dealer, broker or financial institution that has a sales
agreement with the Distributor, or directly through the Distributor, or
automatically from your bank account through an Asset Builder Plan under
the OppenheimerFunds AccountLink service.
-- Buying Shares Through Your Dealer. Your dealer will place your
order with the Distributor on your behalf.
-- Buying Shares Through the Distributor. Complete an
OppenheimerFunds New Account Application and return it with a check
payable to "Oppenheimer Funds Distributor, Inc." Mail it to P.O. Box 5270,
Denver, Colorado 80217. If you don't list a dealer on the application,
the Distributor will act as your agent in buying the shares. However, it
is recommended that you discuss your investment first with a financial
advisor, to be sure that it is appropriate for you.
-- Buying Shares Through OppenheimerFunds AccountLink. You can use
AccountLink to link your Fund account with an account at a U.S. bank or
other financial institution that is an Automated Clearing House (ACH)
member. You can then transmit funds electronically to purchase shares,
to send redemption proceeds, and to transmit dividends and distributions.
Shares are purchased for your account on AccountLink on the regular
business day the Distributor is instructed by you to initiate the ACH
transfer to buy shares. You can provide those instructions automatically,
under an Asset Builder Plan, described below, or by telephone instructions
using OppenheimerFunds PhoneLink, also described below. You should request
AccountLink privileges on the application or dealer settlement
instructions used to establish your account. Please refer to "AccountLink"
below for more details.
-- Asset Builder Plans. You may purchase shares of the Fund (and up
to four other OppenheimerFunds) automatically each month from your account
at a bank or other financial institution under an Asset Builder Plan with
AccountLink. Details are on the Application and in the Statement of
Additional Information.
-- At What Price Are Shares Sold? Shares are sold at the public
offering price based on the net asset value (and any initial sales charge
that applies) that is next determined after the Distributor receives the
purchase order in Denver, Colorado. In most cases, to enable you to
receive that day's offering price, the Distributor must receive your order
by the time of day The New York Stock Exchange closes, which is normally
4:00 P.M., New York time, but may be earlier on some days (all references
to time in this Prospectus mean "New York time"). The net asset value is
determined as of that time on each day The New York Stock Exchange is open
(which is a "regular business day"). If you buy shares through a dealer,
the dealer must receive your order by the close of The New York Stock
Exchange on a regular business day and transmit it to the Distributor so
that it is received before the Distributor's close of business that day,
which is normally 5:00 P.M. The Distributor may reject any purchase order
for the Fund's shares, in its sole discretion.
The public offering price is normally net asset value plus an initial
sales charge. However, in some cases, described below, purchases are not
subject to an initial sales charge, and the offering price will be the net
asset value. In some cases, reduced sales charges may be available, as
described below. Out of the amount you invest, the Fund receives the net
asset value to invest for your account. The sales charge varies depending
on the amount of your purchase. A portion of the sales charge may be
retained by the Distributor and allocated to your dealer as commission.
The current sales charge rates and commissions paid to dealers and brokers
are as follows:
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
Front-End Sales Charge Commission as
As a Percentage of: Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 5.75% 6.10% 4.75%
- -------------------------------------------------------------------------
$25,000 or more 5.50% 5.82% 4.75%
but less than
$50,000
- -------------------------------------------------------------------------
$50,000 or more 4.75% 4.99% 4.00%
but less than
$100,000
- -------------------------------------------------------------------------
$100,000 or more 3.75% 3.90% 3.00%
but less than
$250,000
- -------------------------------------------------------------------------
$250,000 or more 2.50% 2.56% 2.00%
but less than
$500,000
- -------------------------------------------------------------------------
$500,000 or more 2.00% 2.04% 1.60%
but less than
$1 million
- -------------------------------------------------------------------------
</TABLE>
The Distributor reserves the right to reallow the entire commission
to dealers. If that occurs, the dealer may be considered an "underwriter"
under Federal securities laws.
-- Contingent Deferred Sales Charge. There is no initial sales
charge on purchases of Class A shares of any one or more OppenheimerFunds
aggregating $1 million or more (shares of the Fund and other
OppenheimerFunds that offer only one class of shares that has no class
designation are considered "Class A Shares" for this purpose). However,
the Distributor pays dealers of record commissions on such purchases in
an amount equal to the sum of 1.0% of the first $2.5 million, plus 0.50%
of the next $2.5 million, plus 0.25% of share purchases over $5 million.
That commission will be paid only on the amount of those purchases in
excess of $1 million that were not previously subject to a front-end sales
charge and dealer commission.
If you redeem any of those shares within 18 months of the end of the
calendar month of their purchase, a contingent deferred sales charge may
be deducted from the redemption proceeds. That sales charge will be equal
to 1.0% of the aggregate net asset value of either (1) the redeemed shares
(not including shares purchased by reinvestment of dividends or capital
gain distributions) or (2) the original cost of the shares, whichever is
less. However, the contingent deferred sales charge paid on such shares
will not exceed the aggregate commissions the Distributor paid to your
dealer on all Class A shares of all OppenheimerFunds you purchased subject
to the Class A contingent deferred sales charge.
In determining whether a contingent deferred sales charge is payable,
the Fund will first redeem shares that are not subject to the sales
charge, including shares purchased by reinvestment of dividends and
capital gains, and then will redeem other shares in the order that you
purchased them. The contingent deferred sales charge is waived in certain
cases described in "Waivers of Sales Charges" below.
No contingent deferred sales charge is charged on exchanges of shares
under the Fund's Exchange Privilege (described below). However, if the
shares acquired by exchange are redeemed within 18 months of the end of
the calendar month of the purchase of the exchanged shares, the sales
charge will apply.
-- Special Arrangements With Dealers. The Distributor may advance
up to 13 months' commissions to dealers that have established special
arrangements with the Distributor for Asset Builder Plans for their
clients. Dealers whose sales of Class A shares of OppenheimerFunds (other
than money market funds) under OppenheimerFunds-sponsored 403(b)(7)
custodial plans exceed $5 million per year (calculated per quarter), will
receive monthly one-half of the Distributor's retained commissions on
those sales, and if those sales exceed $10 million per year, those dealers
will receive the Distributor's entire retained commission on those sales.
Reduced Sales Charges. You may be eligible to buy shares of the Fund at
reduced sales charge rates in one or more of the following ways:
-- Right of Accumulation. To qualify for a lower sales charge rate,
you and your spouse can add together Fund shares you purchase for your
individual accounts, or jointly, or on behalf of your children who are
minors, under trust or custodial accounts. A fiduciary can count all
shares purchased for a trust, estate or other fiduciary account (including
one or more employee benefit plans of the same employer) that has multiple
accounts.
Additionally, you can add together current purchases of shares of the
Fund and Class A shares of other OppenheimerFunds. You can also include
shares of the Fund and Class A shares of other OppenheimerFunds you
previously purchased subject to a sales charge, provided that you still
hold your investment in one of the OppenheimerFunds. The value of those
shares will be based on the greater of the amount you paid for the shares
or their current value (at offering price). The OppenheimerFunds are
listed in "Reduced Sales Charges" in the Statement of Additional
Information, or a list can be obtained from the Distributor. The reduced
sales charge will apply only to current purchases and must be requested
when you buy your shares.
-- Letter of Intent. Under a Letter of Intent, you may purchase
shares of the Fund and Class A shares of other OppenheimerFunds during a
13-month period at the reduced sales charge rate that applies to the total
amount of the intended purchases. This can include purchases made up to
90 days before the date of the Letter. More information is contained in
the Application and in "Reduced Sales Charges" in the Statement of
Additional Information.
-- Waivers of Sales Charges. No sales charge is imposed on sales of
the Fund's shares to the following investors: (1) the Manager or its
affiliates; (2) present or former officers, directors, trustees and
employees (and their "immediate families" as defined in "Reduced Sales
Charges" in the Statement of Additional Information) of the Fund, the
Manager and its affiliates, and retirement plans established by them for
their employees; (3) registered management investment companies, or
separate accounts of insurance companies having an agreement with the
Manager or the Distributor for that purpose; (4) dealers or brokers that
have a sales agreement with the Distributor, if they purchase shares for
their own accounts or for retirement plans for their employees; (5)
employees and registered representatives (and their spouses) of dealers
or brokers described above or financial institutions that have entered
into sales arrangements with such dealers or brokers (and are identified
to the Distributor) or with the Distributor; the purchaser must certify
to the Distributor at the time of purchase that the purchase is for the
purchaser's own account (or for the benefit of such employee's spouse or
minor children); (6) dealers, brokers or registered investment advisers
that have entered into an agreement with the Distributor providing
specifically for the use of shares of the Fund in particular investment
products made available to their clients; or (7) dealers, brokers or
registered investment advisers that have entered into an agreement with
the Distributor to sell shares to defined contribution employee retirement
plans for which the dealer, broker or investment adviser provides
administrative services.
Additionally, no sales charge is imposed on shares that are (a)
issued in plans of reorganization, such as mergers, asset acquisitions and
exchange offers, to which the Fund is a party, or (b) purchased by the
reinvestment of loan repayments by a participant in a retirement plan for
which the Manager or its affiliates acts as sponsor, or (c) purchased by
the reinvestment of dividends or other distributions reinvested from the
Fund or other OppenheimerFunds (other than Oppenheimer Cash Reserves) or
unit investment trusts for which reinvestment arrangements have been made
with the Distributor. There is a further discussion of this policy in
"Reduced Sales Charges" in the Statement of Additional Information.
The contingent deferred sales charge does not apply to purchases at
net asset value described above and is also waived if shares are redeemed
in the following cases: (1) retirement distributions or loans to
participants or beneficiaries from qualified retirement plans, deferred
compensation plans or other employee benefit plans ("Retirement Plans"),
(2) returns of excess contributions made to Retirement Plans, (3)
Automatic Withdrawal Plan payments that are limited to no more than 12%
of the original account value annually, (4) involuntary redemptions of
shares by operation of law or under the procedures set forth in the Fund's
Declaration of Trust or adopted by the Board of Trustees, and (5) if, at
the time an order is placed for Class A shares that would otherwise be
subject to the Class A contingent deferred sales charge, the dealer agrees
to accept the dealer's portion of the commission payable on the sale in
installments of 1/18th of the commission per month (with no further
commission payable if the shares are redeemed within 18 months of
purchase).
-- Service Plan. The Fund has adopted a Service Plan to reimburse
the Distributor for a portion of its costs incurred in connection with the
personal service and maintenance of shareholder accounts that hold shares
of the Fund. Reimbursement is made quarterly at an annual rate that may
not exceed 0.25% of the average annual net assets of the Fund. The
Distributor uses all of those fees to compensate dealers, brokers, banks
and other financial institutions quarterly for providing personal service
and maintenance of accounts of their customers that hold shares of the
Fund and to reimburse itself (if the Fund's Board of Trustees authorizes
such reimbursements, which it has not yet done) for its other expenditures
under the Plan.
Services to be provided include, among others, answering customer
inquiries about the Fund, assisting in establishing and maintaining
accounts in the Fund, making the Fund's investment plans available and
providing other services at the request of the Fund or the Distributor.
Payments are made by the Distributor quarterly at an annual rate not to
exceed 0.25% of the average annual net assets of shares of the Fund held
in accounts of the dealer or its customers. The payments under the Plan
increase the annual expenses of the Fund. For more details, please refer
to "Service Plan" in the Statement of Additional Information.
Special Investor Services
AccountLink. OppenheimerFunds AccountLink links your Fund account to your
account at your bank or other financial institution to enable you to send
money electronically between those accounts to perform a number of types
of account transactions. These include purchases of shares by telephone
(either through a service representative or by PhoneLink, described
below), automatic investments under Asset Builder Plans, and sending
dividends and distributions or Automatic Withdrawal Plan payments directly
to your bank account. Please refer to the Application for details or call
the Transfer Agent for more information.
AccountLink privileges must be requested on the Application you use
to buy shares, or on your dealer's settlement instructions if you buy your
shares through your dealer. After your account is established, you can
request AccountLink privileges on signature-guaranteed instructions to the
Transfer Agent. AccountLink privileges will apply to each shareholder
listed in the registration on your account as well as to your dealer
representative of record unless and until the Transfer Agent receives
written instructions terminating or changing those privileges. After you
establish AccountLink for your account, any change of bank account
information must be made by signature-guaranteed instructions to the
Transfer Agent signed by all shareholders who own the account.
-- Using AccountLink to Buy Shares. Purchases may be made by
telephone only after your account has been established. To purchase shares
in amounts up to $250,000 through a telephone representative, call the
Distributor at 1-800-852-8457. The purchase payment will be debited from
your bank account.
-- PhoneLink. PhoneLink is the OppenheimerFunds automated telephone
system that enables shareholders to perform a number of account
transactions automatically using a touch-tone phone. PhoneLink may be
used on already-established Fund accounts after you obtain a Personal
Identification Number (PIN), by calling the special PhoneLink number: 1-
800-533-3310.
-- Purchasing Shares. You may purchase shares in amounts up to
$100,000 by phone, by calling 1-800-533-3310. You must have established
AccountLink privileges to link your bank account with the Fund, to pay for
these purchases.
-- Exchanging Shares. With the OppenheimerFunds Exchange Privilege,
described below, you can exchange shares automatically by phone from your
Fund account to another OppenheimerFunds account you have already
established by calling the special PhoneLink number. Please refer to "How
to Exchange Shares," below, for details.
-- Selling Shares. You can redeem shares by telephone automatically
by calling the PhoneLink number and the Fund will send the proceeds
directly to your AccountLink bank account. Please refer to "How to Sell
Shares," below, for details.
Automatic Withdrawal and Exchange Plans. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis:
-- Automatic Withdrawal Plans. If your Fund account is worth $5,000
or more, you can establish an Automatic Withdrawal Plan to receive
payments of at least $50 on a monthly, quarterly, semi-annual or annual
basis. The checks may be sent to you or sent automatically to your bank
account on AccountLink. You may even set up certain types of withdrawals
of up to $1,500 per month by telephone. You should consult the
Application and Statement of Additional Information for more details.
-- Automatic Exchange Plans. You can authorize the Transfer Agent to
exchange an amount you establish in advance automatically for shares of
up to five other OppenheimerFunds on a monthly, quarterly, semi-annual or
annual basis under an Automatic Exchange Plan. The minimum purchase for
each OppenheimerFunds account is $25. These exchanges are subject to the
terms of the Exchange Privilege, described below.
Reinvestment Privilege. If you redeem some or all of your Fund shares,
you have up to 6 months to reinvest all or part of the redemption proceeds
in shares of the Fund or Class A shares of other OppenheimerFunds without
paying sales charge. This privilege applies to Fund shares that you
purchased with an initial sales charge or on which you paid a contingent
deferred sales charge when you redeemed them. You must be sure to ask the
Distributor for this privilege when you send your payment. Please consult
the Statement of Additional Information for more details.
Retirement Plans. Fund shares are available as an investment for
retirement plans. If you participate in a plan sponsored by your employer,
the plan trustee or administrator must make the purchase of shares for
your retirement plan account. The Distributor offers a number of different
retirement plans that can be used by individuals and employers:
-- Individual Retirement Accounts including rollover IRAs, for
individuals and their spouses
-- 403(b)(7) Custodial Plans for employees of eligible tax-exempt
organizations, such as schools, hospitals and charitable organizations
-- SEP-IRAs (Simplified Employee Pension Plans) for small business
owners or people with income from self-employment, including SARSEP-IRAs
-- Pension and Profit-Sharing Plans for self-employed persons and
other employers
Please call the Distributor for the OppenheimerFunds plan documents,
which contain important information and applications.
How to Sell Shares
You can arrange to take money out of your account on any regular business
day by selling (redeeming) some or all of your shares. Your shares will
be sold at the next net asset value calculated after your order is
received and accepted by the Transfer Agent. The Fund offers you a number
of ways to sell your shares: in writing or by telephone. You can also set
up Automatic Withdrawal Plans to redeem shares on a regular basis, as
described above. If you have questions about any of these procedures, and
especially if you are redeeming shares in a special situation, such as due
to the death of the owner, or from a retirement plan, please call the
Transfer Agent first, at 1-800-525-7048, for assistance.
-- Retirement Accounts. To sell shares in an OppenheimerFunds
retirement account in your name, call the Transfer Agent for a
distribution request form. There are special income tax withholding
requirements for distributions from retirement plans and you must submit
a withholding form with your request to avoid delay. If your retirement
plan account is held for you by your employer, you must arrange for the
distribution request to be sent by the plan administrator or trustee.
There are additional details in the Statement of Additional Information.
-- Certain Requests Require a Signature Guarantee. To protect you
and the Fund from fraud, certain redemption requests must be in writing
and must include a signature guarantee in the following situations (there
may be other situations also requiring a signature guarantee):
-- You wish to redeem more than $50,000 worth of shares and receive
a check
-- A redemption check is not payable to all shareholders listed on
the account statement
-- A redemption check is not sent to the address of record on your
statement
-- Shares are being transferred to a Fund account with a different
owner or name
-- Shares are redeemed by someone other than the owners (such as an
Executor)
-- Where Can I Have My Signature Guaranteed? The Transfer Agent will
accept a guarantee of your signature by a number of financial
institutions, including: a U.S. bank, trust company, credit union or
savings association, or by a foreign bank that has a U.S. correspondent
bank, or by a U.S. registered dealer or broker in securities, municipal
securities or government securities, or by a U.S. national securities
exchange, a registered securities association or a clearing agency. If you
are signing on behalf of a corporation, partnership or other business, or
as a fiduciary, you must also include your title in the signature.
Selling Shares by Mail. Write a "letter of instructions" that includes:
-- Your name
-- The Fund's name
-- Your Fund account number (from your account statement)
-- The dollar amount or number of shares to be redeemed
-- Any special payment instructions
-- Any share certificates for the shares you are selling, and
-- Any special requirements or documents requested by the Transfer
Agent to assure proper authorization of the person asking to sell shares.
Use the following address for requests by mail:
Oppenheimer Shareholder Services
P.O. Box 5270, Denver, Colorado 80217
Send courier or Express Mail requests to:
Oppenheimer Shareholder Services
10200 E. Girard Avenue, Building D
Denver, Colorado 80231
Selling Shares by Telephone. You and your dealer representative of record
may also sell your shares by telephone. To receive the redemption price
on a regular business day, your call must be received by the Transfer
Agent by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. You may not redeem
shares held in an OppenheimerFunds retirement plan or under a share
certificate by telephone.
-- To redeem shares through a service representative, call
1-800-852-8457
-- To redeem shares automatically on PhoneLink, call 1-800-533-3310
Whichever method you use, you may have a check sent to the address
on the account statement, or, if you have linked your Fund account to your
bank account on AccountLink, you may have the proceeds wired to that
account.
-- Telephone Redemptions Paid by Check. Up to $50,000 may be redeemed
by telephone, in any 7-day period. The check must be payable to all
owners of record of the shares and must be sent to the address on the
account. This service is not available within 30 days of changing the
address on an account statement.
-- Telephone Redemptions Through AccountLink. There are no dollar
limits on telephone redemption proceeds sent to a bank account designated
when you establish AccountLink. Normally the ACH wire to your bank is
initiated on the business day after the redemption. You do not receive
dividends on the proceeds of the shares you redeemed while they are
waiting to be wired.
Selling Shares Through Your Dealer. The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their
customers. Brokers or dealers may charge for that service. Please refer
to "Special Arrangements for Repurchase of Shares from Dealers and
Brokers" in the Statement of Additional Information for more details.
How to Exchange Shares
Shares of the Fund may be exchanged for shares of certain
OppenheimerFunds at net asset value per share at the time of exchange,
without sales charge. A $5 service fee will be deducted from the fund
account you are exchanging into to help defray administrative costs. That
charge is waived for automated exchanges made by brokers on Fund/SERV and
for automated exchanges between already established accounts on PhoneLink,
described below. To exchange shares, you must meet several conditions:
-- Shares of the fund selected for exchange must be available for
sale in your state of residence
-- The prospectuses of this Fund and the fund whose shares you want
to buy must offer the exchange privilege
-- You must hold the shares you buy when you establish your account
for at least 7 days before you can exchange them; after the account is
open 7 days, you can exchange shares every regular business day
-- You must meet the minimum purchase requirements for the fund you
purchase by exchange
-- Before exchanging into a fund, you should obtain and read its
prospectus
Shares of a particular class may be exchanged only for shares of the
same class in the other OppenheimerFunds. For example, you can exchange
shares of this Fund only for Class A shares of another fund. At present,
not all of the OppenheimerFunds offer the same classes of shares. If a
fund has only one class of shares that does not have a class designation,
they are "Class A" shares for exchange purposes. In some cases, sales
charges may be imposed on exchange transactions. Certain OppenheimerFunds
offer Class A shares and either Class B or Class C shares, and a list can
be obtained by calling the Distributor at 1-800-525-7048. Please refer
to "How to Exchange Shares" in the Statement of Additional Information for
more details.
Exchanges may be requested in writing or by telephone:
-- Written Exchange Requests. Submit an OppenheimerFunds Exchange
Request form, signed by all owners of the account. Send it to the
Transfer Agent at the addresses listed in "How to Sell Shares."
-- Telephone Exchange Requests. Telephone exchange requests may be
made either by calling a service representative at 1-800-852-8457 or by
using PhoneLink for automated exchanges, by calling 1-800-533-3310.
Telephone exchanges may be made only between accounts that are registered
with the same name(s) and address. Shares held under certificates may not
be exchanged by telephone.
You can find a list of OppenheimerFunds currently available for
exchanges in the Statement of Additional Information or by calling a
service representative at 1-800-525-7048. That list can change from time
to time.
There are certain exchange policies you should be aware of:
-- Shares are normally redeemed from one fund and purchased from the
other fund in the exchange transaction on the same regular business day
on which the Transfer Agent receives an exchange request that is in proper
form by the close of The New York Stock Exchange that day, which is
normally 4:00 P.M. but may be earlier on some days. However, either fund
may delay the purchase of shares of the fund you are exchanging into if
it determines it would be disadvantaged by a same-day transfer of the
proceeds to buy shares. For example, the receipt of multiple exchange
requests from a dealer in a "market-timing" strategy might require the
sale of securities at a time or price disadvantageous to the Fund.
-- Because excessive trading can hurt fund performance and harm
shareholders, the Fund reserves the right to refuse any exchange request
that will disadvantage it, or to refuse multiple exchange requests
submitted by a shareholder or dealer.
-- The Fund may amend, suspend or terminate the exchange privilege
at any time. Although the Fund will attempt to provide you notice
whenever it is reasonably able to do so, it may impose these changes at
any time.
-- For tax purposes, exchanges of shares involve a redemption of
the shares of the fund you own and a purchase of shares of the other fund,
which may result in a capital gain or loss. For more information about
taxes affecting exchanges, please refer to "How to Exchange Shares" in the
Statement of Additional Information.
-- If the Transfer Agent cannot exchange all the shares you request
because of a restriction cited above, only the shares eligible for
exchange will be exchanged.
Shareholder Account Rules and Policies
-- Net Asset Value Per Share is determined as of the close of The New
York Stock Exchange on each regular business day by dividing the value of
the Fund's net assets by the number of shares that are outstanding. The
Fund's Board of Trustees has established procedures to value the Fund's
securities to determine net asset value. In general, securities values
are based on market value. There are special procedures for valuing
illiquid and restricted securities, obligations for which market values
cannot be readily obtained, and call options and hedging instruments.
These procedures are described more completely in the Statement of
Additional Information.
-- The offering of shares may be suspended during any period in which
the determination of net asset value is suspended, and the offering may
be suspended by the Board of Trustees at any time the Board believes it
is in the Fund's best interest to do so.
-- Telephone Transaction Privileges for purchases, redemptions or
exchanges may be modified, suspended or terminated by the Fund at any
time. If an account has more than one owner, the Fund and the Transfer
Agent may rely on the instructions of any one owner. Telephone privileges
apply to each owner of the account and the dealer representative of record
for the account unless and until the Transfer Agent receives cancellation
instructions from an owner of the account.
-- The Transfer Agent will record any telephone calls to verify data
concerning transactions and has adopted other procedures to confirm that
telephone instructions are genuine, by requiring callers to provide tax
identification numbers and other account data or by using PINs, and by
confirming such transactions in writing. If the Transfer Agent does not
use reasonable procedures it may be liable for losses due to unauthorized
transactions, but otherwise neither it nor the Fund will be liable for
losses or expenses arising out of telephone instructions reasonably
believed to be genuine. If you are unable to reach the Transfer Agent
during periods of unusual market activity, you may not be able to complete
a telephone transaction and should consider placing your order by mail.
-- Redemption or transfer requests will not be honored until the
Transfer Agent receives all required documents in proper form. From time
to time, the Transfer Agent in its discretion may waive certain of the
requirements for redemptions stated in this Prospectus.
-- Dealers that can perform account transactions for their clients
by participating in NETWORKING through the National Securities Clearing
Corporation are responsible for obtaining their clients' permission to
perform those transactions and are responsible to their clients who are
shareholders of the Fund if the dealer performs any transaction
erroneously or improperly.
-- The redemption price for shares will vary from day to day because
the value of the securities in the Fund's portfolio fluctuates. Therefore,
the redemption value of your shares may be more or less than their
original cost.
-- Payment for redeemed shares is made ordinarily in cash and
forwarded by check or through AccountLink (as elected by the shareholder
under the redemption procedures described above) within 7 days after the
Transfer Agent receives redemption instructions in proper form, except
under unusual circumstances determined by the Securities and Exchange
Commission delaying or suspending such payments. The Transfer Agent may
delay forwarding a check or processing a payment via AccountLink for
recently purchased shares, but only until the purchase payment has
cleared. That delay may be as much as 10 days from the date the shares
were purchased. That delay may be avoided if you purchase shares by
certified check or arrange to have your bank provide telephone or written
assurance to the Transfer Agent that your purchase payment has cleared.
-- Involuntary redemptions of small accounts may be made by the Fund
if the account value has fallen below $200 for reasons other than the fact
that the market value of shares has dropped, and in some cases involuntary
redemptions may be made to repay the Distributor for losses from the
cancellation of share purchase orders.
-- Under unusual circumstances, shares of the Fund may be redeemed
"in kind", which means that the redemption proceeds will be paid with
securities from the Fund's portfolio. Please refer to "How to Sell
Shares" in the Statement of Additional Information for more details.
-- "Backup Withholding" of Federal income tax may be applied at the
rate of 31% from dividends, distributions and redemption proceeds
(including exchanges) if you fail to furnish the Fund a certified Social
Security or Employer Identification Number when you sign your application,
or if you violate Internal Revenue Service regulations on tax reporting
of income.
-- The Fund does not charge a redemption fee, but if your dealer or
broker handles your redemption, they may charge a fee. That fee can be
avoided by redeeming your Fund shares directly through the Transfer Agent.
Under the circumstances described in "How to Buy Shares," you may be
subject to a contingent deferred sales charge when redeeming certain
shares of the Fund.
-- To avoid sending duplicate copies of materials to households, the
Fund will mail only one copy of each annual and semi-annual report to
shareholders having the same last name and address on the Fund's records.
However, each shareholder may call the Transfer Agent at 1-800-525-7048
to ask that copies of those materials be sent personally to that
shareholder.
Dividends, Capital Gains and Taxes
Dividends. The Fund declares dividends from net investment income on an
annual basis and normally pays those dividends to shareholders in
December, but the Board of Trustees can change that date. The Board may
also cause the Fund to declare dividends after the close of the Fund's
fiscal year (which ends September 30th). Because the Fund does not have
an objective of seeking current income, the amounts of dividends it pays,
if any, will likely be small.
Capital Gains. The Fund may make distributions annually in December out
of any net short-term or long-term capital gains and the Fund may make
supplemental distributions of capital gains following the end of its
fiscal year. Long-term capital gains will be separately identified in the
tax information the Fund sends you after the end of the year. Short-term
capital gains are treated as dividends for tax purposes. There can be no
assurances that the Fund will pay any capital gains distributions in a
particular year.
Distribution Options. When you open your account, specify on your
application how you want to receive your distributions. For
OppenheimerFunds retirement accounts, all distributions are reinvested.
For other accounts, you have four options:
-- Reinvest All Distributions in the Fund. You can elect to reinvest
all dividends and long-term capital gains distributions in additional
shares of the Fund.
-- Reinvest Long-Term Capital Gains Only. You can elect to reinvest
long-term capital gains in the Fund while receiving dividends by check or
sent to your bank account on AccountLink.
-- Receive All Distributions in Cash. You can elect to receive a
check for all dividends and long-term capital gains distributions or have
them sent to your bank on AccountLink.
-- Reinvest Your Distributions in Another OppenheimerFunds Account.
You can reinvest all distributions in another OppenheimerFunds account you
have established.
Taxes. If your account is not a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the
Fund. Long-term capital gains are taxable as long-term capital gains when
distributed to shareholders. It does not matter how long you held your
shares. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Distributions are subject to
federal income tax and may be subject to state or local taxes. Your
distributions are taxable when paid, whether you reinvest them in
additional shares or take them in cash. Every year the Fund will send you
and the IRS a statement showing the amount of all taxable distributions
you received in the previous year.
-- "Buying a Dividend". When a fund goes ex-dividend, its share
price is reduced by the amount of the distribution. If you buy shares on
or just before the ex-dividend date, or just before the Fund declares a
capital gains distribution, you will pay the full price for the shares and
then receive a portion of the price back as a taxable dividend or capital
gain.
-- Taxes on Transactions. Share redemptions, including redemptions
for exchanges, are subject to capital gains tax. Generally speaking, a
capital gain or loss is the difference between the price you paid for the
shares and the price you received when you sold them.
-- Returns of Capital. In certain cases distributions made by the
Fund may be considered a non-taxable return of capital to shareholders.
If that occurs, it will be identified in notices to shareholders. A non-
taxable return of capital may reduce your tax basis in your Fund shares.
This information is only a summary of certain federal tax information
about your investment. More information is contained in the Statement of
Additional Information, and in addition you should consult with your tax
adviser about the effect of an investment in the Fund on your particular
tax situation.<PAGE>
Appendix
Industry Classifications
Aerospace/Defense
Air Transportation
Auto Parts Distribution
Automotive
Bank Holding Companies
Banks
Beverages
Broadcasting
Broker-Dealers
Building Materials
Cable Television
Chemicals
Commercial Finance
Computer Hardware
Computer Software
Conglomerates
Consumer Finance
Containers
Convenience Stores
Department Stores
Diversified Financial
Diversified Media
Drug Stores
Drug Wholesalers
Durable Household Goods
Education
Electric Utilities
Electrical Equipment
Electronics
Energy Services & Producers
Entertainment/Film
Environmental
Food
Gas Utilities
Gold
Health Care/Drugs
Health Care/Supplies & Services
Homebuilders/Real Estate
Hotel/Gaming
Industrial Services
Insurance
Leasing & Factoring
Leisure
Manufacturing
Metals/Mining
Nondurable Household Goods
Oil - Integrated
Paper
Publishing/Printing
Railroads
Restaurants
Savings & Loans
Shipping
Special Purpose Financial
Specialty Retailing
Steel
Supermarkets
Telecommunications - Technology
Telephone - Utility
Textile/Apparel
Tobacco
Toys
Trucking
<PAGE>
APPENDIX TO PROSPECTUS OF
OPPENHEIMER GLOBAL EMERGING GROWTH FUND
Graphic material included in Prospectus of Oppenheimer Global
Emerging Growth Fund: "Comparison of Total Return of Oppenheimer Global
Emerging Growth Fund with the S&P 500 Index - Change in Value of a $10,000
Hypothetical Investment"
A linear graph will be included in the Prospectus of Oppenheimer
Global Emerging Growth Fund (the "Fund") depicting the initial account
value and subsequent account value of a hypothetical $10,000 investment
in the Fund. That graph will cover the period from 12/30/87 (inception
of the Fund) through 9/30/94. The graph will compare such values with
hypothetical $10,000 investments over the same time periods in the Morgan
Stanley World Index and the S&P 500 Index. Set forth below are the
relevant data points that will appear on the linear graph. Additional
information with respect to the foregoing, including a description of the
Morgan Stanley World Index and the S&P 500 Index, is set forth in the
Prospectus under "Performance of the Fund - Comparing the Fund's
Performance to the Market."
<TABLE>
<CAPTION>
Oppenheimer Morgan
Fiscal Year Global Emerging Stanley S&P
(Period Ended) Growth Fund World Index 500 Index
<S> <C> <C> <C>
12/30/87 $ 9,425 $10,000 $10,000
09/30/88 $10,019 $ 9,355 $11,308
09/30/89 $11,542 $11,709 $15,034
09/30/90 $11,275 $ 9,184 $13,645
09/30/91 $25,681 $11,437 $17,887
09/30/92 $19,339 $11,322 $19,862
09/30/93 $20,846 $13,613 $22,438
09/30/94 $18,780 $14,642 $23,264
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent O P E N H E I M E R
Oppenheimer Shareholder Services Global
P.O. Box 5270 Emerging
Denver, Colorado 80217 Growth
1-800-525-7048 Fund
Custodian of Portfolio Securities
The Bank of New York
One Wall Street Prospectus
New York, New York 10015 Effective January 24, 1995
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person
has been authorized to give any information or to
make any representations other than those
contained in this Prospectus or the Statement of
Additional Information and, if given or made, such
information and representations must not be relied
upon as having been authorized by the Fund,
Oppenheimer Management Corporation, Oppenheimer
Funds Distributor, Inc. or any affiliate thereof.
This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of
the securities offered hereby in any state to any
person to whom it is unlawful to make such an
offer in such state.
OppenheimerFunds
PR751.0195.N
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center
New York, New York 10048-0203
1-800-525-7048
Investment Advisor
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048-0203
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048-0203
Transfer Agent O P P E N H E I M E R
Oppenheimer Shareholder Services Global
P.O. Box 5270 Emerging
Denver, Colorado 80217 Growth
1-800-525-7048 Fund
Custodian of Portfolio Securities
The Bank of New York
One Wall Street Prospectus and
New York, New York 10015 New Account Application
Effective January 24, 1995
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen
Shalov & Wein
114 West 47th Street
New York, New York 10036
No dealer, broker, salesperson or any other person
has been authorized to give any information or to
make any representations other than those
contained in this Prospectus or the Statement of
Additional Information and, if given or made, such
information and representations must not be relied
upon as having been authorized by the Fund,
Oppenheimer Management Corporation, Oppenheimer
Funds Distributor, Inc. or any affiliate thereof.
This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of
the securities offered hereby in any state to any
person to whom it is unlawful to make such an
offer in such state.
OppenheimerFunds
PR750.0195.N
<PAGE>
Oppenheimer Global Emerging Growth Fund
Two World Trade Center, New York, New York 10048-0203
1-800-525-7048
Statement of Additional Information dated January 24, 1995
This Statement of Additional Information of Oppenheimer Global Emerging
Growth Fund is not a Prospectus. This document contains additional
information about the Fund and supplements information in the Prospectus
dated January 24, 1995. It should be read together with the Prospectus,
which may be obtained by writing to the Fund's Transfer Agent, Oppenheimer
Shareholder Services, at P.O. Box 5270, Denver, Colorado 80217 or by
calling the Transfer Agent at the toll-free number shown above.
Contents
</TABLE>
<TABLE>
<C> <S>
Page
About the Fund
Investment Objective and Policies. . . . . . . . . . . . . .2
Investment Policies and Strategies. . . . . . . . . . .2
Other Investment Techniques and Strategies. . . . . . .2
Other Investment Restrictions . . . . . . . . . . . . 14
How the Fund is Managed . . . . . . . . . . . . . . . . . 15
Organization and History. . . . . . . . . . . . . . . 15
Trustees and Officers of the Fund . . . . . . . . . . 15
The Manager and Its Affiliates. . . . . . . . . . . . 20
Brokerage Policies of the Fund . . . . . . . . . . . . . . 21
Performance of the Fund. . . . . . . . . . . . . . . . . . 23
Service Plan . . . . . . . . . . . . . . . . . . . . . . . 25
About Your Account
How To Buy Shares. . . . . . . . . . . . . . . . . . . . . 26
How To Sell Shares . . . . . . . . . . . . . . . . . . . . 31
How To Exchange Shares . . . . . . . . . . . . . . . . . . 35
Dividends, Capital Gains and Taxes . . . . . . . . . . . . 36
Additional Information About the Fund. . . . . . . . . . . 37
Financial Information About the Fund
Independent Auditors' Report . . . . . . . . . . . . . . . 39
Financial Statements . . . . . . . . . . . . . . . . . . . 40
</TABLE>
<PAGE>
ABOUT THE FUND
Investment Objective and Policies
Investment Policies and Strategies. The investment objective and policies
of the Fund are described in the Prospectus. Set forth below is
supplemental information about those policies and the types of securities
in which the Fund invests, as well as the strategies the Fund may use to
try to achieve its objective. Capitalized terms used in this Statement
of Additional Information have the same meaning as those terms have in the
Prospectus.
In selecting securities for the Fund's portfolio, the Fund's
investment advisor, Oppenheimer Management Corporation (the "Manager"),
evaluates the merits of securities primarily through the exercise of its
own investment analysis. This may include, among other things, evaluation
of the history of the issuer's operations, prospects for the industry of
which the issuer is part, the issuer's financial condition, the issuer's
pending product developments and developments by competitors, the effect
of general market and economic conditions on the issuer's business, and
legislative proposals or new laws that might affect the issuer. Current
income is not a consideration in the selection of portfolio securities for
the Fund, whether for appreciation, defensive or liquidity purposes. The
fact that a security has a low yield or does not pay current income will
not be an adverse factor in selecting securities to try to achieve the
Fund's investment objective of capital appreciation unless the Manager
believes that the lack of yield might adversely affect appreciation
possibilities.
The portion of the Fund's assets allocated to securities selected for
capital appreciation and the investment techniques used will depend upon
the judgment of the Fund's Manager as to the future movement of the equity
securities markets. If the Manager believes that economic conditions
favor a rising market, the Fund will emphasize securities and investment
methods selected for high capital growth. If the Manager believes that
a market decline is likely, defensive securities and investment methods
may be emphasized (See "Temporary Defensive Investments," below).
-- Emerging Growth Companies. The Manager uses a global "theme
oriented approach" in managing the Fund. This "theme oriented approach"
seeks to capitalize on important global trends that the Manager believes
offers the most promising areas for long-term growth. Examples currently
include, among others, telecommunications, developing capital markets,
emerging consumer markets, the environment and biotechnology. These
sectors may change from time to time as the Manager reviews important
global trends. The Manager also considers performance and growth rates
of foreign companies relative to domestic companies in selecting
investments for the Fund's portfolio.
-- Warrants and Rights. The prices of warrants do not necessarily
move in a manner parallel to the prices of the underlying securities. The
price the Fund pays for a warrant will be lost unless the warrant is
exercised prior to its expiration. Rights are similar to warrants, but
normally have a short duration and are distributed directly by the issuer
to its shareholders. Rights and warrants have no voting rights, receive
no dividends and have no rights with respect to the assets of the issuer.
Other Investment Techniques and Strategies
-- Hedging With Options and Futures Contracts. The Fund may use
hedging instruments for the purposes described in the Prospectus. When
hedging to attempt to protect against declines in the market value of the
Fund's portfolio, or to permit the Fund to retain unrealized gains in the
value of portfolio securities which have appreciated, or to facilitate
selling securities for investment reasons, the Fund may: (i) sell Stock
Index Futures, (ii) buy puts, or (iii) write covered calls on securities
held by it or on Stock Index Futures (as described in the Prospectus).
When hedging to establish a position in the equity securities markets as
a temporary substitute for the purchase of individual equity securities
the Fund may: (i) buy Stock Index Futures, or (ii) buy calls on Stock
Index Futures or securities. Normally, the Fund would then purchase the
equity securities and terminate the hedging portion.
The Fund's strategy of hedging with Futures and options on Futures
will be incidental to the Fund's investment activities in the underlying
cash market. In the future, the Fund may employ hedging instruments and
strategies that are not presently contemplated but which may be
subsequently developed, to the extent such investment methods are
consistent with the Fund's investment objective, and are legally
permissible and disclosed in the Prospectus. Additional information about
the hedging instruments the Fund may use is provided below.
-- Writing Covered Calls. As described in the Prospectus, the Fund
may write covered calls. When the Fund writes a call on an investment, it
receives a premium and agrees to sell the callable investment to a
purchaser of a corresponding call during the call period (usually not more
than 9 months) at a fixed exercise price (which may differ from the market
price of the underlying investment) regardless of market price changes
during the call period. To terminate its obligation on a call it has
written, the Fund may purchase a corresponding call in a "closing
purchase transaction." A profit or loss will be realized, depending upon
whether the net of the amount of option transaction costs and the premium
received on the call the Fund has written is more or less than the price
of the call the Fund subsequently purchased. A profit may also be
realized if the call lapses unexercised because the Fund retains the
underlying investment and the premium received. Those profits are
considered short-term capital gains for Federal income tax purposes, as
are premiums on lapsed calls, and when distributed by the Fund are taxable
as ordinary income. If the Fund could not effect a closing purchase
transaction due to the lack of a market, it would have to hold the
callable investment until the call lapsed or was exercised.
The Fund may also write calls on Futures without owning a futures
contract or deliverable securities, provided that at the time the call is
written, the Fund covers the call by segregating in escrow an equivalent
dollar value of deliverable securities or liquid assets. The Fund will
segregate additional liquid assets if the value of the escrowed assets
drops below 100% of the current value of the Future. In no circumstances
would an exercise notice as to a Future put the Fund in a short futures
position.
The Fund's Custodian, or a securities depository acting for the
Custodian, will act as the Fund's escrow agent, through the facilities of
the Options Clearing Corporation ("OCC"), as to the investments on which
the Fund has written options that are traded on exchanges, or as to other
acceptable escrow securities, so that no margin will be required from the
Fund for such option transactions. OCC will release the securities
covering a call on the expiration of the call or when the Fund enters into
a closing purchase transaction. Call writing affects the Fund's turnover
rate and the brokerage commissions it pays. Commissions, normally higher
than on general securities transactions, are payable on writing or
purchasing a call.
-- Stock Index Futures. As described in the Prospectus, the Fund may
invest in Stock Index Futures only if they relate to broadly-based stock
indices. A stock index is considered to be broadly-based if it includes
stocks that are not limited to issuers in any particular industry or group
of industries. A stock index assigns relative values to the common stocks
included in the index and fluctuates with the changes in the market value
of those stocks. Stock indices cannot be purchased or sold directly.
Stock index futures are contracts based on the future value of the
basket of securities that comprise the underlying stock index. The
contracts obligate the seller to deliver, and the purchaser to take, cash
to settle the futures transaction or to enter into an offsetting contract.
No physical delivery of the securities underlying the index is made on
settling the futures obligation. No monetary amount is paid or received
by the Fund on the purchase or sale of a Stock Index Future. Upon
entering into a Futures transaction, the Fund will be required to deposit
an initial margin payment, in cash or U.S. Treasury bills, with the
futures commission merchant (the "futures broker"). Initial margin
payments will be deposited with the Fund's Custodian in an account
registered in the futures broker's name; however, the futures broker can
gain access to that account only under certain specified conditions. As
the Future is marked to market (that is, its value on the Fund's books is
changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures
broker on a daily basis.
At any time prior to the expiration of the Future, the Fund may elect
to close out its position by taking an opposite position, at which time
a final determination of variation margin is made and additional cash is
required to be paid by or released to the Fund. Any gain or loss is then
realized by the Fund on the Future for tax purposes. Although Stock Index
Futures by their terms call for settlement by the delivery of cash, in
most cases the settlement obligation is fulfilled without such delivery
by entering into an offsetting transaction. All futures transactions are
effected through a clearing house associated with the exchange on which
the contracts are traded.
-- Writing Put Options. A put option on securities gives the
purchaser the right to sell, and the writer the obligation to buy, the
underlying investment at the exercise price during the option period.
Writing a put covered by segregated liquid assets equal to the exercise
price of the put has the same economic effect to the Fund as writing a
covered call. The premium the Fund receives from writing a put option
represents a profit, as long as the price of the underlying investment
remains above the exercise price. However, the Fund has also assumed the
obligation during the option period to buy the underlying investment from
the buyer of the put at the exercise price, even though the value of the
investment may fall below the exercise price. If the put expires
unexercised, the Fund (as the writer of the put) realizes a gain in the
amount of the premium less transaction costs. If the put is exercised,
the Fund must fulfill its obligation to purchase the underlying investment
at the exercise price, which will usually exceed the market value of the
investment at that time. In that case, the Fund may incur a loss, equal
to the sum of the sale price of the underlying investment and the premium
received minus the sum of the exercise price and any transaction costs
incurred.
When writing put options on securities or on foreign currencies, to
secure its obligation to pay for the underlying security, the Fund will
deposit in escrow liquid assets with a value equal to or greater than the
exercise price of the underlying securities. The Fund therefore forgoes
the opportunity of investing the segregated assets or writing calls
against those assets. As long as the obligation of the Fund as the put
writer continues, it may be assigned an exercise notice by the exchange
or broker-dealer through whom such option was sold, requiring the Fund to
exchange currency at the specified rate of exchange or to take delivery
of the underlying security against payment of the exercise price. The
Fund may have no control over when it may be required to purchase the
underlying security, since it may be assigned an exercise notice at any
time prior to the termination of its obligation as the writer of the put.
This obligation terminates upon expiration of the put, or such earlier
time at which the Fund effects a closing purchase transaction by
purchasing a put of the same series as that previously sold. Once the
Fund has been assigned an exercise notice, it is thereafter not allowed
to effect a closing purchase transaction.
The Fund may effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent an
underlying security from being put. Furthermore, effecting such a closing
purchase transaction will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by the deposited
assets, or to utilize the proceeds from the sale of such assets for other
investments by the Fund. The Fund will realize a profit or loss from a
closing purchase transaction if the cost of the transaction is less or
more than the premium received from writing the option. As above for
writing covered calls, any and all such profits described herein from
writing puts are considered short-term capital gains for Federal tax
purposes, and when distributed by the Fund, are taxable as ordinary
income.
-- Purchasing Puts and Calls. The Fund may purchase calls to protect
against the possibility that the Fund's portfolio will not participate in
an anticipated rise in the securities market. When the Fund purchases a
call (other than in a closing purchase transaction), it pays a premium
and, except as to calls on stock indices, has the right to buy the
underlying investment from a seller of a corresponding call on the same
investment during the call period at a fixed exercise price. In
purchasing a call, the Fund benefits only if the call is sold at a profit
or if, during the call period, the market price of the underlying
investment is above the sum of the exercise price, transaction costs, and
the premium paid, and the call is exercised. If the call is not exercised
or sold (whether or not at a profit), it will become worthless at its
expiration date and the Fund will lose its premium payment and the right
to purchase the underlying investment. When the Fund purchases a call on
a stock index, it pays a premium, but settlement is in cash rather than
by delivery of the underlying investment to the Fund.
When the Fund purchases a put, it pays a premium and, except as to
puts on stock indices, has the right to sell the underlying investment to
a seller of a corresponding put on the same investment during the put
period at a fixed exercise price. Buying a put on an investment the Fund
owns (a "protective put") enables the Fund to attempt to protect itself
during the put period against a decline in the value of the underlying
investment below the exercise price by selling the underlying investment
at the exercise price to a seller of a corresponding put. If the market
price of the underlying investment is equal to or above the exercise price
and as a result the put is not exercised or resold, the put will become
worthless at its expiration and the Fund will lose the premium payment and
the right to sell the underlying investment. However, the put may be sold
prior to expiration (whether or not at a profit).
Puts and calls on broadly-based stock indices or Stock Index Futures
are similar to puts and calls on securities or futures contracts except
that all settlements are in cash and gain or loss depends on changes in
the index in question (and thus on price movements in the stock market
generally) rather than on price movements of individual securities or
futures contracts. When the Fund buys a call on a stock index or Stock
Index Future, it pays a premium. If the Fund exercises the call during
the call period, a seller of a corresponding call on the same investment
will pay the Fund an amount of cash to settle the call if the closing
level of the stock index or Future upon which the call is based is greater
than the exercise price of the call. That cash payment is equal to the
difference between the closing price of the call and the exercise price
of the call times a specified multiple (the "multiplier") which determines
the total dollar value for each point of difference. When the Fund buys
a put on a stock index or Stock Index Future, it pays a premium and has
the right during the put period to require a seller of a corresponding
put, upon the Fund's exercise of its put, to deliver cash to the Fund to
settle the put if the closing level of the stock index or Stock Index
Future upon which the put is based is less than the exercise price of the
put. That cash payment is determined by the multiplier, in the same
manner as described above as to calls.
When the Fund purchases a put on a stock index, or on a Stock Index
Future not owned by it, the put protects the Fund to the extent that the
index moves in a similar pattern to the securities the Fund holds. The
Fund can either resell the put or, in the case of a put on a Stock Index
Future, buy the underlying investment and sell it at the exercise price.
The resale price of the put will vary inversely with the price of the
underlying investment. If the market price of the underlying investment
is above the exercise price, and as a result the put is not exercised, the
put will become worthless on the expiration date. In the event of a
decline in price of the underlying investment, the Fund could exercise or
sell the put at a profit to attempt to offset some or all of its loss on
its portfolio securities.
The Fund's option activities may affect its portfolio turnover rate
and brokerage commissions. The exercise of calls written by the Fund may
cause the Fund to sell related portfolio securities, thus increasing its
turnover rate. The exercise by the Fund of puts on securities will cause
the sale of underlying investments, increasing portfolio turnover.
Although the decision whether to exercise a put it holds is within the
Fund's control, holding a put might cause the Fund to sell the related
investments for reasons that would not exist in the absence of the put.
The Fund will pay a brokerage commission each time it buys or sells a
call, put or an underlying investment in connection with the exercise of
a put or call. Those commissions may be higher than the commissions for
direct purchases or sales of the underlying investments.
Premiums paid for options are small in relation to the market value
of the underlying investments and, consequently, put and call options
offer large amounts of leverage. The leverage offered by trading in
options could result in the Fund's net asset value being more sensitive
to changes in the value of the underlying investments.
-- Options on Foreign Currency. The Fund may write and purchase puts
and calls on foreign currencies that are traded on a securities or
commodities exchange or over-the-counter markets or are quoted by major
recognized dealers in such options. It does so to protect against
declines in the dollar value of foreign securities and against increases
in the dollar cost of foreign securities to be acquired. If the Manager
anticipates a rise in the dollar value of a foreign currency in which
securities to be acquired are denominated, the increased cost of such
securities may be partially offset by purchasing calls or writing puts on
that foreign currency. If a decline in the dollar value of a foreign
currency is anticipated, the decline in value of portfolio securities
denominated in that currency may be partially offset by writing calls or
purchasing puts on that foreign currency. However, in the event of
currency rate fluctuations adverse to the Fund's position, it would lose
the premium it paid and transactions costs.
A call written on a foreign currency by the Fund is covered if the
Fund owns the underlying foreign currency covered by the call or has an
absolute and immediate right to acquire that foreign currency without
additional cash consideration (or for additional cash consideration held
in a segregated account by its custodian) upon conversion or exchange of
other foreign currency held in its portfolio. A call may be written by
the Fund on a foreign currency to provide a hedge against a decline due
to an expected adverse change in the exchange rate in the U.S. dollar
value of a security which the Fund owns or has the right to acquire and
which is denominated in the currency underlying the option. This is a
cross-hedging strategy. In such circumstances, the Fund collateralizes
the option by maintaining in a segregated account with the Fund's
custodian, cash or U.S. Government Securities in an amount not less than
the value of the underlying foreign currency in U.S. dollars marked-to-
market daily.
-- Forward Contracts. A Forward Contract involves bilateral
obligations of one party to purchase, and another party to sell, a
specific currency at a future date (which may be any fixed number of days
from the date of the contract agreed upon by the parties), at a price set
at the time the contract is entered into. These contracts are generally
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. Some forward
contracts are standardized foreign currency futures contracts that are
traded on exchanges and are subject to procedures and regulations
applicable to other Futures.
The Fund may use Forward Contracts to protect against uncertainty in
the level of future exchange rates. The use of Forward Contracts does not
eliminate fluctuations in the prices of the underlying securities the Fund
owns or intends to acquire, but it does fix a rate of exchange in advance.
In addition, although Forward Contracts limit the risk of loss due to a
decline in the value of the hedged currencies, at the same time they limit
any potential gain that might result should the value of the currencies
increase. To attempt to limit its exposure to loss under forward
contracts in a particular foreign currency, the Fund's assets denominated
in that currency or denominated in a closely-denominated foreign currency
will at least equal the difference between the market value and the cost
of the forward contracts in that particular foreign currency.
The Fund may enter into Forward Contracts with respect to specific
transactions. For example, when the Fund enters into a contract for the
purchase or sale of a security denominated in a foreign currency, or when
the Fund anticipates receipt of dividend payments in a foreign currency,
the Fund may desire to "lock-in" the U.S. dollar price of the security or
the U.S. dollar equivalent of such payment by entering into a Forward
Contract, for a fixed amount of U.S. dollars per unit of foreign currency,
for the purchase or sale of the amount of foreign currency involved in the
underlying transaction (this is called a "transaction hedge"). The Fund
will thereby be able to protect itself against a possible loss resulting
from an adverse change in the relationship between the currency exchange
rates during the period between the date on which the security is
purchased or sold, or on which the payment is declared, and the date on
which such payments are made or received.
The Fund may also use Forward Contracts to lock in the U.S. dollar
value of portfolio positions (this is called a "position hedge"). In a
position hedge, for example, when the Fund believes that foreign currency
may suffer a substantial decline against the U.S. dollar, it may enter
into a forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of the Fund's portfolio securities
denominated in that foreign currency, or when the Fund believes that the
U.S. dollar may suffer a substantial decline against a foreign currency,
it may enter into a forward purchase contract to buy that foreign currency
for a fixed dollar amount. The Fund may also enter into a forward
contract to sell a different foreign currency for a fixed U.S. dollar
amount if the Fund believes that the U.S. dollar value of the currency to
be sold pursuant to the forward contract will fall whenever there is a
decline in the U.S. dollar value of the currency in which portfolio
securities of the Fund are denominated (this is known as a "cross-hedge").
The Fund will not enter into a "cross-hedge" unless it is denominated in
a currency or currencies that the Manager believes will have price
movements that tend to correlate closely with the currency in which the
investment being hedged is denominated. The success of cross hedging
depends on many factors, including the ability of the Manager to correctly
identify and monitor the correlation between foreign currencies and the
U.S. dollar. To the extent that the correlation is not identical, the
Fund may experience losses or gains on both the underlying security and
the cross-hedge.
The Fund will not enter into Forward Contracts or maintain a net
exposure in such contracts to the extent that the Fund would be obligated
to deliver an amount of foreign currency in excess of the value of the
Fund's portfolio securities denominated in that currency or in a closely-
correlated currency, unless such net exposure is covered by segregated
liquid assets. The Fund's Custodian will place cash or U.S. Government
securities or other liquid high-quality debt securities in a separate
account having a value equal to the net exposure. If the value of the
securities placed in the separate account declines, additional cash or
securities will be placed in the account on a daily basis so that the
account value will equal the Fund's net exposure. As an alternative, the
Fund may purchase a call option permitting the Fund to purchase the amount
of foreign currency being hedged by a forward sale contract at a price no
higher than the Forward Contract price, or the Fund may purchase a put
option permitting the Fund to sell the amount of foreign currency subject
to a forward purchase contract at a price as high or higher than the
Forward Contract price. Unanticipated changes in currency prices may
result in poorer overall performance for the Fund than if it had not
entered into such contracts.
At or before the maturity of a Forward Contract requiring the Fund
to sell a currency, the Fund may either sell a portfolio security and use
the sale proceeds to make delivery of the currency or retain the security
and offset its contractual obligation to deliver the currency by
purchasing a second contract pursuant to which the Fund will obtain, on
the same maturity date, the same amount of the currency that it is
obligated to deliver. Similarly, the Fund may close out a Forward
Contract requiring it to purchase a specified currency by entering into
a second contract entitling it to sell the same amount of the same
currency on the maturity date of the first contract. The Fund would
realize a gain or loss as a result of entering into such an offsetting
Forward Contract under either circumstance to the extent the exchange rate
or rates between the currencies involved moved between the execution dates
of the first contract and offsetting contract.
The cost to the Fund of engaging in Forward Contracts varies with
factors such as the currencies involved, the length of the contract period
and the market conditions then prevailing. Because Forward Contracts are
usually entered into on a principal basis, no fees or commissions are
involved. Because such contracts are not traded on an exchange, the Fund
must evaluate the credit and performance risk of the counterparty under
a Forward Contract.
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currency deposits
into U.S. dollars on a daily basis. The Fund may convert foreign currency
from time to time, and there are costs to the Fund of currency conversion.
Foreign exchange dealers do not charge a fee for conversion, but they do
seek to realize a profit based on the difference between the prices at
which they buy and sell various currencies. Thus, a dealer may offer to
sell a foreign currency to the Fund at one rate, while offering a lesser
rate of exchange should the Fund desire to resell that currency to the
dealer.
-- Regulatory Aspects of Hedging Instruments. The Fund is required
to operate within certain guidelines and restrictions with respect to its
use of futures and options thereon as established by the Commodities
Futures Trading Commission ("CFTC"). In particular, the Fund is excluded
from registration as a "commodity pool operator" if it complies with the
requirements of Rule 4.5 adopted by the CFCT. Under this Rule, the Fund
is not limited regarding the percentage of its assets committed to futures
margins and related options premiums subject to a hedge position.
However, aggregate initial futures margins and related options premiums
are limited to 5% or less of the Fund's net asset value for other than
bona fide hedging strategies employed by the Fund within the meaning and
intent of applicable provisions of the Commodity Exchange Act and CFCT
regulations thereunder.
Transactions in options by the Fund are subject to limitations
established by option exchanges governing the maximum number of options
that may be written or held by a single investor or group of investors
acting in concert, regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more
accounts or through one or more different exchanges or through one or more
brokers. Thus the number of options which the Fund may write or hold may
be affected by options written or held by other entities, including other
investment companies having the same adviser as the Fund (or an adviser
that is an affiliate of the Fund's adviser). The exchanges also impose
position limits on Futures transactions. An exchange may order the
liquidation of positions found to be in violation of those limits and may
impose certain other sanctions.
Due to requirements under the Investment Company Act, when the Fund
purchases a Stock Index Future, the Fund will maintain, in a segregated
account or accounts with its Custodian, cash or readily-marketable, short-
term (maturing in one year or less) debt instruments in an amount equal
to the market value of the securities underlying such Future, less the
margin deposit applicable to it.
When the Fund writes an over-the-counter("OTC") option, it intends
to enter into an arrangement with a primary U.S. Government securities
dealer, which would establish a formula price at which the Fund would have
the absolute right to repurchase that OTC option. This formula price
would generally be based on a multiple of the premium received for the
option, plus the amount by which the option is exercisable below the
market price of the underlying security ("in-the-money"). For any OTC
option the Fund writes, it will treat as illiquid (for purposes of its
restriction on illiquid securities, stated in the Prospectus) the mark-to-
market value of any OTC option held by it. The Securities and Exchange
Commission is evaluating the general issue of whether or not OTC options
should be considered as liquid securities, and the procedure described
above could be affected by the outcome of that evaluation.
-- Tax Aspects of Covered Calls and Hedging Instruments. The Fund
intends to qualify as a "regulated investment company" under the Internal
Revenue Code (although it reserves the right not to qualify). That
qualification enables the Fund to "pass through" its income and realized
capital gains to shareholders without having to pay tax on them. This
avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive
from the Fund (unless the Fund's shares are held in a retirement account
or the shareholder is otherwise exempt from tax). One of the tests for
the Fund's qualification as a regulated investment company is that less
than 30% of its gross income must be derived from gains realized on the
sale of securities held for less than three months. To comply with this
30% cap, the Fund will limit the extent to which it engages in the
following activities, but will not be precluded from them: (i) selling
investments, including Stock Index Futures, held for less than three
months, whether or not they were purchased on the exercise of a call held
by the Fund; (ii) purchasing options which expire in less than three
months; (iii) effecting closing transactions with respect to calls or puts
written or purchased less than three months previously; (iv) exercising
puts or calls held by the Fund for less than three months; or (v) writing
calls on investments held less than three months.
Certain foreign currency exchange contracts (Forward Contracts) in
which the Fund may invest are treated as "section 1256 contracts." Gains
or losses relating to section 1256 contracts generally are characterized
under the Internal Revenue Code as 60% long-term and 40% short-term
capital gains or losses. However, foreign currency gains or losses
arising from certain section 1256 contracts (including Forward Contracts)
generally are treated as ordinary income or loss. In addition, section
1256 contracts held by the Fund at the end of each taxable year are
"marked-to-market" with the result that unrealized gains or losses are
treated as thought they were realized. These contracts also may be
marked-to-market for purposes of the excise tax applicable to investment
company distributions and for other purposes under rules prescribed
pursuant to the Internal Revenue Code. An election can be made by the
Fund to exempt these transactions from this marked-to-market treatment.
Certain Forward Contracts entered into by the Fund may result in
"straddles" for federal income tax purposes. The straddle rules may
affect the character of gains (or losses) realized by the Fund on straddle
positions. Generally, a loss sustained on the disposition of a
position(s) making up a straddle is allowed only to the extent such loss
exceeds any unrecognized gain in the offsetting positions making up the
straddle. Disallowed loss is generally allowed at the point where there
is no unrecognized gain in the offsetting positions making up the
straddle, or the offsetting position is disposed of.
Under the Internal Revenue Code, gains or losses attributable to
fluctuations in exchange rates which occur between the time the Fund
accrues interest or other receivables or accrues expenses or other
liabilities denominated in a foreign currency and the time the Fund
actually collects such receivables or pays such liabilities generally are
treated as ordinary income or ordinary loss. Similarly, on disposition
of debt securities denominated in a foreign currency and on disposition
foreign currency forward contracts, gains or losses attributable to
fluctuations in the value of a foreign currency between the date of
acquisition of the security or contract and the date of the disposition
also are treated as an ordinary gain or loss. Currency gains and losses
are offset against market gains and losses on each trade before
determining a net "section 988" gain or loss under the Internal Revenue
Code, which may ultimately increase or decrease the amount of the Fund's
investment company income available for distribution to its shareholders.
-- Risks of Hedging With Options and Futures. An option position may
be closed out only on a market that provides secondary trading for options
of the same series, and there is no assurance that a liquid secondary
market will exist for any particular option. In addition to the risks
associated with hedging that are discussed in the Prospectus and above,
there is a risk in using short hedging by (i) selling Stock Index Futures
or (ii) purchasing puts on stock indices or Stock Index Futures to attempt
to protect against declines in the value of the Fund's equity securities.
The risk is that the prices of Stock Index Futures will correlate
imperfectly with the behavior of the cash (i.e., market value) prices of
the Fund's equity securities. The ordinary spreads between prices in the
cash and futures markets are subject to distortions, due to differences
in the natures of those markets. First, all participants in the futures
markets are subject to margin deposit and maintenance requirements.
Rather than meeting additional margin deposit requirements, investors may
close out futures contracts through offsetting transactions which could
distort the normal relationship between the cash and futures markets.
Second, the liquidity of the futures markets depends on participants
entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery,
liquidity in the futures markets could be reduced, thus producing
distortion. Third, from the point of view of speculators, the deposit
requirements in the futures markets are less onerous than margin
requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause temporary
price distortions.
The risk of imperfect correlation increases as the composition of the
Fund's portfolio diverges from the securities included in the applicable
index. To compensate for the imperfect correlation of movements in the
price of the equity securities being hedged and movements in the price of
the hedging instruments, the Fund may use hedging instruments in a greater
dollar amount than the dollar amount of equity securities being hedged if
the historical volatility of the prices of the equity securities being
hedged is more than the historical volatility of the applicable index.
It is also possible that if the Fund has used hedging instruments in a
short hedge, the market may advance and the value of equity securities
held in the Fund's portfolio may decline. If that occurred, the Fund would
lose money on the hedging instruments and also experience a decline in
value in its portfolio securities. However, while this could occur for
a very brief period or to a very small degree, over time the value of a
diversified portfolio of equity securities will tend to move in the same
direction as the indices upon which the hedging instruments are based.
If the Fund uses hedging instruments to establish a position in the
equities markets as a temporary substitute for the purchase of individual
equity securities (long hedging) by buying Stock Index Futures and/or
calls on such Futures, on securities or on stock indices, it is possible
that the market may decline. If the Fund then concludes not to invest in
equity securities at that time because of concerns as to a possible
further market decline or for other reasons, the Fund will realize a loss
on the hedging instruments that is not offset by a reduction in the price
of the equity securities purchased.
-- Investing in Small, Unseasoned Companies. The securities of
small, unseasoned companies may have a limited trading market, which may
adversely affect the Fund's ability to sell them and can reduce the price
the Fund might be able to obtain for them. If other investors trade the
same securities when the Fund attempts to dispose of its holdings, the
Fund may receive lower prices than might otherwise be obtained, because
of the thinner market for such securities.
-- Foreign Securities. "Foreign securities" include equity and debt
securities of companies organized under the laws of countries other than
the United States and debt securities of foreign governments that are
traded on foreign securities exchanges or in the foreign over-the-counter
markets. Securities of foreign issuers that are represented by American
Depository Receipts or that are listed on a U.S. securities exchange or
traded in the U.S. over-the-counter markets are not considered "foreign
securities" for the purpose of the Fund's investment allocations, because
they are not subject to many of the special considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.
Investing in foreign securities offer potential benefits not
available from investing solely in securities of domestic issuers,
including the opportunity to invest in foreign issuers that appear to
offer growth potential, or in foreign countries with economic policies or
business cycles different from those of the U.S., or to reduce
fluctuations in portfolio value by taking advantage of foreign stock
markets that do not move in a manner parallel to U.S. markets. If the
Fund's portfolio securities are held abroad, the countries in which they
may be held and the sub-custodians holding them must be approved by the
Fund's Board of Trustees under applicable rules of the Securities and
Exchange Commission.
-- Risks of Foreign Investing. Investments in foreign securities
present special additional risks and considerations not typically
associated with investments in domestic securities: reduction of income
by foreign taxes; fluctuation in value of foreign portfolio investments
due to changes in currency rates and control regulations (e.g., currency
blockage); transaction charges for currency exchange; lack of public
information about foreign issuers; lack of uniform accounting, auditing
and financial reporting standards comparable to those applicable to
domestic issuers; less volume on foreign exchanges than on U.S. exchanges;
greater volatility and less liquidity on foreign markets than in the U.S.;
less regulation of foreign issuers, stock exchanges and brokers than in
the U.S.; greater difficulties in commencing lawsuits; higher brokerage
commission rates than in the U.S.; increased risks of delays in settlement
of portfolio transactions or loss of certificates for portfolio
securities; possibilities in some countries of expropriation, confiscatory
taxation, political, financial or social instability or adverse diplomatic
developments; and unfavorable differences between the U.S. economy and
foreign economies. In the past, U.S. Government policies have
discouraged certain investments abroad by U.S. investors, through
taxation or other restrictions, and it is possible that such restrictions
could be re-imposed.
-- Restricted and Illiquid Securities. To enable the Fund to sell
restricted securities not registered under the Securities Act of 1933, the
Fund may have to cause those securities to be registered. The expenses
of registration of restricted securities may be negotiated by the Fund
with the issuer at the time such securities are purchased by the Fund,
if such registration is required before such securities may be sold
publicly. When registration must be arranged because the Fund wishes to
sell the security, a considerable period may elapse between the time the
decision is made to sell the securities and the time the Fund would be
permitted to sell them. The Fund would bear the risks of any downward
price fluctuation during that period. The Fund may also acquire, through
private placements, securities having contractual restrictions on their
resale, which might limit the Fund's ability to dispose of such securities
and might lower the amount realizable upon the sale of such securities.
The Fund has percentage limitations that apply to purchases of
restricted securities, as stated in the Prospectus. Those percentage
restrictions do not limit purchases of restricted securities that are
eligible for sale to qualified institutional purchasers pursuant to Rule
144A under the Securities Act of 1933, provided that those securities have
been determined to be liquid by the Board of Trustees of the Fund or by
the Manager under Board-approved guidelines. Those guidelines take into
account the trading activity for such securities and the availability of
reliable pricing information, among other factors. If there is a lack of
trading interest in a particular Rule 144A security, the Fund's holding
of that security may be deemed to be illiquid.
-- Loans of Portfolio Investments. The Fund may lend its portfolio
investments subject to the restrictions stated in the Prospectus.
Repurchase transactions are not considered "loans" for the purpose of the
Fund's limit on the percentage of its assets that can be loaned. Under
applicable regulatory requirements (which are subject to change), the loan
collateral on each business day must at least equal the value of the
loaned securities and must consist of cash, bank letters of credit or
securities of the U.S. Government (or its agencies or instrumentalities).
To be acceptable as collateral, letters of credit must obligate a bank to
pay amounts demanded by the Fund if the demand meets the terms of the
letter. Such terms and the issuing bank must be satisfactory to the Fund.
When it lends securities, the Fund receives amounts equal to the dividends
or interest on loaned securities and also receives one or more of (a)
negotiated loan fees, (b) interest on securities used as collateral, and
(c) interest on short-term debt securities purchased with such loan
collateral. Either type of interest may be shared with the borrower. The
Fund may also pay reasonable finder's, custodian and administrative fees.
The terms of the Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit the Fund to reacquire loaned
securities on five days' notice or in time to vote on any important
matter.
-- Repurchase Agreements. The Fund may acquire securities subject to
repurchase agreements for liquidity purposes to meet anticipated
redemptions, or pending the investment of the proceeds from sales of Fund
shares, or pending the settlement of purchases of portfolio securities.
In a repurchase transaction, the Fund acquires a security from, and
simultaneously resells it to, an approved vendor. An "approved vendor"
is a U.S. commercial bank or the U.S. branch of a foreign bank or a
broker-dealer which has been designated a primary dealer in government
securities, which must meet credit requirements set by the Fund's Board
of Trustees from time to time. The resale price exceeds the purchase
price by an amount that reflects an agreed-upon interest rate effective
for the period during which the repurchase agreement is in effect. The
majority of these transactions run from day to day, and delivery pursuant
to the resale typically will occur within one to five days of the
purchase. Repurchase agreements are considered "loans" under the
Investment Company Act, collateralized by the underlying security. The
Fund's repurchase agreements require that at all times while the
repurchase agreement is in effect, the value of the collateral must equal
or exceed the repurchase price to fully collateralize the repayment
obligation. Additionally, the Manager will impose creditworthiness
requirements to confirm that the vendor is financially sound and will
continuously monitor the collateral's value.
-- Short Sales Against-the-Box. In this type of short sale, while
the short position is open, the Fund must own an equal amount of the
securities sold short, or by virtue of ownership of other securities have
the right, without payment of further consideration, to obtain an equal
amount of the securities sold short. Short sales against-the-box may be
made to defer, for Federal income tax purposes, recognition of gain or
loss on the sale of securities "in the box" until the short position is
closed out. They may also be used to protect a gain on the security "in-
the-box" when the Fund does not want to sell it and recognize a capital
gain. No more than 15% of the Fund's net assets may be held as collateral
for these short sales.
-- Temporary Defensive Investments. When the equity markets in
general are declining, the Fund may commit an increasing portion of its
assets to defensive securities. These may include the types of securities
described in the Prospectus. When investing for defensive purposes, the
Fund will normally emphasize investment in short-term debt securities
(that is, securities maturing in one year or less from the date of
purchase), since those types of securities are generally more liquid and
usually may be disposed of quickly without significant gains or losses so
that the Manager may have liquid assets when it wishes to make investments
in securities for appreciation possibilities.
Other Investment Restrictions
The Fund's most significant investment restrictions are set forth in
the Prospectus. There are additional investment restrictions that the
Fund must follow that are also fundamental policies. Fundamental policies
and the Fund's investment objective cannot be changed without the vote of
a "majority" of the Fund's outstanding voting securities. Under the
Investment Company Act, such "majority" vote is defined as the vote of the
holders of the lesser of: (1) 67% or more of the shares present or
represented by proxy at a shareholder meeting, if the holders of more than
50% of the outstanding shares are present, or (2) more than 50% of the
outstanding shares of the Fund.
Under these additional restrictions, the Fund cannot: (1) invest in
companies for the primary purpose of acquiring control or management
thereof; (2) invest in commodities or commodity contracts; however, the
Fund may buy and sell any of the Hedging Instruments permitted by any of
its other non-fundamental policies, whether or not any such Hedging
Instrument is considered to be a commodity or a commodity contract; (3)
invest in real estate or in interests in real estate, but may purchase
readily marketable securities of companies holding real estate or
interests therein; (4) purchase securities on margin, except that the Fund
may make margin deposits in connection with any of the Hedging Instruments
permitted by any of its other non-fundamental policies; (5) mortgage or
pledge any of its assets; however, this does not prohibit the escrow
arrangements contemplated in the use of Hedging Instruments; (6)
underwrite securities of any issuer, except insofar as it might be deemed
an underwriter under the Securities Act of 1933 in the resale of any
securities held in its own portfolio; (7) invest or hold securities of
any issuer if those officers and Trustees or directors of the Fund or the
Manager owning individually more than 0.5% of the securities of such
issuer together own more than 5% of the securities of such issuer; (8)
invest in oil or gas exploration or development programs or in mineral-
related programs or leases; or (9) lend money, but the Fund may purchase
all or a portion of an issue of bonds, debentures, commercial paper, or
other similar corporate obligations of the types that are usually
purchased by institutions, whether or not publicly distributed.
How the Fund Is Managed
Organization and History. As a Massachusetts business trust, the Fund is
not required to hold, and does not plan to hold, regular annual meetings
of shareholders. The Fund will hold meetings when required to do so by the
Investment Company Act or other applicable law, or when a shareholder
meeting is called by the Trustees or upon proper request of the
shareholders. Shareholders have the right, upon the declaration in
writing or vote of two-thirds of the outstanding shares of the Fund, to
remove a Trustee. The Trustees will call a meeting of shareholders to
vote on the removal of a Trustee upon the written request of the record
holders of 10% of its outstanding shares. In addition, if the Trustees
receive a request from at least 10 shareholders (who have been
shareholders for at least six months) holding shares of the Fund valued
at $25,000 or more or holding at least 1% of the Fund's outstanding
shares, whichever is less, stating that they wish to communicate with
other shareholders to request a meeting to remove a Trustee, the Trustees
will then either make the Fund's shareholder list available to the
applicants or mail their communication to all other shareholders at the
applicants' expense, or the Trustees may take such other action as set
forth under Section 16(c) of the Investment Company Act.
The Fund's Declaration of Trust contains an express disclaimer of
shareholder or Trustee liability for the Fund's obligations, and provides
for indemnification and reimbursement of expenses out of its property for
any shareholder held personally liable for its obligations. The
Declaration of Trust also provides that the Fund shall, upon request,
assume the defense of any claim made against any shareholder for any act
or obligation of the Fund and satisfy any judgment thereon. Thus, while
Massachusetts law permits a shareholder of a business trust (such as the
Fund) to be held personally liable as a "partner" under certain
circumstances, the risk of a Fund shareholder incurring financial loss on
account of shareholder liability is limited to the relatively remote
circumstances in which the Fund would be unable to meet its obligations
described above. Any person doing business with the Trust, and any
shareholder of the Trust, agrees under the Trust's Declaration of Trust
to look solely to the assets of the Trust for satisfaction of any claim
or demand which may arise out of any dealings with the Trust, and the
Trustees shall have no personal liability to any such person, to the
extent permitted by law.
Trustees and Officers of the Fund. The Fund's Trustees and officers and
their principal occupations and business affiliations during the past five
years are listed below. The address of each Trustee and officer is Two
World Trade Center, New York, New York 10048-0203, unless another address
is listed below. All of the Trustees are also trustees of Oppenheimer
Money Market Fund, Inc., Oppenheimer Fund, Oppenheimer Global Fund,
Oppenheimer Time Fund, Oppenheimer Growth Fund, Oppenheimer Discovery
Fund, Oppenheimer Target Fund, Oppenheimer Global Growth & Income Fund,
Oppenheimer Gold & Special Minerals Fund, Oppenheimer Tax-Free Bond Fund,
Oppenheimer New York Tax-Exempt Fund, Oppenheimer California Tax-Exempt
Fund, Oppenheimer Multi-State Tax-Exempt Trust, Oppenheimer Asset
Allocation Fund, Oppenheimer Mortgage Income Fund, Oppenheimer U.S.
Government Trust, Oppenheimer Multi-Sector Income Trust and Oppenheimer
Multi-Government Trust (the "New York-based OppenheimerFunds"). Messrs.
Spiro, Bishop, Bowen, Donohue, Farrar and Zack respectively hold the same
offices with the other New York-based OppenheimerFunds as with the Fund.
As of December 31, 1994, the Trustees and officers of the Fund as a group
owned less than 1% of the outstanding shares of the Fund. The foregoing
does not include shares held of record by an employee benefit plan for
employees of the Manager (for which plan one of the officers listed below,
Mr. Donohue, is a trustee), other than the shares beneficially owned under
that plan by officers of the Fund listed below.
Leon Levy, Chairman of the Board of Trustees; Age: 69
General Partner of Odyssey Partners, L.P. (investment partnership)
and Chairman of Avatar Holdings, Inc. (real estate development).
Leo Cherne, Trustee; Age: 82
386 Park Avenue South, New York, New York 10016
Chairman Emeritus of the International Rescue Committee
(philanthropic organization); formerly Executive Director of The
Research Institute of America.
Robert G. Galli, Trustee*; Age: 61
Vice Chairman of the Manager and Vice President and Counsel of
Oppenheimer Acquisition Corp., the Manager's parent holding company;
formerly he held the following positions: a director of the Manager
and Oppenheimer Funds Distributor, Inc. (the "Distributor"), Vice
President and a director of HarbourView Asset Management Corporation
("HarbourView") and Centennial Asset Management Corporation
("Centennial"), investment advisory subsidiaries of the Manager, a
director of Shareholder Financial Services, Inc. ("SFSI") and
Shareholder Services, Inc. ("SSI"), transfer agent subsidiaries of
the Manager, an officer of other OppenheimerFunds and Executive Vice
President and General Counsel of the Manager and the Distributor.
Benjamin Lipstein, Trustee; Age: 71
591 Breezy Hill Road, Hillsdale, New York 12529
Professor Emeritus of Marketing, Stern Graduate School of Business
Administration, New York University; Director of Sussex Publishers,
Inc. and a Director of Spy Magazine, L.P.
Elizabeth B. Moynihan, Trustee; Age: 65
801 Pennsylvania Avenue, N.W., Washington, DC 20004
Author and architectural historian; a trustee of the Freer Gallery
of Art (Smithsonian Institute), the Institute of Fine Arts (New York
University) and the National Building Museum; a member of the
Trustees Council, Preservation League of New York State; a member of
the Indo-U.S. Sub-Commission on Education and Culture.
Kenneth A. Randall, Trustee; Age: 67
6 Whittaker's Mill, Williamsburg, Virginia 23185
A director of Dominion Resources, Inc. (electric utility holding
company), Dominion Energy, Inc. (electric power and oil & gas
producer), Enron-Dominion Cogen Corp. (cogeneration company), Kemper
Corporation (insurance and financial services company), and Fidelity
Life Association (mutual life insurance company); formerly Chairman
of the Board of ICL, Inc. (information systems) and President and
Chief Executive Officer of The Conference Board, Inc. (international
economic and business research).
Edward V. Regan, Trustee; Age: 64
40 Park Avenue, New York, New York 10016
President of Jerome Levy Economics Institute; a member of the U.S.
Competitiveness Policy Council; a director of GranCare, Inc.
(healthcare provider); formerly New York State Comptroller and a
trustee, New York State and Local Retirement Fund.
Russell S. Reynolds, Jr., Trustee; Age: 63
200 Park Avenue, New York, New York 10166
Founder and Chairman of Russell Reynolds Associates, Inc. (executive
recruiting); Chairman of Directors Publication, Inc. (consulting and
publishing); a trustee of Mystic Seaport Museum, International House,
Greenwich Hospital and the Greenwich Historical Society.
Sidney M. Robbins, Trustee; Age: 82
50 Overlook Road, Ossining, New York 10562
Chase Manhattan Professor Emeritus of Financial Institutions,
Graduate School of Business, Columbia University; Visiting Professor
of Finance, University of Hawaii; a director of The Korea Fund, Inc.
and The Malaysia Fund, Inc. (closed-end investment companies); a
member of the Board of Advisors, Olympus Private Placement Fund,
L.P.; Professor Emeritus of Finance, Adelphi University.
Donald W. Spiro, President and Trustee*; Age: 69
Chairman Emeritus and a director of the Manager; formerly Chairman
of the Manager and the Distributor.
Pauline Trigere, Trustee; Age: 82
498 Seventh Avenue, New York, New York 10018
Chairman and Chief Executive Officer of Trigere, Inc. (design and
sale of women's fashions).
Clayton K. Yeutter, Trustee; Age: 64
1325 Merrie Ridge Road, McLean, Virginia 22101
Of Counsel, Hogan & Hartson (a law firm); a director of B.A.T.
Industries, Ltd. (tobacco and financial services), Caterpillar, Inc.
(machinery), ConAgra, Inc. (food and agricultural products), Farmers
Insurance Company (insurance), FMC Corp. (chemicals and machinery),
Lindsay Manufacturing Co. (irrigation equipment), Texas Instruments,
Inc. (electronics) and The Vigoro Corporation (fertilizer
manufacturer); formerly (in descending chronological order)
Counsellor to the President (Bush) for Domestic Policy, Chairman of
the Republican National Committee, Secretary of the U.S. Department
of Agriculture, and U.S. Trade Representative.
Andrew J. Donohue, Secretary; Age: 44
Executive Vice President and General Counsel of the Manager and the
Distributor; an officer of other OppenheimerFunds; formerly Senior
Vice President and Associate General Counsel of the Manager and the
Distributor, prior to which he was a partner in Kraft & McManimon (a
law firm), an officer of First Investors Corporation (a broker-
dealer) and First Investors Management Company, Inc. (broker-dealer
and investment adviser), and a director and an officer of First
Investors Family of Funds and First Investors Life Insurance Company.
James C. Ayer, Jr., Vice President and Portfolio Manager; Age: 31
Assistant Vice President of the Manager; an officer of other
OppenheimerFunds; formerly an international equities investment
officer with Brown Brothers Harriman & Company, a bank.
George C. Bowen, Treasurer; Age: 58
3410 South Galena Street, Denver, Colorado 80231
Senior Vice President and Treasurer of the Manager; Vice President
and Treasurer of the Distributor and HarbourView; Senior Vice
President, Treasurer, Assistant Secretary and a director of
Centennial; Vice President, Treasurer and Secretary of SSI and SFSI;
an officer of other OppenheimerFunds.
Robert G. Zack, Assistant Secretary; Age: 46
Senior Vice President and Associate General Counsel of the Manager;
Assistant Secretary of SSI and SFSI; an officer of other
OppenheimerFunds.
Robert J. Bishop, Assistant Treasurer; Age: 36
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an Accountant Yale & Seffinger,
P.C., an accounting firm, and previously an Accountant and
Commissions Supervisor for Stuart James Company Inc., a broker-
dealer.
Scott Farrar, Assistant Treasurer; Age: 29
3410 South Galena Street, Denver, Colorado 80231
Assistant Vice President of the Manager/Mutual Fund Accounting; an
officer of other OppenheimerFunds; previously a Fund Controller for
the Manager, prior to which he was an International Mutual Fund
Supervisor for Brown Brothers Harriman Co., a bank, and previously
a Senior Fund Accountant for State Street Bank & Trust Company.
[FN]
- --------------------
*A Trustee who is an "interested person" of the Fund as defined in the
Investment Company Act.
-- Remuneration of Trustees. The officers of the Fund are affiliated
with the Manager; they and the Trustees of the Fund who are affiliated
with the Manager (Messrs. Galli and Spiro; Mr. Spiro is also an officer)
receive no salary or fee from the Fund. The Trustees of the Fund
(including Mr. Delaney, a former Trustee, but excluding Messrs. Galli and
Spiro) received the total amounts shown below from all 19 of the New York-
based OppenheimerFunds (including the Fund) listed in the first paragraph
of this section (and from Oppenheimer Global Environment Fund, a former
New York-based OppenheimerFund), for services in the positions shown:
<TABLE>
<CAPTION>
Total Compensation From All
Name Position New York-based OppenheimerFunds1
<S> <C> <C>
Leon Levy Chairman and Trustee $141,000.00
Leo Cherne Audit Committee Member and$ 68,800.00
Trustee
Edmund T. Delaney Study Committee Member and$ 86,200.00
Trustee2
Benjamin Lipstein Study Committee Member and$ 86,200.00
Trustee
Elizabeth B. MoynihanStudy Committee Member3 and$ 60,625.00
Trustee
Kenneth A. Randall Audit Committee Member and$ 78,400.00
Trustee
Edward V. Regan Audit Committee Member3 and$ 56,275.00
Trustee
Russell S. Reynolds, Jr.Trustee $ 52,100.00
Sidney M. Robbins Study Committee Chairman, $122,100.00
Audit Committee Vice-Chairman
and Trustee
Pauline Trigere Trustee $ 52,100.00
Clayton K. Yuetter Trustee $ 52,100.00
<FN>
- ---------------------
1For the 1994 calendar year.
2Board and committee positions held during a portion of the period shown.
3Committee position held during a portion of the period shown.
</TABLE>
The Fund has adopted a retirement plan that provides for payment to
a retired Trustee of up to 80% of the average compensation paid during
that Trustee's five years of service in which the highest compensation was
received. A Trustee must serve in that capacity for any of the New York-
based OppenheimerFunds for at least 15 years to be eligible for the
maximum payment. No payments have been made by the Fund under the plan as
of September 30, 1994. The accumulated liability for the Fund's projected
benefit obligations under the plan was $62,948 as of that date.
-- Major Shareholders. As of December 31, 1994, the only person who
owned of record or was known by the Fund to own beneficially 5% or more
of the Fund's outstanding shares was Merrill Lynch Pierce Fenner & Smith,
4800 Deer Lake Drive East, 3rd Floor, Jacksonville, Florida 32246, who
owned of record 689,742.399 shares (approximately 7.34% of the Fund's
outstanding shares).
The Manager and Its Affiliates. The Manager is wholly-owned by
Oppenheimer Acquisition Corp. ("OAC"), a holding company controlled by
Massachusetts Mutual Life Insurance Company. OAC is also owned in part
by certain of the Manager's directors and officers, some of whom also
serve as officers of the Fund, and two of whom (Messrs. Galli and Spiro)
serve as Trustees of the Fund.
-- The Investment Advisory Agreement. The investment advisory
agreement between the Manager and the Fund requires the Manager, at its
expense, to provide the Fund with adequate office space, facilities and
equipment, and to provide and supervise the activities of all
administrative and clerical personnel required to provide effective
corporate administration for the Fund, including the compilation and
maintenance of records with respect to its operations, the preparation and
filing of specified reports, and composition of proxy materials and
registration statements for continuous public sale of shares of the Fund.
Expenses not expressly assumed by the Manager under the advisory
agreement or by the Distributor under the General Distributors Agreement
are paid by the Fund. The advisory agreement lists examples of expenses
paid by the Fund, the major categories of which relate to interest, taxes,
brokerage commissions, fees to certain Trustees, legal and audit expenses,
custodian and transfer agent expenses, share issuance costs, certain
printing and registration costs and non-recurring expenses, including
litigation costs. For the Fund's fiscal years ended September 30, 1992,
1993 and 1994, the management fees paid by the Fund to the Manager were
$1,371,488, $1,580,012, and $1,555,894, respectively.
The advisory agreement contains no provision limiting the Fund's
expenses. However, independently of the advisory agreement, the Manager
has undertaken that the total expenses of the Fund in any fiscal year
(including the management fee but excluding taxes, interest, brokerage
commissions, distribution assistance payments and extraordinary expenses
such as litigation costs) shall not exceed the most stringent expense
limitation imposed under state law applicable to the Fund. Pursuant to the
undertaking, the Manager's fee will be reduced at the end of a month so
that there will not be any accrued but unpaid liability under this
undertaking. Currently, the most stringent state expense limitation is
imposed by California, and limits the Fund's expenses (with specified
exclusions) to 2.5% of the first $30 million of average annual net assets,
2% of the next $70 million of average annual net assets, and 1.5% of
average annual net assets in excess of $100 million. The Manager reserves
the right to terminate or amend the undertaking at any time. Any
assumption of the Fund's expenses under this limitation would lower the
Fund's overall expense ratio and increase its total return during any
period in which expenses are limited.
The advisory agreement provides that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or reckless disregard for its obligations and duties under the
advisory agreement, the Manager is not liable for any loss resulting from
a good faith error or omission on its part with respect to any of its
duties thereunder. The advisory agreement permits the Manager to act as
investment adviser for any other person, firm or corporation and to use
the name "Oppenheimer" in connection with other investment companies for
which it may act as investment adviser or general distributor. If the
Manager shall no longer act as investment adviser to the Fund, the right
of the Fund to use the name "Oppenheimer" as part of its name may be
withdrawn.
-- The Distributor. Under its General Distributor's Agreement with
the Fund, the Distributor acts as the Fund's principal underwriter in the
continuous public offering of the Fund's shares but is not obligated to
sell a specific number of shares. Expenses normally attributable to sales
(other than those expenses paid under the Service Plan, but including
advertising and the cost of printing and mailing prospectuses other than
those furnished to existing shareholders), are borne by the Distributor.
During the Fund's fiscal years ended September 30, 1992, 1993 and 1994,
the aggregate sales charges on sales of the Fund's shares were $3,810,637,
$4,353,366, and $1,033,737, respectively, of which the Distributor and an
affiliated broker-dealer retained in the aggregate $999,505, $960,768 and
$262,284, in those respective years. For additional information about
distribution of the Fund's shares and the expenses connected with such
activities, please refer to "Service Plan," below.
-- The Transfer Agent. Oppenheimer Shareholder Services, the Fund's
Transfer Agent, is responsible for maintaining the Fund's shareholder
registry and shareholder accounting records, and for shareholder servicing
and administrative functions.
Brokerage Policies of the Fund
Brokerage Provisions of the Investment Advisory Agreement. One of the
duties of the Manager under the advisory agreement is to arrange the
portfolio transactions for the Fund. The advisory agreement contains
provisions relating to the employment of broker-dealers ("brokers") to
effect the Fund's portfolio transactions. In doing so, the Manager is
authorized by the advisory agreement to employ broker-dealers, including
"affiliated" brokers, as that term is defined in the Investment Company
Act, as may, in its best judgment based on all relevant factors,
implement the policy of the Fund to obtain, at reasonable expense, the
"best execution" (prompt and reliable execution at the most favorable
price obtainable) of such transactions. The Manager need not seek
competitive commission bidding but is expected to minimize the commissions
paid to the extent consistent with the interest and policies of the Fund
as established by its Board of Trustees.
Under the advisory agreement, the Manager is authorized to select
brokers that provide brokerage and/or research services for the Fund
and/or the other accounts over which the Manager or its affiliates have
investment discretion. The commissions paid to such brokers may be higher
than another qualified broker would have charged if a good faith
determination is made by the Manager that the commission is fair and
reasonable in relation to the services provided. Subject to the foregoing
considerations, the Manager may also consider sales of shares of the Fund
and other investment companies managed by the Manager or its affiliates
as a factor in the selection of brokers for the Fund's portfolio
transactions.
Description of Brokerage Practices Followed by the Manager. Subject to
the provisions of the advisory agreement, the procedures and rules
described above, allocations of brokerage are generally made by the
Manager's portfolio traders based upon recommendations from the Manager's
portfolio managers. In certain instances, portfolio managers may directly
place trades and allocate brokerage, also subject to the provisions of the
advisory agreement and the procedures and rules described above. In all
cases, brokerage is allocated under the supervision of the Manager's
executive officers. Transactions in securities other than those for which
an exchange is the primary market are generally done with principals or
market makers. Brokerage commissions are paid primarily for effecting
transactions in listed securities and are otherwise paid only if it
appears likely that a better price or execution can be obtained. When the
Fund engages in an option transaction, ordinarily the same broker will be
used for the purchase or sale of the option and any transaction in the
securities to which the option relates. When possible, concurrent orders
to purchase or sell the same security by more than one of the accounts
managed by the Manager or its affiliates are combined. The transactions
effected pursuant to such combined orders are averaged as to price and
allocated in accordance with the purchase or sale orders actually placed
for each account.
The research services provided by a particular broker may be useful
only to one or more of the advisory accounts of the Manager and its
affiliates, and investment research received for the commissions of those
other accounts may be useful both to the Fund and one or more of such
other accounts. Such research, which may be supplied by a third party at
the instance of a broker, includes information and analyses on particular
companies and industries as well as market or economic trends and
portfolio strategy, receipt of market quotations for portfolio
evaluations, information systems, computer hardware and similar products
and services. If a research service also assists the Manager in a non-
research capacity (such as bookkeeping or other administrative functions),
then only the percentage or component that provides assistance to the
Manager in the investment decision-making process may be paid in
commission dollars. The Board of Trustees has permitted the Manager to
use concessions on fixed-price offerings to obtain research, in the same
manner as is permitted for agency transactions.
The research services provided by brokers broaden the scope and
supplement the research activities of the Manager, by making available
additional views for consideration and comparisons, and by enabling the
Manager to obtain market information for the valuation of securities held
in the Fund's portfolio or being considered for purchase. The Board of
Trustees, including the "independent" Trustees of the Fund (those Trustees
of the Fund who are not "interested persons" as defined in the Investment
Company Act, and who have no direct or indirect financial interest in the
operation of the advisory agreement or the Service Plan described below)
annually reviews information furnished by the Manager as to the
commissions paid to brokers furnishing such services so that the Board may
ascertain whether the amount of such commissions was reasonably related
to the value or benefit of such services.
During the Fund's fiscal years ended September 30, 1992, 1993 and
1994, total brokerage commissions paid by the Fund (not including spreads
or concessions on principal transactions on a net trade basis) were
$19,803, $414,002, and $858,996, respectively. During the fiscal year
ended September 30, 1994, $168,079 was paid to brokers as commissions in
return for research services; the aggregate dollar amount of those
transactions was $42,204,115. The transactions giving rise to those
commissions were allocated in accordance with the Manager's internal
allocation procedures.
Performance of the Fund
Total Return Information. As described in the Prospectus, from time to
time the "average annual total return," "cumulative total return,"
"average annual total return at net asset value" and "total return at net
asset value" of an investment in shares of the Fund may be advertised.
An explanation of how these total returns are calculated and the
components of those calculations is set forth below.
The Fund's advertisements of its performance data must, under
applicable rules of the Securities and Exchange Commission, include the
average annual total returns for shares of the Fund for the 1, 5, and 10-
year periods (or the life of the Fund, if less) ending as of the most
recently-ended calendar quarter prior to the publication of the
advertisement. This enables an investor to compare the Fund's performance
to the performance of other funds for the same periods. However, a number
of factors should be considered before using such information as a basis
for comparison with other investments. An investment in the Fund is not
insured; its returns and share prices are not guaranteed and normally will
fluctuate on a daily basis. When redeemed, an investor's shares may be
worth more or less than their original cost. Returns for any given past
period are not a prediction or representation by the Fund of future
returns. The returns of shares of the Fund are affected by portfolio
quality, the type of investments the Fund holds and its operating
expenses.
-- Average Annual Total Returns. The Fund's "average annual total
return" is an average annual compounded rate of return for each year in
a specified number of years. It is the rate of return based on the change
in value of a hypothetical initial investment of $1,000 ("P" in the
formula below) held for a number of years ("n") to achieve an Ending
Redeemable Value ("ERV") of that investment, according to the following
formula:
1/n
(ERV)
(---) -1 = Average Annual Total Return
( P )
-- Cumulative Total Returns. The cumulative "total return"
calculation measures the change in value of a hypothetical investment of
$1,000 over an entire period of years. Its calculation uses some of the
same factors as average annual total return, but it does not average the
rate of return on an annual basis. Cumulative total return is determined
as follows:
ERV - P
------- = Total Return
P
In calculating total returns for shares of the Fund, the current
maximum sales charge of 5.75% (as a percentage of the offering price) is
deducted from the initial investment ("P") (unless the return is shown at
net asset value, as described below). Total returns also assume that all
dividends and capital gains distributions during the period are reinvested
to buy additional shares at net asset value per share, and that the
investment is redeemed at the end of the period. The "average annual
total returns" on an investment in shares of the Fund for the one and five
year periods ended September 30, 1994 and for the period December 30, 1987
(commencement of operations) to September 30, 1994 were <15.09>%, 8.93%
and 9.79%, respectively. The cumulative "total return" for the period
December 30, 1987 (commencement of operations) to September 30, 1994 was
87.80%.
-- Total Returns at Net Asset Value. From time to time the Fund may
also quote an average annual total return at net asset value or a
cumulative total return at net asset value. Each is based on the
difference in net asset value per share at the beginning and the end of
the period for a hypothetical investment in shares of the Fund (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains
distributions. The cumulative total return at net asset value for the one
year period ended September 30, 1994 was <9.91>%.
Total return information may be useful to investors in reviewing the
performance of the Fund. However, when comparing total return of an
investment in shares of the Fund with that of other alternatives,
investors should understand that as the Fund is an aggressive equity fund
seeking capital appreciation, its shares are subject to greater market
risks and volatility than shares of funds having other investment
objectives and that the Fund is designed for investors who are willing to
accept greater risk of loss in the hopes of realizing greater gains.
Other Performance Comparisons. From time to time the Fund may publish the
ranking of its shares by Lipper Analytical Services, Inc. ("Lipper"), a
widely-recognized independent mutual fund monitoring service. Lipper
monitors the performance of regulated investment companies, including the
Fund, and ranks their performance for various periods based on categories
relating to investment objectives. The performance of the Fund is ranked
against (i) all other funds (excluding money market funds), and (ii) all
other emerging growth funds. The Lipper performance rankings are based
on total returns that include the reinvestment of capital gain
distributions and income dividends but do not take sales charges or taxes
into consideration.
From time to time the Fund may publish the ranking of its performance
by Morningstar, Inc., an independent mutual fund monitoring service that
ranks mutual funds, including the Fund, monthly in broad investment
categories (equity, taxable bond, municipal bond and hybrid) based on
risk-adjusted investment return. Investment return measures a fund's
three, five and ten-year average annual total returns (when available) in
excess of 90-day U.S. Treasury bill returns after considering sales
charges and expenses. Risk reflects fund performance below 90-day U.S.
Treasury bill returns. Risk and return are combined to produce star
rankings reflecting performance relative to the average fund in a fund's
category. Five stars is the "highest" ranking (top 10%), four stars is
"above average" (next 22.5%), three stars is "average" (next 35%), two
stars is "below average" (next 22.5%) and one star is "lowest" (bottom
10%). Morningstar ranks the Fund in relation to other equity funds.
Rankings are subject to change.
From time to time, the Fund's Manager may publish rankings or ratings
of the Manager (or the Transfer Agent), by independent third-parties, on
the investor services provided by them to shareholders of the
OppenheimerFunds, other than the performance rankings of the
OppenheimerFunds themselves. These ratings or rankings of
shareholder/investor services may compare the OppenheimerFunds services
to those of other mutual fund families selected by the rating or ranking
services, and may be based upon the opinions of the rating or ranking
service itself, using its own research or judgment, or based upon surveys
of investors, brokers, shareholders or others. in relation to other equity
funds.
Service Plan
The Fund has adopted a Service Plan under Rule 12b-1 of the
Investment Company Act pursuant to which the Fund will reimburse the
Distributor quarterly for all or a portion of its costs incurred in
connection with the servicing of the shares of the Fund, as described in
the Prospectus. The Plan has been approved by a vote of (i) the Board of
Trustees of the Fund, including a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on that Plan,
and (ii) the holders of a "majority" (as defined in the Investment Company
Act) of the Fund's shares.
In addition, under the Plan the Manager and the Distributor, in their
sole discretion, from time to time may use their own resources (which, in
the case of the Manager, may include profits from the advisory fee it
receives from the Fund) to make payments to brokers, dealers or other
financial institutions (each is referred to as a "Recipient" under the
Plan) for distribution and administrative services they perform. The
Distributor and the Manager may, in their sole discretion, increase or
decrease the amount of payments they make from their own resources to
Recipients.
Unless terminated as described below, the Plan continues in effect
from year to year but only as long as its continuance is specifically
approved at least annually by the Fund's Board of Trustees and its
Independent Trustees by a vote cast in person at a meeting called for the
purpose of voting on such continuance. The Plan may be terminated at any
time by the vote of a majority of the Independent Trustees or by the vote
of the holders of a "majority" (as defined in the Investment Company Act)
of the outstanding shares of the Fund. The Plan may not be amended to
increase materially the amount of payments to be made unless such
amendment is approved by shareholders of the Fund. All material
amendments must be approved by the Independent Trustees.
While the Plan is in effect, the Treasurer of the Fund shall provide
a written report to the Fund's Board of Trustees at least quarterly on the
amount of all payments made pursuant to the Plan, the purpose for which
each payment was made and the identity of each Recipient that received any
payment. The report, including the allocations on which it is based, will
be subject to the review and approval of the Independent Trustees in the
exercise of their fiduciary duty. The Plan further provides that while
it is in effect, the selection and nomination of those Trustees of the
Fund who are not "interested persons" of the Fund is committed to the
discretion of the Independent Trustees. This does not prevent the
involvement of others in such selection and nomination if the final
decision on selection or nomination is approved by a majority of the
Independent Trustees.
Under the Plan, no payment will be made to any Recipient in any
quarter if the aggregate net asset value of all Fund shares held by the
Recipient for itself and its customers, does not exceed a minimum amount,
if any, that may be determined from time to time by a majority of the
Fund's Independent Trustees. The Board of Trustees currently has set no
minimum amount of assets. For the fiscal year ended September 30, 1994,
payments under the Plan totalled $479,894, all of which was paid by the
Distributor to Recipients, including $17,768 paid to MML Investor
Services, Inc., an affiliate of the Distributor.
Any unreimbursed expenses incurred by the Distributor with respect
to shares for any fiscal year may not be recovered in subsequent years.
Payments received by the Distributor under the Plan will not be used to
pay any interest expense, carrying charge, or other financial costs, or
allocation of overhead by the Distributor.
ABOUT YOUR ACCOUNT
How To Buy Shares
Determination of Net Asset Values Per Share. The net asset value per
share of the Fund is determined as of the close of business of The New
York Stock Exchange (the "NYSE") on each regular business day the NYSE is
open by dividing the Fund's net assets by the number of shares
outstanding. The NYSE normally closes at 4:00 P.M., New York time, but
may close earlier on some days (for example, in case of weather
emergencies or on days falling before a holiday). The NYSE's most recent
annual announcement (which is subject to change) states that it will close
on New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It may
also close on other days. The Fund may invest a substantial portion of
its assets in foreign securities primarily listed on foreign exchanges
which may trade on Saturdays or customary U.S. business holidays on which
the NYSE is closed. Because the Fund's net asset value will not be
calculated on those days, the Fund's net asset value per share may be
significantly affected on such days when shareholders may not purchase or
redeem shares.
The Fund's Board of Trustees has established procedures for the
valuation of the Fund's securities, generally as follows: (i) equity
securities traded on a securities exchange or on NASDAQ for which last
sale information is regularly reported are valued at the last reported
sale price on their primary exchange or NASDAQ that day (or, in the
absence of sales that day, at values based on the last sales prices of the
preceding trading day, or closing bid and asked prices); (ii) securities
traded on NASDAQ and other unlisted equity securities for which last sale
prices are not regularly reported but for which over-the-counter market
quotations are readily available are valued at the highest closing bid
price at the time of valuation, or, if no closing bid price is reported,
on the basis of a closing bid price obtained from a dealer who maintains
an active market in that security; (iii) debt securities having a maturity
in excess of 60 days are valued at the mean between the bid and asked
prices determined by a portfolio pricing service approved by the Board or
obtained from active market makers on the basis of reasonable inquiry;
(iv) short-term debt securities having a remaining maturity of 60 days or
less are valued at cost, adjusted for amortization of premiums and
accretion of discounts; (v) securities (including restricted securities)
not having readily-available market quotations are valued at fair value
under the Board's procedures; and (vi) securities traded on foreign
exchanges are valued at the closing or last sales prices reported on a
principal exchange, or, if none, at the mean between closing bid and asked
prices and reflect prevailing rates of exchange taken from the closing
price on the London foreign exchange market that day.
Trading in securities on European and Asian exchanges and over-the-
counter markets is normally completed before the close of the NYSE.
Events affecting the values of foreign securities traded in stock markets
that occur between the time their prices are determined and the close of
the NYSE will not be reflected in the Fund's calculation of net asset
value unless the Board of Trustees or the Manager, under procedures
established by the Board of Trustees, determines that the particular event
would materially affect the Fund's net asset value, in which case an
adjustment would be made.
Puts, calls and Futures held by the Fund are valued at the last sales
price on the principal exchange on which they are traded, or on NASDAQ,
as applicable, or, if there are no sales that day, in accordance with (i),
above. Forward currency contracts are valued at the closing price on the
London foreign exchange market. When the Fund writes an option, an amount
equal to the premium received by the Fund is included in the Fund's
Statement of Assets and Liabilities as an asset, and an equivalent
deferred credit is included in the liability section. The deferred credit
is "marked-to-market" to reflect the current market value of the option.
In determining the Fund's gain on investments, if a call written by the
Fund is exercised, the proceeds are increased by the premium received.
If a call or put written by the Fund expires, the Fund has a gain in the
amount of the premium; if the Fund enters into a closing purchase
transaction, it will have a gain or loss depending on whether the premium
was more or less than the cost of the closing transaction. If the Fund
exercises a put it holds, the amount the Fund receives on its sale of the
underlying investment is reduced by the amount of premium paid by the
Fund.
AccountLink. When shares are purchased through AccountLink, each purchase
must be at least $25.00. Shares will be purchased on the regular business
day the Distributor is instructed to initiate the Automated Clearing House
transfer to buy the shares. Dividends will begin to accrue on such shares
on the day the Fund receives Federal Funds for such purchase through the
ACH system before the close of the NYSE that day, which is normally three
days after the ACH transfer is initiated. The Distributor and the Fund
are not responsible for any delays. If the Federal Funds are received
after the close of the NYSE, dividends will begin to accrue on the next
regular business day after such Federal Funds are received.
Reduced Sales Charges. As discussed in the Prospectus, a reduced sales
charge rate may be obtained under Right of Accumulation and Letters of
Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No
sales charge is imposed in certain other circumstances described in the
Prospectus because the Distributor incurs little or no selling expenses.
The term "immediate family" refers to one's spouse, children,
grandchildren, grandparents, parents, parents-in-law, brothers and
sisters, sons- and daughters-in-law, a sibling's spouse and a spouse's
siblings.
-- The OppenheimerFunds. The OppenheimerFunds are those mutual funds
for which the Distributor acts as the distributor or the sub-distributor
and include the following:
Oppenheimer Tax-Free Bond Fund
Oppenheimer New York Tax-Exempt Fund
Oppenheimer California Tax-Exempt Fund
Oppenheimer Intermediate Tax-Exempt Bond Fund
Oppenheimer Insured Tax-Exempt Bond Fund
Oppenheimer Main Street California Tax-Exempt Fund
Oppenheimer Florida Tax-Exempt Fund
Oppenheimer Pennsylvania Tax-Exempt Fund
Oppenheimer New Jersey Tax-Exempt Fund
Oppenheimer Fund
Oppenheimer Discovery Fund
Oppenheimer Time Fund
Oppenheimer Target Fund
Oppenheimer Growth Fund
Oppenheimer Equity Income Fund
Oppenheimer Value Stock Fund
Oppenheimer Asset Allocation Fund
Oppenheimer Total Return Fund, Inc.
Oppenheimer Main Street Income & Growth Fund
Oppenheimer High Yield Fund
Oppenheimer Champion High Yield Fund
Oppenheimer Investment Grade Bond Fund
Oppenheimer U.S. Government Trust
Oppenheimer Limited-Term Government Fund
Oppenheimer Mortgage Income Fund
Oppenheimer Global Emerging Growth
Oppenheimer Global Fund
Oppenheimer Global Growth & Income Fund
Oppenheimer Gold & Special Minerals Fund
Oppenheimer Strategic Income Fund
Oppenheimer Strategic Investment Grade Bond Fund
Oppenheimer Strategic Short-Term Income Fund
Oppenheimer Strategic Income & Growth Fund
Oppenheimer Strategic Diversified Income Fund
Oppenheimer Target Fund
and the following "Money Market Funds":
Oppenheimer Money Market Fund, Inc.
Oppenheimer Cash Reserves
Centennial Money Market Trust
Centennial Tax Exempt Trust
Centennial Government Trust
Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust
Centennial America Fund, L.P.
Daily Cash Accumulation Fund, Inc.
There is an initial sales charge on the purchase of Class A shares
of each of the OppenheimerFunds except Money Market Funds (under certain
circumstances described herein, redemption proceeds of Money Market Fund
shares may be subject to a contingent deferred sales charge).
-- Letters of Intent. A Letter of Intent ("Letter") is the
investor's statement of intention to purchase shares of the Fund (and
Class A shares of other eligible OppenheimerFunds) sold with a front-end
sales charge during the 13-month period from the investor's first purchase
pursuant to the Letter (the "Letter of Intent period"), which may, at the
investor's request, include purchases made up to 90 days prior to the date
of the Letter. The Letter states the investor's intention to make the
aggregate amount of purchases (excluding any purchases made by
reinvestments of dividends or distributions or purchases made at net asset
value without sales charge), which together with the investor's holdings
of such funds (calculated at their respective public offering prices
calculated on the date of the Letter) will equal or exceed the amount
specified in the Letter. This enables the investor to obtain the reduced
sales charge rate (as set forth in the Prospectus) applicable to purchases
of shares in that amount (the "intended purchase amount"). Each purchase
under the Letter will be made at the public offering price applicable to
a single lump-sum purchase of shares in the intended purchase amount, as
described in the Prospectus.
In submitting a Letter, the investor makes no commitment to purchase
shares, but if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the
investor's holdings of shares on the last day of that period, do not equal
or exceed the intended purchase amount, the investor agrees to pay the
additional amount of sales charge applicable to such purchases, as set
forth in "Terms of Escrow," below (as those terms may be amended from time
to time). The investor agrees that shares equal in value to 5% of the
intended purchase amount will be held in escrow by the Transfer Agent
subject to the Terms of Escrow. Also, the investor agrees to be bound by
the terms of the Prospectus, this Statement of Additional Information and
the Application used for such Letter of Intent, and if such terms are
amended, as they may be from time to time by the Fund, that those
amendments will apply automatically to existing Letters of Intent.
If the total eligible purchases made during the Letter of Intent
period do not equal or exceed the intended purchase amount, the
commissions previously paid to the dealer of record for the account and
the amount of sales charge retained by the Distributor will be adjusted
to the rates applicable to actual purchases. If total eligible purchases
during the Letter of Intent period exceed the intended purchase amount and
exceed the amount needed to qualify for the next sales charge rate
reduction set forth in the applicable prospectus, the sales charges paid
will be adjusted to the lower rate, but only if and when the dealer
returns to the Distributor the excess of the amount of commissions allowed
or paid to the dealer over the amount of commissions that apply to the
actual amount of purchases. The excess commissions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such
purchase, promptly after the Distributor's receipt thereof.
In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted. It is the responsibility of the dealer
of record and/or the investor to advise the Distributor about the Letter
in placing any purchase orders for the investor during the Letter of
Intent period. All of such purchases must be made through the
Distributor.
-- Terms of Escrow That Apply to Letters of Intent.
1. Out of the initial purchase (or subsequent purchases if
necessary) made pursuant to a Letter, shares of the Fund equal in value
to 5% of the intended purchase amount specified in the Letter shall be
held in escrow by the Transfer Agent. For example, if the intended
purchase amount is $50,000, the escrow shall be shares valued in the
amount of $2,500 (computed at the public offering price adjusted for a
$50,000 purchase). Any dividends and capital gains distributions on the
escrowed shares will be credited to the investor's account.
2. If the intended purchase amount specified under the Letter is
completed within the thirteen-month Letter of Intent period, the escrowed
shares will be promptly released to the investor.
3. If, at the end of the thirteen-month Letter of Intent period the
total purchases pursuant to the Letter are less than the intended purchase
amount specified in the Letter, the investor must remit to the Distributor
an amount equal to the difference between the dollar amount of sales
charges actually paid and the amount of sales charges which would have
been paid if the total amount purchased had been made at a single time.
Such sales charge adjustment will apply to any shares redeemed prior to
the completion of the Letter. If such difference in sales charges is not
paid within twenty days after a request from the Distributor or the
dealer, the Distributor will, within sixty days of the expiration of the
Letter, redeem the number of escrowed shares necessary to realize such
difference in sales charges. Full and fractional shares remaining after
such redemption will be released from escrow. If a request is received
to redeem escrowed shares prior to the payment of such additional sales
charge, the sales charge will be withheld from the redemption proceeds.
4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for
redemption any or all escrowed shares.
5. The shares eligible for purchase under the Letter (or the
holding of which may be counted toward completion of the Letter) do not
include any shares sold without a front-end sales charge or without being
subject to a contingent deferred sales charge unless (for the purpose of
determining completion of the obligation to purchase shares under the
Letter) the shares were acquired in exchange for shares of one of the
OppenheimerFunds whose shares were acquired by payment of a sales charge.
6. Shares held in escrow hereunder will automatically be exchanged
for shares of another fund to which an exchange is requested, as described
in the section of the Prospectus entitled "Exchange Privilege," and the
escrow will be transferred to that other fund.
Asset Builder Plans. To establish an Asset Builder Plan from a bank
account, a check (minimum $25) for the initial purchase must accompany the
application. Shares purchased by Asset Builder Plan payments from bank
accounts are subject to the redemption restrictions for recent purchases
described in "How To Sell Shares," in the Prospectus. Asset Builder Plans
also enable shareholders of Oppenheimer Cash Reserves to use those
accounts for monthly automatic purchases of shares of up to four other
OppenheimerFunds.
There is a front-end sales charge on the purchase of certain
OppenheimerFunds, or a contingent deferred sales charge may apply to
shares purchased by Asset Builder payments. An application should be
obtained from the Distributor, completed and returned, and a prospectus
of the selected fund(s) should be obtained from the Distributor or your
financial advisor before initiating Asset Builder payments. The amount
of the Asset Builder investment may be changed or the automatic
investments may be terminated at any time by writing to the Transfer
Agent. A reasonable period (approximately 15 days) is required after the
Transfer Agent's receipt of such instructions to implement them. The Fund
reserves the right to amend, suspend, or discontinue offering such plans
at any time without prior notice.
Cancellation of Purchase Orders. Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset value of the
Fund's shares on the cancellation date is less than on the purchase date.
That loss is equal to the amount of the decline in the net asset value per
share multiplied by the number of shares in the purchase order. The
investor is responsible for that loss. If the investor fails to
compensate the Fund for the loss, the Distributor will do so. The Fund
may reimburse the Distributor for that amount by redeeming shares from any
account registered in that investor's name, or the Fund or the Distributor
may seek other redress.
How to Sell Shares
Information on how to sell shares of the Fund is stated in the
Prospectus. The information below supplements the terms and conditions for
redemptions set forth in the Prospectus.
-- Payments "In Kind". The Prospectus states that payment for shares
tendered for redemption is ordinarily made in cash. However, the Board of
Trustees of the Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of the Fund to make payment
of a redemption order wholly or partly in cash. In that case the Fund may
pay the redemption proceeds in whole or in part by a distribution "in
kind" of securities from the portfolio of the Fund, in lieu of cash, in
conformity with applicable rules of the Securities and Exchange
Commission. The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, pursuant to which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net assets
of the Fund during any 90-day period for any one shareholder. If shares
are redeemed in kind, the redeeming shareholder might incur brokerage or
other costs in selling the securities for cash. The method of valuing
securities used to make redemptions in kind will be the same as the method
the Fund uses to value it portfolio securities described above under
"Determination of Net Asset Values Per Share" and that valuation will be
made as of the time the redemption price is determined.
-- Involuntary Redemptions. The Fund's Board of Trustees has the
right to cause the involuntary redemption of the shares held in any
account if the aggregate net asset value of those shares is less than $200
or such lesser amount as the Board may fix. The Board of Trustees will
not cause the involuntary redemption of shares in an account if the
aggregate net asset value of the shares has fallen below the stated
minimum solely as a result of market fluctuations. Should the Board elect
to exercise this right, it may also fix, in accordance with the Investment
Company Act, the requirements for any notice to be given to the
shareholders in question (not less than 30 days), or the Board may set
requirements for granting permission to the Shareholder to increase the
investment, and set other terms and conditions so that the shares would
not be involuntarily redeemed.
Reinvestment Privilege. Within six months of a redemption, a shareholder
may reinvest all or part of the redemption proceeds of shares of the Fund.
The reinvestment may be made without sales charge only in shares of the
Fund or any of the Class A shares of other OppenheimerFunds into which
shares of the Fund are exchangeable as described below, at the net asset
value next computed after the Transfer Agent receives the reinvestment
order. The shareholder must ask the Distributor for that privilege at the
time of reinvestment. Any capital gain that was realized when the shares
were redeemed is taxable, and reinvestment will not alter any capital
gains tax payable on that gain. If there has been a capital loss on the
redemption, some or all of the loss may not be tax deductible, depending
on the timing and amount of the reinvestment. Under the Internal Revenue
Code, if the redemption proceeds of Fund shares on which a sales charge
was paid are reinvested in shares of the Fund or another of the
OppenheimerFunds within 90 days of payment of the sales charge, the
shareholder's basis in the shares of the Fund that were redeemed may not
include the amount of the sales charge paid. That would reduce the loss
or increase the gain recognized from the redemption. However, in that
case the sales charge would be added to the basis of the shares acquired
by the reinvestment of the redemption proceeds. The Fund may amend,
suspend or cease offering this reinvestment privilege at any time as to
shares redeemed after the date of such amendment, suspension or cessation.
Transfers of Shares. Shares are not subject to the payment of a
contingent deferred sales charge at the time of transfer to the name of
another person or entity (whether the transfer occurs by absolute
assignment, gift or bequest, not involving, directly or indirectly, a
public sale). The transferred shares will remain subject to the
contingent deferred sales charge, calculated as if the transferee
shareholder had acquired the transferred shares in the same manner and at
the same time as the transferring shareholder. If less than all shares
held in an account are transferred, and some but not all shares in the
account would be subject to a contingent deferred sales charge if redeemed
at the time of transfer, then each account shall be allocated a
proportionate number of shares that are not subject to the contingent
deferred sales charge, determined by the ratio of the number of shares
held in the account immediately prior to the transfer.
Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, 403(b)(7) custodial plans, or pension or
profit-sharing plans should be addressed to "Trustee, OppenheimerFunds
Retirement Plans," c/o the Transfer Agent at its address listed in "How
To Sell Shares" in the Prospectus or on the back cover of this Statement
of Additional Information. The request must: (i) state the reason for the
distribution; (ii) state the owner's awareness of tax penalties if the
distribution is premature; and (iii) conform to the requirements of the
plan and the Fund's other redemption requirements. Participants (other
than self-employed persons) in OppenheimerFunds-sponsored pension or
profit-sharing plans may not directly request redemption of their
accounts. The employer or plan administrator must sign the request.
Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed before the
distribution may be made. Distributions from retirement plans are subject
to withholding requirements under the Internal Revenue Code, and IRS Form
W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed.
Unless the shareholder has provided the Transfer Agent with a certified
tax identification number, the Internal Revenue Code requires that tax be
withheld from any distribution even if the shareholder elects not to have
tax withheld. The Fund, the Manager, the Distributor, the Trustee and the
Transfer Agent assume no responsibility to determine whether a
distribution satisfies the conditions of applicable tax laws and will not
be responsible for any tax penalties assessed in connection with a
distribution.
Special Arrangements for Repurchase of Shares from Dealers and Brokers.
The Distributor is the Fund's agent to repurchase its shares from
authorized dealers or brokers. The repurchase price will be the net asset
value next computed after the receipt of an order placed by such dealer
or broker, except that if the Distributor receives a repurchase order from
a dealer or broker after the close of the NYSE on a regular business day,
it will be processed at that day's net asset value if the order was
received by the dealer or broker from its customers prior to the time the
NYSE closes (normally that is 4:00 P.M., but may be earlier on some days)
and the order was transmitted to and received by the Distributor prior to
its close of business that day (normally 5:00 P.M.). Payment ordinarily
will be made within seven days after the Distributor's receipt of the
required redemption documents, with signature(s) guaranteed as described
in the Prospectus.
Automatic Withdrawal and Exchange Plans. Investors owning shares of the
Fund valued at $5,000 or more can authorize the Transfer Agent to redeem
shares (minimum $50) automatically on a monthly, quarterly, semi-annual
or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the
shareholder for receipt of the payment. Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made
by check payable to all shareholders of record and sent to the address of
record for the account (and if the address has not been changed within the
prior 30 days). Required minimum distributions from OppenheimerFunds-
sponsored retirement plans may not be arranged on this basis. Payments
are normally made by check, but shareholders having AccountLink privileges
(see "How To Buy Shares") may arrange to have Automatic Withdrawal Plan
payments transferred to the bank account designated on the
OppenheimerFunds New Account Application or signature-guaranteed
instructions. The Fund cannot guarantee receipt of a payment on the date
requested and reserves the right to amend, suspend or discontinue offering
such plans at any time without prior notice. Because of the sales charge
assessed on share purchases, shareholders should not make regular
additional share purchases while participating in an Automatic Withdrawal
Plan.
By requesting an Automatic Withdrawal or Exchange Plan, the
shareholder agrees to the terms and conditions applicable to such plans,
as stated below and in the provisions of the OppenheimerFunds Application
relating to such Plans, as well as the Prospectus. These provisions may
be amended from time to time by the Fund and/or the Distributor. When
adopted, such amendments will automatically apply to existing Plans.
-- Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent (on the OppenheimerFunds Application or signature-guaranteed
instructions) to exchange a pre-determined amount of shares of the Fund
for shares (of the same class) of other OppenheimerFunds automatically on
a monthly, quarterly, semi-annual or annual basis under an Automatic
Exchange Plan. The minimum amount that may be exchanged to each other
fund account is $25. Exchanges made under these plans are subject to the
restrictions that apply to exchanges as set forth in "How to Exchange
Shares" in the Prospectus and below in this Statement of Additional
Information.
-- Automatic Withdrawal Plans. Fund shares will be redeemed as
necessary to meet withdrawal payments. Shares acquired without a sales
charge will be redeemed first and shares acquired with reinvested
dividends and capital gains distributions will be redeemed next, followed
by shares acquired with a sales charge, to the extent necessary to make
withdrawal payments. Depending upon the amount withdrawn, the investor's
principal may be depleted. Payments made under withdrawal plans should
not be considered as a yield or income on your investment.
The Transfer Agent will administer the investor's Automatic
Withdrawal Plan (the "Plan") as agent for the investor (the "Planholder")
who executed the Plan authorization and application submitted to the
Transfer Agent. The Transfer Agent shall incur no liability to the
Planholder for any action taken or omitted by the Transfer Agent in good
faith to administer the Plan. Certificates will not be issued for shares
of the Fund purchased for and held under the Plan, but the Transfer Agent
will credit all such shares to the account of the Planholder on the
records of the Fund. Any share certificates held by a Planholder may be
surrendered unendorsed to the Transfer Agent with the Plan application so
that the shares represented by the certificate may be held under the Plan.
For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done
at net asset value without a sales charge. Dividends on shares held in
the account may be paid in cash or reinvested.
Redemptions of shares needed to make withdrawal payments will be made
at the net asset value per share determined on the redemption date.
Checks or AccountLink payments of the proceeds of Plan withdrawals will
normally be transmitted three business days prior to the date selected for
receipt of the payment (receipt of payment on the date selected cannot be
guaranteed), according to the choice specified in writing by the
Planholder.
The amount and the interval of disbursement payments and the address
to which checks are to be mailed or AccountLink payments are to be sent
may be changed at any time by the Planholder by writing to the Transfer
Agent. The Planholder should allow at least two weeks' time in mailing
such notification for the requested change to be put in effect. The
Planholder may, at any time, instruct the Transfer Agent by written notice
(in proper form in accordance with the requirements of the then-current
Prospectus of the Fund) to redeem all, or any part of, the shares held
under the Plan. In that case, the Transfer Agent will redeem the number
of shares requested at the net asset value per share in effect in
accordance with the Fund's usual redemption procedures and will mail a
check for the proceeds to the Planholder.
The Plan may be terminated at any time by the Planholder by writing
to the Transfer Agent. A Plan may also be terminated at any time by the
Transfer Agent upon receiving directions to that effect from the Fund.
The Transfer Agent will also terminate a Plan upon receipt of evidence
satisfactory to it of the death or legal incapacity of the Planholder.
Upon termination of a Plan by the Transfer Agent or the Fund, shares that
have not been redeemed from the account will be held in uncertificated
form in the name of the Planholder, and the account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder or his or her executor or
guardian, or other authorized person.
To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form. Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued
without causing the withdrawal checks to stop because of exhaustion of
uncertificated shares needed to continue payments. However, should such
uncertificated shares become exhausted, Plan withdrawals will terminate.
If the Transfer Agent ceases to act as transfer agent for the Fund,
the Planholder will be deemed to have appointed any successor transfer
agent to act as agent in administering the Plan.
How To Exchange Shares
As stated in the Prospectus, shares of a particular class of
OppenheimerFunds having more than one class of shares may be exchanged
only for shares of the same class of other OppenheimerFunds. Shares of
OppenheimerFunds that have a single class without a designation are
considered "Class A" shares for this purpose, and all OppenheimerFunds
offer Class A shares (except for Oppenheimer Strategic Diversified Income
Fund).
Class A shares of OppenheimerFunds may be exchanged at net asset
value for shares of any Money Market Fund. Shares of any Money Market
Fund purchased without a sales charge may be exchanged for shares of
OppenheimerFunds offered with a sales charge upon payment of the sales
charge (or, if applicable, may be used to purchase shares of
OppenheimerFunds subject to a contingent deferred sales charge). Shares
of this Fund acquired by reinvestment of dividends or distributions from
any other of the OppenheimerFunds or from any unit investment trust for
which reinvestment arrangements have been made with the Distributor may
be exchanged at net asset value for Class A shares of any of the
OppenheimerFunds. No contingent deferred sales charge is imposed on
exchanges of shares purchased subject to a contingent deferred sales
charge. However, when Class A shares acquired by exchange of Class A
shares of other OppenheimerFunds purchased subject to a contingent
deferred sales charge are redeemed within 18 months of the end of the
calendar month of the initial purchase of the exchanged Class A shares,
the contingent deferred sales charge is imposed on the redeemed shares
(see "Contingent Deferred Sales Charge" in the Prospectus). Shareholders
should take into account the effect of any exchange on the applicability
and rate of any contingent deferred sales charge that might be imposed in
the subsequent redemption of remaining shares.
The Fund reserves the right to reject telephone or written exchange
requests submitted in bulk by anyone on behalf of 10 or more accounts. The
Fund may accept requests for exchanges of up to 50 accounts per day from
representatives of authorized dealers that qualify for this privilege. In
connection with any exchange request, the number of shares exchanged may
be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or
this Statement of Additional Information or would include shares covered
by a share certificate that is not tendered with the request. In those
cases, only the shares available for exchange without restriction will be
exchanged.
When exchanging shares by telephone, a shareholder must either have
an existing account in, or obtain and acknowledge receipt of a prospectus
of, the fund to which the exchange is to be made. For full or partial
exchanges of an account made by telephone, any special account features
such as Asset Builder Plans, Automatic Withdrawal Plans and retirement
plan contributions will be switched to the new account unless the Transfer
Agent is instructed otherwise. If all telephone lines are busy (which
might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.
Shares to be exchanged are redeemed on the regular business day the
Transfer Agent receives an exchange request in proper form (the
"Redemption Date"). Normally, shares of the fund to be acquired are
purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. The
Fund reserves the right, in its discretion, to refuse any exchange request
that may disadvantage it (for example, if the receipt of multiple exchange
requests from a dealer might require the disposition of portfolio
securities at a time or at a price that might be disadvantageous to the
Fund).
The different OppenheimerFunds available for exchange have different
investment objectives, policies and risks, and a shareholder should assure
that the Fund selected is appropriate for his or her investment and should
be aware of the tax consequences of an exchange. For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of
one fund and a purchase of shares of another. "Reinvestment Privilege,"
above, discusses some of the tax consequences of reinvestment of
redemption proceeds in such cases. The Fund, the Distributor, and the
Transfer Agent are unable to provide investment, tax or legal advice to
a shareholder in connection with an exchange request or any other
investment transaction.
Dividends, Capital Gains and Taxes
Tax Status of the Fund's Dividends and Distributions. The Federal tax
treatment of the Fund's dividends and capital gains distributions is
explained in the Prospectus under the caption "Dividends, Capital Gains
and Taxes." Special provisions of the Internal Revenue Code govern the
eligibility of the Fund's dividends for the dividends-received deduction
for corporate shareholders. Long-term capital gains distributions are not
eligible for the deduction. In addition, the amount of dividends paid by
the Fund which may qualify for the deduction is limited to the aggregate
amount of qualifying dividends that the Fund derives from its portfolio
investments that the Fund has held for a minimum period, usually 46 days.
A corporate shareholder will not be eligible for the deduction on
dividends paid on Fund shares held for 45 days or less. To the extent the
Fund's dividends are derived from gross income from option premiums,
interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for
the deduction.
Dividends, distributions and the proceeds of the redemption of Fund
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money
Market Fund, Inc., as promptly as possible after the return of such checks
to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds.
Under the Internal Revenue Code, by December 31 each year, the Fund
must distribute 98% of its taxable investment income earned from January
1 through December 31 of that year and 98% of its capital gains realized
in the period from November 1 of the prior year through October 31 of the
current year, or else the Fund must pay an excise tax on the amounts not
distributed. While it is presently anticipated that the Fund will meet
those requirements, the Fund's Board of Trustees and the Manager might
determine in a particular year that it would be in the best interest of
shareholders for the Fund not to make such distributions at the required
levels and to pay the excise tax on the undistributed amounts. That would
reduce the amount of income or capital gains available for distribution
to shareholders.
If the Fund has more than 50% of its total assets invested in foreign
securities at the end of its fiscal year, it may elect the application of
Section 853 of the Internal Revenue Code to permit shareholders to take
a credit (or, at their option, a deduction) for foreign taxes paid by the
Fund. Under Section 853, shareholders would be entitled to treat the
foreign taxes withheld from interest and dividends paid to the Fund from
its foreign investments as a credit on their federal income taxes. As an
alternative, shareholders could, if to their advantage, treat the foreign
tax withheld as a deduction from gross income in computing taxable income
rather than as a tax credit. In substance, the Fund's election would
enable shareholders to benefit from the same foreign tax credit or
deduction that would be received if they had been the record owners of the
Fund's foreign securities and had paid foreign taxes on the income
received.
If the Fund qualifies as a "regulated investment company" under the
Internal Revenue Code, it will not be liable for Federal income taxes on
amounts paid by it as dividends and distributions. The Fund qualified
during its last fiscal year, and intends to qualify in current and future
years, but reserves the right not to do so. The Internal Revenue Code
contains a number of complex tests relating to such qualification to
determine whether the Fund will qualify, and the Fund might not meet those
tests in a particular year. For example, the Fund derives 30% or more of
its gross income from the sale of securities held less than three months,
it may fail to qualify (see "Investment Objective and Policies-Tax Aspects
of Hedging Instruments" in the Statement of Additional Information). If
it did not so qualify, the Fund would be treated for tax purposes as an
ordinary corporation and receive no tax deduction for payments made to
shareholders.
Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect
to reinvest all dividends and/or capital gains distributions in shares of
the Fund or in Class A shares of any of the other OppenheimerFunds listed
in "Reduced Sales Charges," above, at net asset value without sales
charge. To elect this option, a shareholder must notify the Transfer
Agent in writing and either have an existing account in the fund selected
for reinvestment or must obtain a prospectus for that fund and an
application from the Distributor to establish an account. The investment
will be made at the net asset value per share in effect at the close of
business on the payable date of the dividend or distribution. Dividends
and/or distributions from shares of other OppenheimerFunds may be invested
in shares of this Fund on the same basis.
Additional Information About the Fund
The Custodian. The Bank of New York is the Custodian of the Fund's
assets. The Custodian's responsibilities include safeguarding and
controlling the Fund's portfolio securities, collecting income on the
portfolio securities and handling the delivery of such securities to and
from the Fund. The Manager has represented to the Fund that the banking
relationships between the Manager and the Custodian have been and will
continue to be unrelated to and unaffected by the relationship between
the Fund and the Custodian. It will be the practice of the Fund to deal
with the Custodian in a manner uninfluenced by any banking relationship
the Custodian may have with the Manager and its affiliates.
Independent Auditors. The independent auditors of the Fund audit the
Fund's financial statements and perform other related audit services.
They also act as auditors for certain other funds advised by the Manager
and its affiliates.
<PAGE>
The Board of Trustees and Shareholders of Oppenheimer
Global Emerging Growth Fund:
We have audited the accompanying statements of investments and assets and
liabilities of Oppenheimer Global Emerging Growth Fund (formerly
Oppenheimer Global Bio-Tech Fund) as of September 30, 1994, and the
related statement of operations for the year then ended, the statements
of changes in net assets for each of the years in the two-year period then
ended and the financial highlights for each of the years in the six-year
period then ended and the period from December 30, 1987 (commencement of
operations) to September 30, 1988. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of September
30, 1994 by correspondence with the custodian and brokers; and where
confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Global Emerging Growth Fund as of September 30,
1994, the results of its operations for the year then ended, the changes
in its net assets for each of the years in the two-year period then ended,
and the financial highlights for each of the years in the six-year period
then ended and the period from December 30, 1987 (commencement of
operations) to September 30, 1988, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
/s/ KPMG Peat Marwick LLP
Denver, Colorado
October 21, 1994
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS September 30, 1994
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--34.5%
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with The First Boston Corp., 4.70%,
dated 9/30/94, to be repurchased at $30,011,750 on 10/3/94,
collateralized by U.S. Treasury Bills., 0%, 6/29/95, with a
value of $30,637,890 (Cost $30,000,000) $30,000,000 $ 30,000,000
-----------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
4.95%, dated 9/30/94, to be repurchased at $26,410,890 on
10/3/94, collateralized by U.S. Treasury Nts., 4.25%-8.50%,
4/15/95-7/15/98, with a value of $14,928,312 and U.S. Treasury
Bills, 0%, 3/16/95-3/23/95, with a value of $12,024,182
(Cost $26,400,000) 26,400,000 26,400,000
------------
Total Repurchase Agreements (Cost $56,400,000) 56,400,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--0.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Glycomed, Inc., 7.50% Cv.Sub.Debs., 1/1/03 (Cost $2,000,000) 2,000,000 1,070,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
UNITS
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RIGHTS AND WARRANTS--0.4%
- ----------------------------------------------------------------------------------------------------------------------------------
Genzyme Corp. Wts., Exp. 12/96 50,000 425,000
-----------------------------------------------------------------------------------------------
PerSeptive Biosystems, Inc. Wts., Exp. 12/97 40,110 145,599
-----------------------------------------------------------------------------------------------
Protein Polymer Technologies, Inc. Wts., Exp.1/97 100,000 21,875
------------
Total Rights and Warrants (Cost $1,351,476) 592,474
SHARES
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--2.7%
- ----------------------------------------------------------------------------------------------------------------------------------
Cambridge Antibody Technology Ltd., Cv.(1)(2)(3) 100,000 2,695,769
-----------------------------------------------------------------------------------------------
Synaptic Pharmaceutical Corp., Cv. Series 3(1)(2)(3) 500,000 1,679,476
------------
Total Preferred Stocks (Cost $5,300,000) 4,375,245
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--69.7%
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--1.7%
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--1.0% PT Tri Polyta Indonesia ADR(1) 10,000 271,250
-----------------------------------------------------------------------------------------------
Tianjin Bohai Chemical Industry Co.(1) 7,000,000 1,272,776
------------
1,544,026
- ----------------------------------------------------------------------------------------------------------------------------------
STEEL--0.7% NTS Steel Group Co. Ltd. 500,000 1,121,120
- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS--1.4%
- ----------------------------------------------------------------------------------------------------------------------------------
BROADCAST MEDIA--0.6% Sistem Televisyen Malaysia Berhad 350,000
914,502
- ----------------------------------------------------------------------------------------------------------------------------------
PUBLISHING--0.8% Sing Tao Holdings 1,500,000 1,286,041
- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--53.1%
- ----------------------------------------------------------------------------------------------------------------------------------
BEVERAGES--0.4% Noble China, Inc.(1) 146,600 710,407
- ----------------------------------------------------------------------------------------------------------------------------------
DRUGS--0.8% Watson Pharmaceutical, Inc.(1) 50,000 1,262,500
- ----------------------------------------------------------------------------------------------------------------------------------
FOOD PROCESSING--0.4% United Foods Co. Ltd. 525,000 725,225
<PAGE>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE: MISCELLANEOUS--50.1%
- ----------------------------------------------------------------------------------------------------------------------------------
AGRICULTURAL BIOTECHNOLOGY--4.2% biosys(1) 60,000 $
240,000
-----------------------------------------------------------------------------------------------
Dekalb Genetics Corp., C1. B 60,000 1,740,000
-----------------------------------------------------------------------------------------------
DNA Plant Technology Corp.(1) 300,000 1,246,890
-----------------------------------------------------------------------------------------------
Pioneer Hi-Bred International, Inc. 50,000 1,575,000
-----------------------------------------------------------------------------------------------
Plant Genetics Systems International NV(1)(3) 213,944 1,995,183
------------
6,797,073
- ----------------------------------------------------------------------------------------------------------------------------------
ANIMAL HEALTHCARE--2.1% Idexx Laboratories, Inc.(1) 80,000 2,360,000
-----------------------------------------------------------------------------------------------
Syntro Corp.(1) 400,000 1,000,000
------------
3,360,000
- ----------------------------------------------------------------------------------------------------------------------------------
DRUGS/BIOPHARMACEUTICALS--8.6% Amylin Pharmaceuticals, Inc.(1) 200,000
1,550,000
-----------------------------------------------------------------------------------------------
Biochem Pharmaceuticals, Inc.(1) 170,000 1,763,750
-----------------------------------------------------------------------------------------------
Biota Holdings Ltd.(1) 500,000 3,403,971
-----------------------------------------------------------------------------------------------
Celtrix Pharmaceuticals, Inc.(1) 275,000 1,905,938
-----------------------------------------------------------------------------------------------
ImmuLogic Pharmaceutical Corp.(1) 147,500 1,511,875
-----------------------------------------------------------------------------------------------
Protein Design Labs, Inc.(1) 50,000 975,000
-----------------------------------------------------------------------------------------------
Sangstat Medical Corp.(1) 120,000 855,000
-----------------------------------------------------------------------------------------------
Schering AG 20 12,297
-----------------------------------------------------------------------------------------------
Vertex Pharmaceuticals, Inc.(1) 150,000 2,137,500
------------
14,115,331
- ----------------------------------------------------------------------------------------------------------------------------------
HUMAN HEALTHCARE--35.2% Advanced Tissue Sciences, Inc., Cl.A(1) 300,000
2,109,390
-----------------------------------------------------------------------------------------------
Amgen, Inc.(1) 100,000 5,325,000
-----------------------------------------------------------------------------------------------
Applied Immune Sciences, Inc.(1) 200,000 1,400,000
-----------------------------------------------------------------------------------------------
Ares-Serono Group, Cl.B 2,885 1,541,265
-----------------------------------------------------------------------------------------------
Athena Neurosciences, Inc.(1) 300,000 2,100,000
-----------------------------------------------------------------------------------------------
AutoImmune, Inc.(1) 170,000 850,000
-----------------------------------------------------------------------------------------------
Cephalon, Inc.(1) 150,000 1,603,125
-----------------------------------------------------------------------------------------------
Chiron Corp.(1)(4) 40,000 2,660,000
-----------------------------------------------------------------------------------------------
COR Therapeutics, Inc.(1) 200,000 3,050,000
-----------------------------------------------------------------------------------------------
Creative BioMolecules, Inc.(1) 300,000 1,012,500
-----------------------------------------------------------------------------------------------
Cygnus Therapeutic Systems(1) 150,000 1,087,500
-----------------------------------------------------------------------------------------------
DNX Corp.(1) 200,000 1,000,000
-----------------------------------------------------------------------------------------------
Elan Corp. PLC, ADR(1) 50,000 1,962,500
-----------------------------------------------------------------------------------------------
Elan Corp. PLC, ADR, Units(1) 13,108 378,494
-----------------------------------------------------------------------------------------------
Genentech, Inc.(1) 50,000 2,625,000
-----------------------------------------------------------------------------------------------
Genetic Therapy, Inc.(1) 68,800 533,200
-----------------------------------------------------------------------------------------------
Genetics Institute, Inc.(1) 100,000 4,537,500
-----------------------------------------------------------------------------------------------
Genzyme Corp.(1) 100,435 3,439,899
-----------------------------------------------------------------------------------------------
Gilead Sciences, Inc.(1) 200,000 2,350,000
-----------------------------------------------------------------------------------------------
IG Laboratories, Inc.(1) 325,000 1,137,500
<PAGE>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
HUMAN HEALTHCARE InSite Vision, Inc.(1) 57,500 $ 330,625
(CONTINUED) -----------------------------------------------------------------------------------------------
Liposome Technology, Inc.(1) 225,000 1,462,500
-----------------------------------------------------------------------------------------------
Magainin Pharmaceuticals, Inc.(1) 250,000 781,250
-----------------------------------------------------------------------------------------------
Martek Biosciences Corp.(1) 135,000 1,316,250
-----------------------------------------------------------------------------------------------
Matrix Pharmaceutical, Inc.(1) 290,000 4,132,500
-----------------------------------------------------------------------------------------------
Penederm, Inc.(1) 100,000 637,500
-----------------------------------------------------------------------------------------------
PerSeptive Biosystems, Inc.(1) 154,080 2,186,010
-----------------------------------------------------------------------------------------------
PerSeptive Technology II Corp., Units(1) 100,000 1,300,000
-----------------------------------------------------------------------------------------------
Quintiles Transnational Corp.(1)(3) 28,950 700,228
-----------------------------------------------------------------------------------------------
Quintiles Transnational Corp.(1) 45,000 1,209,375
-----------------------------------------------------------------------------------------------
Shaman Pharmaceuticals, Inc.(1) 115,000 819,375
-----------------------------------------------------------------------------------------------
T Cell Sciences, Inc.(1) 218,500 655,500
-----------------------------------------------------------------------------------------------
T Cell Sciences, Inc.(1)(3) 120,000 342,500
-----------------------------------------------------------------------------------------------
Univax Biologics, Inc.(1) 150,000 900,000
------------
57,475,986
- ----------------------------------------------------------------------------------------------------------------------------------
HOSPITAL MANAGEMENT--0.9% Quantum Health Resources, Inc.(1) 35,000
1,476,563
- ----------------------------------------------------------------------------------------------------------------------------------
RETAIL STORES--0.5% PT Fast Food Indonesia 410,000 791,342
- ----------------------------------------------------------------------------------------------------------------------------------
ENERGY--1.7%
- ----------------------------------------------------------------------------------------------------------------------------------
OIL--0.8% Elf Gabon SA 7,000 1,361,844
- ----------------------------------------------------------------------------------------------------------------------------------
OIL AND GAS DRILLING--0.9% Petroleum Geo-Services AS(1) 10,000
195,937
-----------------------------------------------------------------------------------------------
Transocean Drilling AS(1) 200,000 1,296,427
------------
1,492,364
- ----------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--5.9%
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS GROUP--0.6% Thai-German Ceramic Industry Company Ltd. 200,000
1,009,008
- ----------------------------------------------------------------------------------------------------------------------------------
CONTAINERS--0.5% M C Packaging Corp. Ltd. 1,614,000 751,941
- ----------------------------------------------------------------------------------------------------------------------------------
Engineering Babcock International Group PLC(1) 800,000 403,712
And Construction--0.2%
- ----------------------------------------------------------------------------------------------------------------------------------
MACHINERY--0.9% Beiren Printing Machinery Holdings Ltd. 604,000 302,500
-----------------------------------------------------------------------------------------------
Powerscreen International PLC 48,000 238,821
-----------------------------------------------------------------------------------------------
Schweizerische Industrie GmbH 500 986,159
------------
1,527,480
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--3.2% Lisnave-Estaleiros Navais de Lisbona SA(1) 200,000
964,601
-----------------------------------------------------------------------------------------------
Pacific Basin Bulk Shipping Ltd.(1) 51,500 785,375
-----------------------------------------------------------------------------------------------
Pacific Carriers, Ltd. 1,236,000 1,150,545
-----------------------------------------------------------------------------------------------
Singmarine Industries Ltd. 500,000 1,295,111
-----------------------------------------------------------------------------------------------
Vard AS(1) 244,000 1,006,499
------------
5,202,131
- ----------------------------------------------------------------------------------------------------------------------------------
Truckers--0.5% Koninklijke Frans Maas Groep NV(1) 25,000 812,813
<PAGE>
MARKET VALUE
SHARES SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY--5.2%
- ----------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE Cerner Corp.(1) 45,000 $ 1,839,375
AND SERVICES--2.6% -----------------------------------------------------------------------------------------------
Pyxis Corp.(1) 100,000 2,450,000
------------
4,289,375
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS: Molecular Dynamics, Inc.(1) 200,000 1,100,000
INSTRUMENTATION--1.4% -----------------------------------------------------------------------------------------------
Oxford GlycoSystems Group PLC(1)(3) 515,132 1,130,447
------------
2,230,447
- ----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.8% Loxley Company Ltd. 80,000
1,370,970
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS--0.4% Cray Electronics Hldgs. 250,000 703,736
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--0.7%
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC COMPANIES--0.7% Wing Shan International Ltd. 4,000,000
1,061,186
------------
Total Common Stocks (Cost $122,586,155) 113,797,123
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $187,637,631) 108.0%
176,234,842
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (8.0) (12,940,058)
----------- ------------
NET ASSETS 100.0% $163,294,784
----------- ------------
----------- ------------
<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
year ended September 30, 1994. The aggregate fair value of all securities of affiliated companies
as of September 30, 1994 amounted to $4,375,245. Transactions during the period in which the
issuer was an affiliate were as follows:
BALANCE BALANCE
SEPTEMBER 30, 1993 GROSS ADDITIONS GROSS REDUCTIONS
SEPTEMBER 30, 1994
------------------- ------------------ ------------------ -------------------
SHARES COST SHARES COST SHARES COST SHARES COST
- ----------------------------------------------------------------------------------------------------------------------------------
Cambridge Antibody
Technology Ltd., Cv. 100,000 $3,300,000 -- $ -- -- $ -- 100,000 $3,300,000
- ----------------------------------------------------------------------------------------------------------------------------------
Synaptic Pharmaceutical
Corp., Cv. Series 3 500,000 2,000,000 -- -- -- -- 500,000 2,000,000
---------- --------- --------- ----------
$5,300,000 $ -- $ -- $5,300,000
---------- --------- --------- ----------
---------- --------- --------- ----------
3. Restricted security--See Note 6 of Notes to Financial Statements.
4. Securities with an aggregate market value of $1,662,500 are held in escrow to cover
outstanding call options, as follows:
SHARES SUBJECT EXPIRATION EXERCISE PREMIUM
MARKET VALUE
CALL DATE PRICE RECEIVED SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
Chiron Corp. 25,000 10/94 $70.00 $57,843 $56,250
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS Investments, at value (including repurchase agreements
of $56,400,000)(cost $187,637,631)--see accompanying statement $176,234,842
-----------------------------------------------------------------------------------------------
Receivables:
Investments sold 2,368,856
Shares of beneficial interest sold 169,927
Dividends and interest 61,076
-----------------------------------------------------------------------------------------------
Other 14,657
------------
Total assets 178,849,358
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Bank overdraft 1,420
-----------------------------------------------------------------------------------------------
Options written, at value (premiums received $57,843)--see accompanying
statement--Note 4 56,250
-----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 14,183,456
Shares of beneficial interest redeemed 738,414
Service plan fees--Note 5 96,849
Other 478,185
------------
Total liabilities 15,554,574
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $163,294,784
------------
------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $175,519,111
NET ASSETS -----------------------------------------------------------------------------------------------
Accumulated net investment loss (172,940)
-----------------------------------------------------------------------------------------------
Accumulated net realized loss from investment, written option and foreign
currency transactions (661,567)
-----------------------------------------------------------------------------------------------
Net unrealized depreciation on investments, options written and translation
of assets and liabilities denominated in foreign currencies (11,389,820)
------------
Net assets--applicable to 8,437,407 shares of beneficial interest outstanding $163,294,784
------------
------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
$19.35
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE (NET ASSET VALUE PLUS SALES CHARGE OF 5.75% OF OFFERING
PRICE) $20.53
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Year Ended September 30, 1994
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME Interest $ 1,102,813
-----------------------------------------------------------------------------------------------
Dividends (net of withholding taxes of $50,970) 275,054
------------
Total income 1,377,867
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 5 1,555,894
-----------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 918,113
-----------------------------------------------------------------------------------------------
Service plan fees--Note 5 479,894
-----------------------------------------------------------------------------------------------
Shareholder reports 175,057
-----------------------------------------------------------------------------------------------
Custodian fees and expenses 51,187
-----------------------------------------------------------------------------------------------
Trustees' fees and expenses 35,677
-----------------------------------------------------------------------------------------------
Legal and auditing fees 31,406
-----------------------------------------------------------------------------------------------
Other 132,189
------------
Total expenses 3,379,417
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (2,001,550)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain (loss) from:
GAIN (LOSS) ON INVESTMENTS, Investments 3,957,091
OPTIONS WRITTEN AND FOREIGN Closing of option contracts written
(545,904)
CURRENCY TRANSACTIONS Foreign currency transactions 114,520
------------
Net realized gain 3,525,707
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments (21,026,354)
Translation of assets and liabilities denominated
in foreign currencies 11,971
------------
Net change (21,014,383)
Net realized and unrealized loss on investments, options written
and foreign currency transactions (17,488,676)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(19,490,226)
------------
------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended September 30,
1994 1993
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS Net investment loss $ (2,001,550) $ (1,538,653)
-----------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, options written
and foreign currency transactions 3,525,707 (680,679)
-----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments, options written and translation of assets and
liabilities denominated in foreign currencies (21,014,383) 13,448,220
------------ ------------
Net increase (decrease) in net assets resulting from
operations (19,490,226) 11,228,888
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Distributions in excess of net realized gain on investments,
DISTRIBUTIONS TO options written and foreign currency transactions ($.169 and
SHAREHOLDERS $.202 per share, respectively) (1,561,312) (1,873,746)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase (decrease) in net assets resulting from
TRANSACTIONS beneficial interest transactions--Note 2 (15,350,295) 60,707,523
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase (decrease) (36,401,833) 70,062,665
-----------------------------------------------------------------------------------------------
Beginning of year 199,696,617 129,633,952
------------ ------------
End of year [including accumulated net investment losses
of ($172,940) and ($2,926,679), respectively] $163,294,784 $199,696,617
------------ ------------
------------ ------------
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
YEAR ENDED SEPTEMBER 30,
1994 1993 1992 1991(2) 1990 1989 1988(1)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $10.00
-------------------------------------------------------------------------------------------
Income (loss) from
investment operations:
Net investment income (loss) (.01) (.10) (.17) (.03) (.02) (.10) .14
Net realized and unrealized
gain (loss) on investments,
options written and foreign
currency transactions (2.11) 1.69 (6.47) 15.12 (.26) 1.69 .49
------ ------ ------ ------ ------ ------ ------
Total income (loss) from
investment operations (2.12) 1.59 (6.64) 15.09 (.28) 1.59 .63
-------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders:
Dividends from net
investment income -- -- (.01) -- -- (.10) --
Distributions in excess
of 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 $19.35 $21.64 $20.25 $26.90 $11.81 $12.09 $10.63
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET
VALUE(3) (9.91)% 7.79% (24.70)% 127.78% (2.32)% 15.21% 6.30%
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands) $163,295 $199,697 $129,634 $103,352 $16,217 $3,872 $1,921
-------------------------------------------------------------------------------------------
Average net assets
(in thousands) $190,984 $194,184 $166,144 $50,989 $8,716 $2,343 $1,394
-------------------------------------------------------------------------------------------
Number of shares
outstanding at end of
period (in thousands) 8,437 9,226 6,400 3,841 1,373 320 181
-------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income (loss) (1.05)% (.80)% (.71)% (.18)% (.37)% (.70)% 1.41%(4)
Expenses 1.77% 1.59% 1.39% 1.50% 1.78% 2.40% 2.06%(4)
-------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 54.7% 41.0% 2.6% 11.2% 16.6% 17.1% 1.7%
<FN>
1. For the period from December 30, 1987 (commencement of operations) to September 30, 1988.
Per
share amounts calculated based on the weighted average number of shares outstanding during the
period.
2. Per share amounts calculated based on the weighted average number of shares outstanding during
the period.
3. 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.
4. Annualized.
5. The lesser of purchases or sales of portfolio securities for a period, divided by the monthly
average of the market value of portfolio securities owned during the period. Securities with a
maturity or expiration date at the time of acquisition of one year or less are excluded from the
calculation. Purchases and sales of investment securities (excluding short-term securities) for
the year ended September 30, 1994 were $92,464,689 and $140,116,746, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
----------------------------------------------------------
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Global Emerging Growth Fund (the Fund),
ACCOUNTING POLICIES operating under the name Oppenheimer Global Bio-Tech Fund
through September 19, 1994, 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
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. At September 30, 1994, the Fund
had available for federal income tax purposes an unused
capital loss carryover of approximately $656,000, which
will expire in 2002.
----------------------------------------------------------
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 year ended September 30, 1994, the Fund's projected
benefit obligations were reduced by $873, resulting in an
accumulated liability of $62,948 at September 30, 1994. No
payments have been made under the plan.
<PAGE>
----------------------------------------------------------
----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT DISTRIBUTIONS TO SHAREHOLDERS. Dividends and
ACCOUNTING POLICIES distributions to shareholders are recorded on the ex-
(CONTINUED) dividend date.
----------------------------------------------------------
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS.
Effective October 1, 1993, the Fund adopted Statement of
Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return
of Capital Distributions by Investment Companies. As a
result, the Fund changed the classification of
distributions to shareholders to better disclose the
differences between financial statement amounts and
distributions determined in accordance with income tax
regulations. Accordingly, subsequent to September 30,
1993, amounts have been reclassified to reflect a decrease
in paid-in capital of $2,497,012, a decrease in
undistributed net investment loss of $2,793,695, and an
increase in undistributed capital loss on investments of
$296,683. During the year ended September 30, 1994, in
accordance with Statement of Position 93-2, paid-in
capital was decreased by $2,002,781, undistributed net
investment loss was decreased by $1,961,594 and
undistributed capital loss was decreased by $41,187.
----------------------------------------------------------
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 The Fund has authorized an unlimited number of no par
BENEFICIAL INTEREST value shares of beneficial interest. Transactions in
shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1994 YEAR ENDED SEPTEMBER 30, 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sold 2,216,798 $48,631,842 5,810,447 $123,150,808
Distributions reinvested 63,096 1,414,325 72,297 1,686,679
Redeemed (3,068,893) (65,396,462) (3,056,478) (64,129,964)
---------- ------------ ---------- ------------
Net increase (decrease) (788,999) $(15,350,295) 2,826,266 $60,707,523
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS At September 30, 1994, net unrealized depreciation on
AND LOSSES ON investments and options written of $11,401,196 was
INVESTMENTS AND composed of gross appreciation of $13,169,919, and gross
OPTIONS WRITTEN depreciation of $24,571,115.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. CALL OPTION Call option activity for the year ended September 30, 1994
ACTIVITY 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 1,750 516,953
------------------------------------------------------------------------------
Options cancelled in closing purchase transactions (2,000) (691,977)
------ ---------
Options outstanding at September 30, 1994 250 $57,843
------ ---------
------ ---------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES Management fees paid to the Manager were in accordance
AND OTHER with the investment advisory agreement with the Fund which
TRANSACTIONS WITH provides for an annual fee of 1% on the first $50 million
AFFILIATES 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.
<PAGE>
----------------------------------------------------------
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES For the year ended September 30, 1994, commissions (sales
AND OTHER charges paid by investors) on sales of Fund shares totaled
TRANSACTIONS WITH $1,033,737, of which $262,284 was retained by Oppenheimer
AFFILIATES Funds Distributor, Inc. (OFDI), a subsidiary of the
(CONTINUED) 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 year ended
September 30, 1994, OFDI paid $17,768 to an affiliated
broker/dealer as reimbursement for personal service and
maintenance expenses.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. RESTRICTED The Fund owns securities purchased in private placement
SECURITIES transactions, without registration under the Securities
Act of 1933 (the Act). The securities are valued under
methods approved by the Board of Trustees as reflecting
fair value. The Fund intends to invest no more than 10% of
its net assets (determined at the time of purchase) in
restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that
are determined to be liquid by the Board of Trustees or by
the Manager under Board-approved guidelines. Restricted
and illiquid securities, excluding securities eligible for
resale pursuant to Rule 144A of the Act amount to
$8,543,603, or 5.2% of the Fund's net assets, at
September 30, 1994. Illiquid and/or restricted securities,
including those restricted securities that are
transferable under Rule 144A of the Act are listed below.
<TABLE>
<CAPTION>
VALUATION PER UNIT
SECURITY ACQUISITION DATE COST PER UNIT AS OF SEPTEMBER
30, 1994
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cambridge Antibody Technology Ltd., Cv. 2/5/93 $33.00 $26.96
-----------------------------------------------------------------------------------------------------------
Oxford GlycoSystems Group PLC 5/21/93 $ 1.94 $ 2.19
-----------------------------------------------------------------------------------------------------------
Plant Genetics Systems International NV 5/27/92 $11.18 $ 9.33
-----------------------------------------------------------------------------------------------------------
Quintiles Transnational Corp. 8/2/93 $17.27 $24.19
-----------------------------------------------------------------------------------------------------------
Synaptic Pharmaceutical Corp., Cv. Series 3 1/19/93 $ 4.00 $ 3.36
-----------------------------------------------------------------------------------------------------------
T Cell Sciences, Inc. 11/23/93 $ 6.35 $ 2.85
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7. REORGANIZATION At a shareholder meeting scheduled for November 11, 1994,
shareholders of Oppenheimer Global Environment Fund
("Global Environment Fund") will be asked to approve a
reorganization of Global Environment Fund with and into
Oppenheimer Global Emerging Growth Fund ("Emerging Growth
Fund"). Shareholders of Global Environment Fund would
receive shares of Emerging Growth Fund and Global
Environment Fund would be liquidated. If shareholder
approval is received, it is expected that the
reorganization will be consummated on or about
November 18, 1994.
<PAGE>
Investment Adviser
Oppenheimer Management Corporation
Two World Trade Center
New York, New York 10048
Distributor
Oppenheimer Funds Distributor, Inc.
Two World Trade Center
New York, New York 10048
Transfer and Shareholder Servicing Agent
Oppenheimer Shareholder Services
P.O. Box 5270
Denver, Colorado 80217
1-800-525-7048
Custodian of Portfolio Securities
The Bank of New York
One Wall Street
New York, NY 10015
Independent Auditors
KPMG Peat Marwick LLP
707 Seventeenth Street
Denver, Colorado 80202
Legal Counsel
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street
New York, New York 10036
<PAGE>
