[FRONT COVER]
Oppenheimer Cash Reserves
Annual Report July 31, 1996
[Picture of BarBQ]
"I want
to know my
money will
be there
when
I need it."
[Oppenheimer Logo]
<PAGE>
This Fund is for people who want to earn current income while maintaining the
value of their initial investment.
How Your Fund Is Managed
Oppenheimer Cash Reserves seeks maximum current income with stability of
principal while giving you a way to keep a portion of your assets liquid.
The manager of your Fund looks for maximum yield from money market
securities, such as short-term corporate notes, U.S. government securities, and
repurchase agreements.
The Fund's dividends accrue daily and are paid monthly. And to offer you
stability of principal, the Fund seeks to maintain a constant $1.00 per share
net asset value (NAV).(1)
Performance
The Fund's seven-day annualized yield for Class A shares as of 7/31/96 was 4.41%
with compounding and 4.32% without compounding. For Class B and C shares, the
seven-day annualized yields were 3.84% and 3.83% with compounding, and 3.77% and
3.76% without compounding, respectively.(2)
Compounded annualized yield for Class A shares for the 12 months ended
7/31/96 was 4.58%. Without compounding, the annualized yield was 4.48%. For
Class B and C shares, compounded annualized yields for the 12 months ended
7/31/96 were 4.00% and 4.00%. Without compounding, they were 3.92% and 3.92%.(3)
Outlook
"Unless we begin to see clear evidence of a slowdown in the economy relative to
last year, we will remain fairly short in our average maturity. Given this
outlook for the market, we expect to continue to provide shareholders with a
competitive income stream as well as safety of principal."
Dottie Warmack, Portfolio Manager
July 31, 1996
Past performance does not guarantee future results.
1. An investment in the Fund is neither insured nor guaranteed by the U.S.
government, and there is no assurance that the Fund will maintain a stable $1.00
share price in the future.
2. Compounded yields assume reinvestment of dividends.
3. As of 6/30/96, the Fund's seven-day annualized yield for Class A, B, and C
shares were 4.51%, 3.94%, and 3.94% with compounding, and 4.41%, 3.86%, and
3.86% without compounding, respectively. Compounded annualized yields for Class
A, B, and C shares for the 12 months ended 6/30/96 were 4.62%, 4.03%, and
3.98%, respectively. Without compounding, the annualized yields for the 12
months ended 6/30/96 were 4.52%, 3.95%, and 3.90%, respectively.
2 Oppenheimer Cash Reserves
<PAGE>
[Photo of James C. Swain]
[Caption]
James C. Swain
Chairman
Oppenheimer
Cash Reserves
[Photo of Bridget A. Macaskill]
[Caption]
Bridget A. Macaskill
President
Oppenheimer
Cash Reserves
Dear Shareholder,
Money market funds have been steady performers during the first half of 1996 and
we expect the same--or better--for the rest of the year.
Money market funds are generally pegged to short-term interest rates, which
are largely determined by the Federal Reserve Board. Unlike long-term interest
rates, short-term rates have stayed relatively steady during 1996. As a result,
money market fund yields have also remained steady during the period.
During the first half of 1996, the Federal Reserve cut interest rates
once--by 0.25% to 5.25%--in order to stimulate the economy. At the time, it
appeared as if the economy was slowing to the point where a recession was a real
possibility. Growth in the fourth quarter of 1995 was almost nonexistent, and
retailers had a poor Christmas season. As a result, interest rates--and
subsequently money market yields--fell, due to investors' expectations that the
Fed would lower rates further.
Suddenly, however, investor perception of the economy changed. An
employment report, issued in February, indicated that there had been a
substantial increase in nonagricultural jobs--the largest increase in 12 years.
Although that employment report was later revised downward, investor sentiment
had already been significantly altered.
Indeed, first and second quarter economic growth turned out to be more
robust than expected. As a result, speculation regarding another rate cut by
the Federal Reserve Board has ended for the time being. There has even been
talk that the Fed may have to raise interest rates before the end of the year
to slow down the economy and stave off inflation.
Higher interest rates--a negative for stocks and bonds--are a plus for
money market funds, particularly if inflation truly stays low. That's because
money market fund assets tend to be invested in high quality securities such as
Treasury bills and commercial paper issued by blue chip corporations. These
securities typically mature anywhere from a few days to one year. And, because
the average maturity of a money market fund is very short, money market funds
can quickly reinvest in higher yielding money market instruments when interest
rates rise.
Currently, money market fund yields have stabilized in the 4-5% area, while
inflation continues to advance at 2-3%. Therefore, money market funds offer
investors a high degree of liquidity, preservation of capital and a return in
excess of inflation.
Your portfolio managers discuss the outlook for your Fund in light of these
broad issues on the following pages. Thank you for your confidence in
OppenheimerFunds. We look forward to helping you reach your investment goals in
the future.
/s/James C. Swain /s/Bridget A. Macaskill
James C. Swain Bridget A. Macaskill
August 21, 1996
3 Oppenheimer Cash Reserves
<PAGE>
Dottie Warmack
Portfolio Manager
Q + A
An interview with your Fund's managers.
How has the Fund performed over the past year?
In what was a very difficult fixed-income market, the Fund performed well. By
positioning our investments in securities offering competitive yields, we
successfully provided shareholders with current income while maintaining a
constant share price.
What investments have had a positive effect on the portfolio?
The Fund's objective--to preserve capital while capturing as high a yield as
possible--means the bulk of the portfolio is invested in low risk, short-term
securities such as commercial paper, letters of credit and floating rate
securities. However, within these areas, there are actions we can take to
increase the portfolio's performance as the market changes.
For example, as interest rates began to rise early this year, we began to
invest more heavily in shorter-term securities. These must be replaced by new
issues more frequently, so as rates rose, we were able to replace our maturing
holdings with newly issued securities offering higher yields. This positioning
helped us maintain a competitive yield during the period.(1)
Were any factors working against the Fund?
No. The Fund successfully met its objectives over the period largely because we
anticipated higher interest rates and thus positioned our investments in
securities that offered competitive yields and relative price stability.
What areas of the market are you currently targeting?
As always, we continue to focus on offering competitive yields, while watching
interest rates carefully. At this time, we believe reports of
stronger-than-expected economic growth are making further interest rate cuts
this year unlikely. However, we also doubt that the economy is robust enough to
expect further rate increases. Although the market has reversed its direction,
we're currently maintaining our focus on shorter securities and watching
carefully for ways to increase yield.
What is your outlook for the Fund?
Because the securities we must invest in have short maturities, the yields they
pay are directly related to prevailing interest rates. As a result, money market
funds like this benefit from higher interest rates. The fact that rates are
higher now than at the beginning of the year should continue to work in our
favor over the near term. Still, unless we begin to see clear evidence of a
further pickup or slowdown in the economy relative to last year, we will remain
fairly neutral in our average maturity. Given this outlook for the market, we
expect to continue to provide shareholders with a competitive income stream as
well as safety of principal.[solid box]
1. The Fund's portfolio is subject to change.
4 Oppenheimer Cash Reserves
<PAGE>
Financials
Contents
- -------------------------------------------------------------------------------
Statement of Investments 6
Statement of Assets and Liabilities 9
Statements of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
Notes to Financial Statements 14
Independent Auditors' Report 17
Federal Income Tax Information 18
5 Oppenheimer Cash Reserves
<PAGE>
Statement of Investments July 31, 1996
<TABLE>
<CAPTION>
Face Value
Amount See Note 1
<S> <C> <C>
===================================================================================================================================
Certificates of Deposit--3.0%
- -----------------------------------------------------------------------------------------------------------------------------------
Domestic Certificates
Of Deposit--1.9% Huntington National Bank, 5.09%, 8/21/96 $ 5,000,000 $ 5,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
Eurodollar Certificates
Of Deposit--1.1% Deutsche Bank, 5.10%, 8/23/96 3,000,000 3,000,018
---------
Total Certificates of Deposit (Cost $8,000,018) 8,000,018
===================================================================================================================================
Direct Bank Obligations--2.2%
- -----------------------------------------------------------------------------------------------------------------------------------
National Westminster Bank of Canada:
4.94%, 8/15/96 3,000,000 2,994,242
5.48%, 10/15/96 3,000,000 2,965,750
---------
Total Direct Bank Obligations (Cost $5,959,992) 5,959,992
===================================================================================================================================
Letters of Credit--1.9%
- -----------------------------------------------------------------------------------------------------------------------------------
Credit Suisse, guaranteeing commercial paper of COSCO Co.,
Ltd., 5.40%, 9/16/96 (Cost $4,965,500) 5,000,000 4,965,500
===================================================================================================================================
Short-Term Notes--93.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages--1.8% Coca-Cola Enterprises, Inc., 5.49%, 10/9/96(1) 5,000,000 4,947,388
- -----------------------------------------------------------------------------------------------------------------------------------
Broker/Dealers--7.5% CS First Boston, Inc., 5.492%, 3/4/97(2)(3) 5,000,000 5,000,000
-------------------------------------------------------------------------------------------
Dean Witter, Discover & Co., 5.77%, 1/15/97(2) 5,000,000 5,005,389
-------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., 4.95%, 8/28/96 5,000,000 4,981,438
-------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc., 5.27%, 9/30/96(2) 5,000,000 5,000,000
----------
19,986,827
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Finance--14.7% CIT Group Holdings, Inc., 5.32%, 8/2/96 5,000,000 4,999,261
-------------------------------------------------------------------------------------------
Countrywide Home Loan:
5.35%, 8/28/96 2,900,000 2,888,364
5.40%, 9/5/96 4,700,000 4,675,325
5.44%, 8/21/96 5,000,000 4,984,889
- -----------------------------------------------------------------------------------------------------------------------------------
FINOVA Capital Corp.:
5.45%, 9/3/96 8,500,000 8,457,925
5.50%, 9/16/96 3,000,000 2,978,917
- -----------------------------------------------------------------------------------------------------------------------------------
Heller Financial, Inc.:
5.42%, 9/4/96 5,250,000 5,223,126
5.46%, 9/9/96 5,000,000 4,970,425
----------
39,178,232
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software--3.7% First Data Corp., 5.45%, 9/10/96 10,000,000 9,939,444
- -----------------------------------------------------------------------------------------------------------------------------------
Conglomerates--1.5% Pacific Dunlop Holdings, Inc., guaranteed by
Pacific Dunlop Ltd., 5.37%, 10/31/96(1) 4,181,000 4,124,246
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Finance--3.7% American Express Credit Corp., 4.92%, 8/23/96 5,000,000 4,984,967
- -----------------------------------------------------------------------------------------------------------------------------------
Sears Roebuck Acceptance Corp., 5.40%, 9/17/96 5,000,000 4,964,750
---------
9,949,717
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Financial--6.4% Associates Corp. of North America, 5.70%, 8/1/96 12,000,000 12,000,000
- -----------------------------------------------------------------------------------------------------------------------------------
Household Finance Corp., 5.39%, 8/7/96 5,000,000 5,000,000
----------
17,000,000
6 Oppenheimer Cash Reserves
<PAGE>
Face Value
Amount See Note 1
===================================================================================================================================
Electronics--6.0% ITT Industries, Inc.:
5.45%, 9/20/96(1) $5,000,000 $ 4,962,153
5.47%, 8/19/96(1) 7,000,000 6,980,855
-------------------------------------------------------------------------------------------
Mitsubishi Electric Finance America, Inc., 5.50%, 9/18/96(1) 4,000,000 3,970,933
----------
15,913,941
- -----------------------------------------------------------------------------------------------------------------------------------
Energy Services & Union Pacific Resources Group Inc.:
Producers--3.5% 5.45%, 9/19/96(1) 5,197,000 5,158,448
5.45%, 8/23/96(1) 4,175,000 4,161,095
---------
9,319,543
- -----------------------------------------------------------------------------------------------------------------------------------
Environmental--1.9% WMX Technologies, Inc., 5.32%, 9/10/96(1) 5,000,000 4,970,444
- -----------------------------------------------------------------------------------------------------------------------------------
Leasing & Factoring--3.7% CSW Credit, Inc.:
5.38%, 9/17/96 5,000,000 4,964,881
5.42%, 8/7/96 5,000,000 4,995,483
---------
9,960,364
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing--1.7% Rexam PLC, 5.35%, 8/21/96(1) 4,596,000 4,582,340
- -----------------------------------------------------------------------------------------------------------------------------------
Metals/Mining--0.8% English China Clays PLC, 5.40%, 8/19/96(1) 2,100,000 2,094,330
- -----------------------------------------------------------------------------------------------------------------------------------
Nondurable Avon Capital Corp., 5.53%, 10/10/96(1) 10,000,000 9,892,472
Household Goods--3.7%
- -----------------------------------------------------------------------------------------------------------------------------------
Special Purpose Financial--22.8% Asset Securitization Cooperative:
5.35%, 8/20/96(1) 6,946,000 6,926,387
5.42%, 9/16/96(1) 5,000,000 4,965,372
-------------------------------------------------------------------------------------------
CIESCO L.P., 5.33%, 8/22/96 5,000,000 4,984,454
-------------------------------------------------------------------------------------------
Cooperative Association of Tractor Dealers, Inc.:
5%, 8/22/96 4,900,000 4,885,708
5.45%, 8/15/96 2,000,000 1,995,761
5.70%, 8/1/96 6,000,000 6,000,000
-------------------------------------------------------------------------------------------
CXC, Inc., 5.42%, 9/20/96(1) 9,271,000 9,201,210
-------------------------------------------------------------------------------------------
Fleet Funding Corp., 5.35%, 8/19/96(1) 12,000,000 11,967,900
-------------------------------------------------------------------------------------------
Short-Term Card Account Trust 1995-1, Cl. A1, 5.51%, 5,000,000 5,000,000
1/15/97(2)(3)
-------------------------------------------------------------------------------------------
WCP Funding, 5.45%, 9/9/96(1) 5,000,000 4,970,750
----------
60,897,542
- -----------------------------------------------------------------------------------------------------------------------------------
Specialty Retailing--3.5% Cosmair, Inc., 5.47%, 8/16/96(1) 5,000,000 4,988,604
-------------------------------------------------------------------------------------------
St. Michael Finance Ltd., guaranteed by 4,498,000 4,480,403
Marks & Spencer PLC, 5.03%, 8/29/96 ---------
9,469,007
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications- NYNEX Corp.:
Technology--2.6% 5.33%, 8/14/96 4,000,000 3,992,301
5.40%, 9/23/96 3,000,000 2,976,150
---------
6,968,451
7 Oppenheimer Cash Reserves
<PAGE>
Statement of Investments (Continued)
Face Value
Amount See Note 1
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone Utilities--3.8% GTE Corp.:
5.40%, 8/22/96 $5,250,000 $ 5,233,463
5.43%, 8/14/96 5,000,000 4,990,196
----------
10,223,659
-----------
Total Short-Term Notes (Cost $249,417,947) 249,417,947
===================================================================================================================================
Foreign Government Obligations--1.1%
- -----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale, 5.67%, 7/29/97 3,000,000 3,000,000
(Cost $3,000,000)(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value 101.5% 271,343,457
- -----------------------------------------------------------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (1.5) (4,022,809)
---------- ------------
Net Assets 100.0% $267,320,648
========== ============
</TABLE>
Short-term notes, direct bank obligations and letters of credit are generally
traded on a discount basis; the interest rate is the discount rate received by
the Fund at the time of purchase. Other securities normally bear interest at the
rates shown.
1. Security issued in an exempt transaction without registration under the
Securities Act of 1933 (the Act). The securities are carried at amortized cost,
and amount to $98,864,927, or 36.98% of the Fund's net assets. Pursuant to
guidelines adopted by the Board of Trustees, these securities are determined to
be liquid.
2. Floating or variable rate obligation maturing in more than one year. The
interest rate, which is based on specific, or an index of, market interest
rates, is subject to change periodically and is the effective rate on July 31,
1996. This instrument may also have a demand feature which allows the recovery
of principal at any time, or at specified intervals not exceeding one year, on
up to 30 days' notice. Maturity date shown represents effective maturity based
on variable rate and, if applicable, demand feature.
3. Security may be considered illiquid by virtue of the absence of a readily
available market or because of legal or contractual restrictions on resale.
Illiquid securities amount to $10,000,000, or 3.74% of the Fund's net assets, at
July 31, 1996. The Fund may not invest more than 10% of its net assets
(determined at the time of purchase) in illiquid securities. See accompanying
Notes to Financial Statements.
8 Oppenheimer Cash Reserves
<PAGE>
Statement of Assets and Liabilities July 31, 1996
<TABLE>
====================================================================================================================================
<S> <C> <C>
Assets Investments, at value--see accompanying statement $271,343,457
------------------------------------------------------------------------------------------------------------
Cash 120,882
------------------------------------------------------------------------------------------------------------
Receivables:
Shares of beneficial interest sold 718,383
Interest 330,879
------------------------------------------------------------------------------------------------------------
Other 175,419
------------
Total assets 272,689,020
====================================================================================================================================
Liabilities Payables and other liabilities:
Shares of beneficial interest redeemed 5,017,803
Dividends 277,725
Shareholder reports 38,519
Distribution and service plan fees 31,385
Other 2,940
------------
Total liabilities 5,368,372
====================================================================================================================================
Net Assets $267,320,648
============
====================================================================================================================================
Composition of Paid-in capital $267,328,430
Net Assets ------------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions (7,782)
------------
Net assets $267,320,648
============
====================================================================================================================================
Net Asset Value Class A Shares:
Per Share Net asset value, redemption price and offering price per share (based on net assets
of $170,030,647 and 170,093,786 shares of beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $85,573,467 and 85,573,179 shares of beneficial interest outstanding) $1.00
------------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $11,716,534 and 11,716,135 shares of beneficial interest outstanding) $1.00
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Cash Reserves
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Seven Months Year Ended
Ended July 31, December 31,
1996(1) 1995
====================================================================================================================================
<S> <C> <C> <C>
Investment Income Interest $6,612,252 $8,909,157
====================================================================================================================================
Expenses Management fees--Note 3 596,591 732,759
------------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 3:
Class A 171,738 210,588
Class B 213,875 264,659
Class C 27,500 45,313
------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 3 384,042 648,387
------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 23,922 33,844
------------------------------------------------------------------------------------------------------------
Legal and auditing fees 8,337 13,011
------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 4,479 1,849
------------------------------------------------------------------------------------------------------------
Shareholder reports -- 198,680
------------------------------------------------------------------------------------------------------------
Insurance expenses 2,846 7,127
------------------------------------------------------------------------------------------------------------
Other 12,788 76,370
--------- ----------
Total expenses 1,446,118 2,232,587
====================================================================================================================================
Net Investment Income 5,166,134 6,676,570
====================================================================================================================================
Net Realized Gain (Loss) on Investments (6,753) 37,450
====================================================================================================================================
Net Increase in Net Assets Resulting From Operations $5,159,381 $6,714,020
========== ==========
</TABLE>
1. The Fund changed its fiscal year end from December 31 to July 31.
See accompanying Notes to Financial Statements.
10 Oppenheimer Cash Reserves
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Seven Months
Ended July 31, Year Ended December 31,
1996(1) 1995 1994
====================================================================================================================================
<S> <C> <C> <C>
Operations Net investment income $ 5,166,134 $ 6,676,570 $ 3,568,242
------------------------------------------------------------------------------------------------------------
Net realized gain (loss) (6,753) 37,450 56
------------ ------------ ------------
Net increase in net assets resulting from operations 5,159,381 6,714,020 3,568,298
====================================================================================================================================
Dividends and Class A (3,897,426) (4,996,089) (2,852,731)
Distributions to Class B (1,119,443) (1,474,886) (648,288)
Shareholders Class C (143,788) (249,786) (67,223)
====================================================================================================================================
Beneficial Interest Net increase (decrease) in net assets resulting from
Transactions beneficial interest transactions--Note 2:
Class A 21,502,771 49,175,977 28,436,616
Class B 48,195,633 (9,426,294) 46,175,820
Class C 6,692,718 (580,955) 5,603,372
====================================================================================================================================
Net Assets Total increase 76,389,846 39,161,987 80,215,864
------------------------------------------------------------------------------------------------------------
Beginning of period 190,930,802 151,768,815 71,552,951
------------ ------------ ------------
End of period $267,320,648 $190,930,802 $151,768,815
============ ============ ============
</TABLE>
1. The Fund changed its fiscal year end from December 31 to July 31.
See accompanying Notes to Financial Statements.
11 Oppenheimer Cash Reserves
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Class A
---------------------------------------------------
Seven Months
Ended July 31, Year Ended December 31,
1996(2) 1995 1994 1993
==============================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00
- ----------------------------------------------------------------------------------------------
Income from investment operations--net
investment income and net realized gain .03 .05 .03 .02
- ----------------------------------------------------------------------------------------------
Dividends and distributions
to shareholders (.03) (.05) (.03) (.02)
- ----------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00
======== ======== ======= =======
==============================================================================================
Total Return, at Net Asset Value(5) 2.68% 4.84% 3.22% 2.05%
==============================================================================================
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $170,031 $148,529 $99,361 $70,924
- ----------------------------------------------------------------------------------------------
Average net assets (in thousands) $149,889 $105,349 $87,908 $76,910
- ----------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 4.47%(6) 4.71% 3.25% 1.99%
Expenses, before voluntary reimbursement
by the Manager 1.06%(6) 1.36% 1.32% 1.55%
Expenses, net of voluntary reimbursement
by the Manager N/A N/A N/A N/A
</TABLE>
1. For the period from December 1, 1993 (inception of offering) to December 31,
1993.
2. The Fund changed its fiscal year end from December 31 to July 31.
3. For the period from August 17, 1993 (inception of offering) to December 31,
1993.
4. Less than $.005 per share.
12 Oppenheimer Cash Reserves
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- ----------------------- ----------------------------------------------- -----------------------------------------------
Seven Months Seven Months
Ended July 31, Year Ended December 31, Ended July 31, Year Ended December 31,
1992 1991 1996(2) 1995 1994 1993(3) 1996(2) 1995 1994 1993(1)
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -------------------------------------------------------------------------------------------------------------------------------
.03 .06 .02 .04 .03 --(4) .02 .04 .02 --(4)
- -------------------------------------------------------------------------------------------------------------------------------
(.03) (.06) (.02) (.04) (.03) --(4) (.02) (.04) (.02) --(4)
- -------------------------------------------------------------------------------------------------------------------------------
$1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======== ======= ======= ======= ===== ======= ====== ====== =====
===============================================================================================================================
3.07% 5.67% 2.35% 4.26% 2.54% 0.56% 2.35% 4.21% 2.51% 0.14%
===============================================================================================================================
$ 89,266 $112,883 $85,573 $37,378 $46,803 $628 $11,717 $5,024 $5,604 $1
- -------------------------------------------------------------------------------------------------------------------------------
$104,970 $105,352 $49,226 $35,360 $21,262 $454 $ 6,333 $6,040 $2,107 $1
- -------------------------------------------------------------------------------------------------------------------------------
3.07% 5.13% 3.91%(6) 4.15% 3.05% 1.49%(6) 3.91%(6) 4.12% 3.19% 1.18%(6)
1.42% 1.22% 1.61%(6) 1.92% 1.89% 2.12%(6) 1.61%(6) 1.97% 1.90% 2.35%(6)
1.25% 1.15% N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
5. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period (or inception of offering), with all dividends
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. Total
returns are not annualized for periods of less than one full year. Total returns
reflect changes in net investment income only.
6. Annualized.
See accompanying Notes to Financial Statements.
13 Oppenheimer Cash Reserves
<PAGE>
Notes to Financial Statements
================================================================================
1. Significant
Accounting Policies
Oppenheimer Cash Reserves (the Fund) is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company. On June 27, 1996, the Board of Trustees elected to change the fiscal
year end of the Fund from December 31 to July 31. Accordingly, these financial
statements are presented for the seven month period from January 1, 1996 to July
31, 1996. The Fund's investment objective is to seek the maximum current income
that is consistent with stability of principal by investing in "money market"
securities meeting specified quality standards. The Fund's investment advisor is
OppenheimerFunds, Inc. (the Manager). The Fund offers Class A, Class B and Class
C shares. Class B and Class C shares may be subject to a contingent deferred
sales charge. All three classes of shares have identical rights to earnings,
assets and voting privileges, except that each class has its own distribution
and/or service plan, expenses directly attributable to a particular class and
exclusive voting rights with respect to matters affecting a single class. Class
B shares will automatically convert to Class A shares six years after the date
of purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued on the basis of amortized
cost, which approximates market value.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal 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 to shareholders. Therefore, no federal
income or excise tax provision is required. At July 31, 1996, the Fund had
available for federal income tax purposes an unused capital loss carryover of
approximately $6,800, which expires in 2004.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly. To
effect its policy of maintaining a net asset value of $1.00 per share, the Fund
may withhold dividends or make distributions of net realized gains.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date). Realized gains and losses on investments are
determined on an identified cost basis, which is the same basis used for federal
income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
14 Oppenheimer Cash Reserves
<PAGE>
Notes to Financial Statements (continued)
================================================================================
2. Shares of
Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Seven Months Ended July 31, 1996(1) Year Ended December 31, 1995 Year Ended December 31, 1994
----------------------------------- ---------------------------- ----------------------------
Shares Amount Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A:
Sold 265,507,057 $265,507,057 367,360,698 $367,360,698 298,811,461 $298,811,461
Dividends and
distributions reinvested 3,477,339 3,477,339 4,666,289 4,666,289 2,517,663 2,517,663
Redeemed (247,481,642) (247,481,625) (322,851,010) (322,851,010) (272,892,508) (272,892,508)
------------ ------------ ------------ ------------ ------------ ------------
Net increase 21,502,754 $ 21,502,771 49,175,977 $ 49,175,977 28,436,616 $ 28,436,616
============ ============ ============ ============ ============ ============
====================================================================================================================================
Class B:
Sold 175,381,171 $175,381,171 111,551,709 $111,551,709 101,626,173 $101,626,173
Dividends and
distributions reinvested 836,342 836,342 1,179,668 1,179,668 519,118 519,118
Redeemed (128,021,880) (128,021,880) (122,157,671) (122,157,671) (55,969,471) (55,969,471)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 48,195,633 $ 48,195,633 (9,426,294) $ (9,426,294) 46,175,820 $ 46,175,820
============ ============ ============ ============ =========== ===========
====================================================================================================================================
Class C:
Sold 32,552,967 $ 32,552,967 20,708,644 $ 20,708,644 11,011,788 $ 11,011,788
Dividends and
distributions reinvested 116,233 116,233 207,924 207,924 56,507 56,507
Redeemed (25,976,482) (25,976,482) (21,497,523) (21,497,523) (5,464,923) (5,464,923)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 6,692,718 $ 6,692,718 (580,955) $ (580,955) 5,603,372 $ 5,603,372
============ ============ ============ ============ =========== ===========
</TABLE>
1. The Fund changed its fiscal year end from December 31 to July 31.
<PAGE>
================================================================================
3. Management Fees
And Other Transactions
With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.50% on the first
$250 million of average annual net assets with a reduction of 0.025% on each
$250 million thereafter, to 0.40% on net assets in excess of $1 billion. The
Manager has agreed to reimburse the Fund if aggregate expenses (with specified
exceptions) exceed the most stringent applicable regulatory limit on Fund
expenses.
During the seven months ended July 31, 1996, OppenheimerFunds
Distributor, Inc. (OFDI) received contingent deferred sales charges of $220,111
and $3,064 upon redemption of Class B and Class C shares, as reimbursement for
sales commissions advanced by OFDI at the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered
investment companies. OFS's total costs of providing such services are allocated
ratably to these companies.
The Fund has adopted a Service Plan for Class A shares to reimburse OFDI
for a portion of its costs incurred in connection with the personal service and
maintenance of accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate that may not exceed 0.20% of the average annual net
assets of Class A shares of the Fund. OFDI uses the service fee to reimburse
brokers, dealers, banks and other financial institutions quarterly for providing
personal service and maintenance of accounts of their customers that hold Class
A shares. During the seven months ended July 31, 1996, OFDI paid $36,675 to an
affiliated broker/dealer as reimbursement for Class A personal service and
maintenance expenses.
15 Oppenheimer Cash Reserves
<PAGE>
Notes to Financial Statements (Continued)
================================================================================
3. Management Fees
And Other Transactions
With Affiliates
(continued)
The Fund has adopted compensation type Distribution and Service Plans for Class
B and Class C shares to compensate OFDI for its services and costs in
distributing Class B and Class C shares and servicing accounts. Under the Plans,
the Fund pays OFDI an annual asset-based sales charge of 0.75% per year on Class
B shares that are outstanding for 6 years or less and on Class C shares, as
compensation for sales commissions paid from its own resources at the time of
sale and associated financing costs. If the Plans are terminated by the Fund,
the Board of Trustees may allow the Fund to continue payments of the asset-based
sales charge to OFDI for certain expenses it incurred before the Plans were
terminated. OFDI may also receive a service fee of 0.25% per year as
compensation 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. At present, these
service fees are set at zero for Class B and Class C shares. Both fees are
computed on the average annual net assets of Class B and Class C shares,
determined as of the close of each regular business day. During the seven months
ended July 31, 1996, OFDI retained $213,755 and $27,497, respectively, as
compensation for Class B and Class C sales commissions and service fee advances,
as well as financing costs.
16 Oppenheimer Cash Reserves
<PAGE>
Independent Auditors' Report
================================================================================
The Board of Trustees and Shareholders of Oppenheimer Cash Reserves:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Cash Reserves as of July 31, 1996,
the related statements of operations for the seven months then ended and the
year ended December 31, 1995, the statements of changes in net assets for the
seven months ended July 31, 1996 and the years ended December 31, 1995 and 1994,
and the financial highlights for the period January 1, 1991 to July 31, 1996.
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. Our procedures included confirmation of securities owned at July 31,
1996 by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of Oppenheimer
Cash Reserves at July 31, 1996, the results of its operations, the changes in
its net assets, and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
August 21, 1996
17 Oppenheimer Cash Reserves
<PAGE>
Federal Income Tax Information (Unaudited)
================================================================================
In early 1997, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1996. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
None of the dividends paid by the Fund during the fiscal year ended July
31, 1996 are eligible for the corporate dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
18 Oppenheimer Cash Reserves
<PAGE>
Oppenheimer Cash Reserves
================================================================================
Officers and Trustees James C. Swain, Chairman and Chief Executive Officer
Bridget A. Macaskill, Trustee and President
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee
Sam Freedman, Trustee
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President and Secretary
Dorothy G. Warmack, Vice President
George C. Bowen, Vice President, Treasurer and
Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of Citibank, N.A.
Portfolio Securities
================================================================================
Independent Auditors Deloitte & Touche LLP
================================================================================
Legal Counsel Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppenheimer Cash Reserves. This
report must be preceded or accompanied by a Prospectus of Oppenheimer Cash
Reserves. For material information concerning the Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
19 Oppenheimer Cash Reserves
<PAGE>
[BACK COVER]
Information
General Information
Monday-Friday 8:30 a.m.-9 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
Telephone Transactions
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1-800-852-8457
PhoneLink
24 hours a day, automated
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Information Hotline
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issues that affect your investments
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RA0760.001.0796 September 30, 1996
[Picture of Jennifer Leonard]
[Caption] Jennifer Leonard, Customer Service Representative
OppenheimerFunds Services
"How may I help you?"
As an Oppenheimer fund shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or ready
account access, you can benefit from services designed to make investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account and
handle administrative requests. You can reach them at our General Information
number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
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For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
OppenheimerFunds Services, with their Award of Excellence in 1993. So call us
today--we're here to help.
[Oppenheimer Logo]
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P.O. Box 5270
Denver, CO 80217-5270
- ---------------------------------------------
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