<PAGE>
[PHOTO]
Annual Report October 31, 1999
Oppenheimer
WORLD BOND FUND
[LOGO] OPPENHEIMERFUNDS-Registered Trademark-
The Right Way to Invest
<PAGE>
REPORT HIGHLIGHTS
CONTENTS
1 President's Letter
3 An Interview with Your Fund's Manager
8 Fund Performance
14 FINANCIAL STATEMENTS
42 INDEPENDENT AUDITORS' REPORT
43 Federal Income Tax Information
44 Officers and Trustees
45 OppenheimerFunds Family
Declining bond prices in the wake of 1998's global financial crisis were only
PARTIALLY OFFSET BY STABLE TO RISING BOND PRICES SO FAR IN 1999.
We believe that higher yielding bonds--such as emerging-markets debt and lower
rated investment-grade securities-- CURRENTLY OFFER THE MOST ATTRACTIVE VALUES
in the international fixed income markets.
As bond prices continue to recover from the effects of last year's financial
crisis, WE ARE OPTIMISTIC ABOUT THE POTENTIAL FOR CAPITAL APPRECIATION.
<TABLE>
<CAPTION>
- ---------------------------------------
AVERAGE ANNUAL
TOTAL RETURNS
For the 1-Year Period
Ended 10/31/99*
CLASS A
Without With
Sales Chg. Sales Chg.
- ---------------------------------------
<S> <C>
7.07% 1.98%
<CAPTION>
CLASS B
Without With
Sales Chg. Sales Chg.
- ---------------------------------------
<S> <C>
6.22% 1.38%
<CAPTION>
CLASS C
Without With
Sales Chg. Sales Chg.
- ---------------------------------------
<S> <C>
6.24% 5.27%
- ---------------------------------------
</TABLE>
- ---------------------------------------
NOT FDIC INSURED.
NO BANK GUARANTEE.
MAY LOSE VALUE.
- ---------------------------------------
* See page 12 for further details.
<PAGE>
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
Dear shareholder,
[PHOTO]
BRIDGET A. MACASKILL
President
Oppenheimer
World Bond Fund
Whenever a new year begins--let alone a new decade or century--it makes sense to
pause a moment to assess where we've been and where we're going.
In retrospect, U.S. stocks and bonds in 1999 were subject to sudden and
substantial swings in investor sentiment because of economic uncertainty. When
the year began, investors were concerned that growth in the United States might
slow in response to economic weakness overseas. At mid-year, investors were
concerned that the economy was too strong, potentially rekindling inflationary
pressures. Yet, by year end, it became clearer that while the U.S. economy grew
robustly in 1999, inflation remained at low levels. Indeed, investors appeared
more comfortable with the economy after the Federal Reserve Board demonstrated
its inflation-fighting resolve by raising interest rates three times between
June and November.
As is normal in a rising-interest-rate environment, bond prices generally
declined in 1999, led lower by U.S. Treasury bonds. In the stock market, while
most major indices advanced, strong performance was mostly limited to a handful
of large-capitalization growth companies, principally in the technology arena.
Smaller and value-oriented stocks provided particularly lackluster returns and,
overall, foreign stocks outperformed U.S. stocks in 1999.
Looking forward, we expect the U.S. economy to remain on a moderate-growth,
low-inflation course. As recent revisions of 1999's economic statistics
demonstrated, the economy has defied many analysts' forecasts by growing at a
strong rate, which should be positive for the bond market. Similarly, positive
economic forces could help the stock market's performance broaden to include
value-oriented and smaller stocks.
We see particularly compelling opportunities outside of the U.S. market.
Many foreign stocks also ended 1999 more attractively valued than large-cap U.S.
stocks, and economic trends in overseas markets could lead to higher stock
prices. In Europe, corporate restructuring has just begun, giving
1 OPPENHEIMER WORLD BOND FUND
<PAGE>
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------
companies there the same potential for cost-cutting and productivity
improvements that U.S. companies enjoyed 10 years ago. In Japan and Asia,
economic recovery is expected to gain strength, which could allow stocks to
rally from relatively low levels.
Another 1999 trend that should remain in force in 2000 is the growth of
businesses related to the Internet. The rise of e-commerce has been good for
consumers and the economy because of greater price competition, which has helped
keep inflation under control. The Internet has also been good for investors, as
even companies with no earnings have seen their stock prices soar. Clearly,
while the Internet is here to stay, not all "dot-com" companies will survive,
and many of these high-flying Internet stocks will eventually--and perhaps very
suddenly--return to more reasonable levels. The long-term winners are most
likely to be companies that support the Internet's growth with content or
infrastructure.
What else is in store for investors in 2000? While we do not have an
infallible crystal ball, we believe that in almost any investment environment,
consistent success stems from an unwavering focus on fundamental investment
principles such as maintaining a long-term perspective, using diversification to
manage risks and availing oneself of the services of a knowledgeable financial
advisor. Indeed, these principles serve as the foundation for every investment
we offer, helping to make OppenheimerFunds THE RIGHT WAY TO INVEST in 2000 and
beyond.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
November 19, 1999
These general market views represent opinions of OppenheimerFunds, Inc. and are
not intended to predict or depict performance of any particular fund. Specific
discussion, as it applies to your Fund, is contained in the pages that follow.
2 OPPENHEIMER WORLD BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
[PHOTO]
PORTFOLIO MANAGEMENT
TEAM (L TO R)
Art Steinmetz
(Portfolio Manager)
David Negri
Q HOW DID OPPENHEIMER WORLD BOND FUND PERFORM DURING THE ONE-YEAR PERIOD THAT
ENDED OCTOBER 31, 1999?
A. Given very challenging conditions in the world's fixed income markets, we are
generally pleased with the Fund's performance over the past year. Poor market
performance in the wake of last year's global currency and credit crisis was
partially offset by greater market stability in 1999.
HOW WOULD YOU CHARACTERIZE THE INVESTMENT ENVIRONMENT OVER THE PAST YEAR?
The global bond markets have been highly volatile, especially in the emerging
markets. When the reporting period began, we were in the midst of the global
financial crisis, which had spread from Asia to Russia and was threatening Latin
America. The bond markets were further unsettled by problems experienced by a
number of hedge funds, which were forced to sell large amounts of bonds into an
already troubled market. In 1999, both the global financial crisis and
hedge-fund problems appeared to ease, and signs began to emerge that troubled
emerging-market economies were stabilizing. Bond prices began to rise from
depressed levels, but have not yet rebounded enough to retrace all of their
previous declines.
In the United States, stronger-than-expected economic growth caused the
Federal Reserve Board to raise short-term interest rates twice during the summer
of 1999. Most U.S. government securities prices fell in anticipation of these
rate hikes.
3 OPPENHEIMER WORLD BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW HAVE THE VARIOUS EMERGING MARKETS IN WHICH THE FUND INVESTS FARED OVER THE
PAST YEAR?
Southeast Asian economies have been the first to start to recover from last
year's financial crisis. Many have begun to implement the reforms necessary to
strengthen their troubled banking and financial systems. As a result, overseas
investors have become more comfortable committing capital to Asia, and greater
liquidity has helped these markets rally.
Although Russia remains mired in the problems that led to default on its
government debt during the summer of 1998, other Eastern European nations have
enjoyed stronger economic conditions. For example, our investments in Turkey
have performed quite well.
The recession in Latin America has persisted. However, we expect Latin
American bond markets to recover when economic conditions there improve.
HOW HAVE FIXED INCOME MARKETS FARED IN THE DEVELOPED REGIONS?
The Japanese bond market has ranked among the top performers over the past year.
While the Japanese economy has not yet improved dramatically, the government
appears to be serious about implementing long-awaited financial reforms. As a
result, investors took advantage of attractive values in Japanese bonds based on
the not-yet-realized expectation that the recession will end sometime in the
foreseeable future.
On the other hand, European bond markets have generally languished amid
slower-than-expected economic growth. Returns for U.S. investors from European
bonds have suffered because of the weakening of Europe's new currency, the euro,
relative to the U.S. dollar.
[SIDENOTE:]
"YIELD SPREADS HAVE NOT BEEN MUCH WIDER THAN THEY ARE TODAY, DESPITE THE FACT
THAT ECONOMIC CONDITIONS APPEAR TO BE IMPROVING IN MANY REGIONS. IN OUR VIEW,
THIS REPRESENTS AN OUTSTANDING INVESTMENT OPPORTUNITY."
4 OPPENHEIMER WORLD BOND FUND
<PAGE>
While returns from U.S. Treasury securities have been negative so far in 1999,
we have found particularly attractive values in the U.S. Government agency
sector. For example, bonds issued by the Federal Home Loan Mortgage Corporation,
a Government agency, typically yield about 40 basis points more than U.S.
Treasury securities; currently they yield about 90 basis points more. We
attribute this wider-than-average difference to the achievement of a federal
budget surplus, which has resulted in lower issuance of U.S. Treasury
securities.
HOW WAS THE FUND MANAGED IN THIS ENVIRONMENT?
While we reduced our holdings of U.S. Government bonds over the past year, we
have attempted to take advantage of prevailing relative values in this sector
by emphasizing mortgage-backed securities, including "interest-only" securities
whose prices tend to increase as interest rates rise.
We increased our exposure to emerging market debt. Within the emerging
markets, we have focused on Latin America and Southeast Asia. As these
securities and currencies rebound from depressed levels, we expect the Fund to
benefit.
Although Japanese bonds have recently performed well, we have maintained a
relatively low exposure to these securities. From a fundamental investment
standpoint, we believe that other areas of the world, such as Europe, currently
offer more favorable economic conditions and, therefore, better long-term return
potential.
In fact, after de-emphasizing the developed markets of Europe for most of
the reporting period, we recently began to increase our exposure to European
bonds and the euro. That's because we expect European economic growth to
accelerate relative to U.S. growth, which should produce currency-related gains.
5 OPPENHEIMER WORLD BOND FUND
<PAGE>
AN INTERVIEW WITH YOUR FUND'S MANAGER
- --------------------------------------------------------------------------------
HOW DO YOU MANAGE THE VARIOUS RISKS THAT AFFECT THE FIXED INCOME MARKETS?
We have recently adopted a number of proprietary quantitative models that are
designed to help us identify, quantify and manage three of the specific kinds of
risk that can affect the Fund: interest-rate risk, currency risk and credit
risk. These models combine quantitative tools--such as econometric modeling and
technical analysis--to help recommend the direction in which we should weight
the portfolio relative to our benchmark. Of course, we always combine the
quantitative analyses with our own fundamental judgement as portfolio managers.
In our view, these models serve as a valuable information resource in our
decision-making process.
WHAT IS YOUR OUTLOOK FOR THE FORESEEABLE FUTURE?
We are cautiously optimistic. We have attempted to position the fund to take
advantage of good values in emerging-market and lower quality, investment-grade
bonds. If, as we expect, many of the world's economies gain strength, we
believe these investments should provide above-average total returns, including
high yields and price appreciation.
[SIDENOTE:]
AVERAGE ANNUAL
TOTAL RETURNS(1)
For the Periods Ended 9/30/99
<TABLE>
<CAPTION>
Class A
1-Year 5-Year 10-Year
- -------------------------------
<S> <C> <C>
1.03% 5.41% 6.67%
<CAPTION>
Class B Since
1-Year 5-Year Inception
- -------------------------------
<S> <C> <C>
0.38% N/A -4.06%
<CAPTION>
Class C Since
1-Year 5-Year Inception
- -------------------------------
<S> <C> <C>
4.24% N/A -1.72%
- -------------------------------
<CAPTION>
STANDARDIZED YIELDS(2)
For the 30 Days Ended 10/31/99
- -------------------------------
<S> <C>
Class A 13.81%
- -------------------------------
Class B 13.95
- -------------------------------
Class C 13.68
- -------------------------------
</TABLE>
1. See page 12 for further details.
2. Standardized yield is based on net investment income for the 30-day period
ended October 31, 1999. Falling share prices will tend to artificially raise
yields.
6 OPPENHEIMER WORLD BOND FUND
<PAGE>
Nonetheless, we are prepared for continued volatility in the fixed income
markets over the short term. For example, higher U.S. interest rates implemented
by the Federal Reserve Board over the summer may adversely affect international
bond markets, especially in those countries that export goods and services to
the United States. However, once this round of rate hikes is over, we believe
the stage will be set for very attractive returns over the longer term. Having
the patience and discipline to weather short-term volatility on the road to
longer-term gains is the essence of our investment strategy, and is an important
reason Oppenheimer World Bond Fund is part of THE RIGHT WAY TO INVEST.
<TABLE>
Top Ten Country Holdings(3)
- ----------------------------------------------------
<S> <C>
United States 33.6%
- ----------------------------------------------------
Argentina 6.5
- ----------------------------------------------------
Turkey 5.8
- ----------------------------------------------------
Germany 4.6
- ----------------------------------------------------
Mexico 4.5
- ----------------------------------------------------
Brazil 3.9
- ----------------------------------------------------
Indonesia 3.8
- ----------------------------------------------------
Venezuela 3.5
- ----------------------------------------------------
Norway 3.3
- ----------------------------------------------------
Italy 2.2
</TABLE>
- -------------------------------
[SIDENOTE:]
REGIONAL ALLOCATION(3)
[PIE CHART]
<TABLE>
<S> <C>
- - United States/Canada 34.6%
- - Latin America 21.2
- - Asia 15.9
- - Europe 15.9
- - Middle East/Africa 7.6
- - Emerging Europe 4.8
</TABLE>
3. Portfolio is subject to change. Percentages are as of October 31, 1999, and
are based on total market value of investments.
7 OPPENHEIMER WORLD BOND FUND
<PAGE>
FUND PERFORMANCE
- --------------------------------------------------------------------------------
HOW HAS THE FUND PERFORMED?
BELOW IS A DISCUSSION, BY THE MANAGER, OF THE FUND'S PERFORMANCE DURING ITS
FISCAL YEAR ENDED OCTOBER 31, 1999, FOLLOWED BY A GRAPHICAL COMPARISON OF THE
FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED MARKET INDEX.
MANAGEMENT'S DISCUSSION OF PERFORMANCE. During the Fund's fiscal year that ended
October 31, 1999, Oppenheimer World Bond Fund provided attractive returns
relative to many other fixed income investments. Returns were positively
influenced by recoveries and anticipated recoveries in key markets, including
Japan and Asia. On the other hand, the Fund was adversely influenced by
declining bond prices in global markets that were affected by last year's global
credit and currency crisis. In some markets, adverse local currency movements
relative to the U.S. dollar also negatively affected performance. In this
environment, the Manager attempted to position the Fund to take advantage of
depressed values and widened yield spreads. The Manager believed that this
strategy should help boost returns as economic and market conditions improve.
The Fund's portfolio holdings, allocations and strategies are subject to change.
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of
the Fund held until October 31, 1999. In the case of Class A shares, performance
is measured over a ten-year period. In the case of Class B and Class C shares,
performance is measured from inception of those classes on April 27, 1998. The
Fund's performance reflects the deduction of the maximum initial sales charge on
Class A shares, the applicable contingent deferred sales charge on Class B and
Class C shares, and reinvestments of all dividends and capital gains
distributions.
8 OPPENHEIMER WORLD BOND FUND
<PAGE>
The Fund's performance is compared to that of Salomon Brothers World Government
Bond Index. This Index is an inclusive index of institutionally traded bonds,
including fixed rate bonds, with a remaining maturity of one year or longer with
amounts outstanding of at least the equivalent of $25 million. Floating- or
variable-rate bonds and private-placement-type securities are not included. The
Index is designed to measure the total return performance of the domestic and
foreign government bond markets.
Index performance reflects the reinvestment of income, but does not
consider the effect of transaction costs, and none of the data in the graphs
shows the effect of taxes. The Fund's performance reflects the effects 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 the index.
9 OPPENHEIMER WORLD BOND FUND
<PAGE>
FUND PERFORMANCE
- --------------------------------------------------------------------------------
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer World Bond Fund (Class A)
and Salomon Brothers World Government Bond Index
<TABLE>
<CAPTION>
Oppenheimer Salomon Brothers
World Bond Fund Class A World Government Bond Index
<S> <C> <C>
11/23/88 $9,525 $10,000
10/31/89 $10,241 $10,110
10/31/90 $10,924 $11,263
10/31/91 $12,662 $12,534
10/31/92 $13,389 $14,275
10/31/93 $14,740 $15,987
10/31/94 $14,884 $16,566
10/31/95 $16,196 $19,084
10/31/96 $18,486 $20,107
10/31/97 $19,953 $20,633
10/31/98 $19,304 $23,222
10/31/99 $20,669 $22,650
</TABLE>
AVERAGE ANNUAL TOTAL RETURN OF CLASS A SHARES OF THE FUND AT 10/31/99(1)
1-Year 1.98% 5-Year 5.75% 10-Year 6.75%
CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer World Bond Fund (Class B)
and Salomon Brothers World Government Bond Index
<TABLE>
<CAPTION>
Oppenheimer Salomon Brothers
World Bond Fund Class B World Government Bond Index
<S> <C> <C>
4/27/98 $10,000 $10,000
10/31/98 $9,407 $11,196
10/31/99 $9,643 $10,921
</TABLE>
CUMULATIVE TOTAL RETURN OF CLASS B SHARES OF THE FUND AT 10/31/99(1)
1-Year 1.38% Life -2.38%
10 OPPENHEIMER WORLD BOND FUND
<PAGE>
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer World Bond Fund (Class C)
and Salomon Brothers World Government Bond Index
<TABLE>
<CAPTION>
Oppenheimer Salomon Brothers
World Bond Fund Class C World Government Bond Index
<S> <C> <C>
4/27/98 $10,000 $10,000
10/31/98 $9,391 $11,196
10/31/99 $9,978 $10,921
</TABLE>
CUMULATIVE TOTAL RETURN OF CLASS C SHARES OF THE FUND AT 10/31/99(1)
1-Year 5.27% Life -0.15%
The performance information for Salomon Brothers World Government Bond Index
in the graphs begins on 11/30/88 for Class A and 4/30/98 for both Class B and
Class C.
1. See page 12 for further details.
Past performance is not predictive of future performance. Graphs are not drawn
to the same scale.
11 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES
- --------------------------------------------------------------------------------
IN REVIEWING PERFORMANCE AND RANKINGS, PLEASE REMEMBER THAT PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. THE FUND'S
PERFORMANCE MAY FROM TIME TO TIME BE SUBJECT TO SUBSTANTIAL SHORT-TERM CHANGES,
PARTICULARLY DURING PERIODS OF MARKET OR INTEREST RATE VOLATILITY. FOR UPDATES
ON THE FUND'S PERFORMANCE, PLEASE CONTACT YOUR FINANCIAL ADVISOR, CALL US AT
1.800.525.7048 OR VISIT OUR WEBSITE, www.oppenheimerfunds.com.
Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown.
CLASS A shares of the Fund were first publicly offered on 11/23/88. Class A
returns include the current maximum initial sales charge of 4.75%. Class A
shares are subject to an annual 0.25% asset-based sales charge.
CLASS B shares of the Fund were first publicly offered on 4/27/98. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 4% (since inception). The ending account value in the graph is net of the
applicable 4% contingent deferred sales charge. Class B shares are subject to an
annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 4/27/98. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
An explanation of the different performance calculations is in the Fund's
prospectus.
12 OPPENHEIMER WORLD BOND FUND
<PAGE>
- ---------------------------------------------------------------------
FINANCIALS
- ---------------------------------------------------------------------
13 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS October 31, 1999
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
MORTGAGE-BACKED OBLIGATIONS--14.8%
- ---------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--10.3%
- ---------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--9.3%
Federal Home Loan Mortgage Corp., Collateralized Mtg.
Obligations, Gtd. Multiclass Mtg. Participation Certificates,
Series 1343, Cl. LA, 8%, 8/15/22 $ 229,000 $ 234,510
- ---------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates,
Series 2054, Cl. TE, 6.25%, 4/15/24 109,000 104,231
- ---------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only
Stripped Mtg.-Backed Security
Series 197, Cl. IO, 11.232%, 4/1/28(2) 1,376,122 438,209
Series 199, Cl. IO, 22.578%, 8/1/28(2) 1,289,375 419,249
- ---------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Mtg.-Backed Certificates:
11.50%, 1/1/18 45,467 49,981
13%, 5/1/19 191,919 218,602
- ---------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.50%, 3/1/28 2,147,811 2,060,890
---------------
3,525,672
- ---------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--1.0%
Government National Mortgage Assn.:
7.50%, 5/15/24 37,661 37,915
7.50%, 1/15/26(3,4) 282,409 283,607
11%, 10/20/19(4) 51,759 57,239
---------------
378,761
- ---------------------------------------------------------------------------------------------------------
PRIVATE--4.5%
- ---------------------------------------------------------------------------------------------------------
COMMERCIAL--3.0%
Asset Securitization Corp., Commercial Mtg.
Pass-Through Certificates, Series 1996-MD6,
Cl. A5, 7.163%, 11/13/26(5) 200,000 192,062
- ---------------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp.,
Interest-Only Stripped Mtg.-Backed Security,
Series 1996-C1, Cl. X-2, 29.86%, 12/25/20(2,6) 6,208,300 81,484
- ---------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg.
Pass-Through Certificates, Series 1996-C1, Cl. E, 7.421%, 3/15/06(5,6) 553,342 460,830
- ---------------------------------------------------------------------------------------------------------
Nykredit AS, 7% Cv. Bonds, 10/1/29 [DKK] 1,684,000 233,264
- ---------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg.
Pass-Through Certificates, Series 1995-C1, Cl. F, 6.90%, 2/25/27 93,735 85,270
- ---------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through
Certificates, Series 1995-C4, Cl. E, 8.71%, 6/25/26(5,6) 100,000 96,156
---------------
1,149,066
</TABLE>
14 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
MULTIFAMILY--0.5%
Mortgage Capital Funding, Inc., Multifamily Mtg.
Pass-Through Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(7) $ 250,000 $ 196,211
- ---------------------------------------------------------------------------------------------------------
RESIDENTIAL--1.0%
CS First Boston Mortgage Securities Corp., Mtg.
Pass-Through Certificates, Series 1997-C1, Cl. E, 7.50%, 3/1/11(6) 190,000 158,472
- ---------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg.
Pass-Through Certificates, Series 1997-CHL1, Cl. C, 8.502%, 7/25/06(5,6) 200,000 183,500
- ---------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Series 1997-TZH, Cl. D, 7.902%, 3/25/22(6) 50,000 47,266
---------------
389,238
---------------
Total Mortgage-Backed Obligations (Cost $5,595,179) 5,638,948
- ---------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--17.3%
- ---------------------------------------------------------------------------------------------------------
AGENCY--0.7%
Federal National Mortgage Assn.:
Sr. Unsub. Medium-Term Nts., 6.50%, 7/10/02 [AUD] 200,000 127,368
Sr. Unsub. Nts., 6.375%, 8/15/07 [AUD] 205,000 124,852
---------------
252,220
- ---------------------------------------------------------------------------------------------------------
TREASURY--16.6%
U.S. Treasury Bonds:
6%, 8/15/04(8) 340,000 340,850
STRIPS, 5.97%, 11/15/18(8,9) 4,050,000 1,172,119
- ---------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
5.25%, 5/15/04 2,450,000 2,380,329
5.625%, 11/30/00 600,000 600,000
7%, 7/15/06 1,750,000 1,828,204
---------------
6,321,502
---------------
Total U.S. Government Obligations (Cost $6,719,340) 6,573,722
- ---------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--39.4%
- ---------------------------------------------------------------------------------------------------------
ARGENTINA--3.5%
Argentina (Republic of) Bonds:
Bonos de Consolidacion de Deudas, Series I, 2.857%, 4/1/07(5) [ARP] 517,969 352,192
Series D, Zero Coupon, 9.87%, 10/15/02(9) 160,000 120,800
- ---------------------------------------------------------------------------------------------------------
Argentina (Republic of) Nts., Series REGS, 11.75%, 2/12/07 [ARP] 765,000 663,969
- ---------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 2.857%, 4/1/07(5) [ARP] 258,984 168,855
- ---------------------------------------------------------------------------------------------------------
City of Buenos Aires Bonds, Series 3, 10.50%, 5/28/04 [ARP] 10,000 7,754
---------------
1,313,570
- ---------------------------------------------------------------------------------------------------------
AUSTRALIA--0.4%
Australia Postal Corp. Unsec. Unsub. Nts., 6%, 3/25/09 [AUD] 280,000 163,622
</TABLE>
15 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS CONTINUED
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL--3.4%
Brazil (Federal Republic of) Bonds, 11.625%, 4/15/04 $ 65,000 $ 62,094
- ---------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14 272,973 183,574
- ---------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Debt Conversion Bonds, 7%, 4/15/12(5) 850,000 556,750
- ---------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Eligible Interest Bonds, 6.937%, 4/15/06(5) 454,960 371,930
- ---------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Gtd. Bonds, 7%, 4/15/09(5) 158,000 116,130
---------------
1,290,478
---------------
- ---------------------------------------------------------------------------------------------------------
BULGARIA--1.1%
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer Bonds,
Tranche A, 2.75%, 7/28/12(10) 590,000 398,250
- ---------------------------------------------------------------------------------------------------------
CANADA--1.0%
Canada (Government of) Bonds, Series J24, 10.25%, 2/1/04 490,000 385,427
- ---------------------------------------------------------------------------------------------------------
COLOMBIA--0.3%
Colombia (Republic of) Nts., 8.625%, 4/1/08 70,000 59,937
- ---------------------------------------------------------------------------------------------------------
Colombia (Republic of) Unsec. Bonds, 10.875%, 3/9/04 60,000 60,375
---------------
120,312
- ---------------------------------------------------------------------------------------------------------
ECUADOR--0.0%
Ecuador (Republic of) Past Due Interest Bonds, 2/27/15(11) 76,847 16,522
- ---------------------------------------------------------------------------------------------------------
GERMANY--2.5%
Germany (Republic of) Bonds:
6.25%, 4/26/06 [DEM] 460 517
6.75%, 5/13/04 [DEM] 170,000 192,678
Series 98, 5.25%, 1/4/08 [EUR] 480,000 506,042
Zero Coupon, 5.63%, 7/4/27(9) [EUR] 520,000 108,254
- ---------------------------------------------------------------------------------------------------------
Germany (Republic of) Stripped Bonds, Series JA24,
Zero Coupon, 5.54%, 1/4/24(9) [EUR] 600,000 150,911
---------------
958,402
- ---------------------------------------------------------------------------------------------------------
GREAT BRITAIN--1.0%
United Kingdom Treasury Nts., 10%, 9/8/03 [GBP] 210,000 386,973
- ---------------------------------------------------------------------------------------------------------
ITALY--2.2%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
9.50%, 2/1/06 [EUR] 555,000 716,192
10.50%, 9/1/05 [ITL] 100,810 133,671
---------------
849,863
</TABLE>
16 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
IVORY COAST--1.3%
Ivory Coast (Government of) Front Loaded Interest Reduction Bonds:
2%, 3/29/18(10) [FRF] 2,215,000 $ 81,634
2%, 3/29/18(10) 715,000 180,537
- ---------------------------------------------------------------------------------------------------------
Ivory Coast (Government of) Past Due Interest Bonds,
Series F, 1.90%, 3/29/18(10) [FRF] 5,144,562 230,821
---------------
492,992
- ---------------------------------------------------------------------------------------------------------
JAPAN--1.7%
Japan (Government of) Bonds, Series 141, 6.50%, 6/20/01 [JPY] 60,000,000 632,254
- ---------------------------------------------------------------------------------------------------------
JORDAN--1.4%
Hashemite (Kingdom of Jordan) Bonds, Series DEF, 5.50%, 12/23/23(10) 90,000 56,925
- ---------------------------------------------------------------------------------------------------------
Hashemite (Kingdom of Jordan) Disc. Bonds, 6.188%, 12/23/23(5) 680,000 457,300
---------------
514,225
- ---------------------------------------------------------------------------------------------------------
MEXICO--1.3%
Petroleos Mexicanos Debs., 14.50%, 3/31/06(6) [GBP] 100,000 185,422
- ---------------------------------------------------------------------------------------------------------
United Mexican States Bonds, 11.375%, 9/15/16 300,000 321,375
---------------
506,797
- ---------------------------------------------------------------------------------------------------------
NIGERIA--0.7%
Nigeria (Federal Republic of) Promissory Nts., Series RC, 5.092%, 1/5/10 422,789 262,125
- ---------------------------------------------------------------------------------------------------------
NORWAY--3.3%
Norway (Government of) Bonds, 9.50%, 10/31/02 [NOK] 8,970,000 1,254,721
- ---------------------------------------------------------------------------------------------------------
PANAMA--0.4%
Panama (Republic of) Past Due Interest Debs., 5.819%, 7/17/16(5) 188,950 142,186
- ---------------------------------------------------------------------------------------------------------
PERU--1.4%
Peru (Republic of) Sr. Nts., Zero Coupon, 4.53%, 2/28/16(9) 1,247,337 547,269
- ---------------------------------------------------------------------------------------------------------
POLAND--0.4%
Poland (Republic of) Bonds, Series 1000, 13%, 10/12/00 [PLZ] 725,000 168,440
- ---------------------------------------------------------------------------------------------------------
RUSSIA--1.7%
Russia (Government of) Principal Loan Debs., Series 24 yr., 12/15/20(11) 1,840,000 170,775
- ---------------------------------------------------------------------------------------------------------
Russia (Government of) Sr. Unsec. Unsub. Nts., 11.75%, 6/10/03 90,000 55,125
- ---------------------------------------------------------------------------------------------------------
Russia (Government of) Unsec. Bonds, 11%, 7/24/18 380,000 186,200
- ---------------------------------------------------------------------------------------------------------
Russian Federation Unsec. Unsub. Nts.:
8.75%, 7/24/05 185,000 89,262
12.75%, 6/24/28 240,000 126,972
---------------
628,334
- ---------------------------------------------------------------------------------------------------------
SLOVAKIA--0.7%
Vseobenona Uverova Banka Unsec. Sub. Nts., 7.011%, 12/28/06(5) 380,000 269,800
</TABLE>
17 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS CONTINUED
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
SOUTH AFRICA--1.7%
South Africa (Republic of) Bonds:
Series 150, 12%, 2/28/05 [ZAR] 190 $ 29
Series 153, 13%, 8/31/10 [ZAR] 2,986,000 439,009
Series 175, 9%, 10/15/02 [ZAR] 1,300,000 189,216
---------------
628,254
- ---------------------------------------------------------------------------------------------------------
SPAIN--1.2%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado:
8.80%, 4/30/06 [EUR] 180,000 224,843
10%, 2/28/05 [EUR] 180,000 231,499
---------------
456,342
- ---------------------------------------------------------------------------------------------------------
THE NETHERLANDS--1.8%
The Netherlands (Government of) Bonds:
6%, 1/15/06 [EUR] 105,000 115,939
7.75%, 3/1/05 [EUR] 480,000 570,117
---------------
686,056
- ---------------------------------------------------------------------------------------------------------
TURKEY--0.9%
Turkey (Republic of) Treasury Bills, Zero Coupon, 78.57%, 280,000,000,000 353,015
8/23/00(9) [TRL]
- ---------------------------------------------------------------------------------------------------------
VENEZUELA--3.5%
Venezuela (Republic of) Disc. Bonds, Series DL, 6.312%, 12/18/07(5) 1,474,141 1,188,527
- ---------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6.875%, 3/31/07(5) 178,571 142,411
- ---------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Unsec. Bonds, 13.625%, 8/15/18 15,000 13,762
---------------
1,344,700
- ---------------------------------------------------------------------------------------------------------
VIETNAM--0.6%
Vietnam (Government of) Bonds, 3%, 3/12/28(5) 740,000 228,475
---------------
Total Foreign Government Obligations (Cost $15,380,341) 14,999,404
- ---------------------------------------------------------------------------------------------------------
LOAN PARTICIPATIONS--4.6%
- ---------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.:
Tranche 1, 6.812%, 9/4/06(5,6) 548,181 402,228
Tranche A, 7.50%, 3/4/00(5,6) 20,000 19,700
- ---------------------------------------------------------------------------------------------------------
Algeria (Republic of) Trust III Nts., Tranche 3, 1.063%, 3/4/10(5,6) 23,800,000 110,037
[JPY]
- ---------------------------------------------------------------------------------------------------------
Algeria (Republic of) Unrestructured Nts., 6.615%, 1/22/01(6) [JPY] 24,300,000 224,407
- ---------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 2.018%, 1/1/09(5) [JPY] 19,226,190 145,656
Tranche B, 5.906%, 1/1/09(5,6) 52,941 48,772
</TABLE>
18 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
LOAN PARTICIPATIONS Continued
- ---------------------------------------------------------------------------------------------------------
PT Bank Negara Indonesia Gtd. Nts.:
Series 3 yr., 9.156%, 8/25/01(5,6) $ 180,000 $ 164,700
Series 4 yr., 9.406%, 8/25/02(5,6) 90,000 79,650
- ---------------------------------------------------------------------------------------------------------
PT Lippo Bank Nts.:
8.906%, 8/25/00(5,6) 150,000 144,000
9.156%, 8/25/01(5,6) 225,000 205,875
9.406%, 8/25/02(5,6) 50,000 44,250
- ---------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement, Tranche A,
1.148%, 9/30/00(5,6) [JPY] 19,108,944 166,627
---------------
Total Loan Participations (Cost $1,517,441) 1,755,902
- ---------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--9.1%
- ---------------------------------------------------------------------------------------------------------
CHEMICALS--1.1%
Reliance Industries Ltd., 10.25% Unsec. Debs., Series B, 1/15/2097 520,000 419,819
- ---------------------------------------------------------------------------------------------------------
ENERGY--0.8%
Empresa Electrica del Norte Grande SA, 7.75% Bonds, 3/15/06(7) 250,000 127,657
- ---------------------------------------------------------------------------------------------------------
Moran Energy, Inc., 8.75% Cv. Sub. Debs., 1/15/08 200,000 188,347
---------------
316,004
- ---------------------------------------------------------------------------------------------------------
FINANCIAL--4.5%
AB Spintab, 5.50% Bonds, Series 169, 9/17/03 [SEK] 900,000 107,791
- ---------------------------------------------------------------------------------------------------------
Allgemeine Hypobk AG, 5% Sec. Nts., Series 501, 9/2/09 [EUR] 50,000 49,959
- ---------------------------------------------------------------------------------------------------------
Bakrie Investindo, Zero Coupon Promissory Nts., 3/16/99(6,11) [IDR] 850,000,000 18,681
- ---------------------------------------------------------------------------------------------------------
Bayerische Vereinsbank AG, 5% Sec. Nts., Series 661, 7/28/04 [EUR] 480,614 504,315
- ---------------------------------------------------------------------------------------------------------
Dresdner Funding Trust II, 5.79% Sub. Nts., 6/30/11(6) [EUR] 270,000 260,554
- ---------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.875% Sr. Unsec. Nts., 6/7/02 [GBP] 290,000 476,480
- ---------------------------------------------------------------------------------------------------------
KBC Bank Funding Trust IV, 8.22% Nts., 11/29/49(10,12) [EUR] 90,000 96,601
- ---------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04(7,11) 185,000 6,937
- ---------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa:
11% Nts., 6/18/03(6,11) 50,000 6,500
20% Nts., 3/6/00(11) [IDR] 1,000,000,000 19,048
24% Nts., 6/19/03(11) [IDR] 492,900,000 9,389
- ---------------------------------------------------------------------------------------------------------
SanLuis Corp., SA DE CV, 8.875% Sr. Unsec. Nts., 3/18/08 190,000 165,300
---------------
1,721,555
- ---------------------------------------------------------------------------------------------------------
GAMING/LEISURE--0.0%
Capital Gaming International, Inc., 11.50% Promissory Nts., 8/1/95(11) 2,000 --
- ---------------------------------------------------------------------------------------------------------
HOUSING--0.2%
Internacional de Ceramica SA, 9.75% Unsec. Unsub. Nts., 8/1/02(7) 90,000 63,225
</TABLE>
19 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS CONTINUED
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA/ENTERTAINMENT: TELECOMMUNICATIONS--2.1%
Netia Holdings BV, 0%/11% Sr. Disc. Nts., 11/1/07(13) [DEM] 200,000 $ 68,252
- ---------------------------------------------------------------------------------------------------------
Netia Holdings II BV, 13.50% Sr. Nts., 6/15/09(7) [EUR] 275,000 296,279
- ---------------------------------------------------------------------------------------------------------
NTL, Inc., 9.50% Sr. Unsec. Unsub. Nts., Series B, 4/1/08 [GBP] 65,000 104,792
- ---------------------------------------------------------------------------------------------------------
Telewest Communications plc, 0%/9.875% Sr. Nts., 4/15/09(7,13) [GBP] 320,000 317,678
---------------
787,001
- ---------------------------------------------------------------------------------------------------------
TRANSPORTATION--0.4%
General Motors Acceptance Corp., 6.875% Nts., Series EC, 9/9/04 [GBP] 60,000 96,928
- ---------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(6) 188,587 66,477
---------------
163,405
---------------
Total Corporate Bonds and Notes (Cost $4,166,054) 3,471,009
<CAPTION>
SHARES
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--0.1%
- ---------------------------------------------------------------------------------------------------------
Optel, Inc.(14) 45 --
- ---------------------------------------------------------------------------------------------------------
Price Communications Corp.(14) 1,105 24,035
---------------
Total Common Stocks (Cost $11) 24,035
<CAPTION>
UNITS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS, WARRANTS AND CERTIFICATES--0.0%
- ---------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/23/03 206 --
- ---------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 1/23/03(6) 119 1
- ---------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts., Exp. 9/1/04(6) 350 372
- ---------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/15/05 495 5,514
- ---------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/15/07(6) 50 607
- ---------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc. Wts., Exp. 6/1/06(6) 100 4,275
- ---------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 6/30/05(6) 640 160
---------------
Total Rights, Warrants and Certificates (Cost $1,731) 10,929
<CAPTION>
FACE
AMOUNT(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS--14.7%
- ---------------------------------------------------------------------------------------------------------
Citibank NA (Nassau Branch), Argentine Peso Linked Nts., 14.50%, 1/14/00 $ 390,000 390,156
- ---------------------------------------------------------------------------------------------------------
Citibank NA (Nassau Branch), Brazilian Real Linked Nts., 23.75%, 10/25/00 190,000 190,000
- ---------------------------------------------------------------------------------------------------------
Citibank NA (Nassau Branch), Mexican Peso Linked Nts.:
26.10%, 10/29/01 [MXN] 1,828,750 192,168
27.40%, 9/20/01 338,000 347,802
28.60%, 9/13/01 380,000 392,084
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indian Rupee/Japanese Yen Linked Nts., Zero Coupon,
12.73%, 8/17/01(9) 425,000 309,315
</TABLE>
20 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
STRUCTURED INSTRUMENTS Continued
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indonesian Rupiah Floating Linked Nts.,
13.86%, 8/3/00 $ 230,000 $ 227,861
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Indonesian Rupiah Linked Nts., 13.667%, 6/30/00 275,000 267,273
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank AG, New York, Philippine Peso/Japanese Yen
Linked Nts., 10.55%, 5/12/00 320,000 258,528
- ---------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Russian OFZ Linked Nts.:
Series 25030, Zero Coupon, 146.53%, 12/15/01(9) [RUR] 259,000 1,230
Series 27001, 25%, 2/6/02(5) [RUR] 75,800 677
Series 27002, 25%, 5/22/02(5) [RUR] 75,800 633
Series 27003, 25%, 6/5/02(5) [RUR] 75,800 630
Series 27004, 25%, 9/18/02(5) [RUR] 75,800 592
Series 27005, 25%, 10/9/02(5) [RUR] 75,800 574
Series 27006, 25%, 1/22/03(5) [RUR] 75,800 546
Series 27007, 25%, 2/5/03(5) [RUR] 75,800 544
Series 27008, 25%, 5/21/03(5) [RUR] 75,800 523
Series 27009, 25%, 6/4/03(5) [RUR] 75,800 513
Series 27010, 25%, 9/17/03(5) [RUR] 75,800 508
Series 27011, 25%, 10/8/03(5) [RUR] 75,800 486
Series 28001, 25%, 1/21/04(5) [RUR] 75,800 488
- ---------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc. Russian OFZ Linked Nts., Series L:
25%, 2/6/02(5) [RUR] 68,820 1,230
25%, 5/22/02(5) [RUR] 68,820 1,150
25%, 6/5/02(5) [RUR] 68,820 1,144
25%, 9/18/02(5) [RUR] 68,820 1,074
25%, 10/9/02(5) [RUR] 68,820 1,041
25%, 1/22/03(5) [RUR] 68,820 991
25%, 2/5/03(5) [RUR] 68,820 989
25%, 5/21/03(5) [RUR] 68,820 949
25%, 6/4/03(5) [RUR] 68,820 932
25%, 9/17/03(5) [RUR] 68,820 923
25%, 10/8/03(5) [RUR] 68,820 883
25%, 1/21/04(5) [RUR] 68,820 886
Zero Coupon, 53.77%, 12/15/01(9) [RUR] 235,000 2,233
- ---------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. Turkey Treasury Bond Linked Nts.:
87.283%, 1/7/01(5) [TRL] 185,000,000,000 446,675
87.282%, 1/9/01(5) [TRL] 175,100,000,000 422,772
- ---------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc. Turkey Treasury Bill Linked Nts.,
92.10%, 8/24/00(5) 500,000 446,460
- ---------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc. Turkey Treasury Bond Linked Nts.,
87.283%, 1/7/01(5) [TRL] 222,908,218,827 541,463
- ---------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Argentine Peso Linked Nts.:
13.512%, 3/10/00 388,000 391,414
15.10%, 1/18/00 195,000 197,360
16.10%, 3/3/00 200,000 203,660
- ---------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Indonesian Rupiah Linked Nts.,
18.19%, 8/18/00 200,000 239,840
- ---------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Philippine Peso/Japanese Yen Linked Nts.,
16.04%, 5/10/00 150,000 111,840
---------------
Total Structured Instruments (Cost $5,864,265) 5,599,040
</TABLE>
21 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF INVESTMENTS CONTINUED
<TABLE>
<CAPTION>
MARKET VALUE
DATE STRIKE CONTRACTS SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPTIONS PURCHASED--0.1%
- ---------------------------------------------------------------------------------------------------------
European Monetary Unit Call Opt. 12/2/99 EUR 1.071 2,740,000 $ 19,098
- ---------------------------------------------------------------------------------------------------------
Hong Kong Dollar Put Opt. 1/11/00 HKD 7.894 2,368,200 54
- ---------------------------------------------------------------------------------------------------------
Japanese Yen Call Opt.(6) 1/24/00 JPY 99.000 82,000,000 10,380
---------------
Total Options Purchased (Cost $79,397) 29,532
<CAPTION>
FACE
AMOUNT(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS--0.3%
- ---------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets,
5.20%, dated 10/29/99, to be repurchased at $100,043 on 11/1/99,
collateralized by U.S. Treasury Nts., 4.875%-8%, 7/31/00-11/15/28,
with a value of $53,671 and U.S. Treasury Bonds, 7.125%-11.75%,
2/15/01-2/15/23, with a value of $48,402 (Cost $100,000) $100,000 100,000
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $39,423,759) 100.4% 38,202,521
- ---------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4) (138,723)
----------------------------------
NET ASSETS 100.0% $38,063,798
----------------------------------
----------------------------------
</TABLE>
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. Face amount is reported in U.S. Dollars, except for those denoted in the
following currencies:
ARP Argentine Peso ITL Italian Lira
AUD Australian Dollar JPY Japanese Yen
CAD Canadian Dollar MXN Mexican Nuevo Peso
DEM German Mark NOK Norwegian Krone
DKK Danish Krone PLZ Polish Zloty
EUR Euro RUR Russian Ruble
FRF French Franc SEK Swedish Krona
GBP British Pound Sterling TRL Turkish Lira
IRD Indonesian Rupiah ZAR South African Rand
2. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to
changes in prepayment rates than traditional mortgage-backed securities (for
example, GNMA pass-throughs). Interest rates disclosed represent current yields
based upon the current cost basis and estimated timing and amount of future
cash flows.
3. A sufficient amount of liquid assets has been designated to cover
outstanding written options, as follows:
<TABLE>
<CAPTION>
CONTRACTS EXPIRATION EXERCISE PREMIUM MARKET VALUE
SUBJECT TO PUT DATE PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Polish Zloty Put Opt. 2,319,290 11/4/99 PLZ 4.179 $12,682 $6,503
</TABLE>
4. A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
5. Represents the current interest rate for a variable rate security.
6. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
7. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities
have been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $1,007,987 or 2.65% of the Fund's net
assets as of October 31, 1999.
22 OPPENHEIMER WORLD BOND FUND
<PAGE>
FOOTNOTES TO STATEMENT OF INVESTMENTS CONTINUED
8. Securities with an aggregate market value of $1,512,969 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
9. For zero coupon bonds, the interest rate shown is the effective yield on the
date of purchase.
10. Represents the current interest rate for an increasing rate security.
11. Non-income-producing--issuer is in default.
12. When-issued security to be delivered and settled after October 31, 1999.
13. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
14. Non-income-producing security.
DISTRIBUTION OF INVESTMENTS REPRESENTING GEOGRAPHIC DIVERSIFICATION, AS A
PERCENTAGE OF TOTAL INVESTMENTS AT VALUE, IS AS FOLLOWS:
<TABLE>
<CAPTION>
GEOGRAPHIC DIVERSIFICATION MARKET VALUE PERCENT
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
United States $12,850,553 33.6%
Argentina 2,496,159 6.5
Turkey 2,210,385 5.8
Germany 1,773,229 4.6
Mexico 1,733,853 4.5
Brazil 1,480,479 3.9
Indonesia 1,434,004 3.8
Venezuela 1,344,700 3.5
Norway 1,254,721 3.3
Italy 849,862 2.2
Algeria 756,373 2.0
India 729,134 1.9
Great Britain 704,652 1.9
The Netherlands 686,056 1.8
Russia 650,704 1.7
Japan 632,254 1.7
South Africa 628,254 1.7
Peru 547,269 1.4
Poland 532,971 1.4
Jordan 514,225 1.4
Ivory Coast 492,992 1.3
Spain 456,342 1.2
Australia 415,842 1.1
Bulgaria 398,250 1.0
Canada 389,702 1.0
Philippines 370,368 1.0
Slovakia 269,800 0.7
Nigeria 262,125 0.7
Denmark 233,264 0.6
Vietnam 228,475 0.6
Morocco 194,429 0.5
Trinidad & Tobago 166,626 0.4
Panama 142,186 0.4
Chile 127,657 0.3
Colombia 120,313 0.3
Sweden 107,791 0.3
Ecuador 16,522 0.0
----------------------------------
Total $38,202,521 100.0%
----------------------------------
----------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
23 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (cost $39,423,759)--see accompanying statement $ 38,202,521
- ---------------------------------------------------------------------------------------------------------
Cash 172,287
- ---------------------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency exchange contracts 14,225
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Interest, dividends and principal paydowns 423,654
Investments sold 120,460
Shares of beneficial interest sold 31,385
Closed foreign currency exchange contracts 11,462
Daily variation on futures contracts 11,415
Other 727
----------------
Total assets 38,988,136
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Unrealized depreciation on foreign currency exchange contracts 499
- ---------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $12,682)--see accompanying statement 6,503
- ---------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $94,599 purchased on a when-issued basis) 485,948
Dividends 211,250
Trustees' compensation 87,724
Shareholder reports 61,476
Shares of beneficial interest redeemed 11,219
Transfer and shareholder servicing agent fees 9,704
Daily variation on futures contracts 7,586
Distribution and service plan fees 6,847
Closed foreign currency exchange contracts 6,558
Other 29,024
- ---------------------------------------------------------------------------------------------------------
Total liabilities 924,338
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $38,063,798
----------------
----------------
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Par value of shares of capital stock $ 53,589
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 48,198,308
- ---------------------------------------------------------------------------------------------------------
Overdistributed net investment income (139,724)
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (8,851,817)
- ---------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation of assets and
liabilities denominated in foreign currencies (1,196,558)
----------------
Net assets $38,063,798
----------------
----------------
</TABLE>
24 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE PER SHARE
- ---------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$34,552,699 and 4,864,741 shares of beneficial interest outstanding) $7.10
Maximum offering price per share (net asset value plus sales charge
of 4.75% of offering price) $7.45
- ---------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of $2,735,839
and 384,952 shares of beneficial interest outstanding) $7.11
- ---------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $775,260 and 109,210 shares of beneficial interest outstanding) $7.10
</TABLE>
See accompanying Notes to Financial Statements.
25 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1999
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------
Interest (net of foreign withholding taxes of $8,265) $ 5,031,533
- ---------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $115) 635
----------------
Total income 5,032,168
- ---------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------
Management fees 292,706
- ---------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 66,179
Class B 16,023
Class C 8,083
- ---------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees 101,006
- ---------------------------------------------------------------------------------------------------------
Shareholder reports 100,022
- ---------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 36,907
- ---------------------------------------------------------------------------------------------------------
Trustees' compensation 32,294
- ---------------------------------------------------------------------------------------------------------
Custodian fees and expenses 19,694
- ---------------------------------------------------------------------------------------------------------
Other 24,001
----------------
Total expenses 696,915
Less expenses paid indirectly (6,399)
----------------
Net expenses 690,516
- ---------------------------------------------------------------------------------------------------------
Net Investment Income 4,341,652
- ---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) on:
Investments (1,206,355)
Closing of futures contracts (70,067)
Closing and expiration of option contracts written 115,591
Foreign currency transactions (1,737,306)
----------------
Net realized loss (2,898,137)
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 1,224,060
Translation of assets and liabilities denominated in foreign currencies (2,778)
----------------
Net change 1,221,282
----------------
Net realized and unrealized loss (1,676,855)
- ---------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,664,797
----------------
----------------
</TABLE>
See accompanying Notes to Financial Statements.
26 OPPENHEIMER WORLD BOND FUND
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, 1999 1998
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ---------------------------------------------------------------------------------------------------------
Net investment income $ 4,341,652 $ 4,368,356
- ---------------------------------------------------------------------------------------------------------
Net realized loss (2,898,137) (3,053,977)
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,221,282 (2,480,858)
----------------------------------
Net increase (decrease) in net assets resulting from operations 2,664,797 (1,166,479)
- ---------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (2,671,354) (3,921,503)
Class B (69,360) (8,405)
Class C (50,388) (6,104)
- ---------------------------------------------------------------------------------------------------------
Tax return of capital:
Class A (1,017,454) (313,635)
Class B (80,561) (7,511)
Class C (22,828) (4,729)
- ---------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from beneficial
interest transactions:
Class A (3,211,011) (10,446,596)
Class B 1,832,386 963,214
Class C 219,731 600,668
- ---------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Total decrease (2,406,042) (14,311,080)
- ---------------------------------------------------------------------------------------------------------
Beginning of period 40,469,840 54,780,920
----------------------------------
End of period [including undistributed (overdistributed) net
investment income of $(139,724) and $56,324, respectively] $38,063,798 $40,469,840
----------------------------------
----------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
27 OPPENHEIMER WORLD BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A YEAR ENDED OCTOBER 31, 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.33 $8.28 $8.31 $7.91 $7.93
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .80 .72 .72 .73 .71
Net realized and unrealized gain (loss) (.31) (.97) (.08) .34 (.05)
-----------------------------------------------------------
Total income (loss) from investment operations .49 (.25) .64 1.07 .66
- -----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.51) (.64) (.67) (.67) (.68)
Tax return of capital (.21) (.06) -- -- --
-----------------------------------------------------------
Total dividends and distributions
to shareholders (.72) (.70) (.67) (.67) (.68)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.10 $7.33 $8.28 $8.31 $7.91
-----------------------------------------------------------
-----------------------------------------------------------
Market value, end of period N/A N/A $8.06 $7.50 $7.00
-----------------------------------------------------------
-----------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 7.07% (3.25)% 7.94% 14.14% 8.81%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT MARKET VALUE(2) N/A N/A 16.42% 16.40% 9.09%
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $34,553 $38,950 $54,781 $54,962 $52,340
- -----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $36,620 $48,542 $55,339 $53,309 $51,207
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 11.16% 8.94% 8.65% 9.04% 9.20%
Expenses, before indirect expenses 1.74% 1.56%(4) 1.20%(4) 1.28%(4) 1.24%(4)
Expenses, after indirect expenses 1.72% N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 237% 344% 289% 261% 344%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year. Prior
to April 27, 1998, the Fund operated as a closed-end investment company and
total return was calculated based on market value.
2. Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period (or inception of offering), with
all dividends and distributions reinvested in additional shares on the
reinvestment date, and a sale at the current market price on the last business
day of the period. Total return does not reflect sales charges or brokerage
commissions. Total returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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 period ended October 31, 1999, were $76,761,467 and $77,082,737,
respectively. Prior to the period ended October 31, 1996, purchases and sales
of investment securities included mortgage dollar-rolls.
See accompanying Notes to Financial Statements.
28 OPPENHEIMER WORLD BOND FUND
<PAGE>
<TABLE>
<CAPTION>
CLASS B YEAR ENDED OCTOBER 31, 1999 1998(6)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.34 $8.15
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .72 .25
Net realized and unrealized gain (loss) (.29) (.73)
----------------------------
Total income (loss) from investment operations .43 (.48)
- ------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.45) (.27)
Tax return of capital (.21) (.06)
----------------------------
Total dividends and distributions
to shareholders (.66) (.33)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.11 $7.34
----------------------------
----------------------------
Market value, end of period N/A N/A
----------------------------
----------------------------
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 6.22% (5.93)%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT MARKET VALUE(2) N/A N/A
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $2,736 $933
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $1,607 $340
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:(3)
Net investment income 10.81% 10.97%(7)
Expenses, before indirect expenses 2.49% 2.74%(4,7)
Expenses, after indirect expenses 2.47% N/A
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 237% 344%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year. Prior
to April 27, 1998, the Fund operated as a closed-end investment company and
total return was calculated based on market value.
2. Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period (or inception of offering), with
all dividends and distributions reinvested in additional shares on the
reinvestment date, and a sale at the current market price on the last business
day of the period. Total return does not reflect sales charges or brokerage
commissions. Total returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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 period ended October 31, 1999, were $76,761,467 and $77,082,737,
respectively. Prior to the period ended October 31, 1996, purchases and sales
of investment securities included mortgage dollar-rolls.
6. For the period from April 27, 1998 (inception of offering) to October 31,
1998.
7. This information may not be representative of future ratios.
See Accompanying Notes to Financial Statements.
29 OPPENHEIMER WORLD BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS CONTINUED
<TABLE>
<CAPTION>
CLASS C YEAR ENDED OCTOBER 31, 1999 1998(6)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $7.33 $8.15
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .75 .34
Net realized and unrealized gain (loss) (.31) (.83)
----------------------------
Total income (loss) from investment operations .44 (.49)
- ------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.46) (.27)
Tax return of capital (.21) (.06)
----------------------------
Total dividends and distributions to shareholders (.67) (.33)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.10 $7.33
----------------------------
----------------------------
Market value, end of period N/A N/A
----------------------------
----------------------------
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(1) 6.24% (6.09)%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT MARKET VALUE(2) N/A N/A
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $775 $587
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $809 $253
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(3)
Net investment income 10.14% 9.24%(7)
Expenses, before indirect expenses 2.54% 2.62%(4,7)
Expenses, after indirect expenses 2.52% N/A
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 237% 344%
</TABLE>
1. Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year. Prior
to April 27, 1998, the Fund operated as a closed-end investment company and
total return was calculated based on market value.
2. Assumes a hypothetical purchase at the current market price on the business
day before the first day of the fiscal period (or inception of offering), with
all dividends and distributions reinvested in additional shares on the
reinvestment date, and a sale at the current market price on the last business
day of the period. Total return does not reflect sales charges or brokerage
commissions. Total returns are not annualized for periods of less than one full
year.
3. Annualized for periods of less than one full year.
4. Expense ratio reflects the effect of expenses paid indirectly by the Fund.
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 period ended October 31, 1999, were $76,761,467 and $77,082,737,
respectively. Prior to the period ended October 31, 1996, purchases and sales
of investment securities included mortgage dollar-rolls.
6. For the period from April 27, 1998 (inception of offering) to October 31,
1998.
7. This information may not be representative of future ratios.
See Accompanying Notes to Financial Statements.
30 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer World Bond Fund (the Fund) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. The Fund's investment objective is to seek total return.
The Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Fund
offers Class A, Class B and Class C shares. Class A shares are sold with a
front-end sales charge on investments up to $1 million. Class B and Class C
shares may be subject to a contingent deferred sales charge (CDSC). All classes
of shares have identical rights to earnings, assets and voting privileges,
except that each class has its own expenses directly attributable to that class
and exclusive voting rights with respect to matters affecting that class.
Classes A, B and C have separate distribution and/or service plans. 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.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is
reliable and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost
(or last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on
the closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid is used.
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in foreign currency-linked structured notes
whose market value and redemption price are linked to foreign currency exchange
rates. The structured notes may be leveraged, which increases the notes'
volatility relative to the face of the security. Fluctuations in value of these
securities are recorded as unrealized gains and losses in the accompanying
financial statements. As of October 31, 1999, the market value of these
securities comprised 12.88% of the Fund's net assets and resulted in realized
and unrealized losses of $778,140. The Fund also hedges a portion of the
foreign currency exposure generated by these securities, as discussed in Note
5.
31 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for
securities that have been purchased by the Fund on a forward commitment or
when-issued basis can take place a month or more after the transaction date.
Normally the settlement date occurs within six months after the transaction
date; however, the Fund may, from time to time, purchase securities whose
settlement date extends beyond six months and possibly as long as two years or
more beyond trade date. During this period, such securities do not earn
interest, are subject to market fluctuation and may increase or decrease in
value prior to their delivery. The Fund maintains segregated assets with a
market value equal to or greater than the amount of its purchase commitments.
The purchase of securities on a when-issued or forward commitment basis may
increase the volatility of the Fund's net asset value to the extent the Fund
makes such purchases while remaining substantially fully invested. As of
October 31, 1999, the Fund had entered into net outstanding when-issued or
forward commitments of $94,599.
In connection with its ability to purchase securities on a when-issued or
forward commitment basis, the Fund may enter into mortgage dollar-rolls in
which the Fund sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type, coupon and maturity) but not identical securities on a specified future
date. The Fund records each dollar-roll as a sale and a new purchase
transaction.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and
risk of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of
securities whose issuers subsequently default. As of October 31, 1999,
securities with an aggregate market value of $247,852, representing 0.65% of
the Fund's net assets, were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains
and losses in the Fund's Statement of Operations.
32 OPPENHEIMER WORLD BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral declines,
or if the seller enters an insolvency proceeding, realization of the value of
the collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers to shareholders. Therefore, no
federal income or excise tax provision is required. As of October 31, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $8,678,000, which expires between 2002 and 2007.
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. 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
October 31, 1999, a provision of $11,070 was made for the Fund's projected
benefit obligations and payments of $1,928 were made to retired trustees,
resulting in an accumulated liability of $87,268 as of October 31, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or
a portion of annual compensation they are entitled to receive from the Fund.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustees in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under
the plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
income per share.
33 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes primarily because of the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes. The character of
distributions made during the year from net investment income or net realized
gains may differ from its ultimate characterization for federal income tax
purposes. Also, due to timing of dividend distributions, the fiscal year in
which amounts are distributed may differ from the fiscal year in which the
income or realized gain was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended October 31, 1999, amounts have been reclassified to reflect a
decrease in undistributed net investment income of $1,746,598. Accumulated net
realized loss on investments has decreased by the same amount. As noted in the
Statements of Changes in Net Assets, the Fund realized a tax return of capital
of $1,120,843.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENTS. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
OTHER. Investment transactions are accounted for as of 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
options written and unrealized appreciation and depreciation are determined on
an identified cost basis, which is the same basis used for federal income tax
purposes. Dividends-in-kind are recognized as income on the ex-dividend date,
at the current market value of the underlying security. Interest on
payment-in-kind debt instruments is accrued as income at the coupon rate and a
market adjustment is made periodically.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
34 OPPENHEIMER WORLD BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $.01 par value shares of
beneficial interest of each class. Transactions in shares of beneficial
interest for the year ended October 31, 1999, were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, 1999 YEAR ENDED OCTOBER 31, 1998
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
CLASS A:
Sold 390,587 $ 2,817,009 286,833 $ 2,178,396
Dividends and/or
distributions reinvested 163,761 1,175,569 74,607 566,615
Redeemed (1,001,683) (7,203,589) (1,664,869) (13,191,607)
-----------------------------------------------------------------
Net decrease (447,335) $(3,211,011) (1,303,429) $(10,446,596)
-----------------------------------------------------------------
-----------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
CLASS B:
Sold 361,517 $ 2,585,614 131,607 $ 995,498
Dividends and/or
distributions reinvested 13,053 93,470 1,934 14,358
Redeemed (116,778) (846,698) (6,381) (46,642)
-----------------------------------------------------------------
Net increase 257,792 $ 1,832,386 127,160 $ 963,214
-----------------------------------------------------------------
-----------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
CLASS C:
Sold 102,151 $ 744,459 118,968 $ 899,891
Dividends and/or
distributions reinvested 4,047 29,065 738 5,675
Redeemed (77,118) (553,793) (39,576) (304,898)
-----------------------------------------------------------------
Net increase 29,080 $ 219,731 80,130 $ 600,668
-----------------------------------------------------------------
-----------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS AND LOSSES ON SECURITIES
As of October 31, 1999, net unrealized depreciation on securities and options
written of $1,215,065 was composed of gross appreciation of $1,097,416, and
gross depreciation of $2,312,481.
35 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
4. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Manager were in accordance with
the investment advisory agreement with the Fund which provides for a fee of
0.75% of the first $200 million of average annual net assets of the Fund, 0.72%
of the next $200 million, 0.69% of the next $200 million, 0.66% of the next
$200 million, 0.60% of the next $200 million and 0.58% of average annual net
assets in excess of $1 billion. The Fund's management fee for the year ended
October 31, 1999 was 0.75% of average annual net assets for each class of
shares.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the
Manager, is the transfer and shareholder servicing agent for the Fund and other
Oppenheimer funds. OFS's total costs of providing such services are allocated
ratably to these funds.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN FEES. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period indicated.
<TABLE>
<CAPTION>
AGGREGATE CLASS A COMMISSIONS COMMISSIONS COMMISSIONS
FRONT-END FRONT-END ON CLASS A ON CLASS B ON CLASS C
SALES CHARGES SALES CHARGES SHARES SHARES SHARES
ON CLASS A RETAINED BY ADVANCED BY ADVANCED BY ADVANCED BY
YEAR ENDED SHARES DISTRIBUTOR DISTRIBUTOR(1) DISTRIBUTOR(1) DISTRIBUTOR(1)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
October 31, 1999 $47,476 $21,352 $3,929 $77,474 $4,241
1. The Distributor advances commission payments to dealers for certain sales of
Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<CAPTION>
CLASS A CLASS B CLASS C
CONTINGENT DEFERRED CONTINGENT DEFERRED CONTINGENT DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES
YEAR ENDED RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR RETAINED BY DISTRIBUTOR
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
October 31, 1999 $-- $2,744 $1,245
</TABLE>
The Fund has adopted a Service Plan for Class A shares and Distribution
and Service Plans for Class B and Class C shares under Rule 12b-1 of the
Investment Company Act. Under those plans the Fund pays the Distributor for all
or a portion of its costs incurred in connection with the distribution and/or
servicing of the shares of the particular class.
36 OPPENHEIMER WORLD BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
CLASS A SERVICE PLAN FEES. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements
to the Distributor at a rate of up to 0.25% of average annual net assets of
Class A shares. The Distributor makes payments to plan recipients quarterly at
an annual rate not to exceed 0.25% of the average annual net assets consisting
of Class A shares of the Fund. For the fiscal year ended October 31, 1999,
payments under the Class A Plan totaled $66,179, all of which was paid by the
Distributor to recipients. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
CLASS B AND CLASS C DISTRIBUTION AND SERVICE PLAN FEES. Under each plan,
service fees and distribution fees are computed on the average of the net asset
value of shares in the respective class, determined as of the close of each
regular business day during the period. The Class B and Class C plans provide
for the Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plan during the period for which the fee is paid.
The Distributor retains the asset-based sales charge on Class B shares.
The Distributor retains the asset-based sales charge on Class C shares during
the first year the shares are outstanding. The asset-based sales charges on
Class B and Class C shares allow investors to buy shares without a front-end
sales charge while allowing the Distributor to compensate dealers that sell
those shares.
The Distributor's actual expenses in selling Class B and Class C shares
may be more than the payments it receives from the contingent deferred sales
charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales
charge to the Distributor for distributing shares before the plan was
terminated. The plans allow for the carry-forward of distribution expenses, to
be recovered from asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended October 31, 1999,
were as follows:
<TABLE>
<CAPTION>
DISTRIBUTOR'S DISTRIBUTOR'S
AGGREGATE UNREIMBURSED
UNREIMBURSED EXPENSES AS %
TOTAL PAYMENTS AMOUNT RETAINED EXPENSES OF NET ASSETS
UNDER PLAN BY DISTRIBUTOR UNDER PLAN OF CLASS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $16,023 $15,054 $103,357 3.78%
Class C Plan 8,083 6,074 7,063 0.91
</TABLE>
37 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
5. FOREIGN CURRENCY CONTRACTS
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter
into foreign currency exchange contracts for operational purposes and to seek
to protect against adverse exchange rate fluctuations. Risks to the Fund
include the potential inability of the counterparty to meet the terms of the
contract.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using foreign currency exchange rates as provided
by a reliable bank, dealer or pricing service. Unrealized appreciation and
depreciation on foreign currency contracts are reported in the Statement of
Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement of the
foreign currency transactions. Realized gains and losses are reported with all
other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of
Investments where applicable.
As of October 31, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
CONTRACT VALUATION AS OF UNREALIZED UNREALIZED
CONTRACT DESCRIPTION EXPIRATION DATES AMOUNT (000S) OCTOBER 31, 1999 APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Euro (EUR) 11/10/99 EUR90 $ 94,664 $ -- $ 79
Euro (EUR) 11/19/99-11/24/99 EUR506 532,534 2,540 --
Japanese Yen (JPY) 12/6/99 JPY183,000 1,763,465 4,779 --
-------------------------
7,319 79
-------------------------
CONTRACTS TO SELL
Australian Dollar (AUD) 11/17/99 AUD475 302,782 4,833 --
British Pound Sterling (GBP) 11/19/99-12/13/99 GBP480 787,727 -- 420
Euro (EUR) 11/10/99 EUR86 90,638 78 --
Japanese Yen (JPY) 11/24/99 JPY27,040 260,023 1,995 --
-------------------------
6,906 420
-------------------------
Total Unrealized Appreciation and Depreciation $14,225 $499
-------------------------
-------------------------
</TABLE>
38 OPPENHEIMER WORLD BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
6. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or to
seek to protect against changes in interest rates. The Fund may also buy or
write put or call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund may recognize a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
and/or payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of October 31, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATE CONTRACTS OCTOBER 31, 1999 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONTRACTS TO PURCHASE
Euro-Bobl 12/8/99 2 $ 219,407 $ 1,482
Euro-Bund 12/8/99 4 445,204 10,301
Euro-Schatz 12/8/99 10 1,085,576 4,310
U.S. Long Bond 12/20/99 4 454,375 (7,969)
----------
8,124
----------
CONTRACTS TO SELL
Japanese Bond, 10 yr. 3/9/00 1 1,254,599 1,437
U.K. Long Gilt 12/24/99 1 177,135 (2,904)
U.S. Treasury Nts., 10 yr. 12/20/99 1 109,719 (586)
----------
(2,053)
----------
$ 6,071
----------
----------
</TABLE>
39 OPPENHEIMER WORLD BOND FUND
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED
- --------------------------------------------------------------------------------
7. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Gains and losses are reported in the
Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may
incur a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium whether
or not the option is exercised. The Fund also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market
does not exist.
Written option activity for the year ended October 31, 1999, was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
---------------------------- -----------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding as of
October 31, 1998 216,915,000 $ 53,812 600,989 $ 46,740
Options written 297,846,846 128,948 235,314,827 165,099
Options closed or expired (298,091,203) (101,699) (232,257,209) (139,728)
Options exercised (216,670,643) (81,061) (1,339,317) (59,429)
------------------------------------------------------------
Options outstanding as of
October 31, 1999 -- $ -- 2,319,290 $ 12,682
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
40 OPPENHEIMER WORLD BOND FUND
<PAGE>
- --------------------------------------------------------------------------------
8. ILLIQUID OR RESTRICTED SECURITIES
As of October 31, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933,
may have contractual restrictions on resale, and are valued under methods
approved by the Board of Trustees as reflecting fair value. A security may also
be considered illiquid if it lacks a readily available market or if its
valuation has not changed for a certain period of time. The Fund intends to
invest no more than 10% of its net assets (determined at the time of purchase
and reviewed periodically) in illiquid or restricted securities. Certain
restricted securities, eligible for resale to qualified institutional
investors, are not subject to that limitation. The aggregate value of illiquid
or restricted securities subject to this limitation as of October 31, 1999, was
$3,191,383, which represents 8.38% of the Fund's net assets.
- --------------------------------------------------------------------------------
9. BANK BORROWINGS
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.45%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.08% per annum.
The Fund had no borrowings outstanding during the year ended
October 31, 1999.
41 OPPENHEIMER WORLD BOND FUND
<PAGE>
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
OPPENHEIMER WORLD BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer World Bond Fund as of October 31,
1999, 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
five-year period then ended. 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 as of
October 31, 1999, 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 World Bond Fund as of October 31, 1999, 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 five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG LLP
Denver, Colorado
November 19, 1999
42 OPPENHEIMER WORLD BOND FUND
<PAGE>
FEDERAL INCOME TAX INFORMATION UNAUDITED
- --------------------------------------------------------------------------------
In early 2000, shareholders will receive information regarding all dividends
and distributions paid to them by the Fund during calendar year 1999.
Regulations of the U.S. Treasury Department require the Fund to report this
information to the Internal Revenue Service.
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.
43 OPPENHEIMER WORLD BOND FUND
<PAGE>
OPPENHEIMER WORLD BOND FUND
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Phillip A. Griffiths, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Arthur P. Steinmetz, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
- --------------------------------------------------------------------------------
INVESTMENT ADVISOR OppenheimerFunds, Inc.
- --------------------------------------------------------------------------------
DISTRIBUTOR OppenheimerFunds Distributor, Inc.
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER
SERVICING AGENT OppenheimerFunds Services
- --------------------------------------------------------------------------------
CUSTODIAN OF PORTFOLIO
SECURITIES The Bank of New York
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS KPMG LLP
- --------------------------------------------------------------------------------
LEGAL COUNSEL Mayer, Brown & Platt
This is a copy of a report to shareholders of
Oppenheimer World Bond Fund. This report must be
preceded or accompanied by a Prospectus of Oppenheimer
World Bond Fund. For material information concerning
the Fund, see the Prospectus.
SHARES OF OPPENHEIMER FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT GUARANTEED BY ANY
BANK, ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY,
AND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF THE PRINCIPAL AMOUNT INVESTED.
43 OPPENHEIMER WORLD BOND FUND
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GLOBAL EQUITY
- -----------------------------------------------------------------------------------------------------------------------------------
Developing Markets Fund Global Fund
International Small Company Fund Quest Global Value Fund
Europe Fund Global Growth & Income Fund
International Growth Fund
- -----------------------------------------------------------------------------------------------------------------------------------
EQUITY
- -----------------------------------------------------------------------------------------------------------------------------------
STOCK STOCK & BOND
Enterprise Fund(1) Main Street-Registered Trademark- Growth & Income Fund
Discovery Fund Quest Opportunity Value Fund
Main Street-Registered Trademark- Small Cap Fund Total Return Fund
Quest Small Cap Value Fund Quest Balanced Value Fund
MidCap Fund Capital Income Fund(2)
Capital Appreciation Fund Multiple Strategies Fund
Growth Fund Disciplined Allocation Fund
Disciplined Value Fund Convertible Securities Fund
Quest Value Fund
Trinity Growth Fund SPECIALTY
Trinity Core Fund Real Asset Fund
Trinity Value Fund Gold & Special Minerals Fund
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
TAXABLE MUNICIPAL
International Bond Fund California Municipal Fund(3)
World Bond Fund Main Street-Registered Trademark-California Municipal Fund(3)
High Yield Fund Florida Municipal Fund(3)
Champion Income Fund New Jersey Municipal Fund(3)
Strategic Income Fund New York Municipal Fund(3)
Bond Fund Pennsylvania Municipal Fund(3)
Senior Floating Rate Fund Municipal Bond Fund
U.S. Government Trust Insured Municipal Fund
Limited-Term Government Fund Intermediate Municipal Fund
ROCHESTER DIVISION
Rochester Fund Municipals
Limited Term New York Municipal Fund
- -----------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET(4)
- -----------------------------------------------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
1. Effective July 1, 1999, this fund is closed to new investors. See prospectus
for details.
2. On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
3. Available to investors only in certain states.
4. An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
these funds may seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY10048-0203.
-C- Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
45 OPPENHEIMER WORLD BOND FUND
<PAGE>
INFORMATION AND SERVICES
As an Oppenheimer fund shareholder, you can benefit from special services
designed to make investing simple. Whether it's automatic investment plans,
timely market updates, or immediate account access, you can count on us
whenever you need assistance. So call us today, or visit our website--we're
here to help.
- --------------------------------------------------------------------------------
INTERNET
24-hr access to account information and transactions
www.oppenheimerfunds.com
- --------------------------------------------------------------------------------
GENERAL INFORMATION
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.525.7048
- --------------------------------------------------------------------------------
TELEPHONE TRANSACTIONS
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
1.800.852.8457
- --------------------------------------------------------------------------------
PHONELINK
24-hr automated information and automated transactions
1.800.533.3310
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
Mon-Fri 8:30am-7pm ET
1.800.843.4461
- --------------------------------------------------------------------------------
OPPENHEIMERFUNDS INFORMATION HOTLINE
24 hours a day, timely and insightful messages on the economy and issues that
may affect your investments
1.800.835.3104
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
OppenheimerFunds Services
P.O. Box 5270, Denver, CO 80217-5270
- --------------------------------------------------------------------------------
[LOGO] OPPENHEIMERFUNDS-Registered Trademark-
Distributor, Inc.
RA0705.001.1099 December 30, 1999
