<PAGE>
------------------------------------------
Semiannual Report April 30, 1999
------------------------------------------
O P P E N H E I M E R
World
Bond Fund
[GRAPHIC]
[LOGO]
OppenheimerFunds(R)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
5 An Interview with Your Fund's Manager
11 Financial Statements
39 Officers and Trustees
40 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o The Fund's U.S. Treasury and mortgage bond investments helped offset some of
the volatility experienced in Latin American bonds.
o The Fund benefited from timely investments in rebounding Asian markets, and in
high-yielding bonds from Asian, Eastern European and African countries.
Cumulative Total Returns
For the 6-Month Period
Ended 4/30/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
3.77% -1.16%
- ------------------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
3.37% -1.59%
- ------------------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- ------------------------------------
3.38% 2.39%
- ------------------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
Cumulative total returns are not annualized. In reviewing performance and
rankings, please remember that past performance does not guarantee future
results. Investment return and principal value of an investment in the Fund will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. The Fund's performance may from time to time be subject
to substantial short-term changes, particularly during periods of market or
interest rate volatility. For updates on the Fund's performance, please contact
your financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
1. Includes changes in net asset value per share without deducting any sales
charges.
2. Class A return includes the current maximum initial sales charge of 4.75%.
Class B return includes the applicable contingent deferred sales charge of 5%.
Class C return includes the applicable contingent deferred sales charge of 1%.
Class B and C shares are subject to an annual 0.75% asset-based sales charge. An
explanation of the different performance calculations is in the Fund's
prospectus.
2 Oppenheimer World Bond Fund
<PAGE>
Dear shareholder,
- --------------------------------------------------------------------------------
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
World Bond Fund
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities.(1)
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified portfolio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most analysts'
expectations and the breadth of the market's positive performance has begun to
widen. This has raised concerns that inflationary pressures may re-emerge. In
fact, the Federal Reserve Board recently indicated its readiness to raise
short-term interest rates as an inflation-fighting measure. Looking outside of
the United States, many foreign economies also appear to be on the mend. The
impact of these changes, as it applies to your fund, is discussed more fully
inside by your portfolio manager.
(over, please)
1. Foreign investing entails higher expenses and risks, such as foreign
currency fluctuations, economic and political instability, and differences in
accounting standards.
3 Oppenheimer World Bond Fund
<PAGE>
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of our Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
May 21, 1999
4 Oppenheimer World Bond Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
How did Oppenheimer World Bond Fund perform during the six-month period that
ended April 30, 1999?
Financial difficulties in emerging markets created a volatile environment for
global bonds during the period. Nevertheless, the Fund managed to avoid some of
the more serious pitfalls of the fixed income markets. In particular, we were
able to anticipate negative market reactions to Brazil's January currency
devaluation, as well as identify some rewarding fixed income investments in
fiscally sound emerging markets throughout the rest of the world.
What developments made this such a challenging period for the Fund?
In mid-1998, the value of many corporate and emerging market bonds, along with
most stocks, dropped over fears that the financial crisis in Asia and the August
1998 collapse of the Russian economy signaled slowing global growth. At the
start of the reporting period, global financial markets were just beginning to
recover. The turnaround was sparked by a surprise cut in government lending
rates by the U.S. Federal Reserve Board (the Fed). By indicating the Fed's
willingness to act decisively to avoid a U.S. recession, the move bolstered
investor confidence around the world.
The rally faltered in mid-December, when Brazil's rising deficit and
declining economic growth raised concerns that Latin America's largest economy
might be forced to devalue its currency. The Latin American bond market began to
fall, dropping even more sharply when Brazil did devalue its currency in January
1999.
"We added significantly to our Asian and Latin American holdings. These
investments enabled us to participate in the emerging market recovery that
followed."
Effective May 20, 1999, Art Steinmetz became the Portfolio Manager of the Fund.
5 Oppenheimer World Bond Fund
<PAGE>
Avg Annual Total Returns(1)
For the Periods Ended 3/31/99
Class A
1 year 5 year 10 year
- -------------------------------
- -8.35% 4.93% 6.92%
- -------------------------------
Cumulative Total Returns
For the Period from 4/27/98
to 3/31/99(1)
Since
Inception
- -------------------------------
Class B -9.32%
- -------------------------------
Class C -5.95%
- -------------------------------
An interview with your Fund's manager
- --------------------------------------------------------------------------------
However, the impact of Brazil's devaluation on developed and other emerging
markets proved surprisingly mild, because the U.S. economy remained strong and
some Asian markets showed early signs of recovery. From late January through the
end of the period, emerging market bonds out-performed all other fixed income
asset classes.
How did you manage the Fund in light of these events?
We strive to offer an income advantage over U.S. government securities alone by
investing in a diverse range of bonds and currencies around the world. As a
result, widespread global turmoil substantially affects the Fund's performance.
Nevertheless, careful analysis of market risks and allocation of the Fund's
assets among promising bond sectors helped enable us to capitalize on some
emerging market opportunities.
Recognizing that the Fed's October rate cut was likely to boost investor
confidence, we added significantly to our Asian and Latin American holdings at
that time. These investments helped enable us to participate in the emerging
market recovery that followed. For example, we established a large position in
Korean bonds during the last few months of 1998, the value of which rose sharply
in early 1999 on the strength of positive Korean economic data.
1. Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A average annual total returns include the current maximum initial
sales charge of 4.75%. Class A shares were first publicly offered on 11/23/88 as
a closed-end fund. Effective April 24, 1998, the Fund began operating as an
open-end fund. Class B and Class C returns are cumulative total returns and have
an inception date of 4/27/98. Class B return includes the applicable contingent
deferred sales charge of 5% (1-year). Class C return includes the contingent
deferred sales charge of 1%. Class B and C shares are subject to an annual 0.75%
asset-based sales charge. An explanation of the different performance
calculations is in the Fund's prospectus.
6 Oppenheimer World Bond Fund
<PAGE>
We sold many of our Latin American bonds in mid-December out of concern
regarding Brazil's growing economic difficulties. We also adopted a number of
hedging techniques to protect the value of our remaining Latin American
investments. These hedges included "short" positions against the Brazilian
currency. A short position is one that rises in value when the underlying
security falls in value, and vice versa. When the Brazilian currency was
devalued in January, the value of the currency dropped while that of our short
positions rose. In addition, our position in U.S. government securities,
including both Treasuries and mortgage instruments, helped offset some of
January's weakness in Latin American bonds.
During the remainder of the period, the Fund benefited from our
investments in selected emerging markets securities throughout Asia, Eastern
Europe and Africa. We focused on high-yielding bonds in what we considered to be
fiscally sound countries, such as, India, Bulgaria and the Ivory Coast that we
believed were unlikely to be adversely affected by the recession in Brazil.
Did any developments prove disappointing?
After the Fed's rate hike in October, the strength of the U.S. dollar versus
European currencies hurt returns from our European bond investments. The
dollar's strength was caused by several factors, including the strength of the
underlying U.S. economy and discord among members of the newly created European
Union. However, we believe that the dollar is unlikely to continue its rise. As
European economic growth gains momentum, we expect these investments to benefit.
7 Oppenheimer World Bond Fund
<PAGE>
An interview with your Fund's manager
- --------------------------------------------------------------------------------
What is your outlook for the coming months?
We are cautiously optimistic regarding global bonds in the coming months. While
uncertainties still abound, early signs of recovery can be seen in many areas of
the world. Despite Brazil's problems, we believe there may be attractive growth
prospects for other emerging economies in the region, such as Mexico, Panama,
Peru, Argentina and Chile. We will watch for attractive investment opportunities
in these markets. Europe, as we mentioned, appears to be entering a major growth
cycle, and several Asian markets have demonstrated resilience in recent months.
We will continue to focus on markets with healthy economies that we think have
strong potential for growth.
At the same time, we see little prospect for an acceleration of global
inflation. Since an environment of continuing low interest rates generally
favors long-term bond investments, we plan to look for investment opportunities
among longer-term instruments, including U.S. Treasuries, whenever price
fluctuations offer what we believe is an attractive entry point.
8 Oppenheimer World Bond Fund
<PAGE>
Regional Allocation(2)
[GRAPHIC]
United States/
Canada 42.3%
Latin America 17.4
Europe 14.1
Asia 13.3
Middle East/Africa 8.2
Emerging Europe 4.7
Standardized Yields(3)
For the 30 Days Ended 4/30/99
- ------------------------------
Class A 8.98%
- ------------------------------
Class B 8.55
- ------------------------------
Class C 8.90
- ------------------------------
Whatever economic conditions develop, we will remain dedicated to the principle
of broad diversification, seeking attractive investments among both established
and emerging markets throughout the world. By balancing the relative stability
of developed markets with the above-average growth potential of emerging
markets, we strive to limit risk and increase opportunities for attractive
returns. That's what makes Oppenheimer World Bond Fund part of The Right Way to
Invest.
Top 10 Country Holdings(2)
- ---------------------------------------------
United States 41.2%
- ---------------------------------------------
Brazil 6.0
- ---------------------------------------------
Germany 4.9
- ---------------------------------------------
Indonesia 3.8
- ---------------------------------------------
Mexico 3.1
- ---------------------------------------------
Turkey 3.1
- ---------------------------------------------
Italy 3.0
- ---------------------------------------------
Argentina 2.4
- ---------------------------------------------
Algeria 2.0
- ---------------------------------------------
India 2.0
- ---------------------------------------------
2. Portfolio is subject to change. Percentages are as of April 30, 1999, and
are based on total market value of investments.
3. Standardized yield is based on net investment income for the 30-day period
ended April 30, 1999. Falling share prices will tend to artificially raise
yields.
9 Oppenheimer World Bond Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
10 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
================================================================================================================
<S> <C> <C>
Mortgage-Backed Obligations--15.7%
- ----------------------------------------------------------------------------------------------------------------
Asset Securitization Corp., Commercial Mtg. Pass-Through
Certificates, Series 1996-MD6, Cl. A5, 7.438%, 11/13/26(2) $ 200,000 $ 200,500
- ----------------------------------------------------------------------------------------------------------------
CS First Boston Mortgage Securities Corp., Mtg. Pass-Through
Certificates, Series 1997-C1, Cl. E, 7.50%, 3/1/11(3) 190,000 170,466
- ----------------------------------------------------------------------------------------------------------------
Commercial Mortgage Acceptance Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 1996-C1, Cl. X-2, 28.374%, 12/25/20(3)(4) 6,208,300 95,065
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Collateralized Mtg
Obligations, Gtd. Multiclass Mtg. Participation Certificates,
Series 1343, Cl. LA, 8%, 8/15/22 229,000 239,662
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Gtd. Real Estate Mtg
Investment Conduit Pass-Through Certificates, Series 2054,
Cl. TE, 6.25%, 4/15/24 109,000 107,263
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security:
Series 197, Cl. IO, 9.572%, 4/1/28(4) 1,432,830 433,207
Series 199, Cl. IO, 20.835%, 8/1/28(4) 1,351,969 395,240
- ----------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Mtg.-Backed Certificates:
11.50%, 1/1/18 47,893 52,994
13%, 5/1/19 240,440 276,425
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.50%, 3/1/28 2,320,702 2,306,268
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., Gtd. Real Estate Mtg. Investment
Conduit Pass-Through Certificates, Trust 1992-162, Cl. C, 7%, 10/25/21 350,000 354,154
- ----------------------------------------------------------------------------------------------------------------
First Chicago/Lennar Trust 1, Commercial Mtg. Pass-Through
Certificates, Series 1997-CHL1, Cl. C, 8.053%, 7/25/06(2)(3) 200,000 184,688
- ----------------------------------------------------------------------------------------------------------------
Government National Mortgage Assn.:
7.50%, 5/15/24 38,868 40,145
7.50%, 1/15/26 314,232 324,064
11%, 10/20/19 62,869 70,811
- ----------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital I, Inc., Commercial Mtg. Pass-Through
Certificates, Series 1996-C1, Cl. E, 7.432%, 3/15/06(2)(3) 553,342 466,364
- ----------------------------------------------------------------------------------------------------------------
Mortgage Capital Funding, Inc., Multifamily Mtg. Pass-Through
Certificates, Series 1996-MC1, Cl. G, 7.15%, 6/15/06(5) 250,000 200,000
- ----------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates,
Series 1995-C1, Cl. F, 6.90%, 2/25/27 106,044 98,050
- ----------------------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Series 1997-TZH, Cl. D, 7.902%, 3/25/22(3) 50,000 49,500
- ----------------------------------------------------------------------------------------------------------------
Structured Asset Securities Corp., Multiclass Pass-Through
Certificates, Series 1995-C4, Cl. E, 8.703%, 6/25/26(2)(3) 100,000 93,031
------------
Total Mortgage-Backed Obligations (Cost $6,020,393) 6,157,897
</TABLE>
11 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
================================================================================================================
<S> <C> <C>
U.S. Government Obligations--16.7%
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, STRIPS:
5.565%, 2/15/19(6) $ 3,000,000 $ 913,602
5.836%, 8/15/20(6) 2,325,000 647,011
5.84%, 11/15/26(6) 4,410,000 884,756
5.994%, 11/15/18(6) 5,000,000 1,546,075
- ----------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts., 5.875%, 2/15/04(7)(8)(9) 2,500,000 2,564,845
------------
Total U.S. Government Obligations (Cost $6,721,659) 6,556,289
================================================================================================================
Foreign Government Obligations--34.6%
- ----------------------------------------------------------------------------------------------------------------
Argentina--2.4%
Argentina (Republic of) Bonds:
8.80%, 7/21/03(2) 330,000 314,820
Bonos de Consolidacion de Deudas, Series I, 2.878%, 4/1/07(2)(ARP) 554,963 410,928
- ----------------------------------------------------------------------------------------------------------------
Buenos Aires (Province of) Bonds, Series PBA1, 2.878%, 4/1/07(2)(ARP) 276,435 191,451
- ----------------------------------------------------------------------------------------------------------------
City of Buenos Aires Bonds, Series 3, 10.50%, 5/28/04(ARP) 10,000 9,041
------------
926,240
- ----------------------------------------------------------------------------------------------------------------
Brazil--3.6%
Brazil (Federal Republic of) Bonds, 11.625%, 4/15/04 65,000 63,050
- ----------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization Bonds, 8%, 4/15/14(8) 723,145 504,394
- ----------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Interest Due & Unpaid Bonds,
6.063%, 1/1/01(2) 880,680 838,848
------------
1,406,292
- ----------------------------------------------------------------------------------------------------------------
Bulgaria--1.2%
Bulgaria (Republic of) Front-Loaded Interest Reduction Bearer
Bonds, Tranche A, 2.50%, 7/28/12(10) 760,000 462,650
- ----------------------------------------------------------------------------------------------------------------
Canada--1.0%
Canada (Government of) Bonds, Series J24, 10.25%, 2/1/04(CAD) 490,000 409,878
- ----------------------------------------------------------------------------------------------------------------
Costa Rica--0.1%
Banco Central Costa Rica Interest Claim Bonds, Series A,
5.869%, 5/21/05(2) 51,888 50,526
- ----------------------------------------------------------------------------------------------------------------
Denmark--0.6%
Denmark (Kingdom of) Bonds:
5%, 8/15/05(DKK) 1,175,000 177,959
7%, 12/15/04(DKK) 410,000 68,189
------------
246,148
- ----------------------------------------------------------------------------------------------------------------
France--1.9%
France (Government of) Bonds, Obligations Assimilables du Tresor,
6.50%, 10/25/06(EUR) 102,140 128,061
- ----------------------------------------------------------------------------------------------------------------
France (Government of) Debs., Obligations Assimilables du Tresor,
7.75%, 10/25/05(EUR) 461,310 607,616
------------
735,677
</TABLE>
12 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Germany--3.5%
Germany (Republic of) Bonds:
6.25%, 4/26/06(DEM) 145,460 $ 179,160
6.75%, 7/15/04(DEM) 75,000 92,605
7.50%, 9/9/04(EUR) 574,598 731,545
- ----------------------------------------------------------------------------------------------------------------
Germany (Republic of) Nts., Series 98, 4%, 3/17/00(EUR) 360,605 386,101
------------
1,389,411
- ----------------------------------------------------------------------------------------------------------------
Great Britain--0.6%
United Kingdom Treasury Bonds:
8.50%, 12/7/05(GBP) 25,000 48,476
10%, 9/8/03(GBP) 100,000 192,246
------------
240,722
- ----------------------------------------------------------------------------------------------------------------
Indonesia--0.4%
PT Bank Negara Indonesia Sr. Unsec. Nts., 7.625%, 2/15/07 230,000 155,250
- ----------------------------------------------------------------------------------------------------------------
Italy--3.0%
Italy (Republic of) Treasury Bonds, Buoni del Tesoro Poliennali:
9.50%, 2/1/06(EUR) 555,000 788,562
10.50%, 9/1/05(ITL) 260,810 382,460
------------
1,171,022
- ----------------------------------------------------------------------------------------------------------------
Ivory Coast--1.3%
Ivory Coast (Government of) Front Loaded Interest
Reduction Bonds:
2%, 3/29/18(10)(FRF) 2,215,000 88,865
2%, 3/29/18(10) 715,000 185,900
- ----------------------------------------------------------------------------------------------------------------
Ivory Coast (Government of) Past Due Interest Bonds,
Series F, 1.90%, 3/29/18(10)(FRF) 5,211,375 239,546
------------
514,311
- ----------------------------------------------------------------------------------------------------------------
Jordan--1.0%
Hashemite (Kingdom of Jordan) Disc. Bonds, 6%, 12/23/23(2) 680,000 402,900
- ----------------------------------------------------------------------------------------------------------------
Mexico--1.9%
Bonos de la Tesoreria de la Federcion, Zero Coupon,
33.535%, 6/3/99(6)(MXP) 3,386,000 359,691
- ----------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos Debs., 14.50%, 3/31/06(3)(GBP) 100,000 198,848
- ----------------------------------------------------------------------------------------------------------------
United Mexican States Treasury Bills, Zero Coupon,
20.997%, 7/22/99(6)(MXP) 1,709,450 176,551
------------
735,090
- ----------------------------------------------------------------------------------------------------------------
Moldova--0.2%
Moldova (Republic of) Bonds, 9.875%, 6/13/02 185,000 73,075
</TABLE>
13 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Morocco--0.3%
Morocco (Kingdom of) Loan Participation Agreement,
Tranche A, 2.318%, 1/1/09(2)(JPY) 20,238,095 $ 122,608
- ----------------------------------------------------------------------------------------------------------------
New Zealand--1.5%
New Zealand (Government of) Bonds:
8%, 11/15/06(NZD) 195,000 124,737
10%, 3/15/02(NZD) 745,000 471,421
------------
596,158
- ----------------------------------------------------------------------------------------------------------------
Nigeria--1.0%
Nigeria (Federal Republic of) Promissory Nts.,
Series RC, 5.092%, 1/5/10 642,661 412,049
- ----------------------------------------------------------------------------------------------------------------
Norway--1.4%
Norway (Government of) Bonds, 9.50%, 10/31/02(NOK) 3,790,000 561,227
- ----------------------------------------------------------------------------------------------------------------
Panama--0.5%
Panama (Republic of) Nts., 7.875%, 2/13/02 50,000 48,740
- ----------------------------------------------------------------------------------------------------------------
Panama (Republic of) Past Due Interest Debs., 5.41%, 7/17/16(2) 187,127 146,661
------------
195,401
- ----------------------------------------------------------------------------------------------------------------
Peru--1.6%
Peru (Republic of) Sr. Nts., Zero Coupon, 4.534%, 2/28/16(6) 1,285,639 623,149
- ----------------------------------------------------------------------------------------------------------------
Russia--0.4%
Russia (Government of) Unsec. Bonds, 11%, 7/24/18 440,000 165,000
- ----------------------------------------------------------------------------------------------------------------
Slovakia--0.8%
Vodohospodarska Vystavba Gtd. Nts., 7.25%, 12/19/06 140,000 107,450
- ----------------------------------------------------------------------------------------------------------------
Vseobenona Uverova Banka Unsec. Sub. Nts., 6.80%, 12/28/06(2)(3) 380,000 188,100
------------
295,550
- ----------------------------------------------------------------------------------------------------------------
South Africa--0.0%
South Africa (Republic of) Bonds, Series 150, 12%, 2/28/05(ZAR) 190 28
- ----------------------------------------------------------------------------------------------------------------
Spain--1.3%
Spain (Kingdom of) Gtd. Bonds, Bonos y Obligacion del Estado:
8.80%, 4/30/06(EUR) 180,000 248,713
10%, 2/28/05(EUR) 180,000 254,911
------------
503,624
- ----------------------------------------------------------------------------------------------------------------
Sweden--0.4%
Sweden (Kingdom of) Bonds, Series 1033, 10.25%, 5/5/03(SEK) 1,000,000 149,151
- ----------------------------------------------------------------------------------------------------------------
Turkey--1.3%
Turkey (Republic of) Treasury Bills:
Series 5B, Zero Coupon, 74.116%, 6/23/99(6)(TRL) 128,598,944,788 294,242
Series 6B, Zero Coupon, 79.45%, 9/15/99(6)(TRL) 101,454,432,475 198,486
------------
492,728
</TABLE>
14 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ukraine--0.5%
Ukraine (Government of) Bonds, 16.75%, 10/20/00 $ 294,831 $ 188,692
- ----------------------------------------------------------------------------------------------------------------
Venezuela--0.4%
Venezuela (Republic of) Front-Loaded Interest Reduction Bonds,
Series A, 6%, 3/31/07(2) 190,476 147,143
- ----------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Unsec. Bonds, 13.625%, 8/15/18 15,000 14,138
------------
161,281
- ----------------------------------------------------------------------------------------------------------------
Vietnam--0.5%
Vietnam (Government of) Bonds, 3%, 3/12/28(2) 740,000 215,525
------------
Total Foreign Government Obligations (Cost $13,714,236) 13,601,363
================================================================================================================
Loan Participations--4.1%
- ----------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Reprofiled Debt Loan Participation Nts.:
Tranche 1, 6%, 9/4/06(2) 925,181 497,285
Tranche A, 6.75%, 3/4/00(2) 40,000 36,000
- ----------------------------------------------------------------------------------------------------------------
Algeria (Republic of) Unrestructured Nts., 6.615%, 1/22/01(3)(JPY) 32,399,999 239,211
- ----------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.,
Tranche A, 5.812%, 10/16/00(2)(3) 43,750 41,125
- ----------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreement,
Tranche B, 6.132%, 1/1/09(2)(3) 58,823 50,882
- ----------------------------------------------------------------------------------------------------------------
PT Bank Negara Indonesia Gtd. Nts.:
Series 3 yr., 8.375%, 8/25/01(2)(3) 180,000 111,600
Series 4 yr., 8.625%, 8/25/02(2)(3) 90,000 53,100
- ----------------------------------------------------------------------------------------------------------------
PT Lippo Bank Nts.:
7.875%, 8/25/99(2)(3) 75,000 70,125
8.125%, 8/25/00(2)(3) 150,000 114,750
8.375%, 8/25/01(2)(3) 225,000 139,500
8.625%, 8/25/02(2)(3) 50,000 29,500
- ----------------------------------------------------------------------------------------------------------------
Trinidad & Tobago Loan Participation Agreement,
Tranche A, 1.087%, 9/30/00(2)(3)(JPY) 28,663,416 218,527
------------
Total Loan Participations (Cost $1,776,833) 1,601,605
================================================================================================================
Corporate Bonds and Notes--7.2%
- ----------------------------------------------------------------------------------------------------------------
Chemicals--1.1%
Reliance Industries Ltd., 10.25% Unsec. Debs., Series B, 1/15/2097(2) 520,000 420,484
- ----------------------------------------------------------------------------------------------------------------
Energy--0.8%
Empresa Elec del Norte Grande SA, 7.75% Bonds, 3/15/06(3) 250,000 133,125
- ----------------------------------------------------------------------------------------------------------------
Moran Energy, Inc., 8.75% Cv. Sub. Debs., 1/15/08 200,000 179,896
------------
313,021
- ----------------------------------------------------------------------------------------------------------------
Financial--4.4%
Bakrie Investindo, Zero Coupon Promissory Nts., 3/16/99(3)(11)(IDR) 850,000,000 15,770
- ----------------------------------------------------------------------------------------------------------------
Bayerische Vereinsbank AG, 5% Sec. Nts., Series 661, 7/28/04(EUR) 480,614 545,586
- ----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 6.875% Sr. Unsec. Nts., 6/7/02(GBP) 290,000 486,680
</TABLE>
15 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial (continued)
FUJI Finance (Cayman), 5.80% Bonds, 8/29/49(2)(3) $ 230,000 $ 169,050
- ------------------------------------------------------------------------------------------------------------------
Ongko International Finance Co. BV, 10.50% Gtd. Nts., 3/29/04(3)(11) 185,000 12,488
- ------------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa:
11% Nts., 6/18/03(3)(11) 50,000 6,500
20% Nts., 3/6/00(11)(IDR) 1,000,000,000 16,080
24% Nts., 6/19/03(11)(IDR) 492,900,000 7,926
- ------------------------------------------------------------------------------------------------------------------
Sakura Capital Funding, 5.954% Gtd. Nts., 8/29/49(2)(5) 185,000 148,925
- ------------------------------------------------------------------------------------------------------------------
SanLuis Corp., SA DE CV, 8.875% Unsec. Sr. Nts., 3/18/08 190,000 166,725
- ------------------------------------------------------------------------------------------------------------------
Sumitomo Bank International Finance NV, 6.48% Nts., 6/29/49(2)(3) 185,000 170,200
--------------
1,745,930
- ------------------------------------------------------------------------------------------------------------------
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(5) 90,000 77,625
- ------------------------------------------------------------------------------------------------------------------
Media/Entertainment: Telecommunications--0.5%
Netia Holdings BV, 0%/11% Sr. Disc. Nts., 11/1/07(12)(DEM) 200,000 74,107
- ------------------------------------------------------------------------------------------------------------------
NTL, Inc., 9.50% Sr. Unsec. Unsub. Nts., Series B, 4/1/08(GBP) 65,000 105,703
--------------
179,810
- ------------------------------------------------------------------------------------------------------------------
Transportation--0.2%
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5) 192,214 99,471
--------------
Total Corporate Bonds and Notes (Cost $3,360,835) 2,836,341
<CAPTION>
Shares
==================================================================================================================
<S> <C> <C>
Common Stocks--0.1%
- ------------------------------------------------------------------------------------------------------------------
Air New Zealand Ltd., Cl. B 24,000 50,362
- ------------------------------------------------------------------------------------------------------------------
Optel, Inc.(13) 45 --
--------------
Total Common Stocks (Cost $65,398) 50,362
<CAPTION>
Units
==================================================================================================================
<S> <C> <C>
Rights, Warrants and Certificates--0.1%
- ------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99(3) 500 5
- ------------------------------------------------------------------------------------------------------------------
Gothic Energy Corp. Wts.:
Exp. 1/03(3) 325 1
Exp. 9/04(3) 350 394
- ------------------------------------------------------------------------------------------------------------------
ICG Communications, Inc. Wts., Exp. 9/05(3) 495 7,857
- ------------------------------------------------------------------------------------------------------------------
Loral Space & Communications Ltd. Wts., Exp. 1/07(3) 50 606
- ------------------------------------------------------------------------------------------------------------------
Microcell Telecommunications, Inc. Wts., Exp. 6/06(3) 100 1,717
- ------------------------------------------------------------------------------------------------------------------
Price Communications Corp. Wts., Exp. 8/07(3) 172 9,460
- ------------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 6/05(3) 640 7,680
--------------
Total Rights, Warrants and Certificates (Cost $2,231) 27,720
</TABLE>
16 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
================================================================================================================
<S> <C> <C>
Structured Instruments--14.4%
- ----------------------------------------------------------------------------------------------------------------
Citibank (New York), El Salvador Colon Linked Nts.,
9.40%, 7/28/99 $ 275,000 $ 275,302
- ----------------------------------------------------------------------------------------------------------------
Citibank (New York), Mexican Peso Linked Nts., 22.50%, 7/29/99 155,117 156,125
- ----------------------------------------------------------------------------------------------------------------
Citibank (New York), Venezuelan Bolivar Linked Nts.:
34.80%, 5/11/99 140,000 136,258
74.62% 5/11/99 150,000 147,148
- ----------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Greek Drachma Linked Nts.,
9.70%, 5/25/99(3)(GRD) 92,542,025 298,799
- ----------------------------------------------------------------------------------------------------------------
Deutsche Bank AG, Turkish Lira O/N Linked Nts.,74%, 5/17/99(TRL) 117,148,011,000 296,185
- ----------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, GKO Linked Nts.,
Zero Coupon, 5/19/99(3)(11)(RUR) 1,760,000 2,137
- ----------------------------------------------------------------------------------------------------------------
Deutsche Morgan Grenfell, Hungarian Forint Linked Nts.,
16%, 5/25/99 149,925 145,802
- ----------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., Russian S-Account Credit Linked
Nts., Zero Coupon, 1/20/99(3)(11)(RUR) 1,400,000 28
- ----------------------------------------------------------------------------------------------------------------
Salomon Smith Barney, Inc., Turkish Lira Linked Nts.,
83%, 7/22/99 270,000 262,478
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Brazil Nota do Banco Central ED Linked Nts.,
Zero Coupon, 17.954%, 6/15/99(6) 280,000 273,787
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Brazilian Linked Nts.:
12.401%, 7/6/99(6) 460,000 444,972
14.001%, 5/4/99(6) 185,000 184,902
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Egyptian Pound Linked Nts., 9.50%, 5/28/99 515,000 508,665
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Israeli Shekel Linked Nts., 12%, 6/7/99 260,000 252,268
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Lebanese Pound Linked Nts., 10.40%, 5/28/99 170,000 169,832
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Slovak Koruna Linked Nts., 12.80%, 5/10/99 150,000 142,308
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Turkey External Credit Linked Nts., 7.75%, 5/13/99 150,000 149,648
- ----------------------------------------------------------------------------------------------------------------
Salomon, Inc., Venezuelan Bolivar Linked Nts., 22.52%, 5/10/99 290,000 285,050
- ----------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Indian Rupee/Japanese Yen Linked Nts.:
16.80%, 11/8/99(14) 170,000 169,643
18.25%, 5/8/00(14) 170,000 169,184
- ----------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Indonesian Rupiah Linked Nts.:
27.17%, 10/19/99 160,000 176,048
33%, 12/15/99 160,000 186,688
33.50%, 4/5/00 320,000 376,160
- ----------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, Philippine Peso/Singapore Dollar
Linked Nts., 16.30%, 7/12/99 270,000 275,643
- ----------------------------------------------------------------------------------------------------------------
Standard Chartered Bank, South Korean Won/Japanese Yen
Linked Nts., 10.55%, 11/8/99(14) 170,000 168,300
------------
Total Structured Instruments (Cost $5,937,600) 5,653,360
</TABLE>
17 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Date Strike Contracts See Note 1
===================================================================================================================
<S> <C> <C> <C> <C>
Call Options Purchased--0.3%
- ------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization
Bonds, Cl. C, 8%, 4/15/14 Call Opt. 6/99 67.00% 359 $ 13,489
- ------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Disc. Bonds,
Series DL, 5.938%, 12/18/07 Call Opt. 6/99 71.75 642 56,250
- ------------------------------------------------------------------------------------------------------------------
Canadian Dollar Call Opt.(3) 5/99 1.487(CAD) 345,000 4,657
- ------------------------------------------------------------------------------------------------------------------
European Monetary Unit Call Opt. 6/99 1.075(EUR) 500,000 4,536
- ------------------------------------------------------------------------------------------------------------------
European Monetary Unit Call Opt. 7/99 1.075(EUR) 490,000 6,694
- ------------------------------------------------------------------------------------------------------------------
European Monetary Unit Call Opt. 7/99 1.085(EUR) 490,000 3,406
- ------------------------------------------------------------------------------------------------------------------
European Monetary Unit Call Opt.(3) 7/99 1.095(EUR) 490,000 2,940
- ------------------------------------------------------------------------------------------------------------------
Japanese Yen Call Opt. 5/99 117.80(JPY) 94,000,000 3,572
- ------------------------------------------------------------------------------------------------------------------
Nikkei 225 Index Call Opt. 3/00 15,500(JPY) 1,081 19,847
- ------------------------------------------------------------------------------------------------------------------
Nikkei 225 Index Call Opt. 3/00 16,000(JPY) 1,000 15,860
-----------
Total Call Options Purchased (Cost $112,307) 131,251
==================================================================================================================
Put Options Purchased--0.3%
- ------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of) Capitalization Bonds,
8%, 4/15/14 Put Opt. 7/99 70.50% 197 9,467
- ------------------------------------------------------------------------------------------------------------------
J.P. Morgan Emerging Market Bond
Index Plus Put Opt.(3) 5/99 99.65 1,390 46
- ------------------------------------------------------------------------------------------------------------------
J.P. Morgan Emerging Market Bond
Index Put Opt.(3) 6/99 142.20 830 4,992
- ------------------------------------------------------------------------------------------------------------------
Russia (Government of) Unsec. Bonds,
11%, 7/24/18 Put Opt.(3) 5/99 20.00 570,000 1,054
- ------------------------------------------------------------------------------------------------------------------
Australian Dollar Put Opt.(3) 6/99 .650(AUD) 755,000 3,616
- ------------------------------------------------------------------------------------------------------------------
European Monetary Unit Put Opt.(3) 5/99 1.089(EUR) 2,455,000 73,895
- ------------------------------------------------------------------------------------------------------------------
Hong Kong Dollar Put Opt. 1/00 7.894(HKD) 2,368,200 2,503
- ------------------------------------------------------------------------------------------------------------------
Saudi Riyal Put Opt.(3) 7/99 3.80(SAR) 1,063,860 322
-----------
Total Put Options Purchased (Cost $204,388) 95,895
<CAPTION>
Face
Amount(1)
================================================================================================================
<S> <C> <C>
Repurchase Agreements--6.3%
- ----------------------------------------------------------------------------------------------------------------
Repurchase agreement with Zion First National Bank, 4.86%, dated 4/30/99,
to be repurchased at $2,493,009 on 5/3/99, collateralized by
U.S. Treasury Bonds, 6.375%--8.875%, 8/15/17--8/15/27, with
a value of $1,129,365, U.S. Treasury Nts., 6.25%--7%, 4/30/02--7/15/06,
with a value of $820,853, and U.S. Treasury Bills, 7/29/99--4/27/00,
with a value of $593,198 (Cost $2,492,000) $2,492,000 2,492,000
- ----------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $40,407,880) 99.8% 39,204,083
- ----------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.2 84,897
---------- -----------
Net Assets 100.0% $39,288,980
========== ===========
</TABLE>
18 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent
- --------------------------------------------------------------------------------
United States $16,151,355 41.2%
- --------------------------------------------------------------------------------
Brazil 2,332,908 6.0
- --------------------------------------------------------------------------------
Germany 1,934,998 4.9
- --------------------------------------------------------------------------------
Indonesia 1,471,484 3.8
- --------------------------------------------------------------------------------
Mexico 1,235,036 3.1
- --------------------------------------------------------------------------------
Turkey 1,201,038 3.1
- --------------------------------------------------------------------------------
Italy 1,171,023 3.0
- --------------------------------------------------------------------------------
Argentina 926,240 2.4
- --------------------------------------------------------------------------------
Venezuela 785,986 2.0
- --------------------------------------------------------------------------------
Algeria 772,496 2.0
- --------------------------------------------------------------------------------
India 759,311 1.9
- --------------------------------------------------------------------------------
France 735,677 1.9
- --------------------------------------------------------------------------------
New Zealand 646,519 1.6
- --------------------------------------------------------------------------------
Peru 623,149 1.6
- --------------------------------------------------------------------------------
Norway 561,226 1.4
- --------------------------------------------------------------------------------
Ivory Coast 514,311 1.3
- --------------------------------------------------------------------------------
Egypt 508,666 1.3
- --------------------------------------------------------------------------------
Spain 503,624 1.3
- --------------------------------------------------------------------------------
Japan 488,175 1.2
- --------------------------------------------------------------------------------
Bulgaria 462,650 1.2
- --------------------------------------------------------------------------------
Slovakia 437,858 1.1
- --------------------------------------------------------------------------------
Nigeria 412,049 1.1
- --------------------------------------------------------------------------------
Canada 411,595 1.1
- --------------------------------------------------------------------------------
Jordan 402,900 1.0
- --------------------------------------------------------------------------------
Greece 298,799 0.8
- --------------------------------------------------------------------------------
Philippines 275,643 0.7
- --------------------------------------------------------------------------------
El Salvador 275,303 0.7
- --------------------------------------------------------------------------------
Israel 252,268 0.6
- --------------------------------------------------------------------------------
Denmark 246,147 0.6
- --------------------------------------------------------------------------------
Great Britain 240,722 0.6
- --------------------------------------------------------------------------------
Trinidad & Tobago 218,527 0.6
- --------------------------------------------------------------------------------
Vietnam 215,525 0.6
- --------------------------------------------------------------------------------
Panama 195,401 0.5
- --------------------------------------------------------------------------------
Ukraine 188,692 0.5
- --------------------------------------------------------------------------------
19 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Unaudited) (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Geographic Diversification (continued) Market Value Percent
- --------------------------------------------------------------------------------
Morocco $ 173,491 0.4%
- --------------------------------------------------------------------------------
Lebanon 169,832 0.4
- --------------------------------------------------------------------------------
Korea, Republic of (South) 168,300 0.4
- --------------------------------------------------------------------------------
Russia 168,220 0.4
- --------------------------------------------------------------------------------
Sweden 149,151 0.4
- --------------------------------------------------------------------------------
Hungary 145,802 0.4
- --------------------------------------------------------------------------------
Chile 133,125 0.3
- --------------------------------------------------------------------------------
Poland 74,107 0.2
- --------------------------------------------------------------------------------
Moldova 73,075 0.2
- --------------------------------------------------------------------------------
Costa Rica 50,526 0.1
- --------------------------------------------------------------------------------
Jamaica 41,125 0.1
- --------------------------------------------------------------------------------
South Africa 28 0.0
----------- ------
Total $39,204,083 100.0%
=========== ======
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 MXP--Mexican Peso
DEM--German Mark NOK--Norwegian Krone
DKK--Danish Krone NZD--New Zealand Dollar
EUR--Euro RUR--Russian Ruble
FRF--French Franc SAR--Saudi Riyal
GBP--British Pound Sterling SEK--Swedish Krona
GRD--Greek Drachma TRL--Turkish Lira
HKD--Hong Kong Dollar ZAR--South African Rand
IDR--Indonesian Rupiah
2. Represents the current interest rate for a variable rate security.
3. Identifies issues considered to be illiquid or restricted--See Note 8 of
Notes to Financial Statements.
4. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows.
5. Represents 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 $526,021 or 1.34% of the Fund's net assets
as of April 30, 1999.
6. For zero coupon bonds, the interest rate shown is the effective yield on
the date of purchase.
7. Securities with an aggregate market value of $325,575 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 6 of Notes to Financial Statements.
20 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. A sufficient amount of liquid assets has been designated to cover outstanding
written options, as follows:
<TABLE>
<CAPTION>
Contracts/Face
Subject to Expiration Exercise Premium Market Value
Call/Put Date Price Received See Note 1
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brazil (Federal Republic of)
Capitalization Bonds
8%, 4/15/14 Call Option $ 197,000 7/15/99 70.50% $ 10,460 $ 9,960
- ----------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of)
Capitalization Bonds,Cl. C,
8%, 4/15/14, Put Option 359,000 6/7/99 62.00 6,268 3,172
- ----------------------------------------------------------------------------------------------------------
Bulgaria (Republic of)
Interest Arrears Bonds, 5.875%,
7/28/11 Put Option 425,000 6/7/99 64.25 6,161 3,825
- ----------------------------------------------------------------------------------------------------------
Venezuela (Republic of)
Disc. Bonds, Series DL, 5.938%,
12/18/07 Call Option 643,000 6/7/99 71.75 45,129 54,078
- ----------------------------------------------------------------------------------------------------------
Australian Dollar Call Option 755,000 6/25/99 1.504AUD 3,435 7,430
- ----------------------------------------------------------------------------------------------------------
Canadian Dollar Put Option 345,000 5/7/99 1.520CAD 567 --
- ----------------------------------------------------------------------------------------------------------
European Monetary Unit
Put Option 500,000 6/24/99 1.035EUR 2,264 2,501
- ----------------------------------------------------------------------------------------------------------
European Monetary Unit
Put Option 490,000 7/2/99 1.035EUR 2,739 2,734
- ----------------------------------------------------------------------------------------------------------
European Monetary Unit
Put Option 490,000 7/15/99 1.050EUR 4,363 5,390
- ----------------------------------------------------------------------------------------------------------
European Monetary Unit
Put Option 490,000 7/28/99 1.050EUR 4,756 5,907
- ----------------------------------------------------------------------------------------------------------
Mexican Peso Call Option 7,287,955 5/27/99 9.984MXP 3,811 44,726
- ----------------------------------------------------------------------------------------------------------
Mexican Peso Call Option 1,640,000 7/22/99 10.250MXP 10,256 12,000
- ----------------------------------------------------------------------------------------------------------
Mexican Peso Put Option 3,190,000 10/8/99 11.000MXP 7,163 1,318
- ----------------------------------------------------------------------------------------------------------
Mexican Peso Put Option 9,130,000 9/23/99 11.000MXP 30,876 2,416
- ----------------------------------------------------------------------------------------------------------
Nikkei 225 Index Put Option 1,081 3/10/00 1,000.000JPY 6,945 4,043
- ----------------------------------------------------------------------------------------------------------
Nikkei 225 Index Put Option 1,000 3/10/00 700.000JPY 7,609 5,190
- ----------------------------------------------------------------------------------------------------------
Polish Zloty Put Option 586,980 5/17/99 3.913PLZ 3,645 3,141
-------- --------
$156,447 $167,831
======== ========
</TABLE>
9. A sufficient amount of securities has been designated to cover outstanding
foreign currency exchange contracts. See Note 5 of Notes to Financial
Statements.
10. Represents the current interest rate for an increasing rate security.
11. Non-income producing--issuer is in default.
12. Denotes a step bond: a zero coupon bond that converts to a fixed or
variable interest rate at a designated future date.
13. Non-income producing security.
14. When-issued security to be delivered and settled after April 30, 1999.
See accompanying Notes to Financial Statements.
21 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
==========================================================================================
<S> <C>
Assets
Investments, at value (cost $40,407,880)--see accompanying statement $ 39,204,083
- ------------------------------------------------------------------------------------------
Cash 16,144
- ------------------------------------------------------------------------------------------
Unrealized appreciation on foreign currency
exchange contracts--Note 5 27,855
- ------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold 1,190,356
Interest, dividends and principal paydowns 535,383
Closed foreign currency exchange contracts 35,883
Shares of beneficial interest sold 10,306
Other 1,665
------------
Total assets 41,021,675
==========================================================================================
Liabilities
Unrealized depreciation on foreign currency
exchange contracts--Note 5 66,081
- ------------------------------------------------------------------------------------------
Options written, at value (premiums received $156,447)--
see accompanying statement--Note 7 167,831
- ------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased (including $510,000 purchased
on a when-issued basis)--Note 1 1,010,414
Dividends 217,787
Trustees' compensation--Note 1 88,743
Shares of beneficial interest redeemed 56,849
Shareholders reports 41,716
Closed foreign currency exchange contracts 21,673
Distribution and service plan fees 19,705
Transfer and shareholder servicing agent fees 12,539
Custodian fees 8,234
Daily variation on futures contracts--Note 6 2,969
Other 18,154
------------
Total liabilities 1,732,695
==========================================================================================
Net Assets $ 39,288,980
============
==========================================================================================
Composition of Net Assets
Par value of shares of capital stock $ 54,038
- ------------------------------------------------------------------------------------------
Additional paid-in capital 49,656,256
- ------------------------------------------------------------------------------------------
Undistributed net investment income 50,611
- ------------------------------------------------------------------------------------------
Accumulated net realized loss on investments
and foreign currency transactions (9,203,389)
- ------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and translation
assets and liabilities denominated in foreign currencies (1,268,536)
------------
Net assets $ 39,288,980
============
</TABLE>
22 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
=============================================================================================
<S> <C>
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets
of $37,044,725 and 5,095,385 shares of beneficial interest outstanding) $7.27
Maximum offering price per share (net asset value plus sales charge of
4.75% of offering price) $7.63
- ---------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent
deferred sales charge) and offering price per share (based on net assets
of $1,510,509 and 207,521 shares of beneficial interest outstanding) $7.28
- ---------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred
sales charge) and offering price per share (based on net assets of
$733,746 and 100,939 shares of beneficial interest outstanding) $7.27
</TABLE>
See accompanying Notes to Financial Statements.
23 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Six Months Ended April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
==========================================================================================
<S> <C>
Investment Income
Interest (net of foreign withholding taxes of $7,413) $ 2,212,790
- ------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $115) 635
------------
Total income 2,213,425
==========================================================================================
Expenses
Management fees--Note 4 150,685
- ------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 65,481
- ------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 43,408
Class B 6,402
Class C 4,412
- ------------------------------------------------------------------------------------------
Shareholder reports 50,328
- ------------------------------------------------------------------------------------------
Trustees' compensation--Note 1 24,061
- ------------------------------------------------------------------------------------------
Legal, auditing and other professional fees 17,404
- ------------------------------------------------------------------------------------------
Custodian fees and expenses 16,040
- ------------------------------------------------------------------------------------------
Registration and filing fees 6,602
- ------------------------------------------------------------------------------------------
Insurance expenses 1,058
- ------------------------------------------------------------------------------------------
Other 8,890
------------
Total expenses 394,771
Less expenses paid indirectly--Note 4 (3,645)
------------
Net expenses 391,126
==========================================================================================
Net Investment Income 1,822,299
==========================================================================================
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investments (including premiums on options exercised) (1,450,495)
Closing of futures contracts (102,051)
Closing and expiration of option contracts written--Note 7 49,435
------------
Net realized loss (1,503,111)
- ------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 718,255
Translation of assets and liabilities denominated in foreign currencies 431,049
------------
Net change 1,149,304
------------
Net realized and unrealized loss (353,807)
==========================================================================================
Net Increase in Net Assets Resulting from Operations $ 1,468,492
============
</TABLE>
See accompanying Notes to Financial Statements.
24 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1999 October 31,
(Unaudited) 1998
===========================================================================================================
<S> <C> <C>
Operations
Net investment income $ 1,822,299 $ 4,368,356
- -----------------------------------------------------------------------------------------------------------
Net realized loss (1,503,111) (3,053,977)
- -----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 1,149,304 (2,480,858)
------------ ------------
Net increase (decrease) in net assets resulting from operations 1,468,492 (1,166,479)
===========================================================================================================
Dividends to Shareholders
Dividends from net investment income:
Class A (1,739,079) (3,921,503)
Class B (52,864) (8,405)
Class C (36,069) (6,104)
- -----------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A -- (313,635)
Class B -- (7,511)
Class C -- (4,729)
===========================================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting from
beneficial interest transactions--Note 2:
Class A (1,569,608) (10,446,596)
Class B 586,580 963,214
Class C 161,688 600,668
===========================================================================================================
Net Assets
Total decrease (1,180,860) (14,311,080)
- -----------------------------------------------------------------------------------------------------------
Beginning of period 40,469,840 54,780,920
------------ ------------
End of period (including undistributed net investment
income of $50,611 and $56,324, respectively) $ 39,288,980 $ 40,469,840
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
25 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
------------------------------------------------
Six Months
Ended
April 30,
1999 Year Ended October 31,
(Unaudited) 1998 1997
===========================================================================================================
<S> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 7.33 $ 8.28 $ 8.31
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .33 .72 .72
Net realized and unrealized gain (loss) (.06) (.97) (.08)
---------- ---------- ----------
Total income (loss) from investment
operations .27 (.25) .64
- -----------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.33) (.64) (.67)
Tax return of capital distribution -- (.06) --
---------- ---------- ----------
Total dividends and distributions
to shareholders (.33) (.70) (.67)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 7.27 $ 7.33 $ 8.28
========== ========== ==========
Market value, end of period N/A N/A $ 8.06
========== ========== ==========
===========================================================================================================
Total Return, at Net Asset Value(2) 3.77% (3.25)% 7.94%
===========================================================================================================
Total Return, at Market Value(3) N/A N/A 16.42%
===========================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 37,045 $ 38,950 $ 54,781
- -----------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 38,354 $ 48,542 $ 55,339
- -----------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.11%(5) 8.94% 8.65%
Expenses(6) 1.92%(5) 1.56% 1.20%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 152% 344% 289%
</TABLE>
1. For the period from April 27, 1998 (inception of offering) to October 31,
1998.
2. 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.
3. 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.
26 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
----------------------------- --------------------- ----------------------
Six Months Six Months
Ended Period Ended Period
April 30, Ended April 30, Ended
1999 Oct. 31, 1999 Oct. 31,
1996 1995 1994 (Unaudited) 1998(1) (Unaudited) 1998(1)
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 7.91 $ 7.93 $ 8.54 $ 7.34 $ 8.15 $ 7.33 $ 8.15
- -----------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .73 .71 .69 .30 .25 .31 .34
Net realized and unrealized gain (loss) .34 (.05) (.61) (.06) (.73) (.07) (.83)
-------- -------- -------- -------- ------- ------ ------
Total income (loss) from investment
operations 1.07 .66 .08 .24 (.48) .24 (.49)
------
- -----------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.67) (.68) (.68) (.30) (.27) (.30) (.27)
Tax return of capital distribution -- -- (.01) -- (.06) -- (.06)
-------- -------- -------- -------- ------- ------ ------
Total dividends and distributions
to shareholders (.67) (.68) (.69) (.30) (.33) (.30) (.33)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 8.31 $ 7.91 $ 7.93 $ 7.28 $ 7.34 $ 7.27 $ 7.33
======== ======== ======== ======== ======= ====== ======
Market value, end of period $ 7.50 $ 7.00 $ 7.00 N/A N/A N/A N/A
======== ======== ======== ======== ======= ====== ======
=============================================================================================================================
Total Return, at Net Asset Value(2) 14.14% 8.81% 0.98% 3.37% (5.93)% 3.38% (6.09)%
=============================================================================================================================
Total Return, at Market Value(3) 16.40% 9.09% (4.84)% N/A N/A N/A N/A
=============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 54,962 $ 52,340 $ 52,439 $ 1,511 $ 933 $ 734 $ 587
- -----------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 53,309 $ 51,207 $ 54,380 $ 1,294 $ 340 $ 891 $ 253
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.04% 9.20% 8.90% 8.28%(5) 10.97%(4)(5) 8.20%(5) 9.24%(4)(5)
Expenses(6) 1.28% 1.24% 1.24% 2.65%(5) 2.74%(4)(5) 2.65%(5) 2.62%(4)(5)
- -----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 261% 344% 316% 152% 344% 152% 344%
</TABLE>
4. This information may not be representative of future ratios.
5. Annualized.
6. Beginning in fiscal 1995, the expense ratio reflects the effect of expenses
paid indirectly by the Fund. Prior year expense ratios have not been adjusted.
7. 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 and mortgage
dollar rolls) for the period ended April 30, 1999 were $47,965,130 and
$56,102,352, 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.
27 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
================================================================================
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. Class B and Class C shares may be subject to a
contingent deferred sales charge. All classes of shares have identical rights to
earnings, assets and voting privileges, except that each class has its own
distribution and/or service plan, expenses directly attributable to that class
and exclusive voting rights with respect to matters affecting that class. Class
B shares will automatically convert to Class A shares six years after the date
of purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency 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.
28 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Structured Notes. The Fund invests in foreign currency-linked structured notes
whereby the market value and redemption price are linked to foreign currency
exchange rates. The structured notes may be leveraged, which increases the
notes' volatility relative to the face of the security. Fluctuations in values
of the securities are recorded as unrealized gains and losses in the
accompanying financial statements. During the six months ended April 30, 1999,
the market value of these securities comprised an average of 14% of the Fund's
net assets, and resulted in realized and unrealized losses of $605,334.
- --------------------------------------------------------------------------------
Securities Purchased on a When-Issued Basis. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of April 30, 1999,
the Fund had entered into outstanding when-issued or forward commitments of
$510,000.
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 April 30, 1999, securities with an
aggregate market value of $60,929, representing 0.16% of the Fund's net assets,
were in default.
29 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
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.
- --------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, and Gains and Losses. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, 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, 1998, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $7,574,000, which expires between 2002 and 2006.
30 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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 six months ended
April 30, 1999, a provision of $10,933 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 $87,131 as of April 30, 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 fees 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 Trustee 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.
- --------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of the distributions made during the year from net investment income
or net realized gains may differ from its ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the fiscal year that the
income or realized gain was recorded by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for on the date the investments are
purchased or sold (trade date) and dividend income is recorded on the
ex-dividend date. Discount on securities purchased is amortized over the life of
the respective securities, in accordance with federal income tax requirements.
Realized gains and losses on investments and unrealized appreciation and
depreciation are determined on an identified cost basis, which is the same basis
used for federal income tax purposes. Dividends-in-kind are recognized as income
on the ex-dividend date, at the current market value of the underlying security.
Interest on payment-in-kind debt instruments is accrued as income at the coupon
rate and a market adjustment is made periodically.
31 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
================================================================================
2. 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 six months ended April 30, 1999 were as follows:
<TABLE>
<CAPTION>
Six Months Ended April 30, 1999 Year Ended October 31, 1998
------------------------------- ---------------------------
Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 218,360 $ 1,597,821 286,833 $ 2,178,396
Dividends reinvested 75,480 551,371 74,607 566,615
Redeemed (510,531) (3,718,800) (1,664,869) (13,191,607)
-------- ------------ ---------- ------------
Net decrease (216,691) $ (1,569,608) (1,303,429) $(10,446,596)
======== ============ ========== ============
- ---------------------------------------------------------------------------------------
Class B:
Sold 138,650 $ 1,016,040 131,607 $ 995,498
Dividends reinvested 4,621 33,814 1,934 14,358
Redeemed (62,910) (463,274) (6,381) (46,642)
-------- ------------ ---------- ------------
Net increase 80,361 $ 586,580 127,160 $ 963,214
======== ============ ========== ============
- ---------------------------------------------------------------------------------------
Class C:
Sold 65,506 $ 482,993 118,968 $ 899,891
Dividends reinvested 2,039 14,878 738 5,675
Redeemed (46,736) (336,183) (39,576) (304,898)
-------- ------------ ---------- ------------
Net increase 20,809 $ 161,688 80,130 $ 600,668
======== ============ ========== ============
</TABLE>
32 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
3. Unrealized Gains and Losses on Investments
As of April 30, 1999, net unrealized depreciation on investments and options
written of $1,215,181 was composed of gross appreciation of $1,001,423, and
gross depreciation of $2,216,604.
================================================================================
4. Management Fees and Other Transactions with Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of 0.75% 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 six months ended April 30, 1999 was
0.75% of average annual net assets for each class of shares.
The Manager acts as the accounting agent for the Fund at an annual
fee of $18,000, plus out-of-pocket costs and expenses reasonably incurred.
For the six months ended April 30, 1999, commissions (sales charges
paid by investors) on sales of Class A shares totaled $30,955, of which $12,532
was retained by OppenheimerFunds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class A, Class
B and Class C shares totaled $3,006, $23,702 and $1,819. The amount paid to an
affiliated broker/dealer for Class B shares was $1,878. During the six months
ended April 30, 1999, OFDI received contingent deferred sales charges of $1,133
for Class C shares, as reimbursement for sales commissions advanced by OFDI at
the time of sale of such shares.
OppenheimerFunds Services (OFS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund and other Oppenheimer
funds. OFS's total costs of providing such services are allocated ratably to
these funds.
Expenses paid indirectly represent a reduction of custodian fees for
earnings on cash balances maintained by the Fund.
The Fund has adopted a Service Plan for Class A shares to reimburse
OFDI for a portion of its costs incurred in connection with the personal service
and maintenance of shareholder accounts that hold Class A shares. Reimbursement
is made quarterly at an annual rate that may not exceed 0.25% of the average
annual net assets of Class A shares of the Fund. OFDI uses the service fee to
reimburse brokers, dealers, banks and other financial institutions quarterly for
providing personal service and maintenance of accounts of their customers that
hold Class A shares.
33 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions with Affiliates (continued)
The Fund has adopted Distribution and Service Plans for Class B and Class C
shares to compensate OFDI for its costs in distributing Class B and Class C
shares and servicing accounts. Under the Plans, the Fund pays OFDI an annual
asset-based sales charge of 0.75% per year on Class B and Class C shares, for
its services rendered in distributing Class B and Class C shares. OFDI also
receives a service fee of 0.25% per year to compensate dealers for providing
personal services for accounts that hold Class B and Class C shares. Each fee is
computed on the average annual net assets of Class B or Class C shares,
determined as of the close of each regular business day. During the six months
ended April 30, 1999, OFDI retained $6,003 and $3,479, respectively, as
compensation for Class B and Class C sales commissions and service fee advances,
as well as financing costs. If either Plan is terminated by the Fund, the Board
of Trustees may allow the Fund to continue payments of the asset-based sales
charge to OFDI for distributing shares before the Plan was terminated. As of
April 30, 1999, OFDI had incurred excess distribution and servicing costs of
$51,844 for Class B and $6,804 for Class C.
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuation. Risks to the Fund include the
potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
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.
34 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
As of April 30, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract
Expiration Amounts Valuation as of Unrealized Unrealized
Contract Description Dates (000s) April 30, 1999 Appreciation Depreciation
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contracts to Purchase
Australian Dollar (AUD) 5/24/99 965 AUD $ 639,262 $19,990 $ --
British Pound Sterling (GBP) 5/26/99 90 GBP 144,866 -- 947
Euro (EUR) 5/17/99-
7/16/99 1,544 EUR 1,640,968 -- 36,059
Japanese Yen (JPY) 6/9/99 87,700 JPY 738,397 3,821 --
------- -------
23,811 37,006
------- -------
Contracts to Sell
Australian Dollar (AUD) 5/12/99 135 AUD 89,474 -- 3,735
British Pound Sterling (GBP) 5/26/99 165 GBP 265,616 2,576 ---
Canadian Dollar (CAD) 7/9/99 195 CAD 133,964 -- 3,722
New Zealand Dollar (NZD) 5/24/99 1,145 NZD 640,890 -- 21,618
Norwegian Krone (NOK) 6/28/99 2,308 NOK 304,728 1,468 --
------- -------
4,044 29,075
------- -------
Total Unrealized Appreciation and Depreciation $27,855 $66,081
======= =======
</TABLE>
================================================================================
6. Futures Contracts
The Fund may buy and sell interest rate futures contracts in order to gain
exposure to or protect against changes in interest rates. The Fund may also buy
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.
35 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
6. Futures Contracts (continued)
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities (initial margin) in an amount equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable
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 April 30, 1999, the Fund had outstanding futures contracts as follows:
<TABLE>
<CAPTION>
Unrealized
Expiration Number of Valuation as of Appreciation
Contract Description Date Contracts April 30, 1999 (Depreciation)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
U.S. Treasury Bonds, 30 yr. 6/99 2 $240,375 $(5,875)
Contracts to Sell
U.S. Treasury Nts., 10 yr. 6/99 1 114,688 938
-------
$(4,937)
=======
</TABLE>
36 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
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 footnote 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 six months ended April 30, 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 295,809,598 119,756 232,994,537 131,945
Options closed or expired (288,011,000) (85,260) (217,522,044) (54,019)
Options exercised (215,030,000) (25,677) (848,440) (30,850)
------------ ------------ ------------ ------------
Options outstanding
as of April 30, 1999 9,683,598 $ 62,631 15,225,042 $ 93,816
============ ============ ============ ============
</TABLE>
37 Oppenheimer World Bond Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Unaudited) (Continued)
- --------------------------------------------------------------------------------
================================================================================
8. Illiquid and Restricted Securities
As of April 30, 1999, investments in securities included issues that are
illiquid or restricted. Restricted securities are often purchased in private
placement transactions, are not registered under the Securities Act of 1933, may
have contractual restrictions on resale, and are valued under methods approved
by the Board of Trustees as reflecting fair value. A security may be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limit. The aggregate value of illiquid or restricted securities
subject to this limitation as of April 30, 1999, was $3,441,721, which
represents 8.76% 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 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the six months ended
April 30, 1999.
================================================================================
10. Subsequent Event
Effective May 20, 1999, Art Steinmetz became the Portfolio Manager of the Fund.
38 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
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
Ashwin K. Vasan, Vice President
Brian W. Wixted, Treasurer
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
Andrew J. Donohue, Secretary
Robert G. Zack, Assistant Secretary
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
================================================================================
Legal Counsel Gordon Altman Butowsky Weitzen Shalov & Wein
The financial statements included herein have been
taken from the records of the Fund without
examination of the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer 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.
39 Oppenheimer World Bond Fund
<PAGE>
------------------------------------------
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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
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www.oppenheimerfunds.com
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General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
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1-800-525-7048
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Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
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1-800-852-8457
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PhoneLink
24-hr automated information and automated transactions
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1-800-533-3310
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Telecommunication Device for the Deaf (TDD)
Mon-Fri 8:30am-6pm ET
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1-800-843-4461
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OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on
the economy and issues that affect your investments
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1-800-835-3104
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Transfer and Shareholder Servicing Agent
OppenheimerFunds Services,
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
OppenheimerFunds(R)
Distributor, Inc.
RS0705.001.0499 June 29, 1999
