<PAGE>
[Logo] OPPENHEIMER FUNDS
OPPENHEIMER STRATEGIC INCOME FUND
ANNUAL REPORT SEPTEMBER 30, 1994
"I NEED HIGH INCOME, BUT NOT A LOT OF RISK.
"MY FINANCIAL ADVISOR RECOMMENDED THIS FUND BECAUSE ITS UNIQUE INVESTMENT
STRATEGY IS SPECIFICALLY DESIGNED TO LOWER RISK."
WOMAN SITTING BY
WOMAN HUGGING
CHILD
<PAGE>
FUND FACTS
IN THIS REPORT:
ANSWERS TO TIMELY QUESTIONS YOU SHOULD ASK YOUR FUND'S MANAGERS.
- - HOW DID THE FUND RESPOND TO RISING INTEREST RATES IN THE U.S. AND OVERSEAS?
- - WHAT'S THE OUTLOOK FOR THE CORPORATE BOND MARKET?
- - WHERE ARE YOU FINDING ATTRACTIVE INVESTMENT OPPORTUNITIES TODAY?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT OPPENHEIMER STRATEGIC INCOME FUND
- --------------------------------------------------------------------------------
1 The Fund seeks high current income by investing in foreign fixed income
securities, U.S. government issues and higher-yielding, lower-rated
corporate bonds.
- --------------------------------------------------------------------------------
2 Standardized yield for the 30 days ended September 30, 1994 for Class A
shares was 8.65% and 8.31% for Class B shares.(1)
- --------------------------------------------------------------------------------
3 Total return at net asset value for the 12 months ended September 30, 1994
was 1.85% for Class A shares and 1.07% for Class B shares.(2)
- --------------------------------------------------------------------------------
4 Average annual total returns for Class A shares for the 1-year period ended
September 30, 1994 and since inception of the Fund on October 16, 1989 were
--2.98% and 9.93%, respectively. For Class B shares, average annual total
returns for the 1-year period ended September 30, 1994 and since inception
of the Class on November 30, 1992 were --3.93% and 6.43%, respectively.(3)
- --------------------------------------------------------------------------------
5 The Fund's Class A shares received **** from Morningstar, Inc. as of
September 30, 1994. The Fund was ranked among 165 hybrid funds.(4)
- --------------------------------------------------------------------------------
6 "The Fund's flexibility to shift assets strategically among bond market
sectors is a major plus for shareholders in the current investment
environment. It has allowed us to capitalize on opportunities offered in
higher-yielding corporate bonds, the best performing bond market sector
over the last 12 months. And it has enabled us to limit the portfolio's
exposure to rising interest rates worldwide."
PORTFOLIO MANAGERS DAVID NEGRI AND ART STEINMETZ, SEPTEMBER 30, 1994
(1) Standardized yield is net investment income calculated on a
yield-to-maturity basis for the 30-day period ended 9/30/94, divided by the
maximum offering price at the end of the period, compounded semiannually and
then annualized. Falling net asset values will tend to artificially raise
yields.
(2) Based on the change in net asset value per share from 9/30/93 to 9/30/94,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
(3) Average annual total returns are based on a hypothetical investment held
until 9/30/94, after deducting the current maximum initial sales charge of 4.75%
for Class A shares and the contingent deferred sales charge of 5% (1-year) and
4% (since inception) for Class B shares.
(4) Source: Morningstar Mutual Funds, 9/30/94. Morningstar, Inc., an
independent mutual fund monitoring service, produces proprietary monthly
rankings of mutual funds in broad investment categories (equity, taxable bond,
tax-exempt bond, and "hybrid") based on risk-adjusted investment return, after
considering sales charges and expenses. Investment return measures a fund's (or
class's) 3-, 5-, and 10-year (depending on the inception of the class or fund)
average annual total returns in excess of 90-day U.S. Treasury bill returns.
Risk measures a fund's (or class's) performance below 90-day U.S. Treasury bill
returns. Risk and returns are combined to produce star rankings reflecting
performance relative to the average fund in a fund's category. Five stars is the
"highest" ranking (top 10%), four stars is "above average" (22.5%) and 1 star is
lowest (bottom 1%). The Fund's current ranking is also the Fund's ranking for
the 1-year and 3-year periods ended 9/30/94. Rankings are subject to change. The
Fund's Class A and Class B shares have the same portfolio.
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment and principal
value on an investment in the Fund will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than the original cost.
2 Oppenheimer Strategic Income Fund
<PAGE>
REPORT TO SHAREHOLDERS
ABOVE-AVERAGE TOTAL RETURN
TOTAL RETURN FOR THE 1-YEAR PERIOD ENDED SEPTEMBER 30, 1994
OPPENHEIMER STRATEGIC 1.85%
INCOME FUND A
(AT NAV)(7)
OPPENHEIMER STRATEGIC 1.07%
INCOME FUND B
(AT NAV)(7)
LIPPER GENERAL BOND --2.69%
FUNDS AVERAGE(8)
Extending the record of performance that has earned the Fund's Class A Shares a
**** ranking from Morningstar, Inc., Oppenheimer Strategic Income Fund continued
to provide an attractive level of income for the 12 months ended September 30,
1994.(5) At that date, the Fund's standardized 30-day yield was 8.65% for Class
A shares and 8.31% for Class B shares.(6)
Once again, your managers' ability to shift assets strategically among
three sectors--U.S. government securities, high yield corporate bonds and
foreign fixed income securities--played an important role in the Fund's
performance over the past year. As the Federal Reserve and central banks
worldwide moved aggressively to raise short-term interest rates to fend off
inflation, your managers were able to capture rising yields while limiting the
portfolio's price volatility.
As U.S. interest rates began to rise, your managers reduced the Fund's
exposure to long-term U.S. government bonds, as well as to high yield corporate
bonds issued by consumer-durable and financial services companies, whose
earnings are sensitive to interest rate changes.
The proceeds were used to add to holdings in higher-yielding corporate
bonds issued by larger industrial companies, notably in chemicals, mining,
metals, and forest products sectors. These companies' earnings tend to rise in
the middle-to-late stages of an economic expansion.
The foreign portion of the portfolio continues to emphasize Latin
America and other emerging markets. As interest rates rose offshore and the
dollar weakened against major currencies, these positions were reduced somewhat,
while more investments were centered in Europe. In addition to increasing the
portfolio's holdings of foreign government bonds, your managers focused more
attention on large European industrial companies positioned to benefit from
economic growth.
Looking ahead, your managers don't anticipate major changes in the
portfolio's composition in the near term. The Fund's allocations will, of
course, be adjusted should the economic expansion appear to be ending, but signs
are currently pointing to continued gradual growth--and your Fund is
well-positioned to provide attractive returns.
We appreciate the confidence you have placed in Oppenheimer Strategic
Income Fund and we look forward to continuing to help you reach your investment
goals.
James C. Swain
Chairman
Oppenheimer Strategic Funds Trust for
Oppenheimer Strategic Income Fund
Jon S. Fossel
President
Oppenheimer Strategic Funds Trust for
Oppenheimer Strategic Income Fund
October 21, 1994
(5) See footnote 4, page 2.
(6) See footnote 1, page 2.
(7) See footnote 2, page 2.
(8) Source of data: Lipper Analytical Services. The Lipper total return average
for the 1-year period ended 9/30/94 was for 35 general bond funds. The average
is shown for comparative purposes only. Oppenheimer Strategic Income Fund is
characterized by Lipper as a general bond fund. Lipper performance does not
take sales charges into consideration.
3 Oppenheimer Strategic Income Fund
<PAGE>
- ------------------------------------------------------------------------------
Statement of Investments September 30, 1994
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements--0.9%
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital Markets, 4.95%, dated
9/30/94, to be repurchased at $40,716,789 on 10/3/94, collateralized by U.S.
Treasury Nts., 4.25%--8.50%, 4/15/95--7/15/98, with a value of $23,014,481
and U.S. Treasury Bills, 0%, 3/16/95--3/23/95, with a value of $18,537,281
(Cost $40,700,000) $40,700,000 $40,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
Short-Term Government Obligations--0.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Bonos de la Tesoreria la Federacion:
0%, 8/3/95 7,623,450(1) 2,103,222
0%, 8/10/95 12,197,520(1) 3,360,261
- ------------------------------------------------------------------------------------------------------------------------------------
United Mexican States Treasury Bills, 0%, 11/10/94 35,238,970(1) 10,203,270
- ------------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Government Obligations (Cost $15,646,044) 15,666,753
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Government Obligations--49.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina (Republic Of):
Bonos de Consolidacion de Deudas:
Bonds, 8.375%, 12/20/03 36,950,000 30,797,934
Bonds, Series I, 3.704%, 4/1/01(4)(6) 77,759,247(1) 45,377,982
Bonds, Series I, 4.375%, 4/1/01(4)(6) 27,007,821 20,469,552
Bonds, Series I, 4.8125%, 4/1/07(4)(6) 45,913,296 28,585,986
Bonds, Series I, 4.8125%, 9/1/02(4)(6) 15,634,644 10,528,088
Supplier Bocon (Pesos), 4.60%, 4/1/07 5,057,512(1) 2,118,317
Discount Bonds, 4.250%, 3/31/23 20,000,000 14,250,000
Par Bonds, 4.25%, 3/31/23(8) 30,000,000 14,925,000
Past Due Interest Bonds, 5%, 3/31/05(4)(6) 107,000,000 81,721,250
- ------------------------------------------------------------------------------------------------------------------------------------
Bariven SA Sr. Nts., Gtd. by Petroleos de Venezuela:
9.50%, 12/10/96 500,000 478,750
9%, 2/25/97(5) 1,000,000 930,000
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
6% Debs., 9/15/13 32,000,000 17,220,000
Bonds, Banco do Brasil SA, 10.50%, 4/14/98 5,000,000 5,043,750
Bonds, Banco do Nordeste, Sr. Unsec. Debs, 9%, 11/12/96 8,200,000 7,779,750
Bonds, Nacional de Desenvolvimento Economico e Social:
10.375%, 4/27/98 3,850,000 3,854,813
Interest Due and Unpaid Bonds, 8.75%, 1/1/01(4) 19,061,000 15,844,456
Nts., Banco Estado Minas Gerais:
10%, 1/15/96 14,870,000 14,349,550
7.875%, 2/10/99(5) 4,000,000 3,290,000
8.25%, 2/10/00 9,000,000 7,245,000
8.25%, 2/10/00(5) 2,000,000 1,630,000
- ------------------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of):
8.75%, Nts., 10/6/99 5,000,000 4,984,084
1989--1990 Integrated Loan Facility Bonds:
4.188%, 7/1/01(4)(5) 16,131,048 15,485,807
4.44%, 10/26/03(4)(5) 8,122,423 7,594,466
Empresa Columbiana de Petroleos, Nts., 7.25%, 7/8/98(5) 15,650,000 14,926,188
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds:
9%, 11/15/98 158,160,000(1) 26,215,716
6%, 12/10/99 47,450,000(1) 6,929,474
</TABLE>
4 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Face Market Value
Amount See Note 1
------ ------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Government Obligations (continued)
First Australia National Mortgage Acceptance Corp. Ltd Bonds,
Series 17, 15%, 7/15/02 $3,740,000(1) $ 3,015,869
- ------------------------------------------------------------------------------------------------------------------------------------
Indonesia (Republic of) CD, Bank Negara, 0%, 4/24/95 56,500,000,000(1) 23,817,889
- ------------------------------------------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds:
12%, 9/1/97 13,600,000,000(1) 8,843,486
12.50%, 1/1/98 13,500,000,000(1) 8,877,980
Buoni Pollennali del Tes:
12%, 1/1/96 13,720,000,000(1) 8,904,807
12%, 5/1/97 62,325,000,000(1) 40,491,269
12.50%, 6/16/97 12,300,000,000(1) 8,074,634
12.50%, 3/19/98 4,740,000,000(1) 3,135,692
12%, 1/17/99 10,000,000,000(1) 6,476,281
- ------------------------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.:
Tranche A, 4.125%, 10/15/00(4)(5) 900,000 738,000
Tranche B, 4.125%, 11/15/04(4)(5) 5,000,000 3,400,000
- ------------------------------------------------------------------------------------------------------------------------------------
Landeskredietbank Baden Sr. Unsec. Unsub. Nts., 11.625%, 6/24/99 5,000,000,000(1) 3,241,186
- ------------------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of):
Loan Participation Agreement:
Tranche A, 5.938%, 1/1/09(4)(5) 55,950,000 40,843,500
Tranche B, 4.312%, 1/1/04(4)(5) 33,800,000 26,089,375
- ------------------------------------------------------------------------------------------------------------------------------------
New South Wales Treasury Corp., 7% Gtd. Bonds, 4/1/04 16,000,000(1) 9,375,719
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds:
9%, 11/15/96 65,570,000(1) 39,610,123
10%, 7/15/97 29,150,000(1) 18,009,173
- ------------------------------------------------------------------------------------------------------------------------------------
Oesterreich Kontrollbank Sr. Unsec. Unsub. Gtd. Nts., 10%, 8/10/99 3,700,000,000(1) 2,276,923
- ------------------------------------------------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation Agreement, 5.0625%, 2/3/24(4)(5)(7) 20,750,000(1) 11,481,851
- ------------------------------------------------------------------------------------------------------------------------------------
Quebec, Canada (Province of), Sr. Nts., 9.50%, 10/2/02 20,000,000(1) 13,495,634
- ------------------------------------------------------------------------------------------------------------------------------------
South Africa (Republic of), Loan Participation Agreements:
Eskom 4.907%, 12/23/97(4)(5) 6,457,568 6,037,827
Eskom 4.651%, 1/15/98(4)(5) 8,750,000 8,137,500
Eskom 4.875%, 4/15/98(4)(5) 2,767,816 2,504,874
Eskom 4.75%, 9/15/99(4)(5) 8,578,951 7,763,951
Eskom 4.875%, 2/15/00(4)(5) 29,550,000 27,333,750
- ------------------------------------------------------------------------------------------------------------------------------------
South Australia Government Finance Authority Bonds, 10%, 1/15/03 34,200,000(1) 24,282,057
- ------------------------------------------------------------------------------------------------------------------------------------
Spain (Kingdom of):
Bonds, 11.45%, 8/30/98 10,236,000,000(1) 80,606,211
Bonds, 10.25%, 11/30/98 1,500,000,000(1) 11,351,344
Gtd. Bonds, Bonos y Obligacion del Estado, 12.25%, 3/25/00 9,781,000,000(1) 78,905,977
- ------------------------------------------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria:
Bonds, 12%, 10/22/98 19,000,000(1) 15,100,310
Gtd. Bonds, 8.25%, 10/15/03 80,290,000(1) 51,130,130
- ------------------------------------------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts., 12%, 11/20/98 43,743,000(1) 76,484,630
- ------------------------------------------------------------------------------------------------------------------------------------
United Mexican States:
1990 Combined Multi-Year Restructuring Agreement,
Restructured Sov. Loan, 4.28%, 12/23/06(4)(5) 26,277,514 21,876,031
Banco Nacional de Comercio Exterior SNC International Finance BV
Collateralized Fixed Rate Par Bonds:
Series A, 6.25%, 12/31/19 15,000,000 9,721,875
Series B, 6.25%, 12/31/19 15,000,000 9,721,875
</TABLE>
5 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
------- --------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Government Obligations (continued)
Gtd. Matador Bonds:
13%, 1/29/97 $1,250,000,000(1) $9,819,166
12.65%, 6/21/98 2,900,000,000(1) 21,652,719
12.25%, 12/3/98 19,500,000(1) 32,000,800
7.25% Debs., 2/2/04 1,750,000 1,467,821
Bankpesca Restructured Sov. Loan, 6.0625%, 10/26/06(4)(5) 5,310,128 4,420,682
Banobras Myra Loan Participation Agreement, Tranche 2,
6.125%, 11/16/06(4)(5) 3,271,125 2,723,213
- ------------------------------------------------------------------------------------------------------------------------------------
Myra Old Money Loan Participation Agreements:
5.6875%, 3/20/05(4)(5) 4,039,820 3,363,150
6.1725%, 3/20/05(4)(5) 167,589 139,518
- ------------------------------------------------------------------------------------------------------------------------------------
New New Money Loan Participation Agreements, 5.1825%, 3/25/05(4)(5) 1,203,817 1,002,178
Tranche A, 6.0625%, 3/25/05(4)(5) 2,659,208 2,213,791
Nts., Nacional Financiera SNC, 13.60%, 4/2/98 1,395,000,000(1) 10,998,875
- ------------------------------------------------------------------------------------------------------------------------------------
Petacalco Topolobampo Trust, Sr. Sec. Unsub. Nts.:
8.125%, 12/15/03(5) 1,950,000 1,674,563
8.125%, 12/15/03 10,975,000 9,424,781
- ------------------------------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos Gtd. Medium Term Nts.:
7.60%, 6/15/00(5) 14,310,000 13,033,834
8.625%, 12/1/23 13,500,000 11,189,070
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds:
10.50%, 2/15/95(11) 190,000,000 193,443,750
10.375%, 5/15/95 25,000,000 25,703,125
8.125%, 8/15/19 100,100,000 101,726,250
7.875%, 2/15/21 197,500,000 195,031,250
6.25%, 8/15/23 48,000,000 38,984,971
7.125%, 2/15/23 100,000,000 90,906,189
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
11.25%, 2/15/95 66,500,000 67,892,303
5.125%, 11/15/95 150,000 148,500
9.25%, 1/15/96 13,000,000 13,475,305
11.25%, 5/15/19 28,000,000 28,936,233
8.875%, 11/15/19(12) 128,719,000 135,637,646
9.50%, 11/15/19 85,000,000 88,107,761
8.50%, 11/15/20 44,000,000 46,392,500
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of):
6.75% Debs., 9/20/95(5) 29,025,000 27,537,469
6.2364% Debs., 12/29/95(4) 8,048,318 7,364,211
8.2375% Unsub. Nts., 9/20/95(4) 2,500,000 2,360,738
9.125% Unsub., 3/11/96 7,500,000 7,106,250
9.00% Sr. Unsec. Unsub. Nts., 5/27/96(5) 23,025,000 21,557,156
- ------------------------------------------------------------------------------------------------------------------------------------
Bonds, Banco Venezuela TCI:
0% Debs, 12/13/94 456,558 442,862
0% Debs, 12/13/98(5) 9,885,056 6,326,436
- ------------------------------------------------------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds, 12.50%, 4/1/98 21,400,000(1) 17,192,205
- ------------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Government Obligations (Cost $2,518,241,698) 2,355,130,917
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage/Asset-Backed Obligations--5.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Mortgage Finance Corp:
Nts., 6.75%, 4/25/24(5) 849,343 579,412
Nts., 6.75%, 2/25/25(5) 710,295 485,665
</TABLE>
6 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Face Market Value
Amount See Note 1
------- ------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage/Asset-Backed
Obligations (continued)
Sub. Mtg. Pass-Through Certificates, Series 1994-1:
0%, Cl. B-8, 3/25/25(5) $2,184,269 $1,639,568
0%, Cl. B-9, 3/25/25(5) 2,184,269 1,566,531
0%, Cl B-10, 3/25/25(5) 1,092,134 779,511
- ------------------------------------------------------------------------------------------------------------------------------------
Citicorp Mortgage Securities, Inc., 7% Sub. Bonds, Series 1993-5:
Cl. B3, 4/25/23 1,662,792 1,189,417
Cl. B4, 4/25/23 1,603,408 217,963
- ------------------------------------------------------------------------------------------------------------------------------------
CMC Security Corp. III, 0% Collateralized Mtg. Oblig., Series 1994-E,
Cl. E-B3, 3/25/24(5) 4,957,267 3,389,532
- ------------------------------------------------------------------------------------------------------------------------------------
CSFOB 11%, Cl.E, 2/15/14(5) 12,000,000 11,701,248
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Trust, 1994-C1, Class 2-D, 8.70%, 9/25/25(5) 2,500,000 2,398,828
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Trust, 1994-C1, Class 2-E, 8.70%, 9/25/25(5) 2,500,000 2,312,109
- ------------------------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Series 176, Class F, 8.95%, 3/15/20 16,988,000 17,368,530
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Interest-Only Stripped Mtg.-Backed
Security:
Trust 221, Class 2, 7.50%, 5/25/23(10) 63,848,072 23,923,063
Trust 240, Class 2, 7%, 9/25/23(10) 114,242,159 43,197,816
Trust 240, Class 2, 7%, 2/25/24(10) 170,646,483 65,485,589
Trust 252, Class 2, 7.50%, 11/30/23(10) 88,701,927 33,679,013
Trust 258, Class 2, 7%, 3/25/24(10) 35,135,718 12,714,738
- ------------------------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Principal-Only Stripped
Mtg.-Backed Security, Series 1993-253 Class G, 0%, 11/25/23(9) 7,802,220 3,513,437
- ------------------------------------------------------------------------------------------------------------------------------------
GE Capital Mtg. Services, Inc.:
Series 1994-7 Cl. B3, 6% Sub. Bonds., 2/25/09 1,586,524 1,149,239
Series 1994-10 Cl. B3, 6.5% Sub. Bonds., 3/25/24(5) 4,763,001 3,328,148
Series 1994-11 Cl. B3, 6.5% Sub. Bonds., 5/25/24(5) 3,167,515 2,134,114
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Agricultural Credit, Inc. Farmer Mac Agricultural Real Estate
Trust Sr. Sub. Mtg. Pass-Through Certificates:
9.18%, Series 1992-2, Cl. B2, 1/15/03(4)(5) 5,681,627 4,320,255
9.47%, Series 1992-2, Cl. B3, 4/15/09(4)(5) 5,792,386 4,407,260
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Funding Corp. 7.785% Mtg. Pass-Through Certificates,
Series 1993-6, Cl. B5, 6/15/23(5) 4,087,900 3,021,214
- ------------------------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp. Commercial Mtg. Pass-Through Certificates:
8.25%, Series 1992-CHF, Cl.C, 12/25/20 1,776,220 1,726,265
10.638 %, Series 1992-16, Cl. B3, 5/24/24(4) 2,822,000 2,859,039
8.75%, Series 1993-C1, Cl.B, 5/25/24 7,572,000 7,496,280
8.50%, Series 1993-C2, Cl.E, 3/25/25 161,685 158,578
8%, Series 1994-C1, Cl.E, 6/25/26 5,000,000 3,781,250
- ------------------------------------------------------------------------------------------------------------------------------------
SKW Real Estate Limited Partnership, 9.05%, Secured
Note, Cl. E, 4/15/04(5) 9,500,000 9,048,750
- ------------------------------------------------------------------------------------------------------------------------------------
Total Mortgage/Asset-Backed Obligations (Cost $268,347,594) 269,572,362
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Bonds and Notes--35.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials--4.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--1.7%
Acme Metals, Inc., 12.50% Sr. Sec. Nts., 8/1/02 6,500,000 6,597,500
- ------------------------------------------------------------------------------------------------------------------------------------
Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04(5) 2,000,000 2,030,000
- ------------------------------------------------------------------------------------------------------------------------------------
Atlantis Group, Inc., 11% Sr. Nts., 2/15/03 9,000,000 8,865,000
- ------------------------------------------------------------------------------------------------------------------------------------
Carbide/Graphite Group, Inc., 11.50% Sr. Nts., 9/1/03 15,500,000 15,848,750
</TABLE>
7 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
------- ------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals (continued)
Harris Chemical North America, Inc.:
0%/10.25% Gtd. Sr. Sec. Disc. Nts., 7/15/01(3) $12,500,000 $10,187,500
10.75% Gtd. Sr. Sub. Nts., 10/15/03 1,000,000 942,500
- ------------------------------------------------------------------------------------------------------------------------------------
Malette, Inc., 12.25% Sr. Sec. Nts., 7/15/04 3,750,000 3,881,250
- ------------------------------------------------------------------------------------------------------------------------------------
NL Industries Inc.:
11.75% Sr. Sec. Nts., 10/15/03 500,000 516,250
0%/13% Sr. Sec. Disc. Nts., 10/15/05(3) 1,250,000 795,313
- ------------------------------------------------------------------------------------------------------------------------------------
Quantum Chemical Corp., 10.375% Fst. Mtg. Nts., 6/1/03 3,500,000 3,883,799
- ------------------------------------------------------------------------------------------------------------------------------------
Rexene Corp.:
9% Fst. Priority Nts., 11/15/99(8) 2,535,000 2,522,325
10% 2nd Priority Nts., 11/15/02(6) 3,706,000 3,536,143
- ------------------------------------------------------------------------------------------------------------------------------------
Sherritt, Inc., 11.00% Debs., 3/31/04 10,000,000(1) 7,175,639
- ------------------------------------------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/01/02 12,275,000 12,397,750
USG Corp., 9.25%, 9/15/01 3,200,000 3,048,000
- ------------------------------------------------------------------------------------------------------------------------------------
82,227,719
- ------------------------------------------------------------------------------------------------------------------------------------
Metals--0.8%
Haynes International, Inc., 11.25% Sr. Sec. Nts., 6/15/98 3,000,000 2,565,000
- ------------------------------------------------------------------------------------------------------------------------------------
Horsehead Industries, Inc.:
13.50% Extd. Nts., 6/1/97(4) 4,566,000 4,702,980
14% Sub. Nts., 6/1/99 5,050,000 4,974,250
- ------------------------------------------------------------------------------------------------------------------------------------
Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00 2,000,000 2,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.:
9.875% Sr. Nts., 2/15/02 4,175,000 3,715,750
12.75% Sr. Sub. Nts., 2/1/03 16,850,000 16,386,625
- ------------------------------------------------------------------------------------------------------------------------------------
Stelco, Inc., 10.25% Debs., 4/30/96 4,300,000(1) 3,173,683
- ------------------------------------------------------------------------------------------------------------------------------------
37,518,288
- ------------------------------------------------------------------------------------------------------------------------------------
Paper and Forest
Products--1.7%
Domtar, Inc., 10.85% Debs., 8/15/17 2,500,000(1) 1,703,049
- ------------------------------------------------------------------------------------------------------------------------------------
Equitable Bag, Inc., 12.375% Sr. Nts., 8/15/02(2) 1,830,000 1,070,550
- ------------------------------------------------------------------------------------------------------------------------------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 8,450,000 8,661,250
- ------------------------------------------------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 14,370,000 13,471,875
- ------------------------------------------------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 17,500,000 15,312,500
- ------------------------------------------------------------------------------------------------------------------------------------
Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01 3,250,000 3,258,125
- ------------------------------------------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.75% Sr. Nts., 6/15/00 5,000,000 5,225,000
11.25% Sr. Sub. Nts., 6/15/02 950,000 997,500
10.375% Sr. Sub. Nts., 6/30/04 3,600,000 3,681,000
- ------------------------------------------------------------------------------------------------------------------------------------
Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts., 7/20/15 2,645,897 2,435,522
- ------------------------------------------------------------------------------------------------------------------------------------
Stone Container Corp.:
9.875% Sr. Nts., 2/1/01 18,300,000 17,224,875
10.75% Sr. Sub. Debs., 4/1/02 300,000 286,500
10.75% Fst. Mtg. Nts., 10/1/02 4,100,000 4,094,875
- ------------------------------------------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 5,125,000 5,060,938
- ------------------------------------------------------------------------------------------------------------------------------------
82,483,559
</TABLE>
8 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
------- ------------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals--9.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive--0.6% Envirotest Systems Corp.:
9.125% Sr. Nts., 3/15/01 $3,000,000 $2,782,500
9.625% Sr. Sub. Nts., 4/1/03 8,940,000 8,224,800
- ------------------------------------------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp., 11.875% Sr. Sub. Debs., 10/1/04 2,600,000 2,626,000
- ------------------------------------------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp., Units(5) 8,750,000 4,856,250
- ------------------------------------------------------------------------------------------------------------------------------------
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01 2,500,000 2,525,000
- ------------------------------------------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 8,600,000 7,955,000
- ------------------------------------------------------------------------------------------------------------------------------------
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02 1,350,000 1,410,750
- ------------------------------------------------------------------------------------------------------------------------------------
30,380,300
- ------------------------------------------------------------------------------------------------------------------------------------
Construction Supplies and
Development--0.9%
Baldwin Co., 10.375% Sr. Nts., Series B, 8/1/03 9,000,000 7,605,000
- ------------------------------------------------------------------------------------------------------------------------------------
Dal-Tile International, Inc., 0% Sr. Sec. Nts., 7/15/98 21,500,000 13,491,250
- ------------------------------------------------------------------------------------------------------------------------------------
Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 6,900,000 6,555,000
- ------------------------------------------------------------------------------------------------------------------------------------
NVR, Inc., 11% Gtd. Sr. Nts., 4/15/03 3,490,000 3,193,350
- ------------------------------------------------------------------------------------------------------------------------------------
USG Corp., 10.25% Sr. Sec. Nts., 12/15/02 10,967,000 11,241,175
- ------------------------------------------------------------------------------------------------------------------------------------
Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/99(2) 742,000 1,253,980
- ------------------------------------------------------------------------------------------------------------------------------------
43,339,755
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Goods
and Services--2.6%
Amstar Corp., 11.375% Sr. Sub. Nts., 2/15/97 10,886,000 10,777,140
- ------------------------------------------------------------------------------------------------------------------------------------
Coleman Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 5/27/98 13,450,000 9,078,750
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Pepper Bottling Co. of Texas, 10.25% Sr. Nts., 2/15/00 3,000,000 3,030,000
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Pepper/Seven-Up Cos., Inc., 0%/11.50% Sr. Sub. Disc. Nts., 11/1/02(3) 4,118,000 3,294,400
- ------------------------------------------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 23,000,000 24,610,000
- ------------------------------------------------------------------------------------------------------------------------------------
Insilco Corp., 10.375% Sr. Sec. Nts., 7/1/97 5,866,000 5,961,323
- ------------------------------------------------------------------------------------------------------------------------------------
Interco, Inc., 9% Sec. Nts., Series B, 6/1/04(5) 17,826,000 17,539,045
- ------------------------------------------------------------------------------------------------------------------------------------
MacAndrews & Forbes Group, Inc., Sub. Nts., 12.25%, 7/1/96 1,565,000 1,561,088
- ------------------------------------------------------------------------------------------------------------------------------------
MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 4,915,000 4,890,425
- ------------------------------------------------------------------------------------------------------------------------------------
Mary Kay Corp.:
12.75% Gtd. Sr. Nts., Series B, 12/6/00(5) 1,000,000 1,045,000
10.25% Sr. Nts., 12/31/00(5) 9,875,000 9,677,500
- ------------------------------------------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01 4,150,000 3,934,893
- ------------------------------------------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc., 12% Sr. Sub. Nts., Series B, 11/1/03 6,500,000 6,207,500
- ------------------------------------------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 9.375% Sr. Nts., 4/1/01 5,200,000 4,563,041
- ------------------------------------------------------------------------------------------------------------------------------------
Revlon Worldwide Corp., 0% Sr. Sec. Disc. Nts., 3/15/98 15,450,000 7,184,250
- ------------------------------------------------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 9,450,000 8,587,688
- ------------------------------------------------------------------------------------------------------------------------------------
121,942,043
- ------------------------------------------------------------------------------------------------------------------------------------
Entertainment--1.8%
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(5) 5,775,000 5,053,125
- ------------------------------------------------------------------------------------------------------------------------------------
Aztar Corp., 11% Sr. Sub. Nts., 10/1/02 6,250,000 5,507,813
- ------------------------------------------------------------------------------------------------------------------------------------
Aztar Mortgage Funding, Inc., 13.50% Gtd. Fst. Mtg. Nts., 9/15/96 2,220,000 2,203,350
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc., 11.50% Sr. Sec. Nts., 2/1/01 3,100,000 2,170,000
- ------------------------------------------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(5) 4,200,000 3,255,000
- ------------------------------------------------------------------------------------------------------------------------------------
Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 12,800,000 13,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
Hollywood Casino Corp., 13.50% Fst. Mtg. Nts., 9/30/98 3,500,000 2,992,500
- ------------------------------------------------------------------------------------------------------------------------------------
Hollywood Casino, 14%, 4/1/98 3,000,000 3,105,000
- ------------------------------------------------------------------------------------------------------------------------------------
Kloster Cruise Ltd., 13% Sr. Sec. Nts., 5/1/03 14,000,000 13,930,000
</TABLE>
9 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Entertainment
(continued)
Lady Luck Gaming Finance Corp., 10.50% Fst. Mtg. Nts., 3/1/01 $4,020,000 $1,809,000
- ------------------------------------------------------------------------------------------------------------------------------------
MGM Grand Hotel Finance Corp, 11.75% Fst. Mtg. Nts., Series A, 5/1/99 5,000,000 5,337,500
- ------------------------------------------------------------------------------------------------------------------------------------
Maritime Group Ltd., Units(4)(5)(6) 2,939,466 2,330,262
- ------------------------------------------------------------------------------------------------------------------------------------
Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 7,050,000 4,406,250
- ------------------------------------------------------------------------------------------------------------------------------------
Marvel Holdings, Inc., 0% Sr. Sec. Disc. Nts., Series B, 4/15/98 12,500,000 7,843,750
- ------------------------------------------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 10,000,000 8,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
Treasure Bay Gaming & Resorts, Inc., Units(5) 4,050,000 1,235,250
- ------------------------------------------------------------------------------------------------------------------------------------
Treasure Bay Gaming, 12.25% Fst. Mtg. Nts., 11/15/00(5) 1,125,000 354,375
- ------------------------------------------------------------------------------------------------------------------------------------
Trump Plaza Funding, 10.875%, 6/15/01 1,000,000 712,500
- ------------------------------------------------------------------------------------------------------------------------------------
United Gaming, Inc., 7.50% Cv. Sub. Debs., 9/15/03 1,540,000 1,287,825
- ------------------------------------------------------------------------------------------------------------------------------------
85,733,500
- ------------------------------------------------------------------------------------------------------------------------------------
Hotels/Lodging--0.1%
Embassy Suites, Inc., 10.875% Gtd. Sr. Sub. Nts., 4/15/02 2,250,000 2,340,000
- ------------------------------------------------------------------------------------------------------------------------------------
Host Marriott Hospitality, Inc., 11% Sr. Nts., Series L, 5/1/07 4,353,000 4,380,206
- ------------------------------------------------------------------------------------------------------------------------------------
6,720,206
- ------------------------------------------------------------------------------------------------------------------------------------
Media--1.8%
Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 8,850,000 8,584,500
- ------------------------------------------------------------------------------------------------------------------------------------
Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03 1,000,000 955,000
- ------------------------------------------------------------------------------------------------------------------------------------
GSPI Corp., 10.15% Fst. Mtg. Bonds, 6/24/10(5) 835,202 896,590
- ------------------------------------------------------------------------------------------------------------------------------------
General Media, Inc., 10.625% Sr. Sec. Nts., 12/31/00 4,000,000 3,740,000
- ------------------------------------------------------------------------------------------------------------------------------------
Infinity Broadcasting Corp., 10.375% Sr. Sub. Nts., 3/15/02 4,000,000 4,160,000
- ------------------------------------------------------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 12,000,000 11,730,000
- ------------------------------------------------------------------------------------------------------------------------------------
News America Holdings, Inc.:
12% Sr. Nts., 12/15/01 2,500,000 2,849,190
8.50% Sr. Nts., 2/15/02 6,000,000 5,815,097
8.625%, Sr. Nts., 2/1/03 10,400,000 10,298,006
10.125% Gtd. Sr. Debs., 10/15/12 3,300,000 3,461,541
- ------------------------------------------------------------------------------------------------------------------------------------
SCI Television, Inc.:
7.50% Fst. Sec. Loan Nts., 6/30/98 4,380,331 4,281,774
11% Sr. Sec. Nts., 6/30/05 5,653,155 5,759,152
- ------------------------------------------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., 11.375% Sr. Sub. Nts., 10/1/08 3,000,000 3,127,500
- ------------------------------------------------------------------------------------------------------------------------------------
Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 12,925,000 12,537,250
- ------------------------------------------------------------------------------------------------------------------------------------
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 5,500,000 5,836,875
- ------------------------------------------------------------------------------------------------------------------------------------
84,032,475
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate Development--0.5%
Casino Magic Finance Corp., 11.50% Fst. Mtg. Nts., 10/15/01 4,150,000 3,216,250
- ------------------------------------------------------------------------------------------------------------------------------------
Noranda Forest, Inc., 11% Debs., 7/15/98 2,000,000(1) 1,580,504
- ------------------------------------------------------------------------------------------------------------------------------------
Olympia & York First Canadian Place Ltd., 11% Debs., Series 3, 11/4/49(2) 5,150,000(1) 2,380,448
- ------------------------------------------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 17,000,000 15,385,000
- ------------------------------------------------------------------------------------------------------------------------------------
22,562,202
- ------------------------------------------------------------------------------------------------------------------------------------
Retail--1.4%
Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 17,950,000 17,680,750
- ------------------------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 7,000,000 5,915,000
- ------------------------------------------------------------------------------------------------------------------------------------
Finlay Enterprises, Inc., 0%/12% Sr. Disc. Debs., 5/1/05(3) 750,000 435,000
- ------------------------------------------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 8,370,000 7,951,500
- ------------------------------------------------------------------------------------------------------------------------------------
Parisian, Inc., 9.875% Sr. Sub. Nts., 7/15/03 11,500,000 9,775,000
- ------------------------------------------------------------------------------------------------------------------------------------
R.H. Macy & Co., Inc., 14.50% Sr. Sub. Debs., 10/15/98(2) 7,450,000 5,364,000
</TABLE>
10 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Retail (continued)
Sears Canada, Inc.:
11.75% Debs., 12/5/95 $2,400,000(1) $1,874,240
11.70% Debs., 7/10/00 3,150,000(1) 2,542,133
- ------------------------------------------------------------------------------------------------------------------------------------
Southland Corp., 4.50% 2nd Priority Sr. Sub. Debs., Series A, 6/15/04 4,850,000 3,031,250
- ------------------------------------------------------------------------------------------------------------------------------------
Waban, Inc., 11% Sr. Sub. Nts., 5/15/04 8,000,000 7,920,000
- ------------------------------------------------------------------------------------------------------------------------------------
Zale Delaware, Inc., 11% Gtd. 2nd Priority Sr. Sec. Nts., 7/30/00 2,000,000 2,005,000
- ------------------------------------------------------------------------------------------------------------------------------------
64,493,873
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Cyclicals--4.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Food--2.6%
Family Restaurant, Inc.:
9.75% Sr. Nts., 2/1/02 8,000,000 7,040,000
0%/10.875% Sr. Sub. Disc. Nts., 2/1/04(3) 14,850,000 8,984,250
- ------------------------------------------------------------------------------------------------------------------------------------
Farm Fresh, Inc., 12.25% Sr. Nts., 10/1/00 10,350,000 8,952,750
- ------------------------------------------------------------------------------------------------------------------------------------
Flagstar Corp., 10.75% Sr. Nts., 9/15/01 4,000,000 3,790,000
- ------------------------------------------------------------------------------------------------------------------------------------
Food 4 Less Supermarkets, Inc., 13.75% Sr. Sub Nts., 6/15/01 1,500,000 1,620,000
- ------------------------------------------------------------------------------------------------------------------------------------
Foodmaker, Inc., 14.25% Sr. Sub. Nts., 5/15/98 15,000,000 15,768,750
- ------------------------------------------------------------------------------------------------------------------------------------
Heileman Acquisition Corp., 9.625% Sr. Sub. Nts., 1/31/04 8,050,000 6,862,625
- ------------------------------------------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01(2) 1,000,000 285,000
- ------------------------------------------------------------------------------------------------------------------------------------
Pulsar Internacional, S.A. de C.V.:
8%, Nts., 12/14/94(5) 30,000,000 30,000,000
9%, Nts., 9/19/95(5) 14,750,000 14,750,000
- ------------------------------------------------------------------------------------------------------------------------------------
RJR Nabisco, Inc., 8.625% Medium-Term Nts., 12/1/02 20,000,000 18,255,759
- ------------------------------------------------------------------------------------------------------------------------------------
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00 2,000,000 1,865,000
- ------------------------------------------------------------------------------------------------------------------------------------
Specialty Foods, 10.25% Sr. Nts., 8/15/01 6,100,000 5,490,000
- ------------------------------------------------------------------------------------------------------------------------------------
123,664,134
- ------------------------------------------------------------------------------------------------------------------------------------
Food and Drug Distribution--1.1%
Alco Health Distribution Corp., 11.25% Sr. Debs., 7/15/05(6) 13,540,068 13,248,117
- ------------------------------------------------------------------------------------------------------------------------------------
Di Giorgio Corp., 12% Sr. Nts., 2/15/03 8,680,000 8,680,000
- ------------------------------------------------------------------------------------------------------------------------------------
Duane Reade, 12% Sr. Nts., Series B, 9/15/02 2,250,000 2,182,500
- ------------------------------------------------------------------------------------------------------------------------------------
Grand Union Co.:
11.25% Sr. Nts., 7/15/00 8,350,000 7,577,625
12.25% Sr. Sub. Nts., 7/15/02 8,200,000 6,068,000
- ------------------------------------------------------------------------------------------------------------------------------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 7,350,000 6,504,750
- ------------------------------------------------------------------------------------------------------------------------------------
Thrifty Payless Holdings, 12.25% Sr. Sub. Nts., 4/15/04 2,000,000 2,065,000
- ------------------------------------------------------------------------------------------------------------------------------------
Thrifty Payless, Inc., 11.75% Sr. Nts., 4/15/03 5,000,000 4,987,500
- ------------------------------------------------------------------------------------------------------------------------------------
51,313,492
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare--0.6%
Abbey Healthcare Group, Inc., 9.50% Sr. Sub. Nts., 11/1/02 2,000,000 1,835,000
- ------------------------------------------------------------------------------------------------------------------------------------
American Medical International, Inc.:
11.25% Nts., 2/6/95 1,060,000(1) 1,684,158
13.50% Sr. Sub. Nts., 8/15/01 1,200,000 1,342,500
- ------------------------------------------------------------------------------------------------------------------------------------
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04(5) 3,000,000 3,105,000
- ------------------------------------------------------------------------------------------------------------------------------------
Mediq/PRN Life Support Services, Inc., 11.125% Sr. Sec. Nts., 7/1/99 3,000,000 2,835,000
- ------------------------------------------------------------------------------------------------------------------------------------
Multicare Cos., Inc. (The), 12.50% Sr. Sub. Nts., 7/1/02 6,290,000 7,327,850
- ------------------------------------------------------------------------------------------------------------------------------------
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02 3,750,000 4,003,125
- ------------------------------------------------------------------------------------------------------------------------------------
Total Renal Care, Inc., Units 9,700,000 6,984,000
- ------------------------------------------------------------------------------------------------------------------------------------
29,116,633
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
11 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--1.9%
Global Marine, Inc., 12.75% Sr. Sec. Nts., 12/15/99 $2,600,000 $2,827,500
- ------------------------------------------------------------------------------------------------------------------------------------
Gulf Canada Resources Ltd., 9.25% Sr. Sub. Debs., 1/15/04 10,500,000 9,667,875
- ------------------------------------------------------------------------------------------------------------------------------------
HS Resources, Inc., 9.875% Sr. Sub. Nts., 12/1/03 3,750,000 3,543,750
- ------------------------------------------------------------------------------------------------------------------------------------
Maxus Energy Corp.:
9.875% Nts., 10/15/02 4,550,000 4,390,750
8.50% Debs., 4/1/08 5,000,000 4,306,250
11.50% Debs., 11/15/15 3,500,000 3,517,500
- ------------------------------------------------------------------------------------------------------------------------------------
Mesa Capital Corp., 0%/12.75% Sec. Disc. Nts., 6/30/98(3) 21,047,000 18,679,213
- ------------------------------------------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 13,000,000 14,852,500
- ------------------------------------------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc., 9.375% Sub. Debs., 2/1/06 1,700,000 1,566,125
- ------------------------------------------------------------------------------------------------------------------------------------
Presidio Oil Co.:
11.50% Sr. Sec. Nts., Series B, 9/15/00 6,564,500 6,269,098
13.90% Sr. Sub. Gas Indexed Nts., Series B, 7/15/02(4) 5,250,000 4,672,500
- ------------------------------------------------------------------------------------------------------------------------------------
Rowan Cos., Inc., 11.875% Sr. Nts., 12/1/01 7,500,000 8,025,000
- ------------------------------------------------------------------------------------------------------------------------------------
TGX Corp., 12.675% Sr. Sub. Exch. Nts., 4/1/94(2) 6,920,000 2,802,600
- ------------------------------------------------------------------------------------------------------------------------------------
Triton Energy Corp., 0% Sr. Sub. Disc. Nts., 11/1/97 3,500,000 2,572,500
- ------------------------------------------------------------------------------------------------------------------------------------
87,693,161
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--3.5%
Acadia Partners LP, 13% Sub.Nts., 10/1/97(5) 25,000,000 25,750,000
- ------------------------------------------------------------------------------------------------------------------------------------
Banco Ganadero SA, 9.75%, 8/26/99(5) 13,700,000 13,802,750
- ------------------------------------------------------------------------------------------------------------------------------------
Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99(4) 4,500,000 4,820,625
- ------------------------------------------------------------------------------------------------------------------------------------
Borg-Warner Security Corp, 9.125%, Sr. Sub. Nts., 5/1/03 5,360,000 4,837,400
- ------------------------------------------------------------------------------------------------------------------------------------
Card Establishment Services, Inc., 10% Sr. Sub. Nts., Series B, 10/1/03 17,275,000 16,324,875
- ------------------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(5) 1,611,387 1,772,526
- ------------------------------------------------------------------------------------------------------------------------------------
Grupo Mexicano de Desarrollo S.A., 8.25%, Gtd. Nts., 2/17/01(5) 14,700,000 12,090,750
- ------------------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development Bonds, 12.50%, 7/25/97 60,320,000(1) 39,253,853
- ------------------------------------------------------------------------------------------------------------------------------------
Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 2,500,000 2,718,750
- ------------------------------------------------------------------------------------------------------------------------------------
Nacolah Holding Corp., 9.50% Sr. Nts., 12/1/03 6,500,000 5,801,250
- ------------------------------------------------------------------------------------------------------------------------------------
Navistar Financial Corp., 9.50% Medium-Term Nts., 6/1/96 6,075,000 6,101,122
- ------------------------------------------------------------------------------------------------------------------------------------
Pioneer Finance, 13.50% Fst Mtg. Bonds, 12/1/98 18,205,000 16,839,625
- ------------------------------------------------------------------------------------------------------------------------------------
Reliance Group Holdings, Inc., 9.75% Sr. Sub. Debs., 11/15/03 3,200,000 2,896,016
- ------------------------------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(5) 13,700,000 12,364,250
- ------------------------------------------------------------------------------------------------------------------------------------
165,373,792
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial--2.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Containers--0.8%
Calmar, Inc., 12% Sr. Sec. Nts., 12/15/97 7,000,000 7,017,500
- ------------------------------------------------------------------------------------------------------------------------------------
Calmar Spraying Systems, Inc., 14% Sr. Sub. Disc. Nts., 2/15/99 3,850,000 3,869,250
- ------------------------------------------------------------------------------------------------------------------------------------
Owens-Illinois, Inc., 10% Sr. Sub. Nts., 8/1/02 2,100,000 2,110,500
- ------------------------------------------------------------------------------------------------------------------------------------
Sea Containers Ltd.:
9.50% Sr. Nts., 7/1/03 4,750,000 4,405,625
12.50% Sr. Sub. Debs., Series A, 12/1/04 2,850,000 2,985,375
- ------------------------------------------------------------------------------------------------------------------------------------
Terex Corp., 13% Sr. Nts., 8/1/96(5) 4,065,000 3,780,450
- ------------------------------------------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 11,900,000 11,840,500
- ------------------------------------------------------------------------------------------------------------------------------------
36,009,200
</TABLE>
12 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
General Industrial--0.9%
EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 $15,785,000 $14,364,350
- ------------------------------------------------------------------------------------------------------------------------------------
Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97 3,850,000 3,898,125
- ------------------------------------------------------------------------------------------------------------------------------------
Pace Industries, 10.625% Sr. Nts., 12/1/02 12,300,000 11,193,000
- ------------------------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(5) 3,900,000 3,900,000
- ------------------------------------------------------------------------------------------------------------------------------------
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01 3,450,000 3,907,125
- ------------------------------------------------------------------------------------------------------------------------------------
United States Banknote Corp., 11.625%, 8/1/02 4,220,000 3,776,900
- ------------------------------------------------------------------------------------------------------------------------------------
41,039,500
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--0.8%
Chrysler Corp., 13% Debs., 3/1/97 500,000 513,706
- ------------------------------------------------------------------------------------------------------------------------------------
Chrysler Financial Corp., 13.25% Sr. Nts., 10/15/99 4,500,000 5,485,211
- ------------------------------------------------------------------------------------------------------------------------------------
Tiphook Financial Corp.:
7.125% Gtd. Nts., 5/1/98 5,000,000 3,625,000
8% Gtd. Nts., 3/15/00 5,583,000 3,852,270
- ------------------------------------------------------------------------------------------------------------------------------------
Transportacion Maritima Mexicana S.A.:
8.50% Nts., 10/15/00 4,000,000 3,525,000
9.25% Nts., 5/15/03 11,000,000 9,693,750
- ------------------------------------------------------------------------------------------------------------------------------------
Transtar Holdings LP/Transtar Capital Corp., 0%/13.375% Sr. Disc. Nts.,
Series B, 12/15/03(3) 19,266,000 10,548,135
- ------------------------------------------------------------------------------------------------------------------------------------
Trism, Inc., 10.75% Sr. Sub. Nts., 12/15/00 1,250,000 1,226,563
- ------------------------------------------------------------------------------------------------------------------------------------
38,469,635
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--7.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace/Defense--1.0%
GPA Delaware, Inc.:
8.75% Gtd. Nts., 12/15/98 5,255,000 4,414,200
9.75%, 12/10/01 2,000,000 1,545,000
- ------------------------------------------------------------------------------------------------------------------------------------
GPA Holland BV:
8.50% Medium-Term Nts., 2/10/97(5) 10,500,000 9,318,750
8.625% Medium-Term Nts., Series C, 1/15/99(5) 4,750,000 3,752,500
8.94% Medium-Term Nts., Series C, 2/16/99 2,000,000 1,595,000
9.50% Medium-Term Nts., Series A, 12/15/01(5) 1,500,000 1,155,000
- ------------------------------------------------------------------------------------------------------------------------------------
GPA Investment BV, 6.40% Nts., 11/19/98 2,000,000 1,505,000
- ------------------------------------------------------------------------------------------------------------------------------------
GPA Netherlands BV, 8.50% Medium-Term Nts., 3/3/97(5) 6,500,000 5,752,500
- ------------------------------------------------------------------------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts., 5/15/03 1,800,000 1,845,000
- ------------------------------------------------------------------------------------------------------------------------------------
Sequa Corp., 8.75% Sr. Nts., 12/15/01 9,000,000 8,325,000
- ------------------------------------------------------------------------------------------------------------------------------------
Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05 17,296,000 9,080,400
- ------------------------------------------------------------------------------------------------------------------------------------
48,288,350
- ------------------------------------------------------------------------------------------------------------------------------------
Cable Television--2.7%
Adelphia Communications Corp.:
10.25% Sr. Nts., Series B, 7/15/00 2,000,000 1,840,000
12.50% Sr. Nts., 5/15/02 6,740,000 6,740,000
- ------------------------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc., 12.50%, Sr. Disc. Nts., 6/15/04 17,600,000 8,624,000
- ------------------------------------------------------------------------------------------------------------------------------------
Bell Media Cable, 11.95%, 7/15/04 6,125,000 3,498,906
- ------------------------------------------------------------------------------------------------------------------------------------
Cablevision Systems Corp.:
14% Sr. Sub. Reset Debs., 11/15/03(4) 7,900,000 7,998,750
10.75% Sr. Sub. Debs., 4/1/04 2,525,000 2,575,500
9.875% Sr. Sub. Debs., 2/15/13 5,550,000 5,175,375
9.875% Sr. Sub. Debs., 2/15/13 2,000,000 1,840,000
- ------------------------------------------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(3)(5) 12,600,000 7,985,224
- ------------------------------------------------------------------------------------------------------------------------------------
Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 6,600,000 4,092,000
</TABLE>
13 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Cable Television
(continued)
Continental Broadcasting Ltd./Continental Broadcasting Capital Corp.,
10.625% Sr. Sub. Nts., 7/1/03 $7,150,000 $7,230,438
- ------------------------------------------------------------------------------------------------------------------------------------
Continental Cablevision, Inc., 9.50% Sr. Debs., 8/1/13 8,200,000 7,462,000
- ------------------------------------------------------------------------------------------------------------------------------------
Echostar Communications Corp., Units 23,250,000 11,160,000
- ------------------------------------------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B, 11/1/03(4) 17,500,000 15,837,500
- ------------------------------------------------------------------------------------------------------------------------------------
International CableTel, Inc., 0%/10.875% Sr. Def. Cpn. Nts., 10/15/03(3) 3,600,000 2,016,000
- ------------------------------------------------------------------------------------------------------------------------------------
Marcus Cable, 0%/13.5% Gtd. Sr. Sub. Disc. Nts., 8/1/04(3) 13,200,000 7,227,000
- ------------------------------------------------------------------------------------------------------------------------------------
New World Communications Holding Corp., 0%, 6/15/99(5) 17,000,000 9,201,250
- ------------------------------------------------------------------------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 2,000,000 2,010,000
- ------------------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc.:
7.45% Nts., 2/1/98 800,000 787,000
7.95% Nts., 2/1/00 3,020,000 2,955,825
- ------------------------------------------------------------------------------------------------------------------------------------
Time Warner, Inc./Time Warner Entertainment LP, 10.15% Sr. Nts., 5/1/12 1,000,000 1,053,737
- ------------------------------------------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 8,000,000 8,690,000
- ------------------------------------------------------------------------------------------------------------------------------------
126,000,505
- ------------------------------------------------------------------------------------------------------------------------------------
Communications--2.4%
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03(3) 26,626,000 17,573,160
- ------------------------------------------------------------------------------------------------------------------------------------
Centennial Cellular Corp., 8.875% Sr. Nts., 11/1/01 15,250,000 13,801,250
- ------------------------------------------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(3) 21,402,000 15,409,440
- ------------------------------------------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04(3) 12,400,000 7,347,000
- ------------------------------------------------------------------------------------------------------------------------------------
New City Communications, Inc., 11.375%, Sr. Sub. Nts., 11/1/03 17,975,000 18,199,688
- ------------------------------------------------------------------------------------------------------------------------------------
Nextel Communications, Inc., 0%/9.75% Sr. Disc. Nts., 8/15/04(3) 4,675,000 2,314,125
- ------------------------------------------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
9.75% Sr. Sec. Nts., 8/1/00 3,600,000 3,591,000
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(3) 33,700,000 22,663,250
- ------------------------------------------------------------------------------------------------------------------------------------
Rogers Communications, Inc., 10.875% Sr. Debs., 4/15/04 2,200,000 2,249,500
- ------------------------------------------------------------------------------------------------------------------------------------
USA Mobile Communication, Inc. II, 9.50% Sr. Nts., 2/1/04 9,350,000 8,415,000
- ------------------------------------------------------------------------------------------------------------------------------------
111,563,413
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--1.4%
Bell & Howell Holdings Co.:
10.75% Sr. Sub. Nts., Series B, 10/1/02 2,000,000 1,950,000
0%/10.75% Sr. Disc. Debs., Series B, 3/1/05(3) 28,450,000 14,936,250
- ------------------------------------------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp., 11.375% Sr. Sub. Debs., 5/1/03 2,100,000 2,147,250
- ------------------------------------------------------------------------------------------------------------------------------------
Computervision Corp., 10.875% Sr. Nts., 8/15/97 4,650,000 4,336,125
- ------------------------------------------------------------------------------------------------------------------------------------
Dell Computer Corp., 11% Sr. Nts, 8/15/00 9,500,000 9,951,250
- ------------------------------------------------------------------------------------------------------------------------------------
Imax Corp., 7% Sr. Nts., 3/1/01(8) 13,200,000 11,550,000
- ------------------------------------------------------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc.,
0%/11.50% Sr. Sec. Disc. Nts., 8/15/03(3) 24,000,000 11,340,000
- ------------------------------------------------------------------------------------------------------------------------------------
Unisys Corp.:
9.75% Sr. Nts., 9/15/96 2,000,000 2,026,100
13.50% Credit Sensitive Nts., 7/1/97 4,200,000 4,567,517
8.875% Nts., 7/15/97 1,000,000 977,135
9.75% Sr. Nts., 9/15/16 3,900,000 3,460,263
- ------------------------------------------------------------------------------------------------------------------------------------
67,241,890
</TABLE>
14 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--2.0%
Beaver Valley Funding Corp., 9% Debs., 6/1/17 $20,400,000 $15,520,666
- ------------------------------------------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(3) 17,575,000 12,610,063
- ------------------------------------------------------------------------------------------------------------------------------------
Coastal Corp., 11.75% Sr. Debs., 6/15/06 2,500,000 2,743,750
- ------------------------------------------------------------------------------------------------------------------------------------
Del Norte Funding Corp.:
9.95% Debs., 1/2/98(2) 5,000,000 2,601,765
11.25% Debs., 1/2/14(2) 3,350,000 1,744,459
- ------------------------------------------------------------------------------------------------------------------------------------
El Paso Electric Co.:
9.20% Debs., 7/2/97(2) 1,500,000 810,487
10.375% Lease Obligation Debs., 1/15/94(2) 12,750,000 6,895,735
- ------------------------------------------------------------------------------------------------------------------------------------
El Paso Funding Corp.:
9.375% Debs., 1/1/96(2) 6,000,000 3,241,415
10.75% Debs., 4/1/13(2) 11,900,000 6,485,500
- ------------------------------------------------------------------------------------------------------------------------------------
First PV Funding Corp., Lease Obligation Bonds:
10.30%, Series 1986A, 1/15/14 16,450,000 15,296,409
10.15%, Series 1986B, 1/15/16 20,100,000 18,484,870
- ------------------------------------------------------------------------------------------------------------------------------------
Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 125,000 131,362
- ------------------------------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(5) 9,500,000 8,763,750
- ------------------------------------------------------------------------------------------------------------------------------------
95,330,231
- ------------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds and Notes (Cost $1,779,466,288) 1,682,537,856
Shares
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stocks--0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp.(2)(5) 159,220 716,490
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Gaming, Inc.(6) 82,676 547,729
- ------------------------------------------------------------------------------------------------------------------------------------
Celcaribe SA(5) 2,048,760 2,504,275
- ------------------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(5) 525 525,000
- ------------------------------------------------------------------------------------------------------------------------------------
Ladish, Inc. 806,000 806,000
- ------------------------------------------------------------------------------------------------------------------------------------
New World Communications Group, Inc., Cl. A 44,672 636,576
- ------------------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. 232,222 2,264,165
- ------------------------------------------------------------------------------------------------------------------------------------
Trizec, Ltd. 52,913(1) 414,201
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost $7,871,447) 8,414,436
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred Stocks--0.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Berg Electronic Holdings, Series E(6) 81,248 2,193,696
- ------------------------------------------------------------------------------------------------------------------------------------
Dell Computer Corp., $7.00 Cv., Series A(5) 23,500 3,724,750
- ------------------------------------------------------------------------------------------------------------------------------------
First Madison Bank, FSB, 11.50% 95,000 9,975,000
- ------------------------------------------------------------------------------------------------------------------------------------
K-III Communications Corp.:
Sr. Exch., Series A 80,000 2,060,000
$11.625 Exch., Series B(6)(13) 53,248 5,218,378
- ------------------------------------------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 50,000 1,206,250
- ------------------------------------------------------------------------------------------------------------------------------------
Unisys Corp., $3.75 Cv., Series A 118,800 4,336,200
- ------------------------------------------------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost $27,762,014) 28,714,274
Units
- ------------------------------------------------------------------------------------------------------------------------------------
Rights, Warrants and Certificates--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Ctfs. 37,200 372
Litigation Trust Units 118,975 1,190
</TABLE>
15 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Investments (Continued)
Market Value
Units See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Rights, Warrants and
Certificates (continued)
Becker Gaming, Inc. Wts., Exp. 11/00(5) 262,500 $525,000
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99 69,024 224,328
- ------------------------------------------------------------------------------------------------------------------------------------
Casino America, Inc. Wts., Exp. 11/96 9,789 14,684
- ------------------------------------------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc. Wts., Exp. 10/03 7,000 70,000
- ------------------------------------------------------------------------------------------------------------------------------------
General Media, Inc. Wts., Exp. 12/00(5) 4,000 40,000
- ------------------------------------------------------------------------------------------------------------------------------------
Hollywood Casino Corp. Wts., Exp. 4/98 13,333 1,439,999
- ------------------------------------------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 11/03 182,000 584,220
- ------------------------------------------------------------------------------------------------------------------------------------
Santa Fe Hotel, Inc., Wts., Exp. 12/96 100 55,500
- ------------------------------------------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96(5) 13,935 20,903
- ------------------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. Wts., Exp. 1/98(5) 55,000 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total Rights, Warrants, and Certificates (Cost $1,705,251) 2,976,196
<CAPTION>
Face
Date/Price Amount
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Put Options Purchased--0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
OTC 96-20+ Put Tsy, 7.50%, 11/24 Oct. 12/.009531 $50,000,000 484,375
European OTC Deutsche Mark/U.S. Dollar Put Nov. 2/1.60DEM 338,733,106(1) 698,620
European OTC Deutsche Mark/U.S. Dollar Put Nov. 8/1.60DEM 169,366,553(1) 382,058
European OTC Deutsche Mark/U.S. Dollar Put Nov. 4/1.60DEM 169,366,553(1) 444,933
- ------------------------------------------------------------------------------------------------------------------------------------
Total Put Options Purchased (Cost $7,858,128) 2,009,986
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Instruments--5.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina Local Market Securities Trust:
Series I, 14.75%, 9/1/02(5) 3,750,000 3,750,000
Series II, 11.30%, 4/1/00(5) 23,400,000 23,576,670
- ------------------------------------------------------------------------------------------------------------------------------------
Bancario San Paolo, 14.28% CD, 10/18/94 6,500,000,000(1) 2,419,583
- ------------------------------------------------------------------------------------------------------------------------------------
Bayerishe Landesbank, N.Y. Branch:
Italian Lira Linked Confidence Nt., Girozentrale Branch,
10%, 8/7/95(5) 12,500,000 11,818,750
Italian Lira/Deutsche Mark Linked Confidence Nt., Girozentrale Branch,
10%, 8/7/95 24,580,000 24,029,408
Mexican Peso Linked Confidence Nt., Girozentrale Branch,
35.50%, 12/30/94(5) 19,980,000 19,630,350
- ------------------------------------------------------------------------------------------------------------------------------------
Citibank, 10.50%-17% CD, 8/18/94--8/28/95 31,736,857,279(1) 84,366,061
- ------------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs International Limited, 5.10%, 2/28/95 9,690,000 9,424,494
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., Standard & Poor's 500 Indexed-Linked Nts.:
4.85%, 11/16/94(5) 3,250,000 4,195,100
4.85%, 11/25/94(5) 300,000 410,490
4.85%, 11/25/94(5) 2,212,500 3,165,645
5.038%, 12/22/94(5) 2,000,000 2,665,400
- ------------------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Co. of New York
(Singapore Branch) CD, 12.15%, 2/3/95 14,898,412,500(1) 6,846,539
- ------------------------------------------------------------------------------------------------------------------------------------
Rabobank Certificate of Deposit:
Japanese Yen Maximum Rate Nts., 10%, 6/2/95(5) 12,500,000 11,620,000
British Pound Sterling Maximum Rate Nts., 10%, 6/2/95(5) 25,000,000 22,797,500
Structured Product Asset Return Certificates, 9.40%,
Series 94-2, 9/1/97(5) 10,000,000 9,969,000
</TABLE>
16 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Face Market Value
Amount See Note 1
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Instruments
(continued)
Swiss Bank Corporation Investment Banking, Inc.,
10% CD Sterling Rate Linked Nts., 7/3/95 $23,530,000 $23,209,992
- ------------------------------------------------------------------------------------------------------------------------------------
Total Structured Instruments (Cost $270,746,085) 263,894,982
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $4,938,344,549) 98.7% 4,669,617,762
- ------------------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 1.3 59,576,648
------- --------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.00% $4,729,194,410
------- --------------
------- --------------
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
1. Face amount is reported in foreign currency.
2. Non-income producing security.
3. Represents a zero coupon bond that converts to a fixed rate of interest at a
designated date in the future.
4. Represents the current interest rate for a variable rate security.
5. Restricted security-see Note 6 of Notes to Financial Statements.
6. Interest or dividend is paid in kind.
7. Partial interest payment was received.
8. Represents the current interest rate for an increasing rate security.
9. Principal-Only Strips represent the right to receive the monthly principal
payments on an underlying pool of mortgage loans. The value of these
securities generally increases as interest rates decline and prepayment
rates rise. The price of these securities is typically more volatile than
that of coupon-bearing bonds of the same maturity.
10. 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).
11. Securities with an aggregate market value of $936,675 are held in escrow to
cover initial margin requirements on open interest rate futures sales
contracts, as follows:
Type of Contract Number of Contracts Face Amount
----------------------------------------------------------------------------
U.S. Treasury Nts., 12/94 245 $24,921,094
U.S. Treasury Bonds, 12/94 89 8,808,219
The market value of the open contracts was $33,665,282 at September 30,
1994, with a net unrealized gain of $64,031.
12. Securities with an aggregate market value of $22,128,750 are held in escrow
to cover outstanding call options, as follows:
Shares Expiration Exercise Premium Market Value
Subject to Call Date Price Received See Note 1
------------------------------------------------------------------------------------------------------
OTC 96-20 Put Tsy 7.50 11/24 300,000 10/12/94 1.000156 $609,375 $937,500
European OTC Deutsche Mark/U.S. Dollar 73,914,099 11/04/94 1.50 DEM 355,784 218,277
European OTC Deutsche Mark/U.S. Dollar 33,207,784 11/04/94 1.60 DEM 872,628 1,096,836
European OTC Deutsche Mark/U.S. Dollar 147,828,199 11/02/94 1.50 DEM 686,696 389,856
European OTC Deutsche Mark/U.S. Dollar 66,415,567 11/02/94 1.60 DEM 1,732,112 2,213,366
European OTC Deutsche Mark/U.S. Dollar 73,914,100 11/08/94 1.54 DEM 881,869 908,660
European OTC Deutsche Mark/U.S. Dollar 33,207,784 11/08/94 1.60 DEM 903,055 1,136,225
Argentina (Republic of) OTC U.S. Dollar 25,000 11/16/94 .7533 500,000 540,000
---------
------------------------------------------------------------------------------------------------------
$6,541,519 $7,440,720
13. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the year ended September 30,
1994. The aggregate fair value of all securities of affiliated companies as
of September 30, 1994 amounted to $5,218,378. Transactions during the period
in which the issuer was an affiliate are as follows:
Balance Balance
September 30, 1993 Gross Additions Gross Reductions September 30, 1994
------------------------------ ---------------- ---------------- ------------------------------
Dividend
Shares Cost Shares Cost Shares Cost Shares Cost Income
-------- ------ ---------- ------ ---------- ------ ------- ------ ---------- --------
K-III Communications Corp., $11.625 21,103 $2,095,713 32,281 $3,301,943 136 $13,677 53,248 $5,383,979 $564,467
</TABLE>
See accompanying Notes to Financial Statements.
17 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities September 30, 1994
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Investments, at value (cost $4,938,344,549)--see accompanying statement $4,669,617,762
- ------------------------------------------------------------------------------------------------------------------------------------
Cash 4,400,431
- ------------------------------------------------------------------------------------------------------------------------------------
Unrealized appreciation on futures contracts--Note 7 64,031
- ------------------------------------------------------------------------------------------------------------------------------------
Receivables:
Interest and dividends 109,861,572
Investments sold 84,944,908
Shares of beneficial interest sold 16,958,955
- ------------------------------------------------------------------------------------------------------------------------------------
Other 141,704
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 4,885,989,363
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities Options written, at value (premiums received $6,541,519)--see accompanying statement--Note 4 7,440,720
- ------------------------------------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 114,847,063
Shares of beneficial interest redeemed 19,984,405
Distribution and service plan fees--Note 5 2,939,585
Dividends and distributions 10,331,176
- ------------------------------------------------------------------------------------------------------------------------------------
Other 1,252,004
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 156,794,953
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets $4,729,194,410
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Composition of
Net Assets
Paid-in capital $5,035,306,478
- ------------------------------------------------------------------------------------------------------------------------------------
Overdistributed net investment income (2,882,064)
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment, written option and foreign
currency transactions (34,233,637)
- ------------------------------------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments, options written and translation of assets
and liabilities denominated in foreign currencies (268,996,367)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $4,729,194,410
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value
Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of $3,143,103,010
and 661,897,244 shares of beneficial interest outstanding) $4.75
Maximum offering price per share
(net asset value plus sales charge of 4.75% of offering price) $4.99
- ------------------------------------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $1,586,091,400 and 333,489,354 shares of beneficial interest outstanding) $4.76
See accompanying Notes to Financial Statements.
</TABLE>
18 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statement of Operations For the Year Ended September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Income
Interest:
Unaffiliated companies (net of withholding taxes of $1,101,145) $413,257,729
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 3,242,246
Affiliated companies 564,467
- ------------------------------------------------------------------------------------------------------------------------------------
Total income $417,064,442
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees--Note 5 23,416,082
- ------------------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A--Note 5 7,673,295
Class B--Note 5 12,329,469
- ------------------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 5 4,218,280
- ------------------------------------------------------------------------------------------------------------------------------------
Shareholder reports 1,313,497
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses 846,200
- ------------------------------------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 156,391
Class B 324,858
- ------------------------------------------------------------------------------------------------------------------------------------
Legal and auditing fees 106,799
- ------------------------------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 54,980
- ------------------------------------------------------------------------------------------------------------------------------------
Other 78,098
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 50,517,949
- ------------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 366,546,493
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments,
Options Written and
Foreign Currency
Transactions
Net realized gain (loss) from:
Investments and options written (including premiums on options exercised) (4,635,548)
Closing and expiration of option contracts written--Note 4 9,145,220
Foreign currency transactions (21,719,790)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized loss (17,210,118)
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (371,603,790)
Translation of assets and liabilities denominated in foreign currencies 54,421,484
- ------------------------------------------------------------------------------------------------------------------------------------
Net change (317,182,306)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized loss on investments, options written and foreign
currency transactions (334,392,424)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $32,154,069
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
Year Ended September 30,
1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income $366,546,493 $225,207,116
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, options written and foreign
currency transactions (17,210,118) 63,690,435
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on investments,
options written and translation of assets and liabilities denominated
in foreign currencies (317,182,306) 32,124,174
----------- -----------
Net increase in net assets resulting from operations 32,154,069 321,021,725
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and
Distributions to
Shareholders
Dividends from net investment income:
Class A ($.4329 and $.4960 per share, respectively) (236,741,649) (210,522,530)
Class B ($.3938 and $.3637 per share, respectively) (119,419,105) (18,595,592)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments, options written
and foreign currency transactions:
Class A ($.0124 per share) -- (7,998,180)
Class B ($.0124 per share) -- (36,330)
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of gains on investments, options written
and foreign currency transactions:
Class A ($.1179 per share) (57,628,697) --
Class B ($.1179 per share) (29,069,526) --
- ------------------------------------------------------------------------------------------------------------------------------------
Tax return of capital:
Class A ($.0135 per share) (8,947,314) --
Class B ($.0135 per share) (4,513,275) --
- ------------------------------------------------------------------------------------------------------------------------------------
Beneficial Interest
Transactions
Net increase in net assets resulting from Class A beneficial interest
transactions--Note 2 685,155,178 945,622,259
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B beneficial interest
transactions--Note 2 1,019,463,146 683,558,019
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
Total increase 1,280,452,827 1,713,049,371
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of year 3,448,741,583 1,735,692,212
-------------- --------------
End of year [including undistributed (overdistributed) net
investment income of ($2,882,064) and $2,865,362, respectively] $4,729,194,410 $3,448,741,583
-------------- --------------
-------------- --------------
</TABLE>
See accompanying Notes to Financial Statements.
20 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Highlights September 30, 1993
Class A Class B
------- -------
Year Ended Year Ended
September 30, September 30,
1994 1993 1992 1991 1990(2) 1994 1993(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Data:
Net asset value, beginning of period $5.21 $5.07 $5.01 $4.87 $5.00 $5.22 $4.89
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .45 .48 .46 .56 .59 .42 .36
Net realized and unrealized gain (loss)
on investments, options written
and foreign currency transactions (.35) .17 .14 .21 (.10) (.36) .34
------ ------ ------ ------ ------ ------ ------
Total income from investment
operations .10 .65 .60 .77 .49 .06 .70
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.43) (.50) (.46) (.57) (.57) (.39) (.36)
Distributions from net realized gain
on investments, options written
and foreign currency transactions -- (.01) (.08) (.06) (.05) -- (.01)
Distributions in excess of net
realized gain on investments,
options written and foreign
currency transactions (.12) -- -- -- -- (.12) --
Tax return of capital (.01) -- -- -- -- (.01) --
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions
to shareholders (.56) (.51) (.54) (.63) (.62) (.52) (.37)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.75 $5.21 $5.07 $5.01 $4.87 $4.76 $5.22
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value(3) 1.85% 13.30% 12.56% 16.97% 10.20% 1.07% 13.58%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period
(in millions) $3,143 $2,754 $1,736 $560 $177 $1,586 $695
- ----------------------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $3,082 $2,107 $1,084 $311 $93 $1,236 $276
- ----------------------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 661,897 528,587 342,034 111,739 36,418 333,489 133,235
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 8.72% 9.78% 9.39% 11.82% 12.79%(4) 7.90% 8.13%(4)
Expenses .95% 1.09% 1.16%(5) 1.27%(5) 1.36%(4) 1.71% 1.80%(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 119.0% 148.6% 208.2% 194.7% 424.6% 119.0% 148.6%
<FN>
1. For the period from November 30, 1992 (inception of offering) to September
30, 1993.
2. For the period from October 16, 1989 (commencement of operations) to
September 30, 1990.
3. Assumes a hypothetical initial investment on the business day before the
first day of the fiscal period, with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the net asset value calculated on the last business day of the fiscal period.
Sales charges are not reflected in the total returns.
4. Annualized.
5. Includes $.0002 and $.0020 per share of federal excise tax expense for 1992
and 1991, respectively. The expense ratio, exclusive of federal excise tax
expense, was 1.16% and 1.23%, respectively.
6. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities
owned during the period. Securities with a maturity or expiration date at the
time of acquisition of one year or less are excluded from the calculation.
Purchases and sales of investment securities (excluding short-term
securities) for the year ended September 30, 1994 were $6,168,422,547 and
$4,642,399,344, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements
- -------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Strategic Income Fund (the Fund) is a separate series of
Oppenheimer Strategic Funds Trust, a diversified, open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment advisor is Oppenheimer Management Corporation (the Manager).
The fund offers both Class A and Class B shares. Class A shares are sold with a
front-end sales charge. Class B shares may be subject to a contingent deferred
sales charge. Both classes of shares have identical rights to earnings, assets
and voting privileges, except that each class has its own distribution and/or
service plan, expenses directly attributable to a particular class and exclusive
voting rights with respect to matters affecting a single class. Class B shares
will automatically convert to Class A shares six years after the date of
purchase. The following is a summary of significant accounting policies
consistently followed by the Fund.
- -------------------------------------------------------------------------------
Investment Valuation. Portfolio securities are valued at 4:00 p.m. (New York
time) on each trading day. Listed and unlisted securities for which such
information is regularly reported are valued at the last sale price of the day
or, in the absence of sales, at values based on the closing bid or asked price
or the last sale price on the prior trading day. Long-term debt securities are
valued by a portfolio pricing service approved by the Board of Trustees.
Long-term debt securities which cannot be valued by the approved portfolio
pricing service are valued by averaging the mean between the bid and asked
prices obtained from two active market makers in such securities. Short-term
debt securities having a remaining maturity of 60 days or less are valued at
cost (or last determined market value) adjusted for amortization to maturity of
any premium or discount. Securities for which market quotes are not readily
available are valued under procedures established by the Board of Trustees to
determine fair value in good faith. An option is valued based upon the last
sales price on the principal exchange on which the option is traded or, in the
absence of any transactions that day, the value is based upon the last sale on
the prior trading date if it is within the spread between the closing bid and
asked prices. If the last sale price is outside the spread, the closing bid or
asked price closest to the last reported sale price is used. Forward foreign
currency contracts are valued at the forward rate on a daily basis.
- -------------------------------------------------------------------------------
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. At September 30, 1994, securities with an
aggregate market value of $46,417,790, representing .95% of the Fund's total
assets, were in default.
- -------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The Fund generally enters into forward foreign currency exchange contracts
as a hedge, upon the purchase or sale of a security denominated in a foreign
currency. In addition, the Fund may enter into such contracts as a hedge against
changes in foreign currency exchange rates on portfolio positions. A forward
exchange contract is a commitment to purchase or sell a foreign currency at a
future date, at a negotiated rate. Risks may arise from the potential inability
of the counterparty to meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held and reported with all other foreign currency gains and
losses in the Fund's results of operations.
- -------------------------------------------------------------------------------
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. If the seller of the agreement defaults and the value of
the collateral declines, or if the seller enters an insolvency proceeding,
realization of the value of the collateral by the Fund may be delayed or
limited.
22 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
Options Written. The Fund may write covered call and put options. 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.
In writing an option, the Fund bears the market risk of an unfavorable change in
the price of the security underlying the written option. Exercise of an option
written by the Fund could result in the Fund selling or purchasing a security at
a price different from the current market value. All securities covering call
options written are held in escrow by the custodian bank and the Fund maintains
liquid assets sufficient to cover written put options in the event of exercise
by the holder.
- -------------------------------------------------------------------------------
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 Income Taxes. The Fund intends to continue to comply with provisions of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income tax provision is required.
- -------------------------------------------------------------------------------
Organization Costs. The Manager advanced $13,675 for organization and start-up
costs of the Fund. Such expenses are being amortized over a five-year period
from the date operations commenced. In the event that all or part of the
Manager's initial investment in shares of the Fund is withdrawn during the
amortization period, the redemption proceeds will be reduced to reimburse the
Fund for any unamortized expenses, in the same ratio as the number of shares
redeemed bears to the number of initial shares outstanding at the time of such
redemption.
- -------------------------------------------------------------------------------
Distributions to Shareholders. The Fund intends to declare dividends separately
for Class A and Class B 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.
- -------------------------------------------------------------------------------
Change in Accounting for Distributions to Shareholders. Effective October 1,
1993, the Fund adopted Statement of Position 93-2: Determination, Disclosure,
and Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, subsequent to September 30,
1993, amounts have been reclassified to reflect an increase in paid-in capital
of $223,939, an increase in undistributed net investment loss of $9,032,371, and
a decrease in undistributed capital loss on investments of $8,808,432. During
the year ended September 30, 1994, in accordance with Statement of Position
93-2, paid-in capital was decreased by $13,460,589, undistributed net investment
loss was decreased by $6,359,795 and undistributed capital loss was decreased by
$7,100,794.
- -------------------------------------------------------------------------------
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 options written and unrealized
appreciation and depreciation are determined on an identified cost basis, which
is the same basis used for federal income tax purposes. Dividends in kind are
recognized as income on the ex-dividend date, at the current market value of the
underlying security. Interest on payment-in-kind debt instruments is accrued as
income at the coupon rate and a market adjustment is made on the ex-date.
23 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- -------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1994 Period Ended September 30, 1993(1)
----------------------------- ----------------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 236,638,548 $1,198,107,502 249,430,763 $1,264,793,607
Dividends and distributions reinvested 46,661,271 234,357,544 29,150,165 147,612,098
Redeemed (149,989,676) (747,309,868) (92,028,210) (466,783,446)
------------ -------------- ----------- --------------
Net increase 133,310,143 $685,155,178 186,552,718 $945,622,259
------------ -------------- ----------- --------------
------------ -------------- ----------- --------------
- --------------------------------------------------------------------------------------------------------------------------------
Class B:
Sold 211,514,941 $1,074,296,304 133,631,433 $685,673,857
Dividends and distributions reinvested 13,715,575 68,501,659 1,974,080 10,213,941
Redeemed (24,975,699) (123,334,817) (2,370,976) (12,329,779)
------------ -------------- ----------- --------------
Net increase 200,254,817 $1,019,463,146 133,234,537 $683,558,019
------------ -------------- ----------- --------------
------------ -------------- ----------- --------------
<FN>
1. For the year ended September 30, 1993 for Class A shares and for the period
from November 30, 1992 (inception of offering) to September 30, 1993 for
Class B shares.
- -------------------------------------------------------------------------------
3. Unrealized Gains And Losses on Investments and Options Written
At September 30, 1994, net unrealized depreciation on investments and
options written of $269,561,957 was composed of gross appreciation of
$34,252,245, and gross depreciation of $303,814,202.
- -------------------------------------------------------------------------------
4. Option Activity
Option activity for the year ended September 30, 1994 was as follows:
Call Options Put Options
------------ -----------
Number Amount Number Amount
of Options of Premiums of Options of Premiums
- --------------------------------------------------------------------------------------------------------------------------
Options outstanding at September 30, 1993 30,000 $3,914,062 -- $--
- --------------------------------------------------------------------------------------------------------------------------
Options written 428,562,283 14,188,394 525,152 1,670,220
- --------------------------------------------------------------------------------------------------------------------------
Options cancelled in closing purchase transactions (10,000) (1,734,375) -- --
- --------------------------------------------------------------------------------------------------------------------------
Options expired prior to exercise (39,750) (6,350,000) (225,152) (1,060,845)
- --------------------------------------------------------------------------------------------------------------------------
Options exercised (30,000) (4,085,937) -- --
----------- ---------- ------- --------
Options outstanding at September 30, 1994 428,512,533 $5,932,144 300,000 $609,375
----------- ---------- ------- --------
----------- ---------- ------- --------
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
5. Management Fees And Other Transactions With Affiliates
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for an annual fee of .75% on the
first $200 million of net assets with a reduction of .03% on each $200 million
thereafter to $800 million, .60% on the next $200 million and .50% on net assets
in excess of $1 billion. The Manager has agreed to reimburse the Fund if
aggregate expenses (with specified exceptions) exceed the most stringent
applicable regulatory limit on Fund expenses.
For the year ended September 30, 1994, commissions (sales charges paid by
investors) on sales of Class A shares totaled $31,059,937, of which $8,686,206
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. During the
year ended September 30, 1994, OFDI received contingent deferred sales charges
of $2,731,436 upon redemption of Class B shares as reimbursement for sales
commissions advanced by OFDI at the time of sale of such shares.
Oppenheimer Shareholder Services (OSS), a division of the Manager, is the
transfer and shareholder servicing agent for the Fund, and for other registered
investment companies. OSS's total costs of providing such services are allocated
ratably to these companies.
24 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
5. Management Fees And Other Transactions With Affiliates (continued)
Under separate approved plans, each class may expend up to .25% of its net
assets annually to reimburse OFDI for costs incurred in connection with the
personal service and maintenance of accounts that hold shares of the Fund,
including amounts paid to brokers, dealers, banks and other financial
institutions. In addition, Class B shares are subject to an asset-based sales
charge of .75% of net assets annually, to reimburse OFDI for sales commissions
paid from its own resources at the time of sale and associated financing costs.
In the event of termination or discontinuance of the Class B plan, the Board of
Trustees may allow the Fund to continue payment of the asset-based sales charge
to OFDI for distribution expenses incurred on Class B shares sold prior to
termination or discontinuance of the plan. During the year ended September 30,
1994, OFDI paid $468,405 and $17,712, respectively, to an affiliated
broker/dealer as reimbursement for Class A and Class B personal service and
maintenance expenses and retained $11,816,316 as reimbursement for Class B sales
commissions and service fee advances, as well as financing costs.
- -------------------------------------------------------------------------------
6. Restricted Securities
The Fund owns securities purchased in private placement transactions, without
registration under the Securities Act of 1933 (the Act). The securities are
valued under methods approved by the Board of Trustees as reflecting fair value.
The Fund intends to invest no more than 10% of its net assets (determined at the
time of purchase) in restricted and illiquid securities, excluding securities
eligible for resale pursuant to Rule 144A of the Act that are determined to be
liquid by the Board of Trustees or by the Manager under Board-approved
guidelines. Restricted and illiquid securities, excluding securities eligible
for resale pursuant to Rule 144A of the Act amount to $370,578,238, or 7.8% of
the Fund's net assets, at September 30, 1994. Illiquid and/or restricted
securities, including those restricted securities that are transferable under
Rule 144A of the Act are listed below.
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Acadia Partners LP, 13% Sub. Nts., 10/1/97(1) 3/12/93 $100.00 $103.00
- ------------------------------------------------------------------------------------------------------------------------------------
Aftermarket Technology Corp., 12% Sr. Sub. Nts., 8/1/04(1) 7/21/94 $100.00 $101.50
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina Local Market Securities Trust:
Series I, 14.75%, 9/1/02(1) 9/19/94 $100.00 $100.76
Series II, 11.30%, 4/1/00(1) 8/24/94 $100.00 $100.76
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona Charlie's, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00(1) 11/18/93--12/9/93 $100.00 $87.50
- ------------------------------------------------------------------------------------------------------------------------------------
Banco Ganadero SA, 9.75%, 8/26/99(1) 8/10/94 $99.58 $100.75
- ------------------------------------------------------------------------------------------------------------------------------------
Bariven SA, Sr. Nts., Gtd. by Petroleos de Venezuela, 9%, 2/25/97(1) 7/20/94 $85.38 $93.00
- ------------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank N.Y. Branch:
Italian Lira Linked Confidence Nt.,
Girozentrale Branch, 10%, 8/7/95(1) 5/20/94 $100.00 $94.55
Mexican Peso Linked Confidence Nt.,
Girozentrale Branch, 35.50%, 12/30/94 9/23/94 $100.00 $98.25
- ------------------------------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93--12/9/93 $2.10 $2.00
- ------------------------------------------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp.(1) 4/28/93--8/11/93 $1.27 $4.50
- ------------------------------------------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Nts., Banco Estado Minas Gerais:
7.875%, 2/10/99(1) 8/16/94--8/17/94 $79.66 $82.25
8.25%, 2/10/00(1) 8/15/94 $76.25 $81.50
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Queen & Casino, Inc., 12% Fst. Mtg. Nts., Series A, 11/15/00 11/18/93--12/17/93 $87.70 $77.50
- ------------------------------------------------------------------------------------------------------------------------------------
Celcaribe SA(1) 5/17/94 $1.19 $1.22
- ------------------------------------------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(1) 5/17/94 $60.78 $63.37
- ------------------------------------------------------------------------------------------------------------------------------------
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04(1) 4/22/94 $100.00 $103.50
- ------------------------------------------------------------------------------------------------------------------------------------
Chase Mortgage Finance Corp.:
Nts., 6.75%, 2/25/25(1) 3/21/94 $78.55 $68.38
Nts., 6.75%, 4/25/24(1) 3/21/94 $78.41 $68.22
Sub. Mtg. Pass-Through Certificates, Series 1994-1:
0%, Cl. B-8, 3/25/25(1) 3/22/94 $81.12 $75.06
0%, Cl. B-9, 3/25/25(1) 3/22/94 $80.89 $71.72
0%, Cl. B-10, 3/25/25(1) 3/22/94 $80.41 $71.38
</TABLE>
25 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- -------------------------------------------------------------------------------
6. Restricted Securities (continued)
<TABLE>
<CAPTION>
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CMC Security Corp. III, 0% Collateralized Mtg. Oblig.,
Series 1994-E, Cl. E-B3, 3/25/24(1) 3/21/94 $75.88 $68.38
- ------------------------------------------------------------------------------------------------------------------------------------
CSFOB 11%, Cl. E, 2/15/14 5/16/94 $98.85 $97.51
- ------------------------------------------------------------------------------------------------------------------------------------
Colombia (Republic of):
1989-1990 Integrated Loan Facility Bonds:
4.188%, 7/1/01 6/17/93--11/12/93 $91.78 $96.00
4.44%, 10/26/03 10/25/93--12/17/93 $89.77 $93.50
- ------------------------------------------------------------------------------------------------------------------------------------
Empresa Columbiana de Petroleos, Nts., 7.25%, 7/8/98(1) 4/25/94 $93.25 $95.38
- ------------------------------------------------------------------------------------------------------------------------------------
Dell Computer Corp. $7.00 Cv., Series A(1) 1/27/94--2/2/94 $103.57 $158.50
- ------------------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I. 4/14/92 $1,000.00 $1,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02 4/14/92 $100.00 $110.00
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Trust, 1994-Cl Class 2-D, 8.70%, 9/25/25 8/10/94 $98.00 $95.95
- ------------------------------------------------------------------------------------------------------------------------------------
FDIC Trust, 1994-Cl Class 2-E, 8.70%, 9/25/25 8/10/94 $94.88 $92.48
- ------------------------------------------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp., Units(1) 6/21/94 $51.39 $55.50
- ------------------------------------------------------------------------------------------------------------------------------------
GE Capital Mortgage Services, Inc.:
Series 1994-11 Cl. B3, 6.50%, 5/25/24(1) 3/11/94 $76.00 $67.38
Series 1994-10 Cl. B3, 6.50%, 3/25/24(1) 3/8/94 $77.45 $69.88
- ------------------------------------------------------------------------------------------------------------------------------------
General Media, Inc. Wts., Exp. 12/00(1) 12/15/93 $.01 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
GPA Holland BV:
8.50% Med.-Term Nts., 2/10/97(1) 6/30/93 $69.50 $88.75
8.625% Med.-Term Nts., Series C, 1/15/99 1/10/94 $78.13 $79.00
9.50% Med.-Term Nts., Series A, 12/15/01 1/27/94 $79.96 $77.00
- ------------------------------------------------------------------------------------------------------------------------------------
GPA Netherlands BV, 8.50% Med.-Term Nts., 3/3/97(1) 7/8/93--10/27/93 $76.63 $88.50
- ------------------------------------------------------------------------------------------------------------------------------------
Grupo Mexicano de Desarrollo SA, 8.25% Gtd. Nts., 2/17/01(1) 2/8/94 $100.00 $82.25
- ------------------------------------------------------------------------------------------------------------------------------------
GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10 1/29/93 $102.40 $107.35
- ------------------------------------------------------------------------------------------------------------------------------------
Interco, Inc., 9% Sec. Nts., Series B, 6/1/04(1) 10/14/92 $91.50 $98.50
- ------------------------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing Agreement Nts.:
Tranche A, 4.25%, 10/15/00 4/15/94 $78.50 $82.00
Tranche B, 4.125%, 11/15/04 9/23/93 $70.00 $68.00
- ------------------------------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., Standard & Poor's
500 Indexed-Linked Nts.:
4.85%, 11/16/94 8/16/94 $139.20 $129.08
4.85%, 11/25/94 8/24/94 $132.00 $136.83
4.85%, 11/25/94 8/24/94 $139.00 $143.08
5.038%, 12/22/94 9/21/94 $146.40 $133.27
- ------------------------------------------------------------------------------------------------------------------------------------
Maritime Group Ltd., Units(1) 2/16/94--8/12/94 $99.60 $79.28
- ------------------------------------------------------------------------------------------------------------------------------------
Mary Kay Corp.:
12.75% Gtd. Sr. Nts., Series B, 12/6/00 12/11/92 $106.50 $104.50
10.25% Sr. Nts., 12/31/00 6/30/93--10/11/93 $101.03 $98.00
- ------------------------------------------------------------------------------------------------------------------------------------
Morocco (Kingdom of)
Loan Participation Agreement:
Tranche A, 5.938%, 1/1/09 2/23/94--9/15/94 $75.29 $73.00
Tranche B, 4.312%, 1/1/04 5/18/94--6/3/94 $80.02 $77.19
- ------------------------------------------------------------------------------------------------------------------------------------
New World Communications Holdings Corp., 0%, 6/15/99(1) 6/24/94 $52.32 $54.13
- ------------------------------------------------------------------------------------------------------------------------------------
Polish People's Republic Loan Participation Agreement,
5.0625%, 2/3/24 1/12/94--2/7/94 $63.71 $55.33
- ------------------------------------------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(1) 6/17/94 $100.00 $100.00
- ------------------------------------------------------------------------------------------------------------------------------------
Prudential Agricultural Credit, Inc. Farmer Mac Agricultural
Real Estate Trust Sr. Sub. Mtg. Pass Through Certificates:
9.18%, Series 1992-2, Cl. B2, 1/15/03 8/18/92 $70.74 $76.04
9.47%, Series 1992-2, Cl. B3, 4/15/09 8/18/92 $74.47 $76.09
26 Oppenheimer Strategic Income Fund
<PAGE>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
6. Restricted Securities (continued)
Valuation
Per Unit as of
Security Acquisition Date Cost Per Unit September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pulsar Internacional, S.A. de C.V.:
8% Nts., 12/14/94 12/14/93 $100.00 $100.00
9% Nts., 9/19/95 9/16/94 $99.62 $100.00
- ------------------------------------------------------------------------------------------------------------------------------------
Rabobank Certificate of Deposit:
Japanese Yen Maximum Rate Nts., 10%, 6/2/95 5/20/94 $100.00 $92.96
British Pound Sterling Maximum Rate Nts., 10%, 6/2/95 5/20/94 $100.00 $91.19
- ------------------------------------------------------------------------------------------------------------------------------------
Residential Funding Corp. 7.785% Mtg.
Pass Through Certificates, Series 1993-6, Cl. B5, 6/15/23(1) 6/10/93 $82.13 $73.91
- ------------------------------------------------------------------------------------------------------------------------------------
SKW Real Estate Limited Partnership, 9.05%,
Secured Note, Cl. E, 4/15/04(1) 4/14/94 $99.96 $95.25
- ------------------------------------------------------------------------------------------------------------------------------------
South Africa (Republic Of) Loan Participation Agreements:
Eskom, 4.907%, 12/23/97 11/18/93 $94.75 $93.50
Eskom, 4.651%, 1/15/98 2/9/94 $95.25 $93.00
Eskom, 4.875%, 4/15/98 11/18/93 $94.75 $90.50
Eskom, 4.75%, 9/15/99 12/17/93 $89.75 $90.50
Eskom, 4.875%, 2/15/00 12/3/93 $90.50 $92.50
- ------------------------------------------------------------------------------------------------------------------------------------
Structured Product Asset Return Certificates,
9.40%, Series 94-2, 9/1/97(1) 9/7/94 $100.00 $99.69
- ------------------------------------------------------------------------------------------------------------------------------------
Subic Power Corp., 9.50% Sr. Sec. Nts., Series A, 12/28/08(1) 12/20/93--12/22/93 $100.43 $92.25
- ------------------------------------------------------------------------------------------------------------------------------------
Terex Corp.:
13% Sr. Nts., 8/1/96(1) 4/5/94--5/13/94 $93.33 $93.00
Rts., Exp. 7/96(1) 4/5/94--6/29/94 $1.53 $1.50
- ------------------------------------------------------------------------------------------------------------------------------------
Treasure Bay Gaming & Resorts, Inc., Units(1) 11/10/93--9/12/94 $102.96 $30.50
- ------------------------------------------------------------------------------------------------------------------------------------
Treasure Bay Gaming, 12.25% Fst. Mtg. Nts., 11/15/00(1) 4/21/94--9/12/94 $92.19 $31.50
- ------------------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. Wts., Exp. 1/98 1/13/92--1/23/92 $0.00 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(1) 11/8/93--11/18/93 $100.02 $90.25
- ------------------------------------------------------------------------------------------------------------------------------------
United Mexican States:
1990 Combined Multi-Year Restructuring Agreement,
Restructured Sov. Loan, 4.28%, 12/23/06 1/11/94 $92.00 $83.25
Bankpesca Restructured Sov. Loan, 6.0625%, 10/26/06 1/13/94 $91.75 $83.25
Banobras Myra Loan Participation Agreement,
Tranche 2, 6.125%, 11/16/06 1/24/94 $91.75 $83.25
- ------------------------------------------------------------------------------------------------------------------------------------
Myra Old Money Loan Participation Agreements:
5.6875%, 3/20/05 1/24/94 $91.75 $83.25
6.1725%, 3/20/05 1/24/94 $91.75 $83.25
- ------------------------------------------------------------------------------------------------------------------------------------
New New Money Loan Participation Agreements:
5.1825%, 3/25/05 1/24/94 $91.75 $83.25
Tranche A, 6.0625%, 3/25/05 1/24/94 $91.75 $83.25
- ------------------------------------------------------------------------------------------------------------------------------------
Petacalco Topolobampo Trust, Sr. Sec. Unsub. Nts.,
8.125%, 12/15/03(1) 5/18/94--8/22/94 $87.92 $85.88
- ------------------------------------------------------------------------------------------------------------------------------------
Petroleos Mexicanos Gtd. Med.-Term Nts.,
7.60%, 6/15/00(1) 8/3/94--8/5/94 $84.94 $82.88
- ------------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of):
6.75% Debs., 9/20/95(1) 4/6/94--5/19/94 $95.14 $94.88
9.00% Sr. Unsec. Unsub. Nts., 5/27/96(1) 5/3/94--7/15/94 $94.58 $93.63
- ------------------------------------------------------------------------------------------------------------------------------------
Bonds, Banco Venezuela TCI:
0% Debs., 12/13/98 7/13/93--7/15/93 $72.64 $64.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7. Futures Contracts
At September 30, 1994, the Fund had outstanding futures contracts to sell
debt securities as follows:
<TABLE>
<CAPTION>
Expiration Number of Valuation as of Unrealized
Date Futures Contracts September 30, 1994 Appreciation
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Nts. 12/94 245 $24,859,844 $61,250
U.S. Treasury Bonds 12/94 89 8,805,438 2,781
--- ----------- -------
334 $33,665,282 $64,031
--- ----------- -------
--- ----------- -------
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
27 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
Independent Auditors' Report
- -------------------------------------------------------------------------------
The Board of Trustees and Shareholders of Oppenheimer Strategic Income Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Strategic Income Fund as of
September 30, 1994, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended September 30, 1994
and 1993, and the financial highlights for the period October 16, 1989
(commencement of operations) to September 30, 1994. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
at September 30, 1994 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Oppenheimer
Strategic Income Fund at September 30, 1994, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 21, 1994
28 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
- -------------------------------------------------------------------------------
In early 1995, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1994. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
A distribution of $.104 per share was paid on November 24, 1993, of which
$.010 was designated as a ``capital gain distribution'' for federal income tax
purposes. Whether received in stock or cash, the capital gain distribution
should be treated by shareholders as a gain from the sale of capital assets held
for more than one year (long-term capital gains).
Dividends paid by the Fund during the fiscal year ended September 30, 1994
which are not designated as capital gain distributions should be multiplied by
1.00% to arrive at the net amount eligible for the corporate dividend-received
deduction.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
29 Oppenheimer Strategic Income Fund
<PAGE>
- --------------------------------------------------------------------------------
Oppenheimer Strategic Income Fund
A Series of Oppenheimer Strategic Funds Trust
- --------------------------------------------------------------------------------
Officers and Trustees
James C. Swain, Chairman and Chief Executive Officer
Robert G. Avis, Trustee
William A. Baker, Trustee
Charles Conrad, Jr., Trustee
Jon S. Fossel, Trustee and President
Raymond J. Kalinowski, Trustee
C. Howard Kast, Trustee
Robert M. Kirchner, Trustee
Ned M. Steel, Trustee
Andrew J. Donohue, Vice President
David P. Negri, Vice President
Arthur P. Steinmetz, Vice President
George C. Bowen, Vice President, Secretary, and Treasurer
Robert J. Bishop, Assistant Treasurer
Scott Farrar, Assistant Treasurer
Robert G. Zack, Assistant Secretary
- --------------------------------------------------------------------------------
Investment Advisor Oppenheimer Management Corporation
- --------------------------------------------------------------------------------
Distributor Oppenheimer Funds Distributor, Inc.
- --------------------------------------------------------------------------------
Transfer and Shareholder
Servicing Agent Oppenheimer Shareholder Services
- --------------------------------------------------------------------------------
Custodian of Portfolio Securities The Bank of New York
- --------------------------------------------------------------------------------
Independent Auditors Deloitte & Touche LLP
- --------------------------------------------------------------------------------
Legal Counsel Myer, Swanson & Adams, P.C.
This is a copy of a report to shareholders of Oppenheimer Strategic Income Fund.
This report must be preceded or accompanied by a Prospectus of Oppenheimer
Strategic Income Fund. For material information concerning the Fund, see the
Prospectus.
30 Oppenheimer Strategic Income Fund
<PAGE>
- --------------------------------------------------------------------------------
OppenheimerFunds Family
- --------------------------------------------------------------------------------
OppenheimerFunds offers over 35 funds designed to fit virtually every investment
goal. Whether you're investing for retirement, your children's education or
tax-free income, we have the funds to help you seek your objective.
When you invest with OppenheimerFunds, you can feel comfortable knowing
that you are investing with a respected financial institution with over 30 years
of experience in helping people just like you reach their financial goals. And
you're investing with a leader in global, growth stock and flexible fixed-income
investments--with over 1.8 million shareholder accounts and more than $26
billion under Oppenheimer's management and that of our affiliates.
As an OppenheimerFunds shareholder, you can easily exchange shares of
eligible funds of the same class by mail or by telephone for a small
administrative fee.1 For more information on OppenheimerFunds, please contact
your financial advisor or call us at 1-800-525-7048 for a prospectus. You may
also write us at the address shown on the back cover. As always, please read the
prospectus carefully before you invest.
- --------------------------------------------------------------------------------
Stock Funds Discovery Fund Global Fund
Global Emerging Growth Fund2 Oppenheimer Fund
Time Fund Value Stock Fund
Target Fund Gold & Special Minerals Fund
Growth Fund3
- --------------------------------------------------------------------------------
Stock & Bond Funds
Main Street Income & Growth Fund
Total Return Fund
Global Growth & Income Fund
Equity Income Fund
Asset Allocation Fund
- --------------------------------------------------------------------------------
Bond Funds
High Yield Fund
Champion High Yield Fund
Strategic Income & Growth Fund
Strategic Income Fund
Strategic Diversified Income Fund
Strategic Investment Grade Bond Fund
Strategic Short-Term Income Fund
Investment Grade Bond Fund
Mortgage Income Fund
U.S. Government Trust
Limited-Term Government
- --------------------------------------------------------------------------------
Tax-Exempt Funds
New York Tax-Exempt Fund4
California Tax-Exempt Fund4
Pennsylvania Tax-Exempt Fund4
Florida Tax-Exempt Fund4
New Jersey Tax-Exempt Fund4
Tax-Free Bond Fund
Insured Tax-Exempt Bond Fund
Intermediate Tax-Exempt Bond Fund
- --------------------------------------------------------------------------------
Money Market Funds Money Market Fund Cash Reserves
1. The fee is waived for PhoneLink exchanges between existing accounts. Exchange
privileges are subject to change or termination.
2. Formerly Oppenheimer Global Bio-Tech Fund and Oppenheimer Global Environment
Fund.
3. Formerly Special Fund.
4. Available only to residents of those states.
OppenheimerFunds are distributed by Oppenheimer Funds Distributor, Inc., Two
World Trade Center, New York, NY 10048-0203.
(C) Copyright 1994 Oppenheimer Management Corporation. All rights reserved.
31 Oppenheimer Strategic Income Fund
<PAGE>
"HOW MAY I HELP YOU?"
GENERAL INFORMATION
1-800-525-7048
TALK TO A CUSTOMER SERVICE REPRESENTATIVE.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M., AND SATURDAY FROM 10:00 A.M.
TO 2:00 P.M. ET.
TELEPHONE TRANSACTIONS
1-800-852-8457
MAKE ACCOUNT TRANSACTIONS WITH A CUSTOMER SERVICE REPRESENTATIVE.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M. ET.
PHOTO OF
BARBARA H.
PHONELINK
1-800-533-3310 ICSA LOGO
GET AUTOMATED INFORMATION OR MAKE AUTOMATED TRANSACTIONS.
24 HOURS A DAY, 7 DAYS A WEEK.
TELECOMMUNICATION
DEVICE FOR THE DEAF
1-800-843-4461
SERVICE FOR THE HEARING IMPAIRED.
MONDAY THROUGH FRIDAY FROM
8:30 A.M. TO 8:00 P.M. ET.
OPPENHEIMERFUNDS
INFORMATION HOTLINE
1-800-835-3104
HEAR TIMELY AND INSIGHTFUL MESSAGES ON THE ECONOMY AND ISSUES THAT AFFECT YOUR
FINANCES. 24 HOURS A DAY, 7 DAYS A WEEK.
"Just as OppenheimerFunds offers over 35 different mutual funds designed to help
meet virtually every investment need, Oppenheimer Shareholder Services offers a
variety of services to satisfy your individual needs. Whenever you require help,
we're only a toll-free phone call away.
"For personalized assistance and account information, call our General
Information number to speak with our knowledgeable Customer Service
Representatives and get the help you need.
"When you want to make account transactions, it's easy for you to
redeem shares, exchange shares, or conduct AccountLink transactions, simply by
calling our Telephone Transactions number.
"And for added convenience, OppenheimerFunds' PhoneLink, an automated
voice response system is available 24 hours a day, 7 days a week. PhoneLink
gives you access to a variety of fund, account, and market information. You can
even make purchases, exchanges and redemptions using your touch-tone phone. Of
course, PhoneLink will always give you the option to speak with a Customer
Service Representative during the hours shown to the left.
"When you invest in OppenheimerFunds, you know you'll receive a high
level of customer service. The International Customer Service Association knows
it, too, as it awarded Oppenheimer Shareholder Services a 1993 Award of
Excellence for consistently demonstrating superior customer service.
"Whatever your needs, we're ready to assist you."
RA275.1194.N
[Logo] OPPENHEIMERFUNDS
Oppenheimer Funds Distributor, Inc.
P.O. Box 5270
Denver, CO 80217-5270
Bulk Rate
U.S. Postage
PAID
Permit No. 469
Denver, CO
