<PAGE>
[Logo] OPPENHEIMERFUNDS
OPPENHEIMER STRATEGIC DIVERSIFIED INCOME FUND
ANNUAL REPORT SEPTEMBER 30, 1994
<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?
- - WHERE ARE YOU FINDING THE MOST ATTRACTIVE INVESTMENT OPPORTUNITIES TODAY?
FACTS EVERY SHAREHOLDER SHOULD KNOW ABOUT
OPPENHEIMER STRATEGIC DIVERSIFIED INCOME FUND
- --------------------------------------------------------------------------------
1 The Fund's objective is to seek high current income by investing in three
broad fixed income sectors: U.S. government issues, foreign fixed income
securities, and high-yield lower-rated corporate bonds.
- --------------------------------------------------------------------------------
2 The Fund's standardized yield for the 30 days ended September 30, 1994 was
7.11%.(1)
- --------------------------------------------------------------------------------
3 Total return for the period from inception of the Fund on February 1, 1994
to September 30, 1994 was -0.42%.(2)
- --------------------------------------------------------------------------------
4 "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 semi-annually and
then annualized. Falling net asset values will tend to artificially raise
yields.
(2) Total return is based on a hypothetical investment in the Fund for the
period shown, after deducting the contingent deferred sales charge of 1%.
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 Diversified Income Fund
<PAGE>
REPORT TO SHAREHOLDERS
Oppenheimer Strategic Diversified Income Fund provided shareholders an
attractive level of income for the 8 months ended September 30, 1994. At that
date, the Fund's standardized 30-day yield was 7.11%.(3)
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
erosion.
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 bonds
issued by consumer-durable and financial services companies, whose earnings are
sensitive to interest rate changes.
The proceeds from these sales were used to add to holdings in
higher-yielding corporate bonds issued by larger industrial companies, whose
earnings tend to rise in the middle-to-late stages of an economic expansion. In
addition, your managers increased positions in chemicals, mining, metals, and
forest products sectors.
As interest rates rose offshore and the dollar weakened against major
currencies, positions in Latin America and other emerging markets also were
reduced, while more investments were centered in Europe. In addition to
increasing the portfolio's holdings of foreign government bonds, which made up
14.8% of the portfolio on September 30, your managers focused 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 all
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
Diversified 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 Diversified Income Fund
Jon S. Fossel
President
Oppenheimer Strategic Funds Trust for
Oppenheimer Strategic Diversified Income Fund
October 21, 1994
(3) See footnote 1, page 2.
3 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS September 30, 1994
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS--7.0%
- -------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement with First Chicago Capital Markets, 4.95%, dated
9/30/94, to be repurchased at $3,001,238 on 10/03/94, collateralized by
U.S. Treasury Nts., 4.25%-8.5%, 4/15/95-7/15/98, with a value of
$1,696,399 and U.S. Treasury Bills, 0%, 3/16/95-3/23/95, with a value of
$1,366,384 (Cost $3,000,000)
$3,000,000 $3,000,000 7.00%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS--45.7%
- -------------------------------------------------------------------------------------------------------------------------
Argentina (Republic of):
Bonds, 8.375%, 12/20/03 800,000 666,802
Bonos de Consolidacion de Deudas, Series I, 4.8125%:
9/1/02 (4)(7) 267,900 180,399
4/1/07 (4)(7) 402,244 250,440
-----------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Bonds, Banco Do Nordeste, 9% Sr. Unsec. Debs, 11/12/96 100,000 94,875
Bonds, Banco Nacional de Desenvolvimento Economico e Social,
10.375%, 4/27/98 100,000 100,125
Nts., Banco Estado Minas Gerais:
10%, 1/15/96 50,000 48,250
8.25%, 2/10/00 500,000 402,500
-----------------------------------------------------------------------------------------------------
Denmark (Kingdom of) Bonds:
6%, 12/10/99 2,600,000 (1) 379,697
9%, 11/15/98 1,500,000 (1) 248,632
-----------------------------------------------------------------------------------------------------
Empresa Columbiana de Petroleos, Nts., 7.25%,
7/8/98 (6) 150,000 143,063
-----------------------------------------------------------------------------------------------------
Italy (Republic of) Treasury Bonds:
12.50% 1/1/98 150,000,000 (1) 98,644
Buoni Pollennali del Tes:
12%, 5/1/97 700,000,000 (1) 454,776
12.50%, 6/16/97 300,000,000 (1) 196,942
-----------------------------------------------------------------------------------------------------
Morocco (Kingdom of) Loan Participation Agreements:
Tranche A, 4.50%, 1/1/09 (4)(6) 350,000 255,500
Tranche B, 4.312%, 1/1/04 (4)(6) 50,000 38,594
-----------------------------------------------------------------------------------------------------
New Zealand (Republic of) Bonds, 10%, 7/15/97 635,000 (1) 392,310
-----------------------------------------------------------------------------------------------------
South Australia Government Finance Authority Bonds, 10%, 1/15/03 1,080,000 (1) 766,802
-----------------------------------------------------------------------------------------------------
Spain (Kingdom of):
Bonds, 11.45%, 8/30/98 8,000,000 (1) 62,998
Bonds, 11.45%, 8/30/98 177,290,000 (1) 1,396,119
-----------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria:
12%, 10/22/98 250,000 (1) 198,688
Gtd. Bonds, 8.25%, 10/15/03 180,000 (1) 114,627
-----------------------------------------------------------------------------------------------------
United Kingdom Treasury Nts.:
12%, 11/20/98 306,000 (1) 535,041
12.25%, 3/26/99 240,000 (1) 425,435
-----------------------------------------------------------------------------------------------------
United Mexican States:
Banco Nacional de Comercio Exterior SNC International Finance BV
Gtd. Matador Bonds, 7.25% Debs., 2/2/04 950,000 (1) 796,817
Petacalco Topolobampo Trust, Sr. Sec. Unsub. Nts.:
8.125%, 12/15/03 (6) 200,000 171,750
8.125%, 12/15/03 850,000 729,938
Petroleos Mexicanos Gtd. Medium term Nts., 7.60%, 6/15/00 50,000 45,541
-----------------------------------------------------------------------------------------------------
U.S. Treasury Bonds, 11.75%, 11/15/14 3,600,000 4,799,250
-----------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
8.875%, 11/15/97 (9)(10) 3,656,000 3,852,510
9.25%, 1/15/96 900,000 932,906
-----------------------------------------------------------------------------------------------------
Venezuela (Republic of):
6.75% Debs., 9/20/95 (6) 325,000 308,344
9% Sr. Unsec. Unsub. Nts., 5/27/96 (6) 125,000 117,031
-----------------------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds, 12.5%, 4/1/98 475,000 (1) 381,603
-----------
Total Government Obligations (Cost $19,892,873) 19,586,949
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--3.9%
- -------------------------------------------------------------------------------------------------------------------------
Government Federal National Mortgage Assn. Interest-Only Stripped Mtg.-Backed
Agency--3.9% Security, Trust 240, Class 2:
7%, 9/25/23 (8) 320,217 121,082
7%, 2/25/24 (8) 3,900,491 1,496,813
-----------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 8.95%, 3/15/20 78,000 79,747
-----------
Total Mortgage-Backed Obligations (Cost $1,627,755) 1,697,642
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--36.0%
- -------------------------------------------------------------------------------------------------------------------------
BASIC MATERIALS--4.8%
- -------------------------------------------------------------------------------------------------------------------------
Chemicals--2.6% Harris Chemical North America, Inc., 0%/10.25% Gtd. Sr. Sec.
Disc. Nts., 7/15/01 (3) 400,000 326,000
-----------------------------------------------------------------------------------------------------
4 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Chemicals NL Industries, Inc.:
(continued) 11.75% Sr. Sec. Nts., 10/15/03 $200,000 $206,500
0%/13% Sr. Sec. Disc. Nts., 10/15/05 (3) 400,000 254,500
-----------------------------------------------------------------------------------------------------
Rexene Corp.:
9% Fst. Priority Nts., 11/15/99 (5) 127,000 121,179
10% 2nd Priority Nts., 11/15/02 (7) 200,000 199,000
-----------
1,107,179
- -------------------------------------------------------------------------------------------------------------------------
Metals--0.8% Kaiser Aluminum & Chemical Corp.:
12.75% Sr. Sub. Nts., 2/15/02 250,000 222,500
9.875% Sr. Nts., 2/1/03 100,000 97,250
-----------
319,750
- -------------------------------------------------------------------------------------------------------------------------
Paper and Forest Rainy River Forest Products, 10.75% Sr. Sec. Nts., 10/15/01 50,000 50,125
Products--1.4% -----------------------------------------------------------------------------------------------------
Stone Consolidated, Corp., 10.25% Sr. Sec Nts., 12/15/00 250,000 246,875 *
-----------------------------------------------------------------------------------------------------
Stone Container Corp.:
9.875% Sr. Nts., 2/1/01 200,000 188,250
10.75% Fst. Mtg. Nts., 10/1/02 100,000 99,875
-----------
585,125
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
CONSUMER CYCLICALS-11.5%
- -------------------------------------------------------------------------------------------------------------------------
Automotive--2.2% Envirotest Systems Corp., 9.125% Sr. Nts., 3/15/01 350,000 324,625
-----------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp., 11.875% Sr. Sub. Debs., 10/1/04 300,000 303,000
-----------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 300,000 277,500
-----------------------------------------------------------------------------------------------------
SPX Corp., 11.75% Sr. Sub. Nts., 6/1/02 50,000 52,250 *
-----------
957,375
- -------------------------------------------------------------------------------------------------------------------------
Construction Triangle Pacific Corp., 10.50% Sr. Nts., 8/1/03 250,000 246,250
Supplies and -----------------------------------------------------------------------------------------------------
Development--1.8% USG Corp., 9.25% Sr. Sec. Nts., 9/15/01 200,000 190,500
-----------------------------------------------------------------------------------------------------
Walter Industries, Inc., 14.625% Sr. Nts., Series B, 1/1/49 (2) 200,000 338,000
-----------
774,750
- -------------------------------------------------------------------------------------------------------------------------
Consumer Goods MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 300,000 298,500
and Services--3.3% -----------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, 13% Sr. Nts., 6/15/01 250,000 237,042
-----------------------------------------------------------------------------------------------------
Revlon Consumer Products Corp., 9.375% Sr. Nts., 4/1/01 350,000 307,128
-----------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 300,000 303,000
-----------------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 300,000 272,625
-----------
1,418,295
- -------------------------------------------------------------------------------------------------------------------------
Entertainment--1.6% Capital Gaming International, Inc., 11.50% Sr. Sec. Nts., 2/1/01 250,000 175,000
-----------------------------------------------------------------------------------------------------
Kloster Cruise Ltd., 13% Sr. Sec. Nts., 5/1/03 200,000 199,000
-----------------------------------------------------------------------------------------------------
Marvel (Parent) Holdings, Inc., 0% Sr. Sec. Disc. Nts., 4/15/98 500,000 312,500
-----------
686,500
- -------------------------------------------------------------------------------------------------------------------------
Media--1.1% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A, 10/1/03 200,000 194,000
-----------------------------------------------------------------------------------------------------
Sinclair Broadcasting Group, Inc., 10% Sr. Sub. Nts., 12/15/03 300,000 291,000
-----------
485,000
- -------------------------------------------------------------------------------------------------------------------------
Real Estate
Development--0.6% Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 300,000 271,500
- -------------------------------------------------------------------------------------------------------------------------
Retail--0.9% Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 50,000 49,250
-----------------------------------------------------------------------------------------------------
R.H. Macy & Co., Inc., 14.50% Sr. Sub. Debs., 10/15/98 (2) 450,000 324,000
-----------
373,250
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-CYCLICALS--6.2%
- -------------------------------------------------------------------------------------------------------------------------
Food--0.1% Kash 'N Karry Food Stores, Inc., 14% Sub. Debs., 2/1/01 (2) 200,000 57,000
- -------------------------------------------------------------------------------------------------------------------------
Food and Drug Di Giorgio Corp., 12% Sr. Nts., 2/15/03 150,000 150,000
Distribution--1.1% -----------------------------------------------------------------------------------------------------
Grand Union Co., 12.25% Sr. Sub. Nts., 7/15/02 400,000 296,000
-----------
446,000
- -------------------------------------------------------------------------------------------------------------------------
Healthcare--0.8% Total Renal Care, Inc., Units 500,000 360,000
- -------------------------------------------------------------------------------------------------------------------------
Financial--4.2% Banco Ganadero S.A., 9.75%, 8/26/99 (6) 300,000 302,250
-----------------------------------------------------------------------------------------------------
Borg-Warner Security Corp, 9.125% Sr. Sub. Nts., 5/1/03 400,000 361,000
-----------------------------------------------------------------------------------------------------
Card Establishment Services, Inc., 10% Sr. Sub. Nts.,
Series B, 10/1/03 300,000 283,500
-----------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development Bonds,
12.50%, 7/25/97 980,000 (1) 637,745
-----------------------------------------------------------------------------------------------------
Nacolah Holding Corp., 9.50% Sr. Nts., 12/1/03 250,000 223,125
-----------
1,807,620
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL--3.2%
- -------------------------------------------------------------------------------------------------------------------------
Containers--.9% Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 400,000 398,000
- -------------------------------------------------------------------------------------------------------------------------
General EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 350,000 318,500
Industrial--1.4% -----------------------------------------------------------------------------------------------------
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02 (6) 300,000 300,000
-----------
618,500
- -------------------------------------------------------------------------------------------------------------------------
Transportation--0.9% Tiphook Financial Corp., 7.125% Gtd. Nts., 5/1/98 500,000 362,500
- -------------------------------------------------------------------------------------------------------------------------
5 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TECHNOLOGY--8.8%
- -------------------------------------------------------------------------------------------------------------------------
Aerospace/ GPA Delaware, Inc., 8.75% Gtd. Nts., 12/15/98 $200,000 $168,000
Defense--1.1% -----------------------------------------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts., 5/15/03 300,000 307,500
-----------
475,500
- -------------------------------------------------------------------------------------------------------------------------
Cable American Telecasting, Inc., 12.5% Sr. Disc. Nts., 6/15/04 400,000 196,000
Television--3.9% -----------------------------------------------------------------------------------------------------
Bell Media Cable, 11.95% Sr. Disc. Nts., 7/15/04 (5) 400,000 228,500
-----------------------------------------------------------------------------------------------------
Cablevision Systems Corp., 10.75% Sr. Sub. Debs., 4/1/04 300,000 306,000
-----------------------------------------------------------------------------------------------------
Celcaribe S.A., 0%/13.50% Sr. Sec. Nts., 3/15/04 (3)(6) 100,000 63,375
-----------------------------------------------------------------------------------------------------
Comcast Cellular Corp., 0% Nts., Series B, 3/5/00 500,000 310,000
-----------------------------------------------------------------------------------------------------
Continental Broadcasting Ltd./Continental Broadcasting Capital Corp.,
10.625% Sr. Sub. Nts., 7/1/03 250,000 252,813
-----------------------------------------------------------------------------------------------------
Echostar Communications Corp., Units 320,000 153,600
-----------------------------------------------------------------------------------------------------
Marcus Cable, 0% Gtd. Sr. Sub. Disc. Nts., 8/01/04 (3) 300,000 164,250
-----------
1,674,538
- -------------------------------------------------------------------------------------------------------------------------
Communications--3.6% Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03 (3) 280,000 184,800
-----------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00 (3) 500,000 360,000
-----------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04 (3) 600,000 355,500
-----------------------------------------------------------------------------------------------------
NewCity Communications, Inc., 11.375%, Sr. Sub. Nts., 11/1/03 300,000 303,750
-----------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp., 0%/11.375% Sr.
Sub. Disc. Nts., 8/1/03 (3) 500,000 336,250
-----------
1,540,300
- -------------------------------------------------------------------------------------------------------------------------
Technology--0.2% Imax Corp., 7% Sr. Nts., 3/1/01 (5) 80,000 70,000
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
UTILITIES--1.5%
- -------------------------------------------------------------------------------------------------------------------------
Utility--1.5% Beaver Valley Funding Corp., 9.00% Debs., 6/1/17 300,000 228,245
-----------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04 (3) 165,000 118,387
-----------------------------------------------------------------------------------------------------
El Paso Electric Co., 10.375% Lease Oblig. Debs., 1/2/11 (2) 210,000 113,577
-----------------------------------------------------------------------------------------------------
First PV Funding Corp., Lease Obligation Bonds, 10.15%,
Series 1986B, 1/15/16 200,000 183,929
-----------
644,138
-----------
Total Corporate Bonds and Notes (Cost $15,585,965) 15,432,820
<CAPTION>
SHARES
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--0.2%
- -------------------------------------------------------------------------------------------------------------------------
Capital Gaming, Inc. (7) 6,667 44,169
-----------------------------------------------------------------------------------------------------
Celcaribe S.A. (6) 16,260 19,875
-----------
Total Common Stocks (Cost $70,007) 64,044
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
PREFERRED First Madison Bank, FSB, 11.50% 3,000 315,000
STOCKS--1.2%
- -------------------------------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 C.V., Series B 8,000 193,000
-----------
Total Preferred Stocks (Cost $498,000) 508,000
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS, AND CERTIFICATES--0%
- -------------------------------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99 5,062 16,451
-----------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96 (6) 6 9
-----------
Total Rights, Warrants, and Certificates (Cost $22,524) 16,460
<CAPTION>
DATE/PRICE FACE AMOUNT
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PUT OPTIONS PURCHASED--0%
- -------------------------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar Put Nov. 2/1.60 DEM 1,522,819 (1) 3,141
European OTC Deutsche Mark/U.S. Dollar Put Nov. 8/1.60 DEM 761,409 (1) 2,000
European OTC Deutsche Mark/U.S. Dollar Put Nov. 4/1.60 DEM 761,409 (1) 1,718
-----------
Total Put Options Purchased (Cost $33,185) 6,859
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
STRUCTURED INSTRUMENTS--5.4%
- -------------------------------------------------------------------------------------------------------------------------
Argentina Local Market Securities Trust:
Series I, 14.75%, 9/1/02 (6) 250,000 250,000
Series II, 11.30%, 4/1/00 (6) 300,000 302,265
-----------------------------------------------------------------------------------------------------
Bayerische Landesbank, N.Y. Branch:
Mexican Peso Linked Confidence Nt., Girozentrale Branch,
35.50%, 12/30/94 (6) 200,000 196,500
Italian Lira Linked Confidence Nt., Girozentrale Branch,
10%, 8/7/95 140,000 136,864
-----------------------------------------------------------------------------------------------------
Citibank, 10.50%-16% CD, 12/12/94-8/17/95 274,189,082 (1) 814,731
-----------------------------------------------------------------------------------------------------
Goldman Sachs International Limited, 5.10%, 2/28/95 80,000 77,808
-----------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., Standard & Poor's 500
Index-Linked Nts.:
4.85%, 11/25/94 (6) 25,000 35,770
4.9125%, 12/14/94 (6) 25,000 34,505
-----------------------------------------------------------------------------------------------------
6 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<CAPTION>
FACE MARKET VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Structured Instruments (continued)
Pulsar Internacional, S.A. de C.V., 9%, 9/19/95 (6) $250,000 $250,000
-----------------------------------------------------------------------------------------------------
Swiss Bank Corporation Investment Banking, Inc.,
10% CD Sterling Rate Linked Nts., 7/3/95 230,000 226,872
-----------
Total Structured Instruments (Cost $2,315,444) 2,325,315
- -------------------------------------------------------------------------------------------------------------------------
Total Investments, at Value (Cost $43,045,753) 99.4% 42,638,089
- -------------------------------------------------------------------------------------------------------------------------
Other Assets Net of Liabilities 0.6% 249,652
----------- -----------
Net Assets 100.0% $42,887,741
----------- -----------
----------- -----------
<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 future date.
4. Represents the current interest rate for a variable rate security.
5. Represents the current interest rate for an increasing rate security.
6. Restricted security-See Note 6 of Notes to Financial Statements.
7. Interest or dividend is paid in kind.
8. 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).
9. Securities with an aggregate market value of $93,784 are held in escrow to cover
outstanding call options, as follows:
FACE
SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
TO CALL DATE PRICE RECEIVED SEE NOTE 1
- -------------------------------------------------------------------------------------------------------------------------------
European OTC Deutsche Mark/U.S. Dollar 332,290 11/4/94 1.50 DEM $1,599 $981
European OTC Deutsche Mark/U.S. Dollar 149,290 11/4/94 1.60 DEM 3,923 4,931
European OTC Deutsche Mark/U.S. Dollar 664,581 11/2/94 1.50 DEM 3,087 1,753
European OTC Deutsche Mark/U.S. Dollar 298,580 11/2/94 1.60 DEM 7,787 9,950
European OTC Deutsche Mark/U.S. Dollar 332,291 11/8/94 1.54 DEM 3,965 4,085
European OTC Deutsche Mark/U.S. Dollar 149,290 11/8/94 1.60 DEM 4,060 5,108
------- -------
$24,421 $26,808
10. Securities with an aggregate market value of $10,538 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 1 $101,719
The market value of the open contracts was $101,469 at September 30, 1994 with a net unrealized gain of $249.
</TABLE>
7 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value (cost $43,045,753) - see accompanying statement $42,638,089
------------------------------------------------------------------------------------------------
Cash 557,053
------------------------------------------------------------------------------------------------
Unrealized appreciation on futures contracts - Note 7 249
------------------------------------------------------------------------------------------------
Receivables:
Interest and dividends 945,838
Shares of beneficial interest sold 217,954
Investments sold 15,108
------------------------------------------------------------------------------------------------
Other 12,134
-----------
Total assets 44,386,425
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Options written, at value (premiums received $24,421) - see accompanying
statement - Note 4 26,808
------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 1,253,551
Shares of beneficial interest redeemed 78,804
Distribution and service plan fees - Note 5 21,780
Dividends 105,799
Other 11,942
-----------
Total liabilities 1,498,684
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $42,887,741
-----------
-----------
- ------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $43,752,822
NET ASSETS ------------------------------------------------------------------------------------------------
Undistributed net investment income 4,070
------------------------------------------------------------------------------------------------
Accumulated net realized loss from investment, written option
and foreign currency transactions (460,892)
------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments, options written and
translation of assets and liabilities denominated in foreign
currencies (408,259)
------------------------------------------------------------------------------------------------
Net assets $42,887,741
-----------
-----------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Net asset value, redemption price and offering
PER SHARE price per share (based on net assets of $42,887,741 and 8,943,700
shares of beneficial interest outstanding) $ 4.80
</TABLE>
See accompanying Notes to Financial Statements.
8 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS For the Period from February 1, 1994 (commencement of operations)
to September 30, 1994
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME Interest $1,296,832
Dividends 4,250
----------
Total income 1,301,082
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES Service plan fees - Note 5 143,650
------------------------------------------------------------------------------------------------
Management fees - Note 5 109,624
------------------------------------------------------------------------------------------------
Registration and filing fees 13,505
------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees - Note 5 11,481
------------------------------------------------------------------------------------------------
Custodian fees and expenses 11,441
------------------------------------------------------------------------------------------------
Legal and auditing fees 10,501
------------------------------------------------------------------------------------------------
Shareholder reports 8,957
------------------------------------------------------------------------------------------------
Other 2,389
----------
Total expenses 311,548
------------------------------------------------------------------------------------------------
Less reimbursement from Oppenheimer Management Corporation - Note 5 (61,005)
----------
Net expenses 250,543
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,050,539
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED AND Net realized gain (loss) from:
UNREALIZED GAIN (LOSS) Investments and options written (443,166)
ON INVESTMENTS AND Closing and expiration of option contracts written - Note 4 5,502
FOREIGN CURRENCY Foreign currency transactions (23,228)
TRANSACTIONS ----------
Net realized loss (460,892)
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written (555,781)
Translation of assets and liabilities denominated in foreign currencies 147,522
----------
Net change (408,259)
----------
Net realized and unrealized loss on investments, options written and foreign
currency transactions (869,151)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 181,388
----------
----------
</TABLE>
See accompanying Notes to Financial Statements.
9 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED
SEPTEMBER 30,
1994(1)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS Net investment income $ 1,050,539
------------------------------------------------------------------------------------------------
Net realized loss on investments, options written and foreign
currency transactions (460,892)
------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments, options written and translation of assets and
liabilities denominated in foreign currencies (408,259)
-----------
Net decrease in net assets resulting from operations 181,388
- ------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO Dividends from net investment income
SHAREHOLDERS ($.228 per share) (1,046,469)
- ------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from
TRANSACTIONS beneficial interest transactions - Note 2 43,752,822
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 42,887,741
------------------------------------------------------------------------------------------------
Beginning of period --
End of period (including undistributed net investment income of $4,070) $42,887,741
<FN>
1. For the period from February 1, 1994 (commencement of operations) to September 30, 1994.
</TABLE>
See accompanying Notes to Financial Statements.
10 Oppenheimer Strategic Diversified Income Fund
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
PERIOD ENDED
SEPTEMBER 30,
1994(1)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $ 5.00
- ----------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .23
Net realized and unrealized loss on
investments, options written and foreign currency
transactions (.20)
-------
Total income from investment operations .03
- ----------------------------------------------------------------------------
Dividends from net investment income (.23)
- ----------------------------------------------------------------------------
Net asset value, end of period $ 4.80
- ----------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(2) .58%
- ----------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $42,888
- ----------------------------------------------------------------------------
Average net assets (in thousands) $22,046
- ----------------------------------------------------------------------------
Number of shares outstanding at end of period
(in thousands) 8,944
- ----------------------------------------------------------------------------
Ratios to average net assets(3):
Net investment income 7.187%
Expenses, before voluntary reimbursement by the Manager 2.131%
Expenses net of voluntary reimbursement by the Manager 1.714%
- ----------------------------------------------------------------------------
Portfolio turnover rate(4) 108.8%
<FN>
1. For the period from February 1, 1994 (commencement of operations) to
September 30, 1994.
2. Assumes a hypothetical initial investment on February 1, 1994, 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.
3. Annualized.
4. The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases
and sales of investment securities (excluding short-term securities) for the
period ended September 30, 1994 were $63,604,122 and $21,616,005, respectively.
</TABLE>
See accompanying Notes to Financial Statements.
11 Oppenheimer Strategic Diversified Income Fund
<PAGE>
----------------------------------------------------------
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT Oppenheimer Strategic Diversified Income Fund (the Fund)
ACCOUNTING POLICIES 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 a
single class of shares, designated as Class C shares,
which may be subject to a contingent deferred sales
charge. 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 sale price on the principal exchange
on which the option is traded or, in the absence of any
transactions that day, the value is based upon the last
sale price on the prior trading date if it is within the
spread between the closing bid and asked prices. If the
last sale price is outside the spread, the closing bid or
asked price closest to the last reported sale price is
used. Forward foreign currency exchange 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
$832,577, representing 1.88% 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 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.
12 Oppenheimer Strategic Diversified Income Fund
<PAGE>
----------------------------------------------------------
----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
----------------------------------------------------------
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 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.
----------------------------------------------------------
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.
----------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to
declare dividends 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.
----------------------------------------------------------
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.
13 Oppenheimer Strategic Diversified Income Fund
<PAGE>
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
2. SHARES OF The Fund has authorized an unlimited number of no
BENEFICIAL INTEREST par value shares of beneficial interest.
Transactions in shares of beneficial interest were
as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
SEPTEMBER 30, 1994(1)
----------------------
SHARES AMOUNT
--------------------------------------------------
<S> <C> <C>
Sold 9,579,653 $46,855,355
Dividends Reinvested 132,003 640,038
Redeemed (767,956) (3,742,571)
---------- ------------
Net increase 8,943,700 $43,752,822
---------- ------------
---------- ------------
</TABLE>
1. For the period from February 1, 1994
(commencement of operations) to September 30,
1994.
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS At September 30, 1994, net unrealized
AND LOSSES ON depreciation on investments and options written
INVESTMENTS of $409,802 was composed of gross appreciation of
$382,008, and gross depreciation of $791,810.
- --------------------------------------------------------------------------------
4. OPTION ACTIVITY Option activity for the period from February 1,
1994 (commencement of operations) to
September 30, 1994 was as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------ --------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
OPTIONS PREMIUMS OPTIONS PREMIUMS
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options written 1,926,322 $ 24,421 3,132 $ 5,502
Options expired prior
to exercise -- -- (3,132) (5,502)
----------- --------- ----------- --------
Options outstanding at
September 30, 1994 1,926,322 $ 24,421 -- $ --
----------- --------- ----------- --------
----------- --------- ----------- --------
</TABLE>
- --------------------------------------------------------------------------------
5. MANAGEMENT FEES Management fees paid to the Manager were in
OTHER accordance with the investment advisory agreement
TRANSACTIONS WITH and with the Fund which provides for an annual fee
AFFILIATES 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. In addition,
the Manager has voluntarily undertaken to
reimburse Fund expenses to the level needed to
maintain a stable dividend.
During the eight months ended September 30, 1994,
Oppenheimer Funds Distributor, Inc. (OFDI)
received contingent deferred sales charges of
$18,270 upon redemption of Fund shares, as
reimbursement for sales commissions advanced by
OFDI at the time of sale of such shares.
14 Oppenheimer Strategic Diversified Income Fund
<PAGE>
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
Oppenheimer Shareholder Services (OSS), a division
of the Manager, is the transfer and shareholder
servicing agent for the Fund, and for other
registered investment companies. OSS's total
costs of providing such services are allocated
ratably to these companies.
Under an approved distribution and service plan,
the Fund may expend up to .25% of its net assets
annually to reimburse OFDI for costs incurred in
connection with the personal service and
maintenance of accounts that hold shares of the
Fund, including amounts paid to brokers, dealers,
banks and other financial institutions. In
addition, the Fund's 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 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 Fund shares
sold prior to termination or discontinuance of the
plan. During the period ended September 30, 1994,
OFDI retained $143,650 as reimbursement for Class
C sales commissions and service fee advances, as
well as financing costs.
- --------------------------------------------------------------------------------
6. RESTRICTED The Fund owns securities purchased in private
SECURITIES 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 $2,788,831, or 6.5% 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
ACQUISITION COST UNIT AS OF
SECURITY DATE PER UNIT SEPTEMBER 30, 1994
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Argentina Local Market Securities Trust:
Series I, 14.75%, 9/1/02(1) 9/19/94 $ 98.83 $100.00
Series II, 11.30%, 4/1/00(1) 8/24/94 $100.00 $100.76
Banco Ganadero S.A., 9.75%, 8/26/99(1) 8/10/94 $ 99.58 $100.75
Bayerische Landesbank, N.Y. Branch, Mexican Peso
Linked Confidence Nt., Girozentrale Branch,
35.50%, 12/30/94 9/23/94 $100.00 $ 98.25
Celcaribe S.A.(1) 5/17/94 $119.00 $122.23
Celcaribe S.A., 0%/13.50% Sr. Sec. Nts., 3/15/04(1) 5/17/94 $ 63.34 $ 63.37
Empresa Columbiana de Petroleos, Nts., 7.25%,
7/8/98(1) 4/25/94 $ 93.92 $ 95.38
Lehman Brothers Holdings, Inc., Standard &
Poor's 500 Index-Linked Nts:
4.85%, 11/25/94 8/24/94 $139.00 $143.08
4.9125%, 12/14/94 9/13/94 $137.00 $138.02
Morocco (Kingdom of) Loan Participation
Agreements:
Tranche A, 4.50%, 1/1/09 3/4/94-4/21/94 $ 70.29 $ 73.00
Tranche B, 4.312%, 1/1/04 5/25/94 $ 80.50 $ 77.19
Polymer Group, Inc., 12.25% Sr. Nts., 7/15/02(1) 6/17/94 $100.00 $100.00
Pulsar International, S.A. de C.V., 9%, 9/19/95 9/16/94 $ 99.63 $100.00
Terex Corp. Rts., Exp. 7/96(1) 6/28/94 $ 1.49 $ 1.50
United Mexican States, Petacalco Topolobampo
Trust, Sr. Sec. Unsub. Nts., 8.125%, 12/15/03(1) 8/22/94 $ 88.96 $ 85.88
Venezuela (Republic of):
6.75% Debs., 9/20/95(1) 4/7/94-5/19/94 $ 96.44 $ 94.88
9% Sr. Unsec. Unsub. Nts., 5/27/96(1) 5/3/94-5/19/94 $ 96.98 $ 93.63
<FN>
1. Transferable under Rule 144A of the Act.
</TABLE>
15 Oppenheimer Strategic Diversified Income Fund
<PAGE>
--------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- --------------------------------------------------------------------------------
7. FUTURES At September 30, 1994, the Fund had outstanding
CONTRACTS futures contracts to sell debt securities as
follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
SECURITY DATE CONTRACTS SEPTEMBER 30, 1994 APPRECIATION
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury Nts.,
12/94 12/20/94 1 $101,469 $249
</TABLE>
16 Oppenheimer Strategic Diversified Income Fund
<PAGE>
--------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Trustees and Shareholders of
Oppenheimer Strategic Diversified Income Fund:
We have audited the accompanying statement of
assets and liabilities, including the statement of
investments, of Oppenheimer Strategic Diversified
Income Fund as of September 30, 1994, the related
statement of operations for the period from
February 1, 1994 (commencement of operations) to
September 30, 1994, the statement of changes in
net assets for the period from February 1, 1994
(commencement of operations) to September 30, 1994
and the financial highlights for the period
February 1, 1994 (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 audit.
We conducted our audit in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the financial statements and financial highlights
are free of material misstatement. An audit
includes examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements and financial highlights.
Our procedures included confirmation of securities
owned 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 audit provides
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 Diversified Income Fund at
September 30, 1994, the results of its operations,
the changes in its net assets and the financial
highlights for the above stated period, in
conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 21, 1994
17 Oppenheimer Strategic Diversified 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.
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 .40% 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.
18 Oppenheimer Strategic Diversified Income Fund
<PAGE>
--------------------------------------------------
OPPENHEIMER STRATEGIC DIVERSIFIED 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 Oppenheimer Shareholder
SHAREHOLDER SERVICING Services
AGENT
--------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
--------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche LLP
--------------------------------------------------
LEGAL COUNSEL Myer, Swanson & Adams, P.C.
The financial statements included herein have been
taken from the records of the Fund without
examination by the independent auditors.
This is a copy of a report to shareholders of
Oppenheimer Strategic Diversified Income Fund.
This report must be preceded or accompanied by a
Prospectus of Oppenheimer Strategic Diversified
Income Fund. For material information concerning
the Fund, see the Prospectus.
19 Oppenheimer Strategic Diversified Income Fund
