<PAGE>
[PHOTO]
"We want our money to work hard, but we're concerned about risk."
<PAGE>
This Fund is for people who want HIGH INCOME from an investment that's
strategically designed to lower risk.
STANDARDIZED YIELDS
For the 30 Days Ended 9/30/95:3
Class A
8.52%
Class B
8.16%
Class C
8.10%
THE FUND'S CLASS A SHARES ARE RANKED -STAR- -STAR- -STAR- -STAR- AMONG 195
HYBRID FUNDS AS OF 9/30/95 BY MORNINGSTAR MUTUAL FUNDS.
HOW YOUR FUND IS MANAGED
Oppenheimer Strategic Income Fund seeks high current income by strategically
allocating its assets among three sectors: U.S. government issues, foreign fixed
income securities and higher-yielding, lower-rated corporate bonds. Strategic
investing gives the Fund's managers the flexibility to shift assets among three
fixed income sectors to capitalize on worldwide investment opportunities. At the
same time, allocating the Fund's assets among three distinct fixed income
sectors can provide the diversification necessary to lower risk.
PERFORMANCE
Total returns at net asset value for the 12 months ended 9/30/95 for Class A and
B shares were 8.62% and 7.79%, respectively.1
Your Fund's average annual total returns at maximum offering price for Class
A shares for the 1- and 5-year periods ended 9/30/95 and since inception of the
Class on 10/16/89 were 3.46%, 9.53% and 9.72%, respectively. For Class B shares,
average annual total returns for the 1-year period ended 9/30/95 and since
inception of the Class on 11/30/92 were 2.87% and 7.38%, respectively.2
OUTLOOK
"In this environment, where we don't see any particular market as being
extremely under-valued due to the past year's performance, we'll remain focused
on our dual goals of capturing competitive income and diversifying our
investments to help reduce risk."
David Negri and Art Steinmetz, Portfolio Managers
September 30, 1995
All figures assume reinvestment of dividends and capital gains distributions.
Past performance is not indicative of future results. Investment return 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.
1. Based on the change in net asset value per share from 9/30/94 to 9/30/95,
without deducting any sales charges. Such performance would have been lower if
sales charges were taken into account.
2. Class A returns show results of hypothetical investments on 9/30/94, 9/30/90,
and 10/16/89 (inception of class), after deducting the current maximum initial
sales charge of 4.75%. Class B returns show results of hypothetical investments
on 9/30/94 and 11/30/92 (inception of class) and the deduction of the applicable
contingent deferred sales charge of 5% (1-year) and 3% (since inception).
Certain Class C performance is not yet available because Class C shares were
first publicly offered on 5/26/95. An explanation of the different total returns
is in the Fund's prospectus.
3. Standardized yield is net investment income calculated on a yield-to-maturity
basis for the 30-day period ended 9/30/95, 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.
4. Source: Morningstar Mutual Funds, 9/30/95. Morningstar, Inc., an independent
mutual fund monitoring service, produces proprietary monthly rankings of funds
in broad investment categories (equity, taxable bond, tax-exempt bond, or
"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%), and 1 star is the lowest (bottom 1%). The 4-star current
ranking is a weighted average of the 3- and 5-year rankings for the class, which
were 3 and 4 stars, weighted 40%/60%, respectively. The Fund was ranked among
195 hybrid funds. Rankings are subject to change. The Fund's Class A and C
shares have the same portfolio.
2 Oppenheimer Strategic Income Fund
<PAGE>
James C. Swain
Chairman
Oppenheimer Strategic
Income Fund
Jon S. Fossel
Chairman
Oppenheimer
Management
Corporation
Dear OppenheimerFunds Shareholder,
Although the U.S. stock market has received much of the media attention this
year, the bond market has also turned in an excellent performance thus far in
1995. The driving force: steadily falling long-term interest rates along with an
expectation that inflation would remain low.
As you may know, inflation erodes the purchasing power of future income
because bonds pay a fixed rate of income over a fixed time period. Therefore, as
a result of low inflation expectations and slower, more stable economic growth,
investors had a greater demand for bonds and, as such, prices rose and yields
fell.
Unlike short-term interest rates, which are affected primarily by the
actions of the Federal Reserve Board, long-term interest rates are driven by
investor expectations. So even though long-term interest rates were falling,
short-term interest rates were not generally declining until July 6, when
the Fed cut short-term rates for the first time in three years in an attempt to
stimulate the weakening U.S. economy in the second quarter. Back in 1994, the
surging economy caused the Fed to increase interest rates seven times prior to
its July 6 rate cut--and those rate hikes were primarily responsible for the
poor performance of the U.S. bond market last year. But investors who remained
patient and stayed the course have been rewarded in 1995.
And, although the economy has shown a variety of mixed signals recently, we
believe the Federal Reserve will not return to a tightening policy any time in
the near future. Indeed, the Fed appears to have successfully engineered a "soft
landing" for the U.S. economy, one in which growth is moderate and inflation
almost nonexistent.
This two-year period is an excellent example of why investors need to
maintain their objectivity and perspective. Like all markets, there will be
volatility in bonds from year to year but, over time, the fixed income markets
should tend to provide strong current income relative to inflation, and capital
appreciation and depreciation typically offset each other. As a result of the
Fed's change in policy, we believe we're now in a period in which capital gains
and losses will again take a back seat to income as the main driver behind bond
investing.
At the same time, the U.S. dollar has strengthened against major overseas
currencies as both Japan and Germany continue to reduce interest rates to
stimulate their economies--actions which make the U.S. bond market relatively
more attractive to foreign investors. So as a result of international market
forces, a moderate U.S. economic environment, and the Fed's anti-inflationary
goal, we expect interest rates to remain relatively stable.
Your portfolio manager discusses the outlook for your Fund on the following
pages. Thank you for your confidence in OppenheimerFunds, and we look forward to
helping you reach your investment goals in the future.
/s/ James C. Swain /s/ Jon S. Fossel
James C. Swain Jon S. Fossel
October 23, 1995
3 Oppenheimer Strategic Income Fund
<PAGE>
[PHOTO] [PHOTO]
Q+A AN INTERVIEW WITH YOUR FUND'S MANAGERS
WHAT IS THE BENEFIT OF STRATEGIC INVESTING?
As we've stated before, one of the key benefits of the stra-tegic investing
concept is that it lowers overall risk through diversifying among three typi-
cally uncorrelated fixed income markets--U.S. government issues, foreign fixed
income securities and higher-yielding, lower-rated corporate bonds. Though high
yield bonds are subject to greater risk that the issuer will default on its
prin-cipal or interest payments, diversification helps to lower that risk.
Diversification has also helped a great deal over the last year in which there
was dramatically different performance in each market.
WHY HAVE YOU SHIFTED A PORTION OF THE PORTFOLIO AWAY FROM THE U.S. INTO FOREIGN
BONDS?
Another major benefit of the strategic investing concept is the flexibility to
shift assets toward markets we think show the greatest potential. The move to
increase foreign bonds was based on having taken advantage of the better
relative performance of the domestic market in the first half of the year.
Once the Federal Reserve stopped raising interest rates, the U.S. market
rallied sub-stantially, becoming one of the strongest bull markets in years.
And, while it took the world markets with it, those markets have lagged
somewhat. As a result, we "sold high" in the U.S. to "buy low" abroad.
Foreign bond yields have not yet come down as much as yields in the U.S. By
making this shift, we're hoping to increase income and potentially to bolster
total return.(1)
WHICH FOREIGN MARKETS SEEM PARTICULARLY ATTRACTIVE?
We've been adding to positions in Australia, Canada and some emerging markets.
The strengthening dollar should benefit these markets, because a strong dollar
provides the perception of stability necessary for attracting foreign invest-
ment. Securities in these markets and in Europe, where we've also been adding,
seem to have better value in terms of price and yield than U.S. government bonds
in the current market.
Q WHAT IS THE BENEFIT OF STRATEGIC INVESTING?
4 Oppenheimer Strategic Income Fund
<PAGE>
FACING PAGE
Top left: Art Steinmetz,
Portfolio Manager
Top right: The trading desk
THIS PAGE
David Negri, Portfolio Manager
WHAT MOVES HAVE YOU MADE WITHIN DOMESTIC SECURITIES? As we increased the
Fund's exposure to foreign markets, we decreased our domestic holdings. We
had been moving into longer-term bonds through-out the first quarter because
they'd been benefiting most from lower rates. Most recently, however, as
debate materialized over the likelihood of another interest rate cut and
budget deficit reforms, we began to move into shorter-term bonds. Beyond
that, we've increased our allocation in mortgage bonds so that there is now
roughly an equal weighting in mortgages and Treasuries. As you know, the
markets in '94 and early '95 were unusually volatile, but we expect less
volatility in the second half, a situation that should make mortgages, which
became cheap with fears of increased prepay-ments, a good value.
Finally, we've reduced our allocation in corporate bonds somewhat. They've
done extremely well for us, so we've taken profits and trimmed our position.
HAVE LOW INTEREST RATES BOTH HERE AND IN MOST EUROPEAN ECONOMIES MADE IT
DIFFICULT FOR YOU TO MAINTAIN YIELD WITHOUT INCREASING RISK?
It's a fact that market yields have come down, so we've been looking for
securities with higher yields but with a low correlation to the rest of our
portfolio and better diversification. We've recently added bonds from certain
East Asian markets we find promising. Of course, foreign investments are always
subject to adverse market changes as a result of currency fluctuations. But over
time, the long-term returns more than compensate for temporary risk, especially
when these investments are part of a diversified portfolio. We've also been
buying private label mortgages--mortgage-backed securities on commercial
properties issued by private organizations. We believe these securities can
benefit us in terms of both income and diversification.
WHAT IS YOUR OUTLOOK?
Basically, we're expecting calmer markets going forward, coming off an extremely
volatile period. In addition, the dollar's strength should benefit both the U.S.
and dollar-linked markets by attracting foreign investment, and low global
interest rates should contribute as well. In this environment, where we don't
see any particular market being extremely undervalued due to the past year's
performance, we'll remain focused on our dual goals of capturing competitive
income and diversifying our investments to help reduce risk.
A IT OFFERS THE FLEXIBILITY TO SHIFT ASSETS TOWARD MARKETS WE THINK SHOW THE
GREATEST POTENTIAL.
1. The Fund's portfolio is subject to change.
5 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF DEPOSIT--3.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Bangkok Bank Co. Ltd. CD, 10.50%, 12/15/95(2)(THB) $ 250,000,000 $ 9,968,081
----------------------------------------------------------------------------------------------------
Bank Pacific CD, Zero Coupon, 3/5/96(IDR) 8,400,000,000 3,421,536
----------------------------------------------------------------------------------------------------
Citibank CD:
10.75%, 11/20/95(2)(CLP) 1,553,591,360 3,895,663
10.75%, 11/21/95(2)(CLP) 1,290,148,889 3,235,076
12.70%, 5/15/96(2)(CLP) 2,994,992,000 7,510,006
12.75%, 5/24/96(2)(CLP) 2,858,161,618 7,166,901
13%, 11/13/95(2)(CLP) 970,588,931 2,433,772
13%, 5/6/96(2)(CLP) 2,322,974,667 5,824,908
16%, 10/20/95(2)(CLP) 2,850,650,000 7,148,065
29.50%, 12/22/95(2)(HUF) 357,458,500 2,749,363
----------------------------------------------------------------------------------------------------
CS First Boston, Inc. CD, 15.75%, 6/11/96(2)(3)(IDR) 27,688,800,000 12,219,240
----------------------------------------------------------------------------------------------------
First Boston Corp. CD:
10.40%, 10/12/95(2)(3)(CZK) 457,709,390 17,357,200
11%, 12/27/95(2)(3)(4)(ARA) 3,400,000 3,400,428
12.50%, 12/21/95(2)(3)(ARA) 17,370,000 17,372,189
----------------------------------------------------------------------------------------------------
Indonesia (Republic of) Bank Negara CD:
Zero Coupon, 6/17/96(2)(IDR) 39,500,000,000 15,365,952
Zero Coupon, 7/18/96(2)(IDR) 19,950,000,000 7,683,303
Zero Coupon, 7/8/96(2)(IDR) 15,450,000,000 6,030,920
----------------------------------------------------------------------------------------------------
Krungthai Thanakit CD:
Zero Coupon, 10/13/95(2)(THB) 74,500,000 2,925,931
Zero Coupon, 12/1/95(2)(THB) 108,750,000 4,266,737
----------------------------------------------------------------------------------------------------
Thai Farmers Bank PLC CD, Zero Coupon, 12/7/98(2)(THB) 49,500,000 1,894,733
----------------------------------------------------------------------------------------------------
Thai Military Bank Ltd. CD:
10.75%, 6/12/96(2)(THB) 250,000,000 9,968,081
11%, 11/30/95(2)(THB) 21,250,000 847,287
11%, 12/15/95(2)(THB) 20,000,000 797,446
----------------------------------------------------------------------------------------------------
Thai Military Bank PLC CD, 10%, 1/31/96(2)(THB) 174,500,000 6,954,892
--------------
Total Certificates of Deposit (Cost $163,305,547) 160,437,710
- ----------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--18.9%
- ----------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--15.4%
- ----------------------------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--6.3% Federal Home Loan Mortgage Corp.:
Gtd. Multiclass Participation Certificates,
Series 1455, Cl. J, 7.50%, 12/15/22 25,027,500 25,770,316
Series 176, Cl. F, 8.95%, 3/15/20 14,565,663 14,679,422
----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn.:
Collateralized Mtg. Obligations, Gtd. Real Estate Mtg.
Investment Conduit Pass-Through Certificates, 10.50%, 11/25/20 38,755,000 45,864,120
Gtd. Real Estate Mtg. Investment Conduit Pass-Through
Certificates, Series G93-27, Cl. S,
Inverse Floater, 1.068%, 8/25/23(5) 19,195,926 9,406,004
</TABLE>
6 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FHLMC/FNMA/SPONSORED Gtd. Real Estate Mtg. Investment Conduit Pass-Through
(CONTINUED) Certificates, Trust 1993-87, Cl. S, Inverse Floater,
5.339%, 6/25/23 (coupon inversely
indexed to 1-month US LIBOR, multiplied by 1.857)(5) $ 28,806,289 $ 18,683,580
Interest-Only Stripped Mtg.-Backed Security,
Trust 215, Cl. 2, 14.032%--14.073%, 4/1/23(6) 42,487,950 12,875,840
Interest-Only Stripped Mtg.-Backed Security, Trust 218, Cl. 2,
16.734%, 4/25/23(6) 48,612,701 14,363,535
Interest-Only Stripped Mtg.-Backed Security, Trust 221, Cl. 2,
9.782%--10.517%, 5/25/23(6) 61,261,276 18,100,793
Interest-Only Stripped Mtg.-Backed Security, Trust 222, Cl. 2,
11.27%--14.191%, 6/25/23(6) 298,754,848 91,890,459
Interest-Only Stripped Mtg.-Backed Security, Trust 240, Cl. 2,
9.121%--13.002%, 2/25/24(6) 142,385,044 32,145,189
Interest-Only Stripped Mtg.-Backed Security, Trust 258, Cl. 2,
8.853%, 3/25/24(6) 33,445,196 10,208,624
Principal-Only Stripped Mtg.-Backed Security,
Series 1993-253, Cl. G, 5.777%, 11/25/23(7) 7,802,220 5,317,701
Series 1994-83, Cl. Z, 7.50%, 6/25/24 34,607,848 32,898,913
--------------
332,204,496
- ----------------------------------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--9.0% Government National Mortgage Assn.:
13%, 10/15/15 48,420,310 57,665,563
13.50%, 6/15/15 62,724,732 75,661,708
6%, 10/1/25(4) 50,000,000 50,093,750
6%, 11/15/25(4) 47,795,000 47,884,616
6.50%, 10/1/25(4) 25,440,000 25,813,650
6.50%, 7/20/25 27,262,157 27,620,110
6.50%, 8/20/25 7,391,529 7,488,580
6.50%, 9/20/25 15,539,464 15,767,700
7.50%, 10/15/25(4) 160,000,000 161,600,000
--------------
469,595,677
- ----------------------------------------------------------------------------------------------------------------------------------
PRIVATE--3.5%
- ----------------------------------------------------------------------------------------------------------------------------------
AGRICULTURAL--0.2% Prudential Agricultural Credit, Inc., Farmer Mac Agricultural
Real Estate Trust Sr. Sub. Mtg. Pass-Through Certificates, Series 1992-2:
Cl. B2, 9.192%, 1/15/03(3)(8) 6,383,500 5,342,691
Cl. B3, 9.479%, 4/15/09(3)(8) 7,685,390 5,872,719
--------------
11,215,410
- ----------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL--1.5% CBA Mortgage Corp., Mtg. Pass-Through
Certificates, Series 1993-C1, Cl. F, 7.154%, 12/25/03(3)(8) 14,300,000 10,367,500
----------------------------------------------------------------------------------------------------
Citicorp Mortgage Securities, Inc., Sub. Bonds, Series 1993-5:
Cl. B3, 7%, 4/25/23 1,643,424 1,218,188
Cl. B4, 7%, 4/25/23 1,584,732 205,025
</TABLE>
7 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL (CONTINUED) CS First Boston Mortgage Securities Corp., Mtg.
Pass-Through Certificates, Cl. 1E-1, 11%, 2/15/02(3) $ 15,000,000 $ 14,907,705
----------------------------------------------------------------------------------------------------
FDIC Trust, Gtd. Real Estate Mtg. Investment Conduit
Pass-Through Certificates, Series 1994-C1:
Cl. 2-D, 8.70%, 9/25/25(3) 2,500,000 2,632,813
Cl. 2-E, 8.70%, 9/25/25(3) 2,500,000 2,561,719
Cl. 2-G, 8.70%, 9/25/25(3) 4,870,000 4,868,478
- ----------------------------------------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg.
Pass-Through Certificates:
Series 1991-M6, Cl. B4, 7.477%, 6/25/21(8) 9,606,269 9,477,185
Series 1992-CHF, Cl. C, 8.25%, 12/25/20 1,704,279 1,732,507
Series 1992-CHF, Cl. D, 8.25%, 12/25/20 10,005,542 10,121,231
Series 1993-C1, Cl. B, 8.75%, 5/25/24 8,172,000 8,424,821
Series 1993-C1, Cl. D, 9.45%, 5/25/24 6,597,507 6,927,383
Series 1993-C1, Cl. E, 9.50%, 5/25/24 1,860,695 1,839,763
Series 1993-C2, Cl. E, 8.50%, 3/25/25 2,223,470 2,181,086
--------------
77,465,404
- ----------------------------------------------------------------------------------------------------------------------------------
MULTI-FAMILY--1.2% ACP Mortgage LP, Cl. E, 7.668%, 2/25/28(3) 2,843,846 2,310,626
----------------------------------------------------------------------------------------------------
Countrywide Funding Corp.:
Series 1993-11, Cl. B1, 6.25%, 1/25/09 1,384,344 1,255,752
Series 1993-11, Cl. B3, 6.25%, 2/25/09(3) 807,537 268,569
Series 1993-12, Cl. B1, 6.625%, 2/25/24 3,500,000 3,145,625
----------------------------------------------------------------------------------------------------
Multi-family Capital Access One, Inc.,
Series 1, Cl. D, 10.549%, 1/15/24(3)(8) 3,576,000 3,304,448
----------------------------------------------------------------------------------------------------
Resolution Trust Corp., Commercial Mtg. Pass-Through Certificates:
Series 1992-M4, Cl. B, 7.20%, 9/25/21 3,834,385 3,824,799
Series 1994-C1, Cl. C, 8%, 6/25/26 8,000,000 8,275,000
Series 1994-C1, Cl. E, 8%, 6/25/26 6,643,756 5,545,461
Series 1994-C2, Cl. D, 8%, 4/25/25 1,964,112 1,940,789
Series 1994-C2, Cl. E, 8%, 4/25/25 19,458,690 17,683,085
Series 1994-C2, Cl. G, 8%, 4/25/25 3,983,095 3,276,719
Series 1995-C1, Cl. F, 6.90%, 2/25/07 14,714,710 12,760,413
--------------
63,591,286
- ----------------------------------------------------------------------------------------------------------------------------------
RESIDENTIAL--0.7% Chase Mortgage Finance Corp., Sub. Mtg. Pass-Through Certificates:
Series 1994-1, Cl. B-10, 6.606%, 3/28/25(3)(8) 1,064,342 774,975
Series 1994-1, Cl. B-8, 6.606%, 3/28/25(3)(8) 2,128,685 1,617,801
Series 1994-1, Cl. B-9, 6.606%, 3/28/25(3)(8) 2,128,685 1,596,514
Series 1994-1, Class B-11, 6.606%, 3/28/25(3)(8) 1,064,342 649,914
Series 1994-1, Class B-12, 6.606%, 3/28/25(3)(8) 1,064,342 646,588
----------------------------------------------------------------------------------------------------
Prudential Home Mortgage Securities Corp., Sub. Fixed Rate Mtg.
Securities, Real Estate Mtg. Investment Conduit
Pass-Through Certificates,
Series 1995-A, Cl. B2, 8.684%, 3/28/25(3)(8) 5,417,095 5,533,902
----------------------------------------------------------------------------------------------------
Ryland Mortgage Securities Corp., Sub. Bonds,
Series 1993-3, Cl. B2, 6.7125%, 8/25/08(3) 1,341,583 1,044,758
</TABLE>
8 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RESIDENTIAL (CONTINUED) SKW Real Estate LP, Sec. Nts., Cl. D, 9.05%, 4/15/04(3) $ 10,500,000 $ 10,413,848
----------------------------------------------------------------------------------------------------
U.S. Department of Veterans Affairs, Interest-Only Gtd.
Real Estate Mtg. Investment Conduit Pass-Through Certificates,
Vendee Mtg. Trust,
Series 1992-2, Cl. IO, 18.112%, 9/15/22(6) 185,424,974 6,670,953
Series 1995-2B, Cl. 2-IO, 22.979%, 6/15/25(6) 16,957,022 442,472
Series 1995-3, Cl. 1-IO, 18.721%, 9/15/25(6) 388,661,230 5,957,399
--------------
35,349,124
--------------
Total Mortgage-Backed Obligations (Cost $985,047,834) 989,421,397
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--17.4%
- ----------------------------------------------------------------------------------------------------------------------------------
TREASURY--17.4% U.S. Treasury Bonds:
11.50%, 11/15/95 52,750,000 53,145,625
11.625%, 11/15/02 142,079,000 186,789,399
11.75%, 11/15/14 3,260,000 4,826,838
13.375%, 8/15/01 62,000,000 84,203,750
7.50%, 11/15/24 12,000,000 13,357,500
7.875%, 2/15/21(9)(10) 77,000,000 88,405,625
8.125%, 8/15/19 326,000 382,744
8.125%, 8/15/21 100,000,000 117,843,689
9%, 11/15/18 29,000,000 36,993,125
STRIPS, Zero Coupon, 11/15/18 50,000,000 10,442,543
STRIPS, Zero Coupon, 5/15/18 300,000,000 64,815,857
----------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
8%, 10/15/96 13,570,000 13,879,557
8.75%, 8/15/00 1,150,000 1,280,452
8.875%, 2/15/96 57,000,000 57,676,875
9.25%, 1/15/96 70,000,000 70,721,832
9.375%, 4/15/96 100,636,000 102,617,210
9.50%, 11/15/95 2,700,000 2,712,655
--------------
Total U.S. Government Obligations (Cost $887,438,872) 910,095,276
- ----------------------------------------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--34.3%
- ----------------------------------------------------------------------------------------------------------------------------------
ARGENTINA--0.2% Argentina (Republic of):
Medium-Term Nts., 8%, 8/9/97(NLG) 3,900,000 2,396,320
Sr. Unsec. Unsub. Bonds, 13.45%, 10/21/97(ITL) 1,290,000,000 795,493
Bonds, Bonos del Tesoro, Series II, 5.906%, 9/1/97(8) 8,521,500 8,126,367
----------------------------------------------------------------------------------------------------
Province of Buenos Aires Sr. Unsub. Unsec. Nts., 9.50%, 7/14/97 975,000 945,750
--------------
12,263,930
- ----------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA--3.0% First Australia National Mortgage Acceptance Corp.
Ltd. Bonds, Series 17, 15%, 7/15/02(AUD) 2,190,000 1,951,641
----------------------------------------------------------------------------------------------------
New South Wales Treasury Corp.:
Gtd. Bonds, 12%, 12/1/01(AUD) 48,783,000 43,036,503
Gtd. Exch. Bonds, 12%, 12/1/01(AUD) 14,010,000 12,367,170
----------------------------------------------------------------------------------------------------
Queensland Treasury Corp. Gtd. Nts., 8%, 8/14/01(AUD) 80,413,000 59,660,717
----------------------------------------------------------------------------------------------------
Treasury Corp. of Victoria Gtd. Bonds, 10.25%, 11/15/06(AUD) 20,000,000 16,429,615
----------------------------------------------------------------------------------------------------
Western Australia Treasury Corp. Gtd. Bonds, 10%, 7/15/05(AUD) 30,000,000 24,306,526
--------------
157,752,172
</TABLE>
9 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL--1.9% Banco do Estado de Sao Paulo SA, 9.25% Nts., 10/4/96 $ 540,000 $ 517,050
----------------------------------------------------------------------------------------------------
Banco Estado Minas Gerais:
8.25%, 2/10/00 9,500,000 7,885,000
8.25%, 2/10/00(3) 2,000,000 1,651,250
----------------------------------------------------------------------------------------------------
Brazil (Federal Republic of):
Eligible Interest Bonds, 7.25%, 4/15/06(8) 67,530,000 44,988,483
Interest Due and Unpaid Bonds, 6.688%, 1/1/01(8) 38,717,250 32,859,328
----------------------------------------------------------------------------------------------------
Petroquimica do Nordeste Sr. Unsec. Unsub. Nts., 9.50%, 10/19/01 11,950,000 10,807,281
--------------
98,708,392
- ----------------------------------------------------------------------------------------------------------------------------------
BULGARIA--0.5% Bulgaria (Republic of):
Disc. Bonds, Tranche A, 6.75%, 7/28/24(8) 36,000,000 18,313,198
Interest Arrears Bonds, 6.75%, 7/28/11(8) 19,975,000 9,025,103
--------------
27,338,301
- ----------------------------------------------------------------------------------------------------------------------------------
CANADA--4.4% Canada (Government of) Bonds:
10.25%, 3/1/96(CAD) 24,820,000 18,734,697
11.75%, 2/1/03(CAD) 20,000,000 18,261,553
9%, 12/1/04(CAD) 69,680,000 56,019,667
Series A33, 11.50%, 9/1/00(CAD) 10,000,000 8,675,300
9.75%, 10/1/97(CAD) 95,820,000 74,980,585
9.75%, 6/1/01(CAD) 25,000,000 20,550,297
Series H9, 12%, 3/1/05(CAD) 35,000,000 33,237,211
--------------
230,459,310
- ----------------------------------------------------------------------------------------------------------------------------------
COLOMBIA--0.4% Colombia (Republic of) 1989-1990 Integrated Loan Facility Bonds:
6.875%, 10/26/03(8)(11) 7,994,231 7,194,808
7.313%, 7/1/01(8)(11) 14,979,289 13,930,739
--------------
21,125,547
- ----------------------------------------------------------------------------------------------------------------------------------
COSTA RICA--0.1% Central Bank of Costa Rica Principal Bonds,
Series A, 6.25%, 5/21/10 6,400,000 3,584,000
- ----------------------------------------------------------------------------------------------------------------------------------
DENMARK--2.3% Denmark (Kingdom of) Bonds:
7%, 11/10/24(DKK) 60,000,000 8,974,156
8%, 3/15/06(DKK) 170,000,000 30,536,756
8%, 5/15/03(DKK) 250,000,000 45,676,570
9%, 11/15/00(DKK) 190,000,000 36,881,680
--------------
122,069,162
- ----------------------------------------------------------------------------------------------------------------------------------
ECUADOR--0.3% Ecuador (Republic of):
Disc. Bonds, 6.812%, 2/28/25(8) 30,650,000 15,131,904
Par Bonds, 3%, 2/28/25(8) 5,750,000 1,875,650
--------------
17,007,554
</TABLE>
10 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GERMANY--1.6% German (Federal Government of) Nts., Bundesobligationen,
Series 105, 6.625%, 1/20/98(DEM) 20,000,000 $ 14,624,568
----------------------------------------------------------------------------------------------------
German Unity Fund (German Federal Government) Bonds,
8.75%, 8/20/01(DEM) 53,000,000 41,865,198
----------------------------------------------------------------------------------------------------
Germany (Republic of) Debs., Bundespost Deutscheland,
7.75%, 10/1/04(DEM) 20,000,000 14,835,398
----------------------------------------------------------------------------------------------------
Landeskreditbank Baden-Wurttemberg, 6.50% Nts., 9/15/08(DEM) 10,500,000 6,954,752
----------------------------------------------------------------------------------------------------
Vereinsbank International SA:
10.80% Sr. Debs., 6/16/03(ITL) 5,000,000,000 3,021,253
11% Sr. Unsub. Unsec. Nts., 5/14/03(ITL) 5,000,000,000 3,079,429
--------------
84,380,598
- ----------------------------------------------------------------------------------------------------------------------------------
GREAT BRITAIN--2.6% United Kingdom:
Treasury Nts., 12.50%, 11/21/05(GBP) 10,000,000 19,848,037
Treasury Nts., 13%, 7/14/00(GBP) 21,775,000 41,689,793
Treasury Nts., 9.50%, 4/18/05(GBP) 17,000,000 29,234,927
GILT, 10%, 9/8/03(GBP) 26,010,000 45,822,911
--------------
136,595,668
- ----------------------------------------------------------------------------------------------------------------------------------
ITALY--2.4% Italy (Republic of):
Bonds, 11.50%, 3/1/03(ITL) 35,000,000,000 21,664,596
Treasury Bonds, Buoni del Tesoro Poliennali:
10.50%, 4/1/00(ITL) 34,000,000,000 20,584,609
10.50%, 4/1/05(ITL) 61,000,000,000 35,661,244
12%, 1/1/02(ITL) 16,000,000,000 10,137,138
12%, 9/18/98(ITL) 10,000,000,000 6,348,122
8.50%, 4/1/99(ITL) 20,000,000,000 11,465,094
12%, 5/1/02(ITL) 29,500,000,000 18,626,278
--------------
124,487,081
- ----------------------------------------------------------------------------------------------------------------------------------
JAMAICA--0.0% Jamaica (Government of) 1990 Refinancing Agreement Nts.,
Tranche A, 6.656%, 10/16/00(8)(11) 1,450,000 1,290,500
- ----------------------------------------------------------------------------------------------------------------------------------
MEXICO--2.9% Banco Nacional de Comercio Exterior SNC :
Debs., 10.875%, 6/23/97(8) 500,000 507,500
International Finance BV Gtd. Bonds, 10.875%, 6/23/97(3)(8) 20,120,000 20,371,500
International Finance BV Gtd. Bonds, 12.65%, 6/21/98(ESP) 3,028,000,000 23,443,086
International Finance BV Gtd. Bonds, 13%, 1/29/97(ESP) 1,250,000,000 10,108,872
Zero Coupon, 12/5/95(3) 9,650,000 9,457,000
----------------------------------------------------------------------------------------------------
Banco Nacional de Obras y Servicios Publicos SA Nts.,
10.75%, 8/16/96 4,260,000 4,302,600
----------------------------------------------------------------------------------------------------
Bonos de la Tesoreria de la Federacion, Zero Coupon, 8/15/96(MXP) 54,969,760 18,394,405
</TABLE>
11 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEXICO (CONTINUED) United Mexican States:
Nts., 11.188%, 7/21/97(3)(8) $ 20,000,000 $ 20,323,999
Combined Facility 2, Loan Participation Agreement,
Tranche A, 6.75%, 3/20/99(8)(11) 1,088,112 788,882
Combined Facility 3, Loan Participation Agreement,
Tranche A, 6.75%, 9/20/97(8)(11) 142,880 103,588
Nacional Financiera SNC Nts., 13.60%, 4/2/98ESP 1,773,000,000 13,978,614
Petacalco Topolobampo Trust Sr. Sec. Unsub. Nts.,
8.125%, 12/15/03 975,000 750,750
Petacalco Topolobampo Trust Sr. Sec. Unsub. Nts.,
8.125%, 12/15/03(3) 1,950,000 1,501,500
Petroleos Mexicanos Gtd. Medium-Term Nts., 7.60%, 6/15/00 14,360,000 12,636,800
Petroleos Mexicanos Gtd. Sr. Unsec. Nts., 6.875%, 3/8/99(8) 7,700,000 6,910,750
Petroleos Mexicanos Gtd. Unsec. Unsub. Nts., 7.875%, 3/2/99(CAD) 5,600,000 3,752,212
Banco Nacional de Comercio Exterior SNC International
Finance BV Gtd. Bonds, 12.25%, 12/3/98(GBP) 1,500,000 2,406,692
Gtd. Bonds, Banpesca Restructured Sovereign Loan, 6.902%,
10/26/06(8)(11) 5,147,107 3,738,087
--------------
153,476,837
- ----------------------------------------------------------------------------------------------------------------------------------
MOROCCO--1.5%
Morocco (Kingdom of) Loan Participation Agreement:
Tranche A, 6.688%, 1/1/09(8) 89,550,000 56,080,688
Tranche B, 6.688%, 1/1/04(8) 33,850,000 23,874,744
--------------
79,955,432
- ----------------------------------------------------------------------------------------------------------------------------------
NEW ZEALAND--2.6%
New Zealand (Republic of) Bonds:
10%, 3/15/02(NZD) 130,000,000 94,462,839
10%, 7/15/97(NZD) 8,635,000 5,837,984
8%, 11/15/95(NZD) 23,700,000 15,578,086
8%, 4/15/04(NZD) 26,000,000 17,334,352
--------------
133,213,261
- ----------------------------------------------------------------------------------------------------------------------------------
NORWAY--1.0%
Norwegian Government:
Bonds, 5.75%, 11/30/04(NOK) 113,820,000 16,534,751
Gtd. Bonds, 9.50%, 10/31/02(NOK) 190,000,000 34,586,914
--------------
51,121,665
- ----------------------------------------------------------------------------------------------------------------------------------
PAKISTAN--0.0% Islamic (Republic of Pakistan) Debs., 11.50%, 12/22/99 1,143,000 1,175,861
- ----------------------------------------------------------------------------------------------------------------------------------
PANAMA--0.6% Panama (Republic of) Debs., 7.25%, 5/10/02(8) 36,221,000 28,795,695
- ----------------------------------------------------------------------------------------------------------------------------------
PHILIPPINES--0.0% Philippines (Republic of) Front-Loaded Interest
Reduction Bonds, Series B, 5%, 6/1/08(12) 550,000 424,531
- ----------------------------------------------------------------------------------------------------------------------------------
POLAND--0.8% Poland (Republic of) Disc. Bonds, 7.125%, 10/27/24(8) 55,650,000 42,989,625
- ----------------------------------------------------------------------------------------------------------------------------------
SOUTH AFRICA--0.2% Eskom Loan Participation Agreements:
7.25%, 9/15/99(8)(11) 6,863,161 6,622,950
7.937%, 4/15/98(8)(11) 2,075,862 2,003,207
-------------
8,626,157
</TABLE>
12 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SPAIN--2.5% Spain (Kingdom of):
Bills, Letras del Tesoro, Zero Coupon, 9/6/96(ESP) 980,000,000 $ 7,298,216
Gtd. Bonds, Bonos y Obligacion del Estado, 10.90%, 8/30/03(ESP) 1,200,000,000 9,877,421
Gtd. Bonds, Bonos y Obligacion del Estado, 10%, 2/28/05(ESP) 3,750,000,000 28,819,798
Gtd. Bonds, Bonos y Obligacion del Estado, 11.30%, 1/15/02(ESP) 10,000,000,000 82,742,069
-------------
128,737,504
- ----------------------------------------------------------------------------------------------------------------------------------
SUPERNATIONAL--1.2% Eurofima, 10.75% Sr. Unsec. Nts., 5/19/03(ITL) 8,000,000,000 4,834,005
- ----------------------------------------------------------------------------------------------------------------------------------
International Bank for Reconstruction and Development Bonds:
12.50%, 7/25/97(NZD) 58,300,000 40,971,549
12.50%, 7/25/97(NZD) 8,000,000 5,622,168
----------------------------------------------------------------------------------------------------
Nordic Investment Bank, 10.80% Unsec. Unsub. Bonds, 5/24/03(ITL) 16,000,000,000 9,680,421
-------------
61,108,143
- ----------------------------------------------------------------------------------------------------------------------------------
SWEDEN--1.1% Sweden (Kingdom of) Bonds:
Series 1030, 13%, 6/15/01(SEK) 100,000,000 16,579,539
Series 1033, 10.25%, 5/5/03(SEK) 72,000,000 10,734,707
Series 1035, 6%, 2/9/05(SEK) 198,000,000 22,264,383
Series 1036, 10.25%, 5/5/00(SEK) 65,000,000 9,652,583
-------------
59,231,212
- ----------------------------------------------------------------------------------------------------------------------------------
VENEZUELA--0.2% Venezuela (Republic of) Debs.:
7.188%, 12/29/95(8) 2,682,857 2,672,796
Banco Venezuela TCI, Zero Coupon, 12/13/98(11) 7,908,048 5,970,577
-------------
8,643,373
-------------
Total Foreign Government Obligations (Cost $1,774,025,476) 1,794,561,511
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--29.1%
- ----------------------------------------------------------------------------------------------------------------------------------
BASIC INDUSTRY--2.6%
- ----------------------------------------------------------------------------------------------------------------------------------
CHEMICALS--0.5% NL Industries, Inc.:
0%/13% Sr. Sec. Disc. Nts., 10/15/05(13) 16,505,000 12,337,488
11.75% Sr. Sec. Nts., 10/15/03 3,700,000 3,922,000
----------------------------------------------------------------------------------------------------
Quantum Chemical Corp., 10.375% First Mtg. Nts., 6/1/03 3,500,000 3,950,236
----------------------------------------------------------------------------------------------------
Sherritt, Inc., 11% Debs., 3/31/04(CAD) 10,000,000 7,479,923
-------------
27,689,647
- ----------------------------------------------------------------------------------------------------------------------------------
METALS/MINING--0.7%
Carbide/Graphite Group, Inc. (The), 11.50% Sr. Nts., 9/1/03 13,000,000 13,877,500
----------------------------------------------------------------------------------------------------
Horsehead Industries, Inc., 14% Sub. Nts., 6/1/99 3,050,000 3,187,250
----------------------------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.:
12.75% Sr. Sub. Nts., 2/1/03 2,800,000 3,045,000
9.875% Sr. Nts., 2/15/02 13,375,000 13,441,875
----------------------------------------------------------------------------------------------------
UCAR Global Enterprises, Inc., 12% Sr. Sub. Nts., 1/15/05 2,250,000 2,565,000
-------------
36,116,625
</TABLE>
13 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PAPER--1.2% Domtar, Inc.:
10.85% Debs., 8/5/17 (CAD) 1,700,000 $ 1,348,892
11.25% Debs., 9/15/17 5,625,000 6,145,313
12% Nts., 4/15/01 1,050,000 1,212,750
----------------------------------------------------------------------------------------------------
Gaylord Container Corp., 11.50% Sr. Nts., 5/15/01 8,950,000 9,352,750
----------------------------------------------------------------------------------------------------
Noranda Forest, Inc., 11% Debs., 7/15/98(CAD) 2,000,000 1,607,348
----------------------------------------------------------------------------------------------------
PT Inti Indorayon Utama, 9.125% Sr. Nts., 10/15/00 5,040,000 4,762,800
----------------------------------------------------------------------------------------------------
Repap New Brunswick, Inc., 9.617% First Priority Sr. Sec. Nts.,
7/15/00(8) 7,200,000 7,218,000
----------------------------------------------------------------------------------------------------
Riverwood International Corp.:
10.75% Sr. Nts., 6/15/00 9,990,000 10,839,150
11.25% Sr. Sub. Nts., 6/15/02 7,004,000 7,634,360
----------------------------------------------------------------------------------------------------
Scotia Pacific Holding Co., 7.95% Timber Collateralized Nts., 7/20/15 2,547,149 2,549,709
----------------------------------------------------------------------------------------------------
Stone Consolidated Corp., 10.25% Sr. Sec. Nts., 12/15/00 5,625,000 5,934,375
----------------------------------------------------------------------------------------------------
Stone Container Corp.:
10.75% First Mtg. Nts., 10/1/02 4,700,000 4,899,750
10.75% Sr. Sub. Nts., 6/15/97 900,000 933,750
-------------
64,438,947
- ----------------------------------------------------------------------------------------------------------------------------------
STEEL--0.2% Jorgensen (Earle M.) Co., 10.75% Sr. Nts., 3/1/00 5,525,000 5,497,375
----------------------------------------------------------------------------------------------------
Sheffield Steel Corp., 12% Sec. First Mtg., 11/1/01 4,000,000 3,820,000
----------------------------------------------------------------------------------------------------
Wheel-Pittsburgh Corp., 9.375% Sr. Nts., 11/15/03 3,700,000 3,413,250
-------------
12,730,625
- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER RELATED--5.4%
- ----------------------------------------------------------------------------------------------------------------------------------
CONSUMER PRODUCTS--1.1% Coleman Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B,
5/27/98 14,950,000 11,847,860
----------------------------------------------------------------------------------------------------
Harman International Industries, Inc., 12% Sr. Sub. Nts., 8/1/02 24,950,000 27,569,750
----------------------------------------------------------------------------------------------------
International Semi-Tech Microelectronics, Inc.,
0%/11.50% Sr. Sec. Disc. Nts., 8/15/03(13) 19,960,000 10,678,600
----------------------------------------------------------------------------------------------------
Repap Wisconsin, Inc., 9.25% First Priority Sr. Sec. Nts., 2/1/02 3,500,000 3,386,250
----------------------------------------------------------------------------------------------------
Williams (J. B.) Holdings, Inc., 12% Sr. Nts., 3/1/04 5,200,000 5,226,000
-------------
58,708,460
- ----------------------------------------------------------------------------------------------------------------------------------
FOOD/BEVERAGES/TOBACCO--0.7% Consdoidated Cigar Corp., 10.50% Sr. Sub. Nts., 3/1/03 3,600,000 3,600,000
----------------------------------------------------------------------------------------------------
Di Giorgio Corp., 12% Sr. Nts., 2/15/03 5,975,000 4,511,125
----------------------------------------------------------------------------------------------------
Dr. Pepper Bottling Holdings, Inc., 0%/11.625% Sr. Disc. Nts.,
2/15/03(13) 6,600,000 4,983,000
</TABLE>
14 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FOOD/BEVERAGE/TOBACCO Heileman Acquisition Corp., 9.625% Sr. Sub. Nts., 1/31/04 $ 8,050,000 $ 2,254,000
----------------------------------------------------------------------------------------------------
(CONTINUED) Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96(11) 15,000,000 15,112,500
----------------------------------------------------------------------------------------------------
Royal Crown Corp., 9.75% Sr. Sec. Nts., 8/1/00 1,000,000 977,500
----------------------------------------------------------------------------------------------------
Specialty Foods Acquisition Corp., 10.25% Sr. Nts., 8/15/01 6,500,000 6,142,500
-------------
37,580,625
- ----------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE--1.0% AmeriSource Health Corp., 11.25% Sr. Debs., 7/15/05(14) 9,350,844 10,145,666
----------------------------------------------------------------------------------------------------
Capstone Capital Corp., 10.50% Cv. Sub. Debs., 4/1/02(19) 5,450,000 6,315,188
----------------------------------------------------------------------------------------------------
Charter Medical Corp., 11.25% Sr. Sub. Nts., 4/15/04 6,000,000 6,510,000
----------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc., 13% Sr. Sub. Nts., 7/15/02 4,900,000 5,169,500
----------------------------------------------------------------------------------------------------
Mediq/PRN Life Support Services, Inc., 11.125% Sr. Sec. Nts., 7/1/99 3,000,000 2,850,000
----------------------------------------------------------------------------------------------------
Multicare Cos., Inc. (The), 12.50% Sr. Sub. Nts., 7/1/02 6,290,000 7,139,150
----------------------------------------------------------------------------------------------------
Quorum Health Group, Inc., 11.875% Sr. Sub. Nts., 12/15/02 3,750,000 4,162,500
----------------------------------------------------------------------------------------------------
Tenet Healthcare Corp., 10.125% Sr. Sub. Nts., 3/1/05 200,000 212,000
----------------------------------------------------------------------------------------------------
Total Renal Care, Inc., Units (each unit consists of $1,000 principal
amount of 0%/12% sr. sub. disc. nts., 8/15/04 and nine shares
of non-voting class B common stock)(13)(15) 10,200,000 9,741,000
-------------
52,245,004
- ----------------------------------------------------------------------------------------------------------------------------------
HOTEL/GAMING--1.4% Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A, 11/15/00(11) 5,775,000 4,620,000
----------------------------------------------------------------------------------------------------
Aztar Corp., 13.75% Sr. Sub. Nts., 10/1/04 5,575,000 6,021,000
----------------------------------------------------------------------------------------------------
Bally's Casino Holdings, Inc., Zero Coupon Sr. Disc. Nts., 6/15/98 2,300,000 1,759,500
----------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Promissory Nts. 33,500 --
----------------------------------------------------------------------------------------------------
Capitol Queen & Casino, Inc., 12% First Mtg. Nts., Series A,
11/15/00(11) 2,100,000 1,890,000
----------------------------------------------------------------------------------------------------
Casino Magic Finance Corp., 11.50% First Mtg. Nts., 10/15/01 3,150,000 2,567,250
----------------------------------------------------------------------------------------------------
Hollywood Casino Corp.:
13.50% First Mtg. Nts., 9/30/98 3,500,000 4,252,500
14% Sr. Sec. Nts., 4/1/98 7,900,000 8,749,250
----------------------------------------------------------------------------------------------------
Maritime Group Ltd., Units (each unit consists of $1,000 principal
amount of 14.25% first mtg. nts., series A, 2/15/97 and one warrant
to purchase one share of Palace Casinos, Inc., series A common stock)
(3)(15)(16) 3,042,347 1,262,574
----------------------------------------------------------------------------------------------------
Mohegan Tribal Gaming Authority, 13.50% Sr. Sec. Nts., 11/15/02(3) 2,100,000 2,189,250
----------------------------------------------------------------------------------------------------
Pioneer Finance Corp., 13.50% Gtd. First Mtg. Bonds, 12/1/98 18,205,000 15,383,225
----------------------------------------------------------------------------------------------------
Rio Hotel & Casino, Inc., 10.625% Sr. Sub. Nts., 7/15/05(3) 4,450,000 4,333,188
----------------------------------------------------------------------------------------------------
Santa Fe Hotel, Inc., 11% Gtd. First Mtg. Nts., 12/15/00 100,000 81,500
----------------------------------------------------------------------------------------------------
Showboat, Inc., 13% Sr. Sub. Nts., 8/1/09 2,650,000 2,881,875
----------------------------------------------------------------------------------------------------
Station Casinos, Inc., 9.625% Sr. Sub. Nts., 6/1/03 4,400,000 4,202,000
----------------------------------------------------------------------------------------------------
Trump Hotels & Casino Resorts Holdings LP/Trump
Hotels & Casino Resorts Funding, Inc., 15.50% Sr. Sec. Nts., 6/15/05 2,700,000 2,693,250
----------------------------------------------------------------------------------------------------
Trump Plaza Funding, Inc., 10.875% Gtd. Mtg. Nts., 6/15/01 7,475,000 6,933,063
----------------------------------------------------------------------------------------------------
Trump Taj Mahal Funding, Inc., 11.35% Debs., Series A, 11/15/99 1,344,438 1,145,202
-------------
70,964,627
</TABLE>
15 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LEISURE--0.3% Gillett Holdings, Inc., 12.25% Sr. Sub. Nts., Series A, 6/30/02 $ 12,800,000 $ 13,520,000
- ----------------------------------------------------------------------------------------------------------------------------------
RESTAURANTS--0.4% Carrols Corp., 11.50% Sr. Nts., 8/15/03 2,820,000 2,805,900
----------------------------------------------------------------------------------------------------
Family Restaurants, Inc., 0%/10.875% Sr. Sub. Disc. Nts., 2/1/04(13) 4,000,000 380,000
----------------------------------------------------------------------------------------------------
Foodmaker, Inc.:
14.25% Sr. Sub. Nts., 5/15/98 3,000,000 3,060,000
9.25% Sr. Nts., 3/1/99 5,130,000 4,758,075
9.75% Sr. Sub. Nts., 6/1/02 14,300,000 12,226,500
-------------
23,230,475
- ----------------------------------------------------------------------------------------------------------------------------------
TEXTILE/APPAREL--0.5% Polymer Group, Inc., 12.75% Sr. Nts., 7/15/02(3) 4,200,000 4,347,000
----------------------------------------------------------------------------------------------------
PT Polysindo Eka Perkasa, Zero Coupon Promissory Nts.,
10/23/96(IDR) 20,500,000,000 7,090,865
----------------------------------------------------------------------------------------------------
Synthetic Industries, Inc., 12.75% Sr. Sub. Debs., 12/1/02 14,225,000 14,082,750
----------------------------------------------------------------------------------------------------
WestPoint Stevens, Inc., 9.375% Sr. Sub. Debs., 12/15/05 250,000 244,375
-------------
25,764,990
- ----------------------------------------------------------------------------------------------------------------------------------
ENERGY--1.1%
- ----------------------------------------------------------------------------------------------------------------------------------
Coastal Corp., 11.75% Sr. Debs., 6/15/06 2,500,000 2,694,172
----------------------------------------------------------------------------------------------------
Global Marine, Inc., 12.75% Sr. Sec. Nts., 12/15/99 6,785,000 7,531,350
----------------------------------------------------------------------------------------------------
Kelley Oil & Gas Corp., 13.50% Sr. Nts., 6/15/99 8,300,000 8,009,500
----------------------------------------------------------------------------------------------------
Maxus Energy Corp.:
11.50% Debs., 11/15/15 3,500,000 3,552,500
8.50% Debs., 4/1/08 1,000,000 940,000
----------------------------------------------------------------------------------------------------
OPI International, Inc., 12.875% Gtd. Sr. Nts., 7/15/02 13,000,000 14,820,000
----------------------------------------------------------------------------------------------------
Petroleum Heat & Power Co., Inc.:
12.25% Sub. Debs., 2/1/05 3,825,000 4,150,125
9.375% Sub. Debs., 2/1/06 3,750,000 3,506,250
----------------------------------------------------------------------------------------------------
Plains Resources, Inc., 12% Sr. Sub. Nts., 10/1/99 1,200,000 1,242,000
----------------------------------------------------------------------------------------------------
Southwest Gas Corp., 9.75% Debs., Series F, 6/15/02 125,000 141,820
----------------------------------------------------------------------------------------------------
Triton Energy Corp.:
0%/9.75% Sr. Sub. Disc. Nts., 12/15/00(13) 800,000 740,000
Zero Coupon Sr. Sub. Disc. Nts., 11/1/97 11,350,000 9,718,438
-------------
57,046,155
- ----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES--1.9%
- ----------------------------------------------------------------------------------------------------------------------------------
BANKS & THRIFTS--0.8% Banco Bamerindus do Brasil SA:
10.50% Debs., 6/23/97 1,000,000 957,500
11% Sr. Unsub. Unsec. Bonds, 10/6/97 2,230,000 2,204,913
9% Unsub. Unsec. Bonds, 10/29/98 1,740,000 1,596,450
----------------------------------------------------------------------------------------------------
Banco Ganadero SA:
Zero Coupon Nts., 7/1/96(3) 8,790,000 8,181,804
Zero Coupon Sr. Unsub. Unsec. Nts., 6/15/96(3) 8,190,000 7,656,410
</TABLE>
16 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------=
<S> <C> <C> <C>
BANKS & THRIFTS Banco Mexicano SA, 8% Sr. Unsub. Unsec.
(CONTINUED) Exchangeable Medium-Term Nts., 11/4/98 $ 640,000 $ 555,200
----------------------------------------------------------------------------------------------------
Bank Nederlandse Gemeenten Unsec. Bonds, 10.50%, 6/18/03(ITL) 8,000,000,000 4,778,157
----------------------------------------------------------------------------------------------------
Canadian Imperial Banking Corp., Zero Coupon Indexed Nts., 12/28/95 9,900,000 9,289,170
----------------------------------------------------------------------------------------------------
Morgan Stanley Group, 14.25% Indian Rupee Indexed Nts., 6/26/96(INR) 228,978,900 6,749,562
-------------
41,969,166
- ----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL--0.9% Banco del Atlantico SA, 7.875% Eurobonds, 11/5/98 12,590,000 11,079,200
----------------------------------------------------------------------------------------------------
ECM Fund, L.P.I., 14% Sub. Nts., 6/10/02(11) 997,845 1,097,630
----------------------------------------------------------------------------------------------------
GPA Delaware, Inc.:
8.75% Gtd. Nts., 12/15/98 3,705,000 3,320,606
9.75%, 12/10/01 2,000,000 1,652,500
----------------------------------------------------------------------------------------------------
GPA Holland BV:
8.50% Medium-Term Nts., 2/10/97(3) 10,500,000 10,040,625
8.94% Medium-Term Nts., Series C, 2/16/99 2,000,000 1,735,000
----------------------------------------------------------------------------------------------------
GPA Investment BV, 6.40% Nts., 11/19/98 2,000,000 1,665,000
----------------------------------------------------------------------------------------------------
GPA Netherlands BV, 8.50% Medium-Term Nts., 3/3/97(3) 6,500,000 6,199,375
----------------------------------------------------------------------------------------------------
Olympic Financial Ltd., 13% Sr. Nts., 5/1/00 7,500,000 8,175,000
-------------
44,964,936
- ----------------------------------------------------------------------------------------------------------------------------------
INSURANCE--0.2% Life Partners Group, Inc., 12.75% Sr. Sub. Nts., 7/15/02 2,500,000 2,787,500
----------------------------------------------------------------------------------------------------
Terra Nova Insurance (UK) Holdings PLC, 10.75% Sr. Nts., 7/1/05 6,300,000 6,725,250
-------------
9,512,750
- ----------------------------------------------------------------------------------------------------------------------------------
HOUSING RELATED--1.4%
- ----------------------------------------------------------------------------------------------------------------------------------
BUILDING MATERIALS--0.6% Dal-Tile International, Inc., Zero Coupon Sr. Sec. Nts., 7/15/98 8,750,000 6,693,750
----------------------------------------------------------------------------------------------------
Nortek, Inc., 9.875% Sr. Sub. Nts., 3/1/04 3,500,000 3,193,750
----------------------------------------------------------------------------------------------------
Pacific Lumber Co., 10.50% Sr. Nts., 3/1/03 15,770,000 14,902,650
----------------------------------------------------------------------------------------------------
Southdown, Inc., 14% Sr. Sub. Nts., Series B, 10/15/01 3,450,000 3,855,375
----------------------------------------------------------------------------------------------------
Walter Industries, Inc., 17% Sub. Nts., 1/1/96(16) 4,250,000 2,698,750
-------------
31,344,275
- ----------------------------------------------------------------------------------------------------------------------------------
HOMEBUILDERS/REAL ESTATE--0.8% Blue Bell Funding, Inc., 11.85% Extd. Sec. Nts., 5/1/99 4,442,000 4,686,310
- ----------------------------------------------------------------------------------------------------------------------------------
Hovnanian K. Enterprises, Inc., 11.25% Gtd. Sub. Nts., 4/15/02 6,900,000 6,434,250
----------------------------------------------------------------------------------------------------
Olympia & York First Canadian Place Ltd., 11% Debs., Series 3,
11/4/49(17)(CAD) 5,150,000 2,614,307
----------------------------------------------------------------------------------------------------
Saul (B.F.) Real Estate Investment Trust, 11.625% Sr. Nts., 4/1/02 17,825,000 17,334,813
----------------------------------------------------------------------------------------------------
Tribasa Toll Road Trust, 10.50% Nts., Series 1993-A, 12/1/11(3) 13,700,000 10,549,000
----------------------------------------------------------------------------------------------------
41,618,680
</TABLE>
17 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING--1.8%
- ----------------------------------------------------------------------------------------------------------------------------------
AEROSPACE/ELECTRONICS/ Berg Electronics Holdings Corp., 11.375% Sr. Sub. Debs., 5/1/03 $ 4,550,000 $ 4,823,000
----------------------------------------------------------------------------------------------------
COMPUTERS--0.7% Communications & Power Industries, Inc., 12% Sr. Sub. Nts.,
8/1/05(3) 3,000,000 3,082,500
----------------------------------------------------------------------------------------------------
Dell Computer Corp., 11% Sr. Nts., 8/15/00 9,500,000 10,497,500
----------------------------------------------------------------------------------------------------
Rohr, Inc., 11.625% Sr. Nts., 5/15/03 7,600,000 8,132,000
----------------------------------------------------------------------------------------------------
Unisys Corp.:
13.50% Credit Sensitive Nts., 7/1/97(8) 9,400,000 10,199,000
8.875% Nts., 7/15/97 1,000,000 1,007,922
-------------
37,741,922
- ----------------------------------------------------------------------------------------------------------------------------------
AUTOMOTIVE--0.8% Aftermarket Technology Corp:
12% Sr. Sub. Nts., Series B, 8/1/04 5,370,000 5,678,775
12% Sr. Sub. Nts., Series D, 8/1/04 1,080,000 1,142,100
----------------------------------------------------------------------------------------------------
Chrysler Financial Corp., 13.25% Nts., 10/15/99 4,500,000 5,516,802
----------------------------------------------------------------------------------------------------
Foamex LP/Foamex Capital Corp.:
11.25% Sr. Nts., 10/1/02 5,100,000 5,227,500
9.50% Sr. Sec. Nts., 6/1/00 3,672,000 3,690,360
----------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp., 0%/14% Sr. Disc. Nts., Series B,
7/1/04(13) 7,250,000 3,951,250
----------------------------------------------------------------------------------------------------
JPS Automotive Products Corp., 11.125% Sr. Nts., 6/15/01 2,500,000 2,540,625
----------------------------------------------------------------------------------------------------
Navistar Financial Corp., 9.50% Medium-Term Nts., 6/1/96 6,075,000 6,148,422
----------------------------------------------------------------------------------------------------
Penda Corp., 10.75% Sr. Nts., Series B, 3/1/04 9,100,000 7,962,500
-------------
41,858,334
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL GOODS--0.3% Imo Industries, Inc., 12.25% Sr. Sub. Debs., 8/15/97 1,815,000 1,835,419
----------------------------------------------------------------------------------------------------
Terex Corp., Units (each unit consists of $1,000 principal amount
of 13.75% sr. sec. nts., 5/15/02 and four common stock appreciation
rights)(3)(15) 17,000,000 14,025,000
-------------
15,860,419
- ----------------------------------------------------------------------------------------------------------------------------------
MEDIA--6.6%
- ----------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--1.4% Act III Broadcasting, Inc., 9.625% Sr. Sub. Nts., 12/15/03 5,030,000 5,080,300
----------------------------------------------------------------------------------------------------
Chancellor Broadcasting Co., 12.50% Sr. Sub. Nts., 10/1/04 5,750,000 6,023,125
----------------------------------------------------------------------------------------------------
New City Communications, Inc., 11.375% Sr. Sub. Nts., 11/1/03 10,475,000 10,160,750
----------------------------------------------------------------------------------------------------
New World Communications Group Holding Corp.,
Zero Coupon Sr. Disc. Nts., Series B, 6/15/99 5,000,000 3,375,000
----------------------------------------------------------------------------------------------------
Outlet Broadcasting, Inc., 10.875% Sr. Sub. Nts., 7/15/03 2,000,000 2,110,000
----------------------------------------------------------------------------------------------------
Paxson Communications Corp., 11.625% Sr. Sub. Nts., 10/1/02(3) 14,300,000 14,067,625
----------------------------------------------------------------------------------------------------
SCI Television, Inc., 11% Sr. Nts., Series 1, 6/30/05 2,153,155 2,293,110
----------------------------------------------------------------------------------------------------
SFX Broadcasting, Inc., 11.375% Sr. Sub. Nts., 10/1/00 3,000,000 3,142,500
----------------------------------------------------------------------------------------------------
Sinclair Broadcast Group, Inc.:
10% Sr. Sub. Nts., 12/15/03 9,275,000 9,483,688
10% Sr. Sub. Nts., 9/30/05 2,200,000 2,249,500
----------------------------------------------------------------------------------------------------
United International Holdings, Inc., Zero Coupon Sr. Sec. Disc.
Nts., 11/15/99 13,045,000 7,892,225
----------------------------------------------------------------------------------------------------
Univision Television Group, Inc., 11.75% Sr. Sub. Nts., 1/15/01 5,500,000 5,940,000
-------------
71,817,823
</TABLE>
18 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CABLE TELEVISION--3.5% Adelphia Communications Corp., 12.50% Sr. Nts., 5/15/02 $ 6,090,000 $ 6,135,675
----------------------------------------------------------------------------------------------------
American Telecasting, Inc.:
0%/14.50% Sr. Disc. Nts., 6/15/04(13) 26,479,495 15,291,908
Units (each unit consists of $1,000 principal amount at maturity
of 0%/14.50% sr. disc. nts., 8/15/05 and one warrant to purchase
4.68 shares of American Telecasting, Inc., common stock)(3)(13)(15) 12,800,000 6,208,000
----------------------------------------------------------------------------------------------------
Australis Media Ltd., Units (each unit consists of $1,000 principal
amount of 0%/14% sr. sub. disc. nts., 5/15/03 and one warrant
to purchase 57.721 ordinary shares)(13)(15) 9,000,000 5,355,000
----------------------------------------------------------------------------------------------------
Bell Cablemedia PLC, 0%/11.95% Sr. Disc. Nts., 7/15/04(13) 23,100,000 15,592,500
----------------------------------------------------------------------------------------------------
Cablevision Industries Corp.:
10.75% Sr. Nts., 1/30/02 1,000,000 1,092,500
9.25% Sr. Debs., Series B, 4/1/08 4,400,000 4,686,000
----------------------------------------------------------------------------------------------------
Cablevision Systems Corp.:
10.75% Sr. Sub. Debs., 4/1/04 6,325,000 6,696,594
9.875% Sr. Sub. Debs., 2/15/13 4,550,000 4,754,750
9.875% Sr. Sub. Debs., 4/1/23 1,200,000 1,257,000
----------------------------------------------------------------------------------------------------
Continental Cablevision, Inc.:
11% Sr. Sub. Debs., 6/1/07 3,000,000 3,330,000
9.50% Sr. Debs., 8/1/13 12,255,000 12,775,838
----------------------------------------------------------------------------------------------------
Diamond Cable Communications PLC, 0%/13.25% Sr. Disc. Nts.,
9/30/04(13) 2,750,000 1,828,750
----------------------------------------------------------------------------------------------------
Echostar Communications Corp., 0%/12.875% Sr. Disc. Nts., 6/1/04(13) 13,000,000 6,045,000
----------------------------------------------------------------------------------------------------
Helicon Group LP/Helicon Capital Corp., 9% Sr. Sec. Nts., Series B,
11/1/03(8) 13,800,000 13,041,000
----------------------------------------------------------------------------------------------------
International CableTel, Inc.:
0%/10.875% Sr. Deferred Coupon Nts., 10/15/03(13) 900,000 607,500
0%/12.75% Sr. Deferred Coupon Nts., 4/15/05(13) 9,550,000 5,730,000
----------------------------------------------------------------------------------------------------
Marcus Cable Operating Co. LP/Marcus Cable Capital Corp.,
0%/13.50% Gtd. Sr. Sub. Disc. Nts., Series II, 8/1/04(13) 10,900,000 7,493,750
----------------------------------------------------------------------------------------------------
People's Choice TV Corp., Units (each unit consists of $1,000
principal amount of 0%/13.125% sr. disc. nts., 6/1/04 and one warrant
to purchase 1.427 shares of common stock)(13)(15) 8,900,000 4,650,250
----------------------------------------------------------------------------------------------------
PriCellular Wireless Corp., 0%/12.25% Sr. Sub. Disc. Nts., 10/1/03(13) 6,300,000 4,504,500
----------------------------------------------------------------------------------------------------
TeleWest Communications PLC, 0%/11% Sr. Disc. Debs., 10/1/07(4)(13) 42,245,000 24,924,550
----------------------------------------------------------------------------------------------------
Time Warner Entertainment LP/Time Warner, Inc., 8.375% Sr. Debs.,
3/15/23 13,004,000 13,132,413
</TABLE>
19 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CABLE TELEVISION (CONTINUED) Time Warner, Inc., 9.125% Debs., 1/15/13 $ 12,550,000 $ 13,456,160
----------------------------------------------------------------------------------------------------
TKR Cable I, Inc., 10.50% Sr. Debs., 10/30/07 3,600,000 4,064,180
----------------------------------------------------------------------------------------------------
Videotron Holdings PLC, 0%/11% Sr. Disc. Nts., 8/15/05(13) 900,000 517,500
-------------
183,171,318
- ----------------------------------------------------------------------------------------------------------------------------------
DIVERSIFIED MEDIA--1.2% Ackerley Communications, Inc., 10.75% Sr. Sec. Nts., Series A,
10/1/03 9,050,000 9,593,000
----------------------------------------------------------------------------------------------------
GSPI Corp., 10.15% First Mtg. Bonds, 6/24/10(3) 823,244 973,487
----------------------------------------------------------------------------------------------------
Lamar Advertising Co., 11% Sr. Sec. Nts., 5/15/03 12,000,000 12,150,000
----------------------------------------------------------------------------------------------------
News America Holdings, Inc.:
10.125% Gtd. Sr. Debs., 10/15/12 3,300,000 3,809,120
12% Sr. Nts., 12/15/01 2,500,000 2,804,262
----------------------------------------------------------------------------------------------------
Outdoor Systems, Inc., 10.75% Sr. Nts., 8/15/03 2,400,000 2,316,000
----------------------------------------------------------------------------------------------------
Panamsat LP/Panamsat Capital Corp.:
0%/11.375% Sr. Sub. Disc. Nts., 8/1/03(13) 36,900,000 28,689,750
9.75% Sr. Sec. Nts., 8/1/00 2,525,000 2,638,625
-------------
62,974,244
- ----------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT/FILM--0.3% Imax Corp., 7% Sr. Nts., 3/1/01(12) 13,780,000 13,159,900
- ----------------------------------------------------------------------------------------------------------------------------------
PUBLISHING/PRINTING--0.2% Bell & Howell Holdings Co., 0%/11.50% Sr. Disc. Debs., Series B,
3/1/05(13) 3,400,000 2,125,000
----------------------------------------------------------------------------------------------------
Marvel Holdings, Inc., Zero Coupon Sr. Sec. Disc. Nts., Series B,
4/15/98 8,000,000 5,800,000
----------------------------------------------------------------------------------------------------
United States Banknote Corp., 11.625% Sr. Nts., Series B, 8/1/02 4,220,000 2,764,100
-------------
10,689,100
- ----------------------------------------------------------------------------------------------------------------------------------
OTHER--1.4%
- ----------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATES--0.8% Acadia Partners LP, 13% Sr. Sub. Nts., 10/1/97(3) 25,000,000 25,875,000
----------------------------------------------------------------------------------------------------
MacAndrews & Forbes Group, Inc., 12.25% Sub. Nts., 7/1/96 1,565,000 1,582,606
----------------------------------------------------------------------------------------------------
MacAndrews & Forbes Holdings, Inc., 13% Sub. Debs., 3/1/99 5,215,000 5,260,631
----------------------------------------------------------------------------------------------------
Talley Industries, Inc., 0%/12.25% Sr. Disc. Debs., 10/15/05(13) 11,946,000 8,511,525
-------------
41,229,762
- ----------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL--0.2% EnviroSource, Inc., 9.75% Sr. Nts., 6/15/03 10,735,000 9,661,500
----------------------------------------------------------------------------------------------------
Envirotest Systems Corp., 9.125% Sr. Nts., 3/15/01 5,200,000 3,666,000
-------------
13,327,500
- ----------------------------------------------------------------------------------------------------------------------------------
SERVICES--0.4% Borg-Warner Security Corp., 9.125% Sr. Sub. Nts., 5/1/03 12,160,000 10,123,200
----------------------------------------------------------------------------------------------------
Grupo Mexicano de Desarrollo SA, 8.25% Gtd. Nts., 2/17/01(3) 14,700,000 6,670,125
----------------------------------------------------------------------------------------------------
Protection One Alarm Monitoring, Inc., Units (each unit consists
of ten $1,000 principal amount 0%/13.625% sr. sub. disc. nts.,
6/30/05 and 32 warrants, each warrant entitles holder to
purchase one share of Protection, One, Inc. common stock)(3)(15) 4,200,000 2,929,500
-------------
19,722,825
</TABLE>
20 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
RETAIL--1.6%
- ----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT STORES--0.0% Sears Canada, Inc., 11.75% Debs., 12/5/95(CAD) 2,400,000 $ 1,799,636
- ----------------------------------------------------------------------------------------------------------------------------------
DRUG STORES--0.1% Duane Reade, 12% Sr. Nts., Series B, 9/15/02 4,050,000 3,665,250
- ----------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAILING--0.5% Cole National Group, Inc., 11.25% Sr. Nts., 10/1/01 10,350,000 10,298,250
----------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc., 12% Sr. Nts., 10/1/03 6,600,000 5,610,000
----------------------------------------------------------------------------------------------------
Finlay Fine Jewelry Corp., 10.625% Sr. Nts., 5/1/03 6,970,000 6,795,750
----------------------------------------------------------------------------------------------------
United Stationers Supply Co., 12.75% Sr. Sub. Nts., 5/1/05(3) 5,600,000 6,006,000
-------------
28,710,000
- ----------------------------------------------------------------------------------------------------------------------------------
SUPERMARKETS--1.0% Grand Union Co., 12% Sr. Nts., 9/1/04 27,176,000 26,224,840
----------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc., 11.50% Sr. Nts., 2/1/03(14) 2,188,800 2,172,384
----------------------------------------------------------------------------------------------------
Penn Traffic Co.:
10.25% Sr. Nts., 2/15/02 1,500,000 1,428,750
9.625% Sr. Sub. Nts., 4/15/05 5,900,000 4,867,500
----------------------------------------------------------------------------------------------------
Purity Supreme, Inc., 11.75% Sr. Sec. Nts., Series B, 8/1/99 13,065,000 14,306,175
----------------------------------------------------------------------------------------------------
Ralph's Grocery Co., 13.75% Sr. Sub. Nts., 6/15/05 1,500,000 1,582,500
-------------
50,582,149
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.0%
- ----------------------------------------------------------------------------------------------------------------------------------
AIR TRANSPORTATION--0.3% American International Group, Inc., 11.70%
Unsec. Unsub. Bonds, 12/4/01 (ITL) 18,000,000,000 11,407,073
----------------------------------------------------------------------------------------------------
Northwest Airlines, Inc., 12.092% Sr. Gtd. Nts., 12/31/00 3,305,434 3,506,944
-------------
14,914,017
- ----------------------------------------------------------------------------------------------------------------------------------
RAILROADS--0.3% Transtar Holdings LP/Transtar Capital Corp.,
0%/13.375% Sr. Disc. Nts., Series B, 12/15/03(13) 23,816,000 15,123,160
- ----------------------------------------------------------------------------------------------------------------------------------
SHIPPING--0.4% Sea Containers Ltd.:
12.50% Sr. Sub. Debs., Series A, 12/1/04 2,850,000 3,149,250
9.50% Sr. Sub. Debs., 7/1/0 33,250,000 3,237,813
----------------------------------------------------------------------------------------------------
Trans Ocean Container Corp., 12.25% Sr. Sub. Nts., 7/1/04 12,300,000 12,607,500
-------------
18,994,563
- ----------------------------------------------------------------------------------------------------------------------------------
TRUCKING--0.0% Trism, Inc., 10.75% Sr. Sub. Nts., 12/15/00 1,250,000 1,243,750
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES--4.3%
- ----------------------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--1.8% Beaver Valley II Funding Corp., 9% Second Lease
Obligation Bonds, 6/1/17 5,906,000 5,016,721
----------------------------------------------------------------------------------------------------
C.A. La Electricidad de Caracas, 6.875% Exchange Eurobonds, 9/30/03(8) 3,638,739 1,637,433
----------------------------------------------------------------------------------------------------
California Energy Co., 0%/10.25% Sr. Disc. Nts., 1/15/04(13) 20,140,000 18,072,949
----------------------------------------------------------------------------------------------------
Del Norte Funding Corp.:
11.25% Debs., 1/2/14(17) 3,350,000 2,092,852
9.95% Debs., 1/2/98(17) 5,000,000 3,108,520
----------------------------------------------------------------------------------------------------
El Paso Electric Co.:
10.375% Lease Obligation Bonds, Series 1986A, 1/2/11(17) 2,510,000 1,602,919
10.75% Lease Obligation Bonds, 4/1/13(17) 7,400,000 4,725,684
9.20% Lease Obligation Bonds, Series 1986A, 7/2/97(17) 1,500,000 956,640
9.375% Lease Obligation Bonds, 10/1/96(17) 6,000,000 3,825,840
</TABLE>
21 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
FACE MARKET VALUE
AMOUNT(1) SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELECTRIC UTILITIES
(CONTINUED) First PV Funding Corp.:
10.15% Lease Obligation Bonds, Series 1986B, 1/15/16 $ 20,350,000 $ 21,149,794
10.30% Lease Obligation Bonds, Series 1986A, 1/15/14 16,700,000 17,559,866
----------------------------------------------------------------------------------------------------
Subic Power Corp.:
9.50% Sr. Sec. Nts., 12/28/08(3) 5,586,206 4,866,983
9.50% Sr. Sec. Nts., 12/28/08 7,401,724 6,929,864
-------------
91,546,065
- ----------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.5% Call-Net Enterprises, Inc., 0%/13.25% Sr. Disc. Nts., 12/1/04(13) 6,800,000 4,411,500
----------------------------------------------------------------------------------------------------
Celcaribe SA, 0%/13.50% Sr. Sec. Nts., 3/15/04(3)(13) 12,700,000 9,211,676
----------------------------------------------------------------------------------------------------
Cellular Communications International, Inc., Units (each unit
consists of $1,000 principal amount of zero coupon sr. disc. nts., 8/15/00
and one warrant to purchase 1.126 shares of common stock)(15) 11,950,000 6,632,250
----------------------------------------------------------------------------------------------------
Cellular, Inc., 0%/11.75% Sr. Sub. Disc. Nts., 9/1/03(13) 26,906,000 20,583,090
----------------------------------------------------------------------------------------------------
Comcast Cellular Corp., Zero Coupon Nts., Series B, 3/5/00 7,423,000 5,678,595
----------------------------------------------------------------------------------------------------
Geotek Communications, Inc., Units (each unit consists
of $1,000 principal amount 0%/15% sr. sec. disc. nts.,
7/15/05 and warrants to purchase 30 shares of common stock)
(3)(13)(15) 23,000,000 11,557,500
----------------------------------------------------------------------------------------------------
Horizon Cellular Telephone LP/Horizon Finance Corp.,
0%/11.375% Sr. Sub. Disc. Nts., 10/1/00(13) 21,902,000 18,616,700
----------------------------------------------------------------------------------------------------
In Flight Phone Corp., Units (each unit consists of $1,000
principal amount of 0%/14% sr. disc. nts., series A,
5/15/02 and one warrant to purchase one share of common stock)
(3)(13)(15) 13,050,000 5,220,000
----------------------------------------------------------------------------------------------------
IntelCom Group (USA), Inc. (ICG) and IntelCom Group, Inc.,
Units (each unit consists of ten 0%/13.50% sr. disc. nts., 9/15/05 of ICG
and 33 warrants to purchase an equal number of common shares
of IntelCom at an exercise price equal to $12.51 per share)
(3)(13)(15) 13,200,000 7,359,000
----------------------------------------------------------------------------------------------------
MFS Communications, Inc., 0%/9.375% Sr. Disc. Nts., 1/15/04(13) 17,801,000 13,528,760
----------------------------------------------------------------------------------------------------
PriCellular Wireless Corp., 0%/14% Sr. Sub. Disc. Nts., 11/15/01(13) 18,817,000 15,618,110
----------------------------------------------------------------------------------------------------
USA Mobile Communications, Inc. II:
14% Sr. Nts., 11/1/04 11,100,000 12,709,500
9.50% Sr. Nts., 2/1/04 1,850,000 1,720,500
-------------
132,847,181
-------------
Total Corporate Bonds and Notes (Cost $1,525,605,745) 1,520,424,905
Shares
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--0.2%
----------------------------------------------------------------------------------------------------
American Telecasting, Inc.(18) 50,000 575,000
----------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp.(3)(18) 159,220 955,320
----------------------------------------------------------------------------------------------------
Celcaribe SA(3)(18) 2,065,020 1,964,323
----------------------------------------------------------------------------------------------------
ECM Fund, L.P.I.(11) 525 525,000
----------------------------------------------------------------------------------------------------
Equitable Bag, Inc.(18) 68,985 172,463
----------------------------------------------------------------------------------------------------
Grand Union Co.(18) 244,257 3,175,341
----------------------------------------------------------------------------------------------------
Kaiser Aluminum Corp.(18) 115,330 1,686,701
----------------------------------------------------------------------------------------------------
Kash 'N Karry Food Stores, Inc.(18) 45,170 1,151,835
</TABLE>
22 Oppenheimer Strategic Income Fund
<PAGE>
<TABLE>
<CAPTION>
Market Value
Shares See Note 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED) Ladish, Inc.(18) 806,000 $ 302,250
----------------------------------------------------------------------------------------------------
Thrifty Payless Holdings, Inc.(18) 38,000 161,500
----------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc.(11)(18) 232,222 464,444
----------------------------------------------------------------------------------------------------
Walter Industries, Inc.(18) 1,763 22,148
-------------
Total Common Stocks (Cost $12,951,487) 11,156,325
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--0.9%
- ----------------------------------------------------------------------------------------------------------------------------------
Atlantic Richfield Co., 9% Exchangeable Notes for
Common Stock of Lyondell Petrochemical Co., 9/15/97 28,500 726,750
----------------------------------------------------------------------------------------------------
BankAmerica Corp., 8.375%, Series K 150,000 3,862,500
----------------------------------------------------------------------------------------------------
Berg Electronics Holdings Corp., $3.3438, Series E(14) 92,671 2,548,453
----------------------------------------------------------------------------------------------------
California Federal Bank, 10.625% Non-Cum., Series B 65,975 7,339,719
----------------------------------------------------------------------------------------------------
First Nationwide Bank, 11.50% Non-Cum. 135,000 14,985,000
----------------------------------------------------------------------------------------------------
K-III Communications Corp.:
$11.625 Exchangeable, Series B(14)(19) 59,713 5,851,882
Sr. Exchangeable, Series A 80,000 2,160,000
----------------------------------------------------------------------------------------------------
Kaiser Aluminum Corp., 8.255% Provisionally
Redeemable Income Debt Exchangeable for Stock 59,400 809,325
----------------------------------------------------------------------------------------------------
Prime Retail, Inc., $19.00 Cv., Series B 238,000 4,403,000
----------------------------------------------------------------------------------------------------
Stone Container Corp., $1.75 Cum. Cv. Exchangeable, Series E 18,200 391,300
----------------------------------------------------------------------------------------------------
TGX Corp., Series A(18) 692,000 1,211,000
----------------------------------------------------------------------------------------------------
Unisys Corp., $3.75 Cv., Series A 118,800 4,455,000
-------------
Total Preferred Stocks (Cost $47,403,421) 48,743,929
Units
- ----------------------------------------------------------------------------------------------------------------------------------
RIGHTS, WARRANTS AND CERTIFICATES--0.1%
- ----------------------------------------------------------------------------------------------------------------------------------
American Telecasting, Inc. Wts., Exp. 6/99 119,070 327,443
----------------------------------------------------------------------------------------------------
Ames Department Stores, Inc.:
Excess Cash Flow Payment Certificates, Series AG-7A 37,200 372
Litigation Trust 118,975 1,190
----------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00(11) 262,500 393,750
----------------------------------------------------------------------------------------------------
Capital Gaming International, Inc. Wts., Exp. 2/99 74,086 2,778
----------------------------------------------------------------------------------------------------
Casino America, Inc. Wts., Exp. 11/96 9,789 1,468
----------------------------------------------------------------------------------------------------
Echostar Communications Corp. Wts., Exp. 6/04 78,000 858,000
----------------------------------------------------------------------------------------------------
Eye Care Centers of America, Inc. Wts., Exp. 10/03(3) 6,600 33,000
----------------------------------------------------------------------------------------------------
Foamex LP/JPS Automotive Corp. Wts., Exp. 7/99 7,250 72,500
----------------------------------------------------------------------------------------------------
Icon Health & Fitness, Inc. Wts., Exp. 11/99 4,900 122,500
----------------------------------------------------------------------------------------------------
Protection One, Inc. Wts., Exp. 11/03 182,000 1,615,250
----------------------------------------------------------------------------------------------------
Terex Corp. Rts., Exp. 7/96(3) 16,941 847
----------------------------------------------------------------------------------------------------
United International Securities Ltd. Wts., Exp. 11/99 13,045 495,710
-------------
Total Rights, Warrants and Certificates (Cost $2,050,774) 3,924,808
</TABLE>
23 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
Face Market Value
Amount(1) See Note 1
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
STRUCTURED INSTRUMENTS--1.3%
- ----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank, N.Y. Branch, 10% CD Linked Nts.,
10/30/95 (indexed to the mid-market yield of the Japanese
Government Bond, Series 174, 4.60%, 9/20/04, multiplied by 14)(11) $ 24,640,000 $ 21,941,920
----------------------------------------------------------------------------------------------------
CS First Boston Corp. Argentina Structured Product Asset
Return Trust Certificates, 9.40%, 9/1/97 [representing debt
of Argentina (Republic of) Bonos del Tesoro Bonds,
Series II, 5.906%, 9/1/97 and an interest rate swap between
Credit Suisse
Financial Products and the Trust](3) 6,571,428 6,391,463
----------------------------------------------------------------------------------------------------
Goldman, Sachs & Co. Argentina Local Market Securities Trust,
11.30%, 4/1/00 [representing debt of Argentina (Republic of) Bonos del
Tesoro Bonds, Series 10, 5.98%, 4/1/00 and an interest rate swap
between Goldman Sachs and the Trust](11) 19,578,260 18,501,457
----------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 (representing debt
of Chemical Banking Corp., sub. capital nts., and equity
of Citicorp, 7.75% preferred, series 22)(11)(15) 10,000,000 11,066,000
----------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc. Repackaged Argentina Domestic Securities
Trust, 14.75%, 9/1/02 [representing debt of Argentina (Republic of)
Bonos de Consolidacion de Deudas Bonds, Series I, 5.875%, 9/1/02](11) 6,000,000 4,560,000
----------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12/14/95 (indexed to the Nota Do Tesouro Nacional, Zero Coupon,
12/13/95) 2,830,000 2,756,595
----------------------------------------------------------------------------------------------------
Salomon Brothers, Inc., Zero Coupon Brazilian Credit Linked Nts.,
12/14/95 (indexed to the Nota Do Tesouro Nacional, Zero Coupon,
12/13/95) 4,880,000 4,753,379
-------------
Total Structured Instruments (Cost $75,324,058) 69,970,814
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (Cost $5,473,153,214) 105.3% 5,508,736,675
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (5.3) (275,803,993)
------------- --------------
NET ASSETS 100.0% $5,232,932,682
------------- --------------
------------- --------------
</TABLE>
<TABLE>
<CAPTION>
1. Face amount is reported in U.S. Dollars, except for those denoted in the following currencies:
<S> <C> <C>
ARA--Argentine Austral ESP--Spanish Peseta MXP--Mexican Peso
AUD--Australian Dollar GBP--British Pound Sterling NLG--Netherlands Guilder
CAD--Canadian Dollar HUF--Hungarian Forints NOK--Norwegian Krone
CLP--Chilean Peso IDR--Indonesian Rupiah NZD--New Zealand Dollar
CZK--Czech Koruna INR--Indian Rupee SEK--Swedish Krona
DEM--German Deutsche Mark ITL--Italian Lira THB--Thai Baht
DKK--Danish Krone
</TABLE>
2. Indexed instrument for which the principal
amount and/or interest due at maturity is affected
by the relative value of a foreign currency.
3. Represents a security sold under Rule 144A,
which is exempt from registration under the
Securities Act of 1933, as amended. This security
has been determined to be liquid under guidelines
established by the Board of Trustees. These
securities amount to $360,526,449 or 6.89% of the
Fund's net assets, at September 30, 1995.
4. When-issued security to be delivered and
settled after September 30, 1995.
5. Represents the current interest rate for a
variable rate bond. Variable rate bonds known as
"inverse floaters" pay interest at a rate that
varies inversely with short-term interest rates.
As interest rates rise, inverse floaters produce
less current income. Their price may be more
volatile than the price of a comparable fixed-rate
security. Inverse floaters amount to $28,089,584
or 0.54% of the Fund's net assets at September 30,
1995.
6. Interest-Only Strips represent the right to
receive the monthly interest payments on an
underlying pool of mortgage loans.
These securities typically decline in price as
interest rates decline. Most other fixed-income
securities increase in price when interest rates
decline. The principal amount of the underlying
pool represents the notional amount on which
current interest is calculated. The price of these
securities is typically more sensitive to changes
in prepayment rates than traditional
mortgage-backed securities (for example, GNMA
pass-throughs). Interest rates disclosed represent
current yields based upon the current cost basis
and estimated timing and amount of future cash
flows.
7. 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. Interest rates disclosed represent
current yields based upon the current cost basis
and estimated timing of future cash flows.
24 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
8. Represents the current interest rate for a
variable rate security.
9. Securities with an aggregate market value of
$688,875 are held in collateralized accounts to
cover initial margin requirements on open futures
sales contracts. See Note 9 of Notes to Financial
Statements.
10. A sufficient amount of liquid assets have been
designated to cover outstanding call and put
options, as follows:
<TABLE>
<CAPTION>
FACE SUBJECT EXPIRATION EXERCISE PREMIUM MARKET VALUE
TO CALL/PUT DATE PRICE RECEIVED SEE NOTE 1
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Put Option on Argentina (Republic of)
Past Due Interest Bonds, 6.50%, 3/31/05 30,000 11/2/95 $62.00 $405,000 $753,000
----------------------------------------------------------------------------------------------------
Put Option on Brazil (Federal Republic
of) Interest Due and Unpaid Bonds,
7.813%, 1/1/01 19,000 11/2/95 $95.00 313,500 3,800
-------- --------
$718,500 $756,800
-------- --------
-------- --------
</TABLE>
11. Identifies issues considered to be illiquid--
See Note 8 of Notes to Financial Statements.
12. Represents the current interest rate for an
increasing rate security.
13. Represents a zero coupon bond that converts to
a fixed rate of interest at a designated future
date.
14. Interest or dividend is paid in kind.
15. Units may be comprised of several components,
such as debt and equity and/or warrants to
purchase equity at some point in the future.
16. Non-income producing--issuer is in default of
interest payment.
17. Partial interest payment received.
18. Non-income producing security.
19. 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, 1995. The aggregate fair
value of all securities of affiliated companies as
of September 30, 1995 amounted to $12,167,070.
Transactions during the period in which the issuer
was an affiliate are as follows:
<TABLE>
<CAPTION>
BALANCE
SEPTEMBER 30, 1994 GROSS ADDITIONS GROSS REDUCTIONS
------------------------ ----------------------- ----------------------
FACE/SHARES COST FACE/SHARES COST FACE/SHARES COST
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capstone Capital
Corp., 10.50%
Cv.Sub. Debs., 4/1/02 -- $ -- 5,450,000 $5,537,088 -- $ --
K-III Communications
Corp., $11.625
Exchangeable,
Series B 53,248 $5,383,979 6,465 614,630 -- --
---------- ---------- ---------
$5,383,979 $6,151,718 $ --
---------- ---------- ---------
---------- ---------- ---------
<CAPTION>
BALANCE
SEPTEMBER 30, 1995 INTEREST/
------------------------ DIVIDEND
FACE/SHARES COST INCOME
- -----------------------------------------------------------------
<S> <C> <C> <C>
Capstone Capital 5,450,000 $ 5,537,088 $232,861
Corp., 10.50%
Cv.Sub. Debs., 4/1/02
K-III Communications
Corp., $11.625
Exchangeable,
Series B 59,713 5,998,609 $614,630
----------- --------
$11,535,697 $847,491
----------- --------
----------- --------
</TABLE>
See accompanying Notes to Financial Statements.
25 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS Investments, at value (cost $5,473,153,214)--see accompanying statement $5,508,736,675
----------------------------------------------------------------------------------------------------------
Receivables:
Interest, dividends and principal paydowns 128,413,727
Investments sold 122,629,621
Shares of beneficial interest sold 14,062,106
Receivable for daily variation margin on futures contracts 275,000
----------------------------------------------------------------------------------------------------------
Other 186,914
--------------
Total assets 5,774,304,043
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES Bank overdraft 28,700,257
----------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward foreign currency exchange contracts--Note 5 7,282,708
----------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $718,500)--
see accompanying statement--Note 4 756,800
----------------------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 470,512,822
Shares of beneficial interest redeemed 15,872,047
Dividends 13,704,030
Distribution and service plan fees--Note 6 3,183,500
Transfer and shareholder servicing agent fees 276,695
Other 1,082,502
--------------
Total liabilities 541,371,361
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $5,232,932,682
--------------
--------------
- ----------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF Paid-in capital $5,569,709,674
NET ASSETS ----------------------------------------------------------------------------------------------------------
Overdistributed net investment income (6,400,367)
----------------------------------------------------------------------------------------------------------
Accumulated net realized loss from investments, written options and foreign
currency transactions (359,116,632)
----------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments, options written and translation of assets
and liabilities denominated in foreign currencies 28,740,007
--------------
Net assets $5,232,932,682
--------------
--------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE Class A Shares:
PER SHARE Net asset value and redemption price per share (based on net assets
of $3,218,621,790 and 687,546,419 shares of beneficial interest outstanding) $4.68
Maximum offering price per share
(net asset value plus sales charge of 4.75% of offering price) $4.91
----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $1,947,337,632 and 415,199,883 shares of beneficial interest outstanding) $4.69
----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price and offering price per share (based on net assets
of $66,973,260 and 14,313,936 shares of beneficial interest outstanding) $4.68
</TABLE>
See accompanying Notes to Financial Statements.
26 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENT OF OPERATIONS FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME Interest:
Unaffiliated companies (net of foreign withholding taxes of $497,148) $504,330,415
Affiliated companies 232,861
----------------------------------------------------------------------------------------------------------
Dividends:
Unaffiliated companies 4,194,095
Affiliated companies 614,630
--------------
Total income 509,372,001
- ----------------------------------------------------------------------------------------------------------------------------------
EXPENSES Management fees--Note 6 25,850,896
----------------------------------------------------------------------------------------------------------
Distribution and service plan fees--Note 6:
Class A 7,591,135
Class B 17,108,221
Class C 83,371
----------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 6 5,397,229
----------------------------------------------------------------------------------------------------------
Custodian fees and expenses 2,132,788
----------------------------------------------------------------------------------------------------------
Shareholder reports 1,750,484
----------------------------------------------------------------------------------------------------------
Registration and filing fees:
Class A 9,588
Class B 125,616
Class C 22,691
----------------------------------------------------------------------------------------------------------
Legal and auditing fees 121,770
----------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 85,905
----------------------------------------------------------------------------------------------------------
Other 209,893
--------------
Total expenses 60,489,587
- ----------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 448,882,414
- ----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED Net realized gain (loss) on:
GAIN (LOSS) ON, Investments and options written (including premiums on options exercised) (318,344,913)
INVESTMENTS OPTIONS Closing and expiration of options written (17,484,763)
WRITTEN AND FOREIGN Foreign currency transactions (13,670,507)
CURRENCY TRANSACTIONS Futures transactions 1,207,828
--------------
Net realized loss (348,292,355)
----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments and options written 297,543,927
Translation of assets and liabilities denominated in foreign currencies (890,017)
--------------
Net change 296,653,910
--------------
Net realized and unrealized loss on investments, options written and
foreign currency transactions (51,638,445)
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $397,243,969
--------------
--------------
See accompanying Notes to Financial Statements.
</TABLE>
27 Oppenheimer Strategic Income Fund
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
19951994
<S> <C> <C> <C>
OPERATIONS Net investment income $ 448,882,414 $ 366,546,493
----------------------------------------------------------------------------------------------------------
Net realized loss on investments, options written and foreign
currency transactions (348,292,355) (17,210,118)
----------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on
investments, options written and translation of assets and
liabilities denominated in foreign currencies 296,653,910 (317,182,306)
-------------- --------------
Net increase in net assets resulting from operations 397,243,969 32,154,069
- ----------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND Dividends from net investment income:
DISTRIBUTIONS TO Class A ($.41 and $.4329 per share, respectively) (254,120,541) (236,741,649)
SHAREHOLDERS Class B ($.3771 and $.3938 per share, respectively) (153,748,570) (119,419,105)
Class C ($.1181 per share) (5,287,754) --
----------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments, options
written and foreign currency transactions:
Class A ($.01 per share) (9,994,119) --
Class B ($.01 per share) (5,867,961) --
Class C ($.01 per share) (14,565) --
----------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments, options
written and foreign currency transactions:
Class A ($.1179 per share) -- (57,628,697)
Class B ($.1179 per share) -- (29,069,526)
----------------------------------------------------------------------------------------------------------
Tax return of capital distribution:
Class A ($.0280 and $.0135 per share, respectively) (17,363,434) (8,947,314)
Class B ($.0258 and $.0135 per share, respectively) (10,505,263) (4,513,275)
Class C ($.0081 per share) (361,299) --
- ----------------------------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST Net increase in net assets resulting from Class A beneficial
TRANSACTIONS interest transactions--Note 2 119,123,728 685,155,178
----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class B beneficial
interest transactions--Note 2 378,396,143 1,019,463,146
----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from Class C beneficial
interest transactions--Note 2 66,237,938 --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS Total increase 503,738,272 1,280,452,827
----------------------------------------------------------------------------------------------------------
Beginning of period 4,729,194,410 3,448,741,583
-------------- --------------
End of period (including overdistributed net investment income
of $6,400,367 and $2,882,064, respectively) $5,232,932,682 $4,729,194,410
-------------- --------------
-------------- --------------
</TABLE>
See accompanying Notes to Financial Statements.
28 Oppenheimer Strategic Income Fund
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
1995 1994 1993 1992 1991 1990(1)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING DATA:
Net asset value, beginning of period $4.75 $5.21 $5.07 $5.01 $4.87 $5.00
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .41 .45 .48 .46 .56 .59
Net realized and unrealized gain (loss)
on investments, options written
and foreign currency transactions (.03) (.35) .17 .14 .21 (.10)
- -----------------------------------------------------------------------------------------------------------------------
Total income from
investment operations .38 .10 .65 .60 .77 .49
- -----------------------------------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders:
Dividends from net investment income (.41) (.43) (.50) (.46) (.57) (.57)
Distributions from net realized gain
on investments, options written
and foreign currency transactions (.01) -- (.01) (.08) (.06) (.05)
Distributions in excess of net
realized gain on investments,
options written and foreign
currency transactions -- (.12) -- -- -- --
Tax return of capital (.03) (.01) -- -- -- --
------- ------- ------- ------- ------- -----
Total dividends and distributions
to shareholders (.45) (.56) (.51) (.54) (.63) (.62)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.68 $4.75 $5.21 $5.07 $5.01 $4.87
------- ------- ------- ------- ------- ------
------- ------- ------- ------- ------- ------
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 8.62% 1.85% 13.30% 12.56% 16.97% 10.20%
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) $3,219 $3,143 $2,754 $1,736 $560 177
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in millions) $3,085 $3,082 $2,107 $1,084 $311 $93
- -----------------------------------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 687,546 661,897 528,587 342,034 111,739 36,418
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:
Net investment income 9.63% 8.72% 9.78% 9.39% 11.82% 12.79%(5)
Expenses .99% .95% 1.09% 1.16%(6) 1.27%(6) 1.36%(5)
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 141.5% 119.0% 148.6% 208.2% 194.7% 424.6%
<CAPTION>
Class B Class C
-------------------------------------- -------
Year
Ended
Year Ended Sept, 30, Sept, 30,
1995 1994 1993(2) 1995(1)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING DATA: $4.76 $5.22 $4.89 $4.68
Net asset value, beginning of period
- ------------------------------------------------------------------------------------------
Income (loss) from investment
operations: .37 .42 .36 .13
Net investment income
Net realized and unrealized gain (loss)
on investments, options written (.03) (.36) .34 .01
and foreign currency transactions
------- ------- ------- -------
Total income from .34 .06 .70 .14
investment operations
- -------------------------------------------------------------------------------------------
Dividends and distributions to
shareholders: (.37) (.39) (.36) (.12)
Dividends from net investment income
Distributions from net realized gain
on investments, options written (.01) -- (.01) (.01)
and foreign currency transactions
Distributions in excess of net
realized gain on investments,
options written and foreign -- (.12) -- --
currency transactions (.03) (.01) -- (.01)
Tax return of capital
Total dividends and distributions
to shareholders (.41) (.52) (.37) (.14)
- ------------------------------------------------------------------------------------------
Net asset value, end of period $4.69 $4.76 $5.22 $4.68
------- ------- ------- -------
------- ------- ------- -------
- ------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE(4) 7.79% 1.07% 13.58% 3.09
- ------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) 1,947 $1,586 $695 $67
- ------------------------------------------------------------------------------------------
Average net assets (in millions) 1,711 $1,236 $276 $24
- ------------------------------------------------------------------------------------------
Number of shares outstanding
at end of period (in thousands) 415,200 333,489 133,235 14,314
- ------------------------------------------------------------------------------------------
Ratios to average net assets
Net investment income 8.83% 7.90% 8.13%(5) 8.28
Expenses 1.75% 1.71% 1.80%(5) 2.02
- ------------------------------------------------------------------------------------------
Portfolio turnover rate(7) 141.5% 119.0% 148.6% 141.5%
</TABLE>
1. For the period from May 26, 1995
(inception of offering) to September 30,
1995.
2. For the period from November 30, 1992
(inception of offering) to September 30,
1993.
3. For the period from October 16, 1989
(inception of offering) to September 30,
1990.
4. 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. Total
returns are not annualized for periods of
less than one full year.
5. Annualized.
6. 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.
7. The lesser of purchases or sales of
portfolio securities for a period, divided
by the monthly average of the market value
of portfolio securities owned during the
period. Securities with a maturity or
expiration date at the time of acquisition
of one year or less are excluded from the
calculation. Purchases and sales of
investment securities (excluding short-term
securities) for the period ended September
30, 1995 were $7,299,319,937 and
$6,307,228,611, respectively.
See accompanying Notes to Financial Statements.
29 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 Class A, Class B and Class C shares. Class A shares are sold with a
front-end sales charge. Class B and Class C shares may be subject to a
contingent deferred sales charge. All three classes of shares have identical
rights to earnings, assets and voting privileges, except that each class has its
own distribution and/or service plan, expenses directly attributable to a
particular class and exclusive voting rights with respect to matters affecting a
single class. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
INVESTMENT VALUATION. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
asked price or the last sale price on the prior trading day. Long-term and
short-term ``non-money market'' debt securities are valued by a portfolio
pricing service approved by the Board of Trustees. Such securities which cannot
be valued by the approved portfolio pricing service are valued using
dealer-supplied valuations provided the Manager is satisfied that the firm
rendering the quotes is reliable and that the quotes reflect current market
value, or are valued under consistently applied procedures established by the
Board of Trustees to determine fair value in good faith. Short-term ``money
market type'' debt securities having a remaining maturity of 60 days or less are
valued at cost (or last determined market value) adjusted for amortization to
maturity of any premium or discount. Forward contracts are valued based on the
closing prices of the forward currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
Options are valued based upon the last sale price on the principal exchange on
which the option is traded or, in the absence of any transactions that day, the
value is based upon the last sale price on the prior trading date if it is
within the spread between the closing bid and asked prices. If the last sale
price is outside the spread, the closing bid or asked price closest to the last
reported sale price is used.
- --------------------------------------------------------------------------------
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS. Delivery and payment for securities
that have been purchased by the Fund on a forward commitment or when-issued
basis can take place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to market fluctuation
and may increase or decrease in value prior to their delivery. The Fund
maintains, in a segregated account with its custodian, assets with a market
value equal to the amount of its purchase commitments. The purchase of
securities on a when-issued or forward commitment basis may increase the
volatility of the Fund's net asset value to the extent the Fund makes such
purchases while remaining substantially fully invested. As of September 30,
1995, the Fund had entered into outstanding when-issued or forward commitments
of $313,292,095.
In connection with its ability to purchase securities on a when-issued
or forward commitment basis, the Fund may enter into mortgage ``dollar-rolls''
in which the Fund sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar (same
type coupon and maturity) but not identical securities on a specified future
date. The Fund records each dollar- roll as a sale and a new purchase
transaction.
- --------------------------------------------------------------------------------
SECURITY CREDIT RISK. The Fund invests in high yield securities, which may be
subject to a greater degree of credit risk, greater market fluctuations and risk
of loss of income and principal, and may be more sensitive to economic
conditions than lower yielding, higher rated fixed income securities. The Fund
may acquire securities in default, and is not obligated to dispose of securities
whose issuers subsequently default. At September 30, 1995, securities with an
aggregate market value of $22,888,086, representing .44% of the Fund's net
assets, were in default.
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of securities and investment income are translated at
the rates of exchange prevailing on the respective dates of such transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
30 Oppenheimer Strategic Income Fund
<PAGE>
- --------------------------------------------------------------------------------
1. SIGNIFICANT
ACCOUNTING POLICIES
(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. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES AND GAINS AND LOSSES. Income, expenses (other
than those attributable to a specific class) and gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. At September 30, 1995, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $34,310,000 expiring in 2002 and 2003.
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. The Fund intends to declare dividends separately
for Class A, Class B and Class C shares from net investment income each day the
New York Stock Exchange is open for business and pay such dividends monthly.
Distributions from net realized gains on investments, if any, will be declared
at least once each year.
- --------------------------------------------------------------------------------
CLASSIFICATION OF DISTRIBUTIONS TO SHAREHOLDERS. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of paydown gains and losses and the recognition of certain
foreign currency gains (losses) as ordinary income (loss) for tax purposes. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividend distributions, the fiscal
year in which amounts are distributed may differ from the year that the income
or realized gain (loss) was recorded by the Fund.
During the year ended September 30, 1995, 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, during the year ended
September 30, 1995, amounts have been reclassified to reflect a decrease in
paid-in capital of $28,272,149, a decrease in undistributed net investment
income of $11,013,856, and a decrease in accumulated net realized loss on
investments of $39,286,005.
- --------------------------------------------------------------------------------
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.
31 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, 1995(1) Year Ended September 30, 1994
------------------------------- -----------------------------
Shares Amount Shares Amount
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 148,016,674 $ 683,433,740 236,638,548 $ 1,198,107,502
Dividends and distributions reinvested 44,280,828 204,225,816 46,661,271 234,357,544
Redeemed (166,648,327) (768,535,828) (149,989,676) (747,309,868)
------------- ------------- ------------- --------------
Net increase 25,649,175 $ 119,123,728 133,310,143 $ 685,155,178
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
- -----------------------------------------------------------------------------------------------------
Class B:
Sold 116,898,296 $ 540,870,128 211,514,941 $ 1,074,296,304
Dividends and distributions reinvested 19,012,767 87,850,572 13,715,575 68,501,659
Redeemed (54,200,534) (250,324,557) (24,975,699) (123,334,817)
------------- ------------- ------------- --------------
Net increase 81,710,529 $ 378,396,143 200,254,817 $ 1,019,463,146
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
- -----------------------------------------------------------------------------------------------------
Class C:
Sold 2,871,521 $ 13,389,069 -- --
Dividends and distributions reinvested 90,363 421,261 -- --
Issued in connection with the
acquisition of Oppenheimer Strategic
Diversified Income Fund--Note 711,908,408 55,016,842 -- --
Redeemed (556,356) (2,589,234) -- --
------------- ------------- ------------- --------------
Net increase 14,313,936 $66,237,938 -- --
------------- ------------- ------------- --------------
------------- ------------- ------------- --------------
</TABLE>
1. For the year ended September 30, 1995 for Class A and Class B shares and for
the period from May 26, 1995 (inception of offering) to September 30, 1995 for
Class C shares.
- --------------------------------------------------------------------------------
3. UNREALIZED GAINS
AND LOSSES ON
INVESTMENTS AND
OPTIONS WRITTEN
At September 30, 1995, net unrealized appreciation on investments and options
written of $35,545,161 was composed of gross appreciation of $157,089,688, and
gross depreciation of $121,544,527.
- --------------------------------------------------------------------------------
4. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write covered put and call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options
to hedge against adverse movements in the value of portfolio holdings. When
an option is written, the Fund receives a premium and becomes obligated to
sell or purchase the underlying security at a fixed price, upon exercise of
the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a
written put option, or the cost of the security for a purchased put or call
option is adjusted by the amount of premium received or paid.
In this report, securities designated to cover outstanding call options
are noted in the Statement of Investments. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a
footnote to the Statement of Investments. Options written are reported as a
liability in the Statement of Assets and Liabilities. Gains and losses are
reported in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security increases and the
option is exercised. The risk in writing a put option is that the Fund may
incur a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Fund pays a premium
whether or not the option is exercised. The Fund also has the additional risk
of not being able to enter into a closing transaction if a liquid secondary
market does not exist.
32 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
4. OPTION ACTIVITY (continued)
Written option activity for the year ended September 30, 1995 was as
follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------------- ----------------------------
NUMBER AMOUNT NUMBER AMOUNT
OF OPTIONS OF PREMIUMS OF OPTIONS OF PREMIUMS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options outstanding at September 30, 1994 428,512,533 $ 5,932,144 300,000 $ 609,375
- -------------------------------------------------------------------------------------------------------------------
Options written 492,409 2,981,048 66,538,263 1,354,070
- -------------------------------------------------------------------------------------------------------------------
Options closed or expired (428,904,484) (8,198,502) (66,789,263) (1,244,945)
- -------------------------------------------------------------------------------------------------------------------
Options exercised (100,458) (714,690) -- --
------------- ------------ ------------ -----------
Options outstanding at September 30, 1995 -- $ -- 49,000 $ 718,500
------------- ------------ ------------ -----------
------------- ------------ ------------ -----------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
5. FORWARD
CONTRACTS
A forward foreign currency exchange contract (forward contract) is a commitment
to purchase or sell a foreign currency at a future date, at a negotiated rate.
The Fund uses forward contracts to seek to manage foreign currency
risks. They may also be used to tactically shift portfolio currency risk. The
Fund generally enters into forward 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.
Forward contracts are valued based on the closing prices of the
forward currency contract rates in the London foreign exchange markets on a
daily basis as provided by a reliable bank or dealer. The Fund will realize a
gain or loss upon the closing or settlement of the forward transaction.
In this report, securities held in segregated accounts to cover net
exposure on outstanding forward contracts are noted in the Statement of
Investments where applicable. Gains and losses on outstanding contracts
(unrealized appreciation or depreciation on forward contracts) are reported in
the Statement of Assets and Liabilities. Realized gains and losses are reported
with all other foreign currency gains and losses in the Fund's Statement of
Operations.
Risks include the potential inability of the counterparty to meet the
terms of the contract and unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
At September 30, 1995, the Fund had outstanding forward contracts to purchase
and sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT UNREALIZED
AMOUNT VALUATION AS OF APPRECIATION
CONTRACTS TO PURCHASE EXPIRATION DATE (000S) SEPTEMBER 30, 1995 (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
German Deutsche Mark (DEM) 10/4/95--10/25/95 45,289 (DEM) $ 31,867,353 $ 399,441
Italian Lira (ITL) 10/3/95--10/13/95 79,818,817 (ITL) 49,471,665 629,263
New Zealand Dollar (NZD) 10/3/95--10/10/95 32,604 NZD 21,458,230 (350,668)
Spanish Peseta (ESP) 10/3/95--10/6/95 5,973,525 ESP 48,464,753 324,844
---------------- ------------ -----------
85,870,235 $ 151,262,001 $ 1,002,880
---------------- ------------ -----------
---------------- ------------ -----------
Contracts to Sell
- -------------------------------------------------------------------------------------------------------------------
Australian Dollar (AUD) 10/3/95--10/10/95 29,485 AUD $ 22,260,562 (451,664)
German Deutsche Mark (DEM) 10/18/95--12/14/95 307,000 (DEM) 216,037,314 (8,341,934)
Italian Lira (ITL) 10/3/95--12/11/95 83,556,642 (ITL) 51,723,507 (129,059)
Spanish Peseta (ESP) 10/3/95--11/28/95 9,982,040 ESP 81,030,277 705,873
Swedish Krona (SEK) 12/14/95 20,800 SEK 2,983,603 (68,804)
---------------- ------------- ------------
93,895,967 $ 374,035,263 (8,285,588)
---------------- ------------- ------------
---------------- ------------- ------------
Net Unrealized Depreciation $(7,282,708)
------------
------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
6. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
Management fees paid to the Manager were in accordance with the investment
advisory agreement with the Fund which provides for a fee of .75% on the first
$200 million of average annual 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.
33 Oppenheimer Strategic Income Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- -------------------------------------------------------------------------------
6. MANAGEMENT FEES
AND OTHER TRANSACTIONS
WITH AFFILIATES
(CONTINUED)
For the year ended September 30, 1995, commissions (sales charges paid by
investors) on sales of Class A shares totaled $16,024,553, of which $4,566,642
was retained by Oppenheimer Funds Distributor, Inc. (OFDI), a subsidiary of the
Manager, as general distributor, and by an affiliated broker/dealer. Sales
charges advanced to broker/dealers by OFDI on sales of the Fund's Class B and
Class C shares totaled $20,385,966 and $126,382, of which $1,130,489 and $3,318,
respectively, was paid to an affiliated broker/dealer. During the year ended
September 30, 1995, OFDI received contingent deferred sales charges of
$5,144,993 and $5,409, respectively, upon redemption of Class B and Class C
shares as reimbursement for sales commissions advanced by OFDI at the time of
sale of such shares.
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 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 institutions. In
addition, Class B and Class C 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 or Class C 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 or Class C
shares sold prior to termination or discontinuance of the plan. At September 30,
1995, OFDI had incurred unreimbursed expenses of $73,988,456. During the year
ended September 30, 1995, OFDI paid $499,052, $85,423 and $1,325, respectively,
to an affiliated broker/dealer as reimbursement for Class A, Class B and Class C
personal service and maintenance expenses and retained $14,432,795 and $49,630,
respectively, as reimbursement for Class B and Class C sales commissions and
service fee advances, as well as financing costs.
- --------------------------------------------------------------------------------
7. ACQUISITION OF OPPENHEIMER
STRATEGIC DIVERSIFIED
INCOME FUND
On August 18, 1995, the Fund acquired all of the net assets of Oppenheimer
Strategic Diversified Income Fund, pursuant to an Agreement and Plan of
Reorganization approved by the Oppenheimer Strategic Diversified Income Fund
shareholders on July 12, 1995. The Fund issued 11,908,408 shares of beneficial
interest (Class C), valued at $55,016,842 in exchange for the net assets,
resulting in combined Class C net assets of $63,020,965 on August 18, 1995. The
exchange qualified as a tax-free reorganization for federal income tax purposes.
- --------------------------------------------------------------------------------
8. ILLIQUID AND
RESTRICTED SECURITIES
At September 30, 1995, investments in securities included issues that are
illiquid or restricted. The securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. The Fund intends to invest no more
than 10% of its net assets (determined at the time of purchase) in illiquid or
restricted securities. The aggregate value of these securities subject to this
limitation at September 30, 1995 was $121,816,039 which represents 2.33% of the
Fund's net assets. Information concerning these securities is as follows:
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT SEPT. 30, 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Arizona Charlie's, Inc., 12% First Mtg. Nts., Series A, 11/15/00 11/18/93--12/9/93 $ 100.00 $ 80.00
- ----------------------------------------------------------------------------------------------------------------------------------
Bayerische Landesbank, N.Y. Branch, 10% CD Linked Nts., 10/30/95 4/14/95 $ 100.00 $ 89.05
- ----------------------------------------------------------------------------------------------------------------------------------
Becker Gaming, Inc. Wts., Exp. 11/00 11/18/93--12/9/93 $ 2.10 $ 1.50
- ----------------------------------------------------------------------------------------------------------------------------------
Capital Queen & Casino, Inc., 12% First Mtg. Nts., Series A, 11/15/00 11/18/93--12/17/93 $ 87.89 $ 90.00
- ----------------------------------------------------------------------------------------------------------------------------------
Columbia (Republic of) 1989-1990 Integrated Loan Facility Bonds:
7.313%, 7/1/01 6/17/93--11/12/93 $ 91.77 $ 93.00
6.875%, 10/26/03 10/25/93--12/17/93 $ 89.77 $ 90.00
- ----------------------------------------------------------------------------------------------------------------------------------
ECM Fund L.P.I. Common Stock 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
- ----------------------------------------------------------------------------------------------------------------------------------
Eskom Loan Participation Agreements, 7.937%, 4/15/98 11/18/93 $ 94.75 $ 96.50
- ----------------------------------------------------------------------------------------------------------------------------------
Eskom Loan Participation Agreements, 7.25%, 9/15/99 12/17/93 $ 89.75 $ 96.50
- ----------------------------------------------------------------------------------------------------------------------------------
Goldman Sachs & Co. Argentina Local
Market Securities Trust, 11.30%, 4/1/00 8/24/94 $ 100.00 $ 94.50
- ----------------------------------------------------------------------------------------------------------------------------------
Jamaica (Government of) 1990 Refinancing
Agreement Nts., Tranche A, 6.656%, 10/16/00 7/12/95--8/15/95 $ 89.03 $ 89.00
</TABLE>
34 Oppenheimer Strategic Income Fund
<PAGE>
- -------------------------------------------------------------------------------
8. ILLIQUID AND
RESTRICTED SECURITIES
(CONTINUED)
<TABLE>
<CAPTION>
VALUATION
PER UNIT AS OF
SECURITY ACQUISITION DATE COST PER UNIT SEPT. 30, 1995
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc., Units, 9.75%, 6/15/99 5/15/95 $110.05 $110.66
- ----------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Group, Inc. Repackaged Argentina
Domestic Securities Trust, 14.75%, 9/1/02 9/19/94--10/19/94 $100.31 $ 76.00
- ----------------------------------------------------------------------------------------------------------------------------------
Pulsar Internacional SA de CV, 11.80% Nts., 9/19/96 9/14/95 $100.00 $100.75
- ----------------------------------------------------------------------------------------------------------------------------------
Triangle Wire & Cable, Inc. Common Stock 5/2/94 $ 9.50 $ 2.00
- ----------------------------------------------------------------------------------------------------------------------------------
United Mexican States, Combined Facility 2, Loan
Participation Agreement, Tranche A, 6.75%, 3/20/99 10/25/94 $ 84.25 $ 72.50
- ----------------------------------------------------------------------------------------------------------------------------------
United Mexican States, Combined Facility 3, Loan Participation
Agreement, Tranche A, 6.75%, 9/20/97 10/25/94 $ 89.00 $ 72.50
- ----------------------------------------------------------------------------------------------------------------------------------
United Mexican States, Gtd. Bonds, Banpesca Restructured
Sovereign Loan, 6.902%, 10/26/06 1/13/94 $ 91.75 $ 72.63
- ----------------------------------------------------------------------------------------------------------------------------------
Venezuela (Republic of) Debs., Banco
Venezuela TCI, Zero Coupon, 12/13/98 7/13/93--7/15/93 $ 72.64 $ 75.50
</TABLE>
Pursuant to guidelines adopted by the Board of Trustees, certain unregistered
securities are determined to
be liquid and are not included within the 10% limitation specified above.
- --------------------------------------------------------------------------------
9. FUTURES CONTRACTS
The Fund may buy and sell futures contracts in order to gain exposure to or
protect against changes in interest rates. The Fund may also buy or write put or
call options on these futures contracts.
The Fund generally sells futures contracts to hedge against increases
in interest rates and the resulting negative effect on the value of fixed rate
portfolio securities. The Fund may also purchase futures contracts to gain
exposure to changes in interest rates as it may be more efficient or cost
effective than actually buying fixed income securities. The Fund will segregate
assets to cover its commitments under futures contracts.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin.
Risks of entering into futures contracts (and related options) include
the possibility that there may be an illiquid market and that a change in the
value of the contract or option may not correlate with changes in the value of
the underlying securities.
At September 30, 1995, the Fund had outstanding futures contracts to purchase
debt securities as follows:
<TABLE>
<CAPTION>
EXPIRATION NUMBER OF VALUATION AS OF UNREALIZED
CONTRACTS TO PURCHASE DATE FUTURES CONTRACTS SEPTEMBER 30, 1995 APPRECIATION
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds 12/95 400 $44,100,000 $312,500
</TABLE>
35 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, 1995, the related statement of operations for the year then ended,
the statements of changes in net assets for the years ended September 30, 1995
and 1994, and the financial highlights for the period October 16, 1989
(commencement of operations) to September 30, 1995. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
September 30, 1995 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, 1995, 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 20, 1995
36 Oppenheimer Strategic Income Fund
<PAGE>
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------
In early 1996, shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1995. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
A distribution of $.0148 per share was paid on July 25, 1995, of which
$.0148 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,
1995 which are not designated as capital gain distributions should be multiplied
by 1.15% 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.
37 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
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 Oppenheimer Shareholder Services
SERVICING AGENT
- --------------------------------------------------------------------------------
CUSTODIAN OF The Bank of New York
PORTFOLIO SECURITIES
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS Deloitte & Touche LLP
- --------------------------------------------------------------------------------
LEGAL COUNSEL Myer, Swanson, Adams & Wolf, P.C.
This is a copy of a report to shareholders of Oppenheimer 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.
Shares of Oppenheimer funds are not deposits or obligations of any bank, are not
guaranteed by any bank, and are not insured by the FDIC or any other agency, and
involve investment risks, including possible loss of the principal amount
invested.
38 Oppenheimer Strategic Income Fund
<PAGE>
OPPENHEIMERFUNDS FAMILY
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OppenheimerFunds offers over 30 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 35 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 2.8 million shareholder accounts and more than $38 billion under
Oppenheimer's management and that of our affiliates.
At OppenheimerFunds, we don't charge a fee to exchange shares. And you can exchange shares easily
by mail or by telephone! For more information on Oppenheimer funds, 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 Fund Oppenheimer Fund
Target Fund Value Stock Fund
Growth Fund Gold & Special Minerals Fund
- ----------------------------------------------------------------------------------------------------------------------------------
STOCK & BOND FUNDS Main Street Income & Growth Fund Equity Income Fund
Total Return Fund Asset Allocation Fund
Global Growth & Income Fund Strategic Income & Growth Fund
- ----------------------------------------------------------------------------------------------------------------------------------
BOND FUNDS High Yield Fund Bond Fund
Champion Income Fund U.S. Government Trust
Strategic Income Fund Limited-Term Government Fund
International Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT FUNDS New York Tax-Exempt Fund(2) New Jersey Tax-Exempt Fund(2)
California Tax-Exempt Fund(2) Tax-Free Bond Fund
Pennsylvania Tax-Exempt Fund(2) Insured Tax-Exempt Fund
Florida Tax-Exempt Fund(2) Intermediate Tax-Exempt Fund
- ----------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS Money Market Fund Cash Reserves
1. Exchange privileges are subject to change or termination. Shares may be exchanged only to the
same class of eligible funds.
2. Available only to investors in certain states. Oppenheimer funds are distributed by Oppenheimer
Funds Distributor, Inc., Two World Trade Center, New York, NY 10048-0203.
-C- Copyright 1995 Oppenheimer Management Corporation.
All rights reserved.
</TABLE>
39 Oppenheimer Strategic Income Fund
<PAGE>
INFORMATION
GENERAL INFORMATION
Monday-Friday 8:30 a.m.-8 p.m. ET
Saturday 10 a.m.-2 p.m. ET
1-800-525-7048
TELEPHONE TRANSACTIONS
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-852-8457
PHONELINK
24 hours a day, automated
information and transactions
1-800-533-3310
TELECOMMUNICATIONS DEVICE
FOR THE DEAF (TDD)
Monday-Friday 8:30 a.m.-8 p.m. ET
1-800-843-4461
OPPENHEIMERFUNDS
INFORMATION HOTLINE
24 hours a day, timely and insightful
messages on the economy and
issues that affect your investments
1-800-835-3104
RA0380.001.0995 November 30, 1995
[PHOTO]
Jennifer Leonard, Customer Service Representative
Oppenheimer Shareholder Services
"How may I help you?"
As an Oppenheimer funds shareholder, you have some special privileges. Whether
it's automatic investment plans, informative newsletters and hotlines, or
ready account access, you can benefit from services designed to make
investing simple.
And when you need help, our Customer Service Representatives are only a
toll-free phone call away. They can provide information about your account
and handle administrative requests. You can reach them at our General
Information number.
When you want to make a transaction, you can do it easily by calling our
toll-free Telephone Transactions number. And, by enrolling in AccountLink, a
convenient service that "links" your Oppenheimer funds accounts and your bank
checking or savings account, you can use the Telephone Transactions number to
make investments.
For added convenience, you can get automated information with
OppenheimerFunds PhoneLink service, available 24 hours a day, 7 days a week.
PhoneLink gives you access to a variety of fund, account, and market
information. Of course, you can always speak with a Customer Service
Representative during the General Information hours shown at the left.
You can count on us whenever you need assistance. That's why the
International Customer Service Association, an independent, nonprofit
organization made up of over 3,200 customer service management professionals
from around the country, honored the Oppenheimer funds' transfer agent,
Oppenheimer Shareholder Services, with their Award of Excellence in 1993.
So call us today--we're here to help.
- -------------------------------------------------------------------------------
[LOGO] --------------
Oppenheimer Funds Distributor, Inc. Bulk Rate
P.O. Box 5270 U.S. Postage
Denver, CO 80217-5270 PAID
Permit No. 469
Denver, CO
--------------
